POS AM

As filed with the Securities and Exchange Commission on September 2, 2010

Registration No. 333-154975

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Post-Effective Amendment No. 4

to

Form S-11

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

TNP Strategic Retail Trust, Inc.

(Exact name of registrant as specified in its governing instruments)

1900 Main Street

Suite 700

Irvine, California 92614

(949) 833-8252

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Anthony W. Thompson

Chairman of the Board and Chief Executive Officer

1900 Main Street

Suite 700

Irvine, California 92614

(949) 833-8252

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copy to:

Rosemarie A. Thurston

Gustav F. Bahn

Alston & Bird LLP

1201 West Peachtree Street

Atlanta, Georgia 30309

(404) 881-7000

Approximate date of commencement of proposed sale to public:  As soon as practicable after the effectiveness of the registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box:  þ

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.  o

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

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ

(Do not check if a smaller reporting company)

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

This Post-Effective Amendment No. 4 consists of the following:

1. The registrant’s prospectus dated April 13, 2010;

2.  Supplement No. 7 dated September 2, 2010, included herewith which will be delivered as an unattached document along with the prospectus dated April 13, 2010. Supplement No. 7 supersedes and replaces Supplement No. 2 dated June 3, 2010, Supplement No. 3 dated June 11, 2010, Supplement No. 4 dated July 15, 2010, Supplement No. 5 dated August 12, 2010 and Supplement No. 6 dated August 18, 2010;

3. Part II, included herewith; and

4. Signatures, included herewith.

TNP STRATEGIC RETAIL TRUST, INC.

$1,100,000,000 Maximum Offering

TNP Strategic Retail Trust, Inc. was formed in September 2008 to invest in and manage a portfolio of income-producing retail properties, located primarily in the Western United States, and real estate-related assets, including the investment in or origination of mortgage, mezzanine, bridge and other loans related to commercial real estate. We are externally managed by TNP Strategic Retail Advisor, LLC, which we refer to as our “advisor.” We believe that we operate in such a manner as to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

We are offering up to $1,100,000,000 in shares of our common stock. We will offer $1,000,000,000 in shares of our common stock to the public at a price of $10.00 per share, which we refer to as the “primary offering,” and $100,000,000 in shares of our common stock to our stockholders pursuant to our distribution reinvestment plan at a price of $9.50 per share. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the distribution reinvestment plan.

This investment involves a high degree of risk. You should purchase shares of our common stock only if you can afford a complete loss of your investment. See “Risk Factors” beginning on page 12. These risks include, among others:

•  We have no prior operating history and there is no assurance that we will be able to successfully achieve our investment objectives.

•  We set the offering price of our shares of common stock arbitrarily. This price is unrelated to the book value or net asset value of our shares of common stock or to our expected operating income.

•  Because there is no public trading market for shares of our common stock and we are not obligated to effectuate a liquidity event by a certain date, it will be difficult for you to sell your shares of our common stock.

•  We currently have one property in our real estate portfolio. As a result, this is considered a “blind pool” offering and you will not have the opportunity to evaluate our future investments prior to purchasing shares of our common stock.

•  We depend upon our advisor and its affiliates to conduct our operations and this offering. Adverse changes in the financial health of our advisor or its affiliates could cause our operations to suffer.

•  This is the first public offering sold by our dealer manager. Our ability to raise money and achieve our investment objectives depends on the ability of our dealer manager to successfully market this offering.

•  Our advisor and other affiliates will face conflicts of interest as a result of compensation arrangements, time constraints and competition for investments, which could result in actions that are not in your best interests.

•  We may incur debt exceeding 75% of the cost of our assets in certain circumstances. High debt levels increase the risk to our stockholders.

•  The amount of any distributions we may make is uncertain. Our distributions may exceed our earnings, particularly during the period before we have substantially invested the net proceeds from this offering. Therefore, we may need to borrow funds, request that our advisor, in its discretion, defer its receipt of fees and reimbursement of expenses, or utilize offering proceeds to make cash distributions. As a result, portions of the distributions that we make may represent a return of capital to you.

•  The recent economic downturn and disruption in the financial markets could have an adverse impact on our tenants’ ability to make rental payments and the demand for retail space, result in continued disruptions in the commercial mortgage market and adversely effect our ability to obtain financing on favorable terms, if at all.

•  If we fail to qualify as a REIT, it would adversely affect our operations and our ability to make distributions to our stockholders and may have adverse tax consequences to our stockholders.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. The Attorney General of the State of New York has not passed on or endorsed the merits of this offering. Any representation to the contrary is unlawful. The use of forecasts in this offering is prohibited. Any representation to the contrary and any predictions, written or oral, as to the amount or certainty of any present or future cash benefit or tax consequence which may flow from your investment in our common stock is prohibited.

			Sales		Dealer		Proceeds to Us
	Price to Public(1)		Commission(1)(2)		Manager Fee(1)(2)		Before Expenses(1)(3)
Primary Offering Per Share	$	10.00	$	0.70	$	0.30	$	9.00
Total Maximum	$	1,000,000,000.00	$	70,000,000.00	$	30,000,000.00	$	900,000,000.00
Distribution Reinvestment Plan Offering Per Share	$	9.50		—	$	—	$	9.50
Total Maximum	$	100,000,000.00		—	$	—	$	100,000,000.00

(1)	We reserve the right to reallocate shares of common stock being offered between the primary offering and our distribution reinvestment plan.
(2)	Discounts are available for certain categories of purchasers.
(3)	Proceeds are calculated before reimbursing our advisor for organization and offering expenses.

Our shares of common stock will be offered to investors on a best efforts basis through TNP Securities, LLC, our affiliate and the dealer manager of this offering. The minimum investment amount generally is $1,000. This offering will terminate no later than August 7, 2011 (two years from the date of the commencement of this offering), unless extended.

This prospectus is dated April 13, 2010

SUITABILITY STANDARDS

The shares of common stock we are offering are suitable only as a long-term investment for persons of adequate financial means. We do not expect to have a public market for shares of our common stock, which means that it may be difficult for you to sell your shares. On a limited basis, you may be able to have shares of our common stock redeemed through our share redemption program, and in the future we may also consider various forms of additional liquidity. You should not buy shares of our common stock if you need to sell them immediately or if you will need to sell them quickly in the future.

In consideration of these factors, we have established suitability standards for initial stockholders and subsequent transferees. These suitability standards require that a purchaser of shares of our common stock have either:

•  a net worth (excluding the value of an investor’s home, furnishings and automobiles) of at least $250,000; or

•  a gross annual income of at least $70,000 and a net worth (excluding the value of an investor’s home, furnishings and automobiles) of at least $70,000.

The following states have established suitability standards different from those we have established. Shares will be sold only to investors in these states who meet the special suitability standards set forth below.

Alabama—An Alabama investor must have represented to us that such investor has a liquid net worth of at least 10 times his or her investment in us and other similar programs and that such investor otherwise meets our suitability standards.

California—Investors must have either (1) a minimum net worth of at least $250,000 and an annual gross income of at least $65,000, or (2) a minimum net worth of at least $500,000.

Iowa and Nebraska—An investor must have either (1) a minimum net worth of $100,000 (exclusive of home, auto and furnishings) and annual income of $70,000, or (2) a net worth of $350,000 (exclusive of home, auto and furnishings). In addition, an investor may not invest more than 10% of his or her liquid net worth (exclusive of home, auto and furnishings) in this program or its affiliates.

Kansas—It is recommended by the Office of the Kansas Securities Commissioner that Kansas investors not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation investments. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities.

Kentucky—A Kentucky investor’s aggregate investment in this offering may not exceed 10% of the investor’s liquid net worth.

Massachusetts—It is recommended by the Commonwealth of Massachusetts, Securities Division, that Massachusetts investors not invest, in the aggregate, more than 10% of their liquid net worth in this and similar direct participation programs. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities.

Michigan—A Michigan investor’s maximum investment in us or any affiliate cannot exceed 10% of his or her net worth.

Oregon and Tennessee—Investors may not invest more than 10% of their net worth, calculated exclusive of home, home furnishings, and automobiles.

Due to minimum offering requirements, this offering is currently not available to residents of Ohio.

In the case of sales to fiduciary accounts (such as an individual retirement account, or IRA, Keogh plan or pension or profit sharing plan), these suitability standards must be met by the fiduciary account, by the person who directly or indirectly supplied the funds for the purchase of the shares of our common stock or by the beneficiary of the account.

These suitability standards are intended to help ensure that, given the long-term nature of an investment in shares of our common stock, our investment objectives and the relative illiquidity of our common stock, shares of our common stock are an appropriate investment for those of you who become stockholders. Our sponsor and each participating broker-dealer must make every reasonable effort to determine that the purchase of shares of our common stock is a suitable and appropriate investment for each stockholder based on information provided by the stockholder in the subscription agreement. In making this determination, the

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sponsor and each person selling shares of our common stock on our behalf shall ascertain that the prospective stockholder meets the minimum income and net worth standards; can reasonably benefit from an investment in shares of our common stock based on the prospective stockholder’s overall investment objectives and portfolio structure; is able to bear the economic risk of an investment in shares of our common stock based on the prospective stockholder’s overall financial situation; and has apparent understanding of the fundamental risks of the investment, the risk that the stockholder may lose the entire investment, the lack of liquidity of our shares of common stock, the restrictions on transferability of our shares of common stock and the tax consequences of an investment in us. The sponsor and each person making this determination on our behalf will make this determination on the basis of information it has obtained from a prospective stockholder regarding the prospective stockholder’s financial situation and investment objectives. Relevant information for this purpose includes age, investment objectives, investment experience, income, net worth, financial situation, and other investments of prospective stockholders, as well as any other pertinent factors. Each person selling shares of our common stock on our behalf shall maintain records of the information used to determine that an investment in shares of our common stock is suitable and appropriate for a stockholder for at least six years.

The minimum purchase amount is $1,000, except in certain states as described below. To satisfy the minimum purchase requirements for retirement plans, unless otherwise prohibited by state law, a husband and wife may jointly contribute funds from their separate IRAs, provided that each such contribution is made in increments of $500. You should note that an investment in shares of our common stock will not, in itself, create a retirement plan and that to create a retirement plan you must comply with all applicable provisions of the Internal Revenue Code of 1986, as amended, or the Internal Revenue Code.

The minimum purchase for Tennessee is $5,000. The minimum purchase for Maine, New York and North Carolina residents is $2,500, except for IRAs which must purchase a minimum of $1,000. The minimum purchase for Minnesota residents is $2,500, except for IRAs and other qualified retirement plans which must purchase a minimum of $2,000. Following an initial subscription for at least the required minimum investment, any investor may make additional purchases in increments of at least $100, except for (1) purchases made by residents of Maine and Minnesota, whose additional investments must meet their state’s minimum investment amount, and (2) purchases of shares of our common stock pursuant to our distribution reinvestment plan, which may be in lesser amounts.

HOW TO SUBSCRIBE

Investors who meet the suitability standards described herein may purchase shares of our common stock. See “Suitability Standards” and “Plan of Distribution.” Investors seeking to purchase shares of our common stock should proceed as follows:

•  Read this entire prospectus and any appendices and supplements accompanying this prospectus.

•  Complete the execution copy of the subscription agreement. A specimen copy of the subscription agreement, including instructions for completing it, is included in this prospectus as Appendix C.

•  Deliver a check for the full purchase price of the shares of our common stock being subscribed for along with the completed subscription agreement to the soliciting broker-dealer or investment advisor. Your check should be made payable to “TNP Strategic Retail Trust, Inc.” After you have satisfied the applicable minimum purchase requirement, additional purchases must be in increments of $100, except for purchases made pursuant to our distribution reinvestment plan.

By executing the subscription agreement and paying the total purchase price for the shares of our common stock subscribed for, each investor attests that the investor meets the minimum income and net worth standards as described herein.

Subscriptions will be effective only upon our acceptance, and we reserve the right to reject any subscription in whole or in part. Subscriptions will be accepted or rejected within 30 days of receipt by us, and if rejected, all funds will be returned to subscribers without deduction for any expenses within 10 business days from the date the subscription is rejected. We are not permitted to accept a subscription for shares of our common stock until at least five business days after the date you receive the final prospectus.

An approved trustee must process and forward to us subscriptions made through IRAs, Keogh plans and 401(k) plans. In the case of investments through IRAs, Keogh plans and 401(k) plans, we will send the confirmation and notice of our acceptance to the trustee.

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IMPORTANT INFORMATION ABOUT THIS PROSPECTUS

Please carefully read the information in this prospectus and any accompanying prospectus supplements, which we refer to collectively as the “prospectus.” You should rely only on the information contained in this prospectus. We have not authorized anyone to provide you with different information. This prospectus may only be used where it is legal to sell these securities. You should not assume that the information contained in this prospectus is accurate as of any date later than the date hereof or such other dates as are stated herein or as of the respective dates of any documents or other information incorporated herein by reference.

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a continuous offering process. Periodically, as we make material investments or have other material developments, we will provide a prospectus supplement that may add, update or change information contained in this prospectus. Any statement that we make in this prospectus will be modified or superseded by any inconsistent statement made by us in a subsequent prospectus supplement. The registration statement we filed with the SEC includes exhibits that provide more detailed descriptions of the matters discussed in this prospectus. You should read this prospectus and the related exhibits filed with the SEC and any prospectus supplement, together with additional information described herein under “Additional Information.”

The registration statement containing this prospectus, including exhibits to the registration statement, provides additional information about us and the securities offered under this prospectus. The registration statement can be read at the SEC website, www.sec.gov, or at the SEC public reference room mentioned under the heading “Additional Information.”

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TABLE OF CONTENTS

SUITABILITY STANDARDS	i
HOW TO SUBSCRIBE	ii
IMPORTANT INFORMATION ABOUT THIS PROSPECTUS	iii
QUESTIONS AND ANSWERS ABOUT THIS OFFERING	v
PROSPECTUS SUMMARY	1
RISK FACTORS	12
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS	39
ESTIMATED USE OF PROCEEDS	40
INVESTMENT STRATEGY, OBJECTIVES AND POLICIES	42
OUR INVESTMENT	53
MANAGEMENT	55
MANAGEMENT COMPENSATION TABLE	68
CONFLICTS OF INTEREST	73
PRIOR PERFORMANCE SUMMARY	78
THE OPERATING PARTNERSHIP AGREEMENT	83
STOCK OWNERSHIP	86
DESCRIPTION OF CAPITAL STOCK	87
MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS	98
STATE AND LOCAL TAX CONSIDERATIONS	117
ERISA CONSIDERATIONS	118
PLAN OF DISTRIBUTION	123
SUPPLEMENTAL SALES MATERIAL	127
LEGAL MATTERS	127
ADDITIONAL INFORMATION	127
APPENDIX A: PRIOR PERFORMANCE TABLES OF THOMPSON NATIONAL PROPERTIES, LLC	A-1
APPENDIX B: PRIOR PERFORMANCE TABLES OF TRIPLE NET PROPERTIES, LLC	B-1
APPENDIX C: FORM OF SUBSCRIPTION AGREEMENT	C-1
APPENDIX D: DISTRIBUTION REINVESTMENT PLAN	D-1
EX-10.2
EX-10.41
EX-10.42
EX-10.43
EX-10.44
EX-10.45
EX-10.46
EX-10.47
EX-10.48
EX-10.49
EX-10.50
EX-10.51
EX-10.52
EX-10.53
EX-21
EX-23.1
EX-23.4
EX-23.5

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QUESTIONS AND ANSWERS ABOUT THIS OFFERING

Set forth below are some of the more frequently asked questions and answers relating to our structure, our management and an offering of this type.

Q:	What is a “REIT”?
A:	In general, a REIT is a company that:
	• offers the benefits of a diversified real estate portfolio under professional management;
	• is required to make distributions to investors of at least 90% of its taxable income for each year;
	• avoids the federal “double taxation” treatment of income that generally results from investments in a corporation because a REIT is not generally subject to federal corporate income taxes on the portion of its net income that is distributed to the REIT’s stockholders; and
	• combines the capital of many investors to acquire or provide financing for real estate assets.
Q:	How will you structure the ownership and operation of your assets?
A:	We plan to own substantially all of our assets and conduct our operations through an operating partnership, TNP Strategic Retail Operating Partnership, LP, which was organized in Delaware in September 2008. We are the sole general partner of TNP Strategic Retail Operating Partnership, LP, which we refer to as our “operating partnership.” Because we will conduct substantially all of our operations through an operating partnership, we are organized in what is referred to as an “UPREIT” structure.
Q:	What is an “UPREIT”?
A:	UPREIT stands for Umbrella Partnership Real Estate Investment Trust. We use the UPREIT structure because a contribution of property directly to us is generally a taxable transaction to the contributing property owner. In this structure, a contributor of a property who desires to defer taxable gain on the transfer of his or her property may transfer the property to the operating partnership in exchange for limited partnership units and defer taxation of gain until the contributor later exchanges his or her limited partnership units, typically on a one-for-one basis for shares of the common stock of the REIT. We believe that using an UPREIT structure gives us an advantage in acquiring desired properties from persons who may not otherwise sell their properties because of unfavorable tax results.
Q:	Do you currently own any assets?
A:	Yes. As of April 13, 2010, we owned one 94,574 square foot multi-tenant retail property located in Moreno, California. Because we have a limited portfolio of real estate investments, we are considered a blind pool offering. As significant investments become probable, we will supplement this prospectus to provide information regarding the likely investment. We will also describe material changes to our portfolio, including the closing of significant acquisitions, by means of a supplement to this prospectus. See “Our Investment” for information on our first real estate investment.
Q:	Who will choose which investments to make?
A:	Our advisor, TNP Strategic Retail Advisor, LLC, will select investments for us based on specific investment objectives and criteria and subject to the direction, oversight and approval of our board of directors.
Q:	What kind of offering is this?
A:	Through our dealer manager, we are offering a maximum of $1,000,000,000 in shares of our common stock in our primary offering on a “best efforts” basis at $10.00 per share. We are also offering $100,000,000 in shares of our common stock pursuant to our distribution reinvestment plan at $9.50 per share to those stockholders who elect to participate in such plan as described in this prospectus. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the distribution reinvestment plan.

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Q:	How does a “best efforts” offering work?
A:	When shares of common stock are offered to the public on a “best efforts” basis, the broker-dealers participating in the offering are only required to use their best efforts to sell the shares of our common stock. Broker-dealers do not have a firm commitment or obligation to purchase any of the shares of our common stock.
Q:	How long will this offering last?
A:	This offering will not last beyond August 7, 2011 (two years from the date of the commencement of this offering), unless extended. However, in certain states this offering may only continue for one year unless we renew the offering period for up to one additional year.
Q:	Will I receive a stock certificate?
A:	No. You will not receive a stock certificate unless expressly authorized by our board of directors. We anticipate that all shares of our common stock will be issued in book-entry form only. The use of book-entry registration protects against loss, theft or destruction of stock certificates and reduces the offering costs.
Q:	Who can buy shares of common stock in this offering?
A:	In general, you may buy shares of our common stock pursuant to this prospectus provided that you have either (1) a net worth of at least $70,000 and an annual gross income of at least $70,000 or (2) a net worth of at least $250,000. For this purpose, net worth does not include your home, home furnishings and personal automobiles. Generally, you must initially invest at least $1,000. After you have satisfied the applicable minimum purchase requirement, additional purchases must be in increments of $100, except for purchases made pursuant to our distribution reinvestment plan, which are not subject to any minimum purchase requirement. These minimum net worth and investment levels may be higher in certain states, so you should carefully read the more detailed description under “Suitability Standards” above.
	Our affiliates may also purchase shares of our common stock. The sales commissions and dealer manager fees that are payable by other investors in this offering will be reduced or waived for our affiliates.
Q:	Are there any special restrictions on the ownership of shares?
A:	Yes. Our charter prohibits the ownership of more than 9.8% in value of our capital stock (which includes common stock and preferred stock we may issue) and more than 9.8% in value or number of shares, whichever is more restrictive, of our common stock, unless exempted by our board of directors. This prohibition may discourage large investors from purchasing our shares and may limit your ability to transfer your shares. To comply with tax rules applicable to REITs, we will require our record holders to provide us with detailed information regarding the beneficial ownership of our shares on an annual basis. These restrictions are designed to enable us to comply with the ownership restrictions imposed on REITs by the Internal Revenue Code. See “Description of Capital Stock—Restriction on Ownership of Shares of Capital Stock.”
Q:	Is there any minimum initial investment required?
A:	Yes. To purchase shares of common stock in this offering, you must generally make an initial purchase of at least $1,000 in shares. Once you have satisfied the minimum initial purchase requirement, any additional purchases of our shares of common stock in this offering must be in amounts of at least $100, except for additional purchases pursuant to our distribution reinvestment plan which are not subject to any minimum investment requirement.

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Q:	How do I subscribe for shares of common stock?
A:	Investors who meet the suitability standards described herein may purchase shares of our common stock. See “Suitability Standards.” Investors seeking to purchase shares of our common stock should proceed as follows:
	• Read this entire prospectus and any appendices and supplements accompanying this prospectus.
	• Complete the execution copy of the subscription agreement. A specimen copy of the subscription agreement, including instructions for completing it, is included in this prospectus as Appendix C.
	• Deliver a check for the full purchase price of the shares of our common stock being subscribed for made payable to “TNP Strategic Retail Trust, Inc.” along with the completed subscription agreement to the registered broker-dealer or investment advisor.
	By executing the subscription agreement and paying the total purchase price for the shares of our common stock subscribed for, each investor represents that he meets the suitability standards as stated in the subscription agreement and agrees to be bound by all of its terms.
	Subscriptions will be effective only upon our acceptance, and we reserve the right to reject any subscription in whole or part. Subscriptions will be accepted or rejected within 30 days of receipt by us and, if rejected, all funds shall be returned to subscribers without deduction for any expenses within 10 business days from the date the subscription is rejected. We are not permitted to accept a subscription for shares of our common stock until at least five business days after the date you receive the final prospectus.
	An approved trustee must process and forward to us subscriptions made through individual IRAs, Keough plans and 401(k) plans. In the case of investments through IRAs, Keough plans and 401(k) plans, we will send the confirmation and notice of our acceptance to the trustee.
Q:	How will the payment of fees and expenses affect my invested capital?
A:	We will pay sales commissions and dealer manager fees in connection with this offering. In addition, we will reimburse our advisor for our other organization and offering expenses up to 3.0% of the gross proceeds of the offering and will pay our advisor acquisition and origination fees for substantial services provided in the acquisition or origination of investments. The payment of fees and expenses will reduce the funds available to us for investment in real estate assets and real estate-related assets. Depending primarily upon the number of shares of our common stock we sell in the primary offering and assuming a $10.00 purchase price for shares sold in the primary offering, we estimate that we will use between 85.6% and 86.7% of our gross offering proceeds for investments and 2.2% of our gross offering proceeds for the payment of acquisition and origination fees to our advisor. The payment of fees and expenses will also reduce the book value of your shares of common stock. However, you will not be required to pay any additional amounts in connection with the fees and expenses described in this prospectus.
Q:	What have your distribution payments been since you began operations on November 19, 2009?
A:	Our board of directors approved a monthly cash distribution of $0.05625 per share of common stock, which represents an annualized distribution of $0.675 per share, upon our first asset acquisition which occurred on November 19, 2009. Since we began operations, we have paid distributions to our stockholders as follows:

	Approximate		Annualized Percentage Return
Period	Amount		(Assuming $10.00 share price)
December 2009	$	7,000		6.75	%
1st Quarter 2010		96,000		6.75	%
	$	103,000

For more information on our distribution policy, see “Description of Capital Stock—Distributions.” All distributions to date have been paid with offering proceeds. See “Risk Factors—Investment Risks—Our

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cash distributions are not guaranteed, may fluctuate and may constitute a return of capital or taxable gain from the sale or exchange of property.”

Q:	May I reinvest my distributions?
A:	Yes. Please see “Description of Capital Stock—Distribution Reinvestment Plan” for more information regarding our distribution reinvestment plan.
Q:	If I buy shares of common stock in this offering, how may I later sell them?
A:	At the time you purchase the shares of our common stock, the shares will not be listed for trading on any national securities exchange. As a result, if you wish to sell your shares, you may not be able to do so promptly, or at all, or you may only be able to sell them at a substantial discount from the price you paid. In general, however, you may sell your shares to any buyer that meets the applicable suitability standards unless such sale would cause the buyer to own more than 9.8% of the value of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) or more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock. See “Suitability Standards” and “Description of Capital Stock—Restriction on Ownership of Shares of Capital Stock.” We have adopted a share redemption program, as discussed under “Description of Capital Stock—Share Redemption Program,” which may provide limited liquidity for some of our stockholders.
Q:	What is your exit strategy?
A:	Our board of directors does not anticipate evaluating a transaction providing liquidity for our stockholders until 2015. Our charter does not require our board of directors to pursue a liquidity event. Due to the uncertainties of market conditions in the future, we believe setting finite dates for possible, but uncertain, liquidity events may result in actions not necessarily in the best interests or within the expectations of our stockholders. We expect that our board of directors, in the exercise of its fiduciary duty to our stockholders, will determine to pursue a liquidity event when it believes that then-current market conditions are favorable for a liquidity event, and that such a transaction is in the best interests of our stockholders. A liquidity event could include (1) the sale of all or substantially all of our assets either on a portfolio basis or individually followed by a liquidation, in which the net proceeds are distributed to stockholders, (2) a merger or another transaction approved by our board of directors in which our stockholders will receive cash and/or shares of a publicly traded company or (3) a listing of our shares on a national securities exchange. There can be no assurance as to when a suitable transaction will be available.
Q:	Will the distributions I receive be taxable?
A:	Distributions that you receive, including the market value of our common stock received pursuant to our distribution reinvestment plan, will generally be taxed as ordinary income to the extent they are paid out of our current or accumulated earnings and profits. However, if we recognize a long-term capital gain upon the sale of one of our assets, a portion of our dividends may be designated and treated as a long-term capital gain. In addition, we expect that some portion of your distributions may not be subject to tax in the year received due to the fact that depreciation expenses reduce earnings and profits but do not reduce cash available for distribution. Amounts distributed to you in excess of our earnings and profits will reduce the tax basis of your shares of common stock and will not be taxable to the extent thereof, and distributions in excess of tax basis will be taxable as an amount realized from the sale of your shares of common stock. This, in effect, would defer a portion of your tax until your investment is sold or we are liquidated, at which time you may be taxed at capital gains rates. However, because each investor’s tax considerations are different, we suggest that you consult with your tax advisor.
Q:	When will I get my detailed tax information?
A:	We intend to mail your Form 1099 tax information, if required, by January 31 of each year.
Q:	Where can I find updated information regarding the company?
A:	You may find updated information on our website, www.tnpreit.com. In addition, as a result of the effectiveness of the registration statement of which this prospectus forms a part, we are subject to the

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	informational reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Under the Exchange Act, we will file reports, proxy statements and other information with the SEC. See “Additional Information” for a description of how you may read and copy the registration statement, the related exhibits and the reports, proxy statements and other information we file with the SEC. In addition, you will receive periodic updates directly from us, including three quarterly financial reports and an annual report. We do not intend to calculate the net asset value per share for our shares of common stock until 18 months after the completion of the last offering of our shares of common stock and prior to any listing of our shares on a national securities exchange, and therefore will not provide you with this information until that time. See “Risk Factors—Investment Risks—We will not calculate the net asset value per share for our shares of common stock until 18 months after completion of our offering stage.” Therefore, you will not be able to determine the true value of your shares of common stock on an on-going basis during this offering.”
Q:	Who can answer my questions?
A:	If you have additional questions about this offering or if you would like additional copies of this prospectus, you should contact your registered representative or our dealer manager:

TNP Securities, LLC
1900 Main Street
Suite 700
Irvine, California 92614
949-833-8252
Attn: Investor Services

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PROSPECTUS SUMMARY

This summary highlights selected information contained elsewhere in this prospectus. Because it is a summary, it may not contain all of the information that is important to you. To understand this offering fully, you should read the entire prospectus carefully, including the “Risk Factors” section, before making an investment decision. The use of the words “we,” “us” or “our” refers to TNP Strategic Retail Trust, Inc. and its subsidiaries, including TNP Strategic Retail Operating Partnership, LP, except where the context otherwise requires. References to “shares” and “our common stock” refer to the shares of common stock offered in this offering.

TNP Strategic Retail Trust, Inc.

We were formed as a Maryland corporation on September 17, 2008 to invest in and manage a portfolio of income-producing retail properties, primarily located in the Western United States, and to invest in or originate mortgage, mezzanine, bridge, and other loans related to commercial real estate. We may also invest in other real properties and real estate-related assets that meet our investment objectives.

We believe that we operate in such a manner as to qualify as a REIT for federal income tax purposes. Our office is located at 1900 Main Street, Suite 700, Irvine, California 92614, and our main telephone number is (949) 833-8252.

We commenced our initial public offering of $1,100,000,000 in shares of our common stock on August 7, 2009. As of March 31, 2010, we had received and accepted subscriptions in this offering for 898,587 shares of our common stock, or approximately $8,860,000, excluding shares issued under our distribution reinvestment plan, from approximately 326 stockholders. As of the date of this prospectus, our portfolio consists of a 94,574 square foot multi-tenant retail property located in Moreno, California, which we purchased for an aggregate purchase price of approximately $12,500,000, exclusive of closing costs. Our property is indirectly 100% owned by our operating partnership.

We are externally managed by TNP Strategic Retail Advisor, LLC, which we refer to as our “advisor.” Our advisor’s team of real estate professionals will have substantial discretion with respect to the selection of specific investments consistent with our investment objectives and strategy, subject to the approval of our board of directors. Our advisor’s senior management team has substantial experience in the real estate industry and has successfully completed approximately 200 fully subscribed private placements in real estate programs of multiple property types and six public programs with over 35,700 investors across the United States. These programs have raised nearly $3 billion and have invested over $7.6 billion in commercial real estate.

Our advisor is wholly owned by Thompson National Properties, LLC, a Delaware limited liability company founded in February 2008, which offers real estate investment and asset management services to high net worth domestic, foreign and institutional investors. We refer to Thompson National Properties, LLC as our “sponsor” or “Thompson National Properties.” Thompson National Properties contributed $200,000 to us in connection with our formation. Thompson National Properties is controlled by Anthony W. Thompson, our Chairman and Chief Executive Officer. Mr. Thompson has over 35 years of experience in portfolio management and was the founder of Triple Net Properties, LLC, or Triple Net, and its holding company, NNN Realty Advisors, Inc., or Realty Advisors, each of which combined with Grubb & Ellis Company (NYSE:GBE) in December 2007. As of March 31, 2010, Thompson National Properties has sponsored five real estate funds raising approximately $68.8 million from 747 investors. Additionally, Thompson National Properties has 128 commercial real estate properties under management with a cost in excess of $2.3 billion as of March 31, 2010.

Investment Strategy and Objectives

We will use the net proceeds from this offering to invest in a portfolio of income-producing retail properties, primarily located in the Western United States, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties. We may acquire properties either alone or jointly with another party. In addition to investments in real estate directly or

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through joint ventures, we may also acquire or originate first mortgages or second mortgages, mezzanine loans or other real estate-related loans, which we refer to collectively as “real estate-related loans,” in each case provided that the underlying real estate meets our criteria for direct investment. We may also invest in any other real property or other real estate-related assets that, in the opinion of our board of directors, meets our investment objectives and is in the best interests of our stockholders.

Our investment objectives are to:

•  preserve, protect and return stockholders’ capital contributions;

•  pay predictable and sustainable cash distributions to stockholders; and

•  realize capital appreciation upon the ultimate sale of the investments we acquire.

See “Investment Strategy, Objectives and Policies” for a more complete description of our investment objectives.

Summary of Risk Factors

An investment in shares of our common stock involves significant risks, including the following:

•  We have no prior operating history and there is no assurance that we will be able to successfully achieve our investment objectives.

•  No public trading market exists for our shares and we are not required to effectuate a liquidity event by a certain date. As a result, it will be difficult for you to sell your shares. If you are able to sell your shares, you will likely sell them at a substantial discount.

•  The amount of distributions we will make, if any, is uncertain. Our distributions may exceed our earnings, particularly during the period before we have substantially invested the net proceeds from this offering. Therefore, we may need to borrow funds, request that our advisor, in its discretion, defer its receipt of fees and reimbursement of expenses, or utilize offering proceeds to make cash distributions. As a result, portions of the distributions that we make may represent a return of capital to you, which will lower your tax basis in our shares.

•  We currently have one property in our real estate portfolio. As a result, this is considered a “blind pool” offering and you will not have the opportunity to evaluate our future investments prior to purchasing shares of our common stock.

•  This is a “best efforts” offering and if we are unable to raise substantial funds then we will be limited in the number and type of investments we may make. This is the first non-listed REIT offering sold by our dealer manager. Our ability to raise money and achieve our investment objectives depends on the ability of our dealer manager to successfully market this offering.

•  We rely on our advisor and its affiliates for our day-to-day operations and the selection of our investments. We will pay substantial fees to our advisor, which were not determined on an arm’s-length basis.

•  Our advisor and other affiliates will face conflicts of interest as a result of compensation arrangements, time constraints and competition for investments, including (1) conflicts related to compensation payable by us to our advisor and other affiliates that may not be on terms that would result from arm’s-length negotiations between unaffiliated parties, (2) the allocation of time between advising us and other real estate investment programs and (3) the recommendation of investments on our behalf when other affiliated programs are seeking similar investments.

•  We are the first publicly-offered investment program sponsored by our sponsor. You should not assume that the prior performance of programs managed or sponsored by our sponsor or its affiliates will be indicative of our future performance.

•  Our use of leverage increases the risk of loss on our investments.

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•  We will be subject to risks generally incident to the ownership of real property.

•  The recent economic downturn and disruption in the financial markets could have an adverse impact on our tenants’ ability to make rental payments and the demand for retail space, result in continued disruptions in the commercial mortgage market and adversely effect our ability to obtain financing on favorable terms, if at all.

•  If we fail to qualify as a REIT, it would adversely affect our operations and our ability to make distributions to our stockholders because we will be subject to U.S. federal income tax at regular corporate rates with no ability to deduct distributions made to our stockholders.

Our Board of Directors

We operate under the direction of our board of directors, the members of which are accountable to us and our stockholders as fiduciaries. The board of directors is responsible for the management and control of our affairs. We have five members on our board of directors, three of whom are independent of us, our advisor and our respective affiliates. Our directors will be elected annually by our stockholders. Our board of directors has established an investment committee and an audit committee.

Our Advisor

TNP Strategic Retail Advisor, LLC, our advisor, was formed as a Delaware limited liability company in September 2008. We will rely on our advisor to manage our day-to-day activities and to implement our investment strategy. In addition, our advisor will use its best efforts, subject to the oversight, review and approval of our board of directors, to, among other things, research, identify, review and make investments in and dispositions of our assets on our behalf consistent with our investment strategy and objectives.

Our advisor performs its duties and responsibilities as our fiduciary under an advisory agreement. The term of the advisory agreement ends August 7, 2010, subject to renewals by the board of directors for an unlimited number of successive one-year periods. Our officers and our affiliated directors are all officers of our advisor. The names and biographical information of our directors and officers are set forth under “Management—Directors and Executive Officers.”

Our Sponsor

Thompson National Properties, our sponsor and the parent company of our advisor, was formed as a Delaware limited liability company in February 2008. Thompson National Properties provides value-added real estate investment opportunities and asset management to high net worth domestic, foreign and institutional investors. Anthony W. Thompson is the chairman and chief executive officer of Thompson National Properties and us.

Our Operating Partnership

We intend to own all of our investments through TNP Strategic Retail Operating Partnership, LP, our operating partnership, or its subsidiaries. We refer to common limited partnership units in our operating partnership as “common units.” We are the sole general partner of our operating partnership, and the initial limited partners of our operating partnership are our advisor and TNP Strategic Retail OP Holdings, LLC, which we refer to as “TNP Strategic Retail OP Holdings,” a wholly-owned subsidiary of our sponsor. Our advisor has invested $1,000 in our operating partnership in exchange for common units and TNP Strategic Retail OP Holdings has invested $1,000 in our operating partnership and has been issued a separate class of limited partnership units, which we refer to as the “special units” and which are described below under “—Compensation to Our Advisor and its Affiliates.”

Our Affiliates

Various affiliates of ours are involved in this offering and our operations. TNP Securities, LLC, a registered broker-dealer and a member of the Financial Industry Regulatory Authority, or FINRA, is the dealer manager for this offering and will provide dealer manager services to us in this offering. We refer to TNP Securities, LLC as “TNP Securities” or “our dealer manager.” Messrs. Anthony W. Thompson and Jack R. Maurer serve as the

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Chief Executive Officer and the Chief Financial Officer, respectively, of our dealer manager. Our dealer manager is indirectly owned by Mr. Anthony W. Thompson. For more information regarding our officers and the officers of our advisor and dealer manager, see the “Management” section of this prospectus. Another affiliate, TNP Property Management, LLC, our property manager, will perform certain property management services for us and our operating partnership. We refer to our advisor, our property manager, and other of our affiliates, each as a “TNP affiliate” and collectively, as “TNP affiliates.”

Our Structure

The chart below shows the relationships among various TNP affiliates and our company. We are the sole general partner of our operating partnership and we and our advisor and its affiliates currently own, either directly or indirectly, all of the limited partnership units of our operating partnership. In the future, we may issue limited partnership units to third parties from time to time in connection with acquisitions of real estate properties.

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Terms of the Offering

We are offering up to $1,100,000,000 in shares of our common stock, $1,000,000,000 of which will be offered to the public in our primary offering at a price of $10.00 per share, and $100,000,000 of which will be offered pursuant to our distribution reinvestment plan at a price of $9.50 per share. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and our distribution reinvestment plan. This is a best efforts offering, which means our affiliate, TNP Securities, the dealer manager for this offering, will use its best efforts to sell our shares of common stock, but is not required to sell any specific amount of shares.

We will offer shares of our common stock on a continuous basis until this offering terminates on or before August 7, 2011, unless extended. However, in certain states the offering may continue only one year unless we renew the offering period for up to an additional year. We reserve the right to terminate this offering at any time. We generally intend to admit stockholders on a daily basis.

Compensation to Our Advisor and Affiliates

Our advisor and other affiliates will receive compensation and fees for services related to this offering and for the investment and management of our assets, subject to review and approval of our independent directors. In addition, TNP Strategic Retail OP Holdings, an affiliate of our advisor, has been issued special units in our operating partnership constituting a separate series of partnership interests with special distribution rights.

Set forth below is a summary of the fees and expenses we expect to pay our advisor and its affiliates, including our dealer manager, assuming we raise the maximum amount offered hereby. See “Management Compensation Table” for a more detailed explanation of the fees and expenses payable to our dealer manager and our advisor and its affiliates and for a more detailed description of the special units.

		Estimated Amount
Type of Fee and Recipient	Description and Method of Computation	Maximum Offering
Organizational and Offering Stage
Sales Commission— Dealer Manager	7.0% of gross offering proceeds from the sale of shares in the primary offering (all or a portion of which may be reallowed to participating broker-dealers). No sales commissions will be paid for sales pursuant to the distribution reinvestment plan.	$70,000,000
Dealer Manager Fee—Dealer Manager	3.0% of gross offering proceeds from the sale of shares in the primary offering (a portion of which may be reallowed to participating broker-dealers). No dealer manager fees will be paid for sales pursuant to the distribution reinvestment plan.	$30,000,000
Other Organizational and Offering Expense Reimbursement— Advisor or its affiliates	Reimbursement for organizational and offering expenses (excluding sales commissions and dealer manager fees) incurred on our behalf, but only to the extent that the reimbursement would not cause these organization and offering expenses borne by us to exceed 3.0% of the gross offering proceeds. We estimate that these organization and offering expenses will be 1.75% if the maximum offering proceeds from the primary offering is raised.	$17,500,000

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		Estimated Amount
Type of Fee and Recipient	Description and Method of Computation	Maximum Offering
Operational Stage
Acquisition Fees— Advisor	2.5% of (1) the cost of investments we acquire or (2) our allocable cost of investments acquired in a joint venture, in each case including purchase price, acquisition expenses and any debt attributable to such investments. With respect to investments in and origination of real estate-related loans, we will pay an origination fee to our advisor in lieu of an acquisition fee.	$24,562,500 (assuming no leverage is used). $49,125,000 (assuming a leverage ratio of 50%).
Origination Fees— Advisor	2.5% of the amount funded by us to acquire or originate real estate-related loans, including third party expenses related to such investments and any debt we use to fund the acquisition or origination of the real estate-related loans. We will not pay an acquisition fee with respect to such real estate-related loans.	$24,562,500 (assuming no leverage is used). $49,125,000 (assuming a leverage ratio of 50%).
Asset Management Fees—Advisor	A monthly amount equal to one-twelfth of 0.6% of the sum of the aggregate cost of all assets we own and of our investments in joint ventures, including acquisition fees, origination fees, acquisition and origination expenses and any debt attributable to such investments; provided, however, that our advisor will not be paid the asset management fee until our funds from operations exceed the lesser of (1) the cumulative amount of any distributions declared and payable to our stockholders or (2) an amount that is equal to a 10.0% cumulative, non-compounded, annual return on invested capital for our stockholders. Separate and distinct from the asset management fee, we will also reimburse our advisor or its affiliates for all expenses paid or incurred on our behalf, including the salaries and benefits of persons performing services for us except for the salaries and benefits of persons who also serve as one of our executive officers or as an executive officer of our advisor.	Actual amounts depend upon the aggregate cost of our investments, and, therefore, cannot be determined at this time.
Property Management and Leasing Fees—TNP Property Management, LLC	A monthly market-based fee for property management services of up to 5.0% of the gross revenues generated by our properties. Our property manager may subcontract with third party property managers and will be responsible for supervising and compensating those property managers.	Actual amounts depend upon the gross revenue of the properties and customary property management and leasing fees in the region in which properties are acquired, and, therefore, cannot be determined at this time.

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		Estimated Amount
Type of Fee and Recipient	Description and Method of Computation	Maximum Offering
Operating Expenses— Advisor	We will reimburse our advisor for all expenses paid or incurred by our advisor in connection with the services provided to us, including our allocable share of the advisor’s overhead, such as rent, personnel costs, utilities and IT costs. We will not reimburse our advisor for personnel costs in connection with services for which our advisor is entitled to acquisition, origination or disposition fees.	Actual amounts are dependent upon expenses paid or incurred and, therefore, cannot be determined at the present time.
Liquidity Stage
Disposition Fees— Advisor or its affiliates	If our advisor or its affiliates provides a substantial amount of services, as determined by our independent directors, in connection with the sale of real property, 50% of a customary and competitive real estate sales commission not to exceed 3.0% of the contract sales price of each property sold. With respect to a property held in a joint venture, the foregoing commission will be reduced to a percentage of such amount reflecting our economic interest in the joint venture.	Actual amounts depend upon the sale price of properties, and, therefore, cannot be determined at this time.
Special Units—TNP Strategic Retail OP Holdings	TNP Strategic Retail OP Holdings, an affiliate of our advisor, was issued special units upon its initial investment in our operating partnership, and as the holder of the special units will be entitled to receive (1) 15% of specified distributions made upon the disposition of our operating partnership’s assets, and (2) a one time payment, in the form of shares of our common stock or a promissory note, in conjunction with the redemption of the special units upon the occurrence of certain liquidity events or upon the occurrence of certain events that result in a termination or non-renewal of our advisory agreement, but in each case only after the other holders of our operating partnership’s units, including us, have received (or have been deemed to have received), in the aggregate, cumulative distributions equal to their capital contributions plus a 10.0% cumulative non-compounded annual pre-tax return on their net contributions. The holder of special units will not be entitled to receive any other distributions.	Actual amounts depend on the sale price of real estate assets, and, therefore, cannot be determined at this time.

Prior Investment Programs

The section of this prospectus entitled “Prior Performance Summary” contains a discussion of the real estate programs sponsored by Thompson National Properties and its affiliates. Certain financial data relating to these programs is also provided in the “Prior Performance Tables” in Appendix A to this prospectus. The “Prior Performance Summary” section also includes information regarding prior programs sponsored by Triple Net as of December 31, 2006. Anthony W. Thompson, our Chairman and Chief Executive Officer, served as Chairman and Chief Executive Officer of Triple Net from 1998 through 2006, and Jack R. Maurer, our Vice Chairman and President, served as Senior Vice President—Office of the Chairman of Triple Net during the same period. We are providing information on certain prior programs of Triple Net through December 31, 2006 in Appendix B to this prospectus. The information relating to the Triple Net prior programs has been obtained solely from public information filed with the SEC by Triple Net and its affiliates. We cannot verify

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the accuracy of such information relating to the Triple Net prior programs and such information is not indicative of results of the Triple Net prior programs after December 31, 2006. See “Prior Performance Summary—Prior Programs of Triple Net.” The prior performance of our affiliate’s previous real estate programs may not be indicative of our ultimate performance and, thus, you should not assume that you will experience financial performance and returns comparable to those experienced by investors in these prior programs. You may experience a small return or no return on, or may lose some or all of, your investment in our shares. Please see “Risk Factors—Investment Risks—We have no prior operating history and there is no assurance that we will be able to successfully achieve our investment objectives.”

Conflicts of Interest

Our advisor and certain of our other affiliates will experience conflicts of interest in connection with this offering and the management of our business affairs, including the following:

•  although our advisor does not currently manage other real estate programs, the directors, officers and key personnel of our advisor and our affiliated property manager must allocate their time between advising us and managing other real estate projects and business activities in which they may be involved, including five privately offered real estate programs sponsored by affiliates of our advisor, all of which have investment objectives generally similar to this offering;

•  the compensation payable by us to our advisor and other affiliates may not be on terms that would result from arm’s-length negotiations between unaffiliated parties, and fees such as the acquisition fees and asset management fees payable to our advisor and property management fees payable to our affiliated property manager are payable, in most cases, regardless of the quality of the assets acquired, the services provided to us or whether we make distributions to our stockholders;

•  although our sponsor and advisor have agreed generally to provide us with the first opportunity to acquire income-producing retail properties that meet our investment criteria for which we have sufficient uninvested funds, our sponsor and advisor will be required to make this determination in good faith and will be subject to certain conflicts of interest in recommending acquisitions on our behalf when other affiliated programs are also seeking investments;

•  our property manager is an affiliate of our advisor and, as a result, may benefit from our advisor’s determination to retain our assets while our stockholders may be better served by the sale or disposition of our assets; and

•  our dealer manager is an affiliate of ours and, as a result, you will 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 a securities offering.

Borrowing Policy

We intend to use secured and unsecured debt as a means of providing additional funds for the acquisition of our investments. Our targeted debt level is 50% of the fair market value of our assets. In order to facilitate investments in the early stages of our operations, we expect to temporarily borrow in excess of our long-term targeted debt level. Under our charter, we have a limitation on borrowing which precludes us from borrowing in excess of 300% of the value of our net assets. Net assets for purposes of this calculation are defined to be our total assets (other than intangibles), valued at cost prior to deducting depreciation, reserves for bad debts and other non-cash reserves, less total liabilities. The preceding calculation is generally expected to approximate 75% of the aggregate cost of our assets before non-cash reserves and depreciation. Our charter allows us to temporarily borrow in excess of these amounts if such excess is approved by a majority of the independent directors and disclosed to stockholders in our next quarterly report, along with justification for such excess. In such event, we will review our debt levels at that time and take action to reduce any such excess as soon as practicable. We do not intend to exceed our charter’s leverage limit except in the early stages of our operations when the costs of our investments are most likely to exceed our net offering proceeds. Our aggregate borrowings, secured and unsecured, will be reviewed by the board of directors at least quarterly.

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Distribution Policy

We believe that we operate in such a manner as to qualify as a REIT for federal income tax purposes. To qualify as a REIT, we are required to distribute 90% of our annual taxable income to our stockholders. Our board of directors has approved a monthly cash distribution of $0.05625 per share of common stock, which represents an annualized distribution of $0.675 per share. We accrue and make distributions on a monthly basis. We calculate each stockholder’s specific distribution amount for the month using daily record and declaration dates and your distributions will begin to accrue on the date we mail a confirmation of your subscription for shares of our common stock, subject to our acceptance of your subscription. If we do not have sufficient funds from operations to make distributions, we may need to borrow funds, request that our advisor, in its discretion, defer its receipt of fees and reimbursements of expenses or, to the extent necessary, utilize offering proceeds in order to make cash distributions. If the aggregate amount of cash distributions in any given year exceeds the amount of our “REIT taxable income” generated during the year, the excess amount will either be (1) a return on capital or (2) gain from the sale or exchange of property to the extent that a stockholder’s basis in our common stock equals or is reduced to zero as the result of our current or prior year distributions. For further information regarding the tax consequences in the event we make distributions other than from funds from operations, please see “Material U.S. Federal Income Tax Considerations—Taxation of Taxable U.S. Stockholders.”

Distribution Reinvestment Plan

You may participate in our distribution reinvestment plan and elect to have the cash distributions you receive reinvested in shares of our common stock at $9.50 per share. Our board of directors may terminate the distribution reinvestment plan at its discretion at any time upon 30 days notice to you. Following any termination of the distribution reinvestment plan, all subsequent distributions to stockholders will be made in cash.

Share Redemption Program

Our share redemption program may provide an opportunity for you to have your shares of common stock redeemed by us, subject to certain restrictions and limitations. The purchase price for shares repurchased under the share redemption program will be as set forth below until we begin obtaining appraisals of the value of our real estate and real estate-related assets. We expect to begin obtaining appraisals of the value of our real estate and real estate-related assets beginning 18 months after the date we complete our last public offering of common stock and prior to any listing of our shares on a national security exchange. We will retain persons independent of us and our advisor to prepare these appraisals.

Prior to obtaining appraisals of our real estate and real estate-related assets, the prices at which we will initially repurchase shares are as follows:

	Redemption Price as a
Share Purchase Anniversary	Percentage of Purchase Price
Less than 1 year	No Redemptions Allowed
1 year	92.5%
2 years	95.0%
3 years	97.5%
4 years and longer	100.0%

Unless shares are being redeemed in connection with a stockholders death or disability, there is a one-year holding period before stockholders can begin making redemption requests.

After we begin obtaining appraisals of our real estate and real estate-related assets, we will repurchase shares at the lesser of (1) 100% of the average price per share the original purchaser or purchasers of the shares paid to us, which we refer to as the “issue price,” (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock) or (2) 90% of the net asset value per share, as determined by the most recent appraisal.

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We are not obligated to redeem shares of our common stock under the share redemption program. The number of shares to be redeemed during any calendar year is limited to (1) 5.0% of the weighted average of the number of shares of our common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the distribution reinvestment plan in the prior calendar year plus such additional funds as may be reserved for that purpose by our board of directors; provided, however, that the above volume limitations and holding periods shall not apply to redemptions requested within two years after the death or disability of a stockholder.

The board of directors may, in its sole discretion, amend, suspend or terminate the share redemption program at any time if it determines that the funds available to fund the share redemption program are needed for other business or operational purposes or that amendment, suspension or termination of the share redemption program is in the best interest of our stockholders. The share redemption program will terminate if the shares of our common stock are listed on a national securities exchange.

Liquidity Strategy

Our board of directors does not anticipate evaluating a transaction providing liquidity for our stockholders until 2015. Our charter does not require our board of directors to pursue a liquidity event. Due to the uncertainties of market conditions in the future, we believe setting finite dates for possible, but uncertain, liquidity events may result in actions not necessarily in the best interests or within the expectations of our stockholders. We expect that our board of directors, in the exercise of its fiduciary duty to our stockholders, will determine to pursue a liquidity event when it believes that then-current market conditions are favorable for a liquidity event, and that such a transaction is in the best interests of our stockholders. A liquidity event could include (1) the sale of all or substantially all of our assets either on a portfolio basis or individually followed by a liquidation, in which the net proceeds are distributed to stockholders, (2) a merger or another transaction approved by our board of directors in which our stockholders will receive cash and/or shares of a publicly traded company or (3) a listing of our shares on a national securities exchange. There can be no assurance as to when a suitable transaction will be available.

Investment Company Act Considerations

We intend to conduct our operations so that neither we, nor our operating partnership nor the subsidiaries of our operating partnership are required to register as investment companies under the Investment Company Act of 1940, as amended, or the Investment Company Act.

Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test”. Excluded from the term “investment securities,” among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. Accordingly, under Section 3(a)(1) of the Investment Company Act, in relevant part, a company is not deemed to be an “investment company” if: (i) it neither is, nor holds itself out as being, engaged primarily, nor proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or (ii) it neither is engaged nor proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and does not own or propose to acquire “investment securities” having a value exceeding 40% of the value of its total assets on an unconsolidated basis. We believe that we, our operating partnership and most of the subsidiaries of our operating partnership will satisfy both of the above tests as we intend to invest primarily in real property, through our wholly or majority-owned subsidiaries, the majority of which we expect to have at least 60% of their assets in real property. As these subsidiaries would be investing either solely or primarily in real property, they would be outside of the definition of “investment company” under Section 3(a)(1) of the Investment

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Company Act. As we are organized as a holding company that conducts its businesses primarily through the operating partnership, which in turn is a holding company conducting its business through its subsidiaries, both we and our operating partnership intend to conduct our operations so that they comply with the 40% test. We will monitor our holdings to ensure continuing and ongoing compliance with this test.

The determination of whether an entity is a majority-owned subsidiary of ours or our operating partnership will be made by us. The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company which is a majority-owned subsidiary of such person. The Investment Company Act further defines voting securities as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. We intend to treat companies that we may establish and in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries for purposes of the 40% test. We have not requested the SEC to approve our treatment of any company as a majority-owned subsidiary and the SEC has not done so. If the SEC were to disagree with our treatment of one or more companies as majority-owned subsidiaries, we would need to adjust our strategy and our assets in order to continue to pass the 40% test. Any such adjustment in our strategy could have a material adverse effect on us.

Even if the value of investment securities held by our subsidiaries were to exceed 40%, we expect our subsidiaries to be able to qualify for an exemption from registration as an investment company under the Investment Company Act pursuant to Section 3(c)(5)(C) of the Investment Company Act, which is available for entities “primarily engaged in the business of purchasing or otherwise acquiring mortgages and other liens on and interests in real estate.” This exemption generally requires that at least 55% of our subsidiaries’ portfolios must be comprised of qualifying assets and at least another 25% of each of their portfolios must be comprised of real estate-related assets under the Investment Company Act (and no more than 20% comprised of miscellaneous assets). For purposes of the exclusions provided by Sections 3(c)(5)(C), we will classify our investments based on no-action letters issued by the SEC staff and other SEC interpretive guidance. Although we intend to monitor our portfolio periodically and prior to each investment acquisition, there can be no assurance that we will be able to maintain this exemption from registration for each of these subsidiaries.

In the event that we, or our operating partnership, were to acquire assets that could make either entity fall within the definition of investment company under Section 3(a)(1) of the Investment Company Act, we believe that we would still qualify for an exclusion from registration pursuant to Section 3(c)(6). Although the SEC staff has issued little interpretive guidance with respect to Section 3(c)(6), we believe that we and our operating partnership may rely on Section 3(c)(6) if 55% of the assets of our operating partnership consist of, and at least 55% of the income of our operating partnership is derived from, qualifying real estate investments owned by wholly owned or majority-owned subsidiaries of our operating partnership.

Qualification for exemption from registration under the Investment Company Act will limit our ability to make certain investments. To the extent that the SEC staff provides more specific guidance regarding any of the matters bearing upon such exclusions, we may be required to adjust our strategy accordingly. Any additional guidance from the SEC staff could provide additional flexibility to us, or it could further inhibit our ability to pursue the strategies we have chosen.

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RISK FACTORS

An investment in our common stock involves various risks and uncertainties. You should carefully consider the risks described below in conjunction with the other information contained in this prospectus before purchasing our common stock.

Investment Risks

We have no prior operating history and there is no assurance that we will be able to successfully achieve our investment objectives.

We have no prior operating history and may not be able to successfully operate our business or achieve our investment objectives. As a result, an investment in our shares of common stock may entail more risk than the shares of common stock of a real estate investment trust with a substantial operating history. In addition, you should not rely on the past performance of prior programs managed or sponsored by our sponsor or its affiliates to predict our future results. Our investment strategy and key employees differ from the investment strategies and key employees of these prior programs.

There is no public trading market for shares of our common stock and we are not required to effectuate a liquidity event by a certain date. As a result, it will be difficult for you to sell your shares of common stock and, if you are able to sell your shares, you are likely to sell them at a substantial discount.

There is no current public market for the shares of our common stock and we have no obligation to list our shares on any public securities market or provide any other type of liquidity to our stockholders. It will therefore be difficult for you to sell your shares of common stock promptly or at all. Even if you are able to sell your shares of common stock, the absence of a public market may cause the price received for any shares of our common stock sold to be less than what you paid or less than your proportionate value of the assets we own. We have adopted a share redemption program but it is limited in terms of the amount of shares that may be purchased each quarter. Additionally, our charter does not require that we consummate a transaction to provide liquidity to stockholders on any date certain or at all. As a result, you should purchase shares of our common stock only as a long-term investment, and you must be prepared to hold your shares for an indefinite length of time.

We currently have one property in our real estate portfolio. As a result, this is considered a “blind pool” offering, and you will not have the opportunity to evaluate our investments prior to purchasing shares of our common stock.

We currently have one property in our real estate portfolio. As a result, you will not be able to evaluate the economic merits, transaction terms or other financial or operational data concerning our future investments prior to purchasing shares of our common stock. You must rely on our advisor and our board of directors to implement our investment policies, to evaluate our investment opportunities and to structure the terms of our investments. Because investors are not able to evaluate our future investments in advance of purchasing shares of our common stock, this offering may entail more risk than other types of offerings. This additional risk may hinder your ability to achieve your own personal investment objectives related to portfolio diversification, risk-adjusted investment returns and other objectives.

You may be more likely to sustain a loss on your investment because our sponsor does not have as strong an economic incentive to avoid losses as does a sponsor who has made significant equity investments in its company.

Our sponsor has only invested $200,000 in us through the purchase of 22,222 shares of our common stock at $9.00 per share. Therefore, if we are successful in raising enough proceeds to be able to reimburse our sponsor for our significant organization and offering expenses, our sponsor will have little exposure to loss in the value of our shares. Without this exposure, our investors may be at a greater risk of loss because our sponsor may have less to lose from a decrease in the value of our shares as does a sponsor that makes more significant equity investments in its company.

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This is a “best efforts” offering and if we are unable to raise substantial funds, we will be limited in the number and type of investments we may make, which could negatively impact your investment.

This offering is being made on a “best efforts” basis, whereby the broker-dealers participating in the offering are only required to use their best efforts to sell shares of our common stock and have no firm commitment or obligation to purchase any of the shares of our common stock. If we are unable to raise substantial proceeds from this offering, we will make fewer investments, resulting in less diversification in terms of the number of investments owned, the geographic regions in which our real properties are located and the types of investments that we make. Further, it is likely that in our early stages of growth we may not be able to achieve portfolio diversification consistent with our longer-term investment objectives, increasing the likelihood that any single investment’s poor performance would materially affect our overall investment performance. Our inability to raise substantial funds would also increase our fixed operating expenses as a percentage of gross income. Each of these factors could have an adverse effect on our financial condition and ability to make distributions to our stockholders.

The information concerning the prior performance of programs sponsored by Triple Net, contained in this prospectus has been taken from, or is based upon, publicly available information and we cannot independently verify the accuracy of such information.

The information concerning the prior performance of programs sponsored by Triple Net contained in this prospectus has been taken from, or is based upon, public information of Triple Net and its affiliates filed with the SEC, which contains prior performance information through December 31, 2006. Although we do not have any information that would indicate such information is inaccurate or incomplete, we are unable to verify or assess the reliability, accuracy, or completeness of such information. It is possible such information contains inaccuracies or omissions, or was prepared using a methodology different from the methodology we used when compiling data regarding the prior performance of programs sponsored by our sponsor, Thompson National Properties.

Our ability to successfully conduct this offering is dependent, in part, on the ability of our dealer manager to successfully establish, operate and maintain a network of broker-dealers.

The dealer manager for this offering is TNP Securities. Other than serving as dealer manager for this offering, TNP Securities has no experience acting as a dealer manager for a public offering. The success of this offering, and correspondingly our ability to implement our business strategy, is dependent upon the ability of our dealer manager to establish and maintain a network of licensed securities brokers-dealers and other agents. If our dealer manager fails to perform, we may not be able to raise adequate proceeds through this offering to implement our investment strategy. If we are unsuccessful in implementing our investment strategy, you could lose all or a part of your investment.

Our cash distributions are not guaranteed, may fluctuate and may constitute a return of capital or taxable gain from the sale or exchange of property.

The actual amount and timing of distributions will be determined by our board of directors and typically will depend upon the amount of funds available for distribution, which will depend on items such as current and projected cash requirements and tax considerations. As a result, our distribution rate and payment frequency may vary from time to time. Our long-term strategy is to fund the payment of monthly distributions to our stockholders entirely from our funds from operations. However, during the early stages of our operations, we may need to borrow funds, request that our advisor, in its discretion, defer its receipt of fees and reimbursement of expenses or, to the extent necessary, utilize offering proceeds in order to make cash distributions. We have not established a limit on the amount of proceeds from these sources that may be used to fund distributions. Accordingly, the amount of distributions paid at any given time may not reflect current cash flow from operations. Distributions payable to stockholders may also include a return of capital, rather than a return on capital.

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In the event that we are unable to consistently fund monthly distributions to stockholders entirely from our funds from operations, the value of your shares upon the possible listing of our common stock, the sale of our assets or any other liquidity event may be reduced. Further, if the aggregate amount of cash distributed in any given year exceeds the amount of our “REIT taxable income” generated during the year, the excess amount will either be (1) a return of capital or (2) gain from the sale or exchange of property to the extent that a stockholder’s basis in our common stock equals or is reduced to zero as the result of our current or prior year distributions. For further information regarding the tax consequences in the event we make distributions other than from funds from operations, please see “Material U.S. Federal Income Tax Considerations—Taxation of Taxable U.S. Stockholders.” In addition, to the extent we make distributions to stockholders with sources other than funds from operations, the amount of cash that is distributed from such sources will limit the amount of investments that we can make, which will in turn negatively impact our ability to achieve our investment objectives and limit our ability to make future distributions. Subsequent investors may experience immediate dilution in their investment because a portion of our net assets may have been used to fund distributions instead of retained in our company and used to make investments.

We may suffer from delays in locating suitable investments, which could adversely affect the return on your investment.

Our ability to achieve our investment objectives and to make distributions to our stockholders is dependent upon the performance of our advisor in the acquisition of our investments and the determination of any financing arrangements as well as the performance of our property manager in the selection of tenants and the negotiation of leases. The current market for properties that meet our investment objectives is highly competitive, as is the leasing market for such properties. The more shares we sell in our public offering, the greater our challenge will be to invest all of the net offering proceeds on attractive terms. Except for the investments described in this prospectus, you will not have an opportunity to evaluate our investments or potential tenants. You must rely entirely on the oversight of our board of directors, the management ability of our advisor and the performance of the property manager. We cannot be sure that our advisor will be successful in obtaining suitable investments on financially attractive terms.

We could suffer from delays in locating suitable investments 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 programs sponsored by our sponsor and its affiliates, some of which have investment objectives and employ investment strategies that are similar to ours.

Additionally, as a public company, we are subject to the ongoing reporting requirements under the Securities Exchange Act of 1934, as amended, or 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 and acquisition of properties could adversely affect your returns. In addition, if we are unable to invest our offering proceeds in properties in a timely manner, we will hold the offering proceeds in an interest-bearing account, invest the proceeds in short-term investments or, ultimately, liquidate. In such an event, our ability to pay distributions to our stockholders and the returns to our stockholders would be adversely affected.

Investors who invest in us at the beginning of our public offering may realize a lower rate of return than later investors.

Because we have acquired only one property, there can be no assurances as to when we will begin to generate sufficient cash flow to fully fund the payment of distributions. As a result, investors who invest in us before we commence significant real estate operations and generate significant cash flow may realize a lower rate of return than later investors. We expect to have little cash flow from operations available for distribution

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until we make substantial investments. Therefore, until such time as we have sufficient cash flow from operations to fund fully the payment of distributions therefrom, some or all of our distributions will be paid from other sources, such as from the proceeds of the offering or future offerings, cash advances to us by our advisor, cash resulting from a waiver of fees by our advisor, and borrowings, including borrowings secured by our assets, in anticipation of future operating cash flow.

Investors who invest later in our public offering may realize a lower rate of return than investors who invest earlier in the offering to the extent we fund distributions out of sources other than operating cash flow.

To the extent we incur debt to fund distributions earlier in the offering, the amount of cash available for distributions in future periods will be decreased by the repayment of such debt. Similarly, if we use offering proceeds to fund distributions, later investors may experience immediate dilution in their investment because a portion of our net assets would have been used to fund distributions instead of being retained in our company and used to make real estate investments. Earlier investors will benefit from the investments made with funds raised later in the offering, while later investors may not share in all of the net offering proceeds raised from earlier investors.

We may have to make decisions on whether to invest in certain properties, without detailed information on the property.

To effectively compete for the acquisition of properties and other investments, our advisor and board of directors may be required to make decisions or post substantial non-refundable deposits prior to the completion of our analysis and due diligence on property acquisitions. In such cases, the information available to our advisor and board of directors at the time of making any particular investment decision, including the decision to pay any non-refundable deposit and the decision to consummate any particular acquisition, may be limited, and our advisor and board of directors may not have access to detailed information regarding any particular investment property, such as physical characteristics, environmental matters, zoning regulations or other local conditions affecting the investment property. Therefore, no assurance can be given that our advisor and board of directors will have knowledge of all circumstances that may adversely affect an investment. In addition, our advisor and board of directors expect to rely upon independent consultants in connection with their evaluation of proposed investment properties, and no assurance can be given as to the accuracy or completeness of the information provided by such independent consultants.

Our board of directors does not anticipate evaluating a transaction providing liquidity for our stockholders until 2015. There can be no assurance that we will effect a liquidity event within such time or at all. If we do not effect a liquidity event, it will be very difficult for you to have liquidity for your investment in shares of our common stock.

In the future, our board of directors will consider various forms of liquidity events, including, but not limited to, (1) the sale of all or substantially all of our assets for cash or other consideration, (2) our sale or merger in a transaction that provides our stockholders with cash and/or shares of a publicly traded company and (3) the listing of our common stock on a national securities exchange. Our board of directors does not anticipate evaluating a transaction providing liquidity for our stockholders until 2015. There can be no assurance that we will cause a liquidity event to occur at such time or at all. If we do not effect a liquidity event, it will be very difficult for you to have liquidity for your investment in shares of our common stock other than limited liquidity through our share redemption program. See “Investment Strategy, Objectives and Policies—Liquidity Strategy.”

Payment of fees to our advisor and its affiliates reduces cash available for investment, which may result in our stockholders not receiving a full return of their invested capital.

Because a portion of the offering price from the sale of our shares will be used to pay expenses and fees, the full offering price paid by stockholders will not be invested in real properties and other real estate-related assets. As a result, stockholders will only receive a full return of their invested capital if we either (1) sell our

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assets or our company for a sufficient amount in excess of the original purchase price of our assets or (2) the market value of our company after we list our shares of common stock on a national securities exchange is substantially in excess of the original purchase price of our assets.

If we internalize our management functions, your interest in us could be diluted and we could incur other significant costs associated with being self-managed.

Our board of directors may decide in the future to internalize our management functions. If we do so, we may elect to negotiate to acquire our advisor’s assets and personnel. At this time, we cannot anticipate the form or amount of consideration or other terms relating to any such acquisition. Such consideration could take many forms, including cash payments, promissory notes and shares of our common stock. The payment of such consideration could result in dilution of your interests as a stockholder and could reduce the earnings per share and funds from operations per share attributable to your investment.

Additionally, while we would no longer bear the costs of the various fees and expenses we expect to pay to our advisor under the advisory agreement, our direct expenses would include general and administrative costs, including legal, accounting and other expenses related to corporate governance, SEC reporting and compliance. We would also be required to employ personnel and would be subject to potential liabilities commonly faced by employers, such as workers disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances as well as incur the compensation and benefits costs of our officers and other employees and consultants that will be paid by our advisor or its affiliates. We may issue equity awards to officers, employees and consultants, which awards would decrease net income and funds from operations and may further dilute your investment. We cannot reasonably estimate the amount of fees to our advisor we would save or the costs we would incur if we became self-managed. If the expenses we assume as a result of an internalization are higher than the expenses we avoid paying to our advisor, our earnings per share and funds from operations per share would be lower as a result of the internalization than it otherwise would have been, potentially decreasing the amount of funds available to distribute to our stockholders and the value of our shares.

Internalization transactions involving the acquisition of advisors or property managers affiliated with entity sponsors have also, in some cases, been the subject of litigation. Even if these claims are without merit, we could be forced to spend significant amounts of money defending claims which would reduce the amount of funds available for us to invest in properties or other investments to pay distributions.

If we internalize our management functions, we could have difficulty integrating these functions as a stand-alone entity. Currently, our advisor and its affiliates perform asset management and general and administrative functions, including accounting and financial reporting, for multiple entities. These personnel have substantial know-how and experience which provides us with economies of scale. We may fail to properly identify the appropriate mix of personnel and capital needs to operate as a stand-alone entity. An inability to manage an internalization transaction effectively could thus result in our incurring excess costs and suffering deficiencies in our disclosure controls and procedures or our internal control over financial reporting. Such deficiencies could cause us to incur additional costs, and our management’s attention could be diverted from most effectively managing our real properties and other real estate-related assets.

You are limited in your ability to sell your shares of common stock pursuant to our share redemption program. You may not be able to sell any of your shares of our common stock back to us, and if you do sell your shares, you may not receive the price you paid upon subscription.

Our share redemption program may provide you with an opportunity to have your shares of common stock redeemed by us. We anticipate that shares of our common stock may be redeemed on a quarterly basis. However, our share redemption program contains certain restrictions and limitations, including those relating to the number of shares of our common stock that we can redeem at any given time and limiting the redemption price. Specifically, we presently intend to limit the number of shares to be redeemed during any calendar year to no more than (1) 5.0% of the weighted average of the number of shares of our common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the

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sale of shares under the distribution reinvestment plan in the prior calendar year plus such additional funds as may be borrowed or reserved for that purpose by our board of directors. In addition, our board of directors reserves the right to reject any redemption request for any reason or no reason or to amend or terminate the share redemption program at any time. Therefore, you may not have the opportunity to make a redemption request prior to a potential termination of the share redemption program and you may not be able to sell any of your shares of common stock back to us pursuant to our share redemption program. Moreover, if you do sell your shares of common stock back to us pursuant to the share redemption program, you may not receive the same price you paid for any shares of our common stock being redeemed. See “Description of Capital Stock—Share Redemption Program.”

Payments to the holder of the special units may reduce cash available for distribution to our stockholders and the value of our shares of common stock upon consummation of a liquidity event.

As the holder of the special units of our operating partnership, TNP Strategic Retail OP Holdings may be entitled to receive a cash payment upon dispositions of our operating partnership’s assets and a promissory note, cash or shares of our common stock upon the occurrence of specified events, including, among other events, a listing of our shares on an exchange or the termination or non-renewal of the advisory agreement. Payments to the holder of the special units upon dispositions of our operating partnership’s assets and redemptions of the special units may reduce cash available for distribution to our stockholders and the value of shares of our common stock upon consummation of a liquidity event.

This is a fixed price offering. We established the fixed offering price of our shares on an arbitrary basis and it may not accurately represent the current value of our assets at any particular time. Therefore, the purchase price you paid for shares of our common stock may be higher than the value of our assets per share of our common stock at the time of your purchase.

This is a fixed price offering, which means that the offering price for shares of our common stock is fixed and will not vary based on the underlying value of our assets at any time. Our board of directors arbitrarily determined the offering price in its sole discretion. The fixed offering price for shares of our common stock has not been based on appraisals of any assets we may own nor do we intend to obtain such appraisals. Therefore, the fixed offering price established for shares of our common stock may not accurately represent the current value of our assets per share of our common stock at any particular time and may be higher or lower than the actual value of our assets per share at such time.

We will not calculate the net asset value per share for our shares of common stock until 18 months after completion of our offering stage. Therefore, you will not be able to determine the true value of your shares on an on-going basis during this offering.

We do not intend to calculate the net asset value per share of common stock for our shares during our offering, and therefore, you will not be able to determine the true value of your shares on an on-going basis. Beginning 18 months after the completion of the last offering of our shares and prior to any listing of our shares on a national securities exchange, which we refer to as our offering stage, our board of directors will determine the value of our shares of common stock based on independent valuations of our properties and other assets.

Risks Related To Our Business

Our success is dependent on the performance of our sponsor and its affiliates.

Our ability to achieve our investment objectives and to pay distributions is dependent upon the performance of our advisor, our sponsor and its affiliates. Our sponsor and affiliates are sensitive to trends in the general economy, as well as the commercial real estate and credit markets. The recent macroeconomic downturn and accompanying credit crisis has negatively impacted the value of commercial real estate assets, contributing to a general slow down in the real estate industry, which we anticipate will continue through 2010. A continued economic slowdown could have an adverse impact on our sponsor and its affiliates and could impact certain prior real estate programs sponsored by our sponsor. To the extent that any decline in

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revenues and operating results impacts the performance of our advisor, sponsor or its affiliates, our results of operations, financial condition and ability to pay distributions to our stockholders could also suffer.

Additionally, as a recently formed company, our sponsor does not have the financial resources other more established sponsors may have available. Our sponsor does not currently have a substantial net worth and is operating at a net loss. To the extent that our sponsor’s financial condition deteriorates, it may adversely impact our advisor’s ability to perform its duties to us pursuant to the advisory agreement which could have an adverse effect on our operations and cause the value of your investment to decrease. Moreover, such adverse conditions could require a substantial amount of time on the part of our advisor and its affiliates, thereby decreasing the amount of time they spend actively managing our investments.

If we are delayed or unable to find suitable investments, we may not be able to achieve our investment objectives.

Delays in selecting, acquiring and developing real properties could adversely affect investor returns. Because we are conducting this offering on a “best efforts” basis over time, our ability to commit to purchase specific assets will depend, in part, on the amount of proceeds we have received at a given time. As of the date of this prospectus, we have acquired only one real estate asset with the proceeds of this offering. If we are unable to access sufficient capital, we may suffer from delays in deploying the capital into suitable investments.

Recent events in U.S. financial markets have had, and may continue to have, a negative impact on the terms and availability of credit in the United States and the state of the national economy generally which could have an adverse effect on our business and our results of operations.

The recent failure of large U.S. financial institutions and the resulting turmoil in the United States financial sector has had, and will likely continue to have, a negative impact on the terms and availability of credit and the state of the economy generally within the United States. The tightening of the U.S. credit markets has resulted in fears of a lack of adequate credit and a further economic downturn. Some lenders are imposing more stringent restrictions on the terms of credit and there may be a general reduction in the amount of credit available in the markets in which we conduct business. The negative impact of the tightening of the credit markets may result in an inability to finance the acquisition of real properties and other real estate-related assets on favorable terms, if at all, increased financing costs or financing with increasingly restrictive covenants.

Additionally, decreasing home prices and increasing mortgage defaults have resulted in uncertainty in the real estate and real estate securities and debt markets. As a result, the valuation of real estate-related assets has been volatile and is likely to continue to be volatile in the future. The volatility in markets may make it more difficult for us to obtain adequate financing or realize gains on our investments which could have an adverse effect on our business and our results of operations.

We are uncertain of our sources for funding our future capital needs. If we cannot obtain debt or equity financing on acceptable terms, our ability to acquire real properties or other real estate-related assets and to expand our operations will be adversely affected.

The net proceeds from this offering will be used for investments in real properties and other real estate-related assets, for payment of operating expenses and for payment of various fees and expenses such as acquisition fees and asset management fees. We do not intend to establish a general working capital reserve out of the proceeds from this offering during the initial stages of the offering. Accordingly, in the event that we develop a need for additional capital in the future for investments, the improvement of our real properties or for any other reason, sources of funding may not be available to us. If we cannot establish reserves out of cash flow generated by our investments or out of net sale proceeds in non-liquidating sale transactions, or obtain debt or equity financing on acceptable terms, our ability to acquire real properties and other real estate-related assets and to expand our operations will be adversely affected. As a result, we would be less likely to achieve portfolio diversification and our investment objectives, which may negatively impact our results of operations and reduce our ability to make distributions to our stockholders.

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Risks Relating to Our Organizational Structure

Maryland law and our organizational documents limit your right to bring claims against our officers and directors.

Maryland law provides that a director will not have any liability as a director so long as he or she performs his or her duties in accordance with the applicable standard of conduct. In addition, our charter provides that, subject to the applicable limitations set forth therein or under Maryland law, no director or officer will be liable to us or our stockholders for monetary damages. Our charter also provides that we will generally indemnify our directors, our officers, our advisor and its affiliates for losses they may incur by reason of their service in those capacities unless their act or omission was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, they actually received an improper personal benefit in money, property or services or, in the case of any criminal proceeding, they had reasonable cause to believe the act or omission was unlawful. Moreover, we intend to enter into separate indemnification agreements with each of our directors and executive officers. As a result, we and our stockholders may have more limited rights against these persons than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by these persons in some cases. However, our charter does provide that we may not indemnify our directors, our advisor and its affiliates for loss or liability suffered by them or hold our directors or our advisor and its affiliates harmless for loss or liability suffered by us unless they have determined that the course of conduct that caused the loss or liability was in our best interests, they were acting on our behalf or performing services for us, the liability was not the result of negligence or misconduct by our non-independent directors, our advisor and its affiliates or gross negligence or willful misconduct by our independent directors, and the indemnification or agreement to hold harmless is recoverable only out of our net assets, including the proceeds of insurance, and not from the stockholders. See “Management—Limited Liability and Indemnification of Directors, Officers and Others.”

The limit on the percentage of shares of our common stock that any person may own may discourage a takeover or business combination that may benefit our stockholders.

Our charter restricts the direct or indirect ownership by one person or entity to no more than 9.8% of the value of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) and no more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock unless exempted by our board of directors. This restriction may discourage a change of control of us and may deter individuals or entities from making tender offers for shares of our common stock on terms that might be financially attractive to stockholders or which may cause a change in our management. In addition to deterring potential transactions that may be favorable to our stockholders, these provisions may also decrease your ability to sell your shares of our common stock. See “Description of Capital Stock—Restriction on Ownership of Shares of Capital Stock.”

We may issue preferred stock or other classes of common stock, which issuance could adversely affect the holders of our common stock issued pursuant to this offering.

Investors in this offering do not have preemptive rights to any shares issued by us in the future. We may issue, without stockholder approval, preferred stock or other classes of common stock with rights that could dilute the value of your shares of common stock. However, the issuance of preferred stock must also be approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel. The issuance of preferred stock or other classes of common stock would increase the number of stockholders entitled to distributions without simultaneously increasing the size of our asset base. Our charter authorizes us to issue 450,000,000 shares of capital stock, of which 400,000,000 shares of capital stock are designated as common stock and 50,000,000 shares of capital stock are designated as preferred stock. Our board of directors may amend our charter to increase the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series without stockholder approval. If we ever created and issued preferred stock with a distribution preference over common stock, payment of any distribution preferences of outstanding preferred stock would reduce the amount of funds available for the payment of distributions on

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our common stock. Further, holders of preferred stock are normally entitled to receive a preference payment in the event we liquidate, dissolve or wind up before any payment is made to our common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of preferred stock or a separate class or series of common stock may render more difficult or tend to discourage:

•  a merger, tender offer or proxy contest;

•  the assumption of control by a holder of a large block of our securities; and

•  the removal of incumbent management.

See “Description of Capital Stock—Preferred Stock.”

Our UPREIT structure may result in potential conflicts of interest with limited partners in our operating partnership whose interests may not be aligned with those of our stockholders.

Limited partners in our operating partnership have the right to vote on certain amendments to the operating partnership agreement, as well as on certain other matters. Persons holding such voting rights may exercise them in a manner that conflicts with the interests of our stockholders. As general partner of our operating partnership, we are obligated to act in a manner that is in the best interest of all partners of our operating partnership. Circumstances may arise in the future when the interests of limited partners in our operating partnership may conflict with the interests of our stockholders. These conflicts may be resolved in a manner stockholders do not believe are in their best interest.

In addition, TNP Strategic Retail OP Holdings, the holder of special units in our operating partnership, may be entitled to (1) certain cash payments, as described in the “Management Compensation Table,” upon the disposition of certain of our operating partnership’s assets or (2) a one time payment in the form of cash, a promissory note or shares of our common stock in conjunction with the redemption of the special units upon the occurrence of a listing of our shares on a national stock exchange or certain events that result in the termination or non-renewal of our advisory agreement. This potential obligation to make substantial payments to the holder of the special units may reduce our cash available for distribution to stockholders and limit the amount that stockholders will receive upon the consummation of a liquidity event.

Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we subject to registration under the Investment Company Act, we will not be able to continue our business.

Neither we, nor our operating partnership, nor any of our subsidiaries intend to register as an investment company under the Investment Company Act. Currently, neither we, nor our operating partnership, nor any of our subsidiaries have any assets, and our operating partnership’s and subsidiaries’ intended investments in real estate will represent the substantial majority of our total asset mix, which would not subject us to the Investment Company Act. In order for us not to be subject to regulation under the Investment Company Act, we intend to engage, through our operating partnership and subsidiaries, primarily in the business of buying real estate, and these investments must be made within a year after this offering ends. If we are unable to invest a significant portion of the proceeds of this offering in properties within one year of the termination of this offering, we may avoid being required to register as an investment company by temporarily investing any unused proceeds in government securities with low returns, which would reduce the cash available for distribution to investors and possibly lower your returns.

We expect that most of our assets will be held through wholly owned or majority-owned subsidiaries of our operating partnership. We expect that most of these subsidiaries will be outside the definition of investment company under Section 3(a)(1) of the Investment Company Act as they are generally expected to hold at least 60% of their assets in real property. Section 3(a)(1)(A) of the Investment Company Act defines an investment company as any issuer that is or holds itself out as being engaged primarily in the business of investing, reinvesting or trading in securities. Section 3(a)(1)(C) of the Investment Company Act defines an investment company as any issuer that is engaged or proposes to engage in the business of investing,

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reinvesting, owning, holding or trading in securities and owns or proposes to acquire investment securities having a value exceeding 40% of the value of the issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis, which we refer to as the “40% test.” Excluded from the term “investment securities,” among other things, are U.S. government securities and securities issued by majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company set forth in Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act. We also expect that we and our operating partnership, as holding companies that conduct their businesses through our subsidiaries, will not meet the definition of an investment company under Section 3(a)(1) of the Investment Company Act.

In the event that the value of investment securities held by the subsidiaries of our operating partnership were to exceed 40%, we expect our subsidiaries to be able to rely on the exclusion from the definition of “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires each of our subsidiaries relying on this exception to invest at least 55% of its portfolio in “mortgage and other liens on and interests in real estate,” which we refer to as “qualifying real estate investments” and maintain an additional 25% of its assets in qualifying real estate investments or other real estate-related assets, or the 25% basket. The remaining 20% of the portfolio can consist of miscellaneous assets. What we buy and sell is therefore limited to these criteria. How we determine to classify our assets for purposes of the Investment Company Act will be based in large measure upon no-action letters issued by the SEC staff in the past and other SEC interpretive guidance. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than ten years ago. Pursuant to this guidance, and depending on the characteristics of the specific investments, certain mortgage loans, participations in mortgage loans, mortgage-backed securities, mezzanine loans, joint venture investments and the equity securities of other entities may not constitute qualifying real estate investments and therefore investments in these types of assets may be limited. No assurance can be given that the SEC will concur with our classification of our assets. Future revisions to the Investment Company Act or further guidance from the SEC may cause us to lose our exclusion from registration or force us to re-evaluate our portfolio and our investment strategy. Such changes may prevent us from operating our business successfully.

In the event that we, or our operating partnership, were to acquire assets that could make either entity fall within the definition of investment company under Section 3(a)(1) of the Investment Company Act, we believe that we would still qualify for an exclusion from registration pursuant to Section 3(c)(6). Although the SEC staff has issued little interpretive guidance with respect to Section 3(c)(6), we believe that we and our operating partnership may rely on Section 3(c)(6) if 55% of the assets of our operating partnership consist of, and at least 55% of the income of our operating partnership is derived from, qualifying real estate investments owned by wholly owned or majority-owned subsidiaries of our operating partnership.

To ensure that neither we, nor our operating partnership nor subsidiaries are required to register as an investment company, each entity may be unable to sell assets they would otherwise want to sell and may need to sell assets they would otherwise wish to retain. In addition, we, our operating company or our subsidiaries may be required to acquire additional income- or loss-generating assets that we might not otherwise acquire or forego opportunities to acquire interests in companies that we would otherwise want to acquire. Although we, our operating partnership and our subsidiaries intend to monitor our portfolio periodically and prior to each acquisition, any of these entities may not be able to maintain an exclusion from registration as an investment company. If we, our operating partnership or our subsidiaries are required to register as an investment company but fail to do so, the unregistered entity would be prohibited from engaging in our business, and criminal and civil actions could be brought against such entity. In addition, the contracts of such entity would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of the entity and liquidate its business.

For more information on issues related to compliance with the Investment Company Act, see “Investment Strategy, Objectives and Policies—Investment Company Act Considerations.”

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Risks Related To Conflicts of Interest

You will not have the benefit of an independent due diligence review in connection with this offering.

Because TNP Securities, LLC, our dealer manager, is an affiliate of ours, investors will 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 a securities offering. The lack of an independent due diligence review and investigation increases the risk of your investment because it may not have uncovered facts that would be important to a potential investor.

We depend on our advisor and its key personnel and if any of such key personnel were to cease to be affiliated with our advisor, our business could suffer.

Our ability to make distributions and achieve our investment objectives is dependent upon the performance of our advisor in the acquisition, disposition and management of real properties and other real estate-related assets, the selection of tenants for our real properties and the determination of any financing arrangements. In addition, our success depends to a significant degree upon the continued contributions of certain of the key personnel of Thompson National Properties, our sponsor, including Anthony W. Thompson, Jack R. Maurer and Wendy J. Worcester, each of whom would be difficult to replace. We currently do not have key man life insurance on Jack R. Maurer or Wendy J. Worcester. If our advisor were to lose the benefit of the experience, efforts and abilities of one or more of these individuals, our operating results could suffer.

We may compete with other TNP affiliates for opportunities to acquire or sell investments, which may have an adverse impact on our operations.

We may compete with other TNP affiliates for opportunities to acquire or sell real properties and other real estate-related assets. We may also buy or sell real properties and other real estate-related assets at the same time as other TNP affiliates. In this regard, there is a risk that our advisor will select for us investments that provide lower returns to us than investments purchased by another TNP affiliate. Certain of our affiliates own or manage real properties in geographical areas in which we expect to own real properties. As a result of our potential competition with other TNP affiliates, certain investment opportunities that would otherwise be available to us may not in fact be available. This competition may also result in conflicts of interest that are not resolved in our favor.

The time and resources that our advisor and some of its affiliates, including our officers and directors, devote to us may be diverted, and we may face additional competition due to the fact that TNP affiliates are not prohibited from raising money for, or managing, another entity that makes the same types of investments that we target.

Our advisor and some of its affiliates, including our officers and directors, are not prohibited from raising money for, or managing, another investment entity that makes the same types of investments as those we target. For example, our advisor’s management currently manages five privately offered real estate programs sponsored by affiliates of our advisor. As a result, the time and resources they could devote to us may be diverted. In addition, we may compete with any such investment entity for the same investors and investment opportunities. We may also co-invest with any such investment entity. Even though all such co-investments will be subject to approval by our independent directors, they could be on terms not as favorable to us as those we could achieve co-investing with a third party. See “Conflicts of Interest.”

Our advisor and its affiliates, including our officers and some of our directors, will face conflicts of interest caused by compensation arrangements with us and other TNP affiliates, which could result in actions that are not in the best interests of our stockholders.

Our advisor and its affiliates will receive substantial fees from us in return for their services and these fees could influence the advice provided to us. Among other matters, the compensation arrangements could affect their judgment with respect to:

•  public offerings of equity by us, which allow our dealer manager to earn additional dealer manager fees and our advisor to earn increased acquisition fees and asset management fees;

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•  real property sales, since the asset management fees payable to our advisor will decrease; and

•  the purchase of assets from other TNP affiliates, which may allow our advisor or its affiliates to earn additional asset management fees and property management fees.

Further, our advisor may recommend that we invest in a particular asset or pay a higher purchase price for the asset than it would otherwise recommend if it did not receive an acquisition fee. Certain potential acquisition fees and asset management fees payable to our advisor and property management fees payable to the property manager would be paid irrespective of the quality of the underlying real estate or property management services during the term of the related agreement. These fees may influence our advisor to recommend transactions with respect to the sale of a property or properties that may not be in our best interest at the time. Investments with higher net operating income growth potential are generally riskier or more speculative. In addition, the premature sale of an asset may add concentration risk to the portfolio or may be at a price lower than if we held on to the asset. Moreover, our advisor will have considerable discretion with respect to the terms and timing of acquisition, disposition and leasing transactions. In evaluating investments and other management strategies, the opportunity to earn these fees may lead our advisor to place undue emphasis on criteria relating to its compensation at the expense of other criteria, such as the preservation of capital, to achieve higher short-term compensation. Considerations relating to our affiliates’ compensation from us and other TNP affiliates could result in decisions that are not in the best interests of our stockholders, which could hurt our ability to pay you distributions or result in a decline in the value of your investment. See ”Conflicts of Interest—Fees and Other Compensation to Our Advisor and its Affiliates.”

The conflicts of interest faced by our officers may cause us not to be managed solely in the best interests of our stockholders, which may adversely affect our results of operations and the value of your investment.

Some of our officers are officers and employees of our sponsor, our advisor and other affiliated entities which receive fees in connection with this offering and our operations. Anthony W. Thompson is our Chairman of the Board and Chief Executive Officer and also serves as the Chief Executive Officer of Thompson National Properties. Mr. Thompson controls our sponsor and indirectly controls our advisor and dealer manager. Jack R. Maurer is our Vice Chairman of the Board and President and also serves as the Vice Chairman Partner of Thompson National Properties. Wendy J. Worcester is our Chief Financial Officer, Treasurer and Secretary and also serves as the Chief Administrative Officer of Thompson National Properties and the Chief Financial Officer, Treasurer and Secretary of our advisor. Certain of our officers also own an economic interest in TNP SRT Management, LLC, which owns a 25% interest in our advisor. The ownership interest in our advisor and sponsor by certain of our officers may create conflicts of interest and cause us not to be managed solely in the best interests of our stockholders.

Our advisor may have conflicting fiduciary obligations if we acquire assets from its affiliates or enter into joint ventures with its affiliates. As a result, in any such transaction we may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

Our advisor may cause us to invest in a property owned by, or make an investment in equity securities in or real estate-related loans to, one of its affiliates or through a joint venture with its affiliates. In these circumstances, our advisor will have a conflict of interest when fulfilling its fiduciary obligation to us. In any such transaction, we would not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

The fees we pay to affiliates in connection with this offering and in connection with the acquisition and management of our investments were not determined on an arm’s-length basis; therefore, we do not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

The fees to be paid to our advisor, our property manager, our dealer manager and other affiliates for services they provide for us were not determined on an arm’s-length basis. As a result, the fees have been

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determined without the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties and may be in excess of amounts that we would otherwise pay to third parties for such services.

We may purchase real property and other real estate-related assets from third parties who have existing or previous business relationships with affiliates of our advisor, and, as a result, in any such transaction, we may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

We may purchase real property and other real estate-related assets from third parties that have existing or previous business relationships with affiliates of our advisor. The officers, directors or employees of our advisor and its affiliates and the principals of our advisor who also perform services for other TNP affiliates may have a conflict in representing our interests in these transactions on the one hand and the interests of such affiliates in preserving or furthering their respective relationships on the other hand. In any such transaction, we will not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties, and the purchase price or fees paid by us may be in excess of amounts that we would otherwise pay to third parties.

Risks Related To Investments In Real Estate Generally

Changes in national, regional or local economic, demographic or real estate market conditions may adversely affect our results of operations and returns to our stockholders.

We will be subject to risks incident to the ownership of real estate assets including changes in national, regional or local economic, demographic or real estate market conditions. We will be subject to risks generally attributable to the ownership of real estate assets, including: changes in national, regional or local economic, demographic or real estate market conditions; changes in supply of or demand for similar properties in an area; increased competition for real estate assets targeted by our investment strategy; bankruptcies, financial difficulties or lease defaults by our tenants; changes in interest rates and availability of financing; and changes in government rules, regulations and fiscal policies, including changes in tax, real estate, environmental and zoning laws.

We are unable to predict future changes in national, regional or local economic, demographic or real estate market conditions. For example, a recession or rise in interest rates could make it more difficult for us to lease real properties or dispose of them. In addition, rising interest rates could also make alternative interest-bearing and other investments more attractive and therefore potentially lower the relative value of the real estate assets we acquire. These conditions, or others we cannot predict, may adversely affect our results of operations and returns to our stockholders.

Changes in supply of or demand for similar real properties in a particular area may increase the price of real properties we seek to purchase and decrease the price of real properties when we seek to sell them.

The real estate industry is subject to market forces. We are unable to predict certain market changes including changes in supply of, or demand for, similar real properties in a particular area. Any potential purchase of an overpriced asset could decrease our rate of return on these investments and result in lower operating results and overall returns to our stockholders.

Our operating expenses may increase in the future and, to the extent such increases cannot be passed on to tenants, our cash flow and our operating results would decrease.

Operating expenses, such as expenses for fuel, utilities, labor and insurance, are not fixed and may increase in the future. There is no guarantee that we will be able to pass such increases on to our tenants. To the extent such increases cannot be passed on to tenants, any such increase would cause our cash flow and our operating results to decrease.

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Increasing vacancy rates for certain classes of real estate assets resulting from the recent economic downturn and disruption in the financial markets could adversely affect the value of assets we acquire.

We will depend upon tenants for a majority of our revenue from real property investments. The recent economic downturn and disruption in the financial markets have resulted in a trend toward increasing vacancy rates for certain classes of commercial property, particularly in large metropolitan areas, due to increased tenant delinquencies and/or defaults under leases, generally lower demand for rentable space and potential oversupply of rentable space. Business failures and downsizings have led to reduced consumer demand for retail products and services and reduced demand for retail space. Reduced demand for retail properties could require us to grant rent concessions, make tenant improvement expenditures or reduce rental rates to maintain occupancies beyond those anticipated at the time we acquire a property. The continuation of the economic downturn could impact certain of the real estate assets we may acquire and such real estate assets could experience higher levels of vacancy than anticipated at the time of our acquisition of such real estate assets. The value of our real estate assets could decrease below the amounts we paid for them. Revenues from properties could decrease due to lower occupancy rates, reduced rental rates and potential increases in uncollectible rent. Additionally, we will incur expenses, such as for maintenance costs, insurances costs and property taxes, even though a property is vacant. The longer the period of significant vacancies for a property, the greater the potential negative impact on our revenues and results of operations. A continued economic downturn resulting in increased tenant delinquencies and/or defaults and decreases in demand could have a material adverse effect on our operations and the value of our real estate assets.

Our real properties will be subject to property taxes that may increase in the future, which could adversely affect our cash flow.

Our real properties are subject to real and personal property taxes that may increase as tax rates change and as the real properties are assessed or reassessed by taxing authorities. We anticipate that certain of our leases will generally provide that the property taxes, or increases therein, are charged to the lessees as an expense related to the real properties that they occupy, while other leases will generally provide that we are responsible for such taxes. In any case, as the owner of the properties, we are ultimately responsible for payment of the taxes to the applicable government authorities. If real property taxes increase, our tenants may be unable to make the required tax payments, ultimately requiring us to pay the taxes even if otherwise stated under the terms of the lease. If we fail to pay any such taxes, the applicable taxing authority may place a lien on the real property and the real property may be subject to a tax sale. In addition, we will generally be responsible for real property taxes related to any vacant space.

Uninsured losses or premiums for insurance coverage relating to real property may adversely affect your returns.

We will attempt to adequately insure all of our real properties against casualty losses. There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Risks associated with potential terrorism acts could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders sometimes require commercial property owners to purchase specific coverage against terrorism as a condition for providing mortgage loans. These policies may not be available at a reasonable cost, if at all, which could inhibit our ability to finance or refinance our real properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. Changes in the cost or availability of insurance could expose us to uninsured casualty losses. In the event that any of our real properties incurs a casualty loss which is not fully covered by insurance, the value of our assets will be reduced by any such uninsured loss. In addition, we cannot assure you that funding will be available to us for repair or reconstruction of damaged real property in the future.

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We compete with numerous other parties or entities for real estate assets and tenants and may not compete successfully.

We will compete with numerous other persons or entities seeking to buy real estate assets or to attract tenants to real properties we acquire. These persons or entities may have greater experience and financial strength than us. There is no assurance that we will be able to acquire real estate assets or attract tenants on favorable terms, if at all. For example, our competitors may be willing to offer space at rental rates below our rates, causing us to lose existing or potential tenants and pressuring us to reduce our rental rates to retain existing tenants or convince new tenants to lease space at our properties. Each of these factors could adversely affect our results of operations, financial condition, value of our investments and ability to pay distributions to you.

Delays in the acquisition, development and construction of real properties may have adverse effects on our results of operations and returns to our stockholders.

Delays we encounter in the selection, acquisition and development of real properties could adversely affect your 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, you could suffer delays in receiving cash distributions attributable to those particular real properties. Delays in completion of construction could give tenants the right to terminate preconstruction leases for space at a newly developed project. We may incur additional risks when we make periodic progress payments or other advances to builders prior to completion of construction. Each of those factors could 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. Furthermore, the price we agree to pay for a real property will be based on our projections of rental income and expenses and estimates of the fair market value of real property upon completion of construction. If our projections are inaccurate, we may pay too much for a property.

Actions of joint venture partners could negatively impact our performance.

We may enter into joint ventures with third parties, including with entities that are affiliated with our advisor. We may also purchase and develop properties in joint ventures or in partnerships, co-tenancies or other co-ownership arrangements with the sellers of the properties, affiliates of the sellers, developers or other persons. Such investments may involve risks not otherwise present with a direct investment in real estate, including, for example:

•  the possibility that our venture partner or co-tenant in an investment might become bankrupt;

•  that the venture partner or co-tenant may at any time have economic or business interests or goals which are, or which become, inconsistent with our business interests or goals;

•  that such venture partner or 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 we may incur liabilities as a result of an action taken by such venture partner;

•  that disputes between us and a venture partner may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business;

•  the possibility that if we have a right of first refusal or buy/sell right to buy out a co-venturer, co-owner or partner, we may be unable to finance such a buy-out if it becomes exercisable or we may be required to purchase such interest at a time when it would not otherwise be in our best interest to do so; or

•  the possibility that we may not be able to sell our interest in the joint venture if we desire to exit the joint venture.

Under certain joint venture arrangements, neither venture partner may have the power to control the venture and an impasse could be reached, which might have a negative influence on the joint venture and decrease potential returns to you. In addition, to the extent that our venture partner or co-tenant is an affiliate of our advisor, certain conflicts of interest will exist.

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Costs of complying with governmental laws and regulations related to environmental protection and human health and safety may be high.

All real property investments and the operations conducted in connection with such investments are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. Some of these laws and regulations may impose joint and several liability on customers, owners or operators for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were legal.

Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such real property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. 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 real property as collateral for future borrowings. Environmental laws also may impose restrictions on the manner in which real property may be used or businesses may be operated. 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 real properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our real properties. There are also various local, state and federal fire, health, life-safety and similar regulations with which we may be required to comply and which may subject us to liability in the form of fines or damages for noncompliance. In connection with the acquisition and ownership of our real properties, we may be exposed to such costs in connection with such regulations. The cost of defending against environmental claims, of any damages or fines we must pay, of compliance with environmental regulatory requirements or of remediating any contaminated real property could materially and adversely affect our business, lower the value of our assets or results of operations and, consequently, lower the amounts available for distribution to you.

The costs associated with complying with the Americans with Disabilities Act may reduce the amount of cash available for distribution to our stockholders.

Investment in real properties may also be subject to the Americans with Disabilities Act of 1990, as amended, or ADA. Under the ADA, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. We are committed to complying with the act to the extent to which it applies. The ADA has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. With respect to the properties we acquire, the ADA’s requirements could require us to remove 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 ADA or place the burden on the seller or other third party, such as a tenant, to ensure compliance with the ADA. We cannot assure you that we will be able to acquire properties or allocate responsibilities in this manner. Any monies we use to comply with the ADA will reduce the amount of cash available for distribution to our stockholders.

Real properties are illiquid investments, and we may be unable to adjust our portfolio in response to changes in economic or other conditions or sell a property if or when we decide to do so.

Real properties are illiquid investments. We may be unable to adjust our portfolio in response to changes in economic or other conditions. In addition, the real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any real 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 real property. Also, we may acquire real properties that are subject to contractual “lock-out” provisions that could restrict our ability to dispose of the real property for a period of time.

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

In acquiring a real property, we may agree to restrictions that prohibit the sale of that real 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 real property. Our real properties may also be subject to resale restrictions. All these provisions would restrict our ability to sell a property, which could reduce the amount of cash available for distribution to our stockholders.

Risks Associated with Retail Property

The recent economic downturn in the United States has had, and may continue to have, an adverse impact on the retail industry generally. Slow or negative growth in the retail industry will result in defaults by retail tenants which could have an adverse impact on our financial operations.

The recent economic downturn in the United States has had an adverse impact on the retail industry generally. As a result, the retail industry is facing reductions in sales revenues and increased bankruptcies throughout the United States. The continuation of adverse economic conditions may result in an increase in distressed or bankrupt retail companies, which in turn would result in an increase in defaults by tenants at our commercial properties. Additionally, slow economic growth is likely to hinder new entrants into the retail market which may make it difficult for us to fully lease our properties. Tenant defaults and decreased demand for retail space would have an adverse impact on the value of our retail properties and our results of operations.

We anticipate that our properties will consist primarily of retail properties. Our performance, therefore, is linked to the market for retail space generally.

The market for retail space has been and could be adversely affected by weaknesses in the national, regional and local economies, the adverse financial condition of some large retailing companies, the ongoing consolidation in the retail sector, excess amounts of retail space in a number of markets and competition for tenants with other shopping centers in our markets. Customer traffic to these shopping areas may be adversely affected by the closing of stores in the same shopping center, or by a reduction in traffic to such stores resulting from a regional economic downturn, a general downturn in the local area where our store is located, or a decline in the desirability of the shopping environment of a particular shopping center. Such a reduction in customer traffic could have a material adverse effect on our business, financial condition and results of operations.

Our retail tenants will face competition from numerous retail channels, which may reduce our profitability and ability to pay distributions.

Retailers at our properties will face continued competition from discount or value retailers, factory outlet centers, wholesale clubs, mail order catalogues and operators, television shopping networks and shopping via the Internet. Such competition could adversely affect our tenants and, consequently, our revenues and funds available for distribution.

Retail conditions may adversely affect our base rent and subsequently, our income.

Some of our leases may provide for base rent plus contractual base rent increases. A number of our retail 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 which contain percentage rent clauses, our revenue from tenants may increase as the sales of our tenants increase. Generally, retailers face declining revenues during downturns in the economy. As a result, the portion of our revenue which we may derive from percentage rent leases could decline upon a general economic downturn.

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Our revenue will be impacted by the success and economic viability of our anchor retail tenants. Our reliance on single or significant tenants in certain buildings may decrease our ability to lease vacated space and adversely affect the returns on your investment.

In the retail sector, a tenant occupying all or a large portion of the gross leasable area of a retail center, commonly referred to as an anchor tenant, may become insolvent, may suffer a downturn in business, or may decide not to renew its lease. Any of these events would result in a reduction or cessation in rental payments to us and would adversely affect our financial condition. A lease termination by an anchor tenant could result in lease terminations or reductions in rent by other tenants whose leases may permit cancellation or rent reduction if another tenant’s lease is terminated. In such event, we may be unable to re-lease the vacated space. Similarly, the leases of some anchor tenants may permit the anchor tenant to transfer its lease to another retailer. The transfer to a new anchor tenant could cause customer traffic in the retail center to decrease and thereby reduce the income generated by that retail center. A lease transfer to a new anchor tenant could also allow other tenants to make reduced rental payments or to terminate their leases. In the event that we are unable to re-lease the vacated space to a new anchor tenant, we may incur additional expenses in order to re-model the space to be able to re-lease the space to more than one tenant.

The bankruptcy or insolvency of a major tenant may adversely impact our operations and our ability to pay distributions.

The bankruptcy or insolvency of a significant tenant or a number of smaller tenants may have an adverse impact on our income and our ability to pay distributions. Generally, under bankruptcy law, a debtor tenant has 120 days to exercise the option of assuming or rejecting the obligations under any unexpired lease for nonresidential real property, which period may be extended once by the bankruptcy court. If the tenant assumes its lease, the tenant must cure all defaults under the lease and may be required to provide adequate assurance of its future performance under the lease. If the tenant rejects the lease, we will have a claim against the tenant’s bankruptcy estate. Although rent owing for the period between filing for bankruptcy and rejection of the lease may be afforded administrative expense priority and paid in full, pre-bankruptcy arrears and amounts owing under the remaining term of the lease will be afforded general unsecured claim status (absent collateral securing the claim). Moreover, amounts owing under the remaining term of the lease will be capped. Other than equity and subordinated claims, general unsecured claims are the last claims paid in a bankruptcy and therefore funds may not be available to pay such claims in full.

Risks Associated with Real Estate-Related Loans and Other Real Estate-Related Assets

Disruptions in the financial markets and deteriorating economic conditions could adversely impact the commercial mortgage market as well as the market for debt-related investments generally, which could hinder our ability to implement our business strategy and generate returns for our stockholders.

As part of our investment strategy, we intend to acquire a portfolio of real estate-related loans, real estate-related debt securities and other real estate-related investments. The returns available to investors in these investments are determined by: (1) the supply and demand for such investments and (2) the existence of a market for such investments, which includes the ability to sell or finance such investments. During periods of volatility, the number of investors participating in the market may change at an accelerated pace. As liquidity or “demand” increases, the returns available to investors will decrease. Conversely, a lack of liquidity will cause the returns available to investors to increase. Recently, concerns pertaining to the deterioration of credit in the residential mortgage market have expanded to almost all areas of the debt capital markets including corporate bonds, asset-backed securities and commercial real estate mortgages and loans. We cannot foresee when these markets will stabilize. This instability may interfere with the successful implementation of our business strategy.

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If we make or invest in mortgage loans, our mortgage loans may be affected by unfavorable real estate market conditions, which could decrease the value of those loans and the return on your investment.

If we make or invest in mortgage loans, we will be at risk of defaults by the borrowers on those mortgage loans. These defaults may be caused by many conditions beyond our control, including interest rate levels and local and other economic conditions affecting real estate values. We will not know whether the values of the properties securing our mortgage loans will remain at the levels existing on the dates of origination of those mortgage loans. If the values of the underlying properties drop, our risk will increase because of the lower value of the security associated with such loans.

If we make or invest in mortgage loans, our mortgage loans will be subject to interest rate fluctuations that could reduce our returns as compared to market interest rates and reduce the value of the mortgage loans in the event we sell them; accordingly, the value of your investment would be subject to fluctuations in interest rates.

If we invest in fixed-rate, long-term mortgage loans and interest rates rise, the mortgage loans could yield a return that is lower than then-current market rates. If interest rates decrease, we will be adversely affected to the extent that mortgage loans are prepaid because we may not be able to make new loans at the higher interest rate. If we invest in variable-rate loans and interest rates decrease, our revenues will also decrease. Finally, if we invest in variable-rate loans and interest rates increase, the value of the loans we own at such time would decrease, which would lower the proceeds we would receive in the event we sell such assets. For these reasons, if we invest in mortgage loans, our returns on those loans and the value of your investment will be subject to fluctuations in interest rates.

The CMBS and CDOs in which we may invest are subject to several types of risks.

Commercial mortgage-backed securities, or CMBS, are bonds which evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. Collateralized debt obligations, or CDOs, are a type of debt obligation that are backed by commercial real estate assets, such as CMBS, commercial mortgage loans, B-notes, or mezzanine paper. Accordingly, the mortgage backed securities we invest in are subject to all the risks of the underlying mortgage loans.

In a rising interest rate environment, the value of CMBS and CDOs may be adversely affected when payments on underlying mortgages do not occur as anticipated, resulting in the extension of the security’s effective maturity and the related increase in interest rate sensitivity of a longer-term instrument. The value of CMBS and CDOs may also change due to shifts in the market’s perception of issuers and regulatory or tax changes adversely affecting the mortgage securities markets as a whole. In addition, CMBS and CDOs are subject to the credit risk associated with the performance of the underlying mortgage properties. In certain instances, third party guarantees or other forms of credit support can reduce the credit risk.

CMBS and CDOs are also subject to several risks created through the securitization process. Subordinate CMBS and CDOs are paid interest only to the extent that there are funds available to make payments. To the extent the collateral pool includes a large percentage of delinquent loans, there is a risk that interest payment on subordinate CMBS and CDOs will not be fully paid. Subordinate securities of CMBS and CDOs are also subject to greater credit risk than those CMBS and CDOs that are more highly rated.

The mezzanine loans in which we may invest would involve greater risks of loss than senior loans secured by income-producing real properties.

We may invest in mezzanine loans that take the form of subordinated loans secured by second mortgages on the underlying real property or loans secured by a pledge of the ownership interests of the entity owning the real property, the entity that owns the interest in the entity owning the real property or other assets. These types of investments involve a higher degree of risk than long-term senior mortgage lending secured by income-producing real property because the investment may become unsecured as a result of foreclosure by the senior lender. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be

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sufficient to satisfy our mezzanine loan. If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt. As a result, we may not recover some or all of our investment. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the real property and increasing the risk of loss of principal.

Risks Associated With Debt Financing

Disruptions in the financial markets and deteriorating economic conditions could also adversely affect our ability to secure debt financing on attractive terms and the values of investments we make.

The capital and credit markets have recently experienced extreme volatility and disruption. Liquidity in the global credit market has been severely contracted by these market disruptions, making it costly to obtain new lines of credit or refinance existing debt. We expect to finance our investments in part with debt. As a result of the recent turmoil in the credit markets, we may not be able to obtain debt financing on attractive terms or at all. As such, we may be forced to use a greater proportion of our offering proceeds to finance our acquisitions and originations, reducing the number of investments we would otherwise make. If the current debt market environment persists, we may modify our investment strategy in order to optimize our portfolio performance. Our options would include limiting or eliminating the use of debt and focusing on those investments that do not require the use of leverage to meet our portfolio goals.

We will incur mortgage indebtedness and other borrowings, which may increase our business risks, could hinder our ability to make distributions and could decrease the value of your investment.

We may obtain lines of credit and long-term financing that may be secured by our real properties and other assets. Under our charter, we have a limitation on borrowing which precludes us from borrowing in excess of 300% of the value of our net assets. Net assets for purposes of this calculation are defined to be our total assets (other than intangibles), valued at cost prior to deducting depreciation, reserves for bad debts or other non-cash reserves, less total liabilities. Generally speaking, the preceding calculation is expected to approximate 75% of the aggregate cost of our investments before non-cash reserves and depreciation. We may temporarily borrow in excess of these amounts if such excess is approved by a majority of the independent directors and is disclosed to stockholders in our next quarterly report, along with justification for such excess. In addition, we may incur mortgage debt and pledge some or all of our investments as security for that debt to obtain funds to acquire additional investments or for working capital. We may also borrow funds as necessary or advisable to ensure we maintain our REIT tax qualification, including the requirement that we distribute at least 90% of our annual REIT taxable income to our stockholders (computed without regard to the distribution paid deduction and excluding net capital gains). Furthermore, we may borrow if we otherwise deem it necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes.

High debt levels will cause us to incur higher interest charges, which would result in higher debt service payments and could be accompanied by restrictive covenants. If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt on that 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 on any of our properties will 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 will recognize taxable income on foreclosure, but we would not receive any cash proceeds. If any mortgage contains 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.

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Instability in the debt markets may make it more 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 to our stockholders.

If mortgage debt is unavailable on reasonable terms as a result of increased interest rates or other factors, we may not be able to finance the initial purchase of properties. In addition, if we place mortgage debt on properties, we run the risk of being unable to refinance such debt when the loans come due, or of being unable to refinance on favorable terms. If interest rates are higher when we refinance debt, our income could be reduced. We may be unable to refinance debt at appropriate times, which may require us to sell properties on terms that are not advantageous to us, or could result in the foreclosure of such properties. 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 securities or by borrowing more money.

Increases in interest rates could increase the amount of our debt payments and negatively impact our operating results.

Interest we pay on our debt obligations will reduce cash available for distributions. If we incur variable rate debt, increases in interest rates would increase our interest costs, which would reduce our cash flows and our ability to make distributions to you. 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 at times which may not permit realization of the maximum return on such investments.

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 may 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 a property, discontinue insurance coverage, or replace our advisor. In addition, loan documents may limit our ability to replace a property’s property manager or terminate certain operating or lease agreements related to a property. These or other limitations may adversely affect our flexibility and our ability to achieve our investment objectives.

Our derivative financial instruments that we may use to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on your investment.

We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets, but no hedging strategy can protect us completely. We cannot assure you that our hedging strategy and the derivatives that we use will adequately offset the risk of interest rate volatility or that our hedging transactions will not result in losses. In addition, the use of such instruments may reduce the overall return on our investments. These instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT income test.

Federal Income Tax Risks

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

We believe that we operate in such a manner as to qualify as a REIT for federal income tax purposes. Although we do not intend to request a ruling from the Internal Revenue Service as to our REIT status, we have received the opinion of Alston & Bird LLP with respect to our qualification as a REIT. This opinion has been issued in connection with this offering. Investors should be aware, however, that opinions of counsel are not binding on the Internal Revenue Service or on any court. The opinion of Alston & Bird LLP represents only the view of our counsel based on our counsel’s review and analysis of existing law and on certain representations as to factual matters and covenants made by us, including representations relating to the values of our assets and the sources of our income. Alston & Bird LLP has no obligation to advise us or the holders of our common stock of any subsequent change in the matters stated, represented or assumed in its opinion or of any subsequent

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change in applicable law. Furthermore, both the validity of the opinion of Alston & Bird LLP and our qualification as a REIT will depend on our satisfaction of numerous requirements (some on an annual and quarterly basis) established under highly technical and complex provisions of the Internal Revenue Code, for which there are only limited judicial or administrative interpretations and involves the determination of various factual matters and circumstances not entirely within our control. The complexity of these provisions and of the applicable income tax regulations that have been promulgated under the Internal Revenue Code is greater in the case of a REIT that holds its assets through a partnership, as we will. Moreover, no assurance can be given that legislation, new regulations, administrative interpretations or court decisions will not change the tax laws with respect to qualification as a REIT or the federal income tax consequences of that qualification.

If we were to fail to qualify as a REIT for any taxable year, we would 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 in which we lose 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 be deductible in computing our taxable income and we would no longer be required to make distributions. To the extent that distributions had been made in anticipation of our qualifying as a REIT, we might be required to borrow funds or liquidate some investments to pay the applicable corporate income tax. In addition, although we intend to operate in a manner intended to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause our board of directors to recommend that we revoke our REIT election.

We believe that our operating partnership will be treated for federal income tax purposes as a partnership and not as an association or a publicly traded partnership taxable as a corporation. To minimize the risk that our operating partnership will be considered a “publicly traded partnership” as defined in the Internal Revenue Code, we have placed certain transfer restrictions on the transfer or redemption of the partnership units in our operating partnership. If the Internal Revenue Service were successfully to determine that our operating partnership were properly treated as a corporation, our operating partnership would be required to pay federal income tax at corporate rates on its net income, its partners would be treated as stockholders of our operating partnership and distributions to partners would constitute distributions that would not be deductible in computing our operating partnership’s taxable income. In addition, we could fail to qualify as a REIT, with the resulting consequences described above. See ”Material U.S. Federal Income Tax Considerations.”

To qualify as a REIT we must meet annual distribution requirements, which may result in us distributing amounts that may otherwise be used for our operations.

To obtain the favorable tax treatment accorded to REITs, we normally will be required each year to distribute to our stockholders at least 90% of our real estate investment trust taxable income, determined without regard to the deduction for distributions paid and by excluding net capital gains. We will be subject to federal income tax on our undistributed taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on investments in real estate assets and it is possible that we might be required to borrow funds or sell assets to fund these distributions. If we fund distributions through borrowings, then we will have to repay debt using money we could have otherwise used to acquire properties, resulting in our ownership of fewer real estate assets. If we sell assets or use offering proceeds to pay distributions, we also will have fewer investments. Fewer investments may impact our ability to generate future cash flows from operations and, therefore, reduce your overall return. Although we intend to make distributions sufficient to meet the annual distribution requirements and to avoid corporate income taxation on the earnings that we distribute, it is possible that we might not always be able to do so.

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

We may purchase real properties and lease them back to the sellers of such properties. While we will use our best efforts to structure any such sale-leaseback transaction such that the lease will be characterized as a

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“true lease,” thereby allowing us to be treated as the owner of the property for federal income tax purposes, we cannot assure you that the Internal Revenue Service will not challenge such characterization. In the event that any such 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 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.

You may have current tax liability on distributions if you elect to reinvest in shares of our common stock.

If you participate in our distribution reinvestment plan, you will be deemed to have received a cash distribution equal to the fair market value of the stock received pursuant to the plan. For Federal income tax purposes, you will be taxed on this amount in the same manner as if you have received cash; namely, to the extent that we have current or accumulated earnings and profits, you will have ordinary taxable income. To the extent that we make a distribution in excess of such earnings and profits, the distribution will be treated first as a tax-free return of capital, which will reduce the tax basis in your stock, and the amount of the distribution in excess of such basis will be taxable as a gain realized from the sale of your common stock. As a result, unless you are a tax-exempt entity, you may have to use funds from other sources to pay your tax liability on the value of the common stock received. See ”Description of Capital Stock—Distribution Reinvestment Plan.”

Distributions payable by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.

Tax legislation enacted in 2003, as amended, generally reduces the maximum tax rate for distributions payable by corporations to individuals to 15% through 2010. Distributions payable by REITs, however, generally continue to be taxed at the normal rate applicable to the individual recipient, rather than the 15% preferential rate. Although this legislation does not adversely affect the taxation of REITs or distributions paid by REITs, the more favorable rates applicable to regular corporate distributions could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay distributions, which could adversely affect the value of the stock of REITs, including our common stock.

Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on your investment.

Our ability to dispose of property during the first few years following acquisition is restricted to a substantial extent as a result of our REIT status. Under applicable provisions of the Internal Revenue Code regarding prohibited transactions by REITs, we will be subject to a 100% tax on any gain realized on the sale or other disposition of any property (other than foreclosure property) we own, directly or through any subsidiary entity, including our operating partnership, but excluding our taxable REIT subsidiaries, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of trade or business. Whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. We intend to avoid the 100% prohibited transaction tax by (1) conducting activities that may otherwise be considered prohibited transactions through a taxable REIT subsidiary, (2) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or through any subsidiary other than a taxable REIT subsidiary, will be treated as a prohibited transaction or (3) structuring certain dispositions of our properties to comply with certain safe harbors available under the Internal Revenue Code for properties held at least four years. However, despite our present intention, no assurance can be given that any particular property we own, directly or through any subsidiary entity, including our operating partnership, but excluding our taxable REIT subsidiaries, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business.

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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 you.

Even if we qualify and maintain our status as a REIT, we may be subject to federal and state income taxes. For example, net income from a “prohibited transaction” will 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 real estate assets 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 the companies through which we indirectly own our assets. Any federal or state taxes we pay will reduce our cash available for distribution to you.

Distributions to tax-exempt investors may be classified as unrelated business taxable income.

Neither ordinary nor capital gain distributions with respect to our common stock nor gain from the sale of common stock should generally constitute unrelated business taxable income to a tax-exempt investor. However, there are certain exceptions to this rule. In particular:

•  part of the income and gain recognized by certain qualified employee pension trusts with respect to our common stock may be treated as unrelated business taxable income; if shares of our common stock are predominately held by qualified employee pension trusts, we are required to rely on a special look-through rule for purposes of meeting one of the REIT share ownership tests and we are not operated in a manner to avoid treatment of such income or gain as unrelated business taxable income;

•  part of the income and gain recognized by a tax exempt investor with respect to our common stock would constitute unrelated business taxable income if the investor incurs debt to acquire the common stock; and

•  part or all of the income or gain recognized with respect to our common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans which are exempt from federal income taxation under Sections 501(c)(7), (9), (17) or (20) of the Internal Revenue Code may be treated as unrelated business taxable income.

Complying with the REIT requirements may cause us to forego otherwise attractive opportunities.

To qualify as a REIT for federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of shares of our common stock. We may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Complying with the REIT requirements may force us to liquidate otherwise attractive investments.

To qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including shares of stock in other REITs, certain mortgage loans and mortgage backed securities. The remainder of our investment in securities (other than governmental securities and qualified real estate assets) generally cannot include more than 10.0% of the outstanding voting securities of any one issuer or more than 10.0% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5.0% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25.0% of the value of our total securities can be represented by securities of one or more taxable REIT subsidiaries. If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments.

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Liquidation of assets may jeopardize our REIT status.

To continue to qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to satisfy our obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our status as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory.

Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial and administrative changes have been made to the federal income tax laws applicable to investments in REITs and similar entities. Additional changes to tax laws are likely to continue to occur in the future and we cannot assure you that any such changes will not adversely affect the taxation of a stockholder. Any such changes could have an adverse effect on an investment in shares of our common stock. We urge you to consult with your own tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in shares of our common stock.

The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.

We may acquire mezzanine loans, for which the Internal Revenue Service has provided a safe harbor in Revenue Procedure 2003-65. Pursuant to such safe harbor, if a mezzanine loan is secured by interests in a pass-through entity, it will be treated by the Internal Revenue Service as a real estate asset for purposes of the REIT asset tests and interest derived from the mezzanine loan will be treated as qualifying mortgage interest for purposes of the REIT 75% income test. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. We intend to make investments in loans secured by interests in pass-through entities in a manner that complies with the various requirements applicable to our qualification as a REIT. We may, however, acquire mezzanine loans that do not meet all of the requirements of this safe harbor. In the event we own a mezzanine loan that does not meet the safe harbor, the Internal Revenue Service could challenge such loan’s treatment as a real estate asset for purposes of the REIT asset and income tests and, if such a challenge were sustained, we could fail to qualify as a REIT.

We may be required to pay some taxes due to actions of our taxable REIT subsidiary which would reduce our cash available for distribution to you.

Any net taxable income earned directly by our taxable REIT subsidiaries, or through entities that are disregarded for federal income tax purposes as entities separate from our taxable REIT subsidiaries, will be subject to federal and possibly state corporate income tax. We will elect to treat TNP Strategic Retail TRS, Inc. as a taxable REIT subsidiary, and we may elect to treat other subsidiaries as taxable REIT subsidiaries in the future. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a taxable REIT subsidiary will be subject to an appropriate level of federal income taxation. For example, a taxable REIT subsidiary is limited in its ability to deduct certain interest payments made to an affiliated REIT. In addition, the REIT has to pay a 100% penalty tax on some payments that it receives or on some deductions taken by a taxable REIT subsidiary if the economic arrangements between the REIT, the REIT’s customers and the taxable REIT subsidiary are not comparable to similar arrangements between unrelated parties. Finally, some state and local jurisdictions may tax some of our income even though as a REIT we are not subject to federal income tax on that income because not all states and localities follow the federal income tax treatment of REITs. To the extent that we and our affiliates are required to pay federal, state and local taxes, we will have less cash available for distributions to you.

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Recharacterization of transactions under the operating partnership’s intended private placements could result in a 100% tax on income from prohibited transactions, which would diminish our cash distributions to our stockholders.

The Internal Revenue Service could recharacterize transactions under the operating partnership’s intended private placements such that the operating partnership could be treated as the bona fide owner, for tax purposes, of properties acquired and resold by the entity established to facilitate the transaction. Such recharacterization could result in the income realized on these transactions by the operating partnership being treated as gain on the sale of property that is held as inventory or otherwise held primarily for the sale to customers in the ordinary course of business. In such event, such gain would constitute income from a prohibited transaction and would be subject to a 100% tax. If this occurs, our ability to pay cash distributions to our stockholders will be adversely affected.

Foreign investors may be subject to FIRPTA on the sale of shares of our common stock if we are unable to qualify as a “domestically controlled” REIT.

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, on the gain recognized on the disposition. FIRPTA does not apply, however, to the disposition of stock in a REIT if the REIT is a “domestically controlled REIT.” A domestically controlled REIT is a REIT in which, at all times during a specified testing period (the continuous five year period ending on the date of disposition or, if shorter, the entire period of the REIT’s existence), less than 50% in value of its shares is held directly or indirectly by non-U.S. holders. We cannot assure you that we will qualify as a domestically controlled REIT. If we were to fail to so qualify, gain realized by a foreign investor on a sale of our common stock would be subject to FIRPTA unless our common stock was 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.

Retirement Plan Risks

If you fail to meet the fiduciary and other standards under ERISA or the Internal Revenue Code as a result of an investment in our stock, you could be subject to criminal and civil penalties.

There are special considerations that apply to employee benefit plans subject to the Employee Retirement Income Security Act of 1974, or ERISA, (such as pension, profit-sharing or 401(k) plans) and other retirement plans or accounts subject to Section 4975 of the Internal Revenue Code (such as an IRA or Keogh plan) whose assets are being invested in our common stock. If you are investing the assets of such a plan (including assets of an insurance company general account or entity whose assets are considered plan assets under ERISA) or account in our common stock, you should satisfy yourself that:

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

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

•  your investment satisfies the prudence and diversification requirements of Section 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and/or the Internal Revenue Code;

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

•  your investment will not produce unrelated business taxable income, referred to as UBTI for the plan or IRA;

•  you will be able to value the assets of the plan annually in accordance with ERISA requirements and applicable provisions of the plan or IRA; and

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

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Internal Revenue Code may result in the imposition of civil and criminal penalties and could subject the fiduciary to equitable remedies. In addition, if an investment in our common stock constitutes a prohibited transaction under ERISA or the Internal Revenue Code, the fiduciary who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. For a discussion of the considerations associated with an investment in our shares by an employee benefit plan or IRA, see “ERISA Considerations.”

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements included in this prospectus that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to:

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

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

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

•  the availability of capital;

•  interest rates; and

•  changes to generally accepted accounting principles.

Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this prospectus. All forward-looking statements are made as of the date of this prospectus and the risk that actual results will differ materially from the expectations expressed in this prospectus will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this prospectus, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this prospectus, including, without limitation, the risks described under “Risk Factors,” the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this prospectus will be achieved.

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ESTIMATED USE OF PROCEEDS

The following table presents information regarding our intended use of the gross and net proceeds from our primary offering and pursuant to our distribution reinvestment plan. The table assumes we sell (1) the maximum of $1,000,000,000 in shares of our common stock pursuant to the primary offering and no shares of our common stock pursuant to our distribution reinvestment plan and (2) the maximum of $1,000,000,000 in shares of our common stock pursuant to the primary offering and $100,000,000 in shares of our common stock pursuant to our distribution reinvestment plan. Shares of our common stock will be offered in our primary offering to the public at $10.00 per share and issued pursuant to our distribution reinvestment plan at $9.50 per share. We reserve the right to reallocate the shares of common stock we are offering between the primary offering and the distribution reinvestment plan. The actual use of the capital we raise is likely to be different than the figures presented in the table because we may not raise the entire $1,000,000,000 in our primary offering or the entire $100,000,000 pursuant to our distribution reinvestment plan. Raising less than the full $1,000,000,000 in the primary offering or the full $100,000,000 pursuant to our distribution reinvestment plan will alter the amounts of commissions, fees and expenses set forth below.

The amounts in the table below assume that the full fees and commissions are paid on all shares of our common stock offered to the public in the primary offering. The sales commission and, in some cases, all or a portion of our dealer manager fee, may be reduced or eliminated in connection with certain categories of sales, such as sales for which a volume discount applies, sales through investment advisors or banks acting as trustees or fiduciaries and sales to our affiliates. The reduction in these fees will be accompanied by a corresponding reduction in the per share purchase price but will not affect the amounts available to us for investments. After paying the sales commission, the dealer manager fee and our organizational and offering expenses, we will use the net proceeds of the offering to invest in real estate assets and to pay the fees set forth in the tables below. We will use the net proceeds only for the purposes set forth in this prospectus and in the manner approved by our board of directors, the members of which serve as fiduciaries to our stockholders. Because amounts in the following tables are estimates, they may not accurately reflect the actual receipt or use of the offering proceeds.

						Maximum Primary
	Maximum Primary					Offering and Distribution
	Offering					Reinvestment Plan
	Amount		%			Amount		%
Gross Offering Proceeds	$	1,000,000,000		100.0	%	$	1,100,000,000		100.0	%
Less Offering Expenses:
Sales Commissions		70,000,000		7.0			70,000,000		6.4
Dealer Manager Fee		30,000,000		3.0			30,000,000		2.7
Other Organization and Offering Expenses(1)		17,500,000		1.8			17,500,000		1.6
Net Proceeds(2)	$	882,500,000		88.2	%	$	982,500,000		89.3	%
Less:
Acquisition and Origination Fees(3)(4)		22,062,500		2.2			24,562,500		2.2
Acquisition Expenses(3)(4)		4,412,500		0.4			4,912,500		0.4
Working Capital Reserve(5)		—		—			—		—
Estimated Amount Available for Investments(4)(6)	$	856,025,000		85.6	%	$	953,025,000		86.7	%

(1) Includes all expenses (other than sales commissions and the dealer manager fee) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, charges of our escrow agent and transfer agent, charges of our advisor for administrative services related to the issuance of shares of our common stock in the offering, reimbursements to the dealer manager for amounts it may pay to reimburse the bona fide due diligence expenses of broker-dealers, amounts to reimburse our advisor for the salaries of its employees and other costs in connection with preparing supplemental sales materials, the cost of educational conferences held by us and attendance fees and cost reimbursement for employees of our affiliates to attend retail seminars conducted by broker-dealers. Our advisor has agreed to reimburse us to the extent such other organization and offering expenses incurred by us exceed 3.0% of aggregate gross offering proceeds. We expect that our other organization and offering expenses will represent a lower

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	percentage of the gross offering proceeds as the amount of proceeds we raise in the offering increases. In the table above, we have assumed other organization and offering expenses will constitute 1.75% of gross offering proceeds if we raise the maximum offering amount.
(2)	Until required in connection with the acquisition of our investments, substantially all of the net offering proceeds may be invested in short-term, highly liquid investments, including, but not limited to, government obligations, bank certificates of deposit, short-term debt obligations, interest-bearing accounts and other authorized investments as determined by our board of directors.
(3)	This table excludes debt proceeds. To the extent we fund property acquisitions with debt, as we expect, the amount available for investment and the amount of acquisition fees will be proportionately greater. This table also assumes that we will use all net proceeds from the sale of shares under our distribution reinvestment plan to repurchase shares under our share redemption program. To the extent we use such net proceeds to acquire real estate, our advisor would earn the related acquisition fees. In addition to the acquisition fee, we may also incur customary third-party acquisition expenses in connection with the acquisition (or attempted acquisition) of a real estate asset.
(4)	Amounts available for investments will include customary third party acquisition expenses that are included in the total acquisition costs of the real estate assets acquired and are expensed upon completion of the acquisition. For real estate assets that are not acquired, these costs are also expensed. Third party acquisition expenses may include legal, accounting, consulting, appraisals, engineering, due diligence, title insurance, closing costs and other expenses related to potential investments regardless of whether the asset is actually acquired. Acquisition expenses as a percentage of a real property’s contract price vary. However, in no event will total acquisition fees and acquisition expenses on a real property exceed 6.0% of the contract price of the real property. Furthermore, in no event will the total of all acquisition fees and acquisition expenses paid by us, including acquisition expenses on real properties which are not acquired, exceed 6.0% of the aggregate contract price of all real properties acquired by us. In the table above, we have assumed acquisition expenses will constitute 0.5% of net proceeds.
(5)	We do not anticipate establishing a general working capital reserve out of the proceeds from this offering during the initial stages of the offering. However, we may establish working capital reserves with respect to particular investments, to, for example, provide for maintenance and repairs of real estate assets, leasing commissions and major capital expenditures. Until used for such operating expenses, amounts in our working capital reserves, if any, together with any other proceeds not invested or used for other company purposes, will be invested in permitted temporary investments such as government securities.
(6)	Although it is anticipated that distributions will be funded from operations after we have invested in a substantial portfolio of income-producing investments, funds available for investment may also be used to fund distributions to the extent that our board of directors determines it to be appropriate, which determinations will be based, in part, upon our results of operations. We intend to invest at least 85.6% of the gross offering proceeds in commercial real properties and other real estate-related assets by the completion of the offering stage. At that time, we also expect that approximately 70% of our portfolio will consist of commercial real properties and that approximately 30% of our portfolio will consist of real estate-related assets.

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INVESTMENT STRATEGY, OBJECTIVES AND POLICIES

Investment Strategy

We will use the net proceeds from this offering to invest in a portfolio of income-producing retail properties, primarily located in the Western United States, including neighborhood, community and lifestyle shopping centers, multi-tenant shopping centers and free standing, single-tenant retail properties. We may acquire properties either alone or jointly with another party. In addition to investments in real estate directly or through joint ventures, we may also acquire or originate first mortgages or second mortgages, mezzanine loans or other loans related to commercial real estate, which we refer to collectively as “real estate-related loans,” in each case provided that the underlying real estate meets our criteria for direct investment. We may also invest in any other real estate assets or real estate-related assets that, in the opinion of our board of directors, meet our investment objectives and are in the best interests of our stockholders.

Investment Objectives

Our investment objectives are to:

•  preserve, protect and return stockholders’ capital contributions;

•  pay predictable and sustainable cash distributions to stockholders; and

•  realize capital appreciation upon the ultimate sale of the investments we acquire.

We cannot assure you that we will attain our investment objectives or that the value of our assets will not decrease. Furthermore, within our investment objectives and policies, our advisor will have substantial discretion with respect to the selection of specific investments and the purchase and sale of our assets, subject to the approval of our independent directors. Our board of directors will review our investment policies at least annually to determine whether our investment policies continue to be in the best interests of our stockholders. Each such determination and the basis therefor shall be set forth in the minutes of the meetings of the board of directors.

Primary Focus—Retail Properties

We intend to acquire a diverse portfolio of retail properties, primarily located in large metropolitan areas in the Western United States, including neighborhood, community, power and lifestyle shopping centers, multi-tenant shopping centers and free standing single-tenant retail properties, with a focus on properties located in or near residential areas that have, or have the ability to attract, strong anchor tenants.

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We intend to diversify our portfolio by geographic region within the Western United States, investment size and investment risk with the goal of attaining a portfolio of income-producing properties that provide attractive and stable returns to our investors. We intend to focus on markets where TNP affiliates have an established market presence, knowledge and access to potential investments, as well as an ability to direct property management and leasing operations efficiently. We will review and adjust our target markets periodically to respond to changing market opportunities and to maintain a diverse portfolio of retail properties. Our initial target markets are the following metropolitan areas in the Western United States:

Denver	Las Vegas
Los Angeles/Orange County	Austin
San Francisco	Dallas
San Diego	Houston
Seattle	San Antonio
Oakland	Phoenix
Portland	Scottsdale
Salt Lake City	Albuquerque

Growth in per capita disposable income in the Rocky Mountain and Southwest Region has consistently outpaced the national average since 1970 according to the Bureau of Economic Analysis. We believe that this growth has had a positive impact on commercial real estate sectors in the Western United States. The Western United States has out performed the national average in terms of retail sales per square foot since 1996, according to the International Council of Shopping Centers, and has also out performed the national average in terms of increases in commercial property prices since 2000 according to Moody’s Investor Services. We believe that this historical strong economic performance in the Western United States, the potential for continued growth in the region and our advisor’s depth of experience with retail properties in the region provide us with a unique opportunity to identify properties for our portfolio that will provide favorable risk-adjusted returns.

We also believe that demand for real property in the Western United States will continue to grow due to continued population growth in our target markets. It is expected that aggregate population growth in these markets and surrounding areas will increase by approximately 22% as indicated in the chart below.

		Population as of		Population as of		Percent
Metropolitan Statistical Area	State	October 2008		October 2020		Increase
Phoenix-Mesa-Scottsdale, AZ	AZ		4,335,348		6,336,859		46.17	%
Tucson, AZ	AZ		987,623		1,243,028		25.86	%
Los Angeles-Long Beach-Santa Ana, CA	CA		12,884,699		13,000,662		0.90	%
San Francisco-Oakland-Fremont, CA	CA		4,226,125		4,503,726		6.57	%
Riverside-San Bernardino-Ontario, CA	CA		4,193,189		5,631,565		34.30	%
San Diego-Carlsbad-San Marcos, CA	CA		2,988,071		3,156,321		5.63	%
Sacramento-Arden-Arcade-Roseville, CA	CA		2,119,039		2,469,717		16.55	%
San Jose-Sunnyvale-Santa Clara, CA	CA		1,826,754		2,123,762		16.26	%
Fresno, CA	CA		912,556		1,084,413		18.83	%
Bakersfield, CA	CA		812,475		1,096,515		34.96	%
Oxnard-Thousand Oaks-Ventura, CA	CA		800,934		833,742		4.10	%
Denver-Aurora, CO	CO		2,511,098		3,111,857		23.92	%
Colorado Springs, CO	CO		618,810		742,852		20.05	%
Boise City-Nampa, ID	ID		609,726		894,796		46.75	%
Albuquerque, NM	NM		853,775		1,088,913		27.54	%
Las Vegas-Paradise, NV	NV		1,901,430		2,731,129		43.64	%
Portland-Vancouver-Beaverton, OR-WA	OR-WA		2,215,229		2,720,033		22.79	%
Dallas-Fort Worth-Arlington, TX	TX		6,305,062		8,379,758		32.91	%
Houston-Sugar Land-Baytown, TX	TX		5,767,212		7,565,873		31.19	%
San Antonio, TX	TX		2,040,356		2,673,894		31.05	%
Austin-Round Rock, TX	TX		1,658,551		2,441,377		47.20	%
Salt Lake City, UT	UT		1,121,552		1,406,346		25.39	%
Ogden-Clearfield, UT	UT		530,672		694,990		30.96	%
Provo-Orem, UT	UT		510,807		752,813		47.38	%
Seattle-Tacoma-Bellevue, WA	WA		3,357,986		3,968,915		18.19	%
Total			66,089,079		80,653,856		22.04	%

Source: Proximity (October 2008)

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We believe that despite the recent economic downturn in the United States, demand for property in the Western United States will continue to grow in the long run due to the projected population growth in the region and the recent constraints on the supply of retail property from the tightening credit markets. Additionally, given the recent downturn in the real estate market, we believe there is an opportunity to purchase retail properties at historically low prices thereby increasing our ability to realize greater appreciation on the ultimate dispositions of the properties. However, there can be no assurance that the economy will recover or that demand for property in the Western United States will continue to grow. As a result, a continued economic downturn resulting in increased tenant delinquencies and/or defaults and decreases in demand could have a material adverse effect on our operations and the value of our real estate assets. Please see “Risk Factors—Risks Related to Investments In Real Estate Generally—Increasing vacancy rates for certain classes of real estate assets resulting from the recent economic downturn and disruption of the financial markets could adversely affect the value of the assets we acquire.”

We also intend to diversify our portfolio of retail properties by investment size. We expect that our investments will typically range in size from $10 million to $100 million. We may, however, make investments outside of this range if we believe the property will complement our portfolio or meet our investment objectives.

Many of our properties will be leased to tenants in the chain or franchise retail industry, including, but not limited to, convenience stores, drug stores and restaurant properties. Other properties will be leased to large, national “big box” retailers, either standing alone or as part of so-called “power centers” which are comprised of big box national, regional and local retailers. We also may acquire multi-tenant retail properties, including grocery anchored shopping centers and retail strip centers. Our advisor will monitor industry trends and identify properties for our portfolio that serve to provide a favorable return balanced with risk. Our advisor will primarily target regional or national name brand retail businesses with established track records. We may also invest in retail properties located in other regions of the United States.

We expect that a substantial majority of our investments in retail properties will be core investments, which are generally lower risk, existing properties with at least 80% occupancy and minimal near-term lease rollover. The remaining investments in retail properties will be enhanced-return properties, which are higher-yield and higher-risk investments that our advisor will actively manage and seek to reposition. Examples of enhanced-return properties that we will seek to acquire and reposition include: properties with moderate vacancies or near-term lease rollovers; poorly managed and positioned properties; properties owned by distressed sellers; and build-to-suit properties. Once stabilized, we will either hold enhanced-return properties as core investments or sell them. Whether a core or enhanced-return property, each of our potential investments will be subject to our advisor’s stringent underwriting standards and the approval of our board of directors.

We will seek to achieve our investment objectives through the careful selection and underwriting of individual assets. When making an acquisition, we will emphasize the performance and risk characteristics of that individual investment and how that investment will fit with our portfolio-level performance objectives, the other assets in our portfolio and the returns and risks of available investment alternatives. We will not forgo a good investment opportunity because it does not precisely meet the diversification guidelines set forth above, but we will attempt to construct a portfolio that produces stable and attractive returns by spreading risk across different real estate investments.

Our advisor will have substantial discretion with respect to the selection of specific retail properties. Each acquisition, however, must be approved by our board of directors. In selecting a potential facility for acquisition, we and our advisor will consider a number of factors, including, but not limited to, the following:

•  the property’s location and tenants;

•  the physical location of the property in relation to population centers, density and accessibility;

•  construction quality and condition of the property;

•  potential for capital appreciation;

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•  historical financial performance of the property;

•  rental rates and occupancy levels for the property;

•  potential competitors in the area; and

•  treatment under applicable federal, state and local tax and other laws and regulations.

Ownership of Retail Properties

We will generally hold fee title or a long-term leasehold estate in the retail properties we acquire. We intend to acquire such interests either (1) directly through our operating partnership or through wholly-owned subsidiaries of our operating partnership or (2) indirectly through investments in joint ventures, partnerships, or other co-ownership arrangements with the developers of the properties, TNP affiliates or other persons. In addition, we may purchase properties and lease them back to the sellers of such properties. While we will use our best efforts to structure any such sale-leaseback transaction in which the lease will be characterized as a “true lease” so that we will be treated as the owner of the property for federal income tax purposes, we cannot assure you that the Internal Revenue Service will not challenge such characterization. In the event that any such recharacterization were successful, deductions for depreciation and cost recovery relating to such property would be disallowed and it is possible that under some circumstances we could fail to qualify as a REIT as a result.

In determining whether to purchase a particular property, we may, in accordance with customary practices, obtain a purchase option on such real property. The amount paid for a purchase option, if any, is normally surrendered if the real property is not purchased and is normally credited against the purchase price if the real property is purchased.

Joint Venture Investments

We may enter into joint ventures, partnerships and other co-ownership or participation arrangements for the purpose of obtaining interests in retail properties as well as other real properties. We may also enter into joint ventures for the development or improvement of such properties. Joint venture investments permit us to own interests in large properties and other investments without unduly limiting the diversity of our portfolio. In determining whether to recommend a particular joint venture, our advisor will evaluate the real property that the joint venture owns or is being formed to own under the same criteria used for the selection of our direct real property investments.

Our advisor will also evaluate the potential joint venture partner as to its financial condition, operating capabilities and integrity. We may enter into joint ventures with TNP affiliates, but only provided that:

•  a majority of our directors, including a majority of the independent directors, not otherwise interested in the transaction approve the transaction as being fair and reasonable to us; and

•  the investment by us and such affiliate are on terms and conditions that are substantially the same as those received by the other joint venturers in such joint venture.

We have not established the specific terms we will require in our joint venture agreements. Instead, we will establish the terms with respect to any particular joint venture agreement on a case-by-case basis after our board of directors considers all the facts that are relevant, such as the nature and attributes of our potential joint venture partners, the proposed structure of the joint venture, the nature of the operations, the nature of the property and its operations, the liabilities and assets associated with the proposed joint venture and the size of our interest when compared to the interest owned by other partners in the venture. With respect to any joint venture we enter into, we expect to consider the following types of concerns and safeguards:

•  Our ability to manage and control the joint venture—we will consider whether we should obtain certain approval rights in joint ventures we do not control and for proposed joint ventures in which we are to share control with another entity, we will consider the procedures to address decisions in the event of an impasse.

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•  Our ability to exit the joint venture—we will consider requiring buy/sell rights, redemption rights or forced liquidation rights.

•  Our ability to control transfers of interests held by other partners to the venture—we will consider requiring consent provisions, a right of first refusal and forced redemption rights in connection with transfers.

Acquisition of Properties from Our Affiliates

We are not precluded from acquiring real properties, directly or through joint ventures, from our affiliates, including acquisitions of real properties from our affiliates or programs sponsored by Thompson National Properties in an UPREIT transaction. Any such acquisitions will be approved consistent with the conflict of interest procedures described in this prospectus.

Due Diligence

Our advisor will perform a diligence review on investments we make. As part of this review, our advisor will obtain an environmental site assessment for each proposed property acquisition, which at a minimum will include a Phase I assessment. We will not close the purchase of any real property unless we are generally satisfied with the environmental status of the property except under limited exceptional circumstances in which we determine that there are factors that mitigate any potential environmental risk or liability. We will also generally seek to condition our obligation to close upon the delivery and verification of certain documents from the seller or developer, including, where appropriate:

•  plans and specifications;

•  environmental reports;

•  surveys;

•  evidence of marketable title subject to such liens and encumbrances as are acceptable to our advisor;

•  audited financial statements covering recent operations of real properties having operating histories unless such statements are not required to be filed with the SEC and delivered to stockholders; and

•  title and liability insurance policies.

Other Real Property Investments

Although we anticipate that our focus will be on retail properties, our charter and bylaws do not preclude us from acquiring other types of real properties. In order to diversify our portfolio, we may acquire additional real estate assets, including office, mixed-use, hospital, hospitality and industrial properties. The purchase of any property type will be based upon the best interests of our company and our stockholders as determined by our board of directors and taking into consideration the same factors discussed above. Additionally, we may also acquire properties that are under development or construction, mixed-use properties, undeveloped land, options to purchase properties and other real estate assets. We may enter into arrangements with the seller or developer of a property whereby the seller or developer agrees that if, during a stated period, the property does not generate a specified cash flow, the seller or developer will pay in cash to us a sum necessary to reach the specified cash flow level, subject in some cases to negotiated dollar limitations. In fact, we may invest in whatever types of interests in real estate that we believe are in our best interests.

Secondary Focus—Real Estate-Related Assets

Real Estate-Related Loans

In addition to direct investments in retail properties, we also plan to originate or acquire real estate-related loans that meet our underlying criteria for direct investment. However, we are not specifically limited in the number or size of our portfolio of real estate-related loans, or on the percentage of the net proceeds from this offering that we may invest in a single investment in real estate-related loans. The specific number

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and mix of real estate-related loans in which we invest will depend upon real estate market conditions, particularly with respect to retail properties, other circumstances existing at the time we are investing and the amount of proceeds we raise in the offering.

Our advisor will have substantial discretion with respect to identifying and evaluating specific real estate-related loans. In determining the types of real estate-related loans to originate or acquire, our advisor will evaluate the following criteria:

•  positioning the overall portfolio to achieve an optimal mix of real property and real estate-related loans;

•  diversification benefits relative to the rest of the real estate-related loans within our portfolio;

•  quality and sustainability of underlying property cash flows;

•  broad assessment of macro economic data and regional property level supply and demand dynamics;

•  potential for delivering high current income and attractive risk-adjusted total returns; and

•  additional factors considered important to meeting our investment objectives.

The real estate-related loans which we may originate or invest in include mortgage, mezzanine, bridge and other loans, debt and derivative instruments related to real estate, including mortgage backed securities, collateralized debt obligations (CDOs), debt securities issued by real estate companies and credit default swaps. We may acquire loan servicing rights in connection with these investments. We may structure, underwrite and originate many of the debt products in which we invest. Our underwriting process will involve comprehensive financial, structural, operational and legal due diligence to assess the risks of investments so that we can optimize pricing and structuring. By originating loans directly, we will be able to efficiently structure a diverse range of products. For instance, we may sell some components of the debt we originate while retaining attractive, risk-adjusted strips of the debt for ourselves. Our advisor will source our debt investments and provide loan servicing. We will pay our advisor for loans that we make or acquire and asset management fees for the loans that we hold for investment. We may sell some loans that we originate to third parties for a profit. We expect to hold other loans for investment. We will fund the loans we originate with proceeds from this offering and from other lenders.

Investments in Equity Securities

We may also make equity investments in REITs and other real estate companies. We may purchase the common or preferred stock of these entities or options to acquire their stock. We will target a public company that owns commercial real estate or real estate-related assets when we believe its stock is trading at a discount to that company’s net asset value. We may eventually seek to acquire or gain a controlling interest in the companies that we target.

Borrowing Policies

We intend to use secured and unsecured debt as a means of providing additional funds for the acquisition of real property, securities and real estate-related loans. Our targeted debt level is 50% of the fair market value of our assets. In order to facilitate investments in the early stages of our operations before we have acquired a substantial portfolio of income-generating investment properties, we expect to temporarily borrow in excess of our long-term targeted debt level. By operating on a leveraged basis, we expect that we will have more funds available for investments. This will generally allow us to make more investments than would otherwise be possible, potentially resulting in enhanced investment returns and a more diversified portfolio. However, our use of leverage increases the risk of default on loan payments and the resulting foreclosure on a particular asset. In addition, lenders may have recourse to assets other than those specifically securing the repayment of the indebtedness. When debt financing is unattractive due to high interest rates or other reasons, or when financing is otherwise unavailable on a timely basis, we may purchase certain assets for cash with the intention of obtaining debt financing at a later time.

Under our charter, we have a limitation on borrowing which precludes us from borrowing in excess of 300% of the value of our net assets. Net assets for purposes of this calculation are defined to be our total assets (other than intangibles), valued at cost prior to deducting depreciation, reserves for bad debts and other

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non-cash reserves, less total liabilities. The preceding calculation is generally expected to approximate 75% of the aggregate cost of our assets before non-cash reserves and depreciation. However, our charter allows us to temporarily borrow in excess of these amounts if such excess is approved by a majority of the independent directors and disclosed to stockholders in our next quarterly report, along with an explanation for such excess. In such event, we will review our debt levels at that time and take action to reduce any such excess as soon as practicable. We do not intend to exceed our charter’s leverage limit except in the early stages of our operations when the costs of our investments are most likely to exceed our net offering proceeds.

Our advisor will use its best efforts to obtain financing on the most favorable terms available to us and will seek to refinance assets during the term of a loan only in limited circumstances, such as when a decline in interest rates makes it beneficial to prepay an existing loan, when an existing loan matures or if an attractive investment becomes available and the proceeds from the refinancing can be used to purchase such investment. The benefits of any such refinancing may include increased cash flow resulting from reduced debt service requirements, an increase in distributions from proceeds of the refinancing and an increase in diversification and assets owned if all or a portion of the refinancing proceeds are reinvested.

Our charter restricts us from obtaining loans from any of our directors, our advisor and any of our affiliates unless such loan is 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. Our aggregate borrowings, secured and unsecured, will be reviewed by the board of directors at least quarterly.

Disposition Policies

We generally expect to hold each of our real property investments for five to seven years, which we believe is the optimal period to enable us to capitalize on the potential for increased income and capital appreciation of properties. However, circumstances might arise which could result in a shortened holding period for certain properties. In general, the holding period for real estate-related assets is expected to be shorter than the holding period for our real property investments. The determination of whether a particular real estate-related asset should be sold or otherwise disposed of will be made after consideration of relevant factors with a view toward achieving maximum total investment return for the asset. Relevant factors to be considered by the advisor when disposing of an investment include:

•  the prevailing economic, real estate and securities market conditions;

•  the extent to which the investment has realized its expected total return;

•  portfolio rebalancing and optimization;

•  diversification benefits;

•  opportunity to pursue a more attractive investment in real property or in a real estate-related asset;

•  liquidity benefits with respect to sufficient funds for the share redemption program; and

•  other factors that, in the judgment of the advisor, determine that the sale of the investment is in our best interests.

The determination of whether a particular property should be sold or otherwise disposed of will be made after consideration of relevant factors, including the factors discussed above, with a view toward achieving maximum total investment return for the property. We cannot assure you that this objective will be realized. The selling price of a property will be determined in large part by the amount of rent payable under the leases for such property. In connection with our sales of real properties, we may lend the purchaser all or a portion of the purchase price. In these instances, our taxable income may exceed the cash received in the sale. The terms of payment will be affected by custom in the area in which the property being sold is located and by the then-prevailing economic conditions.

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Investment Limitations

Our charter places numerous limitations on us with respect to the manner in which we may invest our funds prior to a listing of our common stock. Pursuant to our charter, we may not:

•  invest in commodities or commodity futures contracts, except for futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in real property and real estate-related loans;

•  invest in real estate contracts of sale, otherwise known as land sale contracts, unless the contract is in recordable form and is appropriately recorded in the chain of title;

•  make or invest in individual mortgage loans unless an appraisal is obtained concerning the underlying property, except for those mortgage loans insured or guaranteed by a government or government agency. In cases where a majority of our independent directors determines and in all cases in which the transaction is with any of our directors or our advisor and its affiliates, such appraisal shall be obtained from an independent appraiser. We will maintain such appraisal in our records for at least five years and it will be available for our stockholders’ inspection and duplication. We will also obtain a mortgagee’s or owner’s title insurance policy as to the priority of the mortgage;

•  make or invest in mortgage loans that are subordinate to any lien or other indebtedness of any of our directors, our advisor or its affiliates;

•  invest in equity interests of another issuer unless a majority of the directors (including a majority of independent directors) not otherwise interested in the transaction approves such investment as being fair, competitive and commercially reasonable;

•  make or invest in mortgage loans, including construction loans, on any one real property if the aggregate amount of all mortgage loans on such real property would exceed an amount equal to 85% of the appraised value of such real property as determined by appraisal, unless substantial justification exists because of the presence of other underwriting criteria;

•  make investments in unimproved real property mortgage loans on unimproved real property in excess of 10.0% of our total assets;

•  issue equity securities redeemable solely at the option of the holder (this limitation, however, does not limit or prohibit the operation of our share redemption program);

•  issue debt securities in the absence of adequate cash flow to cover debt service;

•  issue options or warrants to purchase shares to our advisor, any of our directors or any of their respective affiliates except on the same terms as the options or warrants are sold to the general public, if at all, and unless the amount of the options or warrants does not exceed an amount equal to 10% of our outstanding shares on the date of grant of the warrants and options;

•  issue shares on a deferred payment basis or under similar arrangement;

•  engage in trading, except for the purpose of short-term investments;

•  engage in underwriting or the agency distribution of securities issued by others;

•  invest in the securities of any entity holding investments or engaging in activities prohibited by our charter; or

•  make any investment that our board of directors believes will be inconsistent with our objectives of qualifying and remaining qualified as a REIT unless and until our board of directors determines, in its sole discretion, that REIT qualification is not in our best interests.

Investment Company Act Considerations

Neither we nor our operating partnership nor any of the subsidiaries of our operating partnership intend to register as, nor do we intend to conduct our operations so as to be regulated as, an investment company under the Investment Company Act. We expect that our investments will be held through wholly-owned or majority-owned subsidiaries of our operating partnership. We further expect that most of these subsidiaries will not fall within the definition of investment company under Section 3(a)(1) of the Investment Company Act. We also

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expect that we and our operating partnership will not meet the definition of an investment company under Section 3(a)(1) of the Investment Company Act. Under Section 3(a)(1) of the Investment Company Act, in relevant part, a company is not deemed to be an “investment company” if:

•  it neither is, nor holds itself out as being, engaged primarily, nor proposes to engage primarily, in the business of investing, reinvesting or trading in securities; or

•  it neither is engaged nor proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and does not own or propose to acquire “investment securities” having a value exceeding 40% of the value of its total assets on an unconsolidated basis, or the 40% test. “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) of the Investment Company Act.

We believe that we, our operating partnership and most of the subsidiaries of our operating partnership will satisfy both of the above tests as we intend to invest primarily in real property through our wholly or majority-owned subsidiaries, the majority of which we expect to have at least 60% of their assets in real property. As these subsidiaries would be investing either solely or primarily in real property, they would be outside of the definition of “investment company” under Section 3(a)(1) of the Investment Company Act. As we are organized as a holding company that conducts its businesses primarily through the operating partnership, which in turn is a holding company conducting its business through its subsidiaries, both we and our operating partnership intend to conduct our operations so that they comply with the 40% test.

The determination of whether an entity is a majority-owned subsidiary of ours or our operating partnership will be made by us. The Investment Company Act defines a majority-owned subsidiary of a person as a company 50% or more of the outstanding voting securities of which are owned by such person, or by another company which is a majority-owned subsidiary of such person. The Investment Company Act further defines voting securities as any security presently entitling the owner or holder thereof to vote for the election of directors of a company. We intend to treat companies that we may establish and in which we own at least a majority of the outstanding voting securities as majority-owned subsidiaries for purposes of the 40% test. We have not requested the SEC to approve our treatment of any company as a majority-owned subsidiary and the SEC has not done so. If the SEC were to disagree with our treatment of one or more companies as majority-owned subsidiaries, we would need to adjust our strategy and our assets in order to continue to pass the 40% test. Any such adjustment in our strategy could have a material adverse effect on us.

Even if the value of investment securities held by our subsidiaries were to exceed 40%, we expect our subsidiaries to be able to rely on the exclusion from the definition of “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act. Section 3(c)(5)(C), as interpreted by the staff of the SEC, requires our subsidiaries to invest at least 55% of its portfolio in “mortgage and other liens on and interests in real estate,” which we refer to as “qualifying real estate investments” and maintain an additional 25% of its assets in qualifying real estate investments or other real estate-related assets, or the 25% basket. The remaining 20% of the portfolio can consist of miscellaneous assets.

For purposes of the exclusions provided by Sections 3(c)(5)(C), we will classify the investments made by our subsidiaries based on no-action letters issued by the SEC staff and other SEC interpretive guidance. Whole loans will be classified as qualifying real estate investments, as long as the loans are “fully secured” by an interest in real estate at the time our subsidiary originates or acquires the loan but will consider loans with loan-to-value ratios in excess of 100% to be real estate-related assets that come within the 25% basket. We will treat mezzanine loan investments as qualifying real estate investments so long as they are structured as “Tier 1” mezzanine loans in accordance with the criteria set forth in the Capital Trust, Inc., SEC No-Action Letter (May 24, 2007), that is: (1) the loan is made specifically and exclusively for the financing of real estate; (2) the loan is underwritten based on the same considerations as a second mortgage and after the subsidiary performs a hands-on analysis of the property being financed; (3) the subsidiary as lender exercises ongoing control rights over the management of the underlying property; (4) the subsidiary as lender has the right to readily cure defaults or purchase the mortgage loan in the event of a default on the mortgage loan; (5) the true measure of the collateral securing the loan is the property being financed and any incidental assets related to

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the ownership of the property; and (6) the subsidiary as lender has the right to foreclose on the collateral and through its ownership of the property-owning entity become the owner of the underlying property.

We will consider a participation in a whole mortgage loan to be a qualifying real estate investments only if (1) our subsidiary has a participation interest in a mortgage loan that is fully secured by real property; (2) our subsidiary has the right to receive its proportionate share of the interest and the principal payments made on the loan by the borrower, and its returns on the loan are based on such payments; (3) our subsidiary invests only after performing the same type of due diligence and credit underwriting procedures that it would perform if it were underwriting the underlying mortgage loan; (4) our subsidiary has approval rights in connection with any material decisions pertaining to the administration and servicing of the loan and with respect to any material modification to the loan agreements; and (5) in the event that the loan becomes non-performing, our subsidiary has effective control over the remedies relating to the enforcement of the mortgage loan, including ultimate control of the foreclosure process, by having the right to: (a) appoint the special servicer to manage the resolution of the loan; (b) advise, direct or approve the actions of the special servicer; (c) terminate the special servicer at any time with or without cause; (d) cure the default so that the mortgage loan is no longer non-performing; and (e) purchase the senior loan at par plus accrued interest, thereby acquiring the entire mortgage loan.

With respect to construction loans which are funded over time, we will consider the outstanding balance (i.e., the amount of the loan actually drawn) as a qualified real estate asset. The SEC has not issued no-action letters specifically addressing construction loans. If the SEC takes a position in the future that is contrary to our classification, we will modify our classification accordingly.

We will treat investments by our subsidiaries in securities issued by companies primarily engaged in the real estate business, interests in securitized real estate loan pools, loans fully secured by a lien on the subject real estate and additional assets of the real estate developer (which may include equity interests in the developer entity and a pledge of additional assets of the developer including parcels of undeveloped or developed real estate), and any loans with a loan-to-value ratio in excess of 100% as real estate-related assets that come within the 25% basket. CMBS and CDOs will also be treated as real-estate related assets that come within the 25% basket.

Consistent with guidance issued by the SEC, we will treat our subsidiaries’ joint venture investments as qualifying assets that come within the 55% basket only if we have the right to approve major decisions affecting the joint venture; otherwise, they will be classified as real-estate related assets that come within the 25% basket.

The treatment of any other investments as qualifying real estate investments and real estate-related assets will be based on the characteristics of the underlying collateral and the particular type of loan (including whether we have foreclosure rights with respect to those securities or loans that have underlying real estate collateral) and will be consistent with SEC guidance.

In the event that we, or our operating partnership, were to acquire assets that could make either entity fall within the definition of investment company under Section 3(a)(1) of the Investment Company Act, we believe that we would still qualify for an exclusion from registration pursuant to Section 3(c)(6). Although the SEC staff has issued little interpretive guidance with respect to Section 3(c)(6), we believe that we and our operating partnership may rely on Section 3(c)(6) if 55% of the assets of our operating partnership consist of, and at least 55% of the income of our operating partnership is derived from, qualifying real estate investment assets owned by wholly owned or majority-owned subsidiaries of our operating partnership.

Finally, to maintain compliance with the Investment Company Act exceptions, we, our operating company or our subsidiaries 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, our operating partnership or our subsidiaries may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forego opportunities to acquire interest in companies that we would otherwise want to acquire and that may be important to our investment strategy. If our subsidiaries fail to own a sufficient amount of qualifying real estate investments or additional qualifying real estate investments or other real estate assets to satisfy the requirements of Section 3(c)(5)(C) and cannot rely on any other exemption or exclusion under the Investment Company Act, we could be characterized as an investment company. Our adviser will continually review our investment activity to attempt to ensure that we will not be regulated as an investment company. Among other

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things, our advisor will attempt to monitor the proportion of our portfolio that is placed in investments in securities.

Liquidity Strategy

Our board of directors does not anticipate evaluating a transaction providing liquidity for stockholders until 2015. Our charter does not require our board of directors to pursue a liquidity event. Due to the uncertainties of market conditions in the future, we believe setting finite dates for possible, but uncertain, liquidity events may result in actions not necessarily in the best interests or within the expectations of our stockholders. We expect that our board of directors, in the exercise of its fiduciary duty to our stockholders, will determine to pursue a liquidity event when it believes that then-current market conditions are favorable for a liquidity event, and that such a transaction is in the best interests of our stockholders. A liquidity event could include (1) the sale of all or substantially all of our assets either on a portfolio basis or individually followed by a liquidation, in which the net proceeds are distributed to stockholders, (2) a merger or another transaction approved by our board of directors in which our stockholders will receive cash and/or shares of a publicly traded company or (3) a listing of our shares on a national securities exchange. There can be no assurance as to when a suitable transaction will be available.

Prior to our completion of a liquidity event, our share redemption program may provide an opportunity for stockholders to have their shares of common stock redeemed, subject to certain restrictions and limitations.

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OUR INVESTMENT

General

As of the date of this prospectus, our portfolio consisted of the Moreno Marketplace, a multi-tenant commercial retail property located in Moreno Valley, California totaling approximately 94,574 square feet which consists of 78,743 of rentable square feet and two finished but unimproved pad sites totaling 15,831 square feet. The total cost of our property was approximately $12,500,000 million, exclusive of closing costs. As of March 31, 2010, there was $10,470,000 of mortgage debt on our property. The weighted-average remaining lease term of our portfolio is 17.6 years.

2009 Property Acquisition

Moreno Marketplace

On November 19, 2009, we acquired a fee simple interest in the Moreno Marketplace, a multi-tenant retail center located in Moreno Valley, California, or the Moreno property, through TNP SRT Moreno Marketplace, LLC, or TNP SRT Moreno, a wholly owned subsidiary of our operating partnership. TNP SRT Moreno acquired the Moreno property for an aggregate purchase price of $12,500,000, exclusive of closing costs. TNP SRT Moreno financed the payment of the purchase price for the Moreno property with a combination of (1) a loan in the aggregate principal amount of $9,250,000 from KeyBank National Association, or KeyBank, evidenced by a promissory note, (2) a loan in the aggregate principal amount of $1,250,000 from Moreno Retail Partners, LLC, or MRP, evidenced by a subordinated convertible promissory note, (3) $626,000 in funds from borrowings under our operating partnership’s revolving credit agreement with KeyBank and (4) proceeds from our public offering in an amount equal to the balance of the purchase price. We paid an acquisition sourcing fee of $130,000 to MRP in connection with the acquisition of the Moreno property. We also paid our advisor an acquisition fee of $202,000 in connection with the acquisition of the Moreno property.

The Moreno property is an approximately 94,574 square foot multi-tenant retail center located in Moreno Valley, California that was constructed in 2008 and is comprised of six buildings and two vacant pad sites. The Moreno property is comprised of approximately 78,743 square feet of building improvements and approximately 15,831 square feet of finished but unimproved pad sites. As of March 31, 2010, the Moreno property was approximately 70.1% leased based on rentable square footage. The Moreno property is anchored by Stater Bros., the largest privately owned supermarket chain in southern California. Stater Bros. occupies 55.9% of the rentable square footage of the Moreno property and pays an annual rent of $730,000 pursuant to a lease that expires in November 2028. Stater Bros. has the option to renew the term of its lease for up to six successive five-year renewal terms after the expiration of the initial term. No other tenants occupy 10% or more of the rentable square feet at the Moreno property.

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Lease Expirations

The following table reflects lease expirations of our property as of December 31, 2009:

					Percent of					Percent of
					Portfolio			Leased		Portfolio
	Number				Annualized			Rentable		Rentable
	of Leases		Annualized		Base Rent			Square Feet		Square Feet
Year of Expiration	Expiring		Base Rent(1)		Expiring			Expiring		Expiring
			(In thousands)
2010		—		—		—			—		—
2011		—		—		—			—		—
2012		—		—		—			—		—
2013		—		—		—			—		—
2014		2		69,000		6.1	%		2,083		3.8	%
2015		—		—		—			—		—
2016		—		—		—			—		—
2017		—		—		—			—		—
2018		—		—		—			—		—
2019		1		63,000		5.5	%		1,447		2.6	%
2020		—		—		—			—		—
Thereafter		3		1,010,000		88.4	%		51,697		93.6	%
Total		6		1,142,000		100	%		55,227		100	%

(1) Annualized base rent represents annualized contractual base rental income as of December 31, 2009, adjusted to straight-line for any future contractual rent increases from the time of our acquisition through the balance of the lease term.

As of December 31, 2009, the following tenant leases represent more than 10% of our property’s annualized base rent:

					Percent of
					Portfolio			Annualized
			Annualized		Annualized			Base Rent per		Lease
Tenant	Property		Base Rent(1)		Base Rent			Square Feet		Expiration(2)
Stater Bros		Moreno	$	774,000		67.7	%	$	17.59		November 2028
Wells Fargo		Moreno	$	135,000		11.8	%	$	27.00		November 2023

(1)	Annualized base rent represents annualized contractual base rental income as of December 31, 2009, adjusted to straight-line for any future contractual rent increases from the time of our acquisition through the balance of the lease term.
(2)	Represents the expiration date of the lease at December 31, 2009 and does not take into account any tenant renewal options.

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MANAGEMENT

Board of Directors

We operate under the direction of our board of directors, the members of which are accountable to us and our stockholders as fiduciaries. The board of directors is responsible for the management and control of our affairs. The board of directors has retained our advisor to manage our day-to-day affairs and to implement our investment strategy, subject to the board of directors’ direction, oversight and approval.

We have a total of five directors, three of whom are independent of us, our advisor and our respective affiliates. An “independent director” is a person who is not an officer or employee of ours, our advisor or our affiliates and has not otherwise been affiliated with such entities for the previous two years. We refer to our directors who are not independent as our “affiliated directors.”

As of the date of this prospectus, our charter and bylaws provide that the number of our directors may be established by a majority of the board of directors but may not be fewer than three nor more than fifteen. Our charter also provides that a majority of the directors must be independent directors and that at least one of the independent directors must have at least three years of relevant real estate experience. The independent directors will nominate replacements for vacancies among the independent directors.

Each director will be elected by the stockholders and will serve for a term of one year. Although the number of directors may be increased or decreased, a decrease will not have the effect of shortening the term of any incumbent director.

Any director may resign at any time and may be removed with or without cause by the stockholders upon the affirmative vote of at least a majority of all the votes entitled to be cast at a meeting called for the purpose of the proposed removal. The notice of the meeting will indicate that the purpose, or one of the purposes, of the meeting is to determine if the director will be removed.

A vacancy following the removal of a director or a vacancy created by an increase in the number of directors or the death, resignation, adjudicated incompetence or other incapacity of a director may be filled only by a vote of a majority of the remaining directors and, in the case of an independent director, the director must also be nominated by the remaining independent directors.

If there are no remaining independent directors, then a majority vote of the remaining directors will be sufficient to fill a vacancy among the independent directors’ positions. If at any time there are no independent or affiliated directors in office, successor directors will be elected by the stockholders. Each director will be bound by our charter.

Duties of Directors

The responsibilities of the board of directors include:

•  approving and overseeing our overall investment strategy, which will consist of elements such as investment selection criteria, diversification strategies and asset disposition strategies;

•  approving any investment for a purchase price, total project cost or sales price greater than an amount equal to 10% of the value of our net assets, including the financing of such investments. The board of directors has delegated to the investment committee the authority to review and approve any acquisition, development and disposition for a purchase price, total project cost or sales price of up to an amount equal to 10% of the value of our net assets;

•  approving and overseeing our debt financing strategies;

•  approving and monitoring the relationship between our operating partnership and our advisor;

•  approving joint ventures, limited partnerships and other such relationships with third parties;

•  approving a potential liquidity event;

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•  determining our distribution policy and authorizing distributions from time to time; and

•  approving amounts available for redemptions of shares of our common stock.

The directors are not required to devote all of their time to our business and are only required to devote such time to our affairs as their duties require. The directors will meet quarterly or more frequently as necessary.

The directors have established and will periodically review written policies on investments and borrowings consistent with our investment objectives and will monitor our administrative procedures, investment operations and performance and those of our advisor to assure that such policies are carried out. Any change in our investment objectives must be approved by the stockholders.

Because of the conflicts of interest created by the relationship among us, our advisor and various affiliates, our charter requires that a majority of our independent directors assume certain responsibilities. At the first meeting of our board of directors consisting of a majority of independent directors, our charter was reviewed and ratified by a vote of the directors and a majority of the independent directors. The independent directors will determine, from time to time but at least annually, that (1) the total fees and expenses paid to our advisor, our property manager and our dealer manager, as applicable, are reasonable in light of our investment performance, net assets, net income and the fees and expenses of other comparable unaffiliated REITs and (2) the compensation paid to our advisor is reasonable in relation to the nature and quality of services performed and that such compensation is within the limits prescribed by this prospectus. The independent directors will also supervise the performance of our advisor and review the compensation we pay our advisor to determine that the provisions of the advisory agreement are carried out. The term of the advisory agreement is one year from the commencement of this offering, subject to renewals upon mutual consent of the parties for an unlimited number of successive one-year periods. If the independent directors determine to terminate the advisory agreement earlier, our advisor will not be entitled to compensation for further services but shall be entitled to receive from us or our operating partnership within 30 days after such termination all unpaid reimbursements or expenses and all earned but unpaid fees payable prior to such termination, subject to certain limitations. In addition, as long as the advisory agreement is not terminated for “cause,” as defined in the advisory agreement, TNP Strategic Retail OP Holdings will receive a subordinated distribution. For a discussion of the subordinated distributions, see “Management Compensation Table.” A majority of our board of directors (including a majority of the independent directors) not otherwise interested in the transaction, must approve all transactions with any of our directors, our advisor or any of their affiliates. Prior to the renewal of the advisory agreement, the independent directors will also be responsible for reviewing the performance of our advisor and determining that all of the fees and compensation to be paid to our advisor is reasonable in relation to the nature and quality of services performed and that the provisions of the advisory agreement are being carried out. The fees payable to the advisor pursuant to the advisory agreement are subject to change based on this review.

As part of their review of our advisor’s compensation, the independent directors will consider factors such as:

•  the quality and extent of the services and advice furnished by our advisor;

•  the amount of fees paid to our advisor in relation to the size, composition and performance of our investments;

•  the success of our advisor in generating investment opportunities that meet our investment objectives;

•  rates charged to other externally advised REITs and similar investors by advisors performing similar services;

•  additional revenues realized by our advisor and its affiliates through their relationships with us, whether we pay them or they are paid by others with whom we do business;

•  the performance of our investments, including income, conservation or appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and

•  the quality of our investments relative to the investments generated by our advisor for its own account.

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Committees of the Board of Directors

Our board of directors may establish committees it deems appropriate to address specific areas in more depth than may be possible at a full board of directors meeting, provided that the majority of the members of each committee are independent directors. Our board of directors has established an investment committee and an audit committee.

Investment Committee

Our board of directors has delegated to the investment committee (1) certain responsibilities with respect to investment in specific investments proposed by our advisor and (2) the authority to review our investment policies and procedures on an ongoing basis and recommend any changes to our board of directors. Our investment committee must at all times be comprised of a majority of independent directors. The investment committee will be comprised of three directors, two of whom will be independent directors. The current members of the Investment Committee are Anthony W. Thompson, Jeffrey S. Rogers and Robert N. Ruth, with Anthony W. Thompson serving as the chairman of the investment committee.

With respect to investments, the board of directors has delegated to the investment committee the authority to approve any investment for a purchase price, total project cost or sales price of up to 10% of the value of our net assets. The board of directors, including a majority of the independent directors, must approve all acquisitions, developments and dispositions for a purchase price, total project cost or sales price greater than 10% of the value of our net assets.

Audit Committee

The audit committee will meet on a regular basis, at least quarterly and more frequently as necessary. The audit committee’s primary function will be to assist the board of directors in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the stockholders and others, the system of internal controls which management has established and the audit and financial reporting process. The current members of the audit committee are Arthur M. Friedman, Jeffrey S. Rogers and Robert N. Ruth. Mr. Friedman is the designated financial expert and the chairman of the audit committee.

Directors and Executive Officers

As of the date of this prospectus, our directors and executive officers and their positions and offices are as follows:

Name	Age		Position
Anthony W. Thompson		63	Chairman of the Board and Chief Executive Officer
Jack R. Maurer		66	Vice Chairman of the Board and President
Wendy J. Worcester		47	Chief Financial Officer, Treasurer and Secretary
Arthur M. Friedman		74	Independent Director
Jeffrey S. Rogers		41	Independent Director
Robert N. Ruth		50	Independent Director

Anthony W. Thompson has served as the Chairman of our board of directors and our Chief Executive Officer since September 2008. Mr. Thompson also serves as Chief Executive Officer of our sponsor, our advisor and our dealer manager. Prior to founding Thompson National Properties in 2008, Mr. Thompson founded Triple Net in 1998 and served as its Chairman and Chief Executive Officer until 2006, when he was named Chairman of the Board for Realty Advisors. In December 2007, Realty Advisors merged with Grubb & Ellis Company and Mr. Thompson was named Chairman of the combined company, a position from which he resigned effective February 8, 2008. During his tenure, Mr. Thompson oversaw operations of two non-listed REITS sponsored by these companies, NNN Healthcare/Office REIT, Inc. (now Healthcare Trust of America, Inc.) and NNN Apartment REIT, Inc. (now Grubb & Ellis Apartment REIT, Inc.) which at the time of his departure had acquired in excess of $600 million in commercial real estate properties. Mr. Thompson’s responsibilities included participating in (1) the oversight of day-to-day operations of the non-listed REITs, (2) the selection of real property and real estate related securities acquisitions and dispositions, (3) the structuring and negotiating of the terms of asset acquisitions and dispositions, (4) the selection of joint venture partners and monitoring these relationships, and (5) the oversight of the property managers, including the

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review and analysis of the operating budgets and leasing plans. Mr. Thompson is a member of the Sterling College Board of Trustees and various other community and charitable organizations. Mr. Thompson holds a Bachelor of Science degree in Economics from Sterling College in Sterling, Kansas. Mr. Thompson is a FINRA Series 1 and 24 registered representative of TNP Securities.

Our board of directors, excluding Mr. Thompson, has determined that Mr. Thompson’s extensive experience overseeing similar non-listed REITs, including the selection, negotiation, and management of investments in real estate and real estate related properties, as well as his status as a FINRA Series 1 and 24 registered representative, are all relevant experiences, attributes and skills that enable Mr. Thompson to effectively carry out his duties and responsibilities as director.

Jack R. Maurer has served as the Vice Chairman of our board of directors and our President since September 2008. Mr. Maurer also serves as Vice Chairman-Partner of our sponsor, President of our advisor, and Chief Financial Officer of our dealer manager. Prior to joining our sponsor in April 2008, Mr. Maurer acted as a consultant with respect to the formation of our sponsor between January 2008 and April 2008. Mr. Maurer served from April 1998 to November 2007 as Senior Vice President—Office of the Chairman with Triple Net and Realty Advisors where Mr. Maurer gained experience in the management of the two non-listed REITs sponsored by these companies, NNN Healthcare/Office REIT, Inc. (now Healthcare Trust of America, Inc.) and NNN Apartment REIT, Inc. (now Grubb & Ellis Apartment REIT, Inc.). Mr. Maurer’s responsibilities included (1) formulating an investment strategy and asset allocation framework, (2) selecting real property and real estate related securities acquisitions and dispositions, (3) managing the REITs’ properties and other assets, and (4) providing research and economic and statistical data in connection with the REITs’ assets and investment opportunities. Mr. Maurer holds a Bachelor of Science degree in Accounting from California University at Northridge and was a Certified Public Accountant from 1973 to 2001. Mr. Maurer is a FINRA Series 7, 24, 27 and 63 registered representative of TNP Securities.

Our board of directors, excluding Mr. Maurer, has determined that Mr. Maurer’s extensive experience managing and consulting similar non-listed REITs, including the formulation of investment strategies and asset allocation frameworks and selection, negotiation, and management of investments in real estate and real estate related properties, as well as his status as a FINRA Series 7, 24, 27 and 63 registered representative, are all relevant experiences, attributes and skills that enable Mr. Maurer to effectively carry out his duties and responsibilities as a director. In addition, our board of directors believes that Mr. Maurer’s 28 years of experience as a certified public accountant adequately equip him to evaluate investments and investment strategies.

Wendy J. Worcester has served as our Chief Financial Officer, Treasurer and Secretary since March 2009. She also serves as the Chief Financial Officer, Treasurer and Secretary of our advisor, Chief Administrative Officer of our sponsor, and Co-Chief Compliance Officer of our dealer manager. Prior to joining our sponsor in May 2008, Ms. Worcester served from April 2006 to April 2008 as a consultant for various start-up companies focusing on forecasting, planning, accounting, legal and fund raising. Ms. Worcester previously worked for Rent.com from September 1999 to March 2006 serving as the Chief Financial and Accounting Officer until its acquisition by eBay in 2005. As Chief Financial and Accounting Officer of Rent.com, Ms. Worcester was responsible for financial planning, forecasting, accounting, treasury and legal issues and teamed with the Chief Executive Officer and President to raise more than $30 million in capital. Prior to joining Rent.com, Ms. Worcester served as Director of Finance from March 1996 to September 1999 at JWT Communications, as Assistant Vice President from July 1995 to March 1996 at Hawthorne Savings and as Tax Senior from September 1984 to September 1987 at Ernst & Young LLP. Ms. Worcester earned a Bachelor of Science degree in Business Administration with an emphasis in Accounting from the University of Southern California in Los Angeles, California. Ms. Worcester is a certified public accountant (inactive status) and a chartered financial analyst. She is a FINRA Series 7, 24, 27 and 63 registered representative of TNP Securities.

Arthur M. Friedman has served as one of our independent directors since March 2009. Mr. Friedman, a certified public accountant, has been an independent business and tax consultant since September 1995 and has served as the president of Arthur M. Friedman, C.P.A., Inc. since July 2002. Mr. Friedman served as a partner of Arthur Andersen from April 1968 until August 1995, during which time he served as Partner in

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Charge of the Andersen Tax Division of the Cleveland office from April 1972 to March 1976 and the Los Angeles office from April 1976 to March 1981, Managing Director of Tax Practice from March 1980 to February 1990 and Managing Director of the Partner Development Program from February 1993 to July 1995. He was also a member of the Andersen Board of Partners from August 1980 until July 1984, and August 1985 until March 1988. Mr. Friedman is a member of the American Institute of Certified Public Accountants, the California Society of Certified Public Accountants and the Illinois Bar Association. He has served as a member of the American Institute of Certified Public Accountants’ Tax Division and received the Dixon Memorial Award, the accounting profession’s highest award for tax service, in October 1998. Mr. Friedman also serves as director of PS Business Parks, Inc., a publicly traded REIT. Mr. Friedman earned a Bachelor of Business Administration degree from the University of Michigan in Ann Arbor, Michigan and a Juris Doctorate degree from DePaul University School of Law in Chicago, Illinois.

Our board of directors, excluding Mr. Friedman, has determined that Mr. Friedman’s experience serving on the board of another REIT and his professional experience as a certified public accountant are relevant experiences, attributes and skills that make Mr. Friedman a valuable addition to our board of directors. In addition, the board of directors believes that Mr. Friedman, with his extensive experience as a certified public accountant, is well-equipped to serve as the financial expert and chair person of the Audit Committee.

Jeffrey S. Rogers has served as one of our independent directors since March 2009. Mr. Rogers has served as President and Chief Operating Officer since February 2005 and as Chief Operating Officer between February 2004 and February 2005 of Integra Realty Resources, Inc., a commercial real estate valuation and counseling firm, where he oversees corporate operations, technology and software initiatives, and all aspects of financial reporting and audit procedures. Mr. Rogers also serves on the board of directors of Integra Realty Resources, Inc. and IRR Residential, LLC, an affiliate of Integra Realty Resources, Inc. Prior to joining Integra Realty Resources, Inc. in February 2004, Mr. Rogers worked from November 2002 to February 2004 as a consultant for Regeneration, LLC, a management consulting firm. Between September 1999 and November 2002, Mr. Rogers held various positions at ReturnBuy, Inc., a technology and software solutions company, including President of ReturnBuy Ventures, a division of ReturnBuy, Inc., between August 2001 and November 2002, Chief Financial Officer between September 1999 and August 2001 and member of the board of directors between September 1999 and August 2001. In January 2003, ReturnBuy, Inc. filed for Chapter 11 bankruptcy as part of a restructuring transaction in which it was acquired by Jabil Circuit, Inc. Mr. Rogers has also served on the Finance Committee of the Young Presidents Organization since March 2009 and will serve as Audit Committee Chairman beginning in July 2010. Mr. Rogers earned a Master of Business Administration degree from The Darden School, University of Virginia in Charlottesville, Virginia, a Juris Doctorate degree from Washington and Lee University School of Law in Lexington, Virginia and a Bachelor of Arts degree in Economics from the Washington and Lee University.

Our board of directors, excluding Mr. Rogers, has determined that Mr. Rogers’ previous leadership position with a commercial real estate valuation and counseling firm and his professional experience as an attorney are relevant experiences, attributes and skills that make Mr. Rogers a valuable addition to our board of directors. In addition, our board of directors believes that Mr. Rogers, with his extensive experience with financial reporting as a former Chief Financial Officer, is well-equipped to serve as a member of the Audit Committee.

Robert N. Ruth has served as one of our independent directors since March 2009. Mr. Ruth is President of The Ruth Group, a Los Angeles based company focused on value-added opportunities in office, industrial and retail projects. Prior to the founding of The Ruth Group in January 2007, Mr. Ruth was the Area President for the Trammell Crow Company based in Los Angeles, California from March 1998 to January 2007 where he was responsible for management of the company’s team of real estate professionals and for planning and growth. Prior to joining Trammell Crow Company, Mr. Ruth was a principal of Tooley & Company until the company was sold to Trammell Crow Company. At Tooley & Company, Mr. Ruth was responsible for acquiring, developing, managing and leasing projects throughout Southern California. Mr. Ruth is a Trustee of the Urban Land Institute (ULI), former Chairman of the ULI Awards Jury, former Chairman of the ULI Program Committee, former Executive Committee Board Member of the ULI and previously served on the board of directors of the Urban Land Foundation. He is a Trustee at the Los Angeles Zoo where he serves as the Audit and Finance Chairman and on the Executive Committee. In addition, he is active on the board of

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directors of both Los Angeles Family Housing (LAFH) and Building Owners Managers Association (BOMA). Mr. Ruth is also an active member of the Young Presidents Organization (YPO), where he previously served as a member of the Executive Committee and Chairman of the Bel Air Chapter. Mr. Ruth attended the University of Southern California in Los Angeles, California where he received a Bachelor of Science degree in the Business School with an emphasis in Real Estate Finance.

Our board of directors, excluding Mr. Ruth, has determined that Mr. Ruth’s experience with investing in office, industrial and retail projects for The Ruth Group, managing real estate professionals for Trammell Crow, and his previous board experience listed above are relevant experiences, attributes and skills that make Mr. Ruth a valuable addition to the board of directors and audit committee.

Our directors and executive officers will serve until their successors are elected and qualify. Our officers will devote such portion of their time to our affairs as is required for the performance of their duties, but they are not required to devote all of their time to us.

Compensation of Executive Officers and Directors

We do not currently have any employees nor do we currently intend to hire any employees who will be compensated directly by us. Each of our executive officers, including each executive officer who serves as a director, is employed by our advisor or its affiliates as its executive officer and receives compensation for his or her services, including services performed on our behalf, from our advisor or its affiliates. As executive officers of our advisor or its affiliates, these individuals will serve to carry out the duties of the advisor pursuant to the advisory agreement, such as to manage our day-to-day affairs and carry out the directives of our board of directors in the review, selection and recommendation of investment opportunities, operating acquired investments and monitoring the performance of our investments to ensure that they are consistent with our investment objectives. The duties that these executive officers will perform on our behalf, on the other hand, serve to fulfill the corporate governance obligations of these persons as our appointed officers pursuant to our charter and bylaws. As such, these duties will not involve the review, selection and recommendation of investment opportunities but rather the performance of corporate governance activities that require the attention of one of our corporate officers, including signing certifications required under the Sarbanes-Oxley Act of 2002, as amended, for filing with our periodic reports. Although we will indirectly bear some of the costs of the compensation paid to our executive officers, either through fees or expense reimbursements we pay to our advisor, we do not intend to pay any compensation directly to our executive officers. Our executive officers, as employees of our advisor or its affiliates, will be entitled to receive awards in the future under our long-term incentive plan as a result of their status as employees of our advisor or its affiliates, although we do not currently intend to grant any such awards.

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Fiscal Year 2009 Director Compensation

We pay our independent directors an annual fee of $30,000, plus $2,500 per in-person board meeting attended, $2,000 per in-person committee meeting attended and $1,000 for each telephonic meeting. If board members attend more than one meeting on any day, we will only pay such person $2,500 for all meetings attended on such day. The audit committee chairperson will receive an additional $10,000 annual retainer. The independent directors may elect to receive their annual retainer and/or meeting fees in an equivalent value of shares of our common stock.

Upon initial election to the board, we grant each independent director 5,000 shares of restricted stock, which we refer to as the “initial restricted stock grant,” pursuant to our independent directors’ compensation plan, which is a sub-plan of our long-term incentive plan described in greater detail below. Going forward, each independent director that subsequently joins the board of directors will receive the initial restricted stock grant on the date he or she joins the board of directors. In addition, on the date of each of our annual stockholders meetings at which an independent director is re-elected to the board of directors, he or she will receive 2,500 shares of restricted stock. One-third of the independent director restricted stock will become non-forfeitable on each of the first three anniversaries of the date of grant. The restricted stock will become fully non-forfeitable in the event of an independent director’s termination of service due to his or her death or disability, or upon the occurrence of a change in our control.

On November 12, 2009, we granted 5,000 restricted common shares to each of our three independent directors pursuant to our incentive stock plan. One-third of the restricted stock, or 1,667 shares, granted to each independent director became non-forfeitable on the date of grant and one-third will become non-forfeitable on each of the first two anniversaries of the date of grant.

The following table sets forth the compensation paid to our independent directors in 2009:

	Fees Earned or		All Other
Name	Paid in Cash(1)		Compensation(2)		Total
Anthony W. Thompson	$	—	$	—	$	—
Jack R. Maurer		—		—		—
Arthur M. Friedman		14,000		45,000		59,000
Jeffrey S. Rogers		14,000		45,000		59,000
Robert N. Ruth		13,000		45,000		58,000

(1)	The amounts shown in this column include payments for attendance at board of director and committee meetings and annual retainers and include amounts paid in the form of shares of our stock, as our directors may elect to receive their annual retainer in an equivalent value of shares of stock.
(2)	Reflects grants of restricted stock. The amounts shown in this column reflect the aggregate fair value computed as of the grant date in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 (“FASB ASC Topic 718”).

All directors receive reimbursement of reasonable out-of-pocket expenses incurred in connection with attending meetings of the board of directors. If a director is also one of our officers, we will not pay any compensation to such person for services rendered as a director.

Long-term Incentive Plan

We have adopted a long-term incentive plan, which we will use to attract and retain qualified directors, officers, employees, and consultants. Our long-term incentive plan offers these individuals an opportunity to participate in our growth through awards in the form of, or based on, our common stock. The long-term incentive plan authorizes the granting of restricted stock, stock options, stock appreciation rights, restricted or deferred stock units, dividend equivalents, other stock-based awards and cash-based awards to directors, employees, officers and consultants of ours or of our affiliates selected by the plan administrator for participation in our long-term incentive plan. Stock options granted under the long-term incentive plan will not exceed an amount equal to 10% of the outstanding shares of our common stock on the date of grant of any such stock options.

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Our board of directors or a committee appointed by the board of directors will administer the long-term incentive plan, with sole authority to determine all of the terms and conditions of the awards, including whether the grant, vesting or settlement of awards may be subject to the attainment of one or more performance goals. As described above, the board of directors also adopted a sub-plan to provide for regular grants of restricted stock to our independent directors. No awards will be granted under the long-term incentive plan if the grant or vesting of the awards would jeopardize our status as a REIT under the Internal Revenue Code or otherwise violate the ownership and transfer restrictions imposed under our charter. Unless otherwise determined by our board of directors, no award granted under the long-term incentive plan will be transferable except through the laws of descent and distribution.

We have reserved 2,000,000 shares for issuance under the long-term incentive plan. In the event of a transaction between our company and our stockholders that causes the per-share value of our common stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering or large nonrecurring cash dividend), the share authorization limits under the long-term incentive plan will be adjusted proportionately and the board of directors will make such adjustments to the long-term incentive plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction. In the event of a stock split, a stock dividend or a combination or consolidation of the outstanding shares of common stock into a lesser number of shares, the authorization limits under the long-term incentive plan will automatically be adjusted proportionately and the shares then subject to each award will automatically be adjusted proportionately without any change in the aggregate purchase price.

Unless otherwise provided in an award certificate or any special plan document governing an award, upon the termination of a participant’s service due to death or disability, all of his or her outstanding options and stock appreciation rights will become fully exercisable, all time-based vesting restrictions on his or her outstanding awards will lapse as of the date of termination, and the payout opportunities attainable under all of his or her outstanding performance-based awards will vest based on target or actual performance (depending on the time during the performance period in which the date of termination occurs) and the awards will payout on a pro rata basis, based on the time elapsed prior to the date of termination. Unless otherwise provided in an award certificate or any special plan document governing an award, upon the occurrence of a change in our control, all outstanding options and stock appreciation rights will become fully exercisable, all time-based vesting restrictions on outstanding awards will lapse, and the payout opportunities attainable under all outstanding performance-based awards will vest based on target performance and the performance-based awards will payout on a pro rata basis, based on the time elapsed prior to the change in control.

Our board of directors may in its sole discretion at any time determine that all or a portion of a participant’s options and stock appreciation rights will become fully or partially exercisable, that all or a part of the time-based vesting restrictions on all or a portion of a participant’s outstanding awards will lapse, and/or that any performance-based criteria with respect to any awards will be deemed to be wholly or partially satisfied, in each case, as of such date as the board may, in its sole discretion, declare. Our board may discriminate among participants or among awards in exercising such discretion.

The long-term incentive plan will automatically expire on the tenth anniversary of the date on which it was approved by our board of directors and stockholders, unless extended or earlier terminated by the board of directors. The board of directors may terminate the long-term incentive plan at any time. The expiration or other termination of the long-term incentive plan will not, without the participants’ consent, have an adverse impact on any award that is outstanding at the time the long-term incentive plan expires or is terminated. The board of directors may amend the long-term incentive plan at any time, but no amendment will adversely affect any award without the participant’s consent and no amendment to the long-term incentive plan will be effective without the approval of our stockholders if such approval is required by any law, regulation or rule applicable to the long-term incentive plan.

Limited Liability and Indemnification of Directors, Officers and Others

Subject to certain limitations, our charter limits the personal liability of our stockholders, directors and officers for monetary damages and provides that we will indemnify and pay or reimburse reasonable expenses

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in advance of final disposition of a proceeding to our directors, officers and advisor and our advisor’s affiliates. In addition, we will enter into indemnification agreements with each of our executive officers and directors and we intend to obtain directors and officers’ liability insurance.

The Maryland General Corporation Law, or the MGCL, permits a corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages, except for liability resulting from (1) actual receipt of an improper benefit or profit in money, property or services or (2) active and deliberate dishonesty established by a final judgment and which is material to the cause of action.

The MGCL allows directors and officers to be indemnified against judgments, penalties, fines, settlements and expenses actually incurred in a proceeding unless the following can be established:

•  an act or omission of the director or officer was material to the cause of action adjudicated in the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty;

•  the director or officer actually received an improper personal benefit in money, property or services; or

•  with respect to any criminal proceeding, the director or officer had reasonable cause to believe his act or omission was unlawful.

However, indemnification for an adverse judgment in a suit by us or in our right, or for a judgment of liability on the basis that personal benefit was improperly received, may not be made unless ordered by a court and then only for expenses.

The MGCL permits a corporation to advance reasonable expenses to a director or officer upon receipt of a written affirmation by the director or officer of his good faith belief that he has met the standard of conduct necessary for indemnification and a written undertaking by him or on his behalf to repay the amount paid or reimbursed if it is ultimately determined that the standard of conduct was not met.

However, our charter provides that we may indemnify our directors and our advisor and its affiliates for loss or liability suffered by them or hold them harmless for loss or liability suffered by us only if all of the following conditions are met:

•  our directors and our advisor or its affiliates have determined, in good faith, that the course of conduct that caused the loss or liability was in our best interests;

•  our directors and our advisor or its affiliates were acting on our behalf or performing services for us;

•  in the case of affiliated directors and our advisor or its affiliates, the liability or loss was not the result of negligence or misconduct;

•  in the case of our independent directors, the liability or loss was not the result of gross negligence or willful misconduct; and

•  the indemnification or agreement to hold harmless is recoverable only out of our net assets and not from our stockholders.

We have also agreed to indemnify and hold harmless our advisor and its affiliates performing services for us from specific claims and liabilities arising out of the performance of their obligations under the advisory agreement subject to the limitations set forth immediately above. As a result, we and our stockholders may be entitled to a more limited right of action than we would otherwise have if these indemnification rights were not included in the advisory agreement.

The general effect to investors of any arrangement under which any of our controlling persons, directors or officers are insured or indemnified against liability is a potential reduction in distributions resulting from our payment of premiums associated with insurance or any indemnification for which we do not have adequate insurance.

The SEC takes the position that indemnification against liabilities arising under the Securities Act is against public policy and unenforceable. Indemnification of our directors and our advisor or its affiliates will

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not be allowed for liabilities arising from or out of a violation of state or federal securities laws, unless one or more of the following conditions are met:

•  there has been a successful adjudication on the merits of each count involving alleged securities law violations;

•  such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction; or

•  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 SEC and of the published position of any state securities regulatory authority in which the securities were offered as to indemnification for violations of securities laws.

We may advance funds to our directors, our advisor and its affiliates for legal expenses and other costs incurred as a result of legal action for which indemnification is being sought only if all of the following conditions are met:

•  the legal action relates to acts or omissions with respect to the performance of duties or services on behalf of us;

•  the party seeking indemnification has provided us with written affirmation of his good faith belief that he has met the standard of conduct necessary for indemnification;

•  the legal action is initiated by a third party who is not a stockholder or the legal action is initiated by a stockholder acting in his capacity as such and a court of competent jurisdiction specifically approves such advancement; and

•  the party seeking indemnification undertakes to repay the advanced funds to us, together with the applicable legal rate of interest thereon, in cases in which he is found not to be entitled to indemnification.

Indemnification may reduce the legal remedies available to us and our stockholders against the indemnified individuals.

The aforementioned charter provisions do not reduce the exposure of directors and officers to liability under federal or state securities laws, nor do they limit a stockholder’s ability to obtain injunctive relief or other equitable remedies for a violation of a director’s or an officer’s duties to us or our stockholders, although the equitable remedies may not be an effective remedy in some circumstances.

Our Advisor

We will rely on our advisor to manage our day-to-day activities and to implement our investment strategy. Our advisor performs its duties and responsibilities as our fiduciary pursuant to an advisory agreement.

Under the terms of the advisory agreement, our advisor will use its best efforts, subject to the oversight, review and approval of our board of directors, to perform the following:

•  participate in formulating an investment strategy and asset allocation framework consistent with achieving our investment objectives;

•  research, identify, review and recommend to our board of directors for approval investments in real properties and other real estate-related assets and dispositions consistent with our investment policies and objectives;

•  structure the terms and conditions of transactions pursuant to which acquisitions and dispositions of investments will be made;

•  actively oversee and manage our portfolio of our real properties and other real estate-related assets for purposes of meeting our investment objectives;

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•  manage our day-to-day affairs, including financial accounting and reporting, investor relations, marketing, informational systems and other administrative services on our behalf;

•  select joint venture partners, structure corresponding agreements and oversee and monitor these relationships;

•  arrange for financing and refinancing of our investments; and

•  recommend various liquidity events to our board of directors when appropriate.

The above summary is provided to illustrate the material functions that our advisor will perform for us as an advisor and is not intended to include all of the services that may be provided to us by our advisor, its affiliates or third parties.

Our advisor is managed by the following individuals:

Name	Position
Anthony W. Thompson	Chief Executive Officer
Jack R. Maurer	President
Wendy J. Worcester	Chief Financial Officer, Treasurer and Secretary

Mr. Thompson and Mr. Maurer will have primary responsibility for the management decisions of our advisor, including the selection of investments to be recommended to our board of directors, the negotiations in connection with these investments and the property management and leasing of these investments. For biographical information on the management of our advisor, see “—Directors and Executive Officers.”

Our sponsor owns a 75% interest in our advisor. TNP SRT Management, LLC, which is an indirect wholly owned subsidiary of our sponsor, owns a 25% non-managing member interest in our advisor. Certain of our officers also own an economic interest in TNP SRT Management, LLC.

The Advisory Agreement

The term of the advisory agreement is one year from the commencement of this offering, subject to renewals upon mutual consent of the parties for an unlimited number of successive one-year periods. The independent directors of our board of directors will evaluate the performance of our advisor before renewing the advisory agreement. The advisory agreement may be terminated:

•  immediately by us for “cause,” or upon the bankruptcy of our advisor;

•  without cause by a majority of our independent directors upon 60 days’ written notice; or

•  with “good reason” by our advisor upon 60 days’ written notice.

“Good reason” is defined in the advisory agreement to mean either any failure by us to obtain a satisfactory agreement from any successor to assume and agree to perform our obligations under the advisory agreement or any material breach of the advisory agreement of any nature whatsoever by us or our operating partnership. “Cause” is defined in the advisory agreement to mean fraud, criminal conduct, misconduct or negligent breach of fiduciary duty by our advisor or a material breach of the advisory agreement by our advisor.

In the event of the termination of the advisory agreement, our advisor will cooperate with us and take all reasonable steps to assist in making an orderly transition of the advisory function. Upon the earliest to occur of (1) the listing of our common stock on a national securities exchange or (2) the termination or non-renewal of the advisory agreement, the special units in our operating partnership held by TNP Strategic Retail OP Holdings will be redeemed resulting in a one-time payment to TNP Strategic Retail OP Holdings in the form of (a) shares of our common stock, (b) a non-interest bearing promissory note payable solely from the proceeds of asset sales due and payable no later than three years after the date of issuance of such note or (c) any combination thereof. Upon an advisory agreement termination event for “cause,” the one-time payment to TNP Strategic Retail OP Holdings will be $1.00. See “Management Compensation Table—Subordinated Distribution Upon Listing or Termination Event—TNP Strategic Retail OP Holdings.” In addition, upon

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termination of the advisory agreement, our advisor will be paid all accrued and unpaid fees and expense reimbursements earned prior to the date of termination. Before selecting a successor advisor, the board of directors must determine that any successor advisor possesses sufficient qualifications to perform the advisory function and to justify the compensation it would receive from us.

See “Management Compensation Table” for a detailed discussion of the fees payable to our advisor under the advisory agreement. We also describe in that section our obligation to reimburse our advisor for organizational and offering expenses, the cost of providing services to us (other than services for which it earns acquisition, origination or dispositions fees for sales of properties or other investments) and payments made by our advisor to third parties in connection with potential investments.

Holdings of Shares of Common Stock, Common Units and Special Units

Our advisor currently owns 100 common units of our operating partnership, for which it contributed $1,000. We are the sole general partner of our operating partnership. TNP Strategic Retail OP Holdings, an affiliate of our advisor, owns all of the special units of our operating partnership, for which it contributed $1,000. The resale of any of our shares of common stock by our affiliates is subject to the provisions of Rule 144 promulgated under the Securities Act, which rule limits the number of shares that may be sold at any one time.

Affiliated Dealer Manager

TNP Securities, our dealer manager and an affiliate of our advisor, is a registered broker-dealer and a member firm of FINRA. TNP Securities will provide certain sales, promotional and marketing services to us in connection with the distribution of the shares of common stock offered pursuant to this prospectus. We will pay our dealer manager a sales commission equal to 7.0% of the gross proceeds from the sale of shares of our common stock sold in the primary offering and a dealer manager fee equal to 3.0% of the gross proceeds from the sale of shares of our common stock sold in the primary offering. Other than serving as dealer manager for this offering, TNP Securities has no experience acting as a dealer manager for an offering.

TNP Securities is managed by the following individuals:

Name	Position
Anthony W. Thompson	Chief Executive Officer
Jack R. Maurer	Chief Financial Officer
Wendy J. Worcester	Co-Chief Compliance Officer
Michael N. Loukas	Co-Chief Compliance Officer

For biographical information regarding Messrs. Thompson and Maurer and Ms. Worcester, see “—Directors and Executive Officers.”

Michael N. Loukas serves as Co-Chief Compliance Officer of TNP Securities. Mr. Loukas has also served as Executive Vice President of Thompson National Properties’ Security Division since July 2009. Mr. Loukas has over 14 years of experience in the financial industry. Prior to joining Thompson National Properties, he served as a Regional Vice President with Security Benefit Distributors from August 2007 to July 2009, as Executive Vice President with The Kelmoore Investment Co. from November 1999 to September 2005, as a Business Development Consultant with Maya Capital Advisors, LLC from December 2005 to July 2007 and as an Institutional Sales Associate with CIBC Oppenheimer from December 1997 to November 1999. Mr. Loukas earned a Bachelor of Arts degree from Bowdoin College in Brunswick, Maine and is a FINRA Series 4, 7, 24, 63 and 65 registered representative of TNP Securities.

Affiliated Property Manager

Our real properties will be managed and leased by TNP Property Management, LLC, a newly formed Delaware limited liability company and our affiliated property manager.

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We will pay our property manager a monthly market-based property management fee of up to 5.0% of the gross revenues generated at our properties for services it provides in connection with operating and managing the property. The property manager may pay some or all of these fees to third parties for management or leasing services.

Our property manager will hire, direct and establish policies for employees who will have direct responsibility for the operations of each real property it manages, which may include, but is not limited to, on-site managers and building and maintenance personnel. Certain employees of our property manager may be employed on a part-time basis and may also be employed by our advisor, our dealer manager or certain companies affiliated with them. Our property manager will also direct the purchase of equipment and supplies and will supervise all maintenance activity. The management fees we pay to our property manager will include, without additional expense to us, all of our property manager’s general overhead costs.

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MANAGEMENT COMPENSATION TABLE

The following table summarizes all of the compensation and fees, including reimbursement of expenses, to be paid by us to our advisor and its affiliates, including our dealer manager, in connection with our organization, this offering and our operations, assuming we raise the maximum amount offered hereby.

		Estimated Amount
Type of Fee and Recipient	Description and Method of Computation	Maximum Offering
Organizational and Offering Stage
Sales Commission(1)—Dealer Manager	7.0% of gross offering proceeds from the sale of shares in the primary offering (all or a portion of which may be reallowed to participating broker-dealers). No sales commissions will be paid for sales pursuant to the distribution reinvestment plan.	$70,000,000
Dealer Manager Fee(1)—Dealer Manager	3.0% of gross offering proceeds from the sale of shares in the primary offering (a portion of which may be reallowed to participating broker-dealers). No dealer manager fees will be paid for sales pursuant to the distribution reinvestment plan.	$30,000,000
Other Organizational and Offering Expense Reimbursement(2)—Advisor and Dealer Manager	Reimbursement for organizational and offering expenses (excluding sales commissions and dealer manager fees) incurred on our behalf, but only to the extent that the reimbursement would not cause these organizational and offering expenses borne by us to exceed 3.0% of the gross offering proceeds. We estimate that organizational and offering expenses will represent a lower percentage of gross offering proceeds as the amount of proceeds increases. Based on our current estimates, we estimate that these expenses will represent 1.75% of gross offering proceeds, or $17,500,000, if we raise the maximum offering.	$17,500,000
Operational Stage
Acquisition Fees(3)—Advisor	2.5% of (1) the cost of investments we acquire or (2) our allocable cost of investments acquired in a joint venture, in each case including purchase price, acquisition expenses and any debt attributable to such investments. With respect to investments in and origination of real estate-related loans, we will pay an origination fee to our advisor in lieu of an acquisition fee.	$24,562,500 (assuming no leverage is used). $49,125,000 (assuming a leverage ratio of 50%).
Origination Fees(3)—Advisor	2.5% of the amount funded by us to acquire or originate real estate-related loans, including third party expenses related to such investments and any debt we use to fund the acquisition or origination of the loan. We will not pay an acquisition fee with respect to such real estate-related loans.	$24,562,500 (assuming no leverage is used). $49,125,000 (assuming a leverage ratio of 50%).

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		Estimated Amount
Type of Fee and Recipient	Description and Method of Computation	Maximum Offering
Asset Management Fees(4)—Advisor	A monthly amount equal to one-twelfth of 0.6% of the sum of the aggregate cost of all assets we own and of our investments in joint ventures, including acquisition fees, origination fees, acquisition and origination expenses and any debt attributable to such investments; provided, however, that our advisor will not be paid the asset management fee until our funds from operations exceed the lesser of (1) the cumulative amount of any distributions declared and payable to our stockholders or (2) an amount that is equal to a 10.0% cumulative, non-compounded, annual return on invested capital for our stockholders. Separate and distinct from the asset management fee, we will also reimburse our advisor or its affiliates for all expenses paid or incurred on our behalf, including the salaries and benefits of persons performing services for us except for the salaries and benefits of persons who also serve as one of our executive officers or as an executive officer of our advisor.	Actual amounts depend upon the cost of our real estate investments and therefore, cannot be determined at this time.
Property Management and Leasing Fees—TNP Property Management, LLC	A monthly market-based fee for property management services of up to 5.0% of the gross revenues generated by our properties. Our property manager may subcontract with third party property managers and will be responsible for supervising and compensating those property managers.	Actual amounts depend upon the gross revenue of the properties and customary property management and leasing fees in the region in which properties are acquired and the property types acquired and, therefore, cannot be determined at this time.
Operating Expenses— Advisor(4)	We will reimburse our advisor for all expenses paid or incurred by our advisor in connection with the services provided to us, including our allocable share of the advisor’s overhead, such as rent, personnel costs, utilities and IT costs. We will not reimburse our advisor for personnel costs in connection with services for which our advisor is entitled to acquisition, origination or disposition fees.	Actual amounts are dependent upon expenses paid or incurred and, therefore, cannot be determined at the present time.
Liquidity Stage
Disposition Fees(5)—Advisor or its affiliates	If our advisor or its affiliates provides a substantial amount of services, as determined by our independent directors, in connection with the sale of a real property, 50% of a customary and competitive real estate commission not to exceed 3.0% of the contract sales price of each property or other investment sold. With respect to a property held in a joint venture, the foregoing commission will be reduced to a percentage of such amount reflecting our economic interest in the joint venture.	Actual amounts depend upon the sale price of the investments and, therefore, cannot be determined at this time.

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		Estimated Amount
Type of Fee and Recipient	Description and Method of Computation	Maximum Offering
Subordinated Participation Interest—TNP Strategic Retail OP Holdings(6)(7)	TNP Strategic Retail OP Holdings, an affiliate of our advisor, is the holder of the special units in our operating partnership. So long as the special units remain outstanding, the holder of special units will receive 15.0% of the net sales proceeds received by our operating partnership on dispositions of its assets after the other holders of common units, including us, have received, in the aggregate, a return of their net capital contributions plus a 10.0% cumulative non-compounded annual return.	Actual amounts depend upon future liquidity events and, therefore cannot be determined at this time.
Subordinated Distribution Upon Listing or Termination Event—TNP Strategic Retail OP Holdings(6)(7)	The special units will be redeemed by our operating partnership, resulting in a one-time payment in the form of shares of our common stock or a promissory note to TNP Strategic Retail OP Holdings, the holder of the special units, upon the earliest to occur of the following events:
	(1) The listing of our common stock on a national securities exchange, which we refer to as a “listing liquidity event.”
	(2) The termination or non-renewal of the advisory agreement, which we refer to as an “advisory agreement termination event,” (a) for “cause,” as defined in the advisory agreement, (b) in connection with a merger, sale of assets or transaction involving us pursuant to which a majority of our directors then in office are replaced or removed, (c) by our advisor for “good reason,” as defined in the advisory agreement, or (d) by us or our operating partnership other than for “cause.”
	Upon a listing liquidity event, a one-time payment to the holder of the special units will be in the amount that would have been distributed with respect to the special units, calculated as described above under “Subordinated Participation Interest—TNP Strategic Retail OP Holdings,” if our operating partnership had distributed to the holders of common units upon liquidation an amount equal to (i) in the event of a listing on a national securities exchange only, the market value of the listed shares based upon the average closing price or, if the average closing price is not available, the average of bid and ask prices, for the 60 day period beginning 120 days after such listing liquidity event or (ii) in the event of an underwritten public offering, the value of the shares based upon the initial public offering price in such offering.
	Upon an advisory agreement termination event for “cause,” the one-time cash payment to the holder of special units will be $1.00.

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		Estimated Amount
Type of Fee and Recipient	Description and Method of Computation	Maximum Offering
	Upon an advisory agreement termination event (other than for “cause,” as defined in the advisory agreement), the one-time payment to the holder of the special units will be the amount that would have been distributed with respect to the special units as described above under “Subordinated Participation Interest—TNP Strategic Retail OP Holdings,” if our operating partnership sold all of its assets for their then fair market values (as determined by appraisal, except for cash and those assets that can be readily marked to market), paid all of its liabilities and distributed any remaining amount to the holders of common units.

(1)	The sales commission and dealer manager fee may be reduced or waived in connection with certain categories of sales, such as sales for which a volume discount applies, sales through investment advisors or banks acting as trustees or fiduciaries, sales to our affiliates and sales under our distribution reinvestment plan.
(2)	Other organization and offering expenses include all expenses (other than sales commission and the dealer manager fee) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, charges of our escrow holder and transfer agent, charges of our advisor for administrative services related to the issuance of shares in the offering, reimbursement of bona fide due diligence expenses of broker-dealers, reimbursement of our advisor for costs in connection with preparing supplemental sales materials, the cost of bona fide training and education meetings held by us (primarily the travel, meal and lodging costs of registered representatives of broker-dealers), attendance and sponsorship fees and cost reimbursement for employees of our affiliates to attend retail seminars conducted by broker-dealers and, in special cases, reimbursement to participating broker-dealers for technology costs associated with the offering, costs and expenses related to such technology costs, and costs and expenses associated with facilitation of the marketing of our shares of common stock and the ownership of our shares of common stock by such broker-dealer’s customers. Any such reimbursement will not exceed actual expenses incurred by our advisor. Our advisor will be responsible for the payment of our cumulative other organization and offering expenses to the extent they exceed 3.0% of the aggregate gross proceeds from the sale of shares of our common stock sold in the primary offering on a best efforts basis without recourse against or reimbursement by us.
(3)	In addition to acquisition and origination fees, we will reimburse our advisor for amounts it pays to third parties in connection with the selection, acquisition or development of a property or acquisition or origination of real estate-related loans, whether or not we ultimately acquire the property or originate the real estate-related loans. Our charter limits our ability to pay acquisition fees if the total of all acquisition fees and expenses relating to the purchase would exceed 6.0% of the contract purchase price. Under our charter, a majority of our board of directors, including a majority of the independent directors, would have to approve any acquisition fees (or portion thereof) which would cause the total of all acquisition fees and expenses relating to a real estate asset acquisition to exceed 6.0% of the contract purchase price.
(4)	Our advisor must reimburse us at least annually for reimbursements paid to our advisor in any year to the extent that such reimbursements to our advisor cause our total operating expenses to exceed the greater of (1) 2% of our average invested assets, or (2) 25% of our net income, unless the independent directors have determined that such excess expenses were justified based on unusual and non-recurring factors. “Average invested assets” means the average monthly book value of our assets invested directly or indirectly in equity interests and loans secured by real estate during the 12-month period before deducting depreciation, bad debts or other non-cash reserves. “Total operating expenses” means all expenses paid or incurred by us, as determined under generally accepted accounting principles in the United States, or GAAP, that are in any way related to our operation, including asset management fees, but excluding (1) the expenses of

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	raising capital such as organization and offering expenses, legal, audit, accounting, underwriting, brokerage, registration and other fees, printing and other such expenses and taxes incurred in connection with the issuance, distribution, transfer and registration of shares of our common stock; (2) interest payments; (3) taxes; (4) non-cash expenditures such as depreciation, amortization and bad debt reserves; (5) reasonable incentive fees based on the gain in the sale of our assets; and (6) acquisition fees, acquisition expenses (including expenses relating to potential acquisitions that we do not close), real estate commissions on the resale of real property and other expenses connected with the acquisition, disposition, management and ownership of investments (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of real property).
(5)	Although we are most likely to pay disposition fees to our advisor or one of its affiliates in our liquidity stage, these fees may also be earned during our operational stage.
(6)	Except as described in the Management Compensation Table, TNP Strategic Retail OP Holdings shall not be entitled to receive any redemption or other payment from us or our operating partnership, including any participation in the monthly distributions we intend to make to our stockholders.
(7)	TNP Strategic Retail OP Holdings cannot earn both the subordinated participation in net sale proceeds and the subordinated distribution upon listing of our common stock on a national securities exchange or the termination or non-renewal of the advisory agreement.

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CONFLICTS OF INTEREST

We are subject to various conflicts of interest arising out of our relationship with our advisor and other affiliates, including (1) conflicts related to the compensation arrangements between our advisor, certain affiliates and us, (2) conflicts with respect to the allocation of the time of our advisor and its key personnel and (3) conflicts with respect to the allocation of investment opportunities. Our independent directors have an obligation to function on our behalf in all situations in which a conflict of interest may arise and will have a fiduciary obligation to act on behalf of the stockholders. The material conflicts of interest are discussed below.

Interests in Other Real Estate Programs

Other than performing services as our advisor, our advisor presently has no interests in other real estate programs. However, some of our officers are officers or employees of our sponsor, our advisor and other affiliated entities which will receive fees in connection with this offering and our operations. Anthony W. Thompson is our Chairman of the Board and Chief Executive Officer and also serves as the Chief Executive Officer of Thompson National Properties, our sponsor. Mr. Thompson controls our sponsor and indirectly controls our advisor and dealer manager. Jack R. Maurer is our Vice Chairman of the Board and President and also serves as the Vice Chairman-Partner of Thompson National Properties. Wendy J. Worcester is our Chief Financial Officer, Treasurer and Secretary and also serves as the Chief Administrative Officer of Thompson National Properties and the Chief Financial Officer, Treasurer and Secretary of our advisor. In addition, Ms. Worcester serves as Co-Chief Compliance Officer of our dealer manager. Certain of our officers also own an economic interest in TNP SRT Management, LLC, which owns a 25% interest in our advisor. In addition, certain members of our advisor’s management team are presently, and plan in the future to continue to be, involved with a number of other real estate programs and activities sponsored by TNP affiliates. Present activities of these affiliates include making investments in the acquisition, ownership, development and management of retail properties, real estate-related assets and other real estate assets. TNP affiliates currently are sponsoring five private real estate programs that are engaged in a continuous offering and have approximately $6,890,000 available for investment as of March 31, 2010. Each has an investment period of up to five years with the possibility of a one year extension for one of the programs.

Our advisor and other affiliates are not prohibited from engaging, directly or indirectly, in any other business or from possessing interests in any other business venture or ventures, including businesses and ventures involved in the acquisition, ownership, development, management, leasing or sale of real property or investing in real estate-related assets. None of the TNP affiliates are prohibited from raising money for another entity that makes the same types of investments that we target and we may co-invest with any such entity. All such potential co-investments will be subject to approval by our board of directors.

We rely on our advisor and its affiliates to manage our day-to-day activities and to implement our investment strategy. Certain of our advisor’s affiliates, including its principals, are presently, and plan in the future to continue to be, and our advisor plans in the future to be, involved with real estate programs and activities which are unrelated to us. As a result of these activities, our advisor, its employees and certain of its affiliates will have conflicts of interest in allocating their time between us and other activities in which they are or may become involved. Our advisor and its employees will devote only as much of their time to our business as our advisor, in its judgment, determines is reasonably required, which may be substantially less than their full time. Therefore, our advisor and its employees may experience conflicts of interest in allocating management time, services, and functions among us and other TNP affiliates and any other business ventures in which they or any of their key personnel, as applicable, are or may become involved. This could result in actions that are more favorable to other TNP affiliates than to us. However, our advisor believes that it and its affiliates have sufficient personnel to discharge fully their responsibilities to all of the activities of TNP affiliates in which they are involved.

Competition

We may compete with other TNP affiliates for opportunities to acquire or sell real properties in certain geographic areas. As a result of this competition, certain investment opportunities may not be available to us.

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We and our advisor have developed procedures to resolve potential conflicts of interest in the allocation of investment opportunities between us and TNP affiliates. Our advisor will be required to provide information to our board of directors to enable the board of directors, including the independent directors, to determine whether such procedures are being fairly applied.

Certain of our advisor’s affiliates currently own or manage properties in geographic areas in which we expect to acquire properties. Conflicts of interest will exist to the extent that we own or manage retail properties and other real properties in the same geographic areas where real properties owned or managed by other TNP affiliates are located. In such a case, a conflict could arise in the leasing of real properties in the event that we and another TNP affiliate were to compete for the same tenants in negotiating leases, or a conflict could arise in connection with the resale of real properties in the event that we and another TNP affiliate were to attempt to sell similar real properties at the same time. Conflicts of interest may also exist at such time as we or our affiliates managing real property on our behalf seek to employ developers, contractors or building managers.

Affiliated Dealer Manager

Our dealer manager, TNP Securities, is one of our affiliates, and this relationship may create conflicts of interest in connection with the performance of its due diligence. Even though our dealer manager will examine the information in this prospectus for accuracy and completeness, the dealer manager will not make an independent due diligence review and investigation of us or this offering of the type normally performed by an unaffiliated, independent underwriter in connection with the offering of securities. Accordingly, you do not have the benefit of such independent review and investigation. Our dealer manager will not be prohibited from acting in any capacity in connection with the offer and sale of securities offered by TNP affiliates that may have investment objectives similar to ours.

Affiliated Property Manager

Our property manager will perform property management services for us and our operating partnership. Our property manager is affiliated with our advisor, and in the future there is potential for a number of the members of our advisor’s management team and our property manager’s management team to overlap. As a result, we will not have the benefit of independent property management to the same extent as if our advisor and our property manager were unaffiliated and did not share any employees or managers. In addition, given that our property manager is affiliated with us, our agreements with our property manager will not be at arm’s-length. Therefore, we will not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

Lack of Separate Representation

Alston & Bird LLP is counsel to us in connection with this offering and serves as counsel to our operating partnership, our advisor and certain affiliates of our advisor in connection with this offering and may continue to do so in the future. There is a possibility that in the future the interests of the various parties may become adverse. In the event that a dispute were to arise between us, our operating partnership, our advisor, or any of their affiliates, separate counsel for such parties would be retained as and when appropriate.

Joint Ventures with Our Affiliates

Subject to approval by our board of directors and the separate approval of our independent directors, we may enter into joint ventures or other arrangements with our affiliates to acquire, develop and manage retail properties and other real estate and real estate-related assets. Our advisor and its affiliates may have conflicts of interest in determining which of such entities should enter into any particular joint venture agreement. Our joint venture partners may have economic or business interests or goals that are or that may become inconsistent with our business interests or goals. In addition, should any joint venture be consummated, our advisor may face a conflict in structuring the terms of the relationship between our interests and the interest of the affiliated joint venture partner and in managing the joint venture. Since our advisor will make investment decisions on our behalf, agreements and transactions between our advisor’s affiliates and us as joint venture

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partners with respect to any such joint venture will not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

Fees and Other Compensation to Our Advisor and its Affiliates

A transaction involving the purchase and sale of a real property or real estate-related asset may result in the receipt of commissions, fees and other compensation by our advisor and its affiliates, including acquisition fees and property management fees and participation in non-liquidating net sale proceeds. None of the agreements that provide for fees and other compensation to our advisor and its affiliates will be the result of arm’s-length negotiations. All such agreements, including our advisory agreement, require approval by a majority of our board of directors, including a majority of the independent directors, not otherwise interested in such transactions, as being fair and reasonable to us and on terms and conditions no less favorable than those that could be obtained from unaffiliated entities. The timing and nature of fees and compensation to our advisor or its affiliates could create a conflict between the interests of our advisor or its affiliates and those of our stockholders. However, the amounts payable to TNP Strategic Retail OP Holdings, as the holder of special units in our operating partnership, are subordinated to the return (or deemed return) to the stockholders or partners of our operating partnership of their capital contributions plus cumulative noncompounded annual returns on such capital.

Subject to oversight by the board of directors, our advisor has considerable discretion with respect to all decisions relating to the terms and timing of all transactions. Therefore, our advisor may have conflicts of interest concerning certain actions taken on our behalf, particularly due to the fact that fees such as the asset management fee and acquisition fees payable to our advisor, and the property management fees payable to our property manager, will generally be payable regardless of the quality of the real properties and real estate-related assets acquired or the services provided to us.

Each transaction we enter into with our advisor or its affiliates is subject to an inherent conflict of interest. The 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 any affiliate. The independent directors who are also otherwise disinterested in the transaction must approve each transaction between us and our advisor or any of its affiliates as being fair and reasonable to us and on terms and conditions no less favorable to us than those available from unaffiliated third parties.

Conflict Resolution Procedures

As discussed above, we are subject to potential conflicts of interest arising out of our relationship with our advisor and its affiliates. These conflicts may relate to compensation arrangements, the allocation of investment opportunities, the terms and conditions on which various transactions might be entered into by us and our advisor or its affiliates and other situations in which our interests may differ from those of our advisor or its affiliates. We have adopted the procedures set forth below to address these potential conflicts of interest.

Priority Allocation of Investment Opportunities

In the advisory agreement, our advisor has agreed that we will have the first opportunity to acquire any investment in an income-producing retail properties identified by our sponsor or advisor that meet our investment criteria, for which we have sufficient uninvested funds. With respect to potential non-retail property investments, in the event that an investment opportunity becomes available that is suitable, under all of the factors considered by our advisor, for both us and one or more other TNP affiliates, and for which more than one of these 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. Our advisor will make this determination in good faith. Our board of directors, including the independent directors, has a duty to ensure that the method used by our advisor for the allocation of the acquisition of real estate assets by two or more affiliated programs seeking to acquire similar types of real estate assets is reasonable and is applied fairly to us.

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Independent Directors

Our independent directors, acting as a group, will resolve potential conflicts of interest whenever they determine that the exercise of independent judgment by the board of directors or our advisor or its affiliates could reasonably be compromised. However, the independent directors may not take any action which, under Maryland law, must be taken by the entire board of directors or which is otherwise not within their authority. The independent directors, as a group, are authorized to retain their own legal and financial advisors. Among the matters we expect the independent directors to review and act upon are:

•  the continuation, renewal or enforcement of our agreements with our advisor and its affiliates, including the advisory agreement and the property management agreement, and the agreement with our dealer manager;

•  transactions with affiliates, including our directors and officers;

•  awards under our long-term incentive plan; and

•  pursuit of a potential liquidity event.

Those conflict of interest matters that cannot be delegated to the independent directors, as a group, under Maryland law must be acted upon by both the board of directors and the independent directors.

Compensation Involving Our Advisor and its Affiliates

The independent directors will evaluate at least annually whether the compensation that we contract to pay to our advisor and its affiliates is reasonable in relation to the nature and quality of services performed and that such compensation is within the limits prescribed by our charter. The independent directors will supervise the performance of our advisor and its affiliates and the compensation we pay to them to determine that the provisions of our compensation arrangements are being performed appropriately. This evaluation will be based on the factors set forth below as well as any other factors deemed relevant by the independent directors:

•  the quality and extent of the services and advice furnished by our advisor;

•  the amount of fees paid to our advisor in relation to the size, composition and performance of our investments;

•  the success of our advisor in generating investment opportunities that meet our investment objectives;

•  rates charged to other externally advised REITs and similar investors by advisors performing similar services; 

•  additional revenues realized by our advisor and its affiliates through their relationship with us, whether we pay them or they are paid by others with whom we do business;

•  the performance of our investments, including income, conservation and appreciation of capital, frequency of problem investments and competence in dealing with distress situations; and

•  the quality of our investments relative to the investments generated by our advisor for its own account.

The independent directors shall record these factors in the minutes of the meetings at which they make such evaluations.

Acquisitions, Leases and Sales Involving Affiliates

We will not acquire or lease properties in which our advisor or its affiliates or any of our directors has an interest without a determination by a majority of the directors (including a majority of the independent directors) not otherwise interested in the transaction that such transaction is fair and reasonable to us and at a price to us no greater than the cost of the asset to our advisor or its affiliates or such director 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 property at an amount in excess of its appraised value. We will

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not sell or lease properties to our advisor or its affiliates or to our directors unless a majority of the directors (including a majority of the independent directors) not otherwise interested in the transaction determine the transaction is fair and reasonable to us.

Mortgage Loans Involving Affiliates

Our charter prohibits us from investing in or making mortgage loans, including when the transaction is with our advisor or our directors or any of their affiliates, unless an independent expert appraises the underlying property. We must keep the appraisal for at least five years and make it available for inspection and duplication by any of our stockholders. In addition, we must obtain a mortgagee’s or owner’s title insurance policy or commitment as to the priority of the mortgage or the condition of the title. Our charter prohibits us from making or investing in any mortgage loans that are subordinate to any lien or other indebtedness of our advisor, our directors or any of their affiliates.

Issuance of Options and Warrants to Certain Affiliates

Our charter prohibits the issuance of options or warrants to purchase our common stock to our advisor, our directors or any of their affiliates (1) on terms more favorable than we would offer such options or warrants to unaffiliated third parties or (2) in excess of an amount equal to 10.0% of our outstanding common stock on the date of grant.

Repurchase of Shares of Common Stock

Our charter prohibits us from paying a fee to our advisor or our directors or any of their affiliates in connection with our repurchase or redemption of our common stock.

Loans and Expense Reimbursements Involving Affiliates

We will not make any loans to our advisor or our directors or any of their affiliates except mortgage loans for which an appraisal is obtained from an independent appraiser. In addition, we will not borrow from these persons unless a majority of directors (including a majority of independent directors) not otherwise interested in the transaction approve the transaction as being fair, competitive and commercially reasonable, and no less favorable to us than comparable loans between unaffiliated parties. These restrictions on loans will only apply to advances of cash that are commonly viewed as loans, as determined by the board of directors. By way of example only, the prohibition on loans would not restrict advances of cash for legal expenses or other costs incurred as a result of any legal action for which indemnification is being sought, nor would the prohibition limit our ability to advance reimbursable expenses incurred by directors or officers or our advisor or its affiliates.

In addition, our directors and officers and our advisor 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, subject to the limitation on reimbursement of operating expenses to the extent that they exceed the greater of 2% of our average invested assets or 25% of our net income, as described in this prospectus under the caption “Management—The Advisory Agreement.”

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PRIOR PERFORMANCE SUMMARY

The information presented in this section represents the historical experience of real estate programs sponsored or advised by our sponsor, Thompson National Properties and its affiliates, which we refer to as “TNP prior programs.” The following summary is qualified in its entirety by reference to the Prior Performance Tables of Thompson National Properties, LLC, which may be found in Appendix A of this prospectus. Investors in our shares of common stock should not assume that they will experience returns, if any, comparable to those experienced by investors in the TNP prior programs. Investors who purchase our shares of common stock will not thereby acquire any ownership interest in any of the entities to which the following information relates.

Pursuant to the requirements of Guide 5, “Preparation of Registration Statements Relating to Interests in Real Estate Limited Partnerships” promulgated by the SEC, we are also including in this section certain historical information of real estate programs sponsored or advised by Triple Net Properties, LLC, or Triple Net, which we refer to as “Triple Net prior programs.” Anthony W. Thompson, our Chairman and Chief Executive Officer, served as Chairman and Chief Executive Officer of Triple Net from 1998 through 2006, and Jack M. Maurer, our Vice Chairman and President, served as Senior Vice President—Office of the Chairman of Triple Net during the same period. We are providing information on the Triple Net prior programs through December 31, 2006 in this section and Appendix B to this prospectus. The information provided in this section and Appendix B with respect to the Triple Net prior programs has been obtained solely from public information filed with the SEC by Triple Net and its affiliates which included prior performance information through December 31, 2006. We cannot verify the accuracy of the information relating to the Triple Net prior programs provided in this section and Appendix B and such information is not indicative of the results of the Triple Net prior programs after December 31, 2006. Investors in our shares should not assume that they will experience returns, if any, comparable to those experienced by investors in Triple Net prior programs.

The returns to our stockholders will depend in part on the mix of product in which we invest, the stage of investment and our place in the capital structure for our investments. As our portfolio is unlikely to mirror in any of these respects investments made by the TNP prior programs or the Triple Net prior programs, the returns to our stockholders will vary from those generated by those prior programs. In addition, all of the TNP prior programs were conducted through privately-held entities that were not subject to either the up-front commissions, fees and expenses associated with this offering or many of the laws and regulations to which we will be subject. You should not assume the past performance of the prior programs will be indicative of our future performance. See the Prior Performance Tables located in Appendix A and Appendix B.

Our Sponsor

Thompson National Properties was formed in Delaware in 2008 to sponsor public and private real estate programs. Thompson National Properties is majority owned by Anthony W. Thompson. Mr. Thompson has been involved in the finance, management, acquisition and renovation of commercial real estate for over 35 years.

Prior Programs of Thompson National Properties

As of December 31, 2009, Thompson National Properties has, directly or indirectly, sponsored five privately offered prior real estate programs. As of December 31, 2009, the TNP prior programs had raised $56,265,000 from approximately 602 investors and none of the TNP prior programs had completed its offering.

The following table sets forth information on the five TNP prior programs.

Name of Program	Type of Program	Launch Year		Program Status
Bruin Fund, L.P.	Private Fund		2008	Operating
TNP Vulture Fund VIII, LLC	Private Fund		2008	Operating
2008 Participating Notes Program, LLC	Private Fund		2008	Operating
TNP 6700 Santa Monica Blvd., DST	Delaware Statutory Trust		2009	Operating
Thompson/Morgan Baton Rouge I DST	Delaware Statutory Trust		2009	Operating

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We intend to conduct this offering in conjunction with existing and future offerings by other public and private real estate entities sponsored by Thompson National Properties. To the extent that such entities have the same or similar objectives as ours or involve similar or nearby properties, such entities may be in competition with the properties we acquire or seek to acquire.

Table II included in Appendix A to this prospectus sets forth information as to the compensation to the sponsor in connection with the TNP prior programs. Table V included in Appendix A to this prospectus sets forth information as to the sale or disposition of properties in connection with the TNP prior programs. Additionally, Table VI contained in Part II of the registration statement, of which this prospectus is a part, provides certain additional information relating to properties acquired by the TNP prior programs. Upon written request, we will furnish a copy of this table to you without charge.

Prior Program Summary Information

Capital Raising

The total amount of funds raised from investors in the five TNP prior programs as of December 31, 2009, was $56,265,000. These funds were invested in real estate with an aggregate cost, including debt and investments of joint venture partners, of approximately $124 million. The total number of investors in these TNP prior programs, collectively, is 602. See Table II for more detailed information about Thompson National Properties’ experience in raising and investing funds and compensation paid to Thompson National Properties and its affiliates as the sponsor of these programs.

Investments

The TNP prior programs had acquired 10 properties between May 12, 2008 and December 31, 2009. The table below gives further information about these properties:

	Properties Purchased
	(as a Percentage of
Location	Aggregate Purchase Price)
United States		100	%
West		57	%
Plains States		—
South Central		10	%
Southeast		33	%
Northeast		—

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The following table gives a percentage breakdown of the aggregate amount of the acquisition and development costs of the properties purchased by the TNP prior programs, categorized by type of property, as of December 31, 2009, all of which were either new, existing or under construction.

	New		Existing			Construction
Commercial:
Office Buildings		—		53	%		—
Industrial Buildings		—		10	%		—
Shopping Centers		—		—			—
Other		—		3	%		—
Residential:
Apartments		—		32	%		—
Hotels		—		—			—
Homebuilding		—		—			—
Land Development		—		—			—
Resort Residential		—		—			1	%
Other		—		1	%		—
Total		—		99	%		1	%

These properties were financed with a combination of debt and offering proceeds.

Dispositions

On December 19, 2008, TNP Vulture Fund VIII, LLC sold a 45.47% interest in VF Carson, LLC to an affiliate, TNP SLI Green Building Fund, LP for an aggregate purchase price of $5,000,000. VF Carson LLC is the sole owner of an 11 story office building located at 302 E. Carson, Las Vegas, Nevada.

Summary of Acquisitions

Since their formation in 2008, the TNP prior programs acquired one retail property, three condominiums, three office properties, one industrial property, one multifamily property and one development project. The total acquisition costs of these properties was approximately $125.0 million of which $78.3 million, or 63%, was financed with mortgage financing. The remaining $46.7 million was provided by investors. The locations of these properties, and the number of each property in each location, are as follows:

Location	Number of Properties
Dallas, Texas		1
Las Vegas, Nevada		5
Park City, Utah		1
Duncan, South Carolina		1
Los Angeles, California		1
Baton Rouge, Louisiana		1

See Table VI in Part II of the registration statement of which this prospectus is a part for more detailed information as to the acquisition of properties by the TNP prior programs in 2009. Upon request and for no fee, we will provide a copy of such table to any prospective investor.

Adverse Business Developments

Although the TNP prior programs generally have been adversely affected by recent economic conditions, the TNP prior programs have operated with no major adverse business conditions or developments.

Prior Programs of Triple Net

Prior to founding Thompson National Properties in 2008, Mr. Thompson founded Triple Net in 1998 and served as its Chairman and Chief Executive Officer from 1998 to 2006. During 2007, Mr. Thompson served as Chairman of a newly formed holding company of Triple Net, Realty Advisors. During this period, Jack R.

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Maurer, our Vice Chairman and President, served as Senior Vice President—Office of the Chairman of Triple Net and Realty Advisors. Realty Advisors combined with Grubb & Ellis Company in December 2007 and Mr. Thompson served as Chairman of the Board of the combined company until his resignation in February 2008.

Thompson National Properties is not affiliated with Triple Net or its affiliates. All information provided in this section and Appendix B to this prospectus with respect to the Triple Net prior programs has been obtained solely from public information filed with the SEC by Triple Net and its affiliates. We have not verified the information provided herein with respect to the Triple Net prior programs and such information is not indicative of results of Triple Net prior programs after December 31, 2006.

From the inception of Triple Net through December 31, 2006, Triple Net and its management team sponsored approximately 165 real estate investment programs, or Triple Net prior programs, including 159 private programs and six public programs, formed for the purpose of acquiring and operating commercial real estate properties, primarily consisting of retail, office, industrial and medical office buildings, healthcare-related facilities and apartment properties. The Triple Net private programs generally involved the issuance of membership interests in a single purpose limited liability company, or LLC, so that investors acquired an indirect interest in a particular property through their equity interest in the LLC. Simultaneously with the acquisition of the property, the LLC would also typically sell undivided tenant in common interests, or TIC interests, directly in the property. A TIC interest is not an interest in any entity, but rather a direct real property interest. A TIC may be an individual or an entity such as a limited liability company. Typically, the TICs are involved in tax deferred exchanges structured to comply with the requirements of Section 1031 of the Internal Revenue Code, whereas the cash purchase of LLC membership units does not meet the requirements of Section 1031, although the LLC’s interest in the underlying real property interest will also be a TIC interest.

Triple Net and its management team also sponsored four public REITs: G REIT, Inc. (as of January 28, 2008, G REIT Liquidating Trust became the successor of G REIT, Inc.); T REIT, Inc. (as of July 20, 2007, T REIT Liquidating Trust became the successor of T REIT, Inc.); NNN Apartment REIT, Inc. (now known as Grubb & Ellis Apartment REIT, Inc.); and NNN Healthcare/Office REIT, Inc. (formerly known as Grubb & Ellis Healthcare REIT, Inc. and now known as Healthcare Trust of America, Inc.). In addition, Triple Net sponsored two limited liability companies that were required to file public reports pursuant to the Exchange Act, NNN 2002 Value Fund, LLC and NNN 2003 Value Fund, LLC. These six public real estate programs raised gross offering proceeds of approximately $580,077,000 from 17,824 investors and purchased interests in 68 real estate properties amounting to an investment of approximately $1,336,168,000 from the inception of Triple Net to December 31, 2006.

Triple Net also sponsored four notes programs; NNN 2004 Notes Program, LLC, NNN 2005 Notes Program, LLC, NNN 2006 Notes Program LLC, and NNN Collateralized Senior Notes, LLC, or the Notes Programs. The Notes Programs were formed for the purpose of making secured and unsecured loans to affiliates of Triple Net.

During 2004, 2005 and 2006, Triple Net prior programs acquired 122 properties, for which the property type, location and method of financing are summarized below.

	No. of
Property Type	Properties
Office		97
Apartments		22
Retail		1
Industrial		1
Land		1
Total		122

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	No. of
Property Type	Properties
Location
Arizona		4
Arkansas		1
California		20
Colorado		6
Florida		11
Georgia		8
Illinois		1
Indiana		1
Maryland		1
Minnesota		2
Missouri		3
Nebraska		2
Nevada		4
New Jersey		2
North Carolina		8
Ohio		3
Oregon		2
Pennsylvania		3
South Carolina		2
Tennessee		3
Texas		31
Utah		1
Virginia		2
Wisconsin		1
Total		122

	No. of
Method of Financing	Properties
All debt		0
All cash		7
Combination of cash and debt		115
Total		122

Adverse Business Developments

Through December 31, 2006, some of the Triple Net prior programs had cash flow deficiencies and/or distributions to investors which represented returns of capital because the distributions were in excess of cash generated from operations, sales and refinancings. Cash deficiencies after cash distributions occur for a variety of reasons, most of which are the result of either (a) the loss of a major tenant and/or a reduction in leasing rates and, as a result, the operating revenues of a program have decreased or (b) the program held multiple properties or buildings, some of the properties or buildings were sold and distributions were made that were attributable to the sold properties which exceeded the cash generated by the operations of the remaining properties. Operating cash flow available after distributions may be affected by timing of rent collection and the payment of expenses, causing either excess or deficit cash flows after distributions for a given period. In addition, excess operating cash flow after distributions may be retained by the program as reserves to fund anticipated and unanticipated future expenditures or to cover reductions in cash flow resulting from the anticipated or unanticipated loss of a tenant.

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THE OPERATING PARTNERSHIP AGREEMENT

General

Our operating partnership was formed on September 26, 2008 to invest in income producing retail properties, located primarily in the Western United States, and real estate-related loans that will be acquired and actively managed by our advisor on our behalf. We utilize an UPREIT structure generally to enable us to acquire real property in exchange for common units from owners who desire to defer taxable gain that would otherwise normally be recognized by them upon the disposition of their real property or transfer of their real property to us in exchange for shares of our common stock or cash. In such a transaction, the property owner’s goals are accomplished because the owner may contribute property to our operating partnership in exchange for common units on a tax-free basis. These owners may also desire to achieve diversity in their investment and other benefits afforded to owners of shares of our common stock in a REIT.

We intend to hold substantially all of our assets in our operating partnership or in subsidiary entities in which our operating partnership owns an interest, and we may make future acquisitions of real properties using the UPREIT structure. Further, our operating partnership is structured to make distributions with respect to common units which are equivalent to the distributions made to our stockholders. Finally, a holder of common units may later exchange his common units for shares of our common stock in a taxable transaction. For purposes of satisfying the asset and income tests for qualification as a REIT for federal income tax purposes, the REIT’s proportionate share of the assets and income of our operating partnership will be deemed to be assets and income of the REIT. We are the sole general partner of our operating partnership. Our advisor has contributed $1,000 to our operating partnership in exchange for common units, and TNP Strategic Retail OP Holdings has invested $1,000 in exchange for special units. Our advisor and TNP Strategic Retail OP Holdings are currently the only limited partners. As the sole general partner of our operating partnership, we have the exclusive power to manage and conduct the business of our operating partnership.

The following is a summary of the material provisions of the limited partnership agreement of our operating partnership, or the operating partnership agreement. This summary is qualified by the specific language in the operating partnership agreement. For more detail, you should refer to the actual operating partnership agreement, a copy of which we have filed as an exhibit to the registration statement of which this prospectus forms a part.

Capital Contributions

As we accept subscriptions for shares of our common stock, we will transfer substantially all of the net offering proceeds to our operating partnership in exchange for common units. However, we will be deemed to have made capital contributions in the amount of the gross offering proceeds received from investors, and our operating partnership will be deemed to have simultaneously paid the fees, commissions and other costs associated with the offering.

If our operating partnership requires additional funds at any time in excess of capital contributions made by us and our advisor, we may borrow funds from a financial institution or other lender and lend such funds to our operating partnership on the same terms and conditions as are applicable to our borrowing of such funds. In addition, we are authorized to cause our operating partnership to issue partnership units for less than fair market value if we conclude in good faith that such issuance is in the best interest of our operating partnership and us. The operating partnership would also be able to issue preferred partnership interests in connection with acquisitions of property or otherwise. These preferred partnership interests could have priority over common partnership interests with respect to distributions from the operating partnership, including priority over the partnership interests that we would own as a general partner.

Operations

The operating partnership agreement requires that our operating partnership be operated in a manner that will enable us to (1) satisfy the requirements for being classified as a REIT for federal income tax purposes, unless we otherwise cease to qualify as a REIT, (2) avoid any federal income or excise tax liability, and (3) ensure that our operating partnership will not be classified as a “publicly traded partnership” for purposes

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of Section 7704 of the Internal Revenue Code, which classification could result in our operating partnership being taxed as a corporation, rather than as a partnership.

Distributions and Allocations of Profits and Losses

The operating partnership agreement generally provides that, except as provided below with respect to the special units, our operating partnership will distribute cash flow from operations and, except as provided below, net sales proceeds from the disposition of assets, to the partners of our operating partnership in accordance with their relative percentage interests, on a quarterly basis (or, at our election, more frequently), in amounts determined by us as general partner such that a holder of one common unit will generally receive the same amount of annual cash flow distributions from our operating partnership as the amount of annual distributions paid to the holder of one share of our common stock (before taking into account certain tax withholdings some states may require with respect to the common units).

Similarly, the operating partnership agreement provides that income of our operating partnership from operations and, except as provided below, income of our operating partnership from disposition of assets, normally will be allocated to the holders of common units in accordance with their relative percentage interests such that a holder of one common unit will be allocated income for each taxable year in an amount equal to the amount of taxable income allocated to us in respect of a holder of one share of our common stock, subject to compliance with the provisions of Sections 704(b) and 704(c) of the Internal Revenue Code and corresponding Treasury Regulations. Losses, if any, will generally be allocated among the partners (other than the holder of the special units) in accordance with their respective percentage interests in our operating partnership. Upon the liquidation of our operating partnership, after payment of debts and obligations, any remaining assets of our operating partnership will be distributed in accordance with the distribution provisions of the operating partnership agreement to the extent of each partner’s positive capital account balance. If we were to have a negative balance in our capital account following a liquidation, we would be obligated to contribute cash to the operating partnership equal to such negative balance for distribution to other partners, if any, having positive balances in their capital accounts.

The holder of the special units will be entitled to distributions from our operating partnership in an amount equal to 15.0% of net sales proceeds received by our operating partnership on dispositions of its assets and dispositions of real properties by joint ventures or partnerships in which our operating partnership owns a partnership interest, after the other holders of common units, including us, have received, in the aggregate, cumulative distributions from operating income, sales proceeds or other sources, equal to their capital contributions plus a 10.0% cumulative non-compounded annual pre-tax return thereon. There will be a corresponding allocation of realized (or, in the case of redemption, unrealized) profits of our operating partnership made to the holder of the special units in connection with the amounts payable with respect to the special units, including amounts payable upon redemption of the special units, and those amounts will be payable only out of realized (or, in the case of redemption, unrealized) profits of our operating partnership. Depending on various factors, including the date on which shares of our common stock are purchased and the price paid for such shares of common stock, a stockholder may receive more or less than the 10.0% cumulative non-compounded annual pre-tax return on their net contributions described above prior to the commencement of distributions to the owner of the special units.

In addition to the administrative and operating costs and expenses incurred by our operating partnership in acquiring and operating our investments, our operating partnership will pay all our administrative costs and expenses and such expenses will be treated as expenses of our operating partnership. Such expenses will include all, but not be limited to:

•  expenses relating to the formation and continuity of our existence;

•  expenses relating to our public offering and registration of securities;

•  expenses associated with the preparation and filing of any periodic reports by us under federal, state or local laws or regulations;

•  expenses associated with compliance by us with applicable laws, rules and regulations; and

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•  our other operating or administrative costs incurred in the ordinary course of our business on behalf of our operating partnership.

Redemption Rights

The holders of common units (other than us and the holder of the special units) generally have the right to cause our operating partnership to redeem all or a portion of their common units for, at our sole discretion, shares of our common stock, cash or a combination of both. If we elect to redeem common units for shares of our common stock, we will generally deliver one share of our common stock for each common unit redeemed. If we elect to redeem common units for cash, the cash delivered will generally equal the amount the limited partner would have received if its common units were redeemed for shares of our common stock and then such shares were subsequently redeemed pursuant to our share redemption program. In connection with the exercise of these redemption rights, a limited partner must make certain representations, including that the delivery of shares of our common stock upon redemption would not result in such limited partner owning shares in excess of the ownership limits in our charter. The special units will be redeemed for a specified amount upon the earliest of: (1) the occurrence of certain events that result in the termination or non-renewal of the advisory agreement or (2) a listing liquidity event. Upon a liquidity event, the specified amount the holder of the special units will be entitled to receive shall be equal to 15.0% of the net sale proceeds received by our operating partnership on disposition of its assets after the holders of the common units, including us, have received, in the aggregate, a return on their net capital contributions plus a 10.0% cumulative non-compounded annual return. In the event of a listing of our shares or the termination of the advisory agreement other than for cause, the holder of the special units will be entitled to a one time payment in the form of shares of our common stock or a promissory note in the amount that would have been distributed upon a liquidity event. If the triggering event is a listing of our shares, the amount of the payment will be (1) in the event of a listing on a national securities exchange only, based on the market value of the listed shares based upon the average closing price or, if the average closing price is not available, the average of bid and ask prices, for the 60 day period beginning 120 days after such listing event or (2) in the event of an underwritten public offering, the value of the shares based upon the initial public offering price in such offering. If the triggering event is the termination of the advisory agreement other than for cause, the amount of the payment will be based on the net asset value of our assets as determined by an independent valuation. See “Management Compensation Table—Subordinated Distribution Upon Listing or Termination Event—TNP Strategic Retail OP Holdings.”

Subject to the foregoing, holders of common units (other than us and the holders of the special units) may exercise their redemption rights at any time after one year following the date of issuance of their common units; provided, however, that a holder of common units may not deliver more than two redemption notices in a single calendar year and may not exercise a redemption right for less than 1,000 common units, unless such holder holds less than 1,000 common units, in which case, it must exercise its redemption right for all of its common units.

Transferability of Operating Partnership Interests

We may not (1) voluntarily withdraw as the general partner of our operating partnership, (2) engage in any merger, consolidation or other business combination or (3) transfer our general partnership interest in our operating partnership (except to a wholly-owned subsidiary), unless the transaction in which such withdrawal, business combination or transfer occurs results in the holders of common units receiving or having the right to receive an amount of cash, securities or other property equal in value to the amount they would have received if they had exercised their exchange rights immediately prior to such transaction (or in the case of the holder of the special units, the amount of cash, securities or other property equal to the fair value of the special units) or unless, in the case of a merger or other business combination, the successor entity contributes substantially all of its assets to our operating partnership in return for an interest in our operating partnership and agrees to assume all obligations of the general partner of our operating partnership. We may also enter into a business combination or we may transfer our general partnership interest upon the receipt of the consent of a majority-in-interest of the holders of common units, other than our advisor and its affiliates. With certain exceptions, the holders of common units may not transfer their interests in our operating partnership, in whole or in part, without our written consent, as general partner.

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STOCK OWNERSHIP

The following table sets forth the beneficial ownership of our common stock as of March 31, 2010 for each person or group that holds more than 5.0% of our common stock, for each director and executive officer and for our directors and executive officers as a group. To our knowledge, each person that beneficially owns our shares has sole voting and disposition power with regard to such shares.

Unless otherwise indicated below, each person or entity has an address in care of our principal executive offices at 1900 Main Street, Suite 700, Irvine, California 92614.

	Number of Shares		Percent of
Name of Beneficial Owner(1)	Beneficially Owned		All Shares
Thompson National Properties, LLC(2)		22,222		2.5	%
Anthony W. Thompson(2)		22,222		2.5	%
David Graham Trust(3)		50,000		5.5	%
Arthur M. Friedman		5,000		0.6	%
Jeffrey S. Rogers		5,000		0.6	%
Robert N. Ruth		5,000		0.6	%
Jack R. Maurer		2,778		0.3	%
Wendy J. Worcester		—		—
All directors and executive officers as a group		40,000		4.4	%

(1)	Under SEC rules, a person is deemed to be a “beneficial owner” of a security if that person has or shares “voting power,” which includes the power to dispose of or to direct the disposition of such security. A person also is deemed to be a beneficial owner of any securities which that person has a right to acquire within 60 days. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities and a person may be deemed to be a beneficial owner of securities as to which he or she has no economic or pecuniary interest.
(2)	Mr. Thompson is the managing member of Thompson National Properties, LLC and may be deemed to have beneficial ownership of the shares beneficially owned by Thompson National Properties, LLC.
(3)	The trustee is Phillip H. Graham and the trust’s address is 7107 Heathwood Court, Bethesda, MD, 20817.

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DESCRIPTION OF CAPITAL STOCK

The following is a summary of the material terms of shares of our common stock as set forth in our charter and is qualified in its entirety by reference to our charter. Under our charter, we have authority to issue a total of 450,000,000 shares of capital stock. Of the total number of shares of capital stock authorized, 400,000,000 shares are designated as common stock with a par value of $0.01 per share, and 50,000,000 shares are designated as preferred stock with a par value of $0.01 per share. Our board of directors, with the approval of a majority of the entire board of directors and without any action by our stockholders, may amend our charter from time to time to increase or decrease the aggregate number of shares of capital stock or the number of shares of capital stock of any class or series that we have authority to issue. As of March 31, 2010, 916,218 shares of our common stock were issued and outstanding, and no shares of preferred stock were issued and outstanding.

Common Stock

The holders of shares of our common stock are entitled to one vote per share on all matters voted on by stockholders, including election of our directors. Our charter does not provide for cumulative voting in the election of directors. Therefore, the holders of a majority of the outstanding shares of our common stock can elect our entire board of directors. Subject to any preferential rights of any outstanding series of preferred stock, the holders of shares of our common stock are entitled to such distributions as may be authorized from time to time by our board of directors out of legally available funds and declared by us and, upon liquidation, are entitled to receive all assets available for distribution to stockholders. All shares of our common stock issued in the offering will be fully paid and non-assessable shares of common stock. Holders of shares of our common stock will not have preemptive rights, which means that you will not have an automatic option to purchase any new shares of common stock that we issue, or have appraisal rights, unless our board of directors determines that appraisal rights apply, with respect to all or any classes or series of our common stock, to one or more transactions occurring after the date of such determination in connection with which stockholders would otherwise be entitled to exercise such rights. Stockholders are not liable for our acts or obligations.

We will not issue certificates for shares of our common stock. Shares of our common stock will be held in “uncertificated” form which will eliminate the physical handling and safekeeping responsibilities inherent in owning transferable share certificates and eliminate the need to return a duly executed share certificate to effect a transfer. Our advisor acts as our registrar and as the transfer agent for shares of our common stock. Transfers can be effected simply by mailing a transfer and assignment form, which we will provide to you at no charge, to:

TNP Strategic Retail Advisor, LLC

1900 Main Street,

Suite 700

Irvine, California 92614

Attention Wendy J. Worcester

Preferred Stock

Our charter authorizes our board of directors to classify and reclassify any unissued shares of our common stock and preferred stock into other classes or series of stock. Prior to issuance of shares of each class or series, the board of directors is required by the MGCL and by our charter to set, subject to our charter restrictions on transfer of our stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption for each class or series. Thus, the board of directors could authorize the issuance of shares of common stock or preferred stock with terms and conditions which could have the effect of delaying, deferring or preventing a transaction or change in control that might involve a premium price for holders of our common stock or otherwise be in their best interest. Our board of directors has no present plans to issue preferred stock, but may do so at any time in the future without stockholder approval. The issuance of preferred stock must be approved by a majority of our independent directors not otherwise interested in the transaction, who will have access, at our expense, to our legal counsel or to independent legal counsel.

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Meetings, Special Voting Requirements and Access To Records

An annual meeting of the stockholders will be held each year, on a specific date set by our board of directors. Special meetings of stockholders may be called only upon the request of a majority of the directors, a majority of the independent directors, the chairman or the president or upon the written request of stockholders entitled to cast at least 10.0% of the votes entitled to be cast at the meeting. Upon receipt of a written request of eligible stockholders, either in person or by mail, stating the purpose of the meeting, we will provide all stockholders, within ten days after receipt of such request, with written notice either in person or by mail, of a meeting and the purpose thereof, and if such meeting is to be held on a date not less than 15 nor more than 60 days after the distribution of such notice, at a time and place specified in the request, or if none is specified, at a time and place convenient to stockholders. The presence either in person or by proxy of stockholders entitled to cast at least a majority of the votes entitled to be cast at the meeting on any matter will constitute a quorum. Generally, the affirmative vote of a majority of all votes cast is necessary to take stockholder action, except that a majority of the votes represented in person or by proxy at a meeting at which a quorum is present is required to elect a director.

Under the MGCL and our charter, stockholders are generally entitled to vote at a duly held meeting at which a quorum is present on (1) the amendment of our charter, (2) our dissolution or (3) our merger or consolidation or the sale or other disposition of all or substantially all of our assets. These matters require the affirmative vote of stockholders entitled to cast at least a majority of the votes entitled to be cast on the matter. With respect to stock owned by our advisor, directors, or any of their affiliates, neither the advisor nor such directors, nor any of their affiliates may vote or consent on matters submitted to stockholders regarding the removal of the advisor, such directors or any of their affiliates or any transaction between us and any of them. In terms of determining the requisite percentage in interest of shares necessary to approve a matter on which our advisor, our directors or their affiliates may not vote or consent, any shares owned by any of them shall not be included.

The advisory agreement, including the selection of our advisor, is approved annually by our directors including a majority of the independent directors. While the stockholders do not have the ability to vote to replace our advisor or to select a new advisor, stockholders do have the ability, by the affirmative vote of a majority of the shares of our common stock entitled to vote on such matter, to remove a director from our board of directors. Any stockholder will be permitted access to all of our records at all reasonable times and may inspect and copy any of them for a reasonable copying charge. Inspection of our records by the office or agency administering the securities laws of a jurisdiction will be provided upon reasonable notice and during normal business hours. An alphabetical list of the names, addresses and telephone numbers of our stockholders, along with the number of shares of our common stock held by each of them, will be maintained as part of our books and records and will be available for inspection by any stockholder or the stockholder’s designated agent at our office. The stockholder list will be updated at least quarterly to reflect changes in the information contained therein. A copy of the list will be mailed to any stockholder who requests the list within 10 days of the request. The copy of the stockholder list shall be printed in alphabetical order, on white paper, and in a readably readable type size (in no event smaller than 10-point type). A stockholder may request a copy of the stockholder list in connection with matters relating to voting rights and the exercise of stockholder rights under federal proxy laws. A stockholder requesting a list will be required to pay reasonable costs of postage and duplication. In addition to the foregoing, stockholders have rights under Rule 14a-7 under the Exchange Act, which provides that, upon the request of investors and the payment of the expenses of the distribution, we are required to distribute specific materials to stockholders in the context of the solicitation of proxies for voting on matters presented to stockholders or, at our option, provide requesting stockholders with a copy of the list of stockholders so that the requesting stockholders may make the distribution of proxies themselves. If a proper request for the stockholder list is not honored, then the requesting stockholder will be entitled to recover certain costs incurred in compelling the production of the list as well as actual damages suffered by reason of the refusal or failure to produce the list. However, a stockholder will not have the right to, and we may require a requesting stockholder to represent that it will not, secure the stockholder list or other information for the purpose of selling or using the list for a commercial purpose not related to the requesting stockholder’s interest in our affairs.

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Restriction on Ownership of Shares of Capital Stock

For us to qualify as a REIT, no more than 50% in value of the outstanding shares of our stock may be owned, directly or indirectly through the application of certain attribution rules under the Internal Revenue Code, by any five or fewer individuals, as defined in the Internal Revenue Code to include specified entities, during the last half of any taxable year. In addition, the outstanding shares of our stock must be owned by 100 or more persons independent of us and each other during at least 335 days of a 12-month taxable year or during a proportionate part of a shorter taxable year, excluding our first taxable year for which we elect to be taxed as a REIT. In addition, we must meet requirements regarding the nature of our gross income to qualify as a REIT. One of these requirements is that at least 75% of our gross income for each calendar year must consist of rents from real property and income from other real property investments. The rents received by our operating partnership from any tenant will not qualify as rents from real property, which could result in our loss of REIT status, if we own, actually or constructively within the meaning of certain provisions of the Internal Revenue Code, 10.0% or more of the ownership interests in that tenant. To assist us in preserving our status as a REIT, among other purposes, our charter contains limitations on the ownership and transfer of shares of common stock which prohibit: (1) any person or entity from owning or acquiring, directly or indirectly, more than 9.8% of the value of our then outstanding capital stock or more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock; (2) the beneficial ownership of the outstanding shares of our capital stock by fewer than 100 persons; and (3) any transfer of or other event or transaction with respect to shares of capital stock that would result in the beneficial ownership of our outstanding shares of capital stock by fewer than 100 persons. In addition, our charter prohibits any transfer of, or other event with respect to, shares of our capital stock that (1) would result in us being “closely held” within the meaning of Section 856(h) of the Internal Revenue Code, (2) would cause us to own, actually or constructively, 9.9% or more of the ownership interests in a tenant of our real property or the real property of our operating partnership or any direct or indirect subsidiary of our operating partnership or (3) would otherwise cause us to fail to qualify as a REIT.

Our charter provides that the shares of our capital stock that, if transferred, would: (1) result in a violation of the 9.8% ownership limit; (2) result in us being “closely held” within the meaning of Section 856(h) of the Internal Revenue Code; (3) cause us to own 9.9% or more of the ownership interests in a tenant of our real property or the real property of our operating partnership or any direct or indirect subsidiary of our operating partnership; or (4) otherwise cause us to fail to qualify as a REIT, will be transferred automatically to a trust effective on the day before the purported transfer of such shares of our capital stock. We will designate a trustee of the share trust that will not be affiliated with us or the purported transferee or record holder. We will also name a charitable organization as beneficiary of the share trust. The trustee will receive all distributions on the shares of our capital stock in the share trust and will hold such distributions in trust for the benefit of the beneficiary. The trustee also will vote the shares of capital stock in the share trust. The intended transferee will acquire no rights in such shares of capital stock, unless, in the case of a transfer that would cause a violation of the 9.8% ownership limit, the transfer is exempted by the board of directors from the ownership limit based upon receipt of information (including certain representations and undertakings from the intended transferee) that such transfer would not violate the provisions of the Internal Revenue Code for our qualification as a REIT. In addition, our charter provides that any transfer of shares of our capital stock that would result in shares of our capital stock being owned by fewer than 100 persons will be null and void and the intended transferee will acquire no rights in such shares of our capital stock.

The trustee will transfer the shares of our capital stock to a person whose ownership of shares of our capital stock will not violate the ownership limits. The transfer will be made no earlier than 20 days after the later of our receipt of notice that shares of our capital stock have been transferred to the trust or the date we determine that a purported transfer of shares of stock has occurred. During this 20-day period, we will have the option of redeeming such shares of our capital stock. Upon any such transfer or redemption, the purported transferee or holder will receive a per share price equal to the lesser of (1) the price per share in the transaction that resulted in the transfer of such shares to the trust (or, in the case of a gift or devise, the price per share on the date of redemption at the time of the gift or devise), or (2) the price per share on the date of the redemption, in the case of a purchase by us, or the price received by the trustee net of any sales

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commission and expenses, in the case of a sale by the trustee. The charitable beneficiary will receive any excess amounts. In the case of a liquidation, holders of such shares will receive a ratable amount of our remaining assets available for distribution to shares of the applicable class or series taking into account all shares of such class or series. The trustee will distribute to the purported transferee or holder an amount equal to the lesser of the amounts received with respect to such shares or the price per share in the transaction that resulted in the transfer of such shares to the trust (or, in the case of a gift or devise, the price at the time of the gift or devise) and will distribute any remaining amounts to the charitable beneficiary.

Any person who acquires or attempts to acquire shares of our capital stock in violation of the foregoing restrictions or who owns shares of our capital stock that were transferred to any such trust is required to give immediate written notice to us of such event, and any person who purports to transfer or receive shares of our capital stock subject to such limitations is required to give us 15 days written notice prior to such purported transaction. In both cases, such persons must provide to us such other information as we may request to determine the effect, if any, of such event on our status as a REIT. The foregoing restrictions will continue to apply until the board of directors determines it is no longer in our best interest to continue to qualify as a REIT.

The ownership limits do not apply to a person or persons that the board of directors exempts from the ownership limit upon appropriate assurances that our qualification as a REIT is not jeopardized. Any person who owns more than 5.0% (or such lower percentage applicable under Treasury Regulations) of the outstanding shares of our capital stock during any taxable year will be asked to deliver a statement or affidavit setting forth the number of shares of our capital stock beneficially owned.

Distributions

Our board of directors has approved a monthly cash distribution of $0.05625 per share of common stock, which represents an annualized distribution of $0.675 per share. We accrue distributions on a daily basis and make distributions on a monthly basis. We calculate each stockholder’s specific distribution amount for the month using daily record and declaration dates, and your distributions will begin to accrue on the date we mail a confirmation of your subscription for shares of our common stock, subject to our acceptance of your subscription.

We are required to make distributions sufficient to satisfy the requirements for qualification as a REIT for federal income tax purposes. Generally, income distributed will not be taxable to us under the Internal Revenue Code if we distribute at least 90% of our taxable income each year (computed without regard to the distributions paid deduction and our net capital gain). Distributions will be authorized at the discretion of the board of directors, in accordance with our earnings, cash flow and general financial condition. The board of directors’ discretion will be directed, in substantial part, by its obligation to cause us to comply with the REIT requirements. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period and may be made in advance of actual receipt of funds in an attempt to make distributions relatively uniform. We are authorized to borrow money, issue new securities or sell assets to make distributions. There are no restrictions on the ability of our operating partnership to transfer funds to us.

We are not prohibited from distributing our own securities in lieu of making cash distributions to stockholders, provided that the securities distributed to stockholders are readily marketable. The receipt of marketable securities in lieu of cash distributions may cause stockholders to incur transaction expenses in liquidating the securities. We do not have any current intention to list the shares of our common stock on a national securities exchange, nor is it expected that a public market for the shares of common stock will develop.

We can give no assurance that we will pay distributions solely from our funds from operations in the future, especially during the period when we are raising capital and have not yet acquired a substantial portfolio of income-producing investments. We have not established a cap on the amount of proceeds that may be used to fund distributions. Accordingly, the amount of distributions paid at any given time may not reflect current cash flow from operations. Distributions payable to stockholders may also include a return of capital, rather than a return on capital. We anticipate that we will begin paying distributions solely from funds from operations after the completion of our offering stage.

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Distribution Reinvestment Plan

Our distribution reinvestment plan will allow you to have cash otherwise distributable to you invested in additional shares of our common stock at a price equal to $9.50 per share. A copy of our distribution reinvestment plan is included as Appendix D to this prospectus. You may elect to participate in the distribution reinvestment plan by completing the subscription agreement, the enrollment form or by other written notice to the plan administrator. Participation in the plan will begin with the next distribution made after acceptance of your written notice. We may terminate the distribution reinvestment plan for any reason at any time upon 30 days prior written notice to participants. Participation in the plan may also be terminated with respect to any person to the extent that a reinvestment of distributions in shares of our common stock would cause the share ownership limitations contained in our charter to be violated. Following any termination of the distribution reinvestment plan, all subsequent distributions to stockholders would be made in cash.

Participants may acquire shares of our common stock pursuant to our distribution reinvestment plan until the earliest date upon which (1) all the common stock registered in this or future offerings to be offered under our distribution reinvestment plan is issued, (2) this offering and any future offering pursuant to our distribution reinvestment plan terminate, and we elect to deregister with the SEC the unsold amount of our common stock registered to be offered under our distribution reinvestment plan or (3) there is more than a de minimis amount of trading in shares of our common stock, at which time any registered shares of our common stock then available under our distribution reinvestment plan will be sold at a price equal to the fair market value of the shares of our common stock, as determined by our board of directors by reference to the applicable sales price with respect to the most recent trades occurring on or prior to the relevant distribution date. In any case, the price per share will be equal to the then-prevailing market price, which will equal the price on the national securities exchange on which such shares of common stock are listed at the date of purchase.

Holders of common units may also participate in the distribution reinvestment plan and have cash otherwise distributable to them by our operating partnership invested in our common stock at a price equal to $9.50 per share.

Stockholders who elect to participate in the distribution reinvestment plan, and who are subject to United States federal income taxation laws, will incur a tax liability on an amount equal to the fair value on the relevant distribution date of the shares of our common stock purchased with reinvested distributions, even though such stockholders have elected not to receive the distributions used to purchase those shares of common stock in cash. Under present law, the United States federal income tax treatment of that amount will be as described with respect to distributions under “Material U.S. Federal Income Tax Considerations—Taxation of Taxable U.S. Stockholders” in the case of a taxable U.S. stockholder (as defined therein) and as described under “Material U.S. Federal Income Tax Considerations—Special Tax Considerations for Non-U.S. Stockholders” in the case of a Non-U.S. Stockholder (as defined therein). However, the tax consequences of participating in our distribution reinvestment plan will vary depending upon each participant’s particular circumstances, and you are urged to consult your own tax advisor regarding the specific tax consequences to you of participation in the distribution reinvestment plan.

All material information regarding the distributions to stockholders and the effect of reinvesting the distributions, including tax consequences, will be provided to the stockholders at least annually. Each stockholder participating in the distribution reinvestment plan will have an opportunity to withdraw from the plan at least annually after receiving this information.

Share Redemption Program

Our share redemption program may provide an opportunity for you to have your shares of common stock redeemed, subject to certain restrictions and limitations. The purchase price for shares repurchased under the share redemption program will be as set forth below until we begin obtaining appraisals of the value of our real estate and real estate-related assets. We expect to begin obtaining appraisals of the value of our real estate and real estate-related assets beginning 18 months after the date we complete our last public offering of

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common stock and prior to any listing of our shares on a national securities exchange. We will retain persons independent of us and our advisor to prepare these appraisals.

Prior to obtaining appraisals of the value of our real estate and real estate-related assets, the prices at which we will initially repurchase shares are as follows:

	Redemption Price as a
Share Purchase Anniversary	Percentage of Purchase Price
Less than 1 year	No Redemptions Allowed
1 year	92.5%
2 years	95.0%
3 years	97.5%
4 years and longer	100.0%

Unless shares are being redeemed in connection with a stockholder’s death or disability, there is a one-year holding period before stockholders can begin making redemption requests.

After we begin obtaining appraisals of the value of our real estate and real estate-related assets, we will repurchase shares at the lesser of (1) 100% of the average price per share the original purchaser or purchasers of the shares paid to us, which we refer to as the “issue price,” (as adjusted for any stock dividends, combinations, splits, recapitalizations and the like with respect to our common stock) or (2) 90% of the net asset value per share, as determined by the most recent appraisal.

Redemption of shares of our common stock will be made quarterly upon written request to us at least 15 days prior to the end of the applicable quarter. Redemption requests will be honored approximately 30 days following the end of the applicable quarter, which we refer to as the “redemption date.” Stockholders may withdraw their redemption request at any time up to three business days prior to the redemption date.

We cannot guarantee that the funds set aside for the share redemption program will be sufficient to accommodate all requests made in any quarter. In the event that we do not have sufficient funds available to redeem all of the shares of our common stock for which redemption requests have been submitted in any quarter, we plan to redeem the shares of our common stock on a pro rata basis on the redemption date. In addition, if we redeem less than all of the shares subject to a redemption request in any quarter, with respect to any unredeemed shares, you can (1) withdraw your request for redemption or (2) ask that we honor your request in a future quarter, if any, when such redemptions can be made pursuant to the limitations of the share repurchase when sufficient funds are available. Such pending requests will be honored on a pro rata basis.

We are not obligated to redeem shares of our common stock under the share redemption program. We presently intend to limit the number of shares to be redeemed during any calendar year to (1) 5.0% of the weighted average of the number of shares of our common stock outstanding during the prior calendar year and (2) those that could be funded from the net proceeds from the sale of shares under the distribution reinvestment plan in the prior calendar year plus such additional funds as may be reserved for that purpose by our board of directors; provided, however, that the above volume limitations and holding periods shall not apply to redemptions requested within two years after the death or disability of a stockholder. There is no fee in connection with a redemption of shares of our common stock.

The aggregate amount of redemptions under our share redemption program is not expected to exceed the aggregate proceeds received from the sale of shares pursuant to our distribution reinvestment plan. However, to the extent that the aggregate proceeds received from the sale of shares pursuant to our distribution reinvestment plan are not sufficient to fund redemption requests pursuant to the 5.0% limitation outlined above, the board of directors may, in its sole discretion, choose to use other sources of funds to redeem shares of our common stock. Such sources of funds could include cash on hand, cash available from borrowings and cash from liquidations of securities investments as of the end of the applicable month, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, cash distributions to stockholders or purchases of real estate assets.

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In addition, the board of directors may, in its sole discretion, amend, suspend, or terminate the share redemption program at any time if it determines that the funds available to fund the share redemption program are needed for other business or operational purposes or that amendment, suspension or termination of the share redemption program is in the best interest of our stockholders. Therefore, you may not have the opportunity to make a redemption request prior to any potential termination of our share redemption program.

Liquidity Events

Our charter does not require our board of directors to pursue a liquidity event on or before any date certain or at all. Our board of directors does not anticipate evaluating a transaction providing liquidity to our stockholders until 2015. We expect that our board of directors, in the exercise of its fiduciary duty to our stockholders, will determine to pursue a liquidity event when it believes that then-current market conditions are favorable for a liquidity event, and that such a transaction is in the best interests of our stockholders. A liquidity event could include (1) the sale of all or substantially all of our assets either on a portfolio basis or individually followed by a liquidation, (2) a merger or another transaction approved by our board of directors in which our stockholders will receive cash and/or shares of a publicly traded company or (3) a listing of our shares on a national securities exchange. There can be no assurance as to when a suitable transaction will be available or as to our ability to successfully effect such a transaction.

Business Combinations

Under the MGCL, business combinations between a Maryland corporation and an interested stockholder or the interested stockholder’s affiliate are prohibited for five years after the most recent date on which the stockholder becomes an interested stockholder. For this purpose, the term “business combinations” includes mergers, consolidations, share exchanges or, in circumstances specified in the MGCL, asset transfers and issuances or reclassifications of equity securities. An “interested stockholder” is defined for this purpose as: (1) any person who beneficially owns 10% or more of the voting power of the corporation’s outstanding voting stock; or (2) 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% or more of the voting power of the then outstanding stock of the corporation. A person is not an interested stockholder under the MGCL if the board of directors approved in advance the transaction by which he otherwise would become an interested stockholder. However, in approving the 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 of directors.

After the five-year prohibition, any business combination between the 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: (1) 80% of the votes entitled to be cast by holders of outstanding shares of voting stock of the corporation and (2) two-thirds of the votes entitled to be cast by holders of voting stock of the corporation other than shares of stock held by the interested stockholder or its affiliate with whom the business combination is to be effected, or held by an affiliate or associate of the interested stockholder, voting together as a single voting group.

These super majority vote requirements do not apply if the corporation’s common stockholders receive a minimum price, as defined under the MGCL, for their shares of common stock in the form of cash or other consideration in the same form as previously paid by the interested stockholder for its shares of common stock.

None of these provisions of the MGCL will apply, however, to business combinations that are approved or exempted by the board of directors of the corporation prior to the time that the interested stockholder becomes an interested stockholder. Pursuant to the business combination statute, our board of directors has exempted any business combination involving us and any person. Consequently, the five-year prohibition and the super majority vote requirements will not apply to business combinations between us and any person. As a result, any person 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 other provisions of the statute.

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Should our board of directors opt into the business combination statute, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer.

Business Combination with Our Advisor

Many REITs that are listed on a national securities exchange or included for quotation on an over-the-counter market are considered self-administered, which means that they employ persons or agents to perform all significant management functions. The costs to perform these management functions are “internalized,” rather than external, and no third party fees, such as advisory fees, are paid by the REIT. We will consider becoming a self-administered REIT once our assets and income are, in our board of directors’ view, of sufficient size such that internalizing some or all of the management functions performed by our advisor is in our best interests and in the best interests of our stockholders.

If our board of directors should make this determination in the future and seeks to pursue internalizing our management functions through a business combination with our advisor, we have agreed to pay one-half, and our advisor has agreed to pay the other half, of the costs of an independent investment banking firm. This firm would jointly advise us and the principals of our advisor on the value of our advisor. After the investment banking firm completes its analyses of our advisor’s value, we will require it to prepare a written report and make a formal presentation to our board of directors.

Following the presentation by the investment banking firm, our board of directors will form a special committee comprised entirely of independent directors to consider a possible business combination with our advisor. The board of directors will, subject to applicable law, delegate all of its decision making power and authority to the special committee with respect to these matters, including the power and authority to retain its own financial advisors and legal counsel to, among other things, negotiate with representatives of our advisor regarding a possible business combination. In any event, before we can complete any business combination with our advisor, the following three conditions must be satisfied:

•  the special committee receives an opinion from a qualified investment banking firm, separate and distinct from the firm jointly retained by us and our advisor to provide a valuation analysis, concluding that the consideration to be paid to acquire our advisor is fair to our stockholders from a financial point of view;

•  our board of directors determines that such business combination is advisable and in our best interests and in the best interests of our stockholders; and

•  such business combination is approved by our stockholders entitled to vote thereon in accordance with our charter and bylaws.

Unless and until definitive documentation is executed, we will not be obligated to complete a business combination with our advisor.

Control Share Acquisitions

The MGCL provides that control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares of common stock owned by the acquiror, by officers or by employees who are directors of the corporation are not entitled to vote on the matter. “Control shares” are voting shares of stock which, if aggregated with all other shares of stock owned by the acquiror or with respect to which the acquiror has the right to vote or to direct the voting of, other than solely by virtue of a revocable proxy, would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting powers:

•  one-tenth or more but less than one-third;

•  one-third or more but less than a majority; or

•  a majority or more of all voting power.

Control shares do not include shares of stock the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval. Except as otherwise specified in the statute, a “control share

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acquisition” means the acquisition of control shares. Once a person who has made or proposes to make a control share acquisition has undertaken to pay expenses and has satisfied other required conditions, the person may compel the board of directors to call a special meeting of stockholders to be held within 50 days of demand to consider the voting rights of the shares of stock. If no request for a meeting is made, the corporation may itself present the question at any stockholders meeting. If voting rights are not approved for the control shares at the meeting or if the acquiring person does not deliver an “acquiring person statement” for the control shares as required by the statute, the corporation may redeem any or all of the control shares for their fair value, except for control shares for which voting rights have previously been approved. Fair value is to be determined for this purpose without regard to the absence of voting rights for the control shares, and is to be determined as of the date of the last control share acquisition or of any meeting of stockholders at which the voting rights for control shares are considered and not approved.

If voting rights for control shares are approved at a stockholders’ meeting and the acquiror becomes entitled to vote a majority of the shares of stock entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the shares of stock as determined for purposes of these appraisal rights may not be less than the highest price per share paid in the control share acquisition. Some of the limitations and restrictions otherwise applicable to the exercise of dissenters’ rights do not apply in the context of a control share acquisition.

The control share acquisition statute does not apply to shares of stock acquired in a merger or consolidation or on a stock exchange if the corporation is a party to the transaction or to acquisitions approved or exempted by the charter or bylaws of the corporation. As permitted by the MGCL, we have provided in our bylaws that the control share provisions of the MGCL will not apply to any acquisition by any person of shares of our stock, but the board of directors retains the discretion to change this provision in the future.

Subtitle 8

Subtitle 8 of Title 3 of the MGCL, or Subtitle 8, permits a Maryland corporation with a class of equity securities registered under the Exchange Act and at least three independent directors to elect to be subject, by provision in its charter or bylaws or a resolution of its board of directors and notwithstanding any contrary provision in its charter or bylaws, to any or all of five provisions:

•  a classified board of directors;

•  a two-thirds vote requirement for removing a director;

•  a requirement that the number of directors be fixed only by vote of the directors;

•  a requirement that vacancies on the board of directors be filled only by the remaining directors and for the remainder of the full term of the class of directors in which the vacancy occurred; and

•  a majority requirement for the calling of a special meeting of stockholders.

Pursuant to Subtitle 8, we have elected to provide that vacancies on our board of directors be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. Through provisions in our charter and bylaws unrelated to Subtitle 8, we vest in the board of directors the exclusive power to fix the number of directorships. We have not elected to be subject to the other provisions of Subtitle 8.

Restrictions on Roll-up Transactions

Until our shares are listed on a national securities exchange, our charter requires that we follow the policy set forth below with respect to any “roll-up transaction.” In connection with any proposed transaction considered a “roll-up transaction” involving us and the issuance of securities of an entity, or a roll-up entity, that would be created or would survive after the successful completion of the roll-up transaction, an appraisal of all properties must be obtained from a competent independent appraiser. The properties must 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 properties as of the date immediately prior to the announcement of the proposed

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roll-up transaction. The appraisal shall assume an orderly liquidation of properties over a 12-month period. The terms of the engagement of the independent appraiser must clearly state that the engagement is for our benefit and our stockholders’ benefit. A summary of the appraisal, indicating all material assumptions underlying the appraisal, shall be included in a report to our stockholders in connection with any proposed roll-up transaction. If the appraisal will be included in a prospectus used to offer the securities of a roll-up entity, the appraisal shall be filed with the SEC and the states as an exhibit to the registration statement for the offering.

A “roll-up transaction” is a transaction involving the acquisition, merger, conversion or consolidation, directly or indirectly, of us and the issuance of securities of a roll-up entity. This term does not include:

•  a transaction involving our securities that have been listed on a national securities exchange for at least 12 months; or

•  a transaction involving our conversion into corporate or association form if, as a consequence of the transaction, there will be no significant adverse change in any of the following: our common stockholder voting rights; the term of our existence; compensation to our advisor or its affiliates; or our investment objectives.

In connection with a proposed roll-up transaction, the person sponsoring the roll-up transaction must offer to our common stockholders who vote “no” on the proposal a choice of:

•  accepting the securities of the roll-up entity offered in the proposed roll-up transaction; or

•  one of the following:

•  remaining as stockholders and preserving their interests on the same terms and conditions as existed previously; or

•  receiving cash in an amount equal to the stockholders’ pro rata share of the appraised value of our net assets.

We are prohibited from participating in any proposed roll-up transaction:

•  that would result in our common stockholders having voting rights in a roll-up entity that are less than those provided in our bylaws and described elsewhere in this prospectus including rights with respect to the election and removal of directors, annual and special meetings, amendment of our declaration of trust and our dissolution;

•  that includes provisions that would operate to materially impede or frustrate 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 voting rights of its securities of the roll-up entity on the basis of the number of shares held by that investor;

•  in which investors’ right to access of records of the roll-up entity will be less than those provided in the section of this prospectus entitled “Meetings, Special Voting Requirements and Access to Records;” or

•  in which any of the costs of the roll-up transaction would be borne by us if the roll-up transaction is rejected by our common stockholders.

Reports to Stockholders

Our charter requires that we prepare an annual report and deliver it to our stockholders within 120 days after the end of each fiscal year. Among the matters that must be included in the annual report are:

•  financial statements that are prepared in accordance with GAAP and are audited by our independent registered public accounting firm;

•  the ratio of the costs of raising capital during the year to the capital raised;

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•  the aggregate amount of asset management fees and the aggregate amount of other fees paid to our advisor and any affiliate of our advisor by us or third parties doing business with us during the year;

•  our total operating expenses for the year, stated as a percentage of our average invested assets and as a percentage of our net income;

•  a report from the independent directors that our policies are in the best interests of our stockholders and the basis for such determination; and

•  separately stated, full disclosure of all material terms, factors and circumstances surrounding any and all transactions involving us and our advisor, a director or any affiliate thereof during the year; and the independent directors are specifically charged with a duty to examine and comment in the report on the fairness of the transactions.

Under the Securities Act, we must update this prospectus upon the occurrence of certain events, such as property acquisitions. We will file updated prospectuses and prospectus supplements with the SEC. We are also subject to the informational reporting requirements of the Exchange Act, and accordingly, we will file annual reports, quarterly reports, proxy statements and other information with the SEC. In addition, we will provide you directly with periodic updates, including prospectuses, prospectus supplements, quarterly reports and other information.

Subject to availability, you may authorize us to provide such periodic updates, electronically by so indicating on your subscription agreement, or by sending us instructions in writing in a form acceptable to us to receive such periodic updates electronically. Unless you elect in writing to receive such periodic updates electronically, all documents will be provided in paper form by mail. You must have internet access to use electronic delivery. While we impose no additional charge for this service, there may be potential costs associated with electronic delivery, such as on-line charges. The periodic updates will be available on our website. You may access and print all periodic updates provided through this service. As periodic updates become available, we will notify you of this by sending you an e-mail message that will include instructions on how to retrieve the periodic updates. If our e-mail notification is returned to us as “undeliverable,” we will contact you to obtain your updated e-mail address. If we are unable to obtain a valid e-mail address for you, we will resume sending a paper copy by regular U.S. mail to your address of record. You may revoke your consent for electronic delivery at any time and we will resume sending you a paper copy of all periodic updates. However, in order for us to be properly notified, your revocation must be given to us a reasonable time before electronic delivery has commenced. We will provide you with paper copies at any time upon request. Such request will not constitute revocation of your consent to receive periodic updates electronically.

Tender Offers

Our charter provides that any tender offer made by any stockholder, including any “mini-tender” offer, must comply with most of the provisions of Regulation 14D of the Exchange Act, including the notice and disclosure requirements. Among other things, the stockholder must provide us notice of such tender offer at least ten business days before initiating the tender offer. If the stockholder does not comply with the provisions set forth above, we will have the right to redeem that stockholder’s shares, if any, and any shares acquired in such tender offer. In addition, such stockholder will be responsible for all of our expenses in connection with his noncompliance.

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MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

General

The following is a summary of the material United States federal income tax considerations associated with an investment in our common stock that may be relevant to you. The statements made in this section of the prospectus are based upon current provisions of the Internal Revenue Code and Treasury Regulations promulgated thereunder, as currently applicable, currently published administrative positions of the Internal Revenue Service and judicial decisions, all of which are subject to change, either prospectively or retroactively. We cannot assure you that any changes will not modify the conclusions expressed in counsel’s opinions described herein. This summary does not address all possible tax considerations that may be material to an investor and does not constitute legal or tax advice. Moreover, this summary does not deal with all tax aspects that might be relevant to you, as a prospective stockholder, in light of your personal circumstances, nor does it deal with particular types of stockholders that are subject to special treatment under the federal income tax laws, such as insurance companies, holders whose shares are acquired through the exercise of share options or otherwise as compensation, holders whose shares are acquired through the distribution reinvestment plan or who intend to sell their shares under the share redemption program, tax-exempt organizations (except as provided below), financial institutions or broker-dealers, or foreign corporations or persons who are not citizens or residents of the United States (except as provided below). The Internal Revenue Code provisions governing the federal income tax treatment of REITs and their stockholders are highly technical and complex, and this summary is qualified in its entirety by the express language of applicable Internal Revenue Code provisions, Treasury Regulations promulgated thereunder and administrative and judicial interpretations thereof.

Alston & Bird LLP has acted as our special U.S. federal income tax counsel, has reviewed this summary and is of the opinion that it fairly summarizes the United States federal income tax considerations that are likely to be material to U.S. stockholders (as defined herein) that hold our common stock. This opinion of Alston & Bird LLP has been filed as an exhibit to the registration statement of which this prospectus is a part. The opinion of Alston & Bird LLP is based on various assumptions, is subject to limitations and is not binding on the Internal Revenue Service or any court.

We urge you, as a prospective stockholder, to consult your tax advisor regarding the specific tax consequences to you of a purchase of shares of common stock, ownership and sale of shares of common stock and of our election to be taxed as a REIT, including the federal, state, local, foreign and other tax consequences of such purchase, ownership, sale and election and of potential changes in applicable tax laws.

REIT Qualification

We believe that we operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes. This section of the prospectus discusses the laws governing the tax treatment of a REIT and its stockholders. These laws are highly technical and complex.

In connection with this offering, Alston & Bird LLP has delivered an opinion to us that, commencing with our taxable year in which we satisfy the minimum offering requirements, we were organized in conformity with the requirements for qualification as a REIT under the Internal Revenue Code, and our proposed method of operation will enable us to meet the requirements for qualification and taxation as a REIT.

It must be emphasized that the opinion of Alston & Bird LLP is based on various assumptions relating to our organization and operation and is conditioned upon representations and covenants made by us regarding our organization, assets and the past, present and future conduct of our business operations. While we intend to operate so that we will qualify as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations and the possibility of future changes in our circumstances, no assurance can be given by Alston & Bird LLP or by us that we will so qualify for any particular year. Alston & Bird LLP will have no obligation to advise us or the holders of our common stock of any subsequent

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change in the matters stated, represented or assumed in the opinion, or of any subsequent change in the applicable law. You should be aware that opinions of counsel are not binding on the Internal Revenue Service or any court, and no assurance can be given that the Internal Revenue Service will not challenge the conclusions set forth in such opinions.

Qualification and taxation as a REIT depends on our ability to meet on a continuing basis, through actual operating results, distribution levels and diversity of share ownership, various qualification requirements imposed upon REITs by the Internal Revenue Code, the compliance with which will not be reviewed by Alston & Bird LLP. Our ability to qualify as a REIT also requires that we satisfy certain asset tests, some of which depend upon the fair market values of assets directly or indirectly owned by us. Such values may not be susceptible to a precise determination. While we intend to continue to operate in a manner that will allow us to qualify as a REIT, no assurance can be given that the actual results of our operations for any taxable year satisfy such requirements for qualification and taxation as a REIT.

Taxation of TNP Strategic Retail Trust, Inc.

If we qualify for taxation as a REIT, we generally will not be subject to federal corporate income taxes on that portion of our ordinary income or capital gain that we distribute currently to our stockholders because the REIT provisions of the Internal Revenue Code generally allow a REIT to deduct distributions paid to its stockholders. This deduction substantially eliminates the federal “double taxation” on earnings (taxation at both the corporate level and stockholder level) that usually results from an investment in a corporation. Even if we qualify for taxation as a REIT, however, we will be subject to federal income taxation as follows:

•  we will be taxed at regular corporate rates on our undistributed REIT taxable income, including undistributed net capital gains;

•  under some circumstances, we may be subject to “alternative minimum tax”;

•  if we have net income from prohibited transactions (which are, in general, sales or other dispositions of property, other than foreclosure property, held primarily for sale to customers in the ordinary course of a trade or business), the income will be subject to a 100% tax;

•  if we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or certain leasehold terminations as “foreclosure property,” we may avoid the 100% tax on gain from a resale of that property (if the sale would otherwise constitute a prohibited transaction), but the income from the sale or operation of the property may be subject to corporate income tax at the highest applicable rate (currently 35%);

•  pursuant to provisions in recently enacted legislation, if we should fail to satisfy the asset or other requirements applicable to REITs, as described below, yet nonetheless maintain our qualification as a REIT because there is reasonable cause for the failure and other applicable requirements are met, we may be subject to an excise tax. In that case, the amount of the tax will be at least $50,000 per failure, and, in the case of certain asset test failures, will be determined as the amount of net income generated by the assets in question multiplied by the highest corporate tax rate (currently 35%) if that amount exceeds $50,000 per failure;

•  if we fail to satisfy either the 75% or 95% Income Test (defined below) but have nonetheless maintained our qualification as a REIT because certain conditions have been met, we will be subject to a 100% tax on an amount based on the magnitude of the failure adjusted to reflect the profit margin associated with our gross income;

•  if we fail to distribute during each year at least the sum of (1) 85% of our REIT ordinary income for the year, (2) 95% of our REIT capital gain net income for such year and (3) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of the required distribution over the sum of (a) the amounts actually distributed plus (b) retained amounts on which corporate level tax is paid by us;

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•  we may elect to retain and pay tax on our net long-term capital gain. In that case, a United States stockholder would be taxed on its proportionate share of our undistributed long-term capital gain and would receive a credit or refund for its proportionate share of the tax we paid;

•  if we fail certain of the REIT asset tests and do not qualify for “de minimis” relief, we may be required to pay a corporate level tax on the income generated by the assets that caused us to violate the asset test;

•  if we acquire appreciated assets from a C corporation (such as a corporation generally subject to corporate level tax) in a transaction in which the C corporation would not normally be required to recognize any gain or loss on disposition of the asset and we subsequently recognize gain on the disposition of the asset during the ten-year period beginning on the date on which we acquired the asset, then a portion of the gain may be subject to tax at the highest regular corporate rate, unless the C corporation made an election to treat the asset as if it were sold for its fair market value at the time of our acquisition; and

•  income earned by any of our taxable REIT subsidiaries will be subject to tax at regular corporate rates.

Requirements for Qualification as a REIT

In order for us to qualify as a REIT, we must meet and continue to meet the requirements discussed below relating to our organization, sources of income, nature of assets and distributions of income to our stockholders.

Organizational Requirements

In order to qualify for taxation as a REIT under the Internal Revenue Code, we must meet tests regarding our income and assets described below and

(i) be a corporation, trust or association that would be taxable as a domestic corporation but for the REIT provisions of the Internal Revenue Code;

(ii) elect to be taxed as a REIT and satisfy relevant filing and other administrative requirements for REITs commencing in the year in which we satisfy the minimum offering requirements;

(iii) be managed by one or more trustees or directors;

(iv) have our beneficial ownership evidenced by transferable shares;

(v) not be a financial institution or an insurance company subject to special provisions of the federal income tax laws;

(vi) use a calendar year for federal income tax purposes;

(vii) have at least 100 stockholders for at least 335 days of each taxable year of 12 months or during a proportionate part of a taxable year of less than 12 months; and

(viii) not be closely held as defined for purposes of the REIT provisions of the Internal Revenue Code.

We would be treated as closely held if, during the last half of any taxable year, more than 50% in value of our outstanding capital shares is owned, directly or indirectly through the application of certain attribution rules, by five or fewer individuals, as defined in the Internal Revenue Code to include certain entities. Items (vii) and (viii) above will not apply until after the first taxable year for which we elect to be taxed as a REIT. If we comply with Treasury Regulations that provide procedures for ascertaining the actual ownership of our common stock for each taxable year and we did not know, and with the exercise of reasonable diligence could not have known, that we failed to meet item (viii) above for a taxable year, we will be treated as having met item (viii) for that year.

We intend to elect to be taxed as a REIT commencing with our taxable year in which we satisfy the minimum offering requirements, and we intend to satisfy the other requirements described in items (i)-(vi) above at all times during each of our taxable years. In addition, our charter contains restrictions regarding

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ownership and transfer of shares of our common stock that are intended to assist us in continuing to satisfy the share ownership requirements in items (vii) and (viii) above (but which should not prevent us from qualifying under item (iv) above). For purposes of the requirements described herein, any corporation that is a qualified REIT subsidiary of ours will not be treated as a corporation separate from us and all assets, liabilities and items of income, deduction and credit of our qualified REIT subsidiaries will be treated as our assets, liabilities and items of income, deduction and credit. A qualified REIT subsidiary is a corporation, other than a taxable REIT subsidiary (as described below under “—Operational Requirements—Asset Tests”), all of the capital shares of which is owned by a REIT.

In the case of a REIT that is a partner in an entity treated as a partnership for federal income tax purposes, the REIT is treated as owning its proportionate share of the assets of the partnership and as earning its allocable share of the gross income of the partnership for purposes of the requirements described herein. In addition, the character of the assets and gross income of the partnership will retain the same character in the hands of the REIT for purposes of the REIT requirements, including the asset and income tests described below. As a result, our proportionate share of the assets, liabilities and items of income of our operating partnership and of any other partnership, joint venture, limited liability company or other entity treated as a partnership for federal income tax purposes in which we or our operating partnership have an interest will be treated as our assets, liabilities and items of income.

The Internal Revenue Code provides relief from violations of the REIT gross income requirements, as described below under “—Operational Requirements—Gross Income Tests,” in cases where a violation is due to reasonable cause and not willful neglect, and other requirements are met, including the payment of a penalty tax that is based upon the magnitude of the violation. In addition, the Internal Revenue Code includes provisions that extend similar relief in the case of certain violations of the REIT asset requirements and other REIT requirements, again provided that the violation is due to reasonable cause and not willful neglect, and other conditions are met, including the payment of a penalty tax. If we fail to satisfy any of the various REIT requirements, there can be no assurance that these relief provisions would be available to enable us to maintain our qualification as a REIT, and, if available, the amount of any resultant penalty tax could be substantial.

Operational Requirements—Gross Income Tests

To maintain our qualification as a REIT, we must satisfy annually two gross income requirements.

•  At least 75% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived directly or indirectly from investments relating to real property or mortgages on real property and from other specified sources, including qualified temporary investment income, as described below. Gross income includes “rents from real property” and, in some circumstances, interest, but excludes gross income from dispositions of property held primarily for sale to customers in the ordinary course of a trade or business. These dispositions are referred to as “prohibited transactions.” This test is the 75% Income Test.

•  At least 95% of our gross income, excluding gross income from prohibited transactions, for each taxable year must be derived from the real property investments described above and generally from distributions and interest and gains from the sale or disposition of shares of our common stock or securities or from any combination of the foregoing. This test is the 95% Income Test.

The rents we will receive or be deemed to receive will qualify as “rents from real property” for purposes of satisfying the gross income requirements for a REIT only if the following conditions are met:

•  the amount of rent received from a customer must not be based in whole or in part on the income or profits of any person; however, an amount received or accrued generally will not be excluded from the term “rents from real property” solely by reason of being based on a fixed percentage or percentages of gross receipts or sales;

•  in general, neither we nor an owner of 10% or more of the shares of our common stock may directly or constructively own 10% or more of a customer, which we refer to as a “Related Party Customer,” or a subtenant of the customer (in which case only rent attributable to the subtenant is disqualified);

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•  rent attributable to personal property leased in connection with a lease of real property cannot be greater than 15% of the total rent received under the lease, as determined based on the average of the fair market values as of the beginning and end of the taxable year; and

•  we normally must not operate or manage the property or furnish or render services to customers, other than through an “independent contractor” who is adequately compensated and from whom we do not derive any income or through a “taxable REIT subsidiary.” However, a REIT may provide services with respect to its properties, and the income derived therefrom will qualify as “rents from real property,” if the services are “usually or customarily rendered” in connection with the rental of space only and are not otherwise considered “rendered to the occupant” primarily for its convenience. Even if the services provided by us with respect to a property are impermissible customer services, the income derived therefrom will qualify as “rents from real property” if such income does not exceed one percent of all amounts received or accrued with respect to that property.

As a result, we may establish taxable REIT subsidiaries to hold assets generating non-qualifying income. Additionally, we may, from time to time, enter into hedging transactions with respect to interest rate exposure on one or more of our assets or liabilities. Any such hedging transactions could take a variety of forms, including the use of derivative instruments such as interest rate swap contracts, interest rate cap or floor contracts futures or forward contracts and options. Any income or gain derived by us from transactions that hedge certain risks, such as the risk of changes in interest rates or currency fluctuations, will not be treated as gross income for purposes of either the 75% or the 95% Income Test, provided that specified requirements are met. Such requirements include that the hedging transaction be properly identified within prescribed time periods and that the transaction either (1) hedges risks associated with indebtedness issued by us that is incurred to acquire or carry “real estate assets” (as described below under “—Asset Tests”) or (2) manages the risks of currency fluctuations with respect to income or gain that qualifies under the 75% or 95% Income Test (or assets that generate such income). We intend to structure any hedging transactions in a manner that does not jeopardize our status as a REIT.

Prior to the making of investments in real properties, we may invest the net offering proceeds in liquid assets such as government securities or certificates of deposit. For purposes of the 75% Income Test, income attributable to a stock or debt instrument purchased with the proceeds received by a REIT in exchange for stock in the REIT (other than amounts received pursuant to a distribution reinvestment plan) constitutes qualified temporary investment income if such income is received or accrued during the one-year period beginning on the date the REIT receives such new capital. To the extent that we hold any proceeds of the offering for longer than one year, we may invest those amounts in less liquid investments such as mortgage backed securities, maturing mortgage loans purchased from mortgage lenders or shares of common stock in other REITs to satisfy the 75% and 95% Income Tests and the Asset Tests described below. We expect the bulk of the remainder of our income to qualify under the 75% and 95% Income Tests as gains from the sale of real property interests, interest on mortgages on real property and rents from real property in accordance with the requirements described above. With regard to rental income, we anticipate that most of our leases will be for fixed rentals with annual “consumer price index” or similar adjustments and that none of the rentals under our leases will be based on the income or profits of any person. Rental leases may provide for payments based on gross receipts, which are generally permissible under the REIT income tests. In addition, none of our customers are expected to be related party customers, and the portion of the rent attributable to personal property is not expected to exceed 15% of the total rent to be received under any lease. We anticipate that all or most of the services to be performed with respect to our real properties will be performed by our property manager and such services are expected to be those usually or customarily rendered in connection with the rental of real property and not rendered to the occupant of such real property primarily for its convenience. Finally, we anticipate that any non-customary services will be provided by a taxable REIT subsidiary or, alternatively, by an independent contractor that is adequately compensated and from whom we derive no income. However, we can give no assurance that the actual sources of our gross income will allow us to satisfy the 75% and 95% Income Tests.

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Notwithstanding our failure to satisfy one or both of the 75% and 95% Income Tests for any taxable year, we may still qualify as a REIT for that year if we are eligible for relief under specific provisions of the Internal Revenue Code. These relief provisions generally will be available if:

•  our failure to meet these tests was due to reasonable cause and not due to willful neglect;

•  we attach a schedule of our income sources to our federal income tax return; and

•  any incorrect information on the schedule is not due to fraud with intent to evade tax.

It is not possible, however, to state whether, in all circumstances, we would be entitled to the benefit of these relief provisions. Even if a relief provision applies, the REIT is 100% taxable on the portion of its gross income attributable to the income that caused the failure to meet the 75% or 95% Income Test.

Operational Requirements

Two limitations may affect our ability to treat rent paid by a lessee as qualifying rents from real property under the REIT rules. If the rent attributable to personal property leased by the a lessee in connection with a lease of real property is greater than 15% of the total rent under the lease, then the portion of the rent attributable to such personal property will not qualify as rents from real property. Also, an amount received or accrued will not qualify as rents from real property for purposes of either the 75% or the 95% Income Test if it is based in whole or in part on the income or profits derived by any person from such property. However, an amount received or accrued will not be excluded from rents from real property solely by reason of being based on a fixed percentage or percentages of receipts or sales. To comply with the limitation on rents attributable to personal property, a lessee may acquire furnishings, equipment and personal property used in real properties in which we may invest, at least to the extent that they exceed this 15% limit. To comply with the prohibition on rent based on net income, we may structure the leases to provide that each lessee is obligated to pay our operating partnership a minimum base rent together with a gross percentage rent, at rates intended to equal market rental rates.

In addition, rent paid by a lessee that leases a real property from our operating partnership will constitute rents from real property for purposes of the 75% and 95% Income Tests only if the lease is respected as a true lease for federal income tax purposes and is not treated as a service contract, joint venture or some other type of arrangement. The determination of whether a lease is a true lease depends on an analysis of all the surrounding facts and circumstances. Potential investors in shares of our common stock should be aware, however, that there are no controlling regulations, published administrative rulings or judicial decisions involving leases with terms substantially similar to the contemplated leases between our operating partnership and the lessees that discuss whether the leases constitute true leases for federal income tax purposes. We intend to structure any leases relating to real properties in which we may invest with any lessee as true leases for federal income tax purposes; however, there can be no assurance that the IRS or a court will not assert a contrary position. If any leases between our operating partnership and a lessee are re-characterized as service contracts or partnership agreements, rather than as true leases, part or all of the payment that we receive from such lessee would not be considered rent or would otherwise fail the various requirements for qualification as rents from real property.

Operational Requirements—Asset Tests

At the close of each quarter of our taxable year, starting with the taxable year with respect to which we elect to be taxed as a REIT, we also must satisfy four tests, which we refer to as “Asset Tests,” relating to the nature and diversification of our assets.

•  First, at least 75% of the value of our total assets must be represented by real estate assets, cash, cash items and government securities. The term “real estate assets” includes real property, mortgages on real property, shares of common stock in other qualified REITs, property attributable to the temporary investment of new capital as described above and a proportionate share of any real estate assets owned by a partnership in which we are a partner or of any qualified REIT subsidiary of ours.

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•  Second, no more than 25% of our total assets may be represented by securities other than those in the 75% asset class.

•  Third, of the investments included in the 25% asset class, the value of any one issuer’s securities that we own may not exceed 5% of the value of our total assets. Additionally, we may not own more than 10% of the voting power or value of any one issuer’s outstanding securities, which we refer to as the “10% Asset Test.” The 10% Asset Test does not apply to securities of a taxable REIT subsidiary, nor does it apply to certain “straight debt” instruments possessing certain characteristics. The term “securities” also does not include the equity or debt securities of a qualified REIT subsidiary of ours or an equity interest in any entity treated as a partnership for federal tax purposes.

•  Fourth, no more than 25% of the value of our total assets may consist of the securities of one or more taxable REIT subsidiaries. Subject to certain exceptions, a taxable REIT subsidiary is any corporation, other than a REIT, in which we directly or indirectly own stock and with respect to which a joint election has been made by us and the corporation to treat the corporation as a taxable REIT subsidiary of ours and also includes any corporation, other than a REIT, in which a taxable REIT subsidiary of ours owns, directly or indirectly, more than 35% of the voting power or value.

Any interest that we hold in a real estate mortgage investment conduit , or REMIC, will generally qualify as real estate assets and income derived from REMIC interests will generally be treated as qualifying income for purposes of the REIT Income Tests described above. If less than 95% of the assets of a REMIC are real estate assets, however, then only a proportionate part of our interest in the REMIC and income derived from the interest will qualify for purposes of the REIT asset and income tests. If we hold a “residual interest” in a REMIC from which we derive “excess inclusion income,” we will be required either to distribute the excess inclusion income or to pay tax on it (or a combination of the two), even though we may not receive the income in cash. To the extent that distributed excess inclusion income is allocable to a particular stockholder, the income (1) would not be allowed to be offset by any net operating losses otherwise available to the stockholder, (2) would be subject to tax as unrelated business taxable income in the hands of most types of stockholders that are otherwise generally exempt from federal income tax and (3) would result in the application of U.S. federal income tax withholding at the maximum rate (30%), without reduction pursuant to any otherwise applicable income tax treaty, to the extent allocable to most types of foreign stockholders. Moreover, any excess inclusion income that we receive that is allocable to specified categories of tax-exempt investors which are not subject to unrelated business income tax, such as government entities, may be subject to corporate-level income tax in our hands, regardless of whether it is distributed.

To the extent that we hold mortgage participations or CMBS that do not represent REMIC interests, such assets may not qualify as real estate assets, and the income generated from them may not qualify for purposes of either or both of the 75% and 95% Income Tests, depending upon the circumstances and the specific structure of the investment.

Certain of our mezzanine loans may qualify for the safe harbor in Revenue Procedure 2003-65 pursuant to which certain loans secured by a first priority security interest in ownership interests in a partnership or limited liability company will be treated as qualifying assets for purposes of the 75% real estate asset test and the 10% Asset Test. We may make some mezzanine loans that do not qualify for that safe harbor and that do not qualify as “straight debt” securities or for one of the other exclusions from the definition of “securities” for purposes of the 10% Asset Test. We intend to make such investments in such a manner as not to fail the asset test described above.

The Asset Tests must generally be met for any quarter in which we acquire securities or other property. Upon full investment of the net offering proceeds we expect that most of our assets will consist of “real estate assets,” and we therefore expect to satisfy the Asset Tests.

If we meet the Asset Tests at the close of any quarter, we will not lose our REIT status for a failure to satisfy the Asset Tests at the end of a later quarter in which we have not acquired any securities or other property if such failure occurs solely because of changes in asset values. If our failure to satisfy the Asset Tests results from an acquisition of securities or other property during a quarter, we can cure the failure by

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disposing of a sufficient amount of non-qualifying assets within 30 days after the close of that quarter. We intend to maintain adequate records of the value of our assets to ensure compliance with the Asset Tests and to take other action within 30 days after the close of any quarter as may be required to cure any noncompliance. If that does not occur, we may nonetheless qualify for one of the relief provisions described below.

To the extent that we fail one or more of the asset tests and we do not fall within the de minimis safe harbors with respect to the 5% and 10% asset tests, we may nevertheless be deemed to have satisfied such requirements if (1) we take certain corrective measures, (2) we meet certain technical requirements and (3) we pay a specified excise tax (the greater of (a) $50,000 or (b) an amount determined by multiplying the highest rate of corporate tax by the net income generated by the assets causing the failure for the period beginning on the first date of the failure and ending on the date that we dispose of the assets (or otherwise satisfy the asset test requirements)).

The Internal Revenue Code contains a number of provisions applicable to REITs, including relief provisions that make it easier for REITs to satisfy the asset requirements or to maintain REIT qualification notwithstanding certain violations of the asset and other requirements.

One such provision allows a REIT that fails one or more of the asset requirements to nevertheless maintain its REIT qualification if (1) it provides the IRS with a description of each asset causing the failure, (2) the failure is due to reasonable cause and not willful neglect, (3) the REIT pays a tax equal to the greater of (a) $50,000 per failure and (b) the product of the net income generated by the assets that caused the failure multiplied by the highest applicable corporate tax rate (currently 35%) and (4) the REIT either disposes of the assets causing the failure within six months after the last day of the quarter in which it identifies the failure or otherwise satisfies the relevant asset tests within that time frame.

A second relief provision applies to de minimis violations of the 10% and 5% asset tests. A REIT may maintain its qualification despite a violation of such requirements if (1) the value of the assets causing the violation do not exceed the lesser of 1% of the REIT’s total assets and $10,000,000 or (2) the REIT either disposes of the assets causing the failure within six months after the last day of the quarter in which it identifies the failure, or the relevant tests are otherwise satisfied within that time frame.

The Internal Revenue Code also provides that certain securities will not cause a violation of the 10% Asset Test described above. Such securities include instruments that constitute “straight debt,” which includes securities having certain contingency features. A security cannot qualify as “straight debt” where a REIT (or a controlled taxable REIT subsidiary of the REIT) owns other securities of the issuer of that security which do not qualify as straight debt, unless the value of those other securities constitute, in the aggregate, 1% or less of the total value of that issuer’s outstanding securities. In addition to straight debt, the Internal Revenue Code provides that certain other securities will not violate the 10% Asset Test. Such securities include (1) any loan made to an individual or an estate, (2) certain rental agreements in which one or more payments are to be made in subsequent years (other than agreements between a REIT and certain persons related to the REIT), (3) any obligation to pay rents from real property, (4) securities issued by governmental entities that are not dependent in whole or in part on the profits of (or payments made by) a non-governmental entity, (5) any security issued by another REIT and (6) any debt instrument issued by a partnership if the partnership’s income is of a nature that it would satisfy the 75% gross income test described above under “—Operational Requirements—Gross Income Tests.” In addition, when applying the 10% Asset Test, a debt security issued by a partnership is not taken into account to the extent, if any, of the REIT’s proportionate equity interest in that partnership.

Operational Requirements—Annual Distribution Requirement

To be taxed as a REIT, we are required to make distributions, other than capital gain distributions, to our stockholders each year in the amount of at least 90% of our REIT taxable income (computed without regard to the distributions paid deduction and our net capital gain and subject to certain other potential adjustments) for all tax years. While we must generally make distributions in the taxable year to which they relate, we may also make distributions in the following taxable year if (1) they are declared before we timely file our federal

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income tax return for the taxable year in question and (2) they are paid on or before the first regular distribution payment date after the declaration.

Even if we satisfy the foregoing distribution requirement and, accordingly, continue to qualify as a REIT for tax purposes, we will still be subject to federal income tax on the excess of our net capital gain and our REIT taxable income, as adjusted, over the amount of distributions to stockholders.

In addition, if we fail to distribute during each calendar year at least the sum of:

•  85% of our ordinary income for that year;

•  95% of our capital gain net income other than the capital gain net income which we elect to retain and pay tax on for that year; and

•  any undistributed taxable income from prior periods;

we will be subject to a 4% nondeductible excise tax on the excess of the amount of the required distributions over the sum of (1) the amounts actually distributed plus (2) retained amounts on which corporate level tax is paid by us.

We intend to make timely distributions sufficient to satisfy this requirement; however, it is possible that we may experience timing differences between (1) the actual receipt of income and payment of deductible expenses and (2) the inclusion of that income and deduction of those expenses for purposes of computing our taxable income. It is also possible that we may be allocated a share of net capital gain attributable to the sale of depreciated property by our operating partnership that exceeds our allocable share of cash attributable to that sale. In those circumstances, we may have less cash than is necessary to meet our annual distribution requirement or to avoid income or excise taxation on undistributed income. We may find it necessary in those circumstances to arrange for financing or raise funds through the issuance of additional shares of common stock to meet our distribution requirements. If we fail to satisfy the distribution requirement for any taxable year by reason of a later adjustment to our taxable income made by the Internal Revenue Service, we may be able to pay “deficiency distributions” in a later year and include such distributions in our deductions for distributions paid for the earlier year. To qualify as a deficiency distribution, the distribution must be paid within 90 days of the adverse determination, and we also must satisfy certain other procedural requirements. In that event, we may be able to avoid losing our REIT status or being taxed on amounts distributed as deficiency distributions, but we would be required to pay interest and a penalty to the Internal Revenue Service based upon the amount of any deduction taken for deficiency distributions for the earlier year.

As noted above, we may also elect to retain, rather than distribute, our net long-term capital gains. The effect of such an election would be as follows:

•  we would be required to pay the federal income tax on these gains;

•  taxable U.S. stockholders, while required to include their proportionate share of the undistributed long-term capital gains in income, would receive a credit or refund for their share of the tax paid by the REIT; and

•  the basis of the stockholder’s shares of common stock would be increased by the difference between the designated amount included in the stockholder’s long-term capital gains and the tax deemed paid with respect to such shares of common stock.

In computing our REIT taxable income, we will use the accrual method of accounting and intend to depreciate depreciable property under the alternative depreciation system. We are required to make an election in the tax year in which depreciable property is placed in service to use the alternative depreciation system. We are required to file an annual federal income tax return, which, like other corporate returns, is subject to examination by the Internal Revenue Service. Because the tax law requires us to make many judgments regarding the proper treatment of a transaction or an item of income or deduction, it is possible that the Internal Revenue Service will challenge positions we take in computing our REIT taxable income and our distributions.

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Issues could arise, for example, with respect to the allocation of the purchase price of real properties between depreciable or amortizable assets and non-depreciable or non-amortizable assets such as land and the current deductibility of fees paid to our advisor or its affiliates. Were the Internal Revenue Service to successfully challenge our characterization of a transaction or determination of our REIT taxable income, we could be found to have failed to satisfy a requirement for qualification as a REIT. If, as a result of a challenge, we are determined to have failed to satisfy the distribution requirements for a taxable year, we would be disqualified as a REIT, unless we were permitted to pay a deficiency distribution to our stockholders and pay interest thereon to the Internal Revenue Service, as provided by the Internal Revenue Code. A deficiency distribution cannot be used to satisfy the distribution requirement, however, if the failure to meet the requirement is not due to a later adjustment to our income by the Internal Revenue Service.

Operational Requirements—Recordkeeping

We must maintain certain records as set forth in Treasury Regulations to avoid the payment of monetary penalties to the Internal Revenue Service. Such Treasury Regulations require that we request, on an annual basis, certain information designed to disclose the ownership of shares of our outstanding common stock. We intend to comply with these requirements.

Failure to Qualify as a REIT

If we fail to qualify as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to qualify as a REIT. In this situation, to the extent of current and accumulated earnings and profits, all distributions to our stockholders that are individuals will generally be taxable at capital gains rates (through 2010), and, subject to limitations of the Internal Revenue Code, corporate distributees may be eligible for the distributions received deduction. We also will be disqualified from taxation as a REIT for the four taxable years following the year during which qualification was lost unless we are entitled to relief under specific statutory provisions.

Sale-Leaseback Transactions

Some of our investments may be in the form of sale-leaseback transactions. We normally intend to treat these transactions as true leases for federal income tax purposes. However, depending on the terms of any specific transaction, the Internal Revenue Service might take the position that the transaction is not a true lease but is more properly treated in some other manner. If such recharacterization were successful, we would not be entitled to claim the depreciation deductions available to an owner of the property. In addition, the recharacterization of one or more of these transactions might cause us to fail to satisfy the Asset Tests or the Income Tests described above based upon the asset we would be treated as holding or the income we would be treated as having earned, and such failure could result in our failing to qualify as a REIT in the year of recharacterization. Alternatively, the amount or timing of income inclusion or the loss of depreciation deductions resulting from the recharacterization might cause us to fail to meet the distribution requirement described above for one or more taxable years absent the availability of the deficiency distribution procedure or might result in a larger portion of our distributions being treated as ordinary distribution income to our stockholders.

Investments in Taxable REIT Subsidiaries

We and each subsidiary that will qualify as a TRS will make a joint election for the TRS to be treated as a taxable REIT subsidiary of our REIT. A domestic TRS (or a foreign TRS with income from a U.S. business) pays federal state and local income taxes at the full applicable corporate rates on its taxable income prior to payment of any dividends. The taxes owed by our TRSs could be substantial. To the extent that our TRSs are required to pay federal, state, local or foreign taxes, the cash available for distribution by us will be reduced accordingly.

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A TRS is permitted to engage in certain kinds of activities that cannot be performed directly by us without jeopardizing our REIT status. However, several provisions regarding the arrangements between a REIT and its TRS ensure that a TRS will be subject to an appropriate level of federal income taxation. For example, the Internal Revenue Code limits the ability of our TRS to deduct interest payments in excess of a certain amount made to us. In addition, we must pay a 100% tax on some payments that we receive from, or on certain expenses deducted by, the TRS if the economic arrangements between us, our tenants and the TRS are not comparable to similar arrangements among unrelated parties.

Taxation of Taxable U.S. Stockholders

In this section, the phrase “U.S. stockholder” means a holder of our common stock that for federal income tax purposes is:

•  a citizen or resident of the United States;

•  a corporation, partnership or other entity treated as a corporation or partnership for U.S. federal income tax purposes created or organized in or under the laws of the United States or of any political subdivision thereof;

•  an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

•  a trust, if a U.S. court is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

If a partnership, including for this purpose any entity that is treated as a partnership for U.S. federal income tax purposes, holds our common stock, the tax treatment of a partner in the partnership will generally depend upon the status of the partner and the activities of the partnership. An investor that is a partnership and the partners in such partnership should consult their tax advisors about the U.S. federal income tax consequences of the acquisition, ownership and disposition of our common stock.

Under the recently enacted Health Care and Education Reconciliation Act of 2010, amending the Patient Protection and Affordable Care Act, high-income U.S. individuals, estates, and trusts will be subject to an additional 3.8% tax on net investment income in tax years beginning after December 31, 2012. For these purposes, net investment income includes dividends and gains from sales of stock. In the case of an individual, the tax will be 3.8% of the lesser of the individual’s net investment income or the excess of the individual’s modified adjusted gross income over $250,000 in the case of a married individual filing a joint return or a surviving spouse, $125,000 in the case of a married individual filing a separate return, or $200,000 in the case of a single individual.

For any taxable year for which we qualify for taxation as a REIT, amounts distributed to, and gains realized by, taxable U.S. stockholders with respect to our common stock generally will be taxed as described herein.

Distributions Generally

Distributions to U.S. stockholders, other than capital gain distributions discussed below, will constitute distributions up to the amount of our current or accumulated earnings and profits and will be taxable to the stockholders as ordinary income. These distributions are not eligible for the dividends received deduction generally available to corporations. In addition, with limited exceptions, these distributions are not eligible for taxation at the preferential income tax rates for qualified distributions received by individuals from taxable C corporations pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003. Stockholders that are individuals, however, are taxed at the preferential rates on distributions designated by and received from us to the extent that the distributions are attributable to (1) income retained by us in the prior taxable year on which we were subject to corporate level income tax (less the amount of tax), (2) distributions received by us from taxable C corporations or (3) income in the prior taxable year from the sales of “built-in gain” property acquired by us from C corporations in carryover basis transactions (less the amount of corporate tax on such income).

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To the extent that we make a distribution in excess of our current and accumulated earnings and profits, the distribution will be treated first as a tax-free return of capital, reducing the tax basis in the U.S. stockholder’s shares of common stock, and the amount of each distribution in excess of a U.S. stockholder’s tax basis in its shares of common stock will be taxable as gain realized from the sale of its shares of common stock. Distributions that we declare in October, November or December of any year payable to a stockholder of record on a specified date in any of these months will be treated as both paid by us and received by the stockholder on December 31 of the year, provided that we actually pay the distribution during January of the following calendar year. U.S. stockholders may not include any of our losses on their own federal income tax returns.

We will be treated as having sufficient earnings and profits to treat as a distribution any distribution by us up to the amount required to be distributed to avoid imposition of the 4% excise tax discussed above. Moreover, any “deficiency distribution” will be treated as an ordinary or capital gain distribution, as the case may be, regardless of our earnings and profits. As a result, stockholders may be required to treat as taxable some distributions that would otherwise result in a tax-free return of capital.

Capital Gain Distributions

Distributions to U.S. stockholders that we properly designate as capital gain distributions normally will be treated as long-term capital gains to the extent they do not exceed our actual net capital gain for the taxable year without regard to the period for which the U.S. stockholder has held his shares of common stock. A corporate U.S. stockholder might be required to treat up to 20% of some capital gain distributions as ordinary income. Long-term capital gains are generally taxable at maximum federal rates of 15% (through 2010) in the case of stockholders who are individuals and 35% in the case of stockholders that are corporations. Capital gains attributable to the sale of depreciable real property held for more than 12 months are subject to a 25% maximum federal income tax rate for taxpayers who are individuals, to the extent of previously claimed depreciation deductions. Further, capital gain distributions are not eligible for the dividend received deduction for corporations.

If the REIT elects to retain and pay tax on its net long term capital gain, our U.S. stockholders will be subject to tax on their proportionate share of the undistributed capital gain. Each U.S. stockholder would then receive a credit, for use on their return of their proportionate share of the tax paid by the REIT. If the credit results in an amount owed to a U.S. stockholder, such U.S. stockholder would receive a refund.

Certain Dispositions of Our Common Stock

In general, capital gains recognized by individuals upon the sale or disposition of shares of common stock will be subject to a maximum federal income tax rate of 15% (through 2010) if such shares of common stock are held for more than 12 months and will be taxed at ordinary income rates (of up to 35% through 2010) if such shares of common stock are held for 12 months or less. Gains recognized by stockholders that are corporations are subject to federal income tax at a maximum rate of 35%, whether or not classified as long-term capital gains. Capital losses recognized by a stockholder upon the disposition of a share of our common stock held for more than one year at the time of disposition will be considered long-term capital losses and are generally available only to offset capital gain income of the stockholder but not ordinary income (except in the case of individuals, who may offset up to $3,000 of ordinary income each year with such capital losses). In addition, any loss upon a sale or exchange of shares of common stock by a stockholder who has held such shares of common stock for six months or less, after applying holding period rules, will be treated as a long-term capital loss to the extent of distributions received from us that are required to be treated by the stockholder as long-term capital gain.

Investments in Real Estate Outside the United States

We may invest in real estate assets, directly or indirectly, in jurisdictions other than the United States. Such assets may be subject to taxes in these non-U.S. jurisdictions that ordinarily would give rise to foreign tax credits for U.S. resident taxpayers. However, our anticipated investment structure will prevent any of our

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U.S. stockholders from utilizing any foreign tax credits generated. The foreign assets we acquire will either be held by us, an entity that intends to qualify as a REIT, or through a taxable REIT subsidiary. Because we intend to operate as a REIT and we are entitled to a dividends paid deduction, the foreign tax credit limitation will prevent us from utilizing any foreign tax credits with respect to property that we acquire directly to offset our income. As such, we expect to only hold foreign real estate assets in low non-U.S. tax jurisdictions directly. With respect to real estate assets located in high non-U.S. tax jurisdictions, we expect to hold such assets through a taxable REIT subsidiary so that such subsidiary may be able to utilize the foreign tax credit to offset its U.S. taxable income. In either case, foreign taxes are not passed through to our U.S. stockholders for purposes of calculating our U.S. stockholders’ foreign tax credit.

Information Reporting Requirements and Backup Withholding for U.S. Stockholders

We will report to U.S. stockholders of our common stock and to the Internal Revenue Service the amount of distributions made or deemed made during each calendar year and the amount of tax withheld, if any. Under some circumstances, U.S. stockholders may be subject to backup withholding on payments made with respect to, or cash proceeds of a sale or exchange of, our common stock. Backup withholding will apply only if the stockholder:

•  fails to furnish its taxpayer identification number (which, for an individual, would be his Social Security number);

•  furnishes an incorrect taxpayer identification number;

•  is notified by the Internal Revenue Service that the stockholder has failed properly to report payments of interest or distributions and is subject to backup withholding; or

•  under some circumstances, fails to certify, under penalties of perjury, that it has furnished a correct taxpayer identification number and has not been notified by the Internal Revenue Service that the stockholder is subject to backup withholding for failure to report interest and distribution payments or has been notified by the Internal Revenue Service that the stockholder is no longer subject to backup withholding for failure to report those payments.

Backup withholding will not apply with respect to payments made to some stockholders, such as corporations in certain circumstances and tax-exempt organizations. Backup withholding is not an additional tax. Rather, the amount of any backup withholding with respect to a payment to a U.S. stockholder will be allowed as a credit against the U.S. stockholder’s United States federal income tax liability and may entitle the U.S. stockholder to a refund, provided that the required information is furnished to the Internal Revenue Service. U.S. stockholders should consult their tax advisors regarding their qualification for exemption from backup withholding and the procedure for obtaining an exemption.

Treatment of Tax-Exempt Stockholders

Tax-exempt entities including employee pension benefit trusts and individual retirement accounts generally are exempt from United States federal income taxation. These entities are subject to taxation, however, on any “unrelated business taxable income,” which we refer to as “UBTI,” as defined in the Internal Revenue Code. The Internal Revenue Service has issued a published ruling that distributions from a REIT to a tax-exempt pension trust did not constitute UBTI. Although rulings are merely interpretations of law by the Internal Revenue Service and may be revoked or modified, based on this analysis, indebtedness incurred by us or by our operating partnership in connection with the acquisition of a property should not cause any income derived from the property to be treated as UBTI upon the distribution of those amounts as distributions to a tax-exempt U.S. stockholder of our common stock. A tax-exempt entity that incurs indebtedness to finance its purchase of our common stock, however, will be subject to UBTI under the debt-financed income rules. However, social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt from taxation under specified provisions of the Internal Revenue Code are subject to different UBTI rules, which generally will require them to treat distributions from us as UBTI unless the organization properly sets aside or reserves such amounts for purposes specified in

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the Internal Revenue Code. These organizations are urged to consult their own tax advisor with respect to the treatment of our distributions to them.

In addition, tax-exempt pension and specified other tax-exempt trusts that hold more than 10% by value of the shares of a REIT may be required to treat a specified percentage of REIT distributions as UBTI. This requirement applies only if our qualification as a REIT depends upon the application of a look-through exception to the closely-held restriction and we are considered to be predominantly held by those tax-exempt trusts. It is not anticipated that our qualification as a REIT will depend upon application of the look-through exception or that we will be predominantly held by these types of trusts; however, we do not guarantee that this will be the case in the future.

Special Tax Considerations for Non-U.S. Stockholders

The rules governing United States federal income taxation of non-resident alien individuals, foreign corporations, foreign partnerships and other foreign stockholders, which we refer to collectively as “Non-U.S. holders,” are complex. The following discussion is intended only as a summary of these rules. Non-U.S. holders should consult with their own tax advisors to determine the impact of United States federal, state and local income tax laws on an investment in our common stock, including any reporting requirements as well as the tax treatment of the investment under the tax laws of their home country.

Ordinary Distributions

The portion of distributions received by Non-U.S. holders payable out of our earnings and profits that are not attributable to our capital gains and that are not effectively connected with a U.S. trade or business of the Non-U.S. holder will be subject to U.S. withholding tax at the rate of 30%, unless reduced by treaty. In general, Non-U.S. holders will not be considered to be engaged in a U.S. trade or business solely as a result of their ownership of our common stock. In cases where the distribution income from a Non-U.S. holder’s investment in our common stock is, or is treated as, effectively connected with the Non-U.S. holder’s conduct of a U.S. trade or business, the Non-U.S. holder generally will be subject to U.S. tax at graduated rates, in the same manner as domestic stockholders are taxed with respect to such distributions, such income must generally be reported on a U.S. income tax return filed by or on behalf of the Non-U.S. holder and the income may also be subject to the 30% branch profits tax in the case of a Non-U.S. holder that is a corporation.

Non-Dividend Distributions

Unless our common stock constitutes a U.S. real property interest, which we refer to as a “USRPI,” distributions by us that are not distributions out of our earnings and profits will not be subject to U.S. income tax. If it cannot be determined at the time at which a distribution is made whether the distribution will exceed current and accumulated earnings and profits, the distribution will be subject to withholding at the rate applicable to distributions. However, the Non-U.S. holder may seek a refund from the Internal Revenue Service of any amounts withheld if it is subsequently determined that the distribution was, in fact, in excess of our current and accumulated earnings and profits. If our common stock constitutes a USRPI, as described below, distributions by us in excess of the sum of our earnings and profits plus the stockholder’s basis in shares of our common stock will be taxed under the Foreign Investment in Real Property Tax Act of 1980, which we refer to as “FIRPTA,” at the rate of tax, including any applicable capital gains rates, that would apply to a domestic stockholder of the same type (e.g., an individual or a corporation, as the case may be), and the collection of the tax will be enforced by a refundable withholding at a rate of 10% of the amount by which the distribution exceeds the stockholder’s share of our earnings and profits.

Capital Gain Distributions

A capital gain distribution will generally not be treated as income that is effectively connected with a U.S. trade or business and will instead be treated the same as an ordinary distribution from us, provided that (1) the capital gain distribution is received with respect to a class of stock that is regularly traded on an established securities market located in the United States and (2) the recipient Non-U.S. holder does not own

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more than 5% of that class of stock at any time during the taxable year in which the capital gain distribution is received. If such requirements are not satisfied, such distributions will be treated as income that is effectively connected with a U.S. trade or business of the Non-U.S. holder without regard to whether the distribution is designated as a capital gain distribution and, in addition, shall be subject to a 35% withholding tax. We do not anticipate our common stock satisfying the “regularly traded” requirement. Distributions subject to FIRPTA may also be subject to a 30% branch profits tax in the hands of a Non-U.S. holder that is a corporation. A distribution is not a USRPI capital gain if we held the underlying asset solely as a creditor. Capital gain distributions received by a Non-U.S. holder from a REIT that are not USRPI capital gains are generally not subject to U.S. income tax but may be subject to withholding tax.

Dispositions of Our Common Stock

A sale of our common stock by a Non-U.S. holder generally will be subject to U.S. taxation under FIRPTA. Our common stock will not be treated as a USRPI if less than 50% of our assets throughout a prescribed testing period consist of interests in real property located within the United States, excluding, for this purpose, interests in real property solely in a capacity as a creditor. Due to the Asset Tests requirements and provided the “domestically controlled” exception discussed below does not apply, we would expect to constitute a USRPI for all taxable years.

Even if the foregoing test is not met, our common stock nonetheless will not constitute a USRPI if we are a “domestically controlled REIT.” A domestically controlled REIT is a REIT in which, at all times during a specified testing period, less than 50% in value of its shares of common stock is held directly or indirectly by Non-U.S. holders. We currently anticipate that we will be a domestically controlled REIT and, therefore, the sale of our common stock should not be subject to taxation under FIRPTA. However, we cannot assure you that we are or will continue to be a domestically controlled REIT. If we were not a domestically controlled REIT, whether a Non-U.S. holder’s sale of our common stock would be subject to tax under FIRPTA as a sale of a United States real property interest would depend on whether our common stock were “regularly traded” on an established securities market and on the size of the selling stockholder’s interest in us. We will not be “regularly traded” on an established securities market in the near future.

If the gain on the sale of shares of common stock were subject to taxation under FIRPTA, a Non-U.S. holder would be subject to the same treatment as a U.S. stockholder with respect to the gain, subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of non-resident alien individuals. Gain from the sale of our common stock that would not otherwise be subject to FIRPTA will nonetheless be taxable in the United States to a Non-U.S. holder in two cases: (1) if the Non-U.S. holder’s investment in our common stock is effectively connected with a U.S. trade or business conducted by such Non-U.S. holder, the Non-U.S. holder will be subject to the same treatment as a U.S. stockholder with respect to such gain or (2) if the Non-U.S. holder is a nonresident alien individual who was present in the United States for 183 days or more during the taxable year and has a “tax home” in the United States, the nonresident alien individual will be subject to a 30% tax on the individual’s capital gain.

Information Reporting Requirements and Backup Withholding for Non-U.S. Stockholders

Non-U.S. stockholders should consult their tax advisors with regard to U.S. information reporting and backup withholding requirements under the Internal Revenue Code.

Statement of Share Ownership

We are required to demand annual written statements from the record holders of designated percentages of our common stock disclosing the actual owners of the shares of common stock. Any record stockholder who, upon our request, does not provide us with required information concerning actual ownership of the shares of common stock is required to include specified information relating to his shares of common stock in his federal income tax return. We also must maintain, within the Internal Revenue District in which we are required to file our federal income tax return, permanent records showing the information we have received

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about the actual ownership of our common stock and a list of those persons failing or refusing to comply with our demand.

Federal Income Tax Aspects of Our Operating Partnership

The following discussion summarizes certain federal income tax considerations applicable to our investment in our operating partnership. The discussion does not cover state or local tax laws or any federal tax laws other than income tax laws.

Classification as a Partnership

We will be entitled to include in our income a distributive share of our operating partnership’s income and to deduct our distributive share of our operating partnership’s losses only if our operating partnership is classified for federal income tax purposes as a partnership, rather than as a corporation or an association taxable as a corporation. Under applicable Treasury Regulations, which we refer to as the “Check-the-Box-Regulations,” an unincorporated domestic entity with at least two members may elect to be classified either as an association taxable as a corporation or as a partnership. If the entity fails to make an election, it generally will be treated as a partnership for federal income tax purposes. Our operating partnership intends to be classified as a partnership for federal income tax purposes and will not elect to be treated as an association taxable as a corporation under the Check-the-Box-Regulations.

Even though our operating partnership will not elect to be treated as an association for Federal income tax purposes, it may be taxed as a corporation if it is deemed to be a “publicly traded partnership.” A publicly traded partnership is a partnership whose interests are traded on an established securities market or are readily tradable on a secondary market or the substantial equivalent thereof. Under applicable Treasury regulations, which we refer to as the “PTP Regulations,” limited safe harbors from the definition of a publicly traded partnership are provided. Pursuant to one of those safe harbors, which we refer to as the “Private Placement Exclusion,” interests in a partnership will not be treated as readily tradable on a secondary market or the substantial equivalent thereof if (1) all interests in the partnership were issued in a transaction (or transactions) that were not required to be registered under the Securities Act and (2) the partnership does not have more than 100 partners at any time during the partnership’s taxable year. In determining the number of partners in a partnership, a person owning an interest in a flow-through entity (including a partnership, grantor trust or S corporation) that owns an interest in the partnership is treated as a partner in such partnership only if (a) substantially all of the value of the owner’s interest in the flow-through entity is attributable to the flow-through entity’s direct or indirect interest in the partnership and (b) a principal purpose of the use of the flow-through entity is to permit the partnership to satisfy the 100 partner limitation. We and our operating partnership believe and currently intend to take the position that our operating partnership should not be classified as a publicly traded partnership because (1) common units are not traded on an established securities market and (2) common units should not be considered readily tradable on a secondary market or the substantial equivalent thereof. In addition, our operating partnership presently qualifies for the Private Placement Exclusion.

Even if our operating partnership were considered a publicly traded partnership under the PTP Regulations, our operating partnership should not be treated as a corporation for Federal income tax purposes as long as 90% or more of its gross income consists of “qualifying income” under section 7704(d) of the Internal Revenue Code. In general, qualifying income includes interest, distributions, real property rents (as defined by section 856 of the Internal Revenue Code) and gain from the sale or disposition of real property. If our operating partnership were characterized as a publicly traded partnership even if it were not taxable as a corporation because of the qualifying income exception, however, holders of common units would be subject to special rules under section 469 of the Internal Revenue Code. Under such rules, each holder of common units would be required to treat any loss derived from our operating partnership separately from any income or loss derived from any other publicly traded partnership, as well as from income or loss derived from other passive activities. In such case, any net losses or credits attributable to our operating partnership that are carried forward may only be offset against future income of our operating partnership. Moreover, unlike other

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passive activity losses, suspended losses attributable to our operating partnership would only be allowed upon the complete disposition of the common unit holder’s “entire interest” in our operating partnership.

We have not requested, and do not intend to request, a ruling from the Internal Revenue Service that our operating partnership will be classified as a partnership for federal income tax purposes.

If for any reason our operating partnership were taxable as a corporation, rather than a partnership, for federal income tax purposes, we would not be able to qualify as a REIT, unless we are eligible for relief from the violation pursuant to relief provisions described above. In addition, any change in our operating partnership’s status for tax purposes might be treated as a taxable event, in which case we might incur a tax liability without any related cash distribution. Further, items of income and deduction of our operating partnership would not pass through to its partners, and its partners would be treated as stockholders for tax purposes. Our operating partnership would be required to pay income tax at corporate tax rates on its net income, and distributions to its partners would constitute distributions that would not be deductible in computing our operating partnership’s taxable income.

Income Taxation of Our Operating Partnership and its Partners

Partners, Not Operating Partnership, Subject to Tax.  A partnership is not a taxable entity for federal income tax purposes. As a partner in our operating partnership, we will be required to take into account our allocable share of our operating partnership’s income, gains, losses, deductions and credits for any taxable year of our operating partnership ending within or with our taxable year, without regard to whether we have received or will receive any distributions from our operating partnership.

Operating Partnership Allocations.  Although a partnership agreement generally determines the allocation of income and losses among partners, such allocations will be disregarded for tax purposes under section 704(b) of the Internal Revenue Code if they do not comply with the provisions of section 704(b) of the Internal Revenue Code and the Treasury Regulations promulgated thereunder. If an allocation is not recognized for federal income tax purposes, the item subject to the allocation will be reallocated in accordance with the partner’s interests in the partnership, which will be determined by taking into account all of the facts and circumstances relating to the economic arrangement of the partners with respect to such item. Our operating partnership’s allocations of taxable income and loss are intended to comply with the requirements of section 704(b) of the Internal Revenue Code and the Treasury Regulations promulgated thereunder.

Tax Allocations With Respect to Contributed Properties.  Pursuant to section 704(c) of the Internal Revenue Code, income, gain, loss and deduction attributable to appreciated or depreciated property that is contributed to a partnership in exchange for an interest in the partnership must be allocated for federal income tax purposes in a manner such that the contributor is charged with, or benefits from, the unrealized gain or unrealized loss associated with the property at the time of the contribution. The amount of unrealized gain or unrealized loss is generally equal to the difference between the fair market value of the contributed property at the time of contribution and the adjusted tax basis of such property at the time of contribution. Under applicable Treasury Regulations, partnerships are required to use a “reasonable method” for allocating items subject to section 704(c) of the Internal Revenue Code, and several reasonable allocation methods are described therein.

Under the operating partnership agreement, subject to exceptions applicable to the special limited partnership interests, depreciation or amortization deductions of our operating partnership generally will be allocated among the partners in accordance with their respective interests in our operating partnership, except to the extent that our operating partnership is required under section 704(c) to use a different method for allocating depreciation deductions attributable to its properties. In addition, gain or loss on the sale of a property that has been contributed to our operating partnership will be specially allocated to the contributing partner to the extent of any built-in gain or loss with respect to the property for federal income tax purposes. It is possible that we may (1) be allocated lower amounts of depreciation deductions for tax purposes with respect to contributed properties than would be allocated to us if each such property were to have a tax basis equal to its fair market value at the time of contribution and (2) be allocated taxable gain in the event of a sale of such contributed properties in excess of the economic profit allocated to us as a result of such sale. These

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allocations may cause us to recognize taxable income in excess of cash proceeds received by us, which might adversely affect our ability to comply with the REIT distribution requirements, although we do not anticipate that this event will occur. The foregoing principles also will affect the calculation of our earnings and profits for purposes of determining the portion of our distributions that are taxable as a distribution. The allocations described in this paragraph may result in a higher portion of our distributions being taxed as a distribution than would have occurred had we purchased such properties for cash.

Basis in Operating Partnership Interest.  The adjusted tax basis of our partnership interest in our operating partnership generally will be equal to (1) the amount of cash and the basis of any other property contributed to our operating partnership by us, (2) increased by (a) our allocable share of our operating partnership’s income and (b) our allocable share of indebtedness of our operating partnership and (3) reduced, but not below zero, by (a) our allocable share of our operating partnership’s loss and (b) the amount of cash distributed to us, including constructive cash distributions resulting from a reduction in our share of indebtedness of our operating partnership. If the allocation of our distributive share of our operating partnership’s loss would reduce the adjusted tax basis of our partnership interest in our operating partnership below zero, the recognition of the loss will be deferred until such time as the recognition of the loss would not reduce our adjusted tax basis below zero. If a distribution from our operating partnership or a reduction in our share of our operating partnership’s liabilities would reduce our adjusted tax basis below zero, that distribution, including a constructive distribution, will constitute taxable income to us. The gain realized by us upon the receipt of any such distribution or constructive distribution would normally be characterized as capital gain, and if our partnership interest in our operating partnership has been held for longer than the long-term capital gain holding period (currently one year), the distribution would constitute long-term capital gain.

Depreciation Deductions Available to Our Operating Partnership.  Our operating partnership will use a portion of contributions we make from net offering proceeds to acquire interests in properties and securities. To the extent that our operating partnership acquires properties or securities for cash, our operating partnership’s initial basis in such properties for federal income tax purposes generally will be equal to the purchase price paid by our operating partnership. Our operating partnership plans to depreciate each depreciable property for federal income tax purposes under the alternative depreciation system of depreciation, which we refer to as “ADS.” Under ADS, our operating partnership generally will depreciate buildings and improvements over a 40-year recovery period using a straight-line method and a mid-month convention and will depreciate furnishings and equipment over a 12-year recovery period. To the extent that our operating partnership acquires properties in exchange for units of our operating partnership, our operating partnership’s initial basis in each such property for federal income tax purposes should be the same as the transferor’s basis in that property on the date of acquisition by our operating partnership. Although the law is not entirely clear, our operating partnership generally intends to depreciate such depreciable property for federal income tax purposes over the same remaining useful lives and under the same methods used by the transferors.

Sale of Our Operating Partnership’s Property.  Generally, any gain realized by our operating partnership on the sale of property held for more than one year will be long-term capital gain, except for any portion of such gain that is treated as depreciation or cost recovery recapture. Our share of any gain realized by our operating partnership on the sale of any property held by our operating partnership as inventory or other property held primarily for sale to customers in the ordinary course of our operating partnership’s trade or business will be treated as income from a prohibited transaction that is subject to a 100% tax. Whether property is held primarily for sale to customers in the ordinary course of a trade or business depends on the facts and circumstances surrounding each property. We intend to avoid the 100% prohibited transaction tax by (1) conducting activities that may otherwise be considered prohibited transactions through a taxable REIT subsidiary, (2) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or through any subsidiary other than a taxable REIT subsidiary, will be treated as a prohibited transaction or (3) structuring certain dispositions of our properties to comply with certain safe harbors available under the Internal Revenue Code for properties held at least four years. Despite our present intention, no assurance can be given that any particular property we own, directly or through any subsidiary entry, including our operating partnership, but excluding out taxable REIT subsidiaries, will not be treated as property held primarily for sale to customers in the ordinary course of trade or business.

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Other Federal Tax Considerations

Legislative or Other Actions Affecting REITs

The American Jobs Creation Act of 2004, which we refer to as the “2004 Act,” made numerous changes to REIT tax rules, including the adoption of new REIT income and asset test relief provisions, as described above. Except as noted above, the provisions of the 2004 Act are effective for taxable years beginning in 2005. In addition, the Jobs and Growth Tax Relief Reconciliation Act of 2003, as amended by subsequent legislation, reduced the maximum tax rates at which individuals are taxed on capital gains from 20% to 15% (through 2010) and on distributions payable by taxable C corporations from 38.6% to 15% (through 2010). While gains from the sale of the shares of REITs are eligible for the reduced tax rates, distributions payable by REITs are not eligible for the reduced tax rates except in limited circumstances. As a result, distributions received from REITs generally will continue to be taxed at ordinary income rates (now at a maximum rate of 35% through 2010). The more favorable tax rates applicable to regular corporate distributions could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the shares of non-REIT corporations that make distributions, which could adversely affect the value of the shares of REITs, including our shares.

The rules dealing with U.S. federal income taxation are constantly under review. No assurance can be given as to whether, when or in what form, the U.S. federal income tax laws applicable to us and our stockholders may be changed. Changes to the federal tax laws and interpretations of federal tax laws could adversely affect an investment in shares of our common stock.

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STATE AND LOCAL TAX CONSIDERATIONS

We and any operating subsidiaries we may form may be subject to state and local tax in states and localities in which we or they do business or own property. Our tax treatment, the tax treatment of our operating partnership, any operating subsidiaries, joint ventures or other arrangements we or our operating partnership may form or enter into and the tax treatment of the holders of our common stock in local jurisdictions may differ from the federal income tax treatment described above. Consequently, prospective stockholders should consult their own tax advisors regarding the effect of state and local tax laws on their investment in our common stock.

Some states may impose an entity level tax directly on us. For example, Texas enacted legislation in 2006 that amended its franchise tax effective for reports originally due on or after January 1, 2008. Under the revised franchise tax, commonly referred to as a margins tax, a REIT may be treated as “taxable entity” if it has any amount of its assets in direct holdings of real estate, other than real estate it occupies for business purposes, as opposed to holding interests in limited partnerships or other entities that directly hold the real estate. If the REIT is treated as a taxable entity, then the tax base is the entity’s gross margin, computed as the lesser of (1) 70% of the entity’s total revenue or (2) the entity’s total revenue less compensation or cost of goods sold, subject to allocation and apportionment under the applicable rules. Each prospective investor is advised to consult his or her own tax advisor to determine the state and local tax consequences of this and other entity level taxes that may be imposed on us.

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ERISA CONSIDERATIONS

The following is a summary of some considerations associated with an investment in our shares by an employee benefit plan, IRA, Keogh plan or other plan or arrangement subject to ERISA and/or the Internal Revenue Code (including investment by an insurance company general account or entity whose assets are considered plan assets under ERISA). This summary is based on provisions of ERISA and the Internal Revenue Code, each as amended through the date of this prospectus, and the relevant regulations, opinions and other authority issued by the Department of Labor and the IRS. We cannot assure you that there will not be adverse tax or labor decisions or legislative, regulatory or administrative changes that would significantly modify the statements expressed herein. Any such changes may apply to transactions entered into prior to the date of their enactment.

Each fiduciary of an employee benefit plan subject to ERISA (such as a profit sharing, section 401(k) or pension plan, and including an insurance company general account or any other entity whose assets are plan assets) or any other retirement plan or account subject to Section 4975 of the Internal Revenue Code, such as an IRA or Keogh plan, seeking to invest plan assets in our shares must, taking into account the facts and circumstances of each such plan or IRA, both referred to herein as a “benefit plan,” consider, among other matters:

•  whether the investment is consistent with the applicable provisions of ERISA and the Internal Revenue Code;

•  whether, under the facts and circumstances pertaining to the benefit plan in question, the fiduciary’s responsibility to the plan has been satisfied;

•  whether the investment will produce UBTI to the benefit plan; and

•  the need to value the assets of the benefit plan annually.

Under ERISA, a plan fiduciary’s responsibilities include the following duties:

•  to act solely in the interest of plan participants and beneficiaries and for the exclusive purpose of providing benefits to them, as well as defraying reasonable expenses of plan administration;

•  to invest plan assets prudently;

•  to diversify the investments of the plan, unless it is clearly prudent not to do so;

•  to ensure sufficient liquidity for the plan;

•  to ensure that plan investments are made in accordance with plan documents; and

•  to consider whether an investment would constitute or give rise to a prohibited transaction under ERISA or the Internal Revenue Code.

ERISA also requires that with certain exceptions, the assets of an employee benefit plan be held in trust and that the trustee, or a duly authorized named fiduciary or investment manager, have exclusive authority and discretion to manage and control the assets of the plan.

Prohibited Transactions

Section 406 of ERISA and Section 4975 of the Internal Revenue Code prohibit specified transactions involving the assets of a benefit plan that are between the plan and any “party in interest” or “disqualified person” with respect to that benefit plan, unless an administrative or statutory exemption applies. These transactions are prohibited regardless of how beneficial they may be for the benefit plan. Prohibited transactions include the sale, exchange or leasing of property, and the lending of money or the extension of credit, between a benefit plan and a party in interest or disqualified person. The transfer to (or use by or for the benefit of) a party in interest or disqualified person of any assets of a benefit plan is also prohibited, as is the furnishing of services between a plan and a party in interest. A fiduciary of a benefit plan is also prohibited from engaging in self-dealing, acting for a person who has an interest adverse to the plan in

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connection with a transaction involving the plan or receiving any consideration for its own account from a party dealing with the plan in a transaction involving plan assets. Furthermore, Section 408 of the Internal Revenue Code states that assets of an IRA trust may not be commingled with other property of the individual who established the IRA, or his or her beneficiaries, except in a common trust fund or common investment fund.

Plan Asset Considerations

In order to determine whether an investment in our shares by a benefit plan creates or gives rise to the potential for either prohibited transactions or a commingling of assets as referred to above, a fiduciary must consider whether an investment in our shares will cause our assets to be treated as assets of the investing benefit plan. ERISA provides that the term “plan assets” generally is defined as under regulations prescribed by the Department of Labor. Regulations promulgated by the Department of Labor provide guidance, which we refer to as the “plan assets regulation,” as to whether, and under what circumstances, the underlying assets of an entity will be deemed to constitute assets of a benefit plan when the plan invests in that entity. Under the plan assets regulation, the assets of an entity in which a benefit plan makes an equity investment will generally be deemed to be assets of the benefit plan, unless one of the exceptions to this general rule applies.

In the event that our underlying assets were treated as the assets of investing benefit plans, our management would be treated as fiduciaries with respect to each benefit plan stockholder and an investment in our shares might constitute an ineffective delegation of fiduciary responsibility to our advisor, and expose the fiduciary of the benefit plan to co-fiduciary liability under ERISA for any breach by our advisor of the fiduciary duties mandated under ERISA.

If our advisor or its affiliates were treated as fiduciaries with respect to benefit plan stockholders, the prohibited transaction restrictions of ERISA and the Internal Revenue Code would apply to any transaction involving our assets. These restrictions could, for example, require that we avoid transactions with persons that are affiliated with or related to us or our affiliates or require that we restructure our activities in order to obtain an administrative exemption from the prohibited transaction restrictions. Alternatively, we might have to provide benefit plan stockholders with the opportunity to sell their shares to us or we might dissolve.

If a prohibited transaction were to occur, the Internal Revenue Code imposes an excise tax equal to 15% of the amount involved and authorizes the IRS to impose an additional 100% excise tax if the prohibited transaction is not “corrected” in a timely manner. These taxes would be imposed on any disqualified person who participates in the prohibited transaction. In addition, our advisor and possibly other fiduciaries of benefit plan stockholders subject to ERISA who permitted the prohibited transaction to occur or who otherwise breached their fiduciary responsibilities (or a non-fiduciary participating in a prohibited transaction) could be required to restore to the benefit plan any profits they realized as a result of the transaction or breach and make good to the benefit plan any losses incurred by the benefit plan as a result of the transaction or breach. With respect to an IRA that invests in our shares, the occurrence of a prohibited transaction involving the individual who established the IRA, or his or her beneficiary, would cause the IRA to lose its tax-exempt status under Section 408(e)(2) of the Internal Revenue Code.

The plan assets regulation provides that the underlying assets of an entity such as a REIT will be treated as assets of a benefit plan investing therein unless the entity satisfies one of the exceptions to the general rule. We believe that we will satisfy one or more of the exceptions described below.

Exception for “Publicly-Offered Securities”

If a benefit plan acquires publicly offered securities, the assets of the issuer of the securities will not be deemed to be plan assets under the plan assets regulation. A publicly offered security must be:

•  sold as part of a public offering registered under the Securities Act, and be part of a class of securities registered under the Securities Exchange Act, within a specified time period;

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•  part of a class of securities that is owned by 100 or more persons who are independent of the issuer and one another; and

•  freely transferable.

Our shares are being sold as part of an offering of securities to the public pursuant to an effective registration statement under the Securities Act and are part of a class that will be registered under the Exchange Act within the specified period. In addition, we anticipate having in excess of 100 independent stockholders; however, having 100 independent stockholders is not a condition to our selling shares in this offering.

Whether a security is freely transferable depends upon the particular facts and circumstances. For example, our shares are subject to certain restrictions on transferability intended to ensure that we qualify for federal income tax treatment as a REIT. The plan assets regulation provides, however, that where the minimum investment in a public offering of securities is $10,000 or less, the presence of a restriction on transferability intended to prohibit transfers that would result in a termination or reclassification of the entity for state or federal tax purposes will not ordinarily affect a determination that such securities are freely transferable. The minimum investment in our shares is less than $10,000; thus, we believe the restrictions imposed in order to maintain our status as a REIT should not cause the shares to be deemed not to be freely transferable.

If our common stock is held by 100 or more independent stockholders, and assuming that no other facts and circumstances other than those referred to in the preceding paragraph exist that restrict transferability of our common stock and the offering takes place as described in this prospectus, our common stock should constitute publicly offered securities and, accordingly, we believe our underlying assets should not be considered plan assets under the plan assets regulation.

Exception for Insignificant Participation by Benefit Plan Investors

The plan assets regulation provides that the assets of an entity will not be deemed to be the assets of a benefit plan if equity participation in the entity by benefit plans is not significant. An equity participation in an entity is not deemed to be significant if benefit plans hold less than 25% of the value of each class of equity interests in that entity. In calculating the value of a class of equity interests, the value of any equity interests held by us or any of our affiliates must be excluded. Although we expect to qualify for this exception, neither our organizational documents nor our escrow arrangements restrict ownership of each class of equity interests held by benefit plans to less than 25%.

Exception for Operating Companies

If we are deemed not to qualify for the publicly offered securities exemption, the plan asset regulation also provides an exception with respect to securities issued by an operating company, which includes venture capital operating companies and real estate operating companies. Under the plan assets regulation, an entity will qualify as a venture capital operating company, or a VCOC, if (1) on certain specified testing dates, at least 50% of the entity’s assets, valued at cost, are invested in venture capital investments, with respect to which the entity has or obtains direct contractual rights to substantially participate in the management of such operating company, and (2) the entity in the ordinary course of its business actually exercises such management rights. A venture capital investment is an investment in an operating company, other than a venture capital operating company. Under the plan assets regulation, an entity will constitute a real estate operating company, or a REOC, if (1) on certain specified testing dates, at least 50% of the entity’s assets, valued at cost, are invested in real estate that is managed or developed and with respect to which the entity has the right to substantially participate directly in the management or development of the real estate, and (2) the entity in the ordinary course of its business is engaged directly in real estate management or development activities. A REOC can be a venture capital investment.

In the event that we determine that we fail to meet the publicly offered securities exception as a result of a failure to sell an adequate number of shares or the shares do not meet the requirements to be freely transferable, we intend to qualify as a VCOC, and our operating partnership will qualify as a REOC. However,

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because of the uncertainty of the application of standards set forth in the plan assets regulation with respect to the operating company exception and because we currently own no real estate assets, we cannot assure that we will qualify for one of the operating company exceptions.

Other Prohibited Transactions

Regardless of whether the shares qualify for the publicly-offered security exception of the plan assets regulation, a prohibited transaction could occur if our advisor, any selected broker-dealer or any of their affiliates is a fiduciary (within the meaning of Section 3(21) of ERISA) with respect to any benefit plan purchasing our shares. Accordingly, unless an administrative or statutory exemption applies, shares should not be purchased by a benefit plan with respect to which any of the above persons is a fiduciary. A person is a fiduciary with respect to a benefit plan under Section 3(21) of ERISA if, among other things, the person has discretionary authority or control with respect to the benefit plan or plan assets or provides investment advice for a fee with respect to plan assets. Under a regulation issued by the Department of Labor, a person shall be deemed to be providing investment advice if that person renders advice as to the advisability of investing in our shares and that person regularly provides investment advice to the benefit plan pursuant to a mutual agreement or understanding (written or otherwise) (1) that the advice will serve as the primary basis for investment decisions and (2) that the advice will be individualized for the benefit plan based on its particular needs.

Annual Valuation

A fiduciary of an employee benefit plan subject to ERISA is required to determine annually the fair market value of each asset of the plan as of the end of the plan’s fiscal year and to file a report reflecting that value with the Department of Labor. When the fair market value of any particular asset is not available, the fiduciary is required to make a good faith determination of that asset’s fair market value, assuming an orderly liquidation at the time the determination is made. In addition, a trustee or custodian of an IRA must provide an IRA participant with a statement of the value of the IRA each year. In discharging its obligation to value assets of a plan, a fiduciary subject to ERISA must act consistently with the relevant provisions of the plan and the general fiduciary standards of ERISA.

Unless and until our shares are listed on a national securities exchange, we do not expect that a public market for our shares will develop. To date, neither the IRS nor the Department of Labor has promulgated regulations specifying how a plan fiduciary should determine the fair market value of shares when the fair market value of such shares is not determined in the marketplace. Until 18 months after the last offering of our shares and prior to any listing of our shares on a national securities exchange, we intend to use the offering price of shares in our most recent offering as the estimated value of a share of our common stock; provided, however, that if we have sold properties or other assets and have made one or more special distributions to stockholders of all or a portion of the net proceeds from such sales, the estimated value of a share of our common stock will be equal to the offering price of shares in our most recent offering less the amount of net sale proceeds per share that constitute a return of capital distributed to investors as a result of such sales. Beginning 18 months after the last offering of our shares and prior to any listing of our shares on a national securities exchange, the estimated value of our shares will be based on valuations of our properties and other assets. These valuations will be prepared by persons independent of us and our advisor.

IRA and Keogh Investors

Although IRAs, Keogh plans and similar arrangements are not subject to ERISA, they are subject to the provisions of Section 4975 of the Internal Revenue Code, prohibiting transactions with disqualified persons and investments and transactions involving fiduciary conflicts. A prohibited transaction or conflict of interest could arise if the fiduciary making the decision to invest has a personal interest in or affiliation with our company or any of its respective affiliates. In the case of an IRA, a prohibited transaction or conflict of interest that involves the beneficiary of the IRA could result in disqualification of the IRA. A fiduciary for an IRA who has any personal interest in or affiliation with our company or any of its respective affiliates, should

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consult with his or her tax and legal advisors regarding the impact such interest may have on an investment in our shares with assets of the IRA.

Shares sold by us may be purchased or owned by investors who are investing assets of their IRAs or Keogh plans. Our acceptance of an investment by an IRA or Keogh plan should not be considered to be a determination or representation by us or any of our respective affiliates that such an investment is appropriate for an IRA or Keogh plan. In consultation with its advisors, each prospective IRA or Keogh plan investor should carefully consider whether an investment in our company is appropriate for, and permissible under, the terms of the governing documents.

Acceptance of subscriptions of any benefit plan is in no respect a representation by us or any other party that such investment meets the relevant legal requirements with respect to that plan or that the investment is appropriate for such plan.

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PLAN OF DISTRIBUTION

General

We are offering a maximum of $1,100,000,000 in shares of our common stock in this offering, including $1,000,000,000 in shares of our common stock (100,000,000 shares) initially allocated to be offered in the primary offering and $100,000,000 in shares of our common stock (10,526,316 shares) initially allocated to be offered pursuant to the distribution reinvestment plan. Prior to the conclusion of this offering, if any of the 10,526,316 shares of our common stock initially allocated to the distribution reinvestment plan remain unsold after meeting anticipated obligations under the distribution reinvestment plan, we may decide to sell some or all of such shares of common stock to the public in the primary offering. Similarly, prior to the conclusion of this offering, if the 10,526,316 shares of our common stock initially allocated to the distribution reinvestment plan have been purchased and we anticipate additional demand for shares of common stock under our distribution reinvestment plan, we may choose to reallocate some or all of the 100,000,000 shares of our common stock allocated to be offered in the primary offering to the distribution reinvestment plan. Shares of our common stock in the primary offering are being offered at $10.00 per share. Any shares purchased pursuant to the distribution reinvestment plan will be sold at $9.50 per share. We determined the offering price for our shares arbitrarily. The price is unrelated to the book value or net asset value of our shares of common stock or to our expected operating income.

We are offering the shares of our common stock to the public on a best efforts basis, which means generally that our dealer manager and the participating broker-dealers described below will be required to use only their best efforts to sell the shares of our common stock, and they have no firm commitment or obligation to purchase any shares of our common stock. Our agreement with our dealer manager may be terminated by either party upon 60 days’ written notice.

Subscriptions will be effective only upon our acceptance, and we reserve the right to reject any subscription in whole or in part for any or no reason. Subscriptions will be accepted or rejected within 30 days of receipt by us, and if rejected, all funds will be returned to subscribers without interest and without deduction within 10 business days from the date the subscription is rejected. We are not permitted to accept a subscription for shares of our common stock until at least five business days after the date you receive the final prospectus. Subject to certain exceptions described in this prospectus, you must initially invest at least $1,000 in shares of our common stock. After investors have satisfied the minimum purchase requirement, minimum additional purchases must be in increments of $100, except for purchases made pursuant to our distribution reinvestment plan, which are not subject to any minimum purchase requirement.

Dealer Manager and Participating Broker-Dealer Compensation and Terms

Except as provided below, TNP Securities, our dealer manager, will receive a sales commission of 7.0% of the gross proceeds from the sale of shares of our common stock in the primary offering. Our dealer manager will also receive 3.0% of the gross proceeds from the sale of shares in the primary offering in the form of a dealer manager fee as compensation for acting as our dealer manager. Our dealer manager will not receive any sales commission or dealer manager fee for shares sold pursuant to our distribution reinvestment plan. We will also reimburse our dealer manager for bona fide due diligence expenses incurred by the dealer manger that are included in a detailed and itemized invoice. Our advisor will receive reimbursement for cumulative organization and offering expenses incurred by our advisor such as legal, accounting, printing and other offering expenses, including marketing, salaries and direct expenses of its employees, employees of its affiliates and others while engaged in registering and marketing the shares of our common stock, which will include development of marketing materials and marketing presentations, planning and participating in due diligence, training seminars and educational seminars and generally coordinating the marketing process for us. Any such reimbursements will not exceed actual expenses incurred by the advisor and will only be made to the extent that such reimbursements would not cause the cumulative sales commission, the dealer manager fee and other organization and offering expenses borne by us to exceed 15.0% of gross offering proceeds from the sale of shares in the primary offering as of the date of reimbursement. Our advisor and its affiliates will be responsible for the payment of our cumulative organization and offering expenses, other than the sales

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commission and our dealer manager fees, to the extent they exceed 3.0% of the aggregate gross offering proceeds from the sale of shares in the primary offering, without recourse against or reimbursement by us. We will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of the shares of our common stock.

Our dealer manager may authorize certain additional broker-dealers who are members of FINRA to participate in selling shares of our common stock to investors. Our dealer manager may re-allow all or a portion of its sales commissions from the sale of shares in the primary offering to such participating broker-dealers with respect to shares of our common stock sold by them. Our dealer manager, in its sole discretion, may also re-allow to participating broker-dealers a portion of its dealer manager fee for reimbursement of marketing expenses. The maximum amount of reimbursements would be based on such factors as the number of shares sold by participating broker-dealers, the assistance of such participating broker-dealers in marketing the offering and due diligence expenses incurred.

To the extent permitted by law and our charter, we will indemnify the dealer manager and participating broker-dealers, against certain liabilities arising under the Securities Act and certain liabilities arising from breaches of our representations and warranties contained in our dealer manager agreement.

We will not pay any selling commissions in connection with the sale of shares to investors whose contracts for investment advisory and related brokerage services include a fixed or “wrap” fee feature. Investors may agree with their participating brokers to reduce the amount of selling commissions payable with respect to the sale of their shares down to zero (l) if the investor has engaged the services of a registered investment advisor or other financial advisor who will be paid compensation for investment advisory services or other financial or investment advice or (2) if the investor is investing through a bank trust account with respect to which the investor has delegated the decision-making authority for investments made through the account to a bank trust department. The net proceeds to us will not be affected by reducing the commissions payable in connection with such transaction. All such sales must be made through registered broker-dealers. Neither our dealer manager nor its affiliates will directly or indirectly compensate any person engaged as an investment advisor or a bank trust department by a potential investor as an inducement for such investment advisor or bank trust department to advise favorably for an investment in our shares. In connection with the sale of shares to investors who elect the “wrap fee” feature, the dealer manager may pay service fees or other denominated fees on an annual basis to the registered investment advisor or other financial advisor or the company that sponsors the wrap account.

As required by the rules of FINRA, total underwriting compensation will not exceed 10.0% of the gross proceeds from shares sold in our primary offering. FINRA and many states also limit our total organization and offering expenses, which include underwriting compensation, reimbursement of bona fide due diligence expenses and issuer expenses, to 15.0% of the gross proceeds from shares sold in our primary offering. We will reimburse our advisor for actual organization and offering expenses incurred by our advisor, which such amount, including underwriting compensation and reimbursement of due diligence expenses, shall not exceed the 15.0% FINRA limitation:

	Maximum
	Percent of
	Gross Offering
Expense	Proceeds
Sales commissions		7.0	%
Dealer manager fee		3.0	%
All other organization and offering expenses(1)		1.75	%
Total		11.75	%

(1) Other organization and offering expenses include all expenses (other than sales commission and the dealer manager fee) to be paid by us in connection with the offering, including our legal, accounting, printing, mailing and filing fees, charges of our escrow holder and transfer agent, charges of our advisor for administrative services related to the issuance of shares in the offering, reimbursement of bona fide due diligence

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expenses of broker-dealers, reimbursement of our advisor for costs in connection with preparing supplemental sales materials, the cost of bona fide training and education meetings held by us (primarily the travel, meal and lodging costs of registered representatives of broker-dealers), attendance and sponsorship fees and cost reimbursement for employees of our affiliates to attend retail seminars conducted by broker-dealers and, in special cases, reimbursement to participating broker-dealers for technology costs associated with the offering, costs and expenses related to such technology costs, and costs and expenses associated with facilitation of the marketing of our shares of common stock and the ownership of our shares of common stock by such broker-dealer’s customers. Our advisor will be responsible for the payment of our cumulative other organization and offering expenses, to the extent they exceed 3.0% of the aggregate gross offering proceeds, or $30,000,000, from the sale of shares of our common stock sold in the primary offering without recourse against or reimbursement by us.

Volume Discounts

In connection with sales of over $500,000 or more to a qualifying purchaser (as defined below), a participating broker-dealer may offer such qualifying purchaser a volume discount by reducing the amount of its sales commissions. Such reduction would be credited to the qualifying purchaser by reducing the total purchase price of the shares payable by the qualifying purchaser.

Assuming a public offering price of $10.00 per share, the following table illustrates the various discount levels that may be offered to qualifying purchasers by participating broker-dealers for shares purchased in the primary offering:

Commissions on Sales per Incremental Share in Volume Discount Range

	Purchase		Percentage
	Price per		(Based					Dealer		Net
Dollar Volume of	Share to		on $10.00/			Amount		Manager Fee		Proceeds
Shares Purchased	Investor		Share)			per Share		per Share		per Share
$500,000 or less	$	10.00		7.0	%	$	0.70	$	0.30	$	9.00
$500,001-$1,000,000	$	9.90		6.0	%	$	0.60	$	0.30	$	9.00
$1,000,001-$2,000,000	$	9.80		5.0	%	$	0.50	$	0.30	$	9.00
$2,000,001-$3,000,000	$	9.70		4.0	%	$	0.40	$	0.30	$	9.00
$3,000,001-$5,000,000	$	9.60		3.0	%	$	0.30	$	0.30	$	9.00
Over $5,000,001	$	9.50		2.0	%	$	0.02	$	0.30	$	9.00

Subscriptions may be combined for the purpose of determining the volume discounts in the case of subscriptions made by any qualifying purchaser, provided all such shares are purchased through the same broker-dealer. The volume discount shall be prorated among the separate subscribers considered to be a single qualifying purchaser. Any request to combine more than one subscription must be made in writing submitted simultaneously with your subscription for shares, and must set forth the basis for such request. Any such request will be subject to verification by the dealer manager that all of such subscriptions were made by a single qualifying purchaser.

For the purposes of such volume discounts, the term “qualifying purchaser” includes:

•  An individual, his or her spouse and their children under the age of 21 who purchase the shares for his, her or their own accounts;

•  A corporation, partnership, association, joint-stock company, trust fund or any organized group of persons, whether incorporated or not;

•  An employees’ trust, pension, profit sharing or other employee benefit plan qualified under Section 401(a) of the Internal Revenue Code; and

•  All commingled trust funds maintained by a given bank.

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Notwithstanding the above, in connection with volume sales, investors who would not constitute a single “purchaser” may request in writing to aggregate subscriptions as part of a combined order for purposes of determining the number of shares purchased, provided that any aggregate group of subscriptions must be received from the same participating broker-dealer, including the dealer manager. Any such reduction in selling commission will be prorated among the separate subscribers.

Because all investors will be paid the same distributions per share as other investors, an investor qualifying for a volume discount will receive a higher percentage return on his or her investment than investors who do not qualify for such discount.

Investors should ask their broker-dealer about the opportunity to receive volume discounts by either qualifying as a qualifying purchaser or by having their subscription(s) aggregated with the subscriptions of other investors, as described above.

Other Discounts

Our executive officers and directors, as well as officers and employees of our advisor and our advisor’s affiliates may, at their option, purchase shares offered hereby at the public offering price, net of the selling commissions and the dealer manager fee, or a purchase price of $9.00 per share, in which case they have advised us that they would expect to hold such shares as stockholders for investment and not for distribution. Additionally, our dealer manager has agreed to sell up to 5.0% of the shares offered hereby in our primary offering to persons to be identified by us at a discount from the public offering price. We intend to use this program to sell shares to certain investors identified by us, including investors who have a prior business relationship with our sponsor, such as real estate brokers, joint venture partners and their employees, title insurance company executives, surveyors, attorneys and similar individuals. In each case, the amount of net proceeds to us will not be affected by reducing or eliminating the sales commissions and the dealer manager fee payable in connection with such sales.

Certain institutional investors and our affiliates may also agree with a participating broker-dealer selling shares of our common stock (or with our dealer manager) to reduce or eliminate the sales commission. The amount of net proceeds to us will not be affected by reducing or eliminating commissions payable in connection with sales to such institutional investors and affiliates.

IRA Fee Arrangement

We have entered into a special arrangement with Community National Bank, or CNB, whereby we have agreed to pay the IRA custodial fee for the first calendar year for any investor who purchases $5,000 or more in shares of our common stock through an IRA established with CNB. In addition, the IRA account owner will be responsible for any supplemental or special services related to the IRA provided by CNB and any fees that may apply as a result of any additional investments (other than shares of our common stock) made through the IRA and for all custodial fees incurred after the first calendar year.

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SUPPLEMENTAL SALES MATERIAL

In addition to this prospectus, we may utilize certain sales material in connection with the offering of shares of our common stock, although only when accompanied by or preceded by the delivery of this prospectus. In certain jurisdictions, some or all of such sales material may not be available. This material may include information relating to this offering, the past performance of our sponsor and its affiliates, property brochures and articles and publications concerning real estate. In addition, the sales material may contain certain quotes from various publications without obtaining the consent of the author or the publication for use of the quoted material in the sales material.

The offering of shares of our common stock is made only by means of this prospectus. Although the information contained in such sales material will not conflict with any of the information contained in this prospectus, such material does not purport to be complete, and should not be considered a part of this prospectus or the registration statement of which this prospectus is a part, or as incorporated by reference in this prospectus or said registration statement or as forming the basis of the offering of the shares of our common stock.

LEGAL MATTERS

The legality of the shares of our common stock being offered hereby has been passed upon for us by Venable LLP. The statements relating to certain federal income tax matters under the caption “Material U.S. Federal Income Tax Considerations” have been reviewed by and our qualifications as a REIT for federal income tax purposes has been passed upon by Alston & Bird LLP, Atlanta, Georgia.

ADDITIONAL INFORMATION

We have filed with the SEC a registration statement under the Securities Act on Form S-11 regarding this offering. This prospectus, which is part of the registration statement, does not contain all the information set forth in the registration statement and the exhibits related thereto filed with the SEC, reference to which is hereby made. As a result of the effectiveness of the registration statement, we are subject to the informational reporting requirements of the Exchange Act, and under the Exchange Act, we will file reports, proxy statements and other information with the SEC. You may read and copy the registration statement, the related exhibits and the reports, proxy statements and other information we file with the SEC at the SEC’s public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549. You can also request copies of those documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information regarding the operation of the public reference rooms. The SEC also maintains an internet site that contains reports, proxy and information statements and other information regarding issuers that file with the SEC. The site’s Internet address is www.sec.gov.

You may also request a copy of these filings at no cost, by writing or telephoning us at:

1900 Main Street

Suite 700

Irvine, California 92614

Attn: Investor Services

(949) 833-8252

Within 120 days after the end of each fiscal year we will provide to our stockholders of record an annual report. The annual report will contain audited financial statements and certain other financial and narrative information that we are required to provide to stockholders.

We also maintain a website at www.tnpreit.com, where there may be additional information about our business, but the contents of that site are not incorporated by reference in or otherwise a part of this prospectus.

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APPENDIX A:

PRIOR PERFORMANCE TABLES OF THOMPSON NATIONAL PROPERTIES, LLC

The following prior performance tables provide information relating to the real estate investment programs sponsored by Thompson National Properties, LLC and its affiliates, collectively referred to herein as “TNP prior real estate programs.” These programs were not prior programs of TNP Strategic Retail Trust, Inc. Thompson National Properties and its affiliates provide commercial real estate services, which focus on identifying and developing institutional quality real estate products and programs for individual and institutional investors. Each individual TNP prior real estate program has its own specific investment objectives; however, the general investment objectives common to all TNP prior real estate programs include providing investors with (1) exposure to investment in real estate as an asset class and (2) current income. Accordingly, each of the TNP prior real estate programs has similar investment objectives to those of TNP Strategic Retail Trust, Inc.

This information should be read together with the summary information included in the “Prior Performance Summary” section of this prospectus.

INVESTORS SHOULD NOT CONSTRUE INCLUSION OF THE FOLLOWING TABLES AS IMPLYING, IN ANY MANNER, THAT WE WILL HAVE RESULTS COMPARABLE TO THOSE REFLECTED IN SUCH TABLES. DISTRIBUTABLE CASH FLOW, FEDERAL INCOME TAX DEDUCTIONS OR OTHER FACTORS COULD BE SUBSTANTIALLY DIFFERENT. INVESTORS SHOULD NOTE THAT, BY ACQUIRING OUR SHARES, THEY WILL NOT BE ACQUIRING ANY INTEREST IN ANY PRIOR PROGRAM.

Description of the Tables

All information contained in the Table in this Appendix A is as of December 31, 2009.

Table II, which includes information regarding compensation paid to the sponsor in connection with the TNP prior programs, is included herein.

Table V, which includes information on the sale or disposition of properties in connection with the TNP prior programs, is included herein.

Tables I and III have been omitted since none of the TNP prior programs have closed. Table IV has been omitted since none of the TNP prior programs have been liquidated.

Additional information relating to the acquisition of properties by TNP prior programs is contained in Table VI, which is included in Part II of the registration statement which TNP Strategic Retail Trust, Inc. has filed with the Securities and Exchange Commission of which this prospectus is a part. Copies of Table VI will be provided to prospective investors at no charge upon request.

A-1

TABLE II

COMPENSATION TO SPONSOR

(UNAUDITED)

Table II provides a summary of the amount and type of compensation paid to Thompson National Properties and affiliates related to TNP prior programs. The information is presented on an aggregate basis as of December 31, 2009.

	Bruin Fund, L.P.
	(Oakwood &		TNP Vulture		2008 Participating		TNP 6700 Santa		Thompson/Morgan
	One Lee Park)		Fund VIII, LLC		Notes Program, LLC		Monica Blvd., DST		Baton Rouge I, DST		Total
Date Offering Commenced		5/9/2008		6/23/2008		12/9/2008		4/2/2009		6/11/2009
Dollar Amount Raised	$	3,950,000	$	9,932,013	$	19,350,374	$	9,763,931	$	13,268,530	$	56,264,847
Amount Paid to Sponsor from Proceeds of Offering
Underwriting Fees	$	—	$	—	$	—	$	—	$	—	$	—
Acquisition Fees
Real Estate Commissions	$	—	$	—	$	—	$	—	$	—	$	—
Acquisition Fees	$	250,000	$	110,250	$	387,687	$	—	$	—	$	747,937
Other—Organizational and Offering	$	—	$	43,526	$	—	$	213,679	$	—	$	257,204
Total Amount Paid to Sponsor	$	250,000	$	153,776	$	387,687	$	213,679	$	—	$	1,005,141
Dollar Amount of Cash Generated from Operations Before Deducting Payments to Sponsor	$	1,957,290	$	1,373,454	$	800,750	$	3,390,838	$	—	$	7,522,333
Amount Paid to Sponsor from Operations:
Property Management Fees	$	66,811	$	38,153	$	35,749	$	41,174	$	—	$	181,886
Asset Management Fees	$	34,333	$	219,431	$	114,452	$	47,906	$	—	$	416,123
Reimbursements	$	—	$	—	$	—	$	—	$	—	$	—
Leasing Commissions	$	—	$	—	$	—	$	—	$	—	$	—
Other	$	—	$	—	$	—	$	—	$	—	$	—
Dollar Amount of Property Sales and Refinancing Before Deduction Payments to Sponsor:
Cash	$	—	$	—	$	—	$	—	$	—	$	—
Notes	$	—	$	—	$	—	$	—	$	—	$	—
Amount Paid to Sponsor from Property Sales and Refinancing:
Real Estate Commissions	$	—	$	—	$	—	$	—	$	—	$	—
Incentive Fees	$	—	$	—	$	—	$	—	$	—	$	—
Other	$	—	$	—	$	—	$	—	$	—	$	—

A-2

TABLE V
SALE OR DISPOSITION OF PROPERTIES

This Table sets forth summary information on the results of the sale or disposals of properties since December 31, 2006 by TNP prior programs. All figures are through December 31, 2009.

Cost of Properties Including Closing and Soft Costs

Excess (Deficiency)

Selling Price, Net of Closing Costs and GAAP Adjustments

Total

of Property

Purchase Money

Adjustments

Acquisition

Operating Cash

Cash Received

Mortgage

Mortgage Taken

Resulting From

Original

Cost, Closing

Receipts Over

Date

Net of

Balance at

Back By

Application of

Mortgage

and Soft

Cash

Property

Acquired

Date of Sale(1)

Closing Costs

Time of Sale

Program(2)

GAAP

Total(3)

Financing

Cost

Total

Expenditures Total

VF CARSON LLC

302 E. Carson

10/3/2008

12/19/2008

$

5,000,000

$

11,074,095

$

—

$

—

$

5,000,000

$

11,074,095

$

10,826,742

$

21,900,837

$

(227,625

)

Notes to Table V

(1)	Sale of 45.47% interest of VF Carson, LLC by TNP Vulture Fund VIII, LLC to TNP SLI Green Building Fund, LP, an affiliate of Thompson National Properties, LLC. [TNP Vulture Fund VIII, LLC continues to hold a 54.53% interest in VF Carson LLC.]
(2)	No purchase money mortgages were taken back by the program.
(3)	This represents the amount of cash that TNP Vulture Fund VIII, LLC received from the sale of the 45.47% interest in VF Carson LLC.

A-3

APPENDIX B:

PRIOR PERFORMANCE TABLES OF TRIPLE NET PROPERTIES, LLC

The information included in this Appendix B with respect to the prior real estate programs sponsored by Triple Net Properties, LLC, or Triple Net, and its affiliates, collectively, Triple Net Group, has been obtained solely from public information filed with the SEC by Triple Net Group which included prior performance information through December 31, 2006. These prior real estate programs are referred to herein as the “Triple Net prior programs.” This information is being provided pursuant to Guide 5, “Preparation of Registration Statements Relating to Interests in Real Estate Limited Partnerships” and solely because Anthony W. Thompson, Chairman of the Board and Chief Executive Officer of TNP Strategic Retail Trust, Inc., was Chairman and Chief Executive Officer of Triple Net from 1998 to 2006. Jack R. Maurer, our Vice Chairman and President, served as Senior Vice President—Office of the Chairman of Triple Net during the same period. TNP Strategic Retail Trust, Inc. and its management is not affiliated with Triple Net. TNP Strategic Retail Trust, Inc. cannot guarantee the accuracy of the information in this Appendix B.

The following tables provide information relating to real estate investment and notes programs sponsored by Triple Net Group, through December 31, 2006. From inception through December 31, 2006, Triple Net Group served as advisor, sponsor or manager of 165 real estate investment programs, consisting of six public programs required to file public reports with the SEC and 159 private real estate investment programs that have no public reporting requirements. The investment objectives of the public reporting companies sponsored by Triple Net, or the Triple Net public programs, include the acquisition and operation of commercial properties; the provision of stable cash flow available for distribution to stockholders; preservation and protection of capital; and the realization of capital appreciation upon the ultimate sale of properties.

The majority of the private real estate programs sponsored by Triple Net Group, or the Triple Net private programs, had as their primary investment objective to preserve investor’s capital investment, realize income through the acquisition, appreciation and sale of interests in real property, make monthly distributions to the investors and profitably sell the real property investment.

The following tables are included herein:

Table III—Annual Operating Results of Prior Programs (Unaudited)
Table IV—Results of Completed Programs (Unaudited)

Triple Net Group presents the data in Table III for each program on either a “GAAP basis” or an “income tax basis” depending on the reporting requirements of the particular program. In compliance with the SEC reporting requirements, the Table III presentation of Revenues, Expenses and Net Income for the Triple Net public programs has been prepared and presented by Triple Net Group in conformity with accounting principles generally accepted in the Unites States of America, or GAAP, which incorporate accrual basis accounting. Triple Net Group presents Table III for all Triple Net private programs on an income tax basis (which can in turn be presented on either a cash basis or accrual basis), specifically, the Triple Net private programs are presented on a cash basis except for Western Real Estate Investment, Inc. and the four notes programs, which are presented on an accrual basis, as the only applicable reporting requirement is for the year-end tax information provided to each investor. The Table III data for all other Triple Net private programs (which are generally formed using limited liability companies, or LLCs) are prepared and presented by Triple Net Group in accordance with the cash method of accounting for income tax purposes. This is because most, if not all, of the investors in these Triple Net private programs are individuals required to report to the Internal Revenue Service using the cash method of accounting for income tax purposes, and the LLCs are required to report on this basis when more than 50% of their investors are taxpayers that report using the cash method of accounting for income tax purposes. When GAAP-basis affiliates invest in a Triple Net private program, the ownership presentation in the tables is made in accordance with the cash method of accounting for income tax purposes. This presentation is made for consistency and to present results meaningful to the typical individual investor that invests in an LLC.

While SEC rules and regulations allow Triple Net Group to record and report results for its private programs on an income tax basis, investors should understand that the results of these private programs may be different if they were reported on a GAAP basis. Some of the major differences between GAAP accounting

B-1

and income tax accounting (and, where applicable, between cash basis and accrual basis income tax accounting) that impact the accounting for investments in real estate are described in the following paragraphs:

•  The primary difference between the cash methods of accounting and accrual methods (both GAAP and the accrual method of accounting for income tax purposes) is that the cash method of accounting generally reports income when received and expenses when paid while the accrual method generally requires income to be recorded when earned and expenses recognized when incurred.

•  GAAP requires that, when reporting lease revenue, the minimum annual rental revenue be recognized on a straight-line basis over the term of the related lease, whereas the cash method of accounting for income tax purposes requires recognition of income when cash payments are actually received from tenants, and the accrual method of accounting for income tax purposes requires recognition of income when the income is earned pursuant to the lease contract.

•  GAAP requires that when an asset is considered held for sale, depreciation ceases to be recognized on that asset, whereas for income tax purposes, depreciation continues until the asset either is sold or is no longer in service.

•  GAAP requires that when a building is purchased certain intangible assets and liabilities (such as above-and below-market leases, tenant relationships and in-place lease costs) are allocated separately from the building and are amortized over significantly shorter lives than the depreciation recognized on the building. These intangible assets and liabilities are not recognized for income tax purposes and are not allocated separately from the building for purposes of tax depreciation.

•  GAAP requires that an asset is considered impaired when the carrying amount of the asset is greater than the sum of the future undiscounted cash flows expected to be generated by the asset, and an impairment loss must then be recognized to decrease the value of the asset to its fair value. For income tax purposes, losses are generally not recognized until the asset has been sold to an unrelated party or otherwise disposed of in an arm’s length transaction.

B-2

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PUBLIC PROGRAMS

G REIT, INC.

Table III presents operating results for programs which have closed their offerings during each of the five years ended December 31, 2006. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	Year Ended December 31,
	2005(4)			2004			2003			2002			Total
Gross Revenues	$	—		$	—		$	—		$	—		$	—
Profit on Sale of Properties		10,682,000			980,000			—			—			11,662,000
Interest, Dividends & Other Income		445,000			332,000			117,000			17,000			911,000
Gain on Sale of Marketable Securities		440,000			251,000			—			—			691,000
Equity in Earnings (Loss) of Unconsolidated Real Estate		1,337,000			(604,000	)		204,000			—			937,000
Income (Loss) from Discontinued Operations		(4,215,000	)		1,225,000			1,337,000			166,000			(1,487,000	)
Less: Operating Expenses		—			—			—			—			—
General and Administrative Expenses		4,006,000			2,419,000			1,287,000			142,000			7,854,000
Interest Expense(1)		2,054,000			1,243,000			293,000			15,000			3,605,000
Depreciation & Amortization		—			—			—			—			—
Minority Interest		—			—			—			—			—
Income Taxes		—			398,000			—			—			398,000
Net Income (Loss)—GAAP Basis	$	2,629,000		$	(1,876,000	)	$	78,000		$	26,000		$	857,000
Taxable Income (Loss) From:
Operations		2,511,000			11,273,000			1,083,000			(16,000	)		14,851,000
Gain on Sale		11,963,000			251,000			—			—			12,214,000
Cash Generated From (Used By):
Operating Activities		19,697,000			39,905,000			7,878,000			(609,000	)		66,871,000
Investing Activities		80,432,000			(563,218,000	)		(291,418,000	)		(26,101,000	)		(800,305,000	)
Financing Activities(2)		(76,789,000	)		552,058,000			296,053,000			35,259,000			806,581,000
Cash Generated From (Used By) Operations, Investing & Financing		23,340,000			28,745,000			12,513,000			8,549,000			73,147,000
Less: Cash Distributions From:
Operating Activities—to Investors		19,023,000			26,335,000			5,285,000			—			50,643,000
Operating Activities—to Minority Interest		674,000			376,000			74,000			—			1,124,000
Investing & Financing Activities		—			—			—			—			—
Other (return of capital)		13,865,000			—			—			170,000			14,035,000
Cash Generated (Deficiency) after Cash Distributions		(10,222,000	)		2,034,000			7,154,000			8,379,000			7,345,000
Less: Special Items (not including Sales & Refinancing)		—			—			—			—			—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	(10,222,000	)	$	2,034,000		$	7,154,000		$	8,379,000		$	7,345,000

B-3

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)—(Continued)

PUBLIC PROGRAMS

G REIT, INC.

The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	Year Ended December 31,
	2005(4)		2004		2003		2002
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results:
Ordinary Income (Loss)
— from operations	$	5.72	$	30.19	$	13.14	$	(3.95	)
— from recapture		—		—		—		—
Capital Gain (Loss)		27.27		0.67		—		—
Cash Distributions to Investors(3)
Sources (on GAAP basis)
— Operating Activities		43.37		70.54		64.12		—
— Investing & Financing Activities		—		—		—		—
— Other (Return of Capital)		31.61		—		—		41.98
Sources (on Cash basis)
— Sales		—		—		—		—
— Investing & Financing Activities		—		—		—		—
— Operations		43.37		70.54		64.12		—
— Other (Return of Capital)	$	31.61	$	—	$	—	$	41.98
Notes:
(1) Includes amortization of deferred financing costs.
(2) Includes proceeds from issuance of common stock—net.	$	—	$	236,109,000	$	138,305,000	$	18,604,000
(3) Cash Distributions per $1,000 invested excludes distributions to minority interests.
(4) The program adopted the liquidation basis of accounting as of December 31, 2005 and for all subsequent periods.

B-4

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PUBLIC PROGRAMS

T REIT, INC.

Table III presents operating results for programs which have closed their offerings during the five years ended December 31, 2006. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	Period from
	January 1, 2005
	through			Year Ended December 31,
	June 30, 2005(4)			2004			2003			2002			Total
Gross Revenues	$	—		$	—		$	—		$	—		$	—
Profit on Sale of Properties		191,000			2,466,000			2,614,000			213,000			5,484,000
Interest, Dividends & Other Income		285,000			622,000			181,000			281,000			1,369,000
Gain on Sale of Marketable Securities		126,000			109,000			—			—			235,000
Equity in Earnings (Loss) of Unconsolidated Real Estate		787,000			581,000			1,160,000			1,126,000			3,654,000
Income (Loss) from Discontinued Operations		(272,000	)		31,000			1,076,000			1,241,000			2,076,000
Less: Operating Expenses		—			—			—			—			—
General and Administrative Expenses		1,013,000			1,213,000			792,000			558,000			3,576,000
Interest Expense(1)		44,000			52,000			50,000			10,000			156,000
Depreciation & Amortization		—			—			—			—			—
Minority Interest		—			—			—			—			—
Income Taxes		—			—			—			—			—
Net Income (Loss)—GAAP Basis	$	60,000		$	2,544,000		$	4,189,000		$	2,293,000		$	9,086,000
Taxable Income (Loss) From:
Operations		157,000			1,197,000			(1,100,000	)		(683,000	)		(429,000	)
Gain on Sale		614,000			2,545,000			2,547,000			284,000			5,990,000
Cash Generated From (Used By):
Operating Activities		883,000			3,590,000			2,950,000			2,290,000			9,713,000
Investing Activities		249,000			(14,333,000	)		2,517,000			(19,279,000	)		(30,846,000	)
Financing Activities(2)		(120,000	)		9,731,000			4,439,000			22,334,000			36,384,000
Cash Generated From (Used By) Operations, Investing & Financing		1,012,000			(1,012,000	)		9,906,000			5,345,000			15,251,000
Less: Cash Distributions From:
Operating Activities—to Investors		792,000			3,438,000			2,950,000			2,290,000			9,470,000
Operating Activities—to Minority Interest		91,000			152,000			—			—			243,000
Investing & Financing Activities		—			—			—			—			—
Other (return of capital)		1,118,000			358,000			896,000			573,000			2,945,000
Cash Generated (Deficiency) after Cash Distributions		(989,000	)		(4,960,000	)		6,060,000			2,482,000			2,593,000
Less: Special Items (not including Sales & Refinancing)		—			—			—			—			—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	(989,000	)	$	(4,960,000	)	$	6,060,000		$	2,482,000		$	2,593,000

B-5

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)—(Continued)

PUBLIC PROGRAMS

T REIT, INC.

The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	Period from
	January 1, 2005
	through		Year Ended December 31,
	June 30, 2005(4)		2004		2003			2002
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results:
Ordinary Income (Loss)
— from operations	$	3.41	$	25.85	$	(23.52	)	$	(17.02	)
— from recapture		—		—		—			—
Capital Gain (Loss)		13.33		54.97		54.47			7.08
Cash Distributions to Investors(3)
Sources (on GAAP basis)
— Operating Activities		17.20		74.25		63.09			57.06
— Investing & Financing Activities		—		—		—			—
— Other (Return of Capital)		24.28		7.73		19.16			14.28
Sources (on Cash basis)
— Sales		—		—		—			—
— Investing & Financing Activities		—		—		—			—
— Operations		17.20		74.25		63.09			57.06
— Other (Return of Capital)	$	24.28	$	7.73	$	19.16		$	14.28
Notes:
(1) Includes amortization of deferred financing costs.
(2) Includes proceeds from issuance of common stock—net	$	—	$	—	$	—		$	19,343,000
(3) Cash Distributions per $1,000 invested excludes distributions to minority interests.
(4) The program adopted the liquidation basis of accounting as of June 30, 2005 and for all subsequent periods. However, the taxable income numbers are for the period from January 1, 2005 through July 28, 2005, the date the plan of liquidation was formally approved.

B-6

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PUBLIC PROGRAMS

NNN 2003 VALUE FUND, LLC

Table III presents operating results for programs which have closed their offerings during the five years ended December 31, 2006. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

										Period from June 19, 2003
										(Date of Inception)
	Year Ended December 31,									through
	2006			2005			2004			December 31, 2003			Total
Gross Revenues	$	3,742,000		$	1,262,000		$	653,000		$	—		$	5,657,000
Profit on Sale of Properties		7,056,000			5,802,000			—			—			12,858,000
Interest, Dividends & Other Income		527,000			416,000			86,000			3,000			1,032,000
Gain on Sale of Marketable Securities		134,000			344,000			—			—			478,000
Equity in Earnings (Loss) of Unconsolidated Real Estate		(1,139,000	)		2,510,000			(682,000	)		(132,000	)		557,000
Income (Loss) from Discontinued Operations		(1,314,000	)		670,000			(145,000	)		—			(789,000	)
Less: Operating Expenses		2,599,000			1,203,000			1,084,000			11,000			4,897,000
General and Administrative Expenses		754,000			1,289,000			339,000			7,000			2,389,000
Interest Expense(1)		2,680,000			768,000			638,000			—			4,086,000
Depreciation & Amortization		2,611,000			665,000			286,000			—			3,562,000
Minority Interest		(19,000	)		166,000			(133,000	)		(31,000	)		(17,000	)
Income Taxes		—			—			—			—			—
Net Income (Loss)—GAAP Basis	$	381,000		$	6,913,000		$	(2,302,000	)	$	(116,000	)	$	4,876,000
Taxable Income From:
Operations		(1,954,000	)		95,000			680,000			231,000			(948,000	)
Gain on Sale		5,952,000			3,354,000			—			—			9,306,000
Cash Generated From (Used By):														—
Operating Activities		(4,789,000	)		238,000			2,476,000			174,000			(1,901,000	)
Investing Activities		15,867,000			(64,529,000	)		(45,158,000	)		(9,932,000	)		(103,752,000	)
Financing Activities		(12,015,000	)		70,050,000			52,269,000			12,437,000			122,741,000
Cash Generated From (Used By) Operations, Investing & Financing		(937,000	)		5,759,000			9,587,000			2,679,000			17,088,000
Less: Cash Distributions From:
Operating Activities—to Investors		—			—			1,908,000			35,000			1,943,000
Operating Activities—to Minority Interest		—			238,000			408,000			19,000			665,000
Investing & Financing Activities		—			—			—			—			—
Other (return of capital)(3),(4)		9,179,000			4,657,000			—			—			13,836,000
Cash Generated (Deficiency) after Cash Distributions		(10,116,000	)		864,000			7,271,000			2,625,000			644,000
Less: Special Items (not including Sales & Refinancing)		—			—			—			—			—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	(10,116,000	)	$	864,000		$	7,271,000		$	2,625,000		$	644,000

B-7

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)—(Continued)

PUBLIC PROGRAMS

NNN 2003 VALUE FUND, LLC

The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

								Period from June 19, 2003
								(Date of Inception)
	Year Ended December 31,							through
	2006			2005		2004		December 31, 2003
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results:
Ordinary Income (Loss)
— from operations	$	(39.17	)	$	1.90	$	22.09	$	71.19
— from recapture		—			—		—		—
Capital Gain (Loss)		119.33			67.08		—		—
Cash Distributions to Investors(2)
Sources (on GAAP basis)
— Operating Activities		—			—		61.97		10.79
— Investing & Financing Activities		—			—		—		—
— Other (Return of Capital)		120.23			69.86		—		—
Sources (on Cash basis)
— Sales		—			—		—		—
— Investing & Financing Activities		—			—		—		—
— Operations		—			—		61.97		10.79
— Other (Return of Capital)	$	120.23		$	69.86	$	—	$	—

Notes:

(1)	Includes amortization of deferred financing costs.
(2)	Cash Distributions per $1,000 invested excludes distributions to minority interests.
(3)	Includes cash distributions of $3,182,000 and $1,164,000 to minority interests for the year ended December 31, 2006 and 2005, respectively.
(4)	Pursuant to NNN 2003 Value Fund, LLC’s Operating Agreement, cash proceeds from capital transactions are first treated as a return of capital.

B-8

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PUBLIC PROGRAMS

NNN 2002 VALUE FUND, LLC

Table III presents operating results for programs which have closed their offerings during the five years ended December 31, 2006. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	Period from									Period from May 15, 2002
	January 1, 2005									(Date of Inception)
	through			Year Ended December 31,						through
	August 31, 2005(3)			2004			2003			December 31, 2002			Total
Gross Revenues	$	—		$	—		$	—		$	—		$	—
Profit on Sale of Properties		6,674,000			—			—			—			6,674,000
Interest, Dividends & Other Income		76,000			6,000			46,000			2,000			130,000
Gain on Sale of Marketable Securities		—			—			—			—			—
Equity in Earnings (Loss) of Unconsolidated Real Estate		373,000			(278,000	)		84,000			—			179,000
Income (Loss) from Discontinued Operations		1,049,000			196,000			(596,000	)		(109,000	)		540,000
Less: Operating Expenses		—			—			—			—			—
General and Administrative Expenses		15,000			99,000			69,000			25,000			208,000
Interest Expense(1)		3,000			9,000			—			40,000			52,000
Depreciation & Amortization		—			—			—			—			—
Minority Interest		—			—			—			—			—
Income Taxes		—			—			—			—			—
Net Income (Loss)—GAAP Basis	$	8,154,000		$	(184,000	)	$	(535,000	)	$	(172,000	)	$	7,263,000
Taxable Income From:
Operations		143,000			732,000			137,000			132,000			1,144,000
Gain on Sale		14,843,000			—			—			—			14,843,000
Cash Generated From (Used By):
Operating Activities		3,378,000			2,984,000			2,140,000			698,000			9,200,000
Investing Activities		22,977,000			(2,170,000	)		(47,060,000	)		(7,959,000	)		(34,212,000	)
Financing Activities		(8,626,000	)		2,068,000			44,416,000			11,619,000			49,477,000
Cash Generated From Operations, Investing & Financing		17,729,000			2,882,000			(504,000	)		4,358,000			24,465,000
Less: Cash Distributions From:
Operating Activities—to Investors		2,726,000			2,027,000			1,693,000			35,000			6,481,000
Operating Activities—to Minority Interest		652,000			957,000			447,000			—			2,056,000
Investing & Financing Activities		—			—			—			—			—
Other (return of capital)(4)		10,330,000			410,000			100,000			—			10,840,000
Cash Generated (Deficiency) after Cash Distributions		4,021,000			(512,000	)		(2,744,000	)		4,323,000			5,088,000
Less: Special Items (not including Sales & Refinancing)		—			—			—			—			—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	4,021,000		$	(512,000	)	$	(2,744,000	)	$	4,323,000		$	5,088,000

B-9

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)—(Continued)

PUBLIC PROGRAMS

NNN 2002 VALUE FUND, LLC

The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	Period from						Period from May 15, 2002
	January 1, 2005						(Date of Inception)
	through		Year Ended December 31,				through
	August 31, 2005(3)		2004		2003		December 31, 2002
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results:
Ordinary Income (Loss)
— from operations	$	4.80	$	24.56	$	5.64	$	67.35
— from recapture		—		—		—		—
Capital Gain (Loss)		498.09		—		—		—
Cash Distributions to Investors(2)
Sources (on GAAP basis)
— Operating Activities		91.48		68.02		69.71		17.86
— Investing & Financing Activities		—		—		—		—
— Other (Return of Capital)		346.64		13.76		4.12		—
Sources (on Cash basis)
— Sales
— Investing & Financing Activities		—		—		—		—
— Operations		91.48		68.02		69.71		17.86
— Other (Return of Capital)	$	346.64	$	13.76	$	4.12	$	—

Notes:

(1)	Includes amortization of deferred financing costs.
(2)	Cash Distributions per $1,000 invested excludes distributions to minority interests.
(3)	The program adopted the liquidation basis of accounting as of August 31, 2005 and for all subsequent periods. However, the taxable income numbers are for the year ended December 31, 2005, as the liquidation basis of accounting is not applicable for income tax purposes.
(4)	Pursuant to NNN 2002 Value Fund, LLC’s Operating Agreement, cash proceeds from capital transactions are first treated as a return of capital.

B-10

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PRIVATE PROGRAMS

TENANT IN COMMON (TIC) PROGRAMS

Table III presents certain operating results for programs which have closed their offerings during the five years ended December 31, 2006. The programs presented are aggregated, having similar investment objectives providing TIC interests, a form of ownership which complies with Section 1031 of the Internal Revenue Code, to investors involved in a tax deferred exchange. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	2006		2005		2004		2003		2002		2001
	122 TIC		100 TIC		60 TIC		36 TIC		18 TIC		2 TIC
	Programs		Programs		Programs		Programs		Programs		Programs
Gross Revenues	$	353,999,775	$	235,233,264	$	142,333,748	$	56,337,980	$	10,884,051	$	311,615
Profit on Sale of Properties		50,355,892		43,545,180		3,365,199		430,126		384,010		—
Less:
Operating Expenses		132,962,673		90,121,252		48,978,673		19,298,613		2,478,639		60,597
General and Administrative Expenses		9,143,262		4,321,152		2,034,752		825,416		171,242		667
Interest Expense		129,424,655		72,621,838		35,325,336		14,787,045		3,698,852		93,874
Depreciation & Amortization
Net Income (Note A)	$	132,825,077	$	111,714,202	$	59,360,186	$	21,857,032	$	4,919,328	$	156,477
Taxable Income (Loss) (Note A)
Cash Generated From:
Operations	$	86,703,984	$	69,922,878	$	55,299,433	$	21,468,277	$	4,607,180	$	156,477
Sales		128,888,158		149,023,359		11,384,836		883,148		312,300		—
Refinancing		2,929,222		7,616,687		819,282		—		—		—
Cash Generated From Operations, Sales & Refinancing
Before Additional Cash Adjustments		218,521,364		226,562,924		67,503,551		22,351,425		4,919,480		156,477
Additional Cash Adjustments		—										—
Less: Monthly Mortgage Principal Repayments		6,014,879		7,372,155		5,389,993		1,820,447		384,765		16,726
Cash Generated From Operations, Sales & Refinancing		212,506,485		219,190,768		62,113,558		20,530,978		4,534,715		139,751
Less: Cash Distributions to Investors From:
Operating Cash Flow		73,814,263		53,006,015		31,274,654		11,476,777		2,347,002		22,395
Sales & Refinancing		132,019,854		141,672,518		12,142,157		771,955		—		—
Other (return of capital) (Note B)		3,831,095		338,295		501,251		117,219		—		—
Cash Generated (Deficiency) after Cash Distributions		2,841,273		24,173,941		18,195,496		8,165,027		2,187,713		117,356
Less: Special Items (not including Sales & Refinancing)		—		—		—		—		—		—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	2,841,273	$	24,173,941	$	18,195,496	$	8,165,027	$	2,187,713	$	117,356
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors Sources (on Tax basis)
— Investment Income	$	—	$	—	$	—	$	—	$	—	$	—
— Return of Capital		2.78		0.34		0.84		0.42		—		—
Sources (on Cash basis)
— Sales and Refinancing		95.81		143.98		20.42		2.78		—		—
— Operations	$	53.57	$	53.87	$	52.60	$	41.40	$	30.13	$	3.31

Note A:

For the TIC programs, individual investors are involved in a tax deferred exchange. Each TIC has an individual tax bases for depreciation and amortization and is responsible for their own calculations of depreciation and amortization.

Note B:

Approximately $3,480,000 in 2006 is due to the following: utilization of equity funded reserves for designated repairs in apartment programs ($1,900,000); utilization of equity funded reserves for payment of mezzanine interest ($380,000); acceleration of payments for interest expense and property taxes for income tax purposes ($450,000); unbilled CAM and rents at December 31, 2006 ($630,000); and unanticipated expenses due to hurricane damage at two properties ($120,000).

B-11

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PRIVATE PROGRAMS

AFFILIATED OWNERSHIP IN TENANT IN COMMON (TIC) PROGRAMS

Table III presents operating results for programs which have closed their offerings during the five years ended December 31, 2006. The programs presented are aggregated, having similar investment objectives providing TIC interests, a form of ownership which complies with Section 1031 of the Internal Revenue Code, to investors involved in a tax deferred exchange. In some instances, other programs affiliated with Triple Net Group have invested in TIC programs either as a TIC or as a member of the LLC. This table presents, in aggregate, the results of affiliated programs investing in a TIC program. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	2006			2005			2004		2003		2002		2001
	13 Affiliated			14 Affiliated			14 Affiliated		6 Affiliated		2 Affiliated		1 Affiliated
	Programs			Programs			Programs		Programs		Programs		Program
Gross Revenues	$	6,916,777		$	11,244,143		$	18,500,226	$	6,352,154	$	594,889	$	22,090
Profit on Sale of Properties		7,149,318			3,113,871			—		158,777		145,659		—
Less: Operating Expenses		4,206,048			5,592,738			6,699,094		2,815,081		233,660		4,264
General and Administrative Expenses		187,856			181,192			154,620		81,474		12,452		—
Interest Expense		2,093,425			2,743,523			3,662,498		1,244,057		196,158		7,528
Depreciation & Amortization
Net Income (Note A)	$	7,578,766		$	5,840,561		$	7,984,014	$	2,370,319	$	298,278	$	10,298
Taxable Income (loss) (Note A):
Cash Generated From:
Operations	$	852,077		$	2,784,768		$	7,669,401	$	2,227,233	$	179,878	$	10,298
Sales		20,674,751			12,910,464			—		334,987		118,459		—
Refinancing		—			(10,403	)		287,066		—		—		—
Cash Generated From Operations, Sales & Refinancing
Before Additional Cash Adjustments		21,526,828			15,684,829			7,956,467		2,562,220		298,337		10,298
Additional Cash Adjustments														—
Less: Monthly Mortgage Principal Repayments		113,815			144,097			105,701		34,142		10,842		1,709
Cash Generated From Operations, Sales & Refinancing		21,413,013			15,540,732			7,850,766		2,528,078		287,495		8,589
Less: Cash Distributions to Investors From:
Operating Cash Flow		1,287,582			2,785,059			3,965,091		1,229,694		133,559		—
Sales & Refinancing		22,627,577			11,054,797			259,288		292,767		—		—
Other (return of capital)		—			—			20,997		—		—		—
Cash Generated (Deficiency) after Cash Distributions		(2,502,146	)		1,700,876			3,605,390		1,005,617		153,936		8,589
Less: Special Items (not including Sales & Refinancing)		—			—			—		—		—		—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	(2,502,146	)	$	1,700,876		$	3,605,390	$	1,005,617	$	153,936	$	8,589
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors
Sources (on Tax basis)
— Investment Income	$	—		$	—		$	—	$	—	$	—	$	—
— Return of Capital		—			—			0.34		—		—		—
Sources (on Cash basis)
— Sales and Refinancings		621.11			182.07			4.17		8.93		—		—
— Operations	$	35.34		$	45.87		$	63.81	$	37.50	$	49.47	$	—

Note A:  For the TIC programs, individual investors are involved in a tax deferred exchange. Each TIC has an individual tax bases for depreciation and amortization and is responsible for their own calculations of depreciation and amortization.

B-12

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PRIVATE PROGRAMS

TENANT IN COMMON (TIC) PROGRAMS EXCLUDING AFFILIATED OWNERSHIP

Table III presents operating results for programs which have closed their offerings during the five years ended December 31, 2006. The programs presented are aggregated, having similar investment objectives providing TIC interests, a form of ownership which complies with Section 1031 of the Internal Revenue Code, to investors involved in a tax deferred exchange. In select cases, other programs affiliated with Triple Net Group have invested in TIC programs either as a TIC or as a member of the LLC. This table presents, in aggregate, the results of TIC programs without affiliated ownership results. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	2006		2005		2004		2003		2002		2001
	122		100		60		36		18		2
	TIC Programs		TIC Programs		TIC Programs		TIC Programs		TIC Programs		TIC Programs
Gross Revenues	$	347,082,998	$	223,989,121	$	123,833,522	$	49,985,826	$	10,289,162	$	289,525
Profit on Sale of Properties		43,206,574		40,431,309		3,365,199		271,349		238,351		—
Less: Operating Expenses		128,756,625		84,528,514		42,279,579		16,483,532		2,244,979		56,333
General and Administrative Expenses		8,955,406		4,139,960		1,880,132		743,942		158,790		667
Interest Expense		127,331,230		69,878,315		31,662,838		13,542,988		3,502,694		86,346
Depreciation & Amortization
Net Income (Note A)	$	125,246,311	$	105,873,641	$	51,376,172	$	19,486,713	$	4,621,050	$	146,179
Taxable Income (loss) (Note A):
Cash Generated From:
Operations	$	85,851,907	$	67,138,110	$	47,630,032	$	19,241,044	$	4,427,302	$	146,179
Sales		108,213,407		136,112,895		11,384,836		548,161		193,841		—
Refinancing		2,929,222		7,627,089		532,216		—		—		—
Cash Generated From Operations, Sales & Refinancing
Before Additional Cash Adjustments		196,994,536		210,878,094		59,547,084		19,789,205		4,621,143		146,179
Additional Cash Adjustments												—
Less: Monthly Mortgage Principal Repayments		5,901,064		7,228,058		5,284,292		1,786,305		373,923		15,017
Cash Generated From Operations, Sales & Refinancing		191,093,472		203,650,036		54,262,792		18,002,900		4,247,220		131,162
Less: Cash Distributions to Investors From:
Operating Cash Flow		72,526,681		50,220,956		27,309,563		10,247,083		2,213,443		22,395
Sales & Refinancing		109,392,277		130,617,721		11,882,869		479,188		—		—
Other (return of capital) (Note B)		3,831,095		338,295		480,254		117,219		—		—
Cash Generated (Deficiency) after Cash Distributions		5,343,419		22,473,064		14,590,106		7,159,410		2,033,777		108,767
Less: Special Items (not including Sales & Refinancing)		—		—		—		—		—		—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	5,343,419	$	22,473,064	$	14,590,106	$	7,159,410	$	2,033,777	$	108,767
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors Sources (on Tax basis)
— Investment Income	$	—	$	—	$	—	$	—	$	—	$	—
— Return of Capital		2.86		0.37		0.90		0.48		—		—
Sources (on Cash basis)
— Sales and Refinancings		81.54		141.47		22.32		1.96		—		—
— Operations	$	54.06	$	54.39	$	51.29	$	41.93	$	29.44	$	3.57

Note A:

For the TIC programs, individual investors are involved in a tax deferred exchange. Each TIC has an individual tax bases for depreciation and amortization and is responsible for their own calculations of depreciation and amortization.

Note B:

Approximately $3,480,000 in 2006 is due to the following: utilization of equity funded reserves for designated repairs in apartment programs ($1,900,000); utilization of equity funded reserves for payment of mezzanine interest ($380,000); acceleration of payments for interest expense and property taxes for income tax purposes ($450,000); unbilled CAM and rents at December 31, 2006 ($630,000); and unanticipated expenses due to hurricane damage at two properties ($120,000).

B-13

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PRIVATE PROGRAMS

MULTIPLE PROPERTY INVESTMENT FUNDS

Table III presents certain operating results for programs which have closed their offering during the five years ended December 31, 2006. The programs are aggregated, having similar investment objectives for the purpose of acquiring interests in multiple unspecified properties that would likely be office buildings, mixed-use, research and development and industrial facilities, and/or shopping centers. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	2006			2005			2004			2003			2002			2001
Gross Revenues	$	2,522,318		$	631,180		$	2,034,929		$	1,903,524		$	2,154,090		$	131,060
Profit on Sale of Properties		847,861			2,030,172			—			181,367			148,478			—
Less: Operating Expenses		924,806			401,885			980,612			885,929			999,943			62,336
General and Administrative Expenses		81,553			163,504			94,807			138,261			127,893			—
Interest Expense		1,576,853			240,744			558,522			494,086			793,565			68,223
Depreciation & Amortization		—			351,244			636,822			423,758			473,500			35,452
Net Income—Tax Basis	$	786,967		$	1,503,975		$	(235,834	)	$	142,857		$	(92,333	)	$	(34,951	)
Taxable Income From:
Operations	$	(60,894	)	$	(526,197	)	$	(235,834	)	$	(38,510	)	$	(240,811	)	$	(34,951	)
Gain on Sale		847,861			2,030,172			—			181,367			148,478			—
Cash Generated From:
Operations		(60,894	)		(174,953	)		648,863			412,827			280,598			501
Sales		847,861			7,102,052			—			588,766			208,200			—
Refinancing		—			—			(88,806	)		—			—			—
Cash Generated From Operations, Sales & Refinancing
Before Additional Cash Adjustments		786,967			6,927,099			560,057			1,001,593			488,798			501
Additional Cash Adjustments
Less: Monthly Mortgage Principal Repayments		—			52,148			77,695			66,812			62,020			—
Cash Generated From Operations, Sales & Refinancing		786,967			6,874,951			482,362			934,781			426,778			501
Less: Cash Distributions to Investors From:
Operating Cash Flow		—						647,681			180,696			218,578			501
Sales & Refinancing		1,898,534			2,623,375			—			588,766			208,200			—
Other (return of capital)		—			—			121,775			—			130,342			17,848
Cash Generated (Deficiency) after Cash Distributions		(1,111,567	)		4,251,576			(287,094	)		165,319			(130,342	)		(17,848	)
Less: Special Items (not including Sales & Refinancing)		—			—			—			—			—			—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	(1,111,567	)	$	4,251,576		$	(287,094	)	$	165,319		$	(130,342	)	$	(17,848	)
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results:
Ordinary Income (Loss)
— from operations	$	(2.67	)	$	(47.87	)	$	(21.45	)	$	(3.50	)	$	(21.91	)	$	(13.66	)
— from recapture								—			—			—			—
Capital Gain (Loss)		37.19			184.69			—			16.50			13.51			—
Cash Distributions to Investors Sources (on Tax basis)
— Investment Income		—			—			—			—			—			—
— Return of Capital		—			—			11.08			—			11.86			6.98
Sources (on Cash basis)
— Sales		83.28			238.66			—			53.56			18.94			—
— Refinancing		—			—			—			—			—			—
— Operations	$	—		$	—		$	58.92		$	16.44		$	19.88		$	0.20

B-14

TABLE III

OPERATING RESULTS OF PRIOR PROGRAMS BY YEAR (UNAUDITED)

PRIVATE PROGRAMS

NOTES PROGRAMS

Table III presents certain operating results for programs which have closed their offerings during the five years ended December 31, 2006. The programs presented are aggregated, having similar investment objectives. The notes programs offer units of interest in the companys’ secured and unsecured notes offerings. The programs were formed for the purpose of making loans to affiliates of Triple Net Group. Investors are making loans to the programs. Triple Net Group, as the sole member of the companies, has guarantied the note unit holders payment of all principal and interest on the note units. The results presented in this table are those of the note unit holders, not the company. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

	2006		2005			2004			2003
	closed		one			one			one
	Notes Program		Notes Program			Notes Program			Notes Program
Gross Revenues	$	—	$	—		$	70,032		$	413
Profit on Sale of Properties				—			—			—
Less: Operating Expenses				—			—			—
General and Administrative Expenses				22,751			7,823			82
Interest Expense				43,514			104,488			19,227
Depreciation & Amortization				—			—			—
Net Income	$	—	$	(66,265	)	$	(42,279	)	$	(18,896	)
Taxable Income (Loss)
Cash Generated From:
Operations	$	—	$	(66,265	)	$	(42,279	)	$	(18,896	)
Sales				—			—			—
Refinancing				—			—			—
Cash Generated From Operations, Sales & Refinancing
Before Additional Cash Adjustments		—		(66,265	)		(42,279	)		(18,896	)
Additional Cash Adjustments
Less: Monthly Mortgage Principal Repayments
Cash Generated From Operations, Sales & Refinancing		—		(66,265	)		(42,279	)		(18,896	)
Less: Cash Distributions to Investors From:
Operating Cash Flow				—			—			—
Sales & Refinancing				—			—			—
Other (return of capital)				—			—			—
Cash Generated (Deficiency) after Cash Distributions		—		(66,265	)		(42,279	)		(18,896	)
Less: Special Items (not including Sales & Refinancing)				—			—			—
Cash Generated (Deficiency) after Cash Distributions and Special Items	$	—	$	(66,265	)	$	(42,279	)	$	(18,896	)
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors
Sources (on Tax basis)
— Investment Income	$	—	$	11.00		$	11.00		$	11.00
— Return of Capital		—		—			—			—
Sources (on Cash basis)
— Sales and Refinancing		—		—			—			—
— Operations	$	—	$	—		$	—		$	—

B-15

TABLE IV

RESULTS OF COMPLETED PROGRAMS (UNAUDITED)

PRIVATE PROGRAMS

DECEMBER 31, 2006

Table IV presents the results of completed programs for programs which have sold properties and completed operations during the five years prior to December 31, 2006. The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

					NNN												NNN				NNN
					2000		NNN Town		NNN		NNN		NNN		Yerington		Tech		NNN		County
	Tellride		Kiwi		Value		&		Bryant		Saddleback		Fund		Shopping		Fund		Alamosa		Center
	Barstow,		Assoc,		Fund,		Country,		Ranch,		Financial,		VIII,		Center,		III,		Plaza,		Drive,
	LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC
Dollar Amount Raised	$	1,619,550	$	2,681,352	$	4,816,000	$	7,200,000	$	5,000,000	$	3,865,800	$	8,000,000	$	1,625,000	$	3,698,750	$	6,650,000	$	3,125,000
Number of Properties Purchased		1		1		7		1		1		1		3		1		3		1		1
Date of Closing of Offering		16-Dec-98		4-Feb-01		27-Feb-01		29-Mar-00		12-Nov-02		29-Oct-02		7-Mar-00		3-Aug-99		20-Jun-00		25-Oct-02		6-Feb-02
Date of First Sale of Property		19-Feb-03		25-Feb-03		26-Oct-01		25-Jun-04		2-Nov-04		27-Dec-04		26-Mar-02		17-Jan-05		3-Jul-01		24-Mar-05		14-Apr-05
Date of Final Sale of Property		19-Feb-03		25-Feb-03		15-Oct-02		25-Jun-04		2-Nov-04		27-Dec-04		6-Jan-04		17-Jan-05		7-Feb-05		24-Mar-05		14-Apr-05
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors
Sources (on Tax basis)
— Investment Income		—		—		—		—		—		—		—		—		—		—		—
— Return of Capital		—		26.58		34.78		71.23		—		11.83		125.22		54.24		—		13.82		—
Sources (on Cash basis)
— Sales		884.53		1,053.34		880.51		1,221.31		1,206.17		1,384.96		1,305.19		1,132.76		1,293.88		1,266.59		1,206.37
— Refinancing		—		—		195.48		68.33		—		—		—		—		—		—		—
— Operations	$	401.16	$	175.12	$	155.63		268.98		184.74		181.08		129.11		496.14		446.45		210.94		247.48

Note: A  There are three notes programs that have completed operations and are closed. The notes programs report interest income to the note unit holders. The remaining programs included in this table are TIC programs with investors generally involved in tax deferred exchanges. Accordingly, each TIC has an individual tax basis for determining amortization and depreciation. Neither type of program requires depreciation or amortization, therefore, there is no presentation of Federal Income Tax Results.

(1)  The investors received a note from buyer as distributed proceeds from the sale.

B-16

TABLE IV

RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)

PRIVATE PROGRAMS

DECEMBER 31, 2006

The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

					(1)				NNN		NNN
	Truckee				NNN				City		LV				NNN
	River		NNN		Rocky		NNN		Center		1900		NNN		801				NNN
	Office		North		Mountain		Jefferson		West		Aerojet		Park		K		NNN		Springtown
	Tower,		Reno		Exchange,		Square,		A,		Way		Sahara,		Street,		Timberhills,		Mall,
	LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC
Dollar Amount Raised	$	5,550,000	$	2,750,000	$	2,670,000	$	9,200,000	$	1,237,803	$	2,000,000	$	4,953,000	$	29,600,000	$	3,695,375	$	2,550,000
Number of Properties Purchased		1		1		1		2		1		1		5		1		1		1
Date of Closing of Offering		15-Jul-99		19-Jun-02		15-Feb-01		26-Aug-03		15-Mar-02		31-Aug-01		17-Mar-03		31-Mar-04		27-Nov-01		21-Mar-03
Date of First Sale of Property		15-Apr-05		19-May-05		31-May-05		22-Jul-05		28-Jul-05		27-Sep-05		20-Dec-05		26-Aug-05		19-Oct-05		2-Nov-05
Date of Final Sale of Property		15-Apr-05		19-May-05		31-May-05		22-Jul-05		28-Jul-05		27-Sep-05		20-Dec-05		26-Aug-05		19-Oct-05		2-Nov-05
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors
Sources (on Tax basis)
— Investment Income		—		—		—		—		—		—		—		—		—		—
— Return of Capital		—		—		24.79		—		13.68		—		35.18		—		—		—
Sources (on Cash basis)
— Sales		953.00		1,758.24		829.87		1,308.76		1,300.67		1,123.45		1,102.58		1,124.72		1,387.80		1,206.35
— Refinancing		—		—		—		—		—		—		—		—		—		—
— Operations		619.55		323.12		187.30		189.41		262.83		319.50		128.07		113.57		305.43		439.16

B-17

TABLE IV

RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)

PRIVATE PROGRAMS

DECEMBER 31, 2006

The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

																			NNN
					NNN				NNN				NNN		NNN		NNN		Titan
	NNN		NNN		Exchange				1851		NNN		Oakey		City		Amber		Building
	Emerald		Kahana		Fund		NNN		E 1st		Reno		Building		Center		Oaks		and
	Plaza,		Gateway,		III,		PCP 1,		Street,		Trademark,		2003,		West B,		III,		Plaza,
	LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC		LLC
Dollar Amount Raised	$	42,800,000	$	8,140,000	$	6,300,000	$	5,800,000	$	20,500,000	$	3,850,000	$	8,270,000	$	8,200,000	$	10,070,000	$	2,219,808
Number of Properties Purchased		1		3		1		6		1		1		1		1		1		1
Date of Closing of Offering		5-Jan-05		6-Mar-03		31-May-00		25-Jun-02		29-Jul-03		29-Sep-01		19-May-04		15-Jun-02		20-Jan-04		28-May-02
Date of First Sale of Property		10-Nov-05		15-Nov-05		9-Dec-05		10-Oct-02		9-Jan-06		23-Jan-06		24-Jan-06		17-Apr-06		15-Jun-06		21-Jul-06
Date of Final Sale of Property		10-Nov-05		15-Nov-05		9-Dec-05		29-Dec-05		9-Jan-06		23-Jan-06		24-Jan-06		17-Apr-06		15-Jun-06		21-Jul-06
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors
Sources (on Tax basis)
— Investment Income		—		—		—		—		—		—		—		—		—		—
— Return of Capital		—		—		14.36		—		—		—		—		—		—		—
Sources (on Cash basis)
— Sales		1,203.34		1,638.63		427.98		1,016.63		1,262.45		1,256.62		1,343.87		1,882.87		1,622.67		1,582.58
— Refinancing		—		—		—		—		—		283.64		—		—		—		—
— Operations		92.28		252.29		231.59		283.85		238.01		361.45		136.48		306.07		190.19		589.44

B-18

TABLE IV

RESULTS OF COMPLETED PROGRAMS (UNAUDITED) — (Continued)

PRIVATE PROGRAMS

DECEMBER 31, 2006

The information contained in this table has been obtained solely from public information of Triple Net and its affiliates filed with the SEC. TNP Strategic Retail Trust, Inc. and its affiliates cannot guarantee the accuracy of the information in this table.

			NNN				NNN		NNN		NNN
	NNN		901		NNN		2004		2005		2006
	Las Cimas		Corporate		Sacramento		Notes		Notes		Notes
	II and III,		Center,		Corporate,		Program,		Program,		Program,		Program
	LLC		LLC		LLC		LLC		LLC		LLC		Totals
Dollar Amount Raised	$	32,250,000	$	6,292,125	$	12,000,000	$	5,000,000			$	1,044,881	$	285,224,444
Number of Properties Purchased		2		1		1		N/A		N/A		N/A		57
Date of Closing of Offering		9-Dec-04		3-Oct-03		21-May-01		14-Aug-01		14-Aug-01		22-May-03
Date of First Sale of Property		7-Aug-06		22-Aug-06		17-Nov-06		N/A		N/A		N/A
Date of Final Sale of Property		7-Aug-06		22-Aug-06		17-Nov-06		N/A		N/A		N/A
Tax and Distribution Data Per $1,000 Invested
Federal Income Tax Results (Note A):
Cash Distributions to Investors
Sources (on Tax basis)
— Investment Income		—		—		—		66.00		33.00		30.00
— Return of Capital		—		10.89		—		—		—		—
Sources (on Cash basis)
— Sales		1,328.68		1,190.72		1,396.11		—		—		—
— Refinancing		—		—		—		—		—		—
— Operations		199.70		172.94		405.69		—		—		—

B-19

APPENDIX C:

FORM OF SUBSCRIPTION AGREEMENT

C-1

C-2

C-3

C-4

C-5

C-6

APPENDIX D:

DISTRIBUTION REINVESTMENT PLAN

EFFECTIVE AS OF AUGUST 7, 2009

This DISTRIBUTION REINVESTMENT PLAN (“Plan”) is adopted by TNP Strategic Retail Trust, Inc., a Maryland corporation (the “Company”), pursuant to its charter (the “Charter”). Unless otherwise defined herein, capitalized terms shall have the same meaning as set forth in the Charter.

1. Distribution Reinvestment.  As agent for the stockholders (“Stockholders”) of the Company who (i) purchase shares of the Company’s common stock (“Shares”) pursuant to the Company’s initial public offering (the “Initial Offering”), or (ii) purchase Shares pursuant to any future offering of the Company (“Future Offering”), and who elect to participate in the Plan (the “Participants”), the Company will apply all distributions declared and paid in respect of the Shares held by each Participant (the “Distributions”), including Distributions paid with respect to any full or fractional Shares acquired under the Plan, to the purchase of Shares for such Participants directly, if permitted under state securities laws and, if not, through the Dealer Manager or Soliciting Dealers registered in the Participant’s state of residence.

2. Effective Date.  The effective date of this Plan shall be the date that the minimum offering requirements (as defined in the Prospectus relating to the Initial Offering) are met in connection with the Initial Offering.

3. Procedure for Participation.  Any Stockholder who has received a Prospectus, as contained in the Company’s registration statement filed with the Securities and Exchange Commission (the “SEC”), may elect to become a Participant by completing and executing the subscription agreement, an enrollment form or any other appropriate authorization form as may be available from the Company, the Dealer Manager or Soliciting Dealer. Participation in the Plan will begin with the next Distribution payable after acceptance of a Participant’s subscription, enrollment or authorization. Shares will be purchased under the Plan on the date that Distributions are paid by the Company. The Company intends to make Distributions on a monthly basis. Each Participant agrees that if, at any time prior to the listing of the Shares on a national stock exchange, if at any time there is a material change in the Participant’s financial condition or the Participant is unable to make any of the representations or warranties set forth in the subscription agreement, such Participant will promptly so notify the Company in writing.

4. Purchase of Shares.  Participants will acquire Shares from the Company under the Plan (the “Plan Shares”) at a price equal to $9.50 per Share until the earliest of (i) all the Plan Shares registered in the Initial Offering are issued, (ii) the Initial Offering and any Future Offering of Plan Shares terminate and the Company elects to deregister with the SEC the unsold Plan Shares, or (iii) there is more than a de minimis amount of trading in the Shares, at which time any registered Plan Shares then available under the Plan will be sold at a price equal to the fair market value of the Shares, as determined by the Company’s Board of Directors by reference to the applicable sales price with respect to the most recent trades occurring on or prior to the relevant Distribution date. Participants in the Plan may also purchase fractional Shares so that 100% of the Distributions will be used to acquire Shares. However, a Participant will not be able to acquire Plan Shares to the extent that any such purchase would cause such Participant to exceed the Aggregate Share Ownership Limit or the Common Share Ownership Limit as set forth in the Charter or otherwise would cause a violation of the Share ownership restrictions set forth in the Charter.

Shares to be distributed by the Company in connection with the Plan may (but are not required to) be supplied from: (a) the Plan Shares which will be registered with the SEC in connection with the Company’s Initial Offering, (b) Shares to be registered with the SEC in a Future Offering for use in the Plan (a “Future Registration”), or (c) Shares purchased by the Company for the Plan in a secondary market (if available) or on a stock exchange (if listed) (collectively, the “Secondary Market”).

Shares purchased in any Secondary Market will be purchased at the then-prevailing market price, which price will be utilized for purposes of issuing Shares in the Plan. Shares acquired by the Company in any Secondary Market or registered in a Future Registration for use in the Plan may be at prices lower or higher than the Share price which will be paid for the Plan Shares pursuant to the Initial Offering.

D-1

If the Company acquires Shares in any Secondary Market for use in the Plan, the Company shall use its reasonable efforts to acquire Shares at the lowest price then reasonably available. However, the Company does not in any respect guarantee or warrant that the Shares so acquired and purchased by the Participant in the Plan will be at the lowest possible price. Further, irrespective of the Company’s ability to acquire Shares in any Secondary Market or to make a Future Offering for Shares to be used in the Plan, the Company is in no way obligated to do either, in its sole discretion.

5. Taxes.  IT IS UNDERSTOOD THAT REINVESTMENT OF DISTRIBUTIONS DOES NOT RELIEVE A PARTICIPANT OF ANY INCOME TAX LIABILITY WHICH MAY BE PAYABLE ON THE DISTRIBUTIONS.

6. Share Certificates.  The ownership of the Shares purchased through the Plan will be in book-entry form unless and until the Company issues certificates for its outstanding common stock.

7. Reports.  Within 90 days after the end of the Company’s fiscal year, the Company shall provide each Stockholder with an individualized report on such Stockholder’s investment, including the purchase date(s), purchase price and number of Shares owned, as well as the dates of Distributions and amounts of Distributions paid during the prior fiscal year. In addition, the Company shall provide to each Participant an individualized quarterly report at the time of each Distribution payment showing the number of Shares owned prior to the current Distribution, the amount of the current Distribution and the number of Shares owned after the current Distribution.

8. Termination by Participant.  A Participant may terminate participation in the Plan at any time, without penalty, by delivering to the Company a written notice. Prior to the listing of the Shares on a national stock exchange, any transfer of Shares by a Participant to a non-Participant will terminate participation in the Plan with respect to the transferred Shares. If a Participant terminates Plan participation, the Company will ensure that the terminating Participant’s account will reflect the whole number of shares in such Participant’s account and provide a check for the cash value of any fractional share in such account. Upon termination of Plan participation for any reason, Distributions will be distributed to the Stockholder in cash.

9. Amendment or Termination of Plan by the Company.  The Board of Directors of the Company may by majority vote (including a majority of the Independent Directors) amend or terminate the Plan for any reason upon 30 days written notice to the Participants.

10. Liability of the Company.  The Company shall not be liable for any act done in good faith, or for any good faith omission to act, including, without limitation, any claims or liability (i) arising out of failure to terminate a Participant’s account upon such Participant’s death prior to receipt of notice in writing of such death; or (ii) with respect to the time and the prices at which Shares are purchased or sold for a Participant’s account. To the extent that indemnification may apply to liabilities arising under the Securities Act of 1933, as amended, or the securities laws of a particular state, the Company has been advised that, in the opinion of the SEC and certain state securities commissioners, such indemnification is contrary to public policy and, therefore, unenforceable.

D-2

TNP STRATEGIC RETAIL TRUST, INC.

UP TO $1,100,000,000 IN SHARES OF

COMMON STOCK

PROSPECTUS

You should rely only on the information contained in this prospectus. No dealer, salesperson or other individual has been authorized to give any information or to make any representations that are not contained in this prospectus. If any such information or statements are given or made, you should not rely upon such information or representation. This prospectus does not constitute an offer to sell any securities other than those to which this prospectus relates, or an offer to sell, or a solicitation of an offer to buy, to any person in any jurisdiction where such an offer or solicitation would be unlawful. This prospectus speaks as of the date set forth above. You should not assume that the delivery of this prospectus or that any sale made pursuant to this prospectus implies that the information contained in this prospectus will remain fully accurate and correct as of any time subsequent to the date of this prospectus.

April 13, 2010

Filed Pursuant to Rule 424(b)(3)

Registration No. 333-154975

TNP STRATEGIC RETAIL TRUST, INC.
SUPPLEMENT NO. 7 DATED SEPTEMBER 2, 2010
TO THE PROSPECTUS DATED APRIL 13, 2010

This document supplements, and should be read in conjunction with, our prospectus dated April 13, 2010, relating to our offering of up to $1,100,000,000 in shares of our common stock. This Supplement No. 7 supersedes and replaces Supplement No. 2 dated June 3, 2010, Supplement No. 3 dated June 11, 2010, Supplement No. 4 dated July 15, 2010, Supplement No. 5 dated August 12, 2010 and Supplement No. 6 dated August 18, 2010. Terms used and not otherwise defined in this Supplement No. 7 have the same meanings as set forth in our prospectus. The purpose of this Supplement No. 7 is to disclose:

•  the status of our public offering;

•  our new website address;

•  our automatic investment plan;

•  changes to our management and the management of our advisor;

•  revisions to risk factors;

•  an update to the section of the prospectus entitled “Description of Capital Stock — Distributions;”

•  selected financial data;

•  our performance — funds from operations and adjusted funds from operations;

•  our property performance — operating loss;

•  a description of our portfolio as of June 30, 2010;

•  our recent property acquisitions;

•  amendments to our operating partnership’s revolving line of credit;

•  information regarding our indebtedness;

•  information regarding our distributions;

•  information regarding redemption of shares;

•  compensation paid to our advisor and its affiliates;

•  updated Table II to the prior performance tables of the TNP prior programs;

•  updated experts language; and

•  information incorporated by reference.

Status of Our Public Offering

We commenced our initial public offering of up to $1,100,000,000 in shares of our common stock on August 7, 2009. As of August 26, 2010, we had received and accepted investors’ subscriptions for and issued 1,931,131 shares of our common stock, including shares issued pursuant to our distribution reinvestment plan, resulting in gross offering proceeds of approximately $19,026,000. As of August 26, 2010, approximately 98,082,171 shares of our common stock remained available for sale to the public under our initial public offering, excluding shares available under our distribution reinvestment plan. We will sell shares of our common stock in our initial public offering until the earlier of August 7, 2011, unless extended, or the date on which the maximum amount has been sold.

Our New Website Address

Our website address has been changed to http://www.tnpsrt.com.

Summary of Our Automatic Investment Plan

We have adopted an automatic investment plan that allows our stockholders to make cash investments of $100.00 or more in additional shares of our common stock at regular intervals through automatic debits to their checking, savings or other bank account. Participation in the automatic investment plan is limited to investors in this offering who have already met the minimum purchase requirement in this offering. Investors in this offering who have also invested in other TNP sponsored real estate programs, including Bruin Fund, L.P., TNP Vulture Fund VIII, LLC, 2008 Participating Notes Program, LLC, TNP Profit Participation Program, LLC, TNP Irving Square, DST, TNP 6700 Santa Monica Blvd., DST and Thompson/Morgan Baton Rouge I, DST, may also invest their distributions from those programs in the automatic investment plan provided they continue to hold the minimum purchase requirements for those programs.

Investors who desire to participate in the automatic investment plan may be able to do so through their participating broker-dealer or, if they are investing in this offering other than through a participating broker-dealer, through the dealer manager, by completing an automatic investment plan enrollment form. Purchases pursuant to our automatic investment plan are made in this offering on a monthly basis.

We will provide a confirmation of monthly purchases under the automatic investment plan within five business days after the end of each month. The confirmation will disclose the following information:

•  the amount of the investment;

•  the date of the investment; and

•  the number and price of the shares purchased.

We will pay dealer manager fees and sales commissions in connection with sales under the automatic investment plan to the same extent that we pay those fees and commissions on shares sold in this offering outside of the automatic investment plan.

Stockholders may terminate their participation in the automatic investment plan at any time by providing us with written notice. Stockholders who elect to participate in the automatic investment plan must agree that, if at any time they fail to meet the applicable investor suitability standards or cannot make the other investor representations set forth in the then-current prospectus and subscription agreement, they will promptly notify us in writing of that fact and their participation in the plan will terminate.

Changes to Our Management

On June 17, 2010, Wendy J. Worcester, our Chief Financial Officer, Treasurer and Secretary, resigned from her respective positions with us, effective as of July 1, 2010. On June 17, 2010, Ms. Worcester also resigned from her position as the Chief Financial Officer, Treasurer and Secretary of our advisor, effective as of July 1, 2010.

On June 17, 2010, our board of directors appointed Christopher S. Cameron to serve as our Chief Financial Officer, Treasurer and Secretary, effective as of July 1, 2010. Mr. Cameron also serves as the Chief Financial Officer, Treasurer and Secretary of our advisor, effective as of July 1, 2010.

Mr. Cameron, age 37, previously served from January 2008 to June 2010 as Director of Accounting and Financial Reporting at Cole Real Estate Investments, a national real estate investment company, or Cole, where he focused on financial tracking and reporting systems, external audit examinations and broker-dealer due diligence reviews. Mr. Cameron also served as Manager of Financial Reporting at Cole from August 2004 to December 2007. Prior to joining Cole in 2004, Mr. Cameron worked at Deloitte & Touche, LLP for four years as a senior accountant serving large public and private entities. Mr. Cameron is a certified public accountant. Mr. Cameron earned a Bachelor of Science in Business Administration, with a major in Accounting and a minor in Finance, from the University of Arizona.

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Revisions to Risk Factors

The ninth risk factor on the prospectus cover and the third risk factor under the caption “Prospectus Summary — Summary of Risk Factors” on page 2 of the prospectus are hereby updated and superseded with the following:

•  The amount of any distributions we may make is uncertain. Our distributions may exceed our earnings, particularly during the period before we have substantially invested the net proceeds from this offering. Generally, distributions paid using offering proceeds will constitute a return of capital, meaning a return of all or a portion of your original investment. To the extent our distributions are funded from offering proceeds, we will have less funds to use for investments which may lower your overall return. Additionally, to date, our distributions declared and paid have exceeded our earnings and, as a result, our distributions have constituted a return of capital. Portions of distributions we make in the future may also represent a return of capital, which would reduce your tax basis in our shares.

The following new risk factor supplements, and should be read in conjunction with, the section of the prospectus entitled, “Risk Factors — Investment Risks,” which begins on page 12 of the prospectus.

To date, our distributions declared and paid have constituted a return of capital.

Generally, distributions paid using offering proceeds will constitute a return of capital, which means a return of all or a portion of your original investment. To date, we have paid all of our distributions from the proceeds of our public offering and, as a result, our distributions have constituted a return of capital. To the extent our distributions are funded from offering proceeds, we will have less funds to use for investments. Additionally, distributions that are treated as a return of capital for federal income tax purposes generally will not be taxable as a dividend to a stockholder, but will reduce the stockholder’s basis in its shares (but not below zero) and therefore can result in the stockholder having a higher gain upon a subsequent sale of such shares. Return of capital distributions in excess of a stockholder’s basis generally will be treated as gain from the sale of such shares.

Update to “Description of Capital Stock — Distributions”

The following disclosure supplements, and should be read in conjunction with, the disclosure in the section of the prospectus entitled, “Description of Capital Stock — Distributions” on page 90 of the prospectus.

Generally, distributions paid using offering proceeds will constitute a return of capital, which means a return of all or a portion of your original investment and a corresponding reduction in your tax basis in our shares. To date, we have paid all of our distributions from the proceeds of our public offering and, as a result, our distributions have constituted a return of capital resulting in less funds for investments.

Selected Financial Data

The following selected financial data should be read in conjunction with our consolidated financial statements and the notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our annual report for the year ended December 31, 2009 and our quarterly report for the quarterly period ended June 30, 2010 and incorporated by reference in this prospectus supplement. Our historical results are not necessarily indicative of results for any future period.

	As of		As of
Selected Financial Data	June 30, 2010		December 31, 2009		December 31, 2008
	(Unaudited)
BALANCE SHEET DATA:
Total assets	$	45,112,000	$	15,605,000	$	202,000
Total liabilities		35,500,000		12,317,000		—
Total equity		9,612,000		3,288,000		202,000

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							Period from
							September 18, 2008
	For the						(Date of Inception)
	Six Months Ended			Year Ended			Through
	June 30, 2010			December 31, 2009			December 31, 2008
	(Unaudited)
STATEMENT OF OPERATIONS DATA:
Total revenue	$	916,000		$	145,000		$	—
Total operating expenses		(2,293,000	)		(1,228,000	)		—
Total other expenses		(567,000	)		(117,000	)		—
Net loss	$	(1,944,000	)	$	(1,200,000	)	$	—
STATEMENT OF CASH FLOWS DATA:
Net cash used in operating activities	$	(1,318,000	)	$	(1,047,000	)	$	(1,000	)
Net cash used in investing activities		(5,462,000	)		(12,500,000	)		—
Net cash provided by financing activities		7,994,000			14,452,000			202,000
OTHER DATA:
Distributions declared	$	319,000		$	31,000		$	—

Funds from Operations and Adjusted Funds from Operations

One of our objectives is to provide cash distributions to our stockholders from cash generated by our operations. Cash generated from operations is not equivalent to net income as determined under GAAP. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, an industry trade group, or NAREIT, has promulgated a standard known as Funds from Operations, or FFO for short, which it believes more accurately reflects the operating performance of a REIT. As defined by NAREIT, FFO means net income computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures in which the REIT holds an interest. We believe that FFO is helpful to investors and our management as a measure of operating performance because it excludes depreciation and amortization, gains and losses from property dispositions, and extraordinary items, and as a result when compared year over year, reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses and interest costs, which is not immediately apparent from net income.

Changes in the accounting and reporting rules under GAAP have prompted a significant increase in the amount of non-operating items included in FFO, as defined. As a result, in addition to FFO, we also calculate Adjusted Funds from Operations, or adjusted FFO, which excludes from FFO (1) any acquisition expenses and acquisition fees expensed by us and that are related to any property, loan or other investment acquired or expected to be acquired by us and (2) any non-operating non-cash charges incurred by us, such as impairments of property or loans, any other-than-temporary impairments of marketable securities, or other similar charges. We believe that adjusted FFO is helpful to our investors and management as a measure of operating performance because it excludes costs that management considers more reflective of investing activities and other non-operating items included in FFO.

As explained below, management’s evaluation of our operating performance excludes the items considered in the calculation of adjusted FFO based on the following economic considerations:

Acquisition costs:  In evaluating investments in real estate, including both business combinations and investments accounted for under the equity method of accounting, management’s investment models and analysis differentiate costs to acquire the investment from the operations derived from the investment. Prior to 2009, acquisition costs for these types of investments were capitalized; however, beginning in 2009 acquisition costs related to business combinations are expensed. We believe by excluding expensed acquisition costs, adjusted FFO provides useful supplemental information that is comparable for each type of our real estate

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investments and is consistent with management’s analysis of the investing and operating performance of our properties.

Subject to the following limitations, FFO and adjusted FFO provide a better basis for measuring our operating performance and comparing our performance and operations to those of other REITs. The calculation of FFO and adjusted FFO may, however, vary from entity to entity because capitalization and expense policies tend to vary from entity to entity. Consequently, the presentation of FFO and adjusted FFO by us may not be comparable to other similarly titled measures presented by other REITs. FFO and adjusted FFO are not intended to be alternatives to net income as an indicator of our performance, liquidity or to “Cash Flows from Operating Activities” as determined by GAAP as a measure of our capacity to pay distributions.

Our calculations of FFO and adjusted FFO are presented in the following table for the year ended December 31, 2009, the six months ended June 30, 2010:

	Six Months Ended			Year Ended
	June 30, 2010			December 31, 2009
Net loss	$	(1,944,000	)	$	(1,200,000	)
Add:
Depreciation and amortization of real estate assets		372,000			46,000
FFO		(1,572,000	)		(1,154,000	)
Add:
Acquisition Expenses		834,000			408,000
Adjusted FFO	$	(738,000	)	$	(746,000	)
Weighted average common shares — basic and diluted		929,727			71,478
Adjusted FFO per share — basic and diluted	$	(0.79	)	$	(10.44	)

Our Property Performance — Operating Loss

For the six months ended June 30, 2010 we had an operating loss of $1,377,000.

Description of Our Portfolio

We invest in and manage a portfolio of income-producing retail properties, primarily located in the Western United States. Although we have not done so, we may invest in and originate mortgage, mezzanine, bridge and other loans related to commercial real estate. As of June 30, 2010, we had invested in two properties, the Moreno Marketplace, a multi-tenant retail center located in Moreno Valley, California, or the Moreno property, and a multi-tenant retail center located in Waianae, Hawaii commonly known as Waianae Mall, or the Waianae property.

					Property			Date		Purchase Price
Property Name	Location	Interest			Type	Square Feet		Acquired		(In Thousands)		Debt
Moreno Marketplace	Moreno Valley, CA		100	%	Retail		94,574		11/19/2009	$	12,500	$	10,500,000	(1)
Waianae Mall	Honolulu, Hawaii		100	%	Retail		170,275		06/04/2010	$	25,688	$	20,741,000	(2)

(1) Financing related to the acquisition of the Moreno property consisted of (1) a loan from KeyBank National Association, or Key Bank, in the aggregate principal amount of $9,250,000, evidenced by a promissory note, or the Moreno property note, and (2) a loan in the aggregate principal amount of $1,250,000, evidenced by a convertible promissory note, or the convertible note. The convertible note was not converted during the period in which the conversion of the note to membership interests was permitted under the terms of the convertible note. The Moreno property note has an initial maturity date of November 19, 2011, which may be extended subject to certain conditions, and the convertible note has a maturity date of November 18, 2015. Interest on the outstanding principal balance of the Moreno property note accrues at

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a rate of 5.5% per annum through the Moreno property note’s initial maturity date, and will accrue at higher rates during each subsequent extension of the maturity date, if any. Interest on the outstanding principal balance of the convertible note accrues at a rate of 8.0% per annum.

(2) Financing related to the acquisition of the Waianae property consisted of the assumption of a loan from Bank of America, N.A., successor by merger to LaSalle Bank National Association, as trustee for Morgan Stanley Capital I, Inc., Commercial Pass-Through Certificates, Series 2006-IQ11, in the principal amount of approximately $20,741,000. The promissory note evidencing the Waianae property loan accrues interest at a rate of 5.3922% per annum.

The following table shows the occupancy rate and the average effective annual rental rate per square foot for each of our properties as of June 30, 2010:

								Weighted
	Occupancy			Weighted		Weighted		Average
	(Based on			Average		Average Effective		Remaining
	Rentable Square			Annualized		Annualized Rental		Lease Term
	Feet)			Rent		Rate per Square Feet		(Months)
Moreno Marketplace		74.33	%	$	424,000	$	13.60		161.7
Waianae Mall		92.26	%	$	139,000	$	16.47		54.2

The only tenant occupying 10% or more of the rentable square feet at the Moreno property is Stater Bros. supermarket, which, as of June 30, 2010, occupied 56% of the total rentable square footage, of the Moreno property and pays $730,000 annually pursuant to a lease that expires in November 2028. Stater Bros. has the option to renew the term of its lease for up to six successive five-year renewal terms after the expiration of the initial term. The other tenants of the Moreno property are Wells Fargo Bank, Jack in the Box, Subway, Fantastic Sam’s and Moreno Beach Dental, none of which occupies 10% or more of the rentable square feet at the Moreno property.

The Moreno property faces competition from other nearby retail properties in and around the submarket of Moreno Valley, California, including Bear Valley Shopping Center, Lakeside Plaza and Lakeside Terrace, which are multi-tenant retail centers located within approximately three miles of the Moreno property. Management currently has no renovation plans for the Moreno property and believes that the Moreno property is suitable for its intended purpose and adequately covered by insurance.

The tenants occupying 10% or more of the rentable square feet at the Waianae property are City Mill, an Oahu-based hardware store, which, as of June 30, 2010, occupied 24.05% of the total rentable square footage, of the Waianae property, and Long Drugs, a pharmacy owned by CVS Caremark, which as of June 30, 2010, occupied 13.85% of the total rentable square footage. On May 24, 2010 City Mill entered into a lease, effective July 1, 2010 and expiring in June 2015, pursuant to which City Mill will pay an annual rent of $209,000. Longs Drugs pays an annual rent of $541,000 pursuant to a lease that expires in January 2021. City Mill has one 5-year option to renew at fair market value. Long Drugs has two 5-year options to renew with increases in rent. Additionally, the State of Hawaii leases 6.35% of the rentable square feet pursuant to a lease that expires on June 15, 2017 and the U.S. Census Bureau leases approximately 6.6% of the rentable square feet pursuant to a lease that expires on December 16, 2010. Other tenants at the Waianae property include Burger King, Goodyear, Blockbuster Video, Fantastic Sams, Starbucks Coffee, Jamba Juice, Payless Shoe Source, Pizza Hut, Subway and Radio Shack, none of which occupies 10% or more of the rentable square feet at the Waianae property.

The Waianae property is the only major multi-tenant retail center on the Western side of the island of Oahu and as a result faces limited competition from other similar multi-tenant retail properties. City Mill, the Waianae property’s largest tenant, faces competition from other retail hardware stores located on the island of Oahu, including a Home Depot located approximately 11 miles to the Southeast of the Waianae property and a Lowes located approximately 12 miles to the east of the Waianae property. Management currently plans to spend approximately $2,000,000 over 3 years for capital improvements and believes that the Waianae property is suitable for its intended purpose and adequately covered by insurance.

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The following table reflects lease expirations and related information for our portfolio as of June 30, 2010.

					Percent of					Percent of
					Portfolio			Leased		Leased
					Annualized			Rentable		Rentable
	Number of		Annualized		Base Rent			Square Feet		Square Feet
Year of Expiration	Leases Expiring		Base Rent(1)		Expiring			Expiring		Expiring
2010		5	$	450,000		10.2	%		16,746		7.8	%
2011		3		231,000		5.2			9,647		4.5
2012		5		489,000		11.1			18,886		8.8
2013		3		86,000		2.0			3,181		1.5
2014		9		588,000		13.3			18,445		8.6
2015		7		485,000		11.0			49,988		23.2
2016		—		—		—			—		—
2017		4		223,000		5.1			15,742		7.3
2018		—		—		—			—		—
2019		1		72,000		1.6			1,447		0.6
2020		1		39,000		0.9			1,658		0.8
Thereafter		6		1,744,000		39.6			79,397		36.9
Total		44	$	4,407,000		100	%		215,137		100	%

(1) Annualized base rent represents annualized contractual base rental income, based on rent in effect on January 1 of the respective year, for each lease that expires during the respective year.

Our Recent Property Acquisitions

Since June 30, 2010, we have made the following two property acquisitions:

Northgate Plaza

On July 6, 2010, or the Northgate closing date, we acquired a fee simple interest in a multi-tenant retail center located in Tucson, Arizona commonly known as Northgate Plaza Shopping Center, or the Northgate property, through TNP SRT Northgate Plaza Tucson, LLC, or TNP SRT Northgate, an indirect wholly owned subsidiary of TNP Strategic Retail Operating Partnership, LP, our operating partnership. TNP Acquisitions, LLC, an affiliate of our sponsor, previously entered into a real estate purchase agreement and escrow instructions, or the Northgate purchase agreement, with Crestline Investments, LLC, an unaffiliated third party, or the Northgate seller, for the purchase of the Northgate property. On June 11, 2010, TNP Acquisitions, LLC assigned the Northgate purchase agreement to TNP SRT Northgate.

Financing and Fees

TNP SRT Northgate acquired the Northgate property for an aggregate purchase price of approximately $8,050,000, or approximately $77.78 per square foot, including the assumption of an existing mortgage loan from Thrivent Financial for Lutherans to the Northgate seller with an outstanding principal balance as of the Northgate closing date of approximately $4,398,000, which we refer to as the “Northgate loan.” TNP SRT Northgate financed the payment of the cash portion of the purchase price for the Northgate property with (1) proceeds from our initial public offering and (2) borrowings under our operating partnership’s revolving credit facility, or the credit agreement, with KeyBank National Association, or KeyBank. In connection with the acquisition of the Northgate property and the assumption of the Northgate loan by TNP SRT Northgate, our operating partnership and KeyBank agreed to certain amendments to the credit agreement, the terms of which are discussed below. The capitalization rate for the Northgate property on the Northgate closing date was approximately 9.52% based on in-place occupancy at the Northgate property of 79.40% as of the

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Northgate closing date. Capitalization rates represent a widely followed measure of initial yield on investment. The capitalization rate of a property is determined by dividing “net operating income” of the property by the purchase price of the property. An acquisition fee of approximately $201,000 was paid to our advisor in connection with the acquisition of the Northgate property.

Description of the Property

The Northgate property is situated on approximately 7.8 acres of fee-simple land, features approximately 103,492 rentable square feet and 446 parking spaces and is comprised of three buildings which provide space for 13 tenants. The Northgate property is located on Grant Road, the primary east/west arterial roadway in the city of Tucson, and is situated at a key intersection through which over 70,000 vehicles pass daily.

The Northgate property was approximately 79.40% leased as of July 6, 2010. The tenants occupying 10% or more of the rentable square feet at the Northgate property are Wal-Mart Neighborhood Market, or Wal-Mart, a grocery and pharmaceutical retailer, which occupies 42,685, or approximately 41.24%, of the rentable square feet at Northgate property, and Dollar Tree Stores, Inc., or Dollar Tree, a single-price point retailer, which occupies 12,308, or approximately 11.89%, of the rentable square feet at the Northgate property. Wal-Mart pays an annual rent of approximately $245,000 pursuant to a lease that expires in May 2025 and Dollar Tree pays an annual rent of approximately $106,218 pursuant to a lease that expires in January 2015. Wal-Mart has the option to renew its lease at the Northgate property for up to 15 additional terms of 5 years each. Other significant tenants at the Northgate property include Tuesday Morning, Rent-A-Center, Burger King, Radio Shack, Jackson Hewitt and Subway.

The following table sets forth additional information with respect to other significant tenants at the Northgate property:

			Approximate
	Rentable		Percentage of Rentable			Lease
Tenant	Square Feet		Square Feet			Expiration
Tuesday Morning		7,164		6.92	%		January 2011
Rent-A-Center		4,000		3.87	%		July 2013
Burger King		2,693		2.60	%		May 2011	(1)
Radio Shack		2,692		2.60	%		August 2015
Jackson Hewitt		2,600		2.51	%		April 2012
Subway		1,350		1.30	%		August 2014

(1) Burger King has the option to renew its lease for up to two additional terms of 5 years each.

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The following table reflects lease expirations and related information at the Northgate property over the next ten years:

										Percent of
					Percent of			Leased		Leased
	Number of				Annualized			Rentable		Rentable
	Leases		Annualized Base		Base Rent			Square Feet		Square Feet
Year of Expiration	Expiring		Rent(1)		Expiring			Expiring		Expiring
2010		1	$	19,049		2.53	%		1,494		1.45	%
2011		2		160,718		21.32			9,857		9.52
2012		2		69,360		9.20			4,800		4.64
2013		3		91,661		12.16			6,982		6.75
2014		1		25,650		3.40			1,350		1.30
2015		2		142,560		18.90			15,000		14.50
2016		—		—		—			—		—
2017		—		—		—			—		—
2018		—		—		—			—		—
2019		—		—		—			—		—
2020		—		—		—			—		—
Thereafter		1		245,000		32.49			42,685		41.24
Total		12	$	753,998		100	%		82,168		79.40	%

(1) Annualized base rent represents annualized contractual base rental income, based on rent in effect on January 1 of the respective year, for each lease that expires during the respective year.

On the Northgate closing date, TNP SRT Northgate and TNP Property Manager, LLC, or the property manager, an affiliate of our sponsor, entered into an agreement for the management of the Northgate property. Pursuant to the management agreement, TNP SRT Northgate will pay the property manager an annual management fee in an amount equal to 5.0% of the Northgate property’s gross revenues (as defined in the management agreement).

The Northgate property faces competition from other nearby multi-tenant retail properties in and around the submarket of Tucson, Arizona, including Fry’s Plaza, Campbell Plaza, Crossroads Festival and Mission Plaza, each of which is a multi-tenant retail center located within approximately three miles of the Northgate property.

Management currently has no plans for capital improvements at the Northgate property and believes that the Northgate property is suitable for its intended purpose and adequately covered by insurance. For the 2009 fiscal year, the Northgate property paid real estate taxes of approximately $112,286. We are currently in the process of determining the depreciable basis in the Northgate property.

San Jacinto Esplanade

On August 11, 2010, or the San Jacinto closing date, we acquired a fee simple interest in a multi-tenant retail center located in San Jacinto, California commonly known as the San Jacinto Esplanade Shopping Center, or the San Jacinto property, through TNP SRT San Jacinto, LLC, or TNP SRT San Jacinto, an indirect wholly owned subsidiary of our operating partnership. On July 9, 2010, TNP Acquisitions, LLC entered into an agreement of purchase and sale and escrow instructions, or the San Jacinto purchase agreement, with Quality Properties Asset Management Company, an unaffiliated third party seller for the purchase of the San Jacinto property. On August 9, 2010, TNP Acquisitions, LLC assigned the San Jacinto purchase agreement to TNP SRT San Jacinto.

Financing and Fees

TNP SRT San Jacinto acquired the San Jacinto property in a bank-owned sale following a foreclosure on the San Jacinto property by a lender for an aggregate purchase price of approximately $7,088,000, exclusive

9

of closing costs, or $125.51 per square foot, which represents an approximately 63% discount from the San Jacinto property’s development cost of approximately $19,000,000. TNP SRT San Jacinto financed the payment of the purchase price with (1) proceeds from our initial public offering and (2) approximately $6,600,000 in funds borrowed under the credit agreement with KeyBank. In connection with the acquisition of the San Jacinto property, our operating partnership and KeyBank agreed to certain amendments to the credit agreement, the terms of which are discussed below. The capitalization rate for the San Jacinto property on the San Jacinto closing date was approximately 5.89% based on in-place occupancy at the San Jacinto property of approximately 52% as of the San Jacinto closing date. Capitalization rates represent a widely followed measure of initial yield on investment. An acquisition fee of approximately $177,200 was paid to our advisor in connection with the acquisition of the San Jacinto property.

Description of the Property

The San Jacinto property is situated on an approximately 11.54 acre parcel of fee-simple land and comprises nine parcels totaling approximately 88,623 square feet of gross leasable area, including approximately 56,473 square feet of existing improvements, two small, single-tenant parcels of undeveloped area totaling approximately 8,150 square feet and one large parcel of undeveloped area suitable for single or multi-tenant purposes totaling approximately 24,000 square feet. All off-site and on-site improvements are currently in place and the undeveloped parcels are ready for immediate development.

The San Jacinto property was approximately 52% occupied as of the San Jacinto closing date, and is anchored by a Fresh & Easy Neighborhood Market, or Fresh & Easy, a supermarket chain with stores in the Western United States. Fresh & Easy is the U.S. division of TESCO, the fourth largest retailer in the world, according to Deloitte Touche Tohmatsu’s Global Powers of Retailing 2010 report. The only tenant occupying 10% or more of the rentable square feet at the San Jacinto property is Fresh & Easy, which occupies approximately 14,080, or approximately 24.9%, of the rentable square feet at the San Jacinto property. A Walgreens Drug Store is located on an adjoining property to the San Jacinto property, but is not a part of the San Jacinto property.

Fresh & Easy pays an annual rent of approximately $175,000 pursuant to a lease that expires in October 2027. Fresh & Easy has the option to renew its lease at the San Jacinto property for up to six additional terms of 5 years each. Other significant tenants at the San Jacinto property include Jack-In-The-Box, Starbucks Coffee and Fantastic Sams.

The following table sets forth additional information with respect to other significant tenants at the San Jacinto property:

			Approximate
			Percentage of
	Rentable		Rentable			Lease
Tenant	Square Feet		Square Feet			Expiration
Jack-In-The-Box		2,654		4.7	%		March 2027
Starbucks Coffee		1,700		3.0	%		June 2017
Fantastic Sams		1,200		2.1	%		March 2013

(1)	Jack-In-The-Box has the option to renew its lease at the San Jacinto property for up to two additional terms of 5 years each.
(2)	Starbucks has the option to renew its lease at the San Jacinto property for up to four additional terms of 5 years each.
(3)	Fantastic Sams has the option to renew its lease at the San Jacinto property for one additional term of 5 years.

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The following table reflects lease expirations and related information at the San Jacinto property over the next ten years:

					Percent of					Percent of
					Portfolio			Leased		Leased
					Annualized			Rentable		Rentable
	Number of		Annualized		Base Rent			Square Feet		Square Feet
Year of Expiration	Leases Expiring		Base Rent(1)		Expiring			Expiring		Expiring
2010		—	$	—		—	%		—		—	%
2011		—		—		—			—		—
2012		—		—		—			—		—
2013		1		43,008		6.98			1,200		2.12
2014		1		35,473		5.76			1,435		2.54
2015		1		18,000		2.92			1,200		2.12
2016		—		—		—			—		—
2017		3		134,533		21.83			4,937		8.74
2018		1		78,372		12.72			2,214		3.92
2019		—		—		—			—		—
2020		—		56,970		9.24			1,730		3.06
Thereafter		2		249,999		40.56			16,725		29.62
Total		10	$	616,357		100	%		29,441		52.13	%

(1) Annualized base rent represents annualized contractual base rental income, based on rent in effect on January 1 of the respective year, for each lease that expires during the respective year.

On the San Jacinto closing date, TNP SRT San Jacinto and the property manager entered into an agreement for the management of the San Jacinto property, or the management agreement. Pursuant to the management agreement, TNP SRT San Jacinto will pay the property manager an annual management fee equal to 5.0% of the San Jacinto property’s gross revenues (as defined in the management agreement).

The San Jacinto property is located at the southeast corner of Sanderson Avenue and Esplanade Avenue, and is adjacent to a number of planned residential housing developments. The San Jacinto property faces limited competition from similar multi-tenant retail properties in the San Jacinto, California area. Village West and Hemet Valley are the only other multi-tenant retail centers located within a two-mile radius of the San Jacinto property. Due to their location, both Village West and Hemet Valley tend to draw customers from a different portion of the San Jacinto trade area.

Management currently has no material plans for capital improvements at the San Jacinto property and believes that the San Jacinto property is suitable for its intended purpose and adequately covered by insurance. For the fiscal year ended June 30, 2010, the San Jacinto property paid real estate taxes of approximately $146,960. We are currently in the process of determining the depreciable basis in the San Jacinto property.

Amendments to Our Operating Partnership’s Revolving Line of Credit

Northgate Property Acquisition

As previously disclosed, on November 12, 2009, our operating partnership entered into the credit agreement with KeyBank, as administrative agent for itself and the other lenders named in the credit agreement, to establish a revolving credit facility with a maximum aggregate borrowing capacity of up to $15,000,000. On the Northgate closing date, in connection with the acquisition of the Northgate property and the assumption of the Northgate loan by TNP SRT Northgate, our operating partnership, us, KeyBank, our sponsor, Anthony W. Thompson (our chairman and chief executive officer), and TNP SRT Northgate Plaza Tucson Holdings, LLC, a wholly owned subsidiary of our operating partnership and the direct parent company of TNP SRT Northgate, or TNP SRT Holdings, entered into a third omnibus amendment and reaffirmation of

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the loan documents relating to the revolving credit facility, or the third credit agreement amendment. The third credit agreement amendment provides for an advance to our operating partnership under the credit agreement in the original principal amount of $1,900,000, which we refer to as the “property loan,” which property loan was used by TNP SRT Northgate to fund a portion of the costs and expenses related to the acquisition of the Northgate property. The property loan, together with all interest, fees and expenses related thereto, was paid in full. In connection with the third credit agreement amendment, TNP SRT Holdings entered into a joinder agreement relating to the pledge and security agreement entered into by our operating partnership and KeyBank in connection with the credit agreement, which, as modified by the joinder agreement, we refer to as the “KeyBank pledge agreement.” Pursuant to the KeyBank pledge agreement, and subject to the terms of the third credit agreement amendment described below, our operating partnership and TNP SRT Holdings pledged a 49% membership interest in TNP SRT Holdings and TNP SRT Northgate, respectively. The third credit agreement amendment provides that, upon the repayment in full of the Northgate loan by TNP SRT Northgate, (1) all of the membership interest in TNP SRT Holdings held by our operating partnership will automatically and without further action on the part of any party be included in the collateral previously pledged to KeyBank pursuant to the KeyBank pledge agreement and (2) all of the membership interest in TNP SRT Northgate held by TNP SRT Holdings will automatically and without further action on the part of any party be included in the collateral previously pledged to KeyBank pursuant to the KeyBank pledge agreement.

San Jacinto Property Acquisition

On the San Jacinto closing date, in connection with the acquisition of the San Jacinto property, our operating partnership, us, our sponsor, Mr. Anthony W. Thompson, TNP SRT Holdings, TNP SRT San Jacinto and KeyBank entered into a fourth omnibus amendment and reaffirmation of the loan documents relating to the credit agreement, or the fourth credit agreement amendment. The fourth credit agreement amendment provides for the San Jacinto loan, which was used by TNP SRT San Jacinto to fund a portion of the costs and expenses related to the acquisition of the San Jacinto property. In connection with the fourth credit agreement amendment, TNP SRT San Jacinto, jointly and severally with our operating partnership, assumed and agreed to perform and observe all of the covenants, agreements, obligations and duties of the Borrower (as defined in the credit agreement) under the credit agreement.

Pursuant to the fourth credit agreement amendment, until such time as the outstanding principal balance of the San Jacinto loan is equal to the lesser of (1) 50% of the “as is” appraised value of the San Jacinto property as shown on the appraisal described in the fourth credit agreement amendment, (2) 50% of the total acquisition costs of the San Jacinto property, or (3) $3,500,000, which we refer to as the “San Jacinto minimum balance,” all net proceeds derived from any issuance of equity securities by us or our operating partnership, any sale or refinancing of any assets of our operating partnership and any casualty or condemnation with respect to the San Jacinto property will be applied to the amounts outstanding under the San Jacinto loan. Thereafter, at such time as the San Jacinto minimum balance has been achieved, any net proceeds derived from any issuance of equity securities by us or our operating partnership, any sale or refinancing of any assets of our operating partnership and any casualty or condemnation with respect to the San Jacinto property will be applied to the amounts outstanding under the credit agreement in the order and manner set forth in the credit agreement, provided that any net proceeds from the sale of the San Jacinto property or any other property owned by our operating partnership shall first be applied to the amounts outstanding under the San Jacinto loan.

The fourth credit agreement amendment also provides that, with respect to any lease for all or any portion of the San Jacinto property in excess of 2,500 square feet which is not on a month-to-month basis, which we refer to as a “major lease,” KeyBank’s prior written approval will be required with respect to (1) the terms of such major lease, including the prospective tenant, (2) each guarantor of any prospective tenant’s obligations under such major lease, (3) any proposed subletting or assignment of such major lease, (4) any amendment or modification of the rent, term or renewal options of such major lease and (5) any termination, expiration, cancellation or surrender of such major lease.

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Information Regarding our Indebtedness

As of June 30, 2010, our leverage ratio, or the ratio of total debt to total purchase price plus cash and cash equivalents, was approximately 77%. As of June 30, 2010, our debt-to-net assets ratio, defined as total debt as a percentage of our total assets (other than intangibles) less total liabilities, was approximately 940%. As of June 30, 2010, we had total outstanding indebtedness of approximately $31,143,000.

Information Regarding Our Distributions

On August 13, 2009, our board of directors approved a monthly cash distribution of $0.05625 per share of common stock. The monthly distribution was contingent upon the closing of our first asset acquisition and represented an annualized distribution of $0.675 per share. On May 11, 2010, our board of directors approved an increase in our monthly cash distribution to $0.05833 per share of common stock contingent upon the closing of our acquisition of the Waianae property, which occurred on June 4, 2010. That monthly distribution amount represents an annualized distribution of $0.70 per share.

Distributions paid during the period from December 2009 (the date we first paid distributions) through June 30, 2010 are presented in the following table:

	Distributions Paid(1)
Period	Cash		% of Total			Reinvested		% of Total			Total
December 2009	$	6,000		46.2	%	$	7,000		53.8	%	$	13,000	100	%
1st Quarter 2010		73,000		70.2			31,000		29.8			104,000	100
2nd Quarter 2010		116,000		66.3			59,000		33.7			175,000	100
	$	195,000		66.8	%	$	97,000		33.2	%	$	292,000	100	%

(1) Of the $292,000 of distributions noted above, $97,000, or 33.2%, was paid through the distribution reinvestment plan in the form of additional shares issued.

Sources of distributions paid during the period from December 2009 (the date we first paid distributions) through June 30, 2010 are presented in the following table:

	Source of Distributions
	Cash
	Distributions								Cash
	from				Funds from				Flow from				Offering
Period	Investments				Prior Quarters				Operations				Proceeds				Total
December 2009	$	—	—	%	$	—	—	%	$	—	—	%	$	6,000	100	%	$	6,000	100	%
1st Quarter 2010		—	—			—	—			—	—			73,000	100			73,000	100
2nd Quarter 2010		—	—			—	—			—	—			116,000	100			116,000	100
	$	—	—	%	$	—	—	%	$	—	—	%	$	195,000	100	%	$	195,000	100	%

Of the $195,000 in cash distributions paid during the period from December 2009 (the date we first paid distributions) through June 30, 2010, 100% was paid using offering proceeds.

Information Regarding Redemption of Shares

As of June 30, 2010, we had not received any requests to redeem shares of common stock.

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Compensation Paid to Our Advisor and its Affiliates

The following data supplements, and should be read in conjunction with, the section of our prospectus captioned “Management Compensation.”

The following table summarizes the cumulative compensation, fees and reimbursements we paid to our advisor, TNP Strategic Retail Advisor, LLC, and its affiliates, including the dealer manager, during the six months ended June 30, 2010 and the year ended December 31, 2009.

	Six Months Ended		Year Ended
Type of Fee or Reimbursement	June 30, 2010		December 31, 2009
Offering Stage:
Selling commissions	$	552,000	$	262,000
Dealer manager fees	$	243,000	$	114,000
Other organization and offering expenses	$	274,000	$	154,000
Operational Stage:
Acquisition fee	$	752,000	$	202,000
Origination fee		—		—
Asset management fee	$	—		—
Property management and leasing fee	$	36,000	$	13,000
Operating expenses	$	—	$	348,000
Acquisition expenses	$	—	$	—
Disposition Stage:
Subordinated participation in net sale proceeds	$	—	$	—
Subordinated listing fee	$	—	$	—
Subordinated fee upon termination	$	—	$	—

As of June 30, 2010 and December 31, 2009, fees and reimbursements accrued but not yet paid were approximately $1,628,000 and $1,439,000, respectively, representing organization and offering costs, deferred asset management fees and property management fees due to affiliates.

Prior Performance Tables

Table II to the prior performance tables of the TNP prior programs contained in our prospectus is hereby superseded and replaced in its entirety by Table II in Appendix A to this Supplement No. 7.

Experts

The consolidated financial statements of TNP Strategic Retail Trust, Inc. and subsidiaries as of December 31, 2009 and 2008, and for the year ended December 31, 2009 and the period from September 18, 2008 (date of inception) through December 31, 2008, and the financial statement schedule III as of December 31, 2009, have been incorporated by reference herein in reliance upon the report of KPMG LLP, independent registered public accounting firm, dated March 31, 2010, except as to Note 1 and Note 7, which are as of May 17, 2010, incorporated by reference herein and upon the authority of said firm as experts in accounting and auditing.

The statement of revenues and certain expenses of Moreno Marketplace for the period from November 10, 2008 (date of commencement of operations) to September 30, 2009, has been incorporated by reference in the prospectus and this prospectus supplement and has been audited by KMJ Corbin & Company LLP, independent auditor, as stated in its report, which is also incorporated herein by reference (which report on the statement of revenues and certain expenses expresses an unqualified opinion and includes an explanatory paragraph referring to the purpose of the statement). Such statement of revenues and certain expenses has been

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so included in reliance upon the report of such firm given upon its authority as experts in accounting and auditing.

The statement of revenues and certain expenses of Waianae Mall for the year ended December 31, 2009, has been incorporated by reference in the prospectus and this prospectus supplement and has been audited by McGladrey & Pullen, LLP, independent auditor, as stated in its report, which is also incorporated herein by reference (which report on the statement of revenues and certain expenses expresses an unqualified opinion and includes an explanatory paragraph referring to the purpose of the statement). Such statement of revenues and certain expenses has been so included in reliance upon the report of such firm given upon its authority as experts in accounting and auditing.

Incorporation of Certain Documents by Reference

We have filed a registration statement on Form S-11 with the SEC with respect to the shares of our common stock to be issued in the offering. This prospectus is a part of that registration statement and, as allowed by SEC rules, does not include all of the information you can find in the registration statement or the exhibits to the registration statement. For additional information relating to us, we refer you to the registration statement and the exhibits to the registration statement. Statements contained in this prospectus as to the contents of any contract or document referred to are necessarily summaries of such contract or document and in each instance, if the contract or document is filed as an exhibit to the registration statement, we refer you to the copy of the contract or document filed as an exhibit to the registration statement.

We file annual, quarterly and special reports, proxy statements and other information with the SEC. We furnish our stockholders by mail (or, where permitted, by electronic delivery and notification) with annual reports containing consolidated financial statements certified by an independent registered public accounting firm. The registration statement is, and all of these filings with the SEC are, available to the public over the Internet at the SEC’s website at http://www.sec.gov. You may also read and copy any filed document at the SEC’s public reference room in Washington, D.C. at 100 F. Street, N.E., Room 1580, Washington D.C. 20549. Please call the SEC at (800) SEC-0330 for further information about the public reference room.

We have elected to “incorporate by reference” certain information into this prospectus. By incorporating by reference, we are disclosing important information to you by referring you to documents we have filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus, except for information incorporated by reference that is superseded by information contained in this prospectus. You can access documents that are incorporated by reference into this prospectus at our website at www.tnpsrt.com. There is additional information about us and our advisor and its affiliates at the website, but unless specifically incorporated by reference herein as described in the paragraphs below, the contents of that site are not incorporated by reference in or otherwise a part of this prospectus. The following documents filed with the SEC are incorporated by reference in this prospectus, except for any document or portion thereof deemed to be “furnished” and not filed in accordance with SEC rules:

•  Annual Report on Form 10-K/A filed with the SEC on May 17, 2010;

•  Annual Report on Form 10-K filed with the SEC on March 31, 2010;

•  Quarterly Report filed on Form 10-Q with the SEC on August 16, 2010;

•  Quarterly Report filed on Form 10-Q with the SEC on May 17, 2010;

•  Current Report on Form 8-K/A filed with the SEC on August 20, 2010;

•  Current Report on Form 8-K filed with the SEC on August 13, 2010;

•  Current Report on Form 8-K filed with the SEC on July 28, 2010;

•  Current Report on Form 8-K filed with the SEC on July 12, 2010;

•  Current Report on Form 8-K filed with the SEC on June 24, 2010;

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•  Current Report on Form 8-K filed with the SEC on June 15, 2010;

•  Current Report on Form 8-K filed with the SEC on June 8, 2010;

•  Current Report on Form 8-K filed with the SEC on May 21, 2010;

•  Current Report on Form 8-K filed with the SEC on April 29, 2010;

•  Current Report on Form 8-K filed with the SEC on April 19, 2010;

•  Current Report on Form 8-K filed with the SEC on February 18, 2010; and

•  Current Report on Form 8-K/A filed with the SEC on February 3, 2010.

We will provide to each person to whom this prospectus is delivered, upon request, a copy of any or all of the information that we have incorporated by reference into this prospectus but not delivered with this prospectus. To receive a free copy of any of the documents incorporated by reference in this prospectus, other than exhibits, unless they are specifically incorporated by reference in those documents, call or write us at 1900 Main Street, Suite 700, Irvine, California 92614 or at (949) 833-8252. The information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.

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Appendix A

TABLE II

COMPENSATION TO SPONSOR

(UNAUDITED)

Table II provides a summary of the amount and type of compensation paid to Thompson National Properties and affiliates related to TNP prior programs. The information is presented on an aggregate basis as of December 31, 2009.

	Bruin Fund, L.P.
	(Oakwood &		TNP Vulture		2008 Participating		TNP 6700 Santa		Thompson/Morgan
	One Lee Park)		Fund VIII, LLC		Notes Program, LLC		Monica Blvd., DST		Baton Rouge I, DST		Total
Date Offering Commenced		5/9/2008		6/23/2008		12/9/2008		4/2/2009		6/11/2009
Dollar Amount Raised	$	3,950,000	$	9,932,013	$	19,350,374	$	9,763,931	$	13,268,530	$	56,264,848
Amount Paid to Sponsor from Proceeds of Offering
Underwriting Fees	$	—	$	—	$	—	$	—	$	—	$	—
Acquisition Fees
Real Estate Commissions	$	—	$	—	$	—	$	—	$	—	$	—
Acquisition Fees	$	250,000	$	110,250	$	387,687	$	—	$	—	$	747,937
Other—Organizational and Offering	$	—	$	43,526	$	250,000	$	213,679	$	—	$	507,205
Total Amount Paid to Sponsor	$	250,000	$	153,776	$	637,687	$	213,679	$	—	$	1,255,142
Dollar Amount of Cash Generated from Operations Before Deducting Payments to Sponsor	$	1,957,290	$	1,235,123	$	837,853	$	3,390,838	$	—	$	7,421,104
Amount Paid to Sponsor from Operations:
Property Management Fees	$	66,811	$	59,511	$	35,749	$	41,174	$	—	$	203,245
Asset Management Fees	$	34,333	$	205,353	$	114,704	$	47,906	$	—	$	402,296
Reimbursements	$	—	$	—	$	—	$	—	$	—	$	—
Leasing Commissions	$	—	$	—	$	—	$	—	$	—	$	—
Other	$	—	$	—	$	—	$	—	$	—	$	—
Dollar Amount of Property Sales and Refinancing Before Deduction Payments to Sponsor:
Cash	$	—	$	—	$	—	$	—	$	—	$	—
Notes	$	—	$	—	$	—	$	—	$	—	$	—
Amount Paid to Sponsor from Property Sales and Refinancing:
Real Estate Commissions	$	—	$	—	$	—	$	—	$	—	$	—
Incentive Fees	$	—	$	—	$	—	$	—	$	—	$	—
Other	$	—	$	—	$	—	$	—	$	—	$	—

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 31.   Other Expenses of Issuance and Distribution.

The following table sets forth the expenses (other than selling commissions) we will incur in connection with the issuance and distribution of securities to be registered pursuant to this registration statement. All amounts other than the SEC registration fee and FINRA filing for have been estimated.

	Amount
SEC registration fee	$	43,000
FINRA filing fee	$	76,000
Accounting fees and expenses	$	2,000,000
Legal fees and expenses	$	2,000,000
Marketing, sales and advertising expenses	$	3,307,000
Blue Sky fees and expenses	$	120,000
Printing and postage expenses	$	4,468,000
Technology Expenses	$	140,000
Investor relations expenses and administration fees	$	346,000
Bona fide due diligence expense reimbursements	$	5,000,000
Total	$	17,500,000

Item 32.   Sales to Special Parties.

Not Applicable.

Item 33.   Recent Sales of Unregistered Securities.

On October 16, 2008 we issued 22,222 shares of common stock at $9.00 per share to Thompson National Properties, LLC, our sponsor, in exchange for $200,000 in cash. We relied on Section 4(2) of the Securities Act for the exemption from the registration requirements of the Securities Act. Thompson National Properties, LLC, by virtue of its affiliation with us, had access to information concerning our proposed operations and the terms and conditions of its investment.

On October 23, 2008 our operating partnership issued 100 common units at $10.00 per unit to our advisor for $1,000 and issued 100 special units at $10.00 per unit to TNP Strategic Retail OP Holdings, LLC for $1,000. Our operating partnership relied on Section 4(2) of the Securities Act for the exemption from the registration requirements of these issuances. We, our advisor and TNP Strategic Retail OP Holdings, LLC by virtue of their affiliation with us, had access to information concerning our operating partnership’s proposed operations and the terms and conditions of its investment.

On November 12, 2009, we granted 5,000 shares of restricted stock to each of our three independent directors pursuant to our amended and restated independent directors compensation plan in a private transaction exempt from registration pursuant to Section 4(2) of the Securities Act. One-third of the independent directors’ shares of restricted stock become non-forfeitable on the date of grant and one-third will become non-forfeitable on each of the first two anniversaries of the date of grant.

On July 22, 2010, we granted 2,500 shares of restricted stock to each of our independent directors pursuant to our amended and restated independent directors compensation plan in a transaction exempt from registration pursuant to Section 4(2) of the Securities Act. One-third of the independent directors’ shares of restricted stock become non-forfeitable on the date of grant and one third will become non-forfeitable on each of the first two anniversaries of the date of grant.

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Item 34.   Indemnification of Directors and Officers.

Subject to certain limitations, our charter limits the personal liability of our directors and officers to us and our stockholders for monetary damages. Maryland law permits a corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment and which is material to the cause of action. Pursuant to Maryland corporate law and our charter, we are also required, subject to certain limitations, to indemnify, and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, a present or former director or officer, our advisor, or any affiliate of our advisor and may indemnify, and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, a present or former employee or agent, which we refer to as indemnitees, 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 our behalf while a director, officer, advisor, affiliate, employee or agent. However, we will not indemnify a director, the advisor or an affiliate of the advisor for any liability or loss suffered by such indemnitee or hold such indemnitee harmless for any liability or loss suffered by us if: (1) the loss or liability was the result of negligence or misconduct if the indemnitee is an affiliated director, the advisor or an affiliate of the advisor, or if the indemnitee is an independent director, the loss or liability was the result of gross negligence or willful misconduct or (2) the indemnitee has not determined, in good faith, that the course of conduct that caused the loss or liability was in our best interests; and we will not indemnify any indemnitee if: (1) 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, (2) the indemnitee actually received an improper personal benefit in money, property, or services, (3) in the case of any criminal proceeding, the indemnitee had reasonable cause to believe that the act or omission was unlawful, or (4) in a proceeding by or in the right of the company, the indemnitee shall have been adjudged to be liable to us. In addition, we will not provide indemnification to a director, the advisor or an affiliate of the advisor for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (1) there has been a successful adjudication on the merits of each count involving alleged securities law violation as to the particular indemnitee; (2) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee or (3) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request of indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which our securities were offered or sold as to indemnification for violation of securities laws.

Pursuant to our charter, we may pay or reimburse reasonable expenses incurred by a director, the advisor or an affiliate of the advisor in advance of final disposition of a proceeding only if the following are satisfied: (1) the indemnitee was made a party to the proceeding by reason of the performance of duties or services on our behalf, (2) the indemnitee provides us with written affirmation of his good faith belief that he has met the standard of conduct necessary for indemnification by us as authorized by the charter, (3) the indemnitee provides us with a written agreement to repay the amount paid or reimbursed by us, 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 (4) the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his capacity as such, a court of competent jurisdiction approves such advancement.

Any indemnification may be paid only out of our net assets, and no portion may be recoverable from the stockholders.

We have entered into indemnification agreements with each of our executive officers and directors. The indemnification agreements require, among other things, that we indemnify our executive officers and directors and advance to the executive officers and directors all related expenses, subject to reimbursement if it is subsequently determined that indemnification is not permitted. In accordance with these agreements, we must indemnify and advance all expenses incurred by

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executive officers and directors seeking to enforce their rights under the indemnification agreements. We also cover officers and directors under our directors’ and officers’ liability insurance.

Item 35.   Treatment of Proceeds from Securities Being Registered.

Not applicable.

Item 36.   Financial Statements and Exhibits.

(a) Index to Financial Statements

The following financial statements and schedule of the Registrant are incorporated into this registration statement by reference.

•  The consolidated financial statements of TNP Strategic Retail Trust, Inc. and subsidiaries as of December 31, 2009 and 2008, and for the year ended December 31, 2009 and the period from September 18, 2008 (date of inception) to December 31, 2008, and the financial statement schedule III as of December 31, 2009, included in the Registrant’s Annual Report on Form 10-K/A for the year ended December 31, 2009, filed with the SEC on May 17, 2010;

•  The consolidated unaudited financial statements of TNP Strategic Retail Trust, Inc. and subsidiaries included in the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2010, filed with the SEC on May 17, 2010;

•  The condensed consolidated unaudited financial statements of TNP Strategic Retail Trust, Inc. and subsidiaries included in the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, filed with the SEC on August 16, 2010;

•  The financial statements for Moreno Marketplace and the related pro forma financial statements of the Registrant included in the Registrant’s Current Report on Form 8-K/A, filed with the SEC on February 3, 2010; and

•  The financial statements for the Waianae Mall and the related pro forma financial statements of the Registrant included in the Registrant’s Current Report on Form 8-K/A, filed with the SEC on August 20, 2010.

(b) Exhibits:

1	.1	Dealer Manager Agreement, dated July 10, 2009 (incorporated by reference to Exhibit 1.1 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11, filed July 10, 2009, Commission File No. 333-154975 (“Pre-Effective Amendment No. 5”))
1	.2	Form of Participating Dealer Agreement (included as Exhibit A to Exhibit 1.1)
3	.1	Articles of Amendment and Restatement of TNP Strategic Retail Trust, Inc. (incorporated by reference to Exhibit 3.1 to Pre-Effective Amendment No. 5)
3	.2	Bylaws of TNP Strategic Retail Trust, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11, filed November 4, 2008, Commission File No. 333-154975)
4	.1	Form of Subscription Agreement (included as Appendix C to the Prospectus)
4	.2	Distribution Reinvestment Plan (included as Appendix D to the Prospectus)
5	.1	Opinion of Venable LLP as to the legality of the securities being registered (incorporated by reference to Exhibit 5.1 to Pre-Effective Amendment No. 5)
8	.1	Opinion of Alston & Bird LLP regarding certain federal income tax considerations (incorporated by reference to Exhibit 8.1 to Pre-Effective Amendment No. 5)
10	.1	Escrow Agreement, dated July 9, 2009, by and among TNP Strategic Retail Trust, Inc., TNP Securities, LLC, and CommerceWest Bank, N.A. (incorporated by reference to Exhibit 10.1 to Pre-Effective Amendment No. 5)

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10	.2	Amended and Restated Advisory Agreement, dated August 7, 2010, by and among TNP Strategic Retail Trust, Inc., TNP Strategic Retail Operating Partnership, LP and TNP Strategic Retail Advisor, LLC
10	.3	Limited Partnership Agreement of TNP Strategic Retail Operating Partnership, LP, dated December 31, 2008, by and among TNP Strategic Retail Trust, Inc., TNP Strategic Retail Advisor, LLC and TNP Strategic Retail OP Holdings, LLC (incorporated by reference to Exhibit 10.3 to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11, filed May 11, 2009, Commission File No. 333-154975)
10	.4	TNP Strategic Retail Trust, Inc. 2009 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to Pre-Effective Amendment No. 5)
10	.5	TNP Strategic Retail Trust, Inc. Amended and Restated Independent Directors Compensation Plan (incorporated by reference to Exhibit 10.5 to Pre-Effective Amendment No. 5)
10	.6	Purchase and Sale Agreement Regarding Moreno Marketplace Shopping Center, dated September 22, 2009 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on November 24, 2009 (the “November 24 Form 8-K”))
10	.7	Assignment of Purchase and Sale Agreement, dated October 21, 2009 (incorporated by reference to Exhibit 10.2 to the November 24 Form 8-K)
10	.8	Assignment of Purchase and Sale Agreement, dated November 19, 2009 (incorporated by reference to Exhibit 10.3 to the November 24 Form 8-K)
10	.9	Promissory Note of TNP SRT Moreno Marketplace, LLC, dated November 12, 2009, in favor of KeyBank National Association (incorporated by reference to Exhibit 10.9 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-11, filed February 19, 2010, Commission File No. 333-154975 (“Post-Effective Amendment No. 1”))
10	.10	Subordinated Convertible Promissory Note of TNP SRT Moreno Marketplace, LLC, dated November 18, 2009, in favor of Moreno Retail Partners, LLC (incorporated by reference to Exhibit 10.10 to Post-Effective Amendment No. 1)
10	.11	Guaranty, dated November 12, 2009, by and between TNP Strategic Retail Trust, Inc. and Anthony W. Thompson, for the benefit of KeyBank National Association (incorporated by reference to Exhibit 10.11 to Post-Effective Amendment No. 1)
10	.12	Environmental Indemnity Agreement, dated November 12, 2009, by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic Retail Trust, Inc., Moreno Retail Partners, LLC, John Skeffington, William Skeffington and KeyBank National Association (incorporated by reference to Exhibit 10.12 to Post-Effective Amendment No. 1)
10	.13	Reimbursement and Fee Agreement, dated November 20, 2009, by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic Retail Trust, Inc. and Anthony W. Thompson (incorporated by reference to Exhibit 10.13 to Post-Effective Amendment No. 1)
10	.14	Revolving Credit Agreement, dated November 12, 2009, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc. and KeyBank National Association (incorporated by reference to Exhibit 10.14 to Post-Effective Amendment No. 1)
10	.15	Revolving Credit Note of TNP Strategic Retail Operating Partnership, LP, dated November 12, 2009, in favor of KeyBank National Association (incorporated by reference to Exhibit 10.15 to Post-Effective Amendment No. 1)
10	.16	Guaranty Agreement, dated November 12, 2009, by and among TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC and Anthony W. Thompson, for the benefit of KeyBank National Association (incorporated by reference to Exhibit 10.16 to Post-Effective Amendment No. 1)
10	.17	Pledge and Security Agreement, dated November 12, 2009, by and between TNP Strategic Retail Trust, Inc. and KeyBank National Association (incorporated by reference to Exhibit 10.17 to Post-Effective Amendment No. 1)
10	.18	Pledge and Security Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and KeyBank National Association (incorporated by reference to Exhibit 10.18 to Post-Effective Amendment No. 1)

II-4

10	.19	Reimbursement Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and Anthony W. Thompson (incorporated by reference to Exhibit 10.19 to Post-Effective Amendment No. 1)
10	.20	Reimbursement and Fee Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and Thompson National Properties, LLC (incorporated by reference to Exhibit 10.20 to Post-Effective Amendment No. 1)
10	.21	Form of Restricted Stock Award Certificate (incorporated by reference to Exhibit 10.20 to Post-Effective Amendment No. 1)
10	.22	Agreement for Purchase and Sale and Joint Escrow Instructions, dated July 13, 2009, by and between West Oahu Mall Associates, LLC and TNP Acquisitions, LLC (incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K for the year ended December 31, 2009, filed on March 31, 2010 (the “2009 Form 10-K”))
10	.23	Assignment and Assumption Agreement, dated December 14, 2009, by and between TNP Acquisitions, LLC and TNP SRT Waianae Mall, LLC (incorporated by reference to Exhibit 10.23 to the 2009 Form 10-K)
10	.24	First Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated July 22, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.24 to the 2009 Form 10-K)
10	.25	Second Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 13, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.25 to the 2009 Form 10-K)
10	.26	Third Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 31, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.26 to the 2009 Form 10-K)
10	.27	Tenth Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated March 15, 2010, by and among West Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.27 to the 2009 Form 10-K)
10	.28	Twelfth Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated April 27, 2010, by and among West Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.28 to Post-Effective Amendment No. 3 to the Registration Statement on Form S-11, filed June 3, 2010, Commission File No. 333-154975))
10	.29	Thirteenth Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated June 2, 2010, by and among West Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.3 to the Form 10-Q for the period ended June 30, 2010, filed August 16, 2010 (the “June 30 Form 10-Q”))
10	.30	Property and Asset Management Agreement, dated June 4, 2010, by and between TNP SRT Waianae Mall, LLC and TNP Property Manager, LLC (incorporated by reference to Exhibit 10.4 to the June 30 Form 10-Q)
10	.31	Loan Agreement, dated September 19, 2005, by and between West Oahu Mall Associates, LLC and IXIS Real Estate Capital, Inc. (incorporated by reference to Exhibit 10.5 to the June 30 Form 10-Q)
10	.32	Note and Mortgage Assumption Agreement, dated June 4, 2010, by and among Bank of America, N.A., West Oahu Mall Associates, LLC and TNP SRT Waianae Mall, LLC (incorporated by reference to Exhibit 10.6 to the June 30 Form 10-Q)
10	.33	Guaranty of Recourse Obligations, dated as of September 19, 2005, by and between Joseph Daneshgar and IXIS Real Estate Capital, Inc. (incorporated by reference to Exhibit 10.7 to the June 30 Form 10-Q)
10	.34	Joinder By and Agreement of New Indemnitor, dated June 4, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., TNP Property Manager, LLC and Anthony W. Thompson (incorporated by reference to Exhibit 10.8 to the June 30 Form 10-Q)

II-5

10	.35	Second Omnibus Amendment and Reaffirmation of Loan Documents, dated June 4, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC, Anthony W. Thompson and KeyBank National Association (incorporated by reference to Exhibit 10.9 to the June 30 Form 10-Q)
10	.36	Reimbursement and Fee Agreement, dated June 9, 2010, by and between TNP Strategic Retail Trust, Inc., TNP SRT Waianae Mall, LLC and Anthony W. Thompson (incorporated by reference to Exhibit 10.10 to the June 30 Form 10-Q)
10	.37	Real Estate Purchase Agreement and Escrow Instructions, dated April 6, 2010, by and between TNP Acquisitions, LLC and Crestline Investments, LLC (incorporated by reference to Exhibit 10.11 to the June 30 Form 10-Q)
10	.38	First Amendment to Real Estate Purchase Agreement and Escrow Instructions, dated May 5, 2010, by and between Crestline Investments, LLC and TNP Acquisitions, LLC (incorporated by reference to Exhibit 10.12 to the June 30 Form 10-Q)
10	.39	Second Amendment to Real Estate Purchase Agreement and Escrow Instruction, dated May 21, 2010, by and between Crestline Investments, LLC and TNP Acquisitions, LLC (incorporated by reference to Exhibit 10.13 to the June 30 Form 10-Q)
10	.40	Assignment and Assumption of Real Estate Purchase Agreement and Escrow Instructions, dated June 11, 2010, by and between TNP Acquisitions, LLC and TNP SRT Northgate Plaza Tucson, LLC (incorporated by reference to Exhibit 10.14 to the June 30 Form 10-Q)
10	.41	Assumption and Second Modification Agreement, dated July 6, 2010, by and among Crestline Investments, L.L.C., TNP SRT Northgate Plaza Tucson Holdings, LLC and Thrivent Financial For Lutherans
10	.42	Promissory Note, dated July 10, 2002, by and between Crestline Investments, L.L.C. and Thrivent Financial For Lutherans
10	.43	Guaranty, dated July 6, 2010, by and between TNP Strategic Retail Trust, Inc. and Thrivent Financial For Lutherans
10	.44	Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated July 10, 2002, by and among Crestline Investments, L.L.C., Fidelity National Title Agency, Inc. and Thrivent Financial For Lutherans
10	.45	Environmental Indemnity Agreement, dated July 6, 2010, by and among TNP SRT Northgate Plaza Tucson Holdings, LLC, TNP Strategic Retail Trust, Inc. and Thrivent Financial For Lutherans
10	.46	Third Omnibus Amendment and Reaffirmation of Loan Documents, dated July 6, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC, Anthony W. Thompson, TNP SRT Northgate Plaza Tucson Holdings, LLC and KeyBank National Association
10	.47	Agreement of Purchase and Sale and Joint Escrow Instructions, dated July 9, 2010, by and between Quality Properties Asset Management Company and TNP Acquisitions, LLC
10	.48	Conditional Reinstatement and First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 4, 2010, by and between Quality Properties Asset Management Company and TNP Acquisitions, LLC
10	.49	Assignment and Assumption of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 9, 2010, by and between TNP Acquisitions, LLC and TNP SRT San Jacinto, LLC
10	.50	Property Management Agreement, dated August 11, 2010, by and between TNP SRT San Jacinto, LLC and TNP Property Manager, LLC
10	.51	Fourth Omnibus Amendment and Reaffirmation of Loan Documents, dated August 11, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC, Anthony W. Thompson, TNP SRT Northgate Plaza Tucson Holdings, LLC and KeyBank National Association
10	.52	Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated August 11, 2010, by and among TNP SRT San Jacinto, LLC, First American Title Insurance Company and KeyBank National Association

II-6

10	.53	Environmental and Hazardous Substances Indemnity Agreement, dated August 11, 2010, by and among TNP SRT San Jacinto, LLC, TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc. and KeyBank National Association
21		Subsidiaries of the Company
23	.1	Consent of KPMG LLP
**23	.2	Consent of Venable LLP (contained in its opinion filed as Exhibit 5.1)
**23	.3	Consent of Alston & Bird LLP (contained in its opinion filed as Exhibit 8.1)
23	.4	Consent of KMJ Corbin & Company LLP
23	.5	Consent of McGladrey & Pullen, LLP
**24		Power of Attorney (included as part of signature page)

** Previously filed.

Item 37.   Undertakings

The registrant undertakes:

(1) to file during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) to include any prospectuses required by Section 10(a)(3) of the Securities Act;

(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and

(iii) to include any material information with respect to the plan of distribution not previously disclosed on the registration statement or any material change to such information in the registration statement;

(2) that, for the purpose of determining any liability under the Securities Act each such post-effective amendment may be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof;

(3) each prospectus filed pursuant to Rule 424(b) as part of this registration statement shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use;

(4) to remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering;

(5) that all post-effective amendments will comply with the applicable forms, rules and regulations of the SEC in effect at the time such post-effective amendments are filed;

(6) that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;

(iii) the portion of any other free writing prospectus relating to the offering containing material information about the registrant or its securities provided by or on behalf of the registrant; and

II-7

(iv) any other communication that is an offer in the offering made by the registrant to the purchaser;

(7) to send to each stockholder, at least on an annual basis, a detailed statement of any transactions with the registrant’s advisor or its affiliates, and of fees, commissions, compensations and other benefits paid or accrued to the advisor or its affiliates, for the fiscal year completed, showing the amount paid or accrued to each recipient and the services performed;

(8) to provide to the stockholders the financial statements required by Form 10-K for the first full fiscal year of operations;

(9) to file a sticker supplement pursuant to Rule 424(c) under the Securities Act during the distribution period describing each significant property that has not been identified in the prospectus whenever a reasonable probability exists that a property will be acquired and to consolidate all stickers into a post-effective amendment filed at least once every three months during the distribution period, with the information contained in such amendment provided simultaneously to existing stockholders. Each sticker supplement shall disclose all compensation and fees received by the advisor and its affiliates in connection with any such acquisition. The post-effective amendment shall include or incorporate by reference audited financial statements in the format described in Rule 3-14 of Regulation S-X that have been filed or are required to be filed on Form 8-K for all significant property acquisitions that have been consummated;

(10) to file, after the end of the distribution period, a current report on Form 8-K containing the financial statements and any additional information required by Rule 3-14 of Regulation S-X, as appropriate based on the type of property acquired and the type of lease to which such property will be subject, to reflect each commitment (such as the signing of a binding purchase agreement) made after the end of the distribution period involving the use of 10.0% or more (on a cumulative basis) of the net proceeds of the offering and to provide the information contained in such report to the stockholders at least once per quarter after the distribution period of the offering has ended; and

(11) insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any such action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-8

TABLE VI

ACQUISITIONS OF PROPERTIES BY PROGRAMS
SPONSORED BY THOMPSON NATIONAL PROPERTIES, LLC
(UNAUDITED)

This Table VI presents summary information on properties acquired by prior real estate programs sponsored by Thompson National Properties, LLC having similar or identical investment objectives to those of TNP Strategic Retail Trust, Inc. This table provides information regarding the general type and location of the properties and the manner in which the properties were acquired. All figures are through December 31, 2009.

					Gross
					Leasable
					Space or
					Number of
					Units and
					Total
					Square		Mortgage				Contract			Other		Other
					Feet		Financing		Cash		Price &			Cash		Cash
				Type of	(SF of	Date of	At		Down		Acquisition			Expenditure		Expenditures		Total
Property	Ownership		Location	Property	Units)	Purchase	Purchase		Payment		Fee			Expensed		Capitalized		Price
Oakwood Tower & One Lee Park		Bruin Fund, L.P.	Dallas, TX	Office	78,000/47,780 and 71,491/47,591 (rsf)	5/12/08	$	8,760,375	$	3,894,636	$	12,879,636			—	$	276,857	$	13,156,493
2747 Paradise Road		TNP Vulture   Fund VIII, LLC	Las Vegas, NV	Condominium	2,050	9/17/08		—	$	625,000	$	643,750			—	$	1,565	$	626,565
1781 Sidewinder Dr		TNP Vulture   Fund VIII, LLC	Park City, UT	Retail/Office	15,044/13,990	9/8/08	$	1,675,170	$	1,634,080	$	3,400,750			—	$	35,949	$	3,436,699
302 E. Carson		TNP Vulture   Fund VIII, LLC	Las Vegas, NV	Office	207,589/200,647	10/3/08	$	12,574,095	$	8,925,905	$	21,500,000(1	)		—	$	404,242	$	21,904,242
VF Danzler		Vulture	Duncan, SC	Land	+/-32.27 acres	10/3/08	$	700,000		—	$	656,250			—	$	4,708	$	648,458
Kodak		TNP 6700 Santa Monica Blvd., DST I	Los Angeles, CA	Office	+/-2.97 acres	12/24/08	$	18,867,000	$	9,400,496	$	31,444,000	(2)	$	85,665	$	548,358	$	32,078,023
Arville		2008 Participating Notes	Las Vegas, NV	Industrial	160,797	1/22/09	$	11,179,800	$	1,129,573	$	12,794,660			56,061		—	$	12,478,061
Baton Rouge 2006 Apartments		Thompson/Morgan Baton Rouge I, DST	Baton Rouge, LA	Multifamily	+/-10.48 acres	6/10/2009	$	24,560,000		—	$	39,750,000	(3)		—		—	$	39,750,000
Turnberry #1001		2008 Participating Notes	Las Vegas, NV	Condominium	2,805	11/16/09		—	$	500,888	$	525,925			1,687		—	$	502,575
Turnberry #3205		2008 Participating Notes	Las Vegas, NV	Condominium	1,556	12/4/09		—	$	415,000	$	415,000	(4)		2,496		—	$	417,496

Notes to Table VI

(1)	An acquisition fee of $351,718 has not been paid as of December 31, 2009 and is not included in the total.
(2)	An acquisition fee of $565,980 has not been paid as of December 31, 2009 and is not included in the total.
(3)	An acquisition fee of $1,197,000 has not been paid as of December 31, 2009 and is not included in the total.
(4)	An acquisition fee of $12,450 has not been paid as of December 31, 2009 and is not included in the total.

II-9

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-11, as amended, and has duly caused this amended registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Irvine, State of California, on September 2, 2010.

TNP Strategic Retail Trust, Inc.

By:  /s/  Anthony W. Thompson

Name:     Anthony W. Thompson

Title:  Chief Executive Officer and

Chairman of the Board

Pursuant to the requirements of the Securities Act of 1933, this amended registration statement has been signed by the following persons in the following capacities and on September 2, 2010.

Signature	Title
/s/  Anthony W. Thompson Anthony W. Thompson	Chief Executive Officer and Chairman of the Board (principal executive officer)
/s/  Jack R. Maurer Jack R. Maurer	President and Vice Chairman of the Board
/s/  Christopher S. Cameron Christopher S. Cameron	Chief Financial Officer (principal financial officer and accounting officer)
/s/  Arthur M. Friedman Arthur M. Friedman	Director
/s/  Jeffrey S. Rogers Jeffrey S. Rogers	Director
/s/  Robert N. Ruth Robert N. Ruth	Director

EXHIBIT INDEX

Exhibit
Number			Description
	1	.1	Dealer Manager Agreement, dated July 10, 2009 (incorporated by reference to Exhibit 1.1 to Pre-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11, filed July 10, 2009, Commission File No. 333-154975 (“Pre-Effective Amendment No. 5”))
	1	.2	Form of Participating Dealer Agreement (included as Exhibit A to Exhibit 1.1)
	3	.1	Articles of Amendment and Restatement of TNP Strategic Retail Trust, Inc. (incorporated by reference to Exhibit 3.1 to Pre-Effective Amendment No. 5)
	3	.2	Bylaws of TNP Strategic Retail Trust, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-11, filed November 4, 2008, Commission File No. 333-154975)
	4	.1	Form of Subscription Agreement (included as Appendix C to the Prospectus)
	4	.2	Distribution Reinvestment Plan (included as Appendix D to the Prospectus)
	5	.1	Opinion of Venable LLP as to the legality of the securities being registered (incorporated by reference to Exhibit 5.1 to Pre-Effective Amendment No. 5)
	8	.1	Opinion of Alston & Bird LLP regarding certain federal income tax considerations (incorporated by reference to Exhibit 8.1 to Pre-Effective Amendment No. 5)
	10	.1	Escrow Agreement, dated July 9, 2009, by and among TNP Strategic Retail Trust, Inc., TNP Securities, LLC, and CommerceWest Bank, N.A. (incorporated by reference to Exhibit 10.1 to Pre-Effective Amendment No. 5)
	10	.2	Amended and Restated Advisory Agreement, dated August 7, 2010, by and among TNP Strategic Retail Trust, Inc., TNP Strategic Retail Operating Partnership, LP and TNP Strategic Retail Advisor, LLC
	10	.3	Limited Partnership Agreement of TNP Strategic Retail Operating Partnership, LP, dated December 31, 2008, by and among TNP Strategic Retail Trust, Inc., TNP Strategic Retail Advisor, LLC and TNP Strategic Retail OP Holdings, LLC (incorporated by reference to Exhibit 10.3 to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11, filed May 11, 2009, Commission File No. 333-154975)
	10	.4	TNP Strategic Retail Trust, Inc. 2009 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to Pre-Effective Amendment No. 5)
	10	.5	TNP Strategic Retail Trust, Inc. Amended and Restated Independent Directors Compensation Plan (incorporated by reference to Exhibit 10.5 to Pre-Effective Amendment No. 5)
	10	.6	Purchase and Sale Agreement Regarding Moreno Marketplace Shopping Center, dated September 22, 2009 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed on November 24, 2009 (the “November 24 Form 8-K”))
	10	.7	Assignment of Purchase and Sale Agreement, dated October 21, 2009 (incorporated by reference to Exhibit 10.2 to the November 24 Form 8-K)
	10	.8	Assignment of Purchase and Sale Agreement, dated November 19, 2009 (incorporated by reference to Exhibit 10.3 to the November 24 Form 8-K)
	10	.9	Promissory Note of TNP SRT Moreno Marketplace, LLC, dated November 12, 2009, in favor of KeyBank National Association (incorporated by reference to Exhibit 10.9 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-11, filed February 19, 2010, Commission File No. 333-154975 (“Post-Effective Amendment No. 1”))
	10	.10	Subordinated Convertible Promissory Note of TNP SRT Moreno Marketplace, LLC, dated November 18, 2009, in favor of Moreno Retail Partners, LLC (incorporated by reference to Exhibit 10.10 to Post-Effective Amendment No. 1)
	10	.11	Guaranty, dated November 12, 2009, by and between TNP Strategic Retail Trust, Inc. and Anthony W. Thompson, for the benefit of KeyBank National Association (incorporated by reference to Exhibit 10.11 to Post-Effective Amendment No. 1)

Exhibit
Number			Description
	10	.12	Environmental Indemnity Agreement, dated November 12, 2009, by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic Retail Trust, Inc., Moreno Retail Partners, LLC, John Skeffington, William Skeffington and KeyBank National Association (incorporated by reference to Exhibit 10.12 to Post-Effective Amendment No. 1)
	10	.13	Reimbursement and Fee Agreement, dated November 20, 2009, by and among TNP SRT Moreno Marketplace, LLC, TNP Strategic Retail Trust, Inc. and Anthony W. Thompson (incorporated by reference to Exhibit 10.13 to Post-Effective Amendment No. 1)
	10	.14	Revolving Credit Agreement, dated November 12, 2009, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc. and KeyBank National Association (incorporated by reference to Exhibit 10.14 to Post-Effective Amendment No. 1)
	10	.15	Revolving Credit Note of TNP Strategic Retail Operating Partnership, LP, dated November 12, 2009, in favor of KeyBank National Association (incorporated by reference to Exhibit 10.15 to Post-Effective Amendment No. 1)
	10	.16	Guaranty Agreement, dated November 12, 2009, by and among TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC and Anthony W. Thompson, for the benefit of KeyBank National Association (incorporated by reference to Exhibit 10.16 to Post-Effective Amendment No. 1)
	10	.17	Pledge and Security Agreement, dated November 12, 2009, by and between TNP Strategic Retail Trust, Inc. and KeyBank National Association (incorporated by reference to Exhibit 10.17 to Post-Effective Amendment No. 1)
	10	.18	Pledge and Security Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and KeyBank National Association (incorporated by reference to Exhibit 10.18 to Post-Effective Amendment No. 1)
	10	.19	Reimbursement Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and Anthony W. Thompson (incorporated by reference to Exhibit 10.19 to Post-Effective Amendment No. 1)
	10	.20	Reimbursement and Fee Agreement, dated November 12, 2009, by and between TNP Strategic Retail Operating Partnership, LP and Thompson National Properties, LLC (incorporated by reference to Exhibit 10.20 to Post-Effective Amendment No. 1)
	10	.21	Form of Restricted Stock Award Certificate (incorporated by reference to Exhibit 10.20 to Post-Effective Amendment No. 1)
	10	.22	Agreement for Purchase and Sale and Joint Escrow Instructions, dated July 13, 2009, by and between West Oahu Mall Associates, LLC and TNP Acquisitions, LLC (incorporated by reference to Exhibit 10.22 to the Annual Report on Form 10-K, filed on March 31, 2010 (the “2009 Form 10-K”))
	10	.23	Assignment and Assumption Agreement, dated December 14, 2009, by and between TNP Acquisitions, LLC and TNP SRT Waianae Mall, LLC (incorporated by reference to Exhibit 10.23 to the 2009 Form 10-K)
	10	.24	First Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated July 22, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.24 to the 2009 Form 10-K)
	10	.25	Second Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 13, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.25 to the 2009 Form 10-K)
	10	.26	Third Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 31, 2009, by and among West Oahu Mall Associates, LLC, TNP Acquisitions, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.26 to the 2009 Form 10-K)

Exhibit
Number			Description
	10	.27	Tenth Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated March 15, 2010, by and among West Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.27 to the 2009 Form 10-K)
	10	.28	Twelfth Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated April 27, 2010, by and among West Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.28 to Post-Effective Amendment No. 3 to the Registration Statement on Form S-11, filed June 3, 2010 (Commission File No. 333-154975))
	10	.29	Thirteenth Amendment of Agreement of Purchase and Sale and Joint Escrow Instructions, dated June 2, 2010, by and among West Oahu Mall Associates, LLC, TNP SRT Waianae Mall, LLC and Title Guaranty Escrow Services, Inc. (incorporated by reference to Exhibit 10.3 to the Form 10-Q for the period ended June 30, 2010, filed August 16, 2010 (the “June 30 Form 10-Q”))
	10	.30	Property and Asset Management Agreement, dated June 4, 2010, by and between TNP SRT Waianae Mall, LLC and TNP Property Manager, LLC (incorporated by reference to Exhibit 10.4 to the June 30 Form 10-Q)
	10	.31	Loan Agreement, dated September 19, 2005, by and between West Oahu Mall Associates, LLC and IXIS Real Estate Capital, Inc. (incorporated by reference to Exhibit 10.5 to the June 30 Form 10-Q)
	10	.32	Note and Mortgage Assumption Agreement, dated June 4, 2010, by and among Bank of America, N.A., West Oahu Mall Associates, LLC and TNP SRT Waianae Mall, LLC (incorporated by reference to Exhibit 10.6 to the June 30 Form 10-Q)
	10	.33	Guaranty of Recourse Obligations, dated as of September 19, 2005, by and between Joseph Daneshgar and IXIS Real Estate Capital, Inc. (incorporated by reference to Exhibit 10.7 to the June 30 Form 10-Q)
	10	.34	Joinder By and Agreement of New Indemnitor, dated June 4, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., TNP Property Manager, LLC and Anthony W. Thompson (incorporated by reference to Exhibit 10.8 to the June 30 Form 10-Q)
	10	.35	Second Omnibus Amendment and Reaffirmation of Loan Documents, dated June 4, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC, Anthony W. Thompson and KeyBank National Association (incorporated by reference to Exhibit 10.9 to the June 30 Form 10-Q)
	10	.36	Reimbursement and Fee Agreement, dated June 9, 2010, by and between TNP Strategic Retail Trust, Inc., TNP SRT Waianae Mall, LLC and Anthony W. Thompson (incorporated by reference to Exhibit 10.10 to the June 30 Form 10-Q)
	10	.37	Real Estate Purchase Agreement and Escrow Instructions, dated April 6, 2010, by and between TNP Acquisitions, LLC and Crestline Investments, LLC (incorporated by reference to Exhibit 10.11 to the June 30 Form 10-Q)
	10	.38	First Amendment to Real Estate Purchase Agreement and Escrow Instructions, dated May 5, 2010, by and between Crestline Investments, LLC and TNP Acquisitions, LLC (incorporated by reference to Exhibit 10.12 to the June 30 Form 10-Q)
	10	.39	Second Amendment to Real Estate Purchase Agreement and Escrow Instruction, dated May 21, 2010, by and between Crestline Investments, LLC and TNP Acquisitions, LLC (incorporated by reference to Exhibit 10.13 to the June 30 Form 10-Q)
	10	.40	Assignment and Assumption of Real Estate Purchase Agreement and Escrow Instructions, dated June 11, 2010, by and between TNP Acquisitions, LLC and TNP SRT Northgate Plaza Tucson, LLC (incorporated by reference to Exhibit 10.14 to the June 30 Form 10-Q)
	10	.41	Assumption and Second Modification Agreement, dated July 6, 2010, by and among Crestline Investments, L.L.C., TNP SRT Northgate Plaza Tucson Holdings, LLC and Thrivent Financial For Lutherans
	10	.42	Promissory Note, dated July 10, 2002, by and between Crestline Investments, L.L.C. and Thrivent Financial For Lutherans

Exhibit
Number			Description
	10	.43	Guaranty, dated July 6, 2010, by and between TNP Strategic Retail Trust, Inc. and Thrivent Financial For Lutherans
	10	.44	Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated July 10, 2002, by and among Crestline Investments, L.L.C., Fidelity National Title Agency, Inc. and Thrivent Financial For Lutherans
	10	.45	Environmental Indemnity Agreement, dated July 6, 2010, by and among TNP SRT Northgate Plaza Tucson Holdings, LLC, TNP Strategic Retail Trust, Inc. and Thrivent Financial For Lutherans
	10	.46	Third Omnibus Amendment and Reaffirmation of Loan Documents, dated July 6, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC, Anthony W. Thompson, TNP SRT Northgate Plaza Tucson Holdings, LLC and KeyBank National Association
	10	.47	Agreement of Purchase and Sale and Joint Escrow Instructions, dated July 9, 2010, by and between Quality Properties Asset Management Company and TNP Acquisitions, LLC
	10	.48	Conditional Reinstatement and First Amendment to Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 4, 2010, by and between Quality Properties Asset Management Company and TNP Acquisitions, LLC
	10	.49	Assignment and Assumption of Agreement of Purchase and Sale and Joint Escrow Instructions, dated August 9, 2010, by and between TNP Acquisitions, LLC and TNP SRT San Jacinto, LLC
	10	.50	Property Management Agreement, dated August 11, 2010, by and between TNP SRT San Jacinto, LLC and TNP Property Manager, LLC
	10	.51	Fourth Omnibus Amendment and Reaffirmation of Loan Documents, dated August 11, 2010, by and among TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc., Thompson National Properties, LLC, Anthony W. Thompson, TNP SRT Northgate Plaza Tucson Holdings, LLC and KeyBank National Association
	10	.52	Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated August 11, 2010, by and among TNP SRT San Jacinto, LLC, First American Title Insurance Company and KeyBank National Association
	10	.53	Environmental and Hazardous Substances Indemnity Agreement, dated August 11, 2010, by and among TNP SRT San Jacinto, LLC, TNP Strategic Retail Operating Partnership, LP, TNP Strategic Retail Trust, Inc. and KeyBank National Association
	21		Subsidiaries of the Company
	23	.1	Consent of KPMG LLP
	**23	.2	Consent of Venable LLP (contained in its opinion filed as Exhibit 5.1)
	**23	.3	Consent of Alston & Bird LLP (contained in its opinion filed as Exhibit 8.1)
	23	.4	Consent of KMJ Corbin & Company LLP
	23	.5	Consent of McGladrey & Pullen, LLP
	**24		Power of Attorney (included as part of signature page)

** Previously filed

EX-10.2

Exhibit 10.2

AMENDED AND RESTATED ADVISORY AGREEMENT

AMONG

TNP STRATEGIC RETAIL TRUST, INC.,

TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP,

AND

TNP STRATEGIC RETAIL ADVISOR, LLC

TABLE OF CONTENTS

1. Definitions	1
2. Appointment	8
3. Duties of the Advisor	8
4. Authority of Advisor	10
5. Bank Accounts	10
6. Records; Access	11
7. Limitations on Activities	11
8. Relationship with Director	11
9. Fees	11
10. Expenses	13
11. Other Services	15
12. Reimbursement to the Advisor	15
13. Business Combination	15
14. Investment Opportunities	16
15. The TNP Name	16
16. Other Activities of the Advisor	17
17. Term of Agreement	17
18. Termination by the Parties	17
19. Assignment to an Affiliate	17
20. Payments to and duties of Advisor Upon Termination	18
21. Indemnification by the Company and the Operating Partnership	18
22. Indemnification by Advisor	20
23. Notices	20
24. Modification	21

25. Severability	21
26. Construction	21
27. Entire Agreement	21
28. Indulgences, Not Waivers	21
29. Gender	21
30. Titles Not to Affect Interpretation	22
31. Execution in Counterparts	22

AMENDED AND RESTATED ADVISORY AGREEMENT

     THIS AMENDED AND RESTATED ADVISORY AGREEMENT (this “Agreement”), dated as of August 7, 2010 (the “Effective Date”), is entered into by and among TNP Strategic Retail Trust, Inc., a Maryland corporation (the “Company”), TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”), and TNP Strategic Retail Advisor, LLC, a Delaware limited liability company (the “Advisor”). Capitalized terms used herein shall have the meanings ascribed to them in Section 1 below.

W I T N E S S E T H

     WHEREAS, the Company has elected to qualify as a REIT, and to invest its funds in investments permitted by the terms of Sections 856 through 860 of the Code;

     WHEREAS, the Company is the general partner of the Operating Partnership and intends to conduct all of its business and make all Investments through the Operating Partnership;

     WHEREAS, the parties hereto previously entered into the Advisory Agreement, effective as of August 7, 2009 (“Original Advisory Agreement”), pursuant to which the Advisor provides certain advisory services to the Company and the Operating Partnership; and

     WHEREAS, the term of the Original Advisory Agreement is for one-year and the Company and Operating Partnership on the one hand, and the Advisor on the other hand, desire to renew the Advisory Agreement for an additional one-year term by entering into this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

     1. DEFINITIONS. As used in this Agreement, the following terms have the definitions hereinafter indicated:

     Acquisition Expenses. Any and all expenses, exclusive of Acquisition Fees, incurred by the Company, the Operating Partnership, the Advisor, or any of their Affiliates in connection with the selection, evaluation, acquisition, origination, making or development of any Investments, 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, title insurance premiums, and the costs of performing due diligence.

     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 Company, the Operating Partnership or the Advisor) in connection with the purchase, development or construction of any Real Estate Asset or other Investment,

including real estate commissions, selection fees, development fees, construction fees, nonrecurring management fees, loan fees, points or any other fees of a similar nature. Excluded shall be (i) Origination Fees and (ii) 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. Advisor shall mean TNP Strategic Retail Advisor, LLC, a Delaware limited liability company, any successor advisor to the Company, the Operating Partnership or any Person to which TNP Strategic Retail Advisor, LLC or any successor advisor subcontracts substantially all of its functions. Notwithstanding the foregoing, a Person hired or retained by TNP Strategic Retail Advisor, LLC to perform property management and related services for the Company or the Operating Partnership that is not hired or retained to perform substantially all of the functions of TNP Strategic Retail Advisor, LLC with respect to the Company or the Operating Partnership as a whole shall not be deemed to be an Advisor.

     Affiliate or Affiliated. With respect to any Person, (i) any Person directly or indirectly owning, controlling or holding, with the power to vote, ten percent (10%) or more of the outstanding voting securities of such other Person; (ii) any Person ten percent (10%) 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.

     Articles of Incorporation. The Articles of Incorporation of the Company, as amended from time to time.

     Asset Management Fee. The term “Asset Management Fee” shall mean the fee payable to the Advisor pursuant to Section 9(e).

     Average Invested Assets. For a specified period, the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in Investments 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.

     Board. The individuals holding such office, as of any particular time, under the Articles of Incorporation, whether they be the Directors named therein or additional or successor Directors.

     Bylaws. The bylaws of the Company, as the same are in effect from time to time.

     Cause. With respect to the termination of this Agreement, fraud, criminal conduct, misconduct or negligent breach of fiduciary duty by the Advisor, or a material breach of this Agreement by the Advisor.

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     Code. Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code 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.

     Company. Company shall mean TNP Strategic Retail Trust, Inc., a Maryland corporation.

     Contract Sales Price. The total consideration received by the Company for the sale of an Investment.

     Dealer Manager. TNP Securities, LLC, or such other Person or entity selected by the Board to act as the dealer manager for the Offering.

     Dealer Manager Fee. 3.0% of Gross Proceeds from the sale of Shares in the Primary Offering, payable to the Dealer Manager for serving as the dealer manager of such Offering.

     Director. A member of the Board of Directors of the Company.

     Disposition Fee. The term “Disposition Fee” shall mean the fees payable to the Advisor pursuant to Section 9(d).

     Distributions. Any distributions of money or other property by the Company to Stockholders, including distributions that may constitute a return of capital for federal income tax purposes.

     Effective Date. Effective Date shall have the meaning set forth in the preamble.

     Excess Amount. Excess Amount shall have the meaning set forth in Section 12.

     Expense Year. Expense Year shall have the meaning set forth in Section 12.

     Funds From Operations. As defined by the National Association of Real Estate Investment Trusts, Funds From Operations means net income computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures in which the a REIT holds an interest.

     GAAP. Generally accepted accounting principles as in effect in the United States of America from time to time.

     Good Reason. Either, (i) any failure to obtain a satisfactory agreement from any successor to the Company or the Operating Partnership to assume and agree to perform the Company’s or the Operating Partnership’s obligations under this Agreement; or (ii) any material breach of this Agreement of any nature whatsoever by the Company or the Operating Partnership.

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     Gross Proceeds. The aggregate purchase price of all Shares sold for the account of the Company through all Offerings, without deduction for Sales Commissions, volume discounts, any marketing support and due diligence expense reimbursement or Organization and Offering Expenses. For the purpose of computing Gross Proceeds, the purchase price of any Share for which reduced Sales Commissions are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the Company 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 reduction.

     Indemnitee. The terms “Indemnitee” and “Indemnitees” shall have the meaning set forth in Section 21.

     Independent Director. Independent Director shall have the meaning set forth in the Articles of Incorporation.

     Invested Capital. The original issue price paid for the Shares reduced by prior Distributions from the sale or financing of the Investments.

     Investments. Any investments by the Company or the Operating Partnership in Real Estate Assets, Real Estate Related Loans or any other asset.

     Joint Ventures. The joint venture or partnership arrangements (other than with the Operating Partnership) in which the Company or any of its subsidiaries is a co-venturer or general partner which are established to own Investments.

     Listing. The listing of the Shares on a national securities exchange or the receipt by the Stockholders of securities that are listed on a national securities exchange in exchange for the Company’s common stock. Upon such Listing, the Shares shall be deemed “Listed.”

     Loans. Any indebtedness or obligations in respect of borrowed money or evidenced by bonds, notes, debentures, deeds of trust, letters of credit or similar instruments, including mortgages and mezzanine loans.

     NASAA REIT Guidelines. The Statement of Policy Regarding Real Estate Investment Trusts published by the North American Securities Administrators Association on May 7, 2007, as may be amended from time to time.

     Net Income. For any period, the Company’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 Company’s assets.

     Offering. The public offering of Shares pursuant to a Prospectus.

     Operating Partnership. Operating Partnership shall mean TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership.

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     Operating Partnership Agreement. The Operating Partnership Agreement among the Company, the Advisor and TNP Strategic Retail OP Holdings, LLC.

     OP Units. Units of limited partnership interest in the Operating Partnership.

     Organization and Offering Expenses. Organization and Offering Expenses means all expenses (other than the Sales Commission and the Dealer Manager Fee) to be paid by the Company in connection with the Offering, including legal, accounting, printing, mailing and filing fees, charges of the escrow holder and transfer agent, charges of the Advisor for administrative services related to the issuance of Shares in the Offering, reimbursement of bona fide due diligence expenses of broker-dealers, reimbursement of the Advisor for costs in connection with preparing supplemental sales materials, the cost of bona fide training and education meetings held by the Company (primarily the travel, meal and lodging costs of the registered representatives of broker-dealers), attendance and sponsorship fees and cost reimbursement for employees of the Company’s Affiliates to attend retail seminars conducted by broker-dealers and, in special cases, reimbursement to participating broker-dealers for technology costs associated with the Offering, costs and expenses related to such technology costs, and costs and expenses associated with facilitation of the marketing of the Shares and the ownership of Shares by such broker-dealer’s customers.

     Origination Fees. The term “Origination Fees” shall mean the fees payable to the Advisor pursuant to Section 9(b).

     Person. An individual, corporation, partnership, trust, joint venture, limited liability company or other entity.

     Primary Offering. The portion of an Offering other than the Shares offered pursuant to the Company’s distribution reinvestment plan.

     Private Placement. Any offering of undivided tenant-in-common (TIC) interests in Real Property acquired by the Operating Partnership, whereby such TIC interests may be eligible for “like kind exchange” pursuant to Section 1031 of the Code.

     Prospectus. A “Prospectus” under Section 2(10) of the Securities Act of 1933, as amended (the “Securities Act”), including a preliminary Prospectus, an offering circular as described in Rule 253 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.

     Real Estate Assets. Any investment by the Company or the Operating Partnership in unimproved and improved Real Property (including, without limitation, fee or leasehold interests, options and leases) either directly or through a Joint Venture.

     Real Estate Related Loans. Any investments in, or origination of, mortgage loans and other types of real estate related debt financing, including, without limitation, mezzanine loans,

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bridge loans, convertible mortgages, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests and participations in such loans, by the Company or the Operating Partnership.

     Real Property. Real property owned from time to time by the Company or the Operating Partnership, either directly or through joint venture arrangements or other partnerships, which consists of (i) land only, (ii) land, including the buildings located thereon, (iii) buildings only or (iv) such investments the Board and the Advisor mutually designate as Real Property to the extent such investments could be classified as Real Property.

     Registration Statement. Registration Statement shall mean the Company’s registration statement on Form S-11 (Registration Number 333-154975), as amended from time to time, to offer and sell to the public on a continuous basis up to 110,526,316 Shares originally filed with the Securities and Exchange Commission on November 4, 2008.

     REIT. A “real estate investment trust” under Sections 856 through 860 of the Code.

     Sale or Sales. Any transaction or series of transactions whereby: (A) the Company 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 Real Property or portion thereof, including the lease of any Real Property consisting of a building only, and including any event with respect to any Real Property which gives rise to a significant amount of insurance proceeds or condemnation awards; (B) the Company 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 Company 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 Company or the Operating Partnership as a co-venturer or partner sells, grants, transfers, conveys, or relinquishes its ownership of any Real Property or portion thereof, including any event with respect to any Real Property which gives rise to insurance claims or condemnation awards; or (D) the Company 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 Real Estate Related Loans or portion thereof (including with respect to any Real Estate Related Loan, all payments 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 Company 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 not including any transaction or series of transactions specified in clauses (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested by the Company in one or more assets within 180 days thereafter.

     Sales Commission. 7.0% of Gross Proceeds from the sale of Shares in the Primary Offering payable to the Dealer Manager and reallowable to Soliciting Dealers with respect to Shares sold by them.

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     Shares. The shares of the Company’s common stock, par value $0.01 per share.

     Soliciting Dealers. Broker-dealers who are members of the Financial Industry Regulatory Authority Inc., or that are exempt from broker-dealer registration, and who, in either case, have executed participating dealer or other agreements with the Dealer Manager to sell Shares.

     Special Committee. The term “Special Committee” shall have the meaning as provided in Section 13(a).

     Special OP Units. The separate series of limited partnership interests to be issued in accordance with Section 9(g).

     Sponsor. Sponsor shall mean Thompson National Properties, LLC, a Delaware limited liability company.

     Stockholders. The registered holders of the Shares.

     Termination Date. The date of termination of this Agreement.

     Termination Event. The termination or nonrenewal of this Agreement (i) in connection with a merger, sale of assets or transaction involving the Company pursuant to which a majority of the Directors then in office are replaced or removed, (ii) by the Advisor for Good Reason or (iii) by the Company and the Operating Partnership other than for Cause.

     Total Operating Expenses. All costs and expenses paid or incurred by the Company, as determined under GAAP, that are in any way related to the operation of the Company or its business, including asset management fees and other fees paid to the Advisor, 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 taxes incurred in connection with the issuance, distribution, transfer, registration and Listing, (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, Origination Fees and Acquisition Expenses, (vii) Disposition Fees on the Sale of Real Property, and (viii) other fees and expenses connected with the acquisition, disposition, management and ownership of real estate interests, mortgages or other property (including the costs of foreclosure, insurance premiums, legal services, maintenance, repair, and improvement of property). The definition of “Total Operating Expenses” set forth above is intended to encompass only those expenses which are required to be treated as Total Operating Expenses under the NASAA REIT Guidelines. As a result, and notwithstanding the definition set forth above, any expense of the Company which is not part of Total Operating Expenses under the NASAA REIT Guidelines shall not be treated as part of Total Operating Expenses for purposes hereof.

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     2%/25% Guidelines. 2%/25% Guidelines shall have the meaning set forth in Section 12.

     2. APPOINTMENT. The Company and the Operating Partnership hereby appoint the Advisor to serve as their advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

     3. DUTIES OF THE ADVISOR. As of the Effective Date, the Advisor undertakes to use its best efforts to present to the Company and the Operating Partnership potential investment opportunities and to provide a continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board. In performance of this undertaking, subject to the supervision of the Board and consistent with the provisions of the Articles of Incorporation and Bylaws of the Company and the Operating Partnership Agreement, the Advisor shall, either directly or by engaging an Affiliate:

          (a) serve as the Company’s and the Operating Partnership’s investment and financial advisor;

          (b) provide the daily management for the Company and the Operating Partnership and perform and supervise the various administrative functions reasonably necessary for the management of the Company and the Operating Partnership;

          (c) investigate, select, and, on behalf of the Company and the Operating Partnership, engage and conduct business with such Persons as the Advisor deems necessary to the proper performance of its obligations hereunder, including, but not limited to, consultants, accountants, correspondents, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, banks, builders, developers, property owners, real estate management companies, real estate operating companies, securities investment advisors, mortgagors, and any and all agents for any of the foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services, including, but not limited to, entering into contracts in the name of the Company and the Operating Partnership with any of the foregoing;

          (d) consult with the officers and Directors of the Company and assist the Directors in the formulation and implementation of the Company’s financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of investments consistent with the investment objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company or the Operating Partnership;

          (e) subject to the provisions of Section 4 hereof, (i) participate in formulating an investment strategy and asset allocation framework, (ii) locate, analyze and select potential Investments, (iii) structure and negotiate the terms and conditions of transactions pursuant to which acquisitions and dispositions of Investments will be made; (iv) research, identify, review

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and recommend acquisitions and dispositions of Investments to the Board and make Investments on behalf of the Company and the Operating Partnership in compliance with the investment objectives and policies of the Company; (v) arrange for financing and refinancing and make other changes in the asset or capital structure of, and dispose of, reinvest the proceeds from the sale of, or otherwise deal with, Investments; (vi) enter into leases and service contracts for Real Estate Assets and, to the extent necessary, perform all other operational functions for the maintenance and administration of such Real Estate Assets; (vii) actively oversee and manage Investments for purposes of meeting the Company’s investment objectives; (viii) select Joint Venture partners, structure corresponding agreements and oversee and monitor these relationships; (ix) oversee Affiliated and non-Affiliated property managers who perform services for the Company or the Operating Partnership; (x) oversee Affiliated and non-Affiliated Persons with whom the Advisor contracts to perform certain of the services required to be performed under this Agreement; (xi) manage accounting and other record-keeping functions for the Company and the Operating Partnership; and (xii) recommend various liquidity events to the Board when appropriate;

          (f) upon request, provide the Board with periodic reports regarding prospective investments;

          (g) make investments in, and dispositions of, Investments within the discretionary limits and authority as granted by the Board;

          (h) negotiate on behalf of the Company and the Operating Partnership with banks or lenders for Loans to be made to the Company and the Operating Partnership, and negotiate on behalf of the Company and the Operating Partnership with investment banking firms and broker-dealers or negotiate private sales of Shares or obtain Loans for the Company and the Operating Partnership, but in no event in such a way so that the Advisor shall be acting as broker-dealer or underwriter; and provided, further, that any fees and costs payable to third parties incurred by the Advisor in connection with the foregoing shall be the responsibility of the Company or the Operating Partnership;

          (i) obtain reports (which may, but are not required to, be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of Investments or contemplated investments of the Company and the Operating Partnership;

          (j) from time to time, or at any time reasonably requested by the Board, make reports to the Board of its performance of services to the Company and the Operating Partnership under this Agreement, including reports with respect to potential conflicts of interest involving the Advisor or any of its Affiliates;

          (k) provide the Company and the Operating Partnership with all necessary cash management services;

          (l) do all things necessary to assure its ability to render the services described in this Agreement;

- 9 -

          (m) deliver to, or maintain on behalf of, the Company copies of all appraisals obtained in connection with the investments in any Real Estate Assets as may be required to be obtained by the Board;

          (n) notify the Board of all proposed material transactions before they are completed; and

          (o) effect any private placement of OP Units, tenancy-in-common (TIC) or other interests in Investments as may be approved by the Board.

     Notwithstanding the foregoing, the Advisor may delegate any of the foregoing duties to any Person so long as the Advisor or any Affiliate remains responsible for the performance of the duties set forth in this Section 3.

     4. AUTHORITY OF ADVISOR.

          (a) Pursuant to the terms of this Agreement (including the restrictions included in this Section 4 and in Section 7), and subject to the continuing and exclusive authority of the Board over the management of the Company, the Board hereby delegates to the Advisor the authority to perform the services described in Section 3.

          (b) Notwithstanding the foregoing, any investment in Real Estate Assets, including any financing thereof, will require the prior approval of the Board, any particular Directors specified by the Board or any committee of the Board, as the case may be.

          (c) If a transaction requires approval by the Independent Directors, the Advisor will deliver to the Independent Directors all documents and other information required by them to properly evaluate the proposed transaction.

          (d) The prior approval of a majority of the Independent Directors not otherwise interested in the transaction and a majority of the Board not otherwise interested in the transaction will be required for each transaction to which the Advisor or its Affiliates is a party.

          (e) The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the authority set forth in this Section 4; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment transactions to which the Advisor has committed the Company or the Operating Partnership prior to the date of receipt by the Advisor of such notification.

     5. BANK ACCOUNTS. The Advisor may establish and maintain one or more bank accounts in its own name for the account of the Company or the Operating Partnership or in the name of the Company and the Operating Partnership and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company or the Operating Partnership, under such terms and conditions as the Board may approve, provided that no funds shall be commingled with the funds of the Advisor; and the

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Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and to the auditors of the Company.

     6. RECORDS; ACCESS. The Advisor shall maintain appropriate records of all its activities hereunder and make such records available for inspection by the Directors and by counsel, auditors and authorized agents of the Company, at any time or from time to time during normal business hours. The Advisor shall at all reasonable times have access to the books and records of the Company and the Operating Partnership.

     7. LIMITATIONS ON ACTIVITIES. Anything else in this Agreement to the contrary notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made in good faith, would (a) adversely affect the status of the Company as a REIT, (b) subject the Company to regulation under the Investment Company Act of 1940, as amended, or (c) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company or its Shares, or otherwise not be permitted by the Articles of Incorporation or Bylaws of the Company, except if such action shall be ordered by the Board, in which case the Advisor shall notify promptly the Board of the Advisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event, the Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given. Notwithstanding the foregoing, the Advisor, its directors, officers, employees and members, and the partners, directors, officers, members and stockholders of the Advisor’s Affiliates shall not be liable to the Company or to the Directors or Stockholders for any act or omission by the Advisor, its directors, officers, employees, or members, and the partners, directors, officers, members or stockholders of the Advisor’s Affiliates taken or omitted to be taken in the performance of their duties under this Agreement except as provided in Section 22 of this Agreement.

     8. RELATIONSHIP WITH DIRECTORS. Subject to Section 7 of this Agreement and to restrictions advisable with respect to the qualification of the Company as a REIT, directors, officers and employees of the Advisor or an Affiliate of the Advisor or any corporate parent of an Affiliate, may serve as a Director and as officers of the Company, except that no director, officer or employee of the Advisor or its Affiliates who also is a Director or officer of the Company shall receive any compensation from the Company for serving as a Director or officer other than reasonable reimbursement for travel and related expenses incurred in attending meetings of the Board and no such Director shall be deemed an Independent Director for purposes of satisfying the Director independence requirement set forth in the Articles of Incorporation.

     9. FEES.

          (a) Acquisition Fees. The Advisor shall receive an Acquisition Fee payable by the Company as compensation for services rendered in connection with the investigation, selection and acquisition (by purchase, investment or exchange) of Investments. The total Acquisition Fees payable to the Advisor or its Affiliates shall equal 2.5% of the cost of all Investments, including Acquisition Expenses and any debt attributed to such investments. With

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respect to investments in and origination of Real Estate Related Loans, the Company will pay the Advisor an Origination Fee in lieu of the Acquisition Fee. With respect to the acquisition of Real Estate Assets through a Joint Venture, the Acquisition Fee payable by the Company to the Advisor shall equal 2.5% of the Company’s allocable cost of such Real Estate Assets, including Acquisition Expenses and any debt attributed to such Investments. The Advisor shall submit an invoice to the Company following the closing or closings of each Investment, accompanied by a computation of the Acquisition Fee. The Company shall pay the Acquisition Fee promptly following receipt of the invoice.

          (b) Origination Fees. As compensation for the investigation, selection, sourcing and acquisition or origination of Real Estate Related Loans, the Company shall pay an Origination Fee to the Advisor for each such acquisition or origination equal to 2.5% of the amount funded by the Company to acquire or originate the Real Estate Related Loan, including any Acquisition Expenses related to such investment and any debt used to fund the acquisition or origination of the Real Estate Related Loan. The Company will not pay an Origination Fee to the Advisor with respect to any transaction pursuant to which the Company is required to pay the Advisor an Acquisition Fee. Notwithstanding anything herein to the contrary, the payment of Origination Fees by the Company shall be subject to the limitations on Acquisition Fees contained in the Company’s Articles of Incorporation. The Advisor shall submit an invoice to the Company following the closing or closings of each Real Estate Related Loan, accompanied by a computation of the Origination Fee. The Company shall pay the Origination Fee to the Advisor promptly following receipt of the invoice.

          (c) Limitation on Total Acquisition Fees, Origination Fees and Acquisition Expenses. Pursuant to the NASAA REIT Guidelines, the total of all Acquisition Fees, Origination Fees and Acquisition Expenses payable in connection with any Investment shall not exceed 6.0% of the “contract purchase price,” as defined in the Articles of Incorporation, of the Investment acquired.

          (d) Disposition Fee. In connection with a Sale in which the Advisor or any Affiliate of the Advisor provides a substantial amount of services, as determined by the Independent Directors, the Company shall pay to the Advisor or its Affiliate a Disposition Fee of up to 50.0% of a customary and competitive real estate commission, but not to exceed 3.0% of the Contract Sales Price. With respect to the Sale of Investments held through a Joint Venture, the Disposition Fee payable by the Company to the Advisor shall be reduced to a percentage of the Disposition Fee proportionate to the Company’s interest in such Joint Venture. Any Disposition Fee payable under this Section 9(d) may be paid in addition to real estate commissions paid to non-Affiliates, provided that the total real estate commissions (including such Disposition Fee) paid to all Persons by the Company for the Sale of each Investment shall not exceed 6.0% of the Contract Sales Price.

          (e) Asset Management Fee. The Advisor shall receive the Asset Management Fee as compensation for services rendered in connection with the management of the Company’s assets. The Asset Management Fee shall be equal to a monthly fee of one-twelfth (1/12^th) of 0.6% of the higher of (i) aggregate cost (before non-cash reserves and depreciation) of all Investments the Company owns, including Acquisition Fees, Origination Fees, acquisition and origination expenses and any debt attributable to such Investments or (ii) the fair market value of Investments (before non-cash reserves and deprecation); provided,

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however, that the Asset Management Fee will accrue and will not be due and payable to the Advisor until the Company’s Funds From Operations exceed the lesser of (1) the cumulative amount of any Distributions declared and payable to Stockholders (other than Distributions of the proceeds of the Sale of an Investment that have not been reinvested) or (2) an amount that is equal to a 10.0% cumulative, non-compounded, annual return on Invested Capital for the Stockholders. With the exception of any portion of the Asset Management Fee related to the disposition of Investments, which shall be payable at the time of such disposition and prorated based on the number of days such Investment was managed by the Advisor before disposition, the Asset Management Fee shall be calculated as of the last business day of each month during the term and of this Agreement payable in arrears on the first business day of each month.

          (f) Private Placement Fee. The Operating Partnership shall reimburse the Advisor for all offering and marketing related expenses incurred on the Company’s or the Operating Partnership’s behalf in connection with any Private Placement up to 2.0% of the gross proceeds of such Private Placement.

          (g) Operating Partnership Interests. The Advisor has made a capital contribution of $1,000 to the Operating Partnership in exchange for OP Units. In addition, an Affiliate of the Advisor has made a capital contribution of $1,000 to the Operating Partnership in exchange for Special OP Units. Upon the earliest to occur of the termination of this Agreement for Cause, a Termination Event or a Listing, all of the Special OP Units shall be redeemed by the Operating Partnership in accordance with the terms of the Operating Partnership Agreement.

          (h) Exclusion of Certain Transactions. In the event the Company or the Operating Partnership shall propose to enter into any transaction in which the Advisor, any Affiliate of the Advisor or any of the Advisor’s directors or officers has a direct or indirect interest, then such transaction shall be approved by a majority of the members of the Board not otherwise interested in such transaction, including a majority of the Independent Directors.

     10. EXPENSES.

          (a) In addition to the compensation paid to the Advisor pursuant to Section 9 hereof, the Company or the Operating Partnership shall pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its Affiliates in connection with the services it provides to the Company and the Operating Partnership pursuant to this Agreement, including, but not limited to:

               (i) Organization and Offering Expenses; provided, however, that the Company shall not reimburse the Advisor to the extent such reimbursement would cause the total amount of Organization and Offering Expenses paid by the Company and the Operating Partnership to exceed 3.0% of the Gross Proceeds raised as of the date of the reimbursement;

               (ii) Acquisition Expenses incurred in connection with the selection and acquisition of Investments subject to the aggregate 6.0% cap on Acquisition Fees, Origination Fees and Acquisition Expenses set forth in Section 9(c);

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               (iii) the actual cost of goods and services used by the Company and obtained from entities not affiliated with the Advisor;

               (iv) interest and other costs for borrowed money, including discounts, points and other similar fees;

               (v) taxes and assessments on income of the Company or Investments;

               (vi) costs associated with insurance required in connection with the business of the Company or by the Board;

               (vii) expenses of managing and operating Investments owned by the Company, whether payable to an Affiliate of the Company or a non-affiliated Person;

               (viii) all expenses in connection with payments to the Directors for attending meetings of the Board and Stockholders;

               (ix) expenses associated with a Listing, if applicable, or with the issuance and distribution of Shares, such as selling commissions and fees, advertising expenses, taxes, legal and accounting fees, listing and registration fees, and other Organization and Offering Expenses;

               (x) expenses connected with payments of Distributions;

               (xi) expenses of organizing, revising, amending, converting, modifying, or terminating the Company or any subsidiary thereof or the Articles of Incorporation or governing documents of any subsidiary;

               (xii) expenses of maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities;

               (xiii) administrative service expenses (including (a) personnel costs; provided, however, that no reimbursement shall be made for costs of personnel to the extent that such personnel perform services in transactions for which the Advisor receives Acquisition Fees, Origination Fees or Disposition Fees, and (b) the Company’s allocable share of other overhead of the Advisor such as rent and utilities); and

               (xiv) audit, accounting and legal fees.

          (b) Expenses incurred by the Advisor on behalf of the Company and the Operating Partnership and payable pursuant to this Section 10 shall be reimbursed no less than monthly to the Advisor.

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          (c) The Advisor shall prepare a statement documenting the expenses of the Company and the Operating Partnership during each quarter, and shall deliver such statement to the Company and the Operating Partnership within 45 days after the end of each quarter.

     11. OTHER SERVICES. Should the Board request that the Advisor or any director, officer or employee thereof render services for the Company and the Operating Partnership other than set forth in Section 3, such services shall be separately compensated at such rates and in such amounts as are agreed upon by the Advisor and the Board, including a majority of the Independent Directors, subject to the limitations contained in the Articles of Incorporation, and shall not be deemed to be services pursuant to the terms of this Agreement.

     12. REIMBURSEMENT TO THE ADVISOR. The Company shall not reimburse the Advisor at the end of any fiscal quarter in which Total Operating Expenses for the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such year. Any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company or, at the option of the Company, subtracted from the Total Operating Expenses reimbursed during the subsequent fiscal quarter. If there is an Excess Amount in any Expense Year and the Independent Directors determine that such excess was justified based on unusual and nonrecurring factors which they deem sufficient, then the Excess Amount may be carried over and included in Total Operating Expenses in subsequent Expense Years and reimbursed to the Advisor in one or more of such years, provided that 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 expenses were justified. Such determination shall be reflected in the minutes of the meetings of the Board. All figures used in the foregoing computation shall be determined in accordance with GAAP applied on a consistent basis.

     13. BUSINESS COMBINATION.

          (a) Business Combination with Advisor. The Company shall consider becoming a self-administered REIT once the Company’s assets and income are, in the view of the Board, of sufficient size such that internalizing the management functions performed by the Advisor is in the best interests of the Company and the Stockholders. If the Board should make this determination in the future, the Company shall pay one-half, and the Advisor shall pay the other one-half, of the cost of an independent investment banking firm, which shall jointly advise the Company and the Advisor on the value of the Advisor. After the investment banking firm completes its analyses, the Company shall require it to prepare a written report and make a formal presentation to the Board. Following the presentation by the investment banking firm, the Board shall form a special committee (the “Special Committee”) comprised entirely of Independent Directors to consider a possible business combination with the Advisor. The Board shall, subject to applicable law, delegate all of its decision-making power and authority to the Special Committee with respect to matters relating to a possible business combination with the Advisor. The Special Committee also shall be authorized to retain its own financial advisors and legal counsel to, among other things, negotiate with representatives of the Advisor regarding a possible business combination with the Advisor.

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          (b) Conditions to Completion of Business Combination with Advisor. Before the Company may complete any business combination with the Advisor in accordance with this Section 13, the following conditions shall be satisfied:

               (i) the Special Committee formed in accordance with Section 13(a) hereof receives an opinion from a qualified investment banking firm, separate and distinct from the firm jointly retained by the Company and the Advisor to provide a valuation analysis in accordance with Section 13(a) hereof, concluding that the consideration to be paid to acquire the Advisor is fair to the Stockholders from a financial point of view;

               (ii) the Board determines that such business combination is advisable and in the best interests of the Company and the Stockholders; and

               (iii) such business combination is approved by the Stockholders entitled to vote thereon in accordance with the Company’s Articles of Incorporation and Bylaws.

     14. INVESTMENT OPPORTUNITIES. In the event that the Advisor identifies an investment opportunity that meets the Company’s investment criteria in an income-producing retail property, for which the Company has sufficient uninvested funds, the investment opportunity will first be offered to the Company. With respect to potential non-retail property investments, in the event that an investment opportunity becomes available that is suitable, under all of the factors considered by the Advisor for both the Company and one or more other Sponsor Affiliates and for which more than one of these entities has sufficient uninvested funds, then the entity that has had the longest time elapse since it was offered an investment opportunity will first be offered such opportunity. Unless the Board of Directors decides not to proceed with an investment opportunity presented to it, the investment opportunity will not be presented to a Sponsor Affiliate; provided, however, that any such investment opportunity shall not be required to be presented to the Company during any period in which the Company does not have sufficient available funds, or a reasonable opportunity of obtaining available funds, with which to make an investment. The Company shall not make any Investment unless the Advisor has recommended the Investment to the Company.

     15. THE TNP NAME. The Advisor and its Affiliates have a proprietary interest in the name “TNP.” The Advisor hereby grants to the Company a non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “TNP” during the term of this Agreement. Accordingly, and in recognition of this right, if at any time the Company ceases to retain the Advisor or one of its Affiliates to perform advisory services for the Company, the Company will, promptly after receipt of written request from the Advisor, cease to conduct business under or use the name “TNP” or any derivative thereof and the Company shall change its name and the names of any of its subsidiaries to a name that does not contain the name “TNP” or any other word or words that might, in the reasonable discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any of its Affiliates. At such time, the Company will also make any changes to any trademarks, servicemarks or other marks necessary to remove any reference to the word “TNP.” Consistent with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates

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has in the past and may in the future organize, sponsor or otherwise permit to exist other investment vehicles (including vehicles for investment in real estate loans, real estate-related debt securities and other real estate assets) and financial and service organizations having “TNP” as a part of their name, all without the need for any consent (and without the right to object thereto) by the Company.

     16. OTHER ACTIVITIES OF THE ADVISOR. Nothing herein contained shall prevent the Advisor or any of its Affiliates from engaging in or earning fees from other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates; nor shall this Agreement limit or restrict the right of any director, officer, member, partner, employee, or stockholder of the Advisor or its Affiliates to engage in or earn fees from any other business or to render services of any kind to any other partnership, corporation, firm, individual, trust or association and earn fees for rendering such services. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein, and earn fees for rendering such advice and service. Specifically, it is contemplated that the Company may enter into joint ventures or other similar co-investment arrangements with certain Persons, and pursuant to the agreements governing such joint ventures or arrangements, the Advisor may be engaged to provide advice and service to such Persons, in which case the Advisor will earn fees for rendering such advice and service.

     17. TERM OF AGREEMENT. This Agreement shall continue in force for a period of one year from the date of the Prospectus pursuant to which the initial Offering is made, subject to an unlimited number of successive one-year renewals upon mutual consent of the parties. It is the duty of the Independent Directors to evaluate the performance of the Advisor annually before renewing the Agreement, and each such renewal shall be for a term of no more than one year.

     18. TERMINATION BY THE PARTIES. This Agreement may be terminated:

          (a) immediately by the Company or the Operating Partnership for Cause or upon the bankruptcy of the Advisor;

          (b) upon 60 days written notice without Cause and without penalty by a majority of the Independent Directors of the Company; or

          (c) upon 60 days written notice with Good Reason by the Advisor.

     The provisions of Sections 19 through 31 of this Agreement survive termination of this Agreement.

     19. ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by the Advisor to an Affiliate with the approval of a majority of the Directors (including a majority of the Independent Directors). The Advisor may assign any rights to receive fees or other payments under this Agreement to any Person without obtaining the approval of the Directors. This Agreement shall not be assigned by the Company or the Operating Partnership without the consent of the Advisor, except in the case of an assignment by the Company or the Operating Partnership to a corporation, limited partnership or other organization which is a successor to all

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of the assets, rights and obligations of the Company or the Operating Partnership, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company and the Operating Partnership are bound by this Agreement.

     20. PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.

          (a) After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company or the Operating Partnership within 30 days after the effective date of such termination all unpaid reimbursements of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement, subject to the 2%/25% Guidelines to the extent applicable.

          (b) The Advisor shall promptly upon termination:

               (i) pay over to the Company and the Operating Partnership all money collected and held for the account of the Company and the Operating Partnership pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled;

               (ii) deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board;

               (iii) deliver to the Board all assets, including all Investments, and documents of the Company and the Operating Partnership then in the custody of the Advisor; and

               (iv) cooperate with the Company and the Operating Partnership to provide an orderly management transition.

     21. INDEMNIFICATION BY THE COMPANY AND THE OPERATING PARTNERSHIP. The Company and the Operating Partnership shall indemnify and hold harmless the Advisor and its Affiliates, including their respective directors (the “Indemnitees,” and each an “Indemnitee”), from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, and to the extent that such indemnification would not be inconsistent with the laws of the State of Maryland, the Articles of Incorporation or the provisions of Section II.G of the NASAA REIT Guidelines. Notwithstanding the foregoing, the Company and the Operating Partnership shall not provide for indemnification of an Indemnitee for any loss or liability suffered by such Indemnitee, nor shall they provide that an Indemnitee be held harmless for any loss or liability suffered by the Company and the Operating Partnership, unless all of the following conditions are met:

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          (a) the Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interest of the Company and the Operating Partnership;

          (b) the Indemnitee was acting on behalf of, or performing services for, the Company or the Operating Partnership;

          (c) such liability or loss was not the result of negligence or misconduct by the Indemnitee; and

          (d) such indemnification or agreement to hold harmless is recoverable only out of the Company’s net assets and not from the Stockholders.

     Notwithstanding the foregoing, an Indemnitee shall not be indemnified by the Company and the Operating Partnership for any losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws by such Indemnitee 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 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 of the Company or the Operating Partnership were offered or sold as to indemnification for violation of securities laws.

     In addition, the advancement of the Company’s or the Operating Partnership’s funds to an Indemnitee for legal expenses and other costs incurred as a result of any legal action for which indemnification is being sought is permissible only if all of the following conditions are satisfied:

          (a) the legal action relates to acts or omissions with respect to the performance of duties or services on behalf of the Company or the Operating Partnership;

          (b) the legal action is initiated by a third party who is not a Stockholder or the legal action is initiated by a Stockholder acting in such Stockholder’s capacity as such and a court of competent jurisdiction specifically approves such advancement; and

          (c) the Indemnitee undertakes to repay the advanced funds to the Company or the Operating Partnership, together with the applicable legal rate of interest thereon, in cases in which such Indemnitee is found not to be entitled to indemnification.

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     22. INDEMNIFICATION BY ADVISOR. The Advisor shall indemnify and hold harmless the Company and the Operating Partnership from contract or other liability, claims, damages, taxes or losses and related expenses including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s bad faith, fraud, misfeasance, intentional misconduct, negligence or reckless disregard of its duties; provided, however, that the Advisor shall not be held responsible for any action of the Board in following or declining to follow any advice or recommendation given by the Advisor.

     23. NOTICES. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is required by the Articles of Incorporation, the Bylaws, or accepted by the party to whom it is given, and shall be given by being delivered by hand, by facsimile transmission, by courier or overnight carrier or by registered or certified mail to the addresses set forth herein:

To the Directors and to the Company:	TNP Strategic Retail Trust, Inc. 1900 Main Street Suite 700 Irvine, California 92614 Telephone: (949) 833-8252 Facsimile: (949) 252-0212 Attention:     Jack R. Maurer, Vice Chairman                       of the Board and President
To the Operating Partnership:	TNP Strategic Retail Operating Partnership, LP 1900 Main Street Suite 700 Irvine, California 92614 Telephone: (949) 833-8252 Facsimile: (949) 252-0212 Attention:      Jack R. Maurer, Vice Chairman                       of the Board and President

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     To the Advisor: TNP Strategic Retail Advisor, LLC
1900 Main Street
Suite 700
Irvine, California 92614
Telephone: (949) 833-8252
Facsimile: (949) 252-0212
Attention:      Jack R. Maurer, Vice Chairman
                      of the Board and President

     Any party may at any time give notice in writing to the other parties of a change in its address for the purposes of this Section 23.

     24. MODIFICATION. This Agreement shall not be changed, modified, terminated, or discharged, in whole or in part, except by an instrument in writing signed by the parties hereto, or their respective successors or assignees.

     25. SEVERABILITY. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part.

     26. CONSTRUCTION. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Maryland.

     27. ENTIRE AGREEMENT. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing.

     28. INDULGENCES, NOT WAIVERS. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver.

     29. GENDER. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires.

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     30. TITLES NOT TO AFFECT INTERPRETATION. The titles of Sections and Subsections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

     31. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories.

[Remainder of Page Intentionally Left Blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Advisory Agreement as of the date and year first written above.

TNP Strategic Retail Trust, Inc.
By:	/s/ Christopher S. Cameron
Name:	Christopher S. Cameron
Title:	Chief Financial Officer, Treasurer and Secretary
TNP Strategic Retail Operating Partnership, LP
By:	TNP Strategic Retail Trust, Inc., its General Partner

By:	/s/ Christopher S. Cameron
Name:	Christopher S. Cameron
Title:	Chief Financial Officer, Treasurer and Secretary

TNP Strategic Retail Advisor, LLC
By:	Thompson National Properties, LLC, its sole member

By:	/s/ Anthony W. Thompson
Name:	Anthony W. Thompson
Title:	Chief Executive Officer

EX-10.41

Exhibit 10.41

This instrument was drafted
by and when recorded this
instrument should be
returned to:

Fennemore Craig, P.C.
3003 North Central Avenue
Suite 2600
Phoenix, Arizona 85012-2913
Attn: William L. Kurtz
(602) 916-5372

Loan No. 10-0086070

[Above space reserved for recording information.]

For Tax Parcel I.D. Numbers, see Exhibit “A” attached hereto.

ASSUMPTION AND SECOND MODIFICATION AGREEMENT

     THIS ASSUMPTION AND SECOND MODIFICATION AGREEMENT (“Assumption”) is made to be effective as of July 6, 2010, by and among CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company (“Assignor”), TNP SRT NORTHGATE PLAZA TUCSON, LLC, a Delaware limited liability company (“Assignee”), and THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation (“Lender”).

RECITALS

     A. On or about July 10, 2002, Lender made a loan to Assignor, in the original principal sum of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000) (the “Loan”). The Loan is evidenced by that certain Promissory Note made by Assignor to the order of Lender dated July 10, 2002 (the “Original Note”), in the face amount of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000), which Original Note was amended and restated by that certain Amended and Restated Promissory Note dated June 22, 2004 (the “Restated Note”), in the face amount of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000), made by Assignor to the order of Lender and Assignor’s obligations thereunder were released, in part, by letter dated July 20, 2005, from Lender (the Original Note, as amended and restated by the Restated Note, and as partially released, is hereinafter referred to as the “Note”).

     B. The Note is secured by, among other things, (i) that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated July 10, 2002 (the “Original Deed of Trust”), made by Assignor, as Trustor, to a trustee for the use and benefit of Lender, as Beneficiary, and recorded July 10, 2002, in Docket 11838, page

LOAN NO. 10-0086070

2324563.3/ASSUMPTION AGREEMENT/CRESTLINE 2010 ASSUMPTION

269, in the office of the Pima County Recorder (all recording information contained herein refers to recordings in the office of the Pima County Recorder), as modified by that certain Modification Agreement dated June 22, 2004 (the “Modification”), by and between Lender, as Lender, and Assignor, as Borrower, and recorded June 25, 2004, in Docket 12331, page 1269, (the Original Deed of Trust, as modified by the Modification, is hereinafter referred to as the “Deed of Trust”); and (ii) that certain Assignment of Rents and Leases dated July 10, 2002 (the “Original Lease Assignment”), from Assignor, as Borrower, to Lender, as Lender, and recorded July 10, 2002, in Docket 11838, page 302, as modified by the Modification, (the Original Lease Assignment, as modified by the Modification, is hereinafter referred to as the “Lease Assignment”), which are liens against the real property described in Exhibit A attached hereto and incorporated herein by this reference (the “Premises”). The Deed of Trust and the Lease Assignment are sometimes hereinafter collectively referred to as the “Security Documents”.

     C. In connection with the making of the Loan, (i) Assignor and DANIEL KIVEL, individually and ALVIN KIVEL, individually (sometimes hereinafter referred to individually as a “Guarantor” and collectively as “Guarantors”), executed and delivered to Lender that certain Environmental Indemnity Agreement dated July 10, 2002 (the “Environmental Indemnity”), by Assignor and Guarantors, as Indemnitors, for the benefit of Lender, as Lender, and (ii) Guarantors executed and delivered to Lender that certain Guaranty dated July 10, 2002 (the “Original Guaranty”), by Guarantor, as Guarantor, to Lender, as Lender, which Original Guaranty has been amended and restated by that certain Amended and Restated Guaranty dated June 22, 2004 (the “Restated Guaranty”), which was released, in part, by letter dated July 20, 2005, from Lender, (the Original Guaranty as amended and restated by the Restated Guaranty, and as partially released, is hereinafter referred to as the “Guaranty”). The Note, the Security Documents and the Environmental Indemnity are sometimes hereinafter collectively referred to as the “Loan Documents”. The Environmental Indemnity and the Guaranty are sometimes hereinafter collectively referred to as the “Guarantor Documents”.

     D. Assignor and Assignee’s predecessor-in-interest, TNP ACQUISITIONS, LLC, a Delaware limited liability company (“Acquisitions”), have entered into that certain Real Estate Purchase Agreement and Escrow Instructions dated April 6, 2010, as amended, pursuant to which Assignor has agreed to sell to Assignee, and Assignee has agreed to purchase from Assignor, the Premises. As a condition of Assignor transferring its interest in the Premises to Assignee, Assignee has agreed to assume, perform and otherwise be bound by all of the terms, covenants, conditions and obligations imposed upon Assignor under the Loan Documents.

     E. Lender is willing to consent to the transfer of the Premises from Assignor to Assignee (the “Transfer”), and the assumption of the Loan by Assignee (the “Loan Assumption”), on the terms and conditions contained herein and in that certain consent to transfer letter dated June 3, 2010 (the “Transfer Consent”), from Lender to Assignor.

     NOW, THEREFORE, in consideration of the foregoing Recitals, which Recitals are incorporated herein by this reference, the covenants and agreements contained

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herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

     1. Recitals. The Recitals are hereby restated and made a material part of this Assumption.

     2. Assignment of Interest. Assignor hereby grants, transfers and assigns to Assignee, effective as of the date hereof, all of its right, title and interest under the Loan Documents.

     3. Acceptance and Assumption of Obligations. Assignee hereby accepts such grant, transfer and assignment of Assignor’s rights under the Loan Documents, and hereby agrees, from and after the date hereof, to pay the Note and the Deed of Trust according to the terms thereof, and hereby assumes and agrees to perform and be bound by all of the terms, covenants, conditions, undertakings, liabilities, and obligations of Assignor under the Loan Documents with the same effect as if Assignee had originally executed and been a party to the Loan Documents, with the understanding that Assignee’s personal liability under the Note is limited in accordance with the terms and conditions thereof. Thus, without limiting the generality of any of the liabilities and obligations assumed by Assignee hereby, the parties hereto agree (a) that, from and after the date of this Assumption, whenever the term “Maker” appear in the Note, such references shall mean, in lieu of Assignor, Assignee, and (b) that whenever the term “Trustor” appears in the Deed of Trust, such reference shall mean, in lieu of Assignor, Assignee. It is expressly understood by Lender and Assignee that Assignee’s liability for any covenants, conditions, undertakings, liabilities, and obligations under the Loan Documents exists only with respect to such obligations from and after the date hereof, and that all representations and warranties contained in the Loan Documents, except as otherwise modified by this Assumption, are as of the date hereof and no representations or warranties are made with respect to the Premises for any period of time prior to the effective date hereof.

     4. Release of Assignor and Guarantor/Indemnitor. Assignor is hereby released from any liability of Assignor to Lender under the Loan Documents solely with respect to matters which occur subsequent to the Transfer. Lender may proceed directly against Assignee for any obligations relating to the Loan Documents. Guarantors are hereby released from any liability as Indemnitor and/or Guarantor under the Guarantor Documents solely with respect to matters which occur subsequent to the Transfer. Concurrently with the execution and delivery hereof, Lender shall cause to be terminated and released of record those certain UCC-1 Financing Statements filed with the Arizona Secretary of State on July 12, 2002 as file No. 200212238187, and recorded in the office of the Pima County Recorder on July 10, 2002 in Docket 11838 at page 269.

     5. Grant of Security Interest. Assignee hereby grants to Lender a security interest, within the meaning of Uniform Commercial Code as adopted in the State in which the Premises is located, in favor of Lender in the “Trust Property” (as that term is defined in the Deed of Trust), leases, rents, issues, income, profits, instruments, general

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intangibles, accounts, contract rights and claims included within or related to the Premises and in all deposits made under the Deed of Trust, and all insurance policies and unearned premiums prepaid thereon, insurance proceeds, and awards, payments or consideration for the taking of the Premises, or any portion thereof, by condemnation or exercise of the power of eminent domain, or from any sale in lieu or in anticipation thereof, assigned to Lender under the Deed of Trust, to the extent that a security interest may be granted therein under the terms of the Uniform Commercial Code in place under the laws of the State in which the Premises is located. Assignee’s organizational number is DE-4830961. Assignee hereby authorizes Lender to file any Uniform Commercial Code financing statements deemed appropriate by Lender to perfect the security interest hereby granted by Assignee to Lender, together with any renewal or continuations of such financing statements.

     6. Assignor’s Indemnification. Assignor hereby agrees to indemnify, defend and hold Assignee harmless from all claims, liabilities, damages, losses, demands, judgments, costs or expenses (including all actual and reasonable attorneys’ fees and costs) made against or suffered by Assignee, which relate to any obligations of Assignor accruing, to be performed or arising out of events occurring prior to the date hereof in respect of the Loan Documents or the Premises for which Assignor has liability to Lender under the Loan Documents and for which no release has been given hereunder. Assignor hereby agrees to indemnify, defend and hold Lender harmless from all claims, liabilities, damages, losses, demands, judgments, costs or expenses (including all actual and reasonable attorneys’ fees and costs) made against or suffered by Lender, in accordance with the terms and conditions of the Loan Documents arising out of events occurring prior to the date hereof in respect of the Loan Documents or the Premises to the extent Assignor has liability to Lender therefor under the Loan Documents and for which no release has been given hereunder.

     7. Assignee’s Indemnification. Assignee hereby agrees to indemnify, defend and hold each of Assignor and the Guarantors harmless from all claims, liabilities, damages, losses, demands, judgments, costs or expenses (including all actual and reasonable attorneys’ fees and costs) made against or suffered by Assignor and/or the Guarantors which relate to any obligations of Assignee accruing, to be performed or arising out of events occurring on or after the date hereof in respect of the Loan Documents or the Premises. Assignee hereby agrees to indemnify, defend and hold Lender harmless from all claims, liabilities, damages, losses, demands, judgments, costs or expenses (including all actual and reasonable attorneys’ fees and costs) made against or suffered by Lender, in accordance with the terms and conditions of the Loan Documents arising out of events occurring on or after the date hereof in respect of the Loan Documents or the Premises.

     8. Assignor’s Representations. Assignor represents and warrants to and for the benefit of Lender that as of the date hereof:

     (a) Assignor is a limited liability company duly organized, existing and in good standing under the laws of the State of Arizona. Assignor is manager

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managed. Alvin Kivel and Daniel Kivel are each a manager of Assignor, each having the authority to act alone for and on behalf of the Company.

     (b) The execution, delivery and performance of this Assumption have been duly authorized by the governing authorities of Assignor and no other action of Assignor or any other party related to Assignor is a requisite to the execution, delivery and performance of this Assumption.

     (c) The Loan Documents are in full force and effect.

     (d) The Loan Documents have not been amended, modified, supplemented or assigned except as indicated in the Recitals.

     (e) To the best of Assignor’s actual knowledge, there is no “Event of Default” (as defined in the Deed of Trust) nor any event, which with the passage of time or notice or both, shall constitute an Event of Default under the Loan Documents.

     (f) Assignor has no defense as to any of its obligations under the Loan Documents.

     9. Assignee’s Representations. Assignee represents and warrants to and for the benefit of Lender that:

     (a) Assignee is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, duly qualified to transact business in, and in good standing under the laws of, the State of Arizona. Assignee is member managed. The sole member of Assignee is TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company (“NPT Holdings”).

     (b) NPT Holdings is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, with the requisite limited liability company power and authority to be the sole member of Assignee.

     (c) TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, is the sole member of NPT Holdings (“Sole Member”).

     (d) Sole Member is a limited partnership duly organized, validly existing and in good standing under the laws of the State of Delaware, with the requisite partnership power and authority to be the sole member of NPT Holdings. The sole general partner of Sole Member is TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation (“General Partner”).

     (e) General Partner is a corporation duly organized, validly existing and in good standing under the laws of the State of Maryland.

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     (f) Assignee has delivered to Lender true, correct and complete copies of its Certificate of Formation and Operating Agreement, and any amendments thereto, and such documents have not been further modified, amended or otherwise changed since the date thereof and all documents required to be filed in connection with the conduct of Assignee’s business have been filed in all appropriate offices.

     (g) NPT Holdings has delivered to Lender true, correct and complete copies of its Certificate of Formation and Operating Agreement, and any amendments thereto, and such documents have not been further modified, amended or otherwise changed since the date thereof and all documents required to be filed in connection with the conduct of NPT Holdings’ business have been filed in all appropriate offices.

     (h) Sole Member has delivered to Lender true, correct and complete copies of its Certificate of Limited Partnership and Form of Limited Partnership Agreement, and such documents have not been further modified, amended or otherwise changed since the date thereof and all documents required to be filed in connection with the conduct of Sole Member’s business have been filed in all appropriate offices.

     (i) General Partner has delivered to Lender true, correct and complete copies of its Articles of Incorporation and Bylaws, and any amendments thereto, and such documents have not been further modified, amended or otherwise changed since the date thereof and all documents required to be filed in connection with the conduct of General Partner’s business have been filed in all appropriate offices.

     (j) All statements, representations, and warranties contained in any writing previously delivered by Assignee to Lender in connection with the Loan Assumption are true and correct in all material respects, and all obligations of Assignee and all conditions to the making of the Loan Assumption have been performed and satisfied in all material respects.

     (k) There has been no material adverse change, financial or otherwise, in the condition of Assignee from that submitted to Lender by Assignee or in any supporting data submitted therewith, and all of the information contained therein is materially true and correct.

     (l) There is no claim, investigation, litigation or condemnation proceeding pending or threatened against Assignee except as may have been heretofore disclosed in writing to Lender.

     (m) There is no judgment, decree, or order of any court or governmental or administrative agency or instrumentality which has been issued against Assignee and which has or may have any material effect on the business of Assignee, except as have been heretofore disclosed to Lender in writing.

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     (n) This Assumption and all other documents required to be executed by Assignee pursuant to the terms hereof and to the terms of the Transfer Consent have been duly authorized, executed and delivered, and this Assumption and the Loan Documents constitute valid and binding obligations of Assignee enforceable in accordance with their respective terms. No approval, consent, order or authorization of any governmental authority and no designation, registration, declaration or filing with any governmental entity is required in connection with the execution and delivery by Assignee of this Assumption.

     (o) The Loan Assumption will not violate or contravene any agreement, indenture, or instrument to which Assignee is a party or by which it may be bound, or be in conflict with, result in a breach of, or constitute a default under any such agreement, indenture, or other instrument, or result in the creation or imposition of any lien, charge, or encumbrance of any nature whatsoever upon any of the property or assets of Assignee except as contemplated by the provisions of the Loan Documents, and no action or approval with respect thereto by any third person is required.

     10. Modification of Deed of Trust. In connection with the Transfer and the Premises to Assignee and this Assumption, the parties agree to modify the Deed of Trust as follows:

     (a) References. Without limiting the generality of any of the liabilities and obligations assumed by Assignee hereby, Lender and Assignee agree that, to the extent applicable: wherever the term “Trustor” appears in the Deed of Trust, such reference shall mean Assignee.

     (b) Address. The address of the Trustor shown in the first paragraph of the Deed of Trust is hereby deleted and replaced with the following address:

c/o Thompson National Properties, LLC, 1900 Main Street, Suite 700,

Irvine, California 92614, Attention: Mr. Steve Corea

     11. Permitted Transfer and Encumbrances. Upon completion of the Transfer, Assignee will be the owner of the Premises. NPT Holdings (which term shall include any successors in interest as provided herein) will control Assignee and own, directly or indirectly, at least 51% of the membership interests in Assignee. Notwithstanding anything to the contrary contained herein or in the Loan Documents, no consent of or notice to Lender shall be required in connection with, and Lender agrees that it expressly consents to, the following transfers: (i) the transfer of membership interests in Assignee as long as NPT Holdings or an affiliate of General Partner continues to control and to own, directly or indirectly, at least 51% of the membership interests in Assignee; (ii) the transfer of membership interests in NPT Holdings as long as Sole Member or an affiliate of General Partner continues to control and to own, directly or indirectly, at least 51% of the membership interests in NPT Holdings; (iii) the transfer or issuance of securities or transfer of shares of General Partner; provided,

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however, that any transfer involving more than 49% of the shares of General Partner in a single transaction or coordinated series of transactions shall be subject to the “Post-Merger Requirements” (as hereinafter defined); (iv) the transfer of limited partnership interests in Sole Member, provided that General Partner remains the sole general partner of and controls Sole Member; (v) so long as the Post-Merger Requirements are satisfied, conduct any merger of General Partner (regardless of which entity is the surviving entity); and/or (vi) so long as the Post-Merger Requirements are satisfied, conduct any corporate reorganization (which term excludes any of the transactions permitted under subsections (i) through (v) of this paragraph) of General Partner, Sole Member or NPT Holdings.

          For the purposes of this Assumption and the Loan Documents, “Post-Merger Requirements” shall mean the following: (A) General Partner is the sole general partner of Sole Member; (B) General Partner shall continue to own, directly or indirectly, at least three (3) retail properties of similar class to the Property containing in the aggregate at least 300,000 square feet of gross leasable area; and (C) General Partner shall have a net worth of at least $8,000,000; provided, however, that the Post-Merger Requirements shall be deemed to be satisfied in connection with any dissolution or winding up of General Partner.

          Notwithstanding the foregoing or anything in the Loan Documents to the contrary, (i) Lender expressly permits and consents to the pledge of not more than 49% of the membership interests in Assignor and NPT Holdings pursuant to that certain Pledge and Security Agreement by and among KeyBank National Association, a national banking association and Sole Member dated November 12, 2009; and (ii) there shall be no restriction on the ability of Sole Member or NPT Holdings to pledge non-voting, non-controlling economic interests in NPT Holdings or Assignee.

     12. Modification Only. This Assumption, to the extent it modifies the Loan Documents, is a modification only, and shall relate back to the original date of execution and delivery of the Loan Documents, and except as herein provided, all of the terms and conditions of the Loan Documents shall remain in full force and effect and the parties hereby ratify and confirm the security and enforceability of the Loan Documents, as expressly modified by this Assumption.

     13. Further Assurances. Assignor and Assignee shall execute, acknowledge, and deliver all such instruments, and take all such action as may be necessary to further assure Lender the rights and obligations assigned and reserved hereby and the full benefits hereof and to preserve and protect this Assumption and all of the rights, powers, and remedies of Lender provided for herein.

     14. Remedies Cumulative, etc. Except as otherwise provided in Section 4 above, each right, power and remedy of Lender provided for in the Loan Documents and the Guarantor Documents now or hereafter existing at law or in equity or by statute or otherwise shall be in addition to every other right, power or remedy provided for in the Loan Documents and the Guarantor Documents or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by

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Lender of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by Lender of any or all such other rights, powers or remedies.

     15. Assignee’s Review of Documents. Assignee acknowledges that it has received, reviewed and approved the Loan Documents.

     16. Consents. On the terms and conditions set forth herein, Lender hereby consents to (a) the Transfer, and (b) the Loan Assumption.

     17. Future Transfers or Assignments. Assignor and Assignee acknowledge that Lender’s consent to the Transfer and the Loan Assumption does not constitute a consent by Lender to any future transfer, conveyance, or assignment of any right, title, or interest under the Loan Documents and such transfers, conveyances and assignments are subject to the provisions of the Loan Documents.

     18. Notices. Notices shall be delivered in the manner prescribed in the Deed of Trust to the parties addressed as follows:

If to Assignor:	Crestline Investments, L.L.C.
	Post Office Box 42677
	Tucson, Arizona 85733
	Attention: Alvin Kivel

Lender shall endeavor to give a courtesy copy of any notice given by it to Assignor hereunder to:

Deborah Oseran

Mendelsohn & Oseran, PLC

3915 E. Broadway Blvd. #301

Tucson, Arizona 85711

     provided, however, that Assignor expressly agrees that the failure to give such courtesy copy shall not affect the validity of the notice given to Assignor.

If to Assignee:	TNP SRT Northgate Plaza Tucson, LLC
	c/o Thompson National Properties, LLC
	1900 Main Street
	Suite 700
	Irvine, California 92614
	Attention: Mr. Steve Corea
If to Lender:	Thrivent Financial for Lutherans
	625 Fourth Avenue South
	Minneapolis, Minnesota 55415
	Attn: Loan Administration
	Mortgage and Real Estate Investments

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     19. Balances. The parties agree that, as of the date hereof, (a) the unpaid principal balance of the Note (which balance reflects the making of the June 15, 2010 monthly installment payment) is FOUR MILLION THREE HUNDRED NINETY-EIGHT THOUSAND FOUR HUNDRED NINETY-NINE AND 20/100 DOLLARS ($4,398,499.20); and (b) Lender is not holding any impounds for taxes and assessments or any impounds for insurance premiums.

     20. Validity of Assignment. Assignor and Assignee acknowledge that this Assumption shall have no force, effect or validity unless Assignor and Assignee consummate the Transfer.

     21. Escrow Waiver Letter. Lender hereby agrees that the escrow waiver letter dated July 10, 2002, from Lender to Assignor shall, notwithstanding anything to the contrary contained therein, remain in full force and effect with Assignee being substituted for Assignor therein.

     22. Successor and Assigns. This Assumption shall be binding upon and inure to the benefit of the successors and assigns of the respective parties hereto.

     23. Governing Law. This Assumption shall be governed by and construed in accordance with the laws of the State of Arizona.

     24. Attorneys’ Fees. In the event of the bringing of any action or suit by a party hereto against another party hereto by reason of any breach of any of the covenants, conditions, agreements, or provisions on the part of the other party arising out of this Assumption, the prevailing party shall be entitled to have and recover of and from the other party all costs and expenses of the action or suit, including actual and reasonable attorneys’ fees and court costs.

     25. Counterparts. This Assumption, including without limitation that certain Consent by Guarantors and Indemnitors, which are attached hereto and by this reference incorporated herein, may be executed in several counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same instrument.

     26. Captions, Gender, and Number. Any section, paragraph, title or caption contained in this Assumption is for convenience only and shall not be deemed a part of this Assumption. As used in this Assumption, the masculine, feminine, or neuter gender, and the singular or plural number shall each be deemed to include the others whenever the context so indicates.

     27. Effectiveness of Assumption. This Assumption shall not be effective unless and until it is recorded in the office of the Pima County Recorder. Assignor and Assignee acknowledge and agree that this Assumption shall not be recorded unless and until all conditions imposed by Lender to such recordation have been complied with to the satisfaction of Lender. Such conditions include the conditions set forth in the

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Transfer Consent, which have been satisfied other than with respect to those to be satisfied upon closing of the Transfer through escrow.

     28. Dating of this Assumption. The parties hereto authorize and instruct LANDMARK TITLE ASSURANCE AGENCY OF ARIZONA, LLC, an Arizona limited liability company, to date this Assumption with the date on which this Assumption is offered for recordation in the office of the Pima County Recorder.

[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the parties have executed this Assumption and Second Modification Agreement to be effective (although not necessarily signed) as of the date first above written.

ASSIGNOR:

CRESTLINE INVESTMENTS, L.L.C., an
Arizona limited liability company

By	/s/ Alvin Kivel Alvin Kivel
	Its Manager

STATE OF ARIZONA	)
	)	ss.
County of Pima	)

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by ALVIN KIVEL, the Manager of CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company, on behalf of the limited liability company.

/s/ Lee Ann Edmond  

Notary Public 

My Commission Expires:

11/20/2013

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     IN WITNESS WHEREOF, the parties have executed this Assumption and Second Modification Agreement to be effective (although not necessarily signed) as of the date first above written.

ASSIGNEE:

TNP SRT NORTHGATE PLAZA TUCSON, LLC, a Delaware limited liability company
By:	TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company Its Sole Member
	By:	TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership Its Sole Member
		By:	TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation General Partner
			By	/s/ Christopher S. Cameron
			Name Christopher S. Cameron
			Title CFO, Secretary

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STATE OF CALIFORNIA	)
	)	ss.
County of Orange	)

     On July 1, 2010, before me, Bhrizra Comacho, a Notary Public, personally appeared Christopher S. Cameron, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

     I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

     WITNESS my hand and official seal.

Signature: /s/ Bhrizra Comacho  

(Seal)

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     IN WITNESS WHEREOF, the parties have executed this Assumption and Second Modification Agreement to be effective (although not necessarily signed) as of the date first above written.

LENDER:

THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation
By	/s/ Paul R. Binder
Name Paul R. Binder
Title Asst. Vice President

STATE OF MINNESOTA	)
	)	ss.
COUNTY OF HENNEPIN	)

     On July 1, 2010, before me, the undersigned, a Notary Public in and for said State, personally appeared Paul R. Binder, personally known to me or proved to me on the basis of satisfactory evidence to be the person who executed the within instrument as a Ass’t Vice President of THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation, the corporation that executed the within instrument.

WITNESS my hand and official seal.

(SEAL)	/s/ Debra Ruth Schwandt Notary Public
My Commission Expires:
January 31, 2015

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CONSENT BY GUARANTORS AND INDEMNITORS

     The undersigned, being (a) Guarantors under the “Guaranty” [as defined in that certain Assumption and Second Modification Agreement of even date herewith (the “Assumption”), by and between Assignor, Assignee and Lender, of which this Consent by Guarantors and Indemnitors is a part; all defined terms used in this Consent by Guarantors and Indemnitors, as indicated by initial capitalization, shall have the meaning given to such terms in the Assumption], and (b) Indemnitors under the Environmental Indemnity, do hereby (i) consent and agree to (A) the Transfer, and (B) the provisions of the Assumption; and (ii) acknowledge and agree that, except as provided in the Assumption, (A) the Guarantor Documents remain in full force and effect in accordance with their respective terms with respect to events which occurred prior to the Transfer, notwithstanding (y) the Transfer, and (z) the execution and delivery of the Assumption, and (B) the provisions of the Assumption shall not, in any way, modify, limit or impair the obligations of the undersigned under the Guarantor Documents in connection with events which occurred prior to the Transfer.

          IN WITNESS WHEREOF, this Consent by Guarantors and Indemnitors has been executed to be effective (although not necessarily executed) as of the date of the Assumption.

/s/ Daniel Kivel  

Daniel Kivel 

/s/ Alvin Kivel  

Alvin Kivel 

The undersigned MARIA KIVEL, the wife of Daniel Kivel, hereby acknowledges that she has read and understands the foregoing Consent, and hereby joins this Consent to the extent necessary to bind her interest in any property owned by her marital community; and, further expressly covenants and agrees that recourse may be had under this Agreement to any property owned jointly (as tenants by entireties, tenants in common, community property or any other form of joint ownership) of the undersigned and Daniel Kivel, if and to the extent such jointly owned property is included in assets referred to in any financial statement heretofore or hereafter submitted by Daniel Kivel to Lender.

/s/ Maria Kivel  

Maria Kivel 

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The undersigned JANICE KIVEL, the wife of Alvin Kivel, hereby acknowledges that she has read and understands the foregoing Consent, and hereby joins this Consent to the extent necessary to bind her interest in any property owned by her marital community; and, further expressly covenants and agrees that recourse may be had under this Agreement to any property owned jointly (as tenants by entireties, tenants in common, community property or any other form of joint ownership) of the undersigned and Alvin Kivel, if and to the extent such jointly owned property is included in assets referred to in any financial statement heretofore or hereafter submitted by Alvin Kivel to Lender.

/s/ Janice Kivel  

Janice Kivel 

STATE OF ARIZONA	)
	)	ss.
County of Pima	)

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by DANIEL KIVEL, individually.

/s/ Lee Ann Edmond  

Notary Public 

My Commission Expires:

11-20-13

STATE OF ARIZONA	)
	)	ss.
County of Pima	)

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by ALVIN KIVEL, individually.

/s/ Lee Ann Edmond  

Notary Public 

My Commission Expires:

11-20-13

17

STATE OF ARIZONA	)
	)	ss.
County of Pima	)

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by MARIA KIVEL, individually.

/s/ Lee Ann Edmond  

Notary Public 

My Commission Expires:

11-20-13

STATE OF ARIZONA	)
	)	ss.
County of Pima	)

     The foregoing instrument was acknowledged before me this 2nd day of July, 2010, by JANICE KIVEL, individually.

/s/ Lee Ann Edmond  

Notary Public 

My Commission Expires:

11-20-13

18

LEGAL DESCRIPTION

The land referred to in this document is situated in the County of Pima, State of Arizona and is described as follows:

A portion of the Southwest quarter of the Southwest quarter of the Southwest quarter of Section 34, Township 13 South, Range 14 East, Gila and Salt River Base and Meridian, Pima County, Arizona, more particularly described as follows:

COMMENCING at the Southwest corner of said Section 34 being monumented by a brass cap in casting;

THENCE North 00 degrees 28 minutes 39 seconds West, along the West line of said Section 34, a distance of 60.00 feet;

THENCE North 89 degrees 53 minutes 28 seconds East, parallel to the South line of said Section 34, a distance of 60.00 feet to the POINT OF BEGINNING, monumented by a ¹/2 inch rebar tagged “LS 4399”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to the West line of said Section 34, a distance of 15.00 feet to a point, monumented by a ¹/2 inch rebar tagged “LS 4399”;

THENCE North 04 degrees 05 minutes 42 seconds East, a distance of 125.43 feet to a chiseled “X”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to the West line of said Section 34, a distance of 124.78 feet;

THENCE North 45 degrees 28 minutes 39 seconds West, a distance of 14.14 feet to a ¹/2 inch rebar tagged “LS 4399”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to and distant 60.00 feet Easterly of the West line of said Section 34, a distance of 305.16 feet to a concrete nail tagged “LS 19324”, being 20.00 feet Southerly of the North line of the Southwest quarter of the Southwest quarter of the Southwest quarter, of said Section 34;

THENCE North 89 degrees 52 minutes 03 seconds East, parallel to the North line of the Southwest quarter of the Southwest quarter of the Southwest quarter of said Section 34, a distance of 555.33 feet to the beginning of a horizontal curve concave Southwesterly and a ¹/2 inch rebar tagged “LS 4399”;

THENCE Southerly along said curve, an arc distance of 39.11 feet, said curve having a central angle of 89 degrees 37 minutes 25 seconds, and a radius of 25.00 feet, to a ¹/2 inch rebar tagged “LS 4399”;

THENCE South 00 degrees 30 minutes 32 seconds East, a distance of 385.23 feet to a ¹/2 inch rebar tagged “LS 4399”;

THENCE South 89 degrees 43 minutes 18 seconds East, a distance of 19.91 feet to a ¹/2 inch rebar tagged “LS 4399”;

THENCE South 00 degrees 28 minutes 56 seconds East, a distance of 180.00 feet to a ¹/2 inch rebar tagged “CE 1322” on the North right-of-way line of Grant Road;

THENCE South 89 degrees 53 minutes 28 seconds West, parallel to and distant 50.00 feet Northerly of the South line of said Section 34, a distance of 200.06 feet to a ¹/2 inch rebar tagged “CE 1322”;

THENCE North 00 degrees 16 minutes 48 seconds West, a distance of 10.00 feet;

THENCE South 89 degrees 53 minutes 28 seconds West, parallel to and distant 60.00 feet Northerly of the South line of said Section 34, a distance of 400.30 feet to the POINT OF BEGINNING.

EXCEPT the certain above-ground improvements, buildings and/or structures conveyed in Deed recorded June 25, 2004 in Docket 12331 at page 1264

Tax Parcel Nos. 110-07-414C9
110-07-414D0
110-07-414E1
110-07-414F2

ii

EX-10.42

EXHIBIT 10.42

PROMISSORY NOTE

$5,300,000	Tucson, Arizona
	July 10, 2002

FOR VALUE RECEIVED, the undersigned, CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company (hereinafter called “Maker”), promises to pay to the order of THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation (hereinafter called “Holder”), by preauthorized Automated Clearinghouse transaction (“ACH”) or such other reasonable method as Holder directs, to its account at Bank One, Milwaukee, Wisconsin, Attention: Thrivent Financial for Lutherans, Account No. 510100001 (Thrivent Loan No. 86070), or at such other place as Holder may from time to time designate in writing, the principal sum of FIVE MILLION THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($5,300,000.00) plus interest calculated on a daily basis (based on a 360-day year) from the date that Holder disburses the principal sum on the principal balance from time to time outstanding as hereinafter provided, principal, interest and all other sums payable hereunder to be paid in lawful money of the United States of America as follows:

A.	Initially, interest shall accrue at the rate of 6.25% per annum.
B.	All interest accruing during the period commencing on the date of this Promissory Note (this “Note”) through and including the fourteenth (14th) day of July, 2002, shall be due and payable on the date of this Note; such interest payment shall be deducted by Holder from the commitment fee delivered to Holder by Maker. Thereafter, interest and principal shall be due and payable in consecutive, equal monthly installments of Thirty- Four Thousand Nine Hundred Sixty-Three and No/100 Dollars ($34,963.00) each, commencing on the fifteenth (15th) day of August, 2002 (hereinafter the “Commencement Date”) and continuing on the fifteenth (15th) day of each and every month thereafter until this Note shall be paid in full or until the interest rate is reset pursuant to Paragraph C.
C.	Holder has the option, upon ninety (90) days prior written notice, to increase or decrease the interest rate at the end of the third loan year, at the end of the sixth loan year and at the end of the ninth loan year (each a “Reset Date”). Holder may, on any Reset Date, reset the interest rate to Holder’s then-current interest rate for similar loans. In the event Holder elects to exercise its option to reset the interest rate on any Reset Date, the principal and interest payment shall be recalculated by Holder based on the principal balance outstanding on the Reset Date and an amortization period calculated by subtracting the number of months elapsed under this Note from 300. Payments will be due in the amount calculated by Holder commencing on the next regularly scheduled payment date and on the fifteenth (15th) day of each and every month thereafter until this Note shall be paid in full or until the interest rate is reset on a subsequent Reset Date pursuant to this paragraph.

05-115863.03
Promissory Note
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

D. If not sooner paid, the entire unpaid principal balance, all accrued and unpaid interest, and all other amounts payable hereunder shall be due and payable in full on the fifteenth (15th) day of July, 2027.

Maker agrees to an effective rate of interest that is the rate stated above plus any additional rate of interest resulting from any other charges in the nature of interest paid or to be paid in connection with this Note.

If any payment required under this Note is not paid when due, then, at the option of Holder, Maker shall pay a “late charge” equal to the greater of three percent (3%) of the amount of that payment or Five Hundred and No/100 Dollars ($500.00), to compensate Holder for administrative expenses and other costs of delinquent payments. This late charge may be assessed without notice, shall be immediately due and payable or, at the option of Holder, added to principal, and shall be in addition to all other rights and remedies available to Holder.

Acceptance by Holder of any payment which is less than payment in full of all amounts due and payable at the time of such payment shall not constitute a waiver of Holder’s right to demand payment of the balance due, or any other rights of the Holder at that time or any subsequent time.

All payments on this Note shall be applied first to the payment of any costs, fees or other charges incurred in connection with the indebtedness evidenced hereby, next to the payment of accrued interest and then to the reduction of the principal balance.

This Note is secured by, among other things, a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (“Deed of Trust”) of even date herewith, executed by Maker, as trustor, in favor of the Holder, as beneficiary, encumbering property situate in Pima County, Arizona. Such Deed of Trust and all other documents or instruments securing the indebtedness evidenced by this Note or executed or delivered in connection with the indebtedness evidenced by this Note are hereinafter called the “Loan Documents.” If Holder is made a party to any litigation by reason of this Note or any of the Loan Documents, Maker agrees to pay all expenses of Holder and such expenses shall bear interest at the rate of fifteen percent (15%) from the date such expenses are actually paid by Holder. Maker specifically waives trial by jury for any matter involving this Note or the Loan Documents.

Time is of the essence of this Note.

Upon the occurrence of any of the following events (“Events of Default”), Holder may, at its sole option, to be exercised at any time thereafter, with notice to Maker of such option being hereby expressly waived, declare the entire unpaid principal balance of this Note and all unpaid, accrued interest thereon, immediately due and payable:

(a)	The failure of Maker to make any payment of principal and/or interest on this Note within ten (10) days of its due date;
(b)	The failure of Maker to comply with any provisions, obligations, or other representations contained in this Note or any of the Loan Documents and such failure is not cured by the performance so required, and the remediation of any consequences the delay in such

05-115863.03
Promissory Note
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

2

performance may have caused, within fifteen (15) days after notice of such failure is given to Maker, provided, however, any failure shall be deemed an Event of Default upon the occurrence thereof (for which no notice shall be required and no cure period shall be available to Maker) if such failure (i) is the third (3rd) to occur within any period of twelve (12) consecutive months (and notice of the first two (2) failures has been sent to Maker), regardless of whether the same or different failures are involved and notwithstanding that Maker may have cured within any applicable cure period any previous failures occurring within such twelve (12) month period, or (ii) in the reasonable discretion of Holder, constitutes or creates a clear and present emergency or threat to property described in the Deed of Trust or the lien or security interest created in any of the Loan Documents. In the event the fifteen (15) days cure period applies to a failure under this subparagraph (b) and such failure cannot, in the sole discretion of Holder, reasonably be cured within said fifteen (15) day period, Maker shall have an additional thirty (30) days to cure such failure so long as Maker is diligently pursuing said cure. In no event shall the cure period exceed the total of forty-five (45) days.

The failure of Holder to exercise the foregoing option or any other right or remedy available hereunder, under any Loan Document, at law, or in equity, shall not constitute a waiver of, or impair, the right to exercise said option or any other right or remedy in the event of any continuing or subsequent such failure.

After maturity of any installment of the Note (and such failure to pay such installment continues for ten (10) days) or after maturity of this Note, including maturity upon acceleration, the amount of the installment or the unpaid principal balance, all accrued and unpaid interest and all other amounts payable hereunder, as applicable, shall bear interest, until paid at the rate of fifteen percent (15%) from and after maturity until paid. Maker shall pay all costs and expenses, including actual and reasonable attorneys’ fees and court costs, incurred in the collection or enforcement of all or any part of this Note. All such costs and expenses shall be secured by the Deed of Trust and by all other Loan Documents. In the event of a dispute between Maker and Holder regarding the interpretation of the Note or the Loan Documents the prevailing party shall be entitled to court costs and reasonable attorneys’ fees incurred resolving the interpretation and such court costs and attorneys’ fees shall be set by the court and not by jury (trial by jury being waived) and shall be included in any judgment.

Notwithstanding the above, Maker agrees that in the Event of Default, followed by acceleration of the maturity of this Note, a tender of an amount necessary to satisfy the entire indebtedness shall be deemed a voluntary prepayment, and to the extent permitted by law, shall include the following prepayment privilege fee; provided further that if such tender occurs during the (i) loan year one through the first six months of the second loan year; (ii) loan year four through the first six months of the fifth loan year; (iii) loan year seven through the first six months of the eighth loan year; and (iv) loan year ten through the first six months of the eleventh loan year, Maker shall pay a prepayment fee equal to the greater of (i) eight percent (8%) of the outstanding principal balance or (ii) the amount prepaid times the privilege rate (defined below). A loan year is each twelve (12) month period starting one month prior to the Commencement Date.

05-115863.03
Promissory Note
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

3

Except as provided below, Maker shall have no right to prepay the principal balance of this Note during (i) loan year one through the first six months of the second loan year; (ii) loan year four through the first six months of the fifth loan year; (iii) loan year seven through the first six months of the eighth loan year; and (iv) loan year ten through the first six months of the eleventh loan year (the “Prohibited Prepayment Periods”). Commencing with the (a) last six months of the second loan year through the first nine months of the third loan year; (b) last six months of the fifth loan year through the first nine months of the sixth loan year; (c) last six months of the eighth loan year through the first nine months of the ninth loan year; and (d) last six months of the eleventh loan year through the first nine months of the twelfth loan year (each a “premium prepayment period”), Maker shall have the right, following the giving of not less than sixty (60) days prior written notice to Holder, to prepay all (and not less than all) of the then outstanding principal balance of this Note, together with all interest accrued, but unpaid thereon to the date of prepayment, plus a premium equal to the greater of (i) one percent (1%) of the outstanding principal balance of this Note or (ii) the amount prepaid times the privilege rate. The privilege rate shall be equal to the product obtained by taking the difference between (1) six and one-quarter percent (6.25%) or the interest rate in effect at the time of such calculation in the event that Holder has exercised its option to reset the interest rate and (2) the market yield of U.S. Treasury issues as quoted daily in The Wall Street Journal which have the closest maturity date (month and year) to the date this Note can be prepaid at par and multiplying this difference by the remaining term of the premium prepayment period (the remaining term to be expressed as a fraction equal to the number of days remaining in the premium prepayment period over 365). The prepayment privilege fee will be reduced to a present value on a per period basis discounted at the above Treasury issues rate. During the last three months of (A) the third loan year; (B) the sixth loan year; (C) the ninth loan year; and (D) the twelfth loan year, Maker shall have the right to prepay this Note in full, upon sixty (60) days prior written notice to Holder, without premium.

UPON AT LEAST SIX (6) MONTHS PRIOR WRITTEN NOTICE, HOLDER HAS THE OPTION TO DECLARE THE ENTIRE UNPAID PRINCIPAL BALANCE OF THE NOTE AND ALL UNPAID, ACCRUED INTEREST THEREON, IMMEDIATELY DUE AND PAYABLE AT THE END OF THE TWELFTH (12TH) LOAN YEAR OR ANY TIME THEREAFTER.

Enforcement of Maker’s liability hereunder shall be limited to the secured property, and any other collateral Holder may hold to secure payment of this Note, and Holder shall not be entitled to seek or obtain any deficiency judgment against Maker, except that Maker shall be and remain fully personally liable for the following:

(i)	tenant security deposits with respect to each lease to the extent not used to satisfy tenant arrearages of rent or to satisfy damages caused by tenant default;
(ii)	rents paid more than one (1) month in advance of its due date;
(iii)	rents and other similar sums received by Maker from the secured property after Maker has failed to pay Holder any sum then due and payable or after an Event of Default unless applied to (A) normal and necessary operating expenses of the secured property or (B) the indebtedness evidenced by this Note (It is understood and agreed that all revenues

05-115863.03
Promissory Note
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

4

	derived from the secured property are to be held by Maker as a trust fund to be used first for the payments due under this Note and the then due and payable legitimate operating expenses of the secured property and only after such payments shall the revenues be used for Maker’s personal use and/or distribution.);
(iv)	insurance or condemnation proceeds used for purposes other than those set forth in Section 5 of the Deed of Trust, or as otherwise approved in writing by Holder;
(v)	amounts necessary to pay taxes, assessments or any other charges by a governmental entity which are a lien upon the secured property at the time Holder takes actual possession of the secured property or has a receiver appointed;
(vi)	amounts necessary to pay any construction lien, mechanics’ liens, materialmen’s liens or similar type lien against the secured property arising out of the acts or omissions of Maker, provided, however, that Maker shall have the right to contest the amount or validity of any such lien, by appropriate legal proceedings if: (x) the legal proceedings shall operate to prevent the collection of such lien and (y) Maker shall deposit with Holder or with the appropriate court or other governmental authority or title insurance company satisfactory to Holder an amount, with such subsequent additions thereto as may be necessary or sufficient in Holder’s opinion to pay such liens, together with all estimated interest and penalties in connection therewith;
(vii)	taxes and fees required to be paid to any government entity for the transfer of title;
(viii)	damages suffered by Holder due to material misrepresentation or waste committed by Maker, its agents or employees; and
(ix)	all actual and reasonable attorneys’ fees and other costs (including interest accrued as provided herein on any delinquent payments) incurred by Holder in order to recover from Maker any amounts for which Maker remains personally liable as provided in subparagraphs (i) through (viii) above.

Further, Maker shall remain personally liable for the prompt payment of the Loan, to the extent of the then outstanding principal amount of the Loan, plus accrued but unpaid interest thereon and any other sums due pursuant to this Note or the Loan Documents, and actual and reasonable attorneys’ fees and all other costs of collection, upon the occurrence of any of the following:

(i)	Maker used fraud to induce Holder to make the Loan evidenced by this Note;
(ii)	Holder is prevented from acquiring title to the secured property following an Event of Default and Holder is unsuccessful in collecting on any title insurance policy that it holds in connection with the secured property because of forfeiture of Maker’s title under federal, state or local laws;
(iii)	Maker voluntarily files a petition or commences any case or proceeding under any provision or chapter of the United States Bankruptcy Code or any member of Maker files an involuntary petition against Maker;

05-115863.03
Promissory Note
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

5

(iv) There is an unconsented transfer of interest in the secured property as defined in Section 6.4 of the Deed of Trust.

Maker, sureties, guarantors and endorsers hereof: (a) agree to be jointly and severally bound, (b) severally waive any homestead or exemption right against said debt, (c) severally waive demand, diligence, presentment for payment, protest and demand, and notice of extension, dishonor, protest, demand and nonpayment of this Note, (d) consent that Holder may extend the time of payment or otherwise modify the terms of payment of any part or the whole of the debt evidenced by this Note, at the request of any other person primarily liable hereon, and such consent shall not alter nor diminish the liability of any person, and (e) agree that Holder may setoff at any time any sums or property owed to any of them by Holder.

This Note shall be binding upon Maker and its successors and assigns and shall inure to the benefit of the Holder hereof, and any subsequent holders of this Note, and their successors and assigns.

All notices required or permitted in connection with this Note shall be given at the place and in the manner provided in the Deed of Trust for the giving of notices.

In the event of any inconsistency between the provisions of this Note and those of the Loan Documents, the provisions of this Note shall control over those of the Loan Documents.

This Note shall in all respects be governed and construed in accordance with the laws of the State of Arizona. Venue shall be appropriate only in Tucson, Arizona. The Maker recognizes that a Court may find that certain provisions of this Note may test and/or exceed the limits imposed by law with respect to notice and/or waivers of rights. However, the Maker intends for the law to be interpreted as broadly as possible to support the enforcement of this Note in accordance with its terms. If any provision of this Note is found by a court of law to be illegal, unenforceable, or contrary to public policy, then it is the intent of Maker that such provision be given force to the fullest possible extent permitted by law, and that the remainder of the Note be construed as if such illegal provision were not contained therein, and that the rights, obligations, and interests of Maker and Holder under the remainder of the Note shall continue in full force and effect. For example, if from any circumstances whatsoever, fulfillment of any provision in this Note or the Loan Documents, would result in an amount paid or agreed to be paid which exceeds the highest lawful rate permissible under applicable usury laws, then the obligation to be fulfilled shall be reduced to the limit of such validity, and if Holder shall receive as interest an amount which would exceed the highest lawful rate, such amount shall be applied to the reduction of the unpaid principal balance due hereunder in the inverse order of maturity without the application of a prepayment privilege fee, and not to the payment of interest.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

05-115863.03
Promissory Note
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

6

IN WITNESS WHEREOF, these presents are executed as of the date first written above.

CRESTLINE INVESTMENTS, L.L.C.,
an Arizona limited liability company
By: Name: Its:	/s/ Alvin Kivel Alvin Kivel Manager

05-115863.03
Promissory Note
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

EX-10.43

Exhibit 10.43

GUARANTY

     THIS GUARANTY, made and entered into as of the 6th day of July, 2010, by TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation (“Guarantor”), to THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation (“Lender”).

RECITALS

     A. Subject to the provisions of that certain Assumption and Second Modification Agreement of even date herewith (the “Assumption Agreement”), by and among CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company (“Assignor”), as Assignor, TNP SRT NORTHGATE PLAZA TUCSON, LLC, a Delaware limited liability company (“Borrower”), as Assignee, and Lender, as Lender, Borrower is, or will be, the owner of the real property described in Exhibit A attached hereto and incorporated herein by this reference (the “Premises”).

     B. The Premises is subject to liens of, among other things, (i) that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated July 10, 2002 (the “Original Deed of Trust”), made by Assignor, as Trustor, to a trustee for the use and benefit of Lender, as Beneficiary, and recorded July 10, 2002, in Docket 11838, page 269, in the office of the Pima County Recorder (all recording information contained herein refers to recordings in the office of the Pima County Recorder), as modified by that certain Modification Agreement dated June 22, 2004 (the “Modification”), by and between Lender, as Lender, and Assignor, as Borrower, and recorded June 25, 2004, in Docket 12331, page 1269, (the Original Deed of Trust, as modified by the Modification, is hereinafter referred to as the “Security Instrument”); and (ii) that certain Assignment of Rents and Leases dated July 10, 2002 (the “Original Lease Assignment”), from Assignor, as Borrower, to Lender, as Lender, and recorded July 10, 2002, in Docket 11838, page 302, as modified by the Modification, (the Original Lease Assignment, as modified by the Modification, is hereinafter referred to as the “Lease Assignment”), which are liens against the real property described in the Security Instrument (the “Premises”). The Security Instrument and the Lease Assignment are sometimes hereinafter collectively referred to as the “Security Documents”.

     C. The Security Documents secure, among other things, payment of the indebtedness evidenced by that certain Promissory Note made by Assignor to the order of Lender dated July 10, 2002 (the “Original Note”), in the face amount of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000), which Original Note was amended and restated by that certain Amended and Restated Promissory Note dated June 22, 2004 (the “Restated Note”), in the face amount of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000), made by Assignor to the order of Lender, (the Original Note, as amended and restated by the Restated Note, is hereinafter referred to as the “Note”). The Note and the Security Documents are hereinafter referred to as the “Loan Documents”.

LOAN NO. 10-0086070

2324569.2/GUARANTY/CRESTLINE 2010 ASSUMPTION

     D. Lender consented to the transfer of the Premises from Assignor to Borrower (the “Transfer”), and the assumption (the “Loan Assumption”) by Borrower of the loan evidenced by the Note and secured by the Security Documents, on the terms and conditions contained in the Assumption Agreement and in that certain consent to transfer letter dated June 3, 2010 (the “Transfer Consent”), from Lender to Assignor.

     E. Guarantor enters into this Guaranty to induce Lender to consent to the Transfer and to satisfy certain of the conditions specified in the Transfer Consent. Guarantor acknowledges that Lender would not permit the Transfer unless Guarantor executes and delivers this Guaranty to Lender, and intends that Lender shall rely on this Guaranty in consenting to the Transfer and permitting the Loan Assumption.

     NOW, THEREFORE, in consideration of the recitals and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Guarantor hereby, jointly and severally, covenant and agree with Lender as follows:

     1. Guaranty. Guarantor hereby irrevocably, unconditionally and absolutely, guarantees to Lender the due and prompt payment, and not just the collectibility, of all amounts and the due and prompt performance by Borrower of all obligations for which Borrower has recourse liability to Lender under the terms of the Note (the payment and performance of the items set forth in this Section being hereinafter collectively referred to as the “Indebtedness Guaranteed”).

     Notwithstanding the provisions of this Section 1 to the contrary, Guarantor shall become personally liable for the prompt payment of all sums owing under the Note and any other sums due pursuant to the Loan Documents, including actual attorneys’ fees and all other costs of collection, to the extent that Borrower becomes fully liable to Lender for such amounts under the terms of the Note.

     2. Incorporation of Loan Documents. The Note, Security Instrument, and the other Loan Documents are hereby made a part of this Guaranty by reference thereto with the same force and effect as if fully set forth herein and, to the best of Guarantor’s knowledge, all representations and warranties made by Borrower in the Loan Documents are true and correct.

     3. Representations and Warranties. In order to induce Lender to make the Loan, Guarantor makes the representations and warranties to Lender set forth in this Section 3. Guarantor acknowledges that but for the truth and accuracy of the matters covered by the following representations and warranties, Lender would not have agreed to make the Loan. Guarantor represents and warrants to Lender as follows:

     a. If Guarantor is a corporation, partnership, limited liability company or trust, it is duly organized, validly existing and in good standing under the laws of the state of its organization, is duly qualified to do business in all states in which it is required to be so qualified and has all requisite power and authority to enter into this Guaranty and to perform its obligations hereunder; the execution, delivery and performance of this Guaranty by Guarantor has been duly and

2

validly authorized; and all requisite action has been taken by Guarantor to make this Guaranty valid and binding upon Guarantor, enforceable in accordance with its terms.

     b. If Guarantor is an individual, such individual is of legal age, is under no legal disability and is fully competent to make, execute and deliver this Guaranty.

     c. If Guarantor is a corporation, partnership, limited liability company or trust, neither the execution and delivery of this Guaranty nor the performance of the provisions of the agreements herein contained on the part of Guarantor will contravene, violate or constitute a default under the organizational and other governing instruments of Guarantor or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under any agreement, indenture, loan or credit agreement or other instrument to which Guarantor or the Premises is subject or result in the violation of any law, rule, regulation, order, judgment or decree to which Guarantor or the Premises is subject.

     d. If Guarantor is an individual, neither the execution and delivery of this Guaranty nor the performance of the provisions of the agreements herein contained on the part of Guarantor will result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under any agreement, indenture, loan or credit agreement or other instrument to which Guarantor or the Premises is subject or result in the violation of any law, rule, regulation, order, judgment or decree to which Guarantor or the Premises is subject.

     e. There are no (i) bankruptcy proceedings involving Guarantor and none is contemplated; (ii) dissolution proceedings involving Guarantor and none is contemplated; (iii) unsatisfied judgments of record against Guarantor; or (iv) tax liens filed against Guarantor.

     f. This Guaranty has been duly executed and delivered by Guarantor and constitutes the legal, valid and binding obligation of Guarantor, enforceable in accordance with its terms, except as to enforcement of remedies, as may be limited by bankruptcy, insolvency or similar laws affecting generally the exercise and enforcement of creditor’s rights and remedies.

     g. There are no judgments, suits, actions or proceedings at law or in equity or by or before any governmental instrumentality or agency now pending against or, to the best of Guarantor’s knowledge, threatened against or affecting Guarantor or its assets, or both, nor has any judgment, decree or order been issued against Guarantor or its assets, or both.

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     h. No consent or approval of any regulatory authority having jurisdiction over Guarantor is necessary or required by law as a prerequisite to the execution, delivery and performance of the terms of this Guaranty.

     i. No Guarantor is, to the extent such would have a material adverse effect on Guarantor and as of the date hereof, (i) in default in the payment or performance of any of its obligations in connection with borrowed money or any other major obligation, or (ii) in default under any other contract or agreement to which Guarantor is a party.

     j. Any and all balance sheets, net worth statements and other financial statements and data which have heretofore been given to Lender with respect to Guarantor fairly and accurately represent the financial condition of Guarantor as of the date thereof, and, since the date thereof, there has been no material adverse change in the financial condition of Guarantor.

     4. Payments. All payments due under this Guaranty are payable upon demand by Lender and shall be paid in the manner set forth in the Note or at such other place as Lender shall notify Guarantor in writing.

     5. Absolute and Unconditional Guaranty. This Guaranty and the obligations of Guarantor under this Guaranty constitute an absolute, present and continuing guaranty of payment and performance and not of collectibility. The obligations of Guarantor under this Guaranty are in no way conditioned or contingent upon any action or omission by Lender or upon any other action, occurrence, or circumstance whatsoever. It is expressly understood and agreed that the obligations of Guarantor hereunder are and shall be absolute under any and all circumstances and shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim that Guarantor may have against Borrower or Borrower may have against Lender. Guarantor agrees that their liability hereunder shall be direct and immediate as a primary obligation and liability, irrespective of whether Lender has declared an Event of Default or commenced the exercise of any remedies under the Note, the Security Instrument or any of the other Loan Documents. Lender may, at its option, proceed directly and at once, without notice, against Guarantor to collect and recover the full amount of the Indebtedness Guaranteed, or any portion thereof, without proceeding against Borrower or any other person or entity, or foreclosing upon, selling, or otherwise disposing of or collecting or applying against any of the Premises or other collateral for the Loan.

     6. [Intentionally Omitted].

     7. Waiver of Notice and Consent. The obligations of Guarantor hereunder shall remain in full force and shall not be impaired by: (a) any agreement extending or otherwise altering the time for or the terms of payment of all or any part of the sums due under the Note, any other Loan Document; (b) any express or implied modification, renewal, extension or acceleration of or to the Note, any other Loan Document; (c) any exercise or non-exercise by Lender of any right or privilege under any of the Loan

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Documents or this Guaranty; (d) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Guarantor, Borrower, or any affiliate of Borrower or Guarantor, or any action taken with respect to this Guaranty by any trustee or receiver or by any court in any such proceeding, whether or not Guarantor shall have had notice or knowledge of any of the foregoing; (e) any release, settlement, compromise, waiver or discharge of any claim of Lender against Borrower or Guarantor from liability under any of the Loan Documents; (f) any subordination, compromise, settlement, release (by operation of law or otherwise), discharge, compound, collection, liquidation, waiver, modification, resort to, exercise or refrain from exercising any right Lender may have under any of the Loan Documents or any collateral described in any of the Loan Documents, this Guaranty or otherwise, or any substitution with respect thereto; (g) any assignment or other transfer of any of the Loan Documents, in whole or in part; (h) any acceptance of partial performance of any of the obligations of Borrower or Guarantor under any of the Loan Documents or this Guaranty; (i) any consent to the transfer of any collateral described in any of the Loan Documents or otherwise; (j) any bid or purchase at any sale of the collateral described in any of the Loan Documents or otherwise; (k) any acceptance of additional security or guarantees of any kind; and (I) any additional loan or extension of credit to or for the benefit of Borrower or Guarantor. Guarantor hereby agrees that Lender may from time to time without notice to or consent of Guarantor and upon such terms and conditions as Lender may deem advisable take any of the above actions without affecting this Guaranty.

     8. Waiver of Defenses. Guarantor hereby unconditionally and absolutely waives the following defenses to enforcement of this Guaranty: (a) any obligation on the part of Lender to protect, secure or insure any of the security given for the payment of the sums due under the Note and the other Loan Documents; (b) any defense arising by reason of the invalidity or unenforceability of any of the Loan Documents or any disability of Borrower; (c) the release of any of the security given for the payment of the Note; (d) notice of acceptance of this Guaranty by Lender; (e) notice of presentment, demands, demands for payment or performance, notice of non-performance, protests, notices of protest and notices of dishonor, notice of non-payment or partial payment and all other notices or formalities; (f) notice of any defaults under the Note or in the performance of any of the covenants and agreements contained therein or in any other Loan Document given as security for the Note; (g) any limitation or exculpation of liability on the part of Borrower whether contained in the Note or otherwise; (h) the transfer or sale by Borrower of any security given for the Note, the other Loan Documents or the Indebtedness Guaranteed or the diminution in value thereof; (i) any failure, neglect or omission on the part of Lender to realize on or protect any security given for the Note or the other Loan Documents; (j) any right to require that Lender proceed against Borrower or exercise its rights under the Loan Documents or exhaust its rights with respect to any security given in the Loan Documents prior to enforcing this Guaranty; provided, however, at its sole discretion Lender may either in a separate action or an action pursuant to this Guaranty pursue its remedies against Borrower or any other guarantor or surety, without affecting its rights under this Guaranty; (k) notice to Guarantor of the existence of or the extending to Borrower of the Loan; (I) any order,

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method or manner of application of any payments on the Loan, the Loan Documents or the Indebtedness Guaranteed; (m) any right to insist Lender disburse the full principal amount of the Note to Borrower or the order, method, manner or amounts disbursed under the Note; (n) any defense arising by reason of the manner in which Lender has exercised its remedies or based upon an election of remedies by Lender; (o) any right of subrogation and any rights to enforce any remedy which Lender now has or may hereafter have against Borrower and any benefit of, and any right to participate in, any security now or hereafter held by Lender; (p) any defense of waiver, release, discharge in bankruptcy, statute of limitations, res judicata, statute of frauds, anti-deficiency statute, fraud, ultra vires acts, usury, illegality or unenforceability which may be available to Borrower in respect of the Note or any other Loan Document; (q) any setoff available against Lender to Borrower whether or not on account of a related transaction; or (r) any defense based upon any statute or rule which provides that the obligation of a surety must be neither larger in amount nor in other respects more burdensome than that of the principal. Guarantor further agrees that no act or thing, except for payment in full, which but for this provision might or could in law or in equity act as a release of the liabilities of Guarantor hereunder, shall in any way affect or impair this Guaranty.

     9. Deficiency. Guarantor expressly agrees that Guarantor shall be and remain liable for the Indebtedness Guaranteed to the extent that it constitutes a deficiency remaining after foreclosure of any mortgage or security interest securing the Note, notwithstanding provisions of law that may prevent Lender from enforcing such deficiency against Borrower.

     10. Insolvency of Borrower. The liability of Guarantor shall not be affected or impaired by any voluntary or involuntary dissolution, sale or other disposition of all or substantially all the assets, marshalling of assets and liabilities, receivership, insolvency, bankruptcy, assignment for the benefit of creditors, reorganization, arrangement, composition or readjustment of, or other similar event or proceeding affecting Borrower or any of its assets.

     11. Subordination to Indebtedness Guaranteed; No Subrogation.

     a. Any indebtedness of Borrower to Guarantor now or hereafter existing (including, but not limited to, any rights to subrogation that Guarantor may have as a result of any payment by Guarantor under this Guaranty), together with any interest thereon, shall be, and such indebtedness is, hereby deferred, postponed and subordinated to the prior payment in full of the Indebtedness Guaranteed. Until payment in full of the Indebtedness Guaranteed, Guarantor agrees not to accept any payment or satisfaction of any kind of indebtedness of Borrower to Guarantor and hereby assign such indebtedness to Lender, including the right to file proof of claim and to vote thereon in connection with any such proceeding under the U.S. Bankruptcy Code, including the right to vote on any plan of reorganization. Further, Guarantor agrees that until such payment in full of the Indebtedness Guaranteed, (a) Guarantor shall not accept payment from the others by way of contribution on

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account of any payment made hereunder by such party to Lender, (b) Guarantor will not take any action to exercise or enforce any rights to such contribution, and (c) if Guarantor should receive any payment, satisfaction or security for any indebtedness of Borrower to Guarantor for payment made hereunder by the recipient to Lender, the same shall be delivered to Lender in the form received, endorsed or assigned as may be appropriate for application on account of, or as security for, the Indebtedness Guaranteed and until so delivered, shall be held in trust for Lender as security for the Indebtedness Guaranteed.

     b. In consideration of the benefits accruing to Guarantor from Borrower, Guarantor hereby expressly waives all rights of subrogation, contribution, indemnification or other similar legal or equitable rights which Guarantor may now or hereafter otherwise be entitled to assert against Borrower, whether arising by contract, by operation of law (including, without limitation, any such right arising under the U.S. Bankruptcy Code) or otherwise with respect to or by reason of any payment by Guarantor under this Guaranty or on account of the Loan in connection herewith. Guarantor agrees that the payment of any amount or amounts by Guarantor pursuant to this Guaranty shall not in any way entitle Guarantor whether at law, in equity or otherwise to any right to participate in any security held by Lender for the payment of the Indebtedness Guaranteed, any right to direct the application or disposition of any such security or any right to direct the enforcement of any such security.

     c. Guarantor hereby agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time payment of any amount due under this Guaranty or otherwise with respect to the Loan is rescinded or must otherwise be restored or returned by Lender upon the insolvency, bankruptcy or reorganization of Borrower, or for any other reason, whether by court order, administrative order or settlement, all as though such payment had not been made.

     12. Debtor’s Financial Condition. Guarantor has knowledge of Borrower’s financial condition and affairs and of all other circumstances which bear upon the risk assumed by Guarantor under this Guaranty. Guarantor hereby agrees to continue to keep themselves informed thereof while this Guaranty is in force and agree that Lender does not have and will not have any obligation to investigate the financial condition or affairs of Borrower for the benefit of Guarantor or to advise Guarantor of any fact respecting, or any change in, the financial condition or affairs of Borrower or any other circumstance which may bear upon Guarantor’s risk hereunder which come to the knowledge of Lender, its directors, officers, employees or agents at any time, whether or not Lender knows, believes or has reason to know or to believe that any such fact or change is unknown to Guarantor or might or does materially increase the risk of Guarantor hereunder.

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     13. Transfer of Assets. Guarantor shall not transfer any of its assets solely or primarily for the purpose of preventing Lender from satisfying any judgment rendered under this Guaranty therefrom, either before or after the entry of any such judgment.

     14. Guarantor’s Financial Statements. Guarantor shall promptly deliver to Borrower all financial statements of Guarantor which Borrower is required by the Security Instrument to deliver to Lender, in time for Borrower to deliver the same to Lender on or before the date provided for the delivery thereof under the Security Instrument.

     15. Release of Liability. Any one or more parties liable upon or in respect of this Guaranty may be released without affecting the liability of any party not so released.

     16. Transfer of the Note and Loan Documents. This Guaranty shall run with the Note and other Loan Documents without the need for any further assignment of this Guaranty to any subsequent holder of the Note or the need for any notice to Guarantor thereof. Upon endorsement or assignment of the Note to any subsequent holder, said subsequent holder of the Note may enforce this Guaranty as if said holder had been originally named as Lender hereunder.

     17. Governing Law. This Guaranty and the rights and obligations of all parties hereunder shall be governed by and construed in accordance with the laws of the State or Commonwealth in which the Premises is located.

     18. Jurisdiction. The parties hereto irrevocably (a) agree that any suit, action or other legal proceeding arising out of or relating to this Guaranty may be brought in a court of record in the state or commonwealth in which the Premises is located or in the courts of the United States of America located in such state or commonwealth, (b) consent to the non-exclusive jurisdiction of each such court in any suit, action or proceeding, and (c) waive any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Nothing contained herein shall prevent Lender from bringing any action or exercising any rights against any security given to Lender by Guarantor, or against Guarantor personally, or against any property of Guarantor, within any other state. Commencement of any such action or proceeding in any other state shall not constitute a waiver of the agreement as to the laws of the state which shall govern the rights and obligations of Guarantor and Lender hereunder.

     19. Guarantor Not Released. No delay or omission of Lender to exercise any of its rights and remedies under this Guaranty or any other Loan Document at any time following the happening of an Event of Default, as defined in the Security Instrument, shall constitute a waiver of the right of Lender to exercise such rights and remedies at a later time by reason of such Event of Default or by reason of any subsequently occurring Event of Default. The acceptance by Lender of payment of any sum payable hereunder after the due date of such payment shall not be a waiver of

8

Lender’s right to either require prompt payment when due of all other sums payable hereunder or to declare a default for failure to make prompt payment.

     20. Captions. The captions to the Sections of this Guaranty are for convenience only and shall not be deemed part of the text of the respective Sections and shall not vary, by implication or otherwise, any of the provisions of this Guaranty.

     21. Severability. The parties hereto intend and believe that each provision of this Guaranty comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or any portion of any provision contained in this Guaranty is held by a court of law to be invalid, illegal, unlawful, void or unenforceable as written in any respect, then it is the intent of all parties hereto that such portion or provision shall be given force to the fullest possible extent that it is legal, valid and enforceable, that the remainder of the Guaranty shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion or provision was not contained therein, and the rights, obligations and interests of Guarantor and Lender under the remainder of this Guaranty shall continue in full force and effect.

     22. Successors and Assigns. The provisions of this Guaranty shall be binding upon Guarantor and upon Guarantor’s heirs, administrators, representatives, executors, successors and assigns and shall inure to the benefit of Lender and its successors and assigns. As used herein the words “successors and assigns” shall also be deemed to include the heirs, representatives, administrators and executors of any natural person who is a party to this Guaranty.

     23. Remedies Cumulative. The remedies of Lender as provided in this Guaranty and the Loan Documents and the warranties contained herein or therein shall be cumulative and concurrent, may be pursued singly, successively or together at the sole discretion of Lender, may be exercised as often as occasion for their exercise shall occur and in no event shall the failure to exercise any such right or remedy be construed as a waiver or release of such right or remedy. No remedy under this Guaranty or under any other Loan Document conferred upon or reserved to Lender is intended to be exclusive of any other remedy provided in this Guaranty or in any other Loan Document or provided by law, but each shall be cumulative and shall be in addition to every other remedy given under this Guaranty or any other Loan Document or now or hereafter existing at law or in equity or by statute.

     24. No Oral Modification. No waiver, amendment, release or modification of this Guaranty shall be made orally or shall be established by conduct, custom or course of dealing but only by an instrument in writing duly executed by Lender and Guarantor.

     25. Notices. Any notice which any party hereto may desire or may be required to give to any other party shall be in writing and either (a) mailed by certified mail, return receipt requested, or (b) sent by a nationally recognized overnight carrier which provides for a return receipt. Any such notice shall be sent to the respective party’s addresses as set forth below or to such other address as such party may, by notice in writing, designate as its address:

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          Guarantor: TNP Strategic Retail Trust, Inc.
c/o Thompson National Properties, LLC
1900 Main Street
Suite 700
Irvine, California 92614
Attention: Mr. Steve Corea

          Lender:      Thrivent Financial for Lutherans
Attention: Loan Administration — Mortgages and Real Estate
625 Fourth Avenue South
Minneapolis, Minnesota 55415

Any such notice shall constitute service of notice hereunder three (3) days after the mailing thereof by certified mail or one (1) day after the sending thereof by overnight carrier.

     26. Joint and Several Liability. The promises and agreements herein shall be construed to be and are hereby declared to be the joint and several promises and agreements of Guarantor and shall constitute the joint and several obligations of Guarantor and shall be fully binding upon and enforceable against Guarantor. Neither the death nor release of any person or party to this Guaranty shall affect or release the joint and several liability of any other person or party. Lender may at its option enforce this Guaranty against one or Guarantor, and Lender shall not be required to resort to enforcement against Guarantor and the failure to proceed against or join Guarantor shall not affect the joint and several liability of any other Guarantor.

     27. WAIVER OF JURY TRIAL. LENDER, BY ITS ACCEPTANCE HEREOF, AND GUARANTOR HEREBY VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS GUARANTY OR CONCERNING THE INDEBTEDNESS GUARANTEED AND/OR ANY COLLATERAL CONTEMPLATED THEREBY, REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS ANY CONTRACTUAL OR TORTIOUS OR OTHER CLAIM. GUARANTOR ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO LENDER IN EXTENDING CREDIT TO BORROWER, THAT LENDER WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT EACH GUARANTOR HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTAND THE LEGAL EFFECT OF THIS WAIVER.

     28. Counterparts. This Guaranty, may be executed in one or more counterparts by some or all of the parties hereto, each of which counterparts shall be an original and all of which together shall constitute a single agreement of Guaranty. The failure of any party hereto to execute this Guaranty, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

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     29. State Law Provisions. Certain provisions / sections of this Guaranty and certain additional provisions / sections that are required by laws of the State or Commonwealth in which the Premises is located may be amended, described and/or otherwise set forth in more detail on Exhibit “A” attached hereto, which such Exhibit by this reference, is incorporated into and made a part of this Guaranty. In the event of any conflict between such state law provisions and any provision herein, the state law provisions shall control.

     30. Dating of this Guaranty. Guarantor hereby authorized Lender to date this Guaranty with the date on which the Assumption Agreement is offered for recordation in the office of the Pima County Recorder.

[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the undersigned has executed this Guaranty to be effective (although not necessarily signed) as of the day and year first above written.

GUARANTOR: TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation
By	/s/ Wendy Worcester
	Name:	Wendy Worcester
	Title:	CFO

STATE OF CALIFORNIA	)
	)	ss.
County of Orange	)

     On June 29, 2010, before me, Bhriza Camacho, a Notary Public, personally appeared Wendy Worcester, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

     I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

     WITNESS my hand and official seal.

Signature:	/s/ Bhriza Camacho
		(Seal)

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EXHIBIT “A”

APPLICABLE STATE LAW PROVISIONS

     A.1 Legal Fees. It is understood and agreed that, in addition to those matters specified in this Guaranty, Guarantor shall also be responsible for paying all of Lender’s actual court costs, witness fees and other litigation-related expenses.

     A.2 Suretyship Waivers. Guarantor hereby waives the benefits of the provisions of Arizona Revised Statutes, Sections 12-1641 et seq., Arizona Revised Statutes, Section 44-142, Arizona Revised Statutes, Section 47-3605, and 16 Arizona Revised Statutes, Rules of Civil Procedure, Rule 17(f).

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EX-10.44

EXHIBIT 10.44

F. ANN RODRIGUEZ, RECORDER
RECORDED BY: PSG
                                DEPUTY RECORDER
                                9394                        ES2
TFNTI
THRIVENT FINANCIAL FOR LUTHERANS
4321 N BALLARD RD
APPLETON WI 54919 DOCKET: 11838
PAGE: 269
NO. OF PAGES: 33
SEQUENCE: 20021320139
                            07/10/2002
DOTRFS 10:47
MAIL
AMOUNT PAID $41.00

This instrument was prepared by any after recordation should be returned to:

Thrivent Financial for Lutherans
4321 North Ballard Road
Appleton, WI 54919
Attn: Real Estate Law Department

DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING

This Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (hereinafter called “Deed of Trust”) is made as of July 10, 2002, by and among CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company, whose mailing address is P.O. Box 42677, Tucson, Arizona 85733, hereinafter called “Trustor,” FIDELITY NATIONAL TITLE AGENCY, INC., an Arizona corporation, whose mailing address is 7750 East Broadway, Tucson, Arizona 85710, hereinafter called “Trustee,” and THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation, whose mailing address is 4321 North Ballard Road, Appleton, Wisconsin 54919, Attention: Investment Department, hereinafter called “Beneficiary.”

WITNESSETH:

SECTION 1 — GRANTING CLAUSE; WARRANTY OF TITLE

1.1 Trustor hereby irrevocably grants, bargains, sells, conveys, transfers, assigns and sets over to Trustee, in trust, with power of sale, all of Trustor’s present and future estate, right, title and interest in and to that real property and all buildings and other improvements now thereon or hereafter constructed thereon (the “Premises”), in the County of Pirna, State of Arizona, described on Exhibit A attached hereto and by this reference made a part hereof, together with all of the following which, with the Premises (except where the context otherwise requires), are hereinafter collectively called the “Trust Property”:

(a) All appurtenances in and to the Premises;

05-115854.03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

(b)	All water and water rights, ditches and ditch rights, reservoir and reservoir rights, stock or interests in irrigation or ditch companies, minerals, oil and gas rights, royalties, lease or leasehold interests owned by Trustor, now or hereafter used or useful in connection with, appurtenant to or related to the Premises;
(c)	All right, title and interest of Trustor now owned or hereafter acquired in and to all streets, roads, alleys and public places, and all easements and rights of way, public or private, now or hereafter used in connection with the Premises;
(d)	All of Trustor’s right, title and interest in and to all machinery, equipment, fixtures and materials now or at any time attached to the Premises together with all processing, manufacturing and service equipment and other personal property now or at any time hereafter located on or appurtenant to the Premises and used in connection with the management and operation thereof;
(e)	All of Trustor’s right, title and interest in and to any licenses, contracts, permits and agreements required or used in connection with the ownership, operation or maintenance of the Premises, and the right to the use of any tradename, trademark, or service mark now or hereafter associated with the operation of any business conducted on the Premises;
(f)	Any and all insurance proceeds, and any and all awards, including interest, hereafter made to Trustor for taking by eminent domain of the whole or any part of the Premises or any easements therein;
(g)	Subject to the rights of Beneficiary under Section 3 hereof, all of Trustor’s right, title and interest in and to all existing and future leases, subleases, licenses and other agreements for the use and occupancy of all or any portion of the Premises and all income receipts, revenues, rents, issues and profits arising from the use or enjoyment of all or any portion of the Premises.

1.2 Trustor warrants that it is well and truly seized of a good and indefeasible title in fee simple to the Premises, that it is the lawful owner of the rest of the Trust Property, and that, except for those matters specifically set forth in the lender’s title insurance policy delivered to Beneficiary with this Deed of Trust which have been approved in writing by Beneficiary (hereinafter called the “Permitted Exceptions”), the title to all the Trust Property is clear, free and unencumbered; Trustor shall forever warrant and defend the same unto Beneficiary, its successors and assigns, against all claims whatsoever.

TRUSTOR FURTHER REPRESENTS, WARRANTS, COVENANTS AND AGRESS AS FOLLOWS:

05-115854.03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

2

SECTION 2 — OBLIGATION SECURED

This Deed of Trust is given for the purpose of securing, in such order of priority as Beneficiary may elect:

2.1	Payment of the sum of FIVE MILLION THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($5,300,000.00) with interest thereon, extension and other fees, late charges, prepayment premiums and actual and reasonable attorneys’ fees, according to the terms of that Promissory Note of even date herewith, made by Trustor, payable to the order of Beneficiary, and all extensions, modifications, renewals or replacements thereof (hereinafter called the “Note”);
2.2	Payment, performance and observance by Trustor of each covenant, condition, provision and agreement contained herein and of all monies expended or advanced by Beneficiary pursuant to the terms hereof, or to preserve any right of Beneficiary hereunder, or to protect or preserve the Trust Property or any part thereof;
2.3	Payment, performance and observance by Trustor of each covenant, condition, provision and agreement contained in any other document or instrument related to the indebtedness hereby secured and of all monies expended or advanced by Beneficiary pursuant to the terms thereof or to preserve any right of Beneficiary thereunder;
2.4	Payment of any and all additional loans and advances made by Beneficiary to Trustor and/or to the then record owner or owners of the Trust Property (excluding, however, any such loan to an individual for personal, family or household purposes) with interest thereon, late charges, extension and other fees, prepayment premiums and actual and reasonable attorneys’ fees, according to the terms of the promissory note(s) and/or credit agreement(s) evidencing such loans and advances, and all extensions, modifications, renewals or replacements thereof.

All of the indebtedness and obligations secured by this Deed of Trust are hereinafter collectively called the “Obligation.”

SECTION 3 — LEASES; ASSIGNMENT OF RENTS AND LEASES

3.1 To facilitate payment and performance of the Obligation, Trustor hereby absolutely transfers and assigns to Beneficiary all right, title and interest of Trustor in and to (i) all existing and future leases, subleases, licenses and other agreements for the use and occupancy of all or any part of the Trust Property, whether written or oral and whether for a definite term or month to month, including but not limited to those described on Exhibit B attached hereto and by this reference made a part hereof, together with all guarantees of the lessee’s obligations thereunder and together with all extensions, modifications and renewals thereof (hereinafter called the “Leases”), and (ii) all income, receipts, revenues, rents, issues and profits now or hereafter arising from or out of the Leases or from or out of the Trust Property or any part thereof, including without limitation room rents, minimum rents, additional rents, percentage rents, parking and

05-115854.03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

3

maintenance charges and fees, tax and insurance contributions, proceeds of the sale of utilities and services, cancellation premiums, claims for damages arising from any breach of the Leases, proceeds from any sale or other disposition of, all or any portion of the Trust Property, and all other benefits arising from the use or enjoyment of, or the lease, sale or other disposition of all or any portion of the Trust Property, and all other benefits arising from the use or enjoyment of, or the lease, sale or other disposition of, all or any portion of the Trust Property, together with the immediate and continuing right to receive all of the foregoing (hereinafter called the “Rents”). In furtherance of this assignment, and not in lieu hereof, Beneficiary may require a separate assignment of rents and leases and/or separate specific assignments of rents and leases covering one or more of the Leases; the terms of all such assignments are incorporated herein by reference.

3.2	Trustor hereby authorizes and directs the lessees and tenants under the Leases that, upon written notice from Beneficiary, all Rents shall be paid directly to Beneficiary as they become due. Trustor hereby relieves the lessees and tenants from any liability to Trustor by reason of the payment of the Rents to Beneficiary. Nevertheless, Trustor shall be entitled to collect the Rents until Beneficiary notifies the lessees and tenants in writing to pay the Rents to Beneficiary. Beneficiary is hereby authorized to give such notification only upon the occurrence of an Event of Default (as hereinafter defined) and at any time thereafter while such Event of Default is continuing. Receipt and application of the Rents by Beneficiary shall not constitute a waiver of any right of Beneficiary under this Deed of Trust or applicable law, shall not cure any Event of Default hereunder, and shall not invalidate or affect any act done in connection with such Event of Default, including, without limitation, any trustee’s sale or foreclosure proceeding. It is understood and agreed that all rents deriving from or arising from the Trust Property received by Trustor are to be held by Trustor as a trust fund to be used first for payments required and due under the Note and legitimate operating expenses of the Trust Property and any excess may be retained by Trustor. In addition to, and not in limitation of, any other remedy provided in or available under this Deed of Trust, Beneficiary has all the rights set forth in A.R.S. §33-702B (as amended, supplemented or supplanted) regarding the enforcement of the assignment of rents and leases contained herein.
3.3	All Rents collected by Trustor shall be applied in the following manner:
	First, to the payment of all taxes and lien assessments levied against the Trust Property, where provision for paying such is not otherwise made;
	Second, to the payment of ground rents (if any) payable with respect to the Trust Property;
	Third, to the payment of current operating costs and expenses (including repairs, maintenance and necessary acquisitions of property and expenditures for capital improvements) arising in connection with the Trust Property;
	Fourth, to the payment of any amounts due and owing under the Obligation;

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
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	Fifth, to Trustor or its designee, if Trustor is not in default; otherwise to hold in trust in a trust account for the benefit of Beneficiary.
	All Rents collected by Beneficiary may be applied to the items above listed in any manner that Beneficiary deems advisable and without regard to the aforestated priorities.
3.4	Trustor represents and warrants that: (i) the Leases are in full force and effect and have not been modified or amended; (ii) the Rents have not been waived, discounted, compromised, setoff or paid more than one month in advance; (iii) there are no other assignments, transfers, pledges or encumbrances of Trustor’s interest in any Leases or Rents; and (iv) neither Trustor nor the lessees and tenants are in default under the Leases.
3.5	Trustor shall (i) fulfill or perform each and every term, covenant and provision of the Leases to be fulfilled or performed by the lessor thereunder, (ii) give prompt notice to Beneficiary of any notice received by Trustor of default thereunder or of any alleged default or failure of performance that could become a default thereunder, together with a complete copy of any such notice; (iii) enforce, short of termination thereof, the performance or observance of each and every term, covenant and provision of each Lease to be performed or observed by the lessees and tenants thereunder; (iv) appear in and defend any action or proceeding arising under, occurring out of, or in any manner connected with any Lease or the obligations, duties, or liabilities of Trustor or any tenant thereunder and upon request by Beneficiary, to do so in the name and on behalf of Beneficiary, but at the expense of Trustor; (v) deliver to Beneficiary, forthwith upon its execution, a copy of each and every Lease and amendment thereof now or at any time hereafter affecting the Trust Property, or any portion thereof; (vi) deliver to Beneficiary, forthwith upon the execution of each and every Lease and amendment thereof, now or at any time hereafter affecting the Trust Property, or any portion thereof, a specific assignment of such new or amended Lease, subjecting such Lease to all of the terms, covenants, and conditions hereof and a copy of such assignment to the lessee; (vii) deliver to Beneficiary, no later than the tenth (10th) day of January of each year, a complete list of each and every Lease, showing unit number, type, name and address of tenant, monthly rental, date to which rent is paid, term of Lease, date of occupancy, date of expiration, security deposit, and each and every special provision, concession, or inducement granted to the tenant thereunder; (viii) hold in trust, in a trust account at a responsible financial institution, in a manner approved in advance by Beneficiary, all security deposited with Trustor for the performance of any Lease by or on behalf of any tenant thereunder, and indemnify and hold Beneficiary harmless from and against any and all liability, loss, damage, cost, and expense incurred by Beneficiary in connection with any such security; and (ix) deliver to Beneficiary, at the request of Beneficiary any time after an Event of Default, all security deposits under all Leases, which funds shall be held by Beneficiary, without interest payable to Trustor, as part of and commingled with the general funds of Beneficiary, but which funds shall, however, be repayable to the subject tenants, pursuant to the terms and provisions of the Leases under which such security deposits were made.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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3.6 Except for any liability it may have for security deposits accepted under 3.5(ix) above, Beneficiary does not assume and shall not be liable for any obligation of the lessor under any of the Leases and all such obligations shall continue to rest upon Trustor as though this assignment had not been made. Beneficiary shall not be liable for the failure or inability to collect any Rents.

SECTION 4 — SECURITY AGREEMENT

4.1

This Deed of Trust shall cover, and the Trust Property shall include, all property now or hereafter affixed or attached to or incorporated upon the Premises, which, to the fullest extent permitted by law, shall be deemed fixtures and a part of the Premises, except that the Trust Property shall not include the sole personal property of any lessees or tenants under the Leases. To the extent any of the Trust Property consists of rights in action or personal property covered by the Uniform Commercial Code, this Deed of Trust shall also constitute a security agreement, and Trustor hereby grants to Beneficiary, as secured party, a security interest in such property, including all proceeds thereof, for the purpose of securing the Obligation. In addition, for the purpose of securing the Obligation, Trustor hereby grants to Beneficiary, as secured party, a security interest in all personal property in the possession or control of Beneficiary and in all of Trustor’s right, title and interest in and to: (i) all building materials, fixtures, equipment and other personal property to be incorporated into any improvements constructed on the Premises; (ii) all goods, materials, supplies, fixtures, equipment, machinery, furniture and furnishings and other personal property that are now or may hereafter be appropriated for use on (whether such items are stored on the Premises or elsewhere), located on, or used in connection with, the Premises; (iii) all rents, issues and profits, and all inventory, accounts, accounts receivable, contract rights, general intangibles, chattel paper, instruments, documents, notes, drafts, letters of credit, insurance policies, premium refunds, insurance and condemnation awards and proceeds, refunds and deposits returned by utility companies and government agencies, tradenames, trademarks and service marks (subject, however, to any franchise or license agreements relating thereto), arising from or related to the Premises and any business conducted on the Premises; and (iv) all replacements and substitutions for, or additions to, all products and proceeds of, and all books, records, files and electronic data relating to, any of the foregoing. The personal property described or referred to in this Paragraph 4.1 is hereinafter called the “Personal Property.” The security interests granted in this Paragraph 4.1 are hereinafter severally and collectively called the “Security Interest.”

4.2

The Security Interest shall be self-operative with respect to the Personal Property, but Trustor shall execute and deliver on demand such additional security agreements, financing statements and other instruments as may be requested in order to impose the Security Interest more specifically upon the Personal Property; Beneficiary is hereby authorized and entitled to file any financing statement deemed necessary or desirable by Beneficiary in order to impose the Security Interest created herein. The Security Interest, at all times, shall be prior to any other interests in the Personal Property except any lien or security interest granted in connection with any Permitted Exception. Trustor shall act and perform as necessary and shall execute and file all security agreements, financing

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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	statements, continuation statements and other documents requested by Beneficiary to establish, maintain and continue the perfected Security Interest. Trustor, on demand, shall promptly pay all costs and expenses of filing and recording, including the costs of any searches, deemed necessary by Beneficiary from time to time to establish and determine the validity and the continuing priority of the Security Interest.
4.3	Trustor shall not sell, transfer, assign or otherwise dispose of any Personal Property or any interest therein without obtaining the prior written consent of Beneficiary, except Personal Property that Trustor is obliged to replace pursuant to the terms hereof. Unless Beneficiary then agrees otherwise in writing, all proceeds from any permitted sale or disposition in excess of that required for replacements shall be paid to Beneficiary to be applied to the Obligation, without prepayment penalty or premium, whether or not then due. Trustor shall keep the Personal Property free of all security interests or other encumbrances, except the Security Interest and any security interests and encumbrances granted in connection with any Permitted Exception. Although proceeds of Personal Property are covered hereby, this shall not be construed to mean that Beneficiary consents to any sale of the Personal Property.
4.4	Trustor shall keep and maintain the Personal Property in good condition and repair, and shall promptly replace any part thereof that from time to time may become obsolete, badly worn or in a state of disrepair (in such manner as shall extend to Beneficiary a first lien or security interest therein). All such replacements shall be free of any other security interest or encumbrance, except any security interest or encumbrance granted in connection with any Permitted Exception.
4.5	Except for purposes of replacement and repair, Trustor, without the prior written consent of Beneficiary, shall not remove, or permit the removal of, any Personal Property from the Premises.
4.6	Trustor hereby warrants, covenants and agrees that: (i) the Personal Property is or will be used primarily for business (other than farm) purposes; (ii) the Personal Property will be kept at the Premises; and (iii) Trustor’s records concerning the Personal Property will be kept at Trustor’s address as set forth in the beginning of this Deed of Trust.
4.7	Trustor shall give Beneficiary immediate written notice of any change in the location of: (i) Trustor’s chief executive office (or residence if Trustor is an individual without an office), as set forth in the beginning of this Deed of Trust; (ii) the Personal Property or any part thereof; (iii) Trustor’s records concerning the Personal Property; or (iv) any change in the state of formation or organization of the Trustor.
4.8	All covenants and warranties of Trustor contained in this Deed of Trust shall apply to the Personal Property whether or not expressly referred to in this Section 4. The covenants and warranties of Trustor contained in this Section 4 are in addition to, and not in limitation of, those contained in the other provisions of this Deed of Trust.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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4.9 Upon its recording in the real property records, this Deed of Trust shall be effective as a financing statement filed as a fixture filing. In addition, a carbon, photographic or other reproduced copy of this Deed of Trust and/or any financing statement relating hereto shall be sufficient for filing and/or recording as a financing statement. The filing of any other financing statement relating to any personal property, rights or interests described herein shall not be construed to diminish any right or priority hereunder.

SECTION 5 — PROTECTION AND PRESERVATION OF THE TRUST PROPERTY

5.1	Trustor shall neither commit nor permit to occur any waste upon the Trust Property but shall at all times make or cause to be made all repairs, maintenance renewals and replacements as may be necessary to maintain the Trust Property in good condition and repair. Trustor shall keep the Trust Property free of termites, dry rot, fungus, beetles and all other harmful or destructive insects and shall keep all plants, trees and shrubs included in the Trust Property neatly pruned and in good condition. Trustor shall allow Beneficiary, at any time and from time to time, to engage an independent inspector to survey the adequacy of the maintenance of the Trust Property. If found to be inadequate, such inspector shall determine the estimated cost of such repairs and replacements necessary to protect and preserve the rentability and usability of the Trust Property. In such event, at the option of Beneficiary and within fifteen (15) days after written demand therefor, a sum equal to the amount of such estimated cost shall thereupon become due and payable by Trustor to be applied upon the indebtedness unless within such period Trustor, at its own cost and expense, shall have completed or shall have commenced and thereafter with diligence, completes such repairs and replacements. In such event, Trustor shall also reimburse Beneficiary the cost of such survey, the same being secured hereby. If the survey determines such maintenance to be adequate, then the cost therefor shall be at the expense of Beneficiary. Trustor shall keep the Trust Property free of rubbish and other unsightly or unhealthful conditions. Trustor shall neither use nor permit the use of the Trust Property in violation of any applicable statute, ordinance or regulation or any policy of insurance insuring the Trust Property. Trustor shall neither use, generate, manufacture, produce, store or Release on, under or about the Premises, or transfer to or from the Premises, any Regulated Substance nor permit any third party to do so, except in compliance with all applicable Environmental Laws. As used herein, the following terms shall have the meanings specified below:
	The term “Regulated Substance” means any substance, material, or matter (including, without limitation, medical waste) that may give rise to liability under any Environmental Laws.
	The term “Environmental Laws” shall mean any local, state or federal laws, rules, ordinances or regulations either in existence as of the date hereof, or enacted or promulgated after the date of this Deed of Trust, that concern the existence, management, control, discharge, treatment, containment, and/or removal of substances or materials that are or may become a threat to public health or the environment; or any common law theory based on nuisance, trespass, negligence, strict liability, aiding and abetting or other torlious conduct.

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Crestline Investments, L.L.C.
Tucson, Arizona
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The term “Release” shall mean any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing, or dumping.

5.2

Trustor shall promptly complete any improvements that may be commenced, in good and workmanlike manner and in conformity with plans and specifications approved by Beneficiary to the extent such is not the obligation of a tenant under a Lease, and shall repair and restore any portions of the Trust Property that may be damaged or destroyed, provided, however, if Beneficiary has no obligation to make insurance or condemnation proceeds in its possession available for such purpose, and Beneficiary elects to apply such proceeds to the payment of the Obligation, Trustor’s obligations under this provision shall not include the obligation referred to above but only an obligation to make such repairs as are necessary to make the remaining undamaged portion of such improvements (if any) useable for their intended purpose. Trustor shall pay when due all claims for work performed and materials furnished on or in connection with the Trust Property or any part thereof and shall pay, discharge, or cause to be removed, all mechanic’s, artisan’s, laborer’s or materialman’s charges, liens, claims of liens or encumbrances upon the Trust Property. Trustor shall comply with all laws, ordinances and regulations now or hereafter enacted affecting the Trust Property or requiring any alterations or improvements to be made. Except as required by law, Trustor shall not remove, substantially alter, or demolish any building or improvement included in the Trust Property without Beneficiary’s prior written consent.

5.3 (a) Trustor shall provide and maintain policies of fire and extended coverage insurance on the Trust Property in an amount not less than the full insurable value, on a replacement-cost basis, of the Trust Property and, when requested by Beneficiary, shall also provide and maintain policies of insurance in amounts required by Beneficiary covering vandalism and malicious mischief, sprinkler leakage and all other risks commonly insured against by persons owning like properties in the locality of the Trust Property or commonly required by prudent institutional lenders making loans secured by liens against such properties. Trustor shall also provide and maintain insurance in the minimum amount of One Million Two Hundred Fifteen Thousand and No/100 Dollars ($1,215,000.00) or in such other amounts as may be determined by Beneficiary in the reasonable exercise of its discretion to cover loss, total or partial, of rentals and other revenues derived from the Trust Property for a period of at least twelve (12) months. All such policies shall contain standard, non-contributory trust beneficiary clauses making losses payable to Beneficiary. Trustor shall also provide and maintain comprehensive general liability insurance in amounts reasonably required by Beneficiary but in no event less than Two Million and No/100 Dollars ($2,000,000.00) per occurrence, and containing endorsements naming Beneficiary as an additional insured. All insurance policies shall contain the New York standard mortgagee clause endorsement, shall provide that Beneficiary is to receive thirty (30) days notice prior to cancellation and shall otherwise be in form, amounts, substance, and with insurance companies reasonably satisfactory to Beneficiary. Original policies of insurance or certified copies thereof shall be delivered to Beneficiary; renewal policies or binders

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Deed of Trust
Crestline Investments L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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	thereof shall be delivered to Beneficiary thirty (30) days before the expiration of the then-existing policies with satisfactory proof that the premiums for renewal have been paid.
(b)	In the event of loss, Trustor shall give immediate notice to Beneficiary, and Beneficiary may make proof of loss if not made promptly by Trustor. Each insurance company is hereby authorized and directed to make payment for loss directly to Beneficiary, instead of to Trustor or to Trustor and Beneficiary jointly; Beneficiary may apply all or any part of such insurance proceeds to the payment of the Obligation, whether or not then due, or the restoration or repair of the Trust Property; provided, however, that if (a) there is projected annual net operating income from the leases remaining in full force and effect after such damage or destruction to equal 1.2 times the sum of the annual principal and interest payments secured by the Trust Property, the annual taxes and assessments and the insurance premiums (or if not, Trustor deposits the difference thereof with Beneficiary until such ratio is achieved), (b) such leases require Trustor to rebuild or restore the buildings and improvements on the Trust Property, (c) the insurers do not deny liability as to the insured, and (d) there is no breach or default under the terms of the Note, this Deed of Trust or any other document or instrument executed or delivered in connection with the Obligation, such proceeds, after deducting therefrom any expenses incurred in the collection thereof, shall be used to reimburse Trustor for the cost of the rebuilding or restoration of buildings or improvements on the Trust Property. Beneficiary shall not be responsible for any insurance, for the collection of any insurance proceeds, or for the insolvency of any insurer. Application of insurance proceeds by Beneficiary shall not cure nor waive any Event of Default nor invalidate any act done hereunder because of any such Event of Default. In the event of the sale of the Trust Property under the power of sale herein granted to Trustee, or upon foreclosure of this Deed of Trust as a mortgage, or in the event Beneficiary or a receiver appointed by the court shall take possession of the Trust Property without sale, then all right, title and interest of Trustor in and to all insurance policies then in force shall inure to the benefit of and pass to the beneficiary in possession, receiver or purchaser at such sale, as the case may be. Beneficiary is hereby appointed attorney in fact for Trustor to assign and transfer such policies.
(c)	If the insurance proceeds are to be used for the restoration and repair of the Trust Property, they shall be held by Beneficiary in a non-interest bearing account selected by Beneficiary in its sole and absolute discretion (the “Restoration Account”). Trustor, at its expense, shall promptly prepare and submit to Beneficiary all plans and specifications necessary for the restoration and repair of the damaged Trust Property, together with evidence acceptable to Beneficiary setting forth the total expenditure needed for the restoration and repair based upon a fixed price contract with a reputable builder and covered by performance and labor and material payment bonds. The plans and specifications and all other aspects of the proposed restoration and repair shall be subject to Beneficiary’s approval. In the event the insurance proceeds held in the Restoration Account are

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Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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insufficient to complete the restoration and repair. Trustor shall deposit in the Restoration Account an amount equal to the difference between the amount then held in the Restoration Account and the total contract price for the restoration and repair. Trustor may commence restoration and repair of the damaged Trust Property only when authorized in writing by Beneficiary to do so and thereafter shall proceed diligently with the restoration and repair until completed. Disbursements shall be made from the Restoration Account for restoration and repair in accordance with a disbursement schedule, and subject to other terms and conditions, acceptable to Beneficiary. Disbursements from the Restoration Account shall be charged first against funds deposited by Trustor and, after such funds are exhausted, against the insurance proceeds deposited therein. In the event the amounts held in the Restoration Account exceed the cost of the restoration and repair of the damaged Trust Property, the excess funds shall be disbursed to Trustor to the extent of any amounts deposited therein by Trustor. Any funds remaining after such disbursement, at Beneficiary’s option, may be applied by Beneficiary to the payment of the Obligation, whether or not then due, or may be disbursed to Trustor. All funds held in the Restoration Account are hereby assigned to Beneficiary as further security for the Obligation. Beneficiary, at any time, may apply all or any part of the funds held in the Restoration Account to the curing of any Event of Default.

5.4

Except as provided in Paragraph 5.5, Trustor shall pay or cause to be paid all taxes and assessments of every kind, nature and description levied or assessed on or against the Trust Property and shall deliver to Beneficiary, at least ten (10) days before they become delinquent, receipts showing payment of all such taxes and assessments and shall pay when due all dues and charges for water and water delivery, electricity, gas, sewers, waste removal, bills for repairs, and any and all other claims, encumbrances and expenses incident to the ownership of the Trust Property.

In the event of the passage after the date of this Deed of Trust of any law of the State of Arizona, deducting from the value of the Trust Property for the purpose of taxation any lien thereon, or changing in any way the laws now in force for the taxation of mortgages, deeds of trust, or debts secured thereby, for state or local purposes, or the manner of the operation of any such taxes so as to affect the interest of Beneficiary, then and in such event, Trustor shall bear and pay the full amount of such taxes, provided that if, for any reason, payment by Trustor of any such new or additional taxes would be unlawful or if the payment thereof would constitute usury or render the Obligation secured hereby wholly or partially usurious under any of the terms or provisions of the Note, or the within Deed of Trust, or otherwise, Beneficiary may, at its option, declare the whole sums secured by this Deed of Trust with interest thereon to be due and payable ninety (90) days from the effective date of the passage or change of law without prepayment charge or penalty, or Beneficiary may, at its option, pay that amount or portion of such taxes as renders the Obligation secured hereby unlawful or usurious, in which event Trustor shall concurrently therewith pay the remaining lawful and non-usurious portion or balance of said taxes.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
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5.5

In order to insure the payment of taxes and assessments that are now, or hereafter may be, a lien upon the Trust Property, Trustor shall pay to Beneficiary each month, in addition to any other payments required hereunder, an amount equal to the taxes and special assessments levied or to be levied against the Trust Property, all as reasonably estimated by Beneficiary (giving due consideration to the previous year’s taxes and assessments) less all deposits theretofore already made, divided by the number of months remaining before one month prior to the date when the taxes and assessments become delinquent. If amounts paid to Beneficiary under the terms of this paragraph are insufficient to pay all taxes and assessments as they become due, Trustor shall pay to Beneficiary upon demand all additional sums necessary to fully pay and discharge these items. All moneys paid to Beneficiary under the terms of this paragraph may be either held by Beneficiary to pay the taxes and assessments before the same become delinquent or applied to the Obligation either upon payment by Beneficiary from its own funds of the taxes and assessments or upon the Event of Default of Trustor To the extent provision is not made for payment pursuant to this paragraph, Trustor shall remain obligated to pay all taxes and assessments as they become due and payable. Deposits made under this paragraph may be commingled with Beneficiary’s general funds; Beneficiary shall have no liability to Trustor for interest on any deposits.

5.6

Trustor hereby assigns, transfers and conveys to Beneficiary all compensation and each and every award of damages in connection with any condemnation for public or private use of, or injury to, the Trust Property or any part thereof, to the extent of the Obligation then remaining unpaid, and all such compensation and awards shall be paid directly to Beneficiary. Beneficiary may apply all or any part of such compensation and awards to the payment of the Obligation, whether or not then due. In the event any such compensation and awards are applied to the indebtedness secured hereby, it shall include a prepayment privilege fee based on the privilege rate as defined in the Note, if and to the extent one is awarded. Any applicable prepayment privilege fee which results shall be paid as part of the award and not in addition thereto. In the event any such compensation and awards are applied to the restoration or repair of the Trust Property, the Trust Property is to be restored according to the same criteria and in the same manner as provided in Section 5.3 herein.

SECTION 6 — PROTECTION AND PRESERVATION OF BENEFICIARY’S INTEREST

6.1

Trustor, by the payment of any such tax or taxes, shall protect Beneficiary against any and all loss from any taxation of indebtedness or deeds of trust, direct or indirect, that may be imposed upon this Deed of Trust, the lien of this Deed of Trust on the Trust Property, or upon the Obligation, by any law, rule, regulation or levy of the federal government, any state government, or any political subdivision thereof. In the event the burden of such taxation cannot lawfully be shifted from Beneficiary to Trustor, Beneficiary may declare the entire Obligation due without prepayment fee and payable sixty (60) days after notice to Trustor.

6.2

If Trustor shall fail to pay any taxes, assessments, expenses or charges, to keep all of the Trust Property free from liens and claims of liens, to maintain and repair the Trust

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Crestline Investments, L.L.C.
Tucson, Arizona
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	Property, or to procure and maintain insurance thereon, or otherwise fail to perform as required herein and such failure constitutes an Event of Default, Beneficiary may advance the monies necessary to pay the same, to accomplish such maintenance and repairs, to procure and maintain such insurance or to so perform; Beneficiary is hereby authorized to enter upon the Trust Property for such purposes, subject to any rights of lessees or tenants on the Trust Property.
6.3	Upon written request by Beneficiary, Trustor shall appear in and prosecute or defend any action or proceeding that may affect the lien or the priority of the lien of this Deed of Trust or the rights of Beneficiary hereunder and shall pay all costs, expenses (including the cost of searching title) and actual and reasonable attorneys’ fees incurred in such action or proceeding. Beneficiary may appear in and defend any action or proceeding purporting to affect the lien or the priority of the lien of this Deed of Trust or the rights of Beneficiary. Beneficiary may pay, purchase, contest or compromise any adverse claim, encumbrance, charge or lien that in the judgment of Beneficiary appears to be prior or superior to the lien of this Deed of Trust, other than any Permitted Exceptions.
6.4	Without obtaining the prior written consent of Beneficiary, Trustor shall not sell, transfer, convey, assign or otherwise dispose of, or further encumber, all or any part of the Trust Property or any interest therein, voluntarily or involuntarily, by operation of law or otherwise. Any material change in the ownership or management of, or interest in, Trustor, including, without limitation, if Daniel Kivel or Alvin Kivel voluntarily divests himself of his management interests in Trustor, or if Daniel Kivel or Alvin Kivel voluntarily cease to be the managers of Trustor, or any pledge or encumbrance of any interest in Trustor, shall be deemed to be a transfer of the Trust Property; provided, however, Daniel Kivel or Alvin Kivel or both may assign his management position to a family member or to a qualified manager. Upon the occurrence of any such transaction with Beneficiary’s consent, or without Beneficiary’s consent if Beneficiary elects not to exercise its rights and remedies for an Event of Default, Beneficiary (i) may increase the interest rate on all or any part of the Obligation to its then current market rate for similar indebtedness; (ii) may charge a loan fee and a processing fee in connection with the change; and (iii) shall not be obligated to release Trustor from any liability hereunder or for the Obligation except to the extent required by law. Consent to any such transaction shall not be deemed to be consent or a waiver of the requirement of consent to any other such transaction.
	Notwithstanding the foregoing paragraph, the following transfers are permitted upon written consent of Beneficiary, which consent shall not be unreasonably withheld, and (i) upon the payment of a One Thousand Five Hundred and No/100 Dollars ($1,500.00) review fee to Beneficiary, and (ii) the payment of all fees and expenses incurred by Beneficiary or its counsel, and (iii) upon delivery to Beneficiary of all documents required by Beneficiary to maintain all of Beneficiary’s security under any Loan Documents or other security related to the Note:

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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(a)	transfers of interests in the Trustor resulting from the death or incapacity of any individual member of Trustor or any trustee of a member of Trustor, or
(b)	transfers of interests in the Trustor by any individual member of Trustor or any trustee of a member of Trustor to a spouse, sibling, children or parents of such individual member of Trustor for estate or tax planning purposes provided no Event of Default exists and no event exists that, with the passage of time or the giving of notice or both, would constitute such an Event of Default, and

	There shall be no $1,500.00 review fee paid to Beneficiary as the result of a transfer under subsection (a) above. Additionally, on one occasion during each Loan Year, any manager, partner, trustee/beneficiary and/or member of Trustor or the entities comprising Trustor may transfer on such one occasion all or a portion of such manager’s, partner’s, trustee’s/beneficiary’s and/or member’s interest to the family members set forth in subsection (b) above, without any obligation to pay the $1,500.00 review fee required under this paragraph.
	Notwithstanding the first paragraph of this Section 6.4, Beneficiary will permit Trustor to transfer all (but not less than all) of Trustor’s interest in the Trust Property once during the term hereof, if Beneficiary is satisfied, in its sole discretion exercised in good faith, that: (1) the proposed buyer or transferee is creditworthy based on Beneficiary’s then current leading criteria, (2) the use of the Trust Property will not change, (3) the proposed buyer or transferee has good managerial and operational skills, and (4) the loan evidenced hereby is not in default and no event has occurred which if left uncured would result in an Event of Default. Trustor shall pay all expenses (including reasonable counsel fees) incurred by Beneficiary in connection with any such proposed transfer; and shall pay Beneficiary a transfer fee equal to one percent (1%) of the principal balance of the Note as of the date of the request for the transfer, which fee less One Thousand Five Hundred and No/100 Dollars ($1,500.00) and Beneficiary’s actual costs and expenses shall be returned if the proposed transfer does not occur.
6.5	Without obtaining the prior written consent of Beneficiary, Trustor shall not consent to, or vote in favor of, the inclusion of all or any part of the Trust Property in any Community Facilities District formed pursuant to the Community Facilities District Act (Laws 1988, Ch. 320), as amended from time to time. Trustor shall immediately give notice to Beneficiary of any notification or advice that Trustor may receive from any municipality or other third party of any intent or proposal to include all or any part of the Trust Property in a Community Facilities District. Beneficiary shall have the right to file a written objection to the inclusion of all or any part of the Trust Property in a Community Facilities District, either in its own name or in the name of Trustor, and to appear at, and participate in, any hearing with respect to the formation of any such district.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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6.6	All rights, powers and remedies granted Beneficiary herein, or otherwise available to Beneficiary, are for the sole benefit and protection of Beneficiary, and Beneficiary may exercise any such right, power or remedy, except as otherwise provided herein, at its option and in its sole and absolute discretion without any obligation to do so. In addition, if, under the terms hereof, Beneficiary is given two or more alternative courses of action, Beneficiary may elect any alternative or combination of alternatives, at its option and in its sole and absolute discretion. If any action requires Beneficiary’s consent or approval, Beneficiary will be deemed to have given its approval if it does not respond within twenty (20) business days after it receives a written request for consent or approval, together with all other items required by Beneficiary, provided that the written request contains a statement that Beneficiary’s consent will be deemed granted if it does not respond within such twenty (20) business day period. All monies advanced by Beneficiary under the terms hereof and all amounts paid, suffered or incurred by Beneficiary in exercising any authority granted herein, including actual attorneys’ fees, shall be added to the Obligation, shall be secured by this Deed of Trust, shall bear interest at the highest rate payable on any of the Obligation until paid, and shall be due and payable by Trustor to Beneficiary immediately upon demand.
6.7	Trustor, upon request of Beneficiary, shall promptly correct any defect, error or omission that may be discovered in the content of this Deed of Trust or in the execution or acknowledgment hereof. In addition, Trustor shall do such further acts as may be necessary or that Beneficiary may reasonably request to carry out more effectively the purposes of this Deed of Trust, to subject any property intended to be encumbered hereby to the lien and security interest hereof, and to perfect and maintain the lien and security interest hereof.
6.8	Within ninety (90) days after the close of each fiscal year Trustor shall deliver to Beneficiary financial statements of Daniel Kivel, Alvin Kivel Janal, LLP, Sea Colony Investments, LLP and of Trustor, including a balance sheet and statements of income and expenses that include the results of the financial operation of the Trust Property, all in reasonable detail and prepared according to generally accepted accounting principles. Year end statements shall be certified by Trustor, if Trustor is an individual, by the chief financial officer of Trustor, if Trustor is a corporation, by a general partner of Trustor, if Trustor is a partnership, or by the managing member, if Trustor is a limited liability company or limited liability partnership. When requested by Beneficiary, Trustor shall promptly deliver, in writing, such further information as Beneficiary shall reasonably request relating to any of such financial statements. Beneficiary may have access to Trustor’s books and records at reasonable times after reasonable notice to enable Beneficiary to verify the information furnished Beneficiary pursuant to this paragraph.
6.9	Trustor, upon request of Beneficiary, shall enter into a management contract with a property management firm acceptable to Beneficiary for the maintenance, care, preservation and leasing of the Premises.

SECTION 7 — REPRESENTATIONS AND WARRANTIES

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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7.1	If Trustor is a corporation, limited liability company, partnership or trust, it (i) is duly organized, validly existing and in good standing under the laws of the state in which it is organized; (ii) is qualified to do business and is in good standing under the laws of the state in which the Trust Property is located and in each state in which it is doing business; (iii) has full power and authority to own its properties and assets and to carry on its business as now conducted; and (iv) is fully authorized and permitted to execute and deliver this Deed of Trust. The execution, delivery and performance by Trustor of this Deed of Trust and all other documents and instruments relating to the Obligation will not result in any breach of the terms or conditions or constitute a default under any agreement or instrument under which Trustor is a party or is obligated. Trustor is not in default in the performance or observance of any covenants, conditions or provisions of any such agreement or instrument.
7.2	Following appropriate recordation, the liens, security, interests and assignments created hereby will be valid, effective, properly perfected and enforceable liens, security interests and assignments.
7.3	All financial statements, profit and loss statements, statements as to ownership and other statements or reports previously or hereafter given to Beneficiary by or on behalf of Trustor are and shall be true, complete and correct as of the date thereof. There has been no material adverse change in the financial condition or the results of the operation of Trustor since the latest financial statement of Trustor given to Beneficiary.
7.4	Trustor has filed all federal, state and local tax returns and has paid all of its current obligations before delinquent, including all federal, state and local taxes and all other payments required under federal, state or local law.
7.5	Neither the Trust Property nor Trustor are in violation of any Environmental Law and neither the Trust Property nor Trustor are subject to any existing, pending or threatened investigation by any federal, state or local governmental authority under or in connection with any Environmental Law. Trustor has not obtained as the result of the requirements of any Environmental Law, and is not required by any Environmental Law to obtain, any permit or license to construct or use any improvements, fixtures or equipment that are a part of, or are located on, the Trust Property or to operate any business that is being conducted or intended to be conducted on the Trust Property. Neither Trustor nor any third party will use, generate, manufacture, produce, store, or Release, on, under or about the Trust Property, or transfer to or from the Trust Property, any Regulated Substance except in compliance with all applicable Environmental Laws. Trustor has not caused or permitted the Release of, and has no knowledge of the Release or presence of, any Regulated Substance on the Trust Property or the migration of any Regulated Substance from or to any other property adjacent to, or in the vicinity of, the Trust Property. Trustor’s prior and present use of the Trust Property has not resulted in, and its intended future use of the Trust Property will not result in the Release of any Regulated Substance on the Trust Property. When known to Trustor, Trustor shall give prompt written notice to Beneficiary at the address set forth herein of:

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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(a)	any proceeding or investigation by any federal, state or local governmental authority (including, without limitation, the Arizona Department of Health Services, Arizona Department of Environmental Quality or the U.S. Environmental Protection Agency) with respect to the presence of any Regulated Substance on the Trust Property or the migration thereof from or to any other property adjacent to, or in the vicinity of, the Trust Property;
(b)	all claims made or threatened by any third party against Trustor or the Trust Property relating to any loss or injury resulting from any Regulated Substance;
(c)	Trustor’s discovery of any occurrence or condition on any property adjoining or in the vicinity of the Trust Property that could cause the Trust Property or any part thereof to be subject to any restrictions on its ownership, occupancy, transferability or use under any Environmental Law; and
(d)	Trustor hereby represents to Beneficiary that the Trust Property is in full compliance with The Americans with Disabilities Act (“the ADA” or “the Act”) and all regulations promulgated thereunder. Trustor hereby covenants and agrees not to permit, commit or suffer to exist any condition which might result in a violation to the Act, and if any such condition should occur to immediately remedy any such condition. Trustor hereby indemnifies and agrees to defend and hold Beneficiary harmless from and against any loss, cost or damage by reason of the breach of the covenants, agreements, representations and indemnities set forth herein.

7.6 All representations and warranties made herein shall survive the execution hereof, the execution and delivery of all other documents and instruments in connection with the Obligation, and until the Obligation has been fully paid and performed.

SECTION 8 — DEFAULTS; REMEDIES

8.1 The occurrence of any of the following events or conditions shall constitute an “Event of Default” under this Deed of Trust:

(a)

Any failure to pay any principal or interest or any other part of the Obligation when the same shall become due and payable and such failure continues for tea (10) days.

(b)

Any failure or neglect to perform or observe any of the covenants, conditions, provisions or agreements of this Deed of Trust, the Note or any other document or instrument executed or delivered in connection with the Obligation (other than a failure or neglect described in one or more of the other provisions of this Paragraph 8.1) and such failure or neglect either cannot be remedied or, if it can be remedied, it continues unremedied for a period of thirty (30) days after notice thereof to Trustor.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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(c)	Any warranty, material representation or material statement contained in this Deed of Trust, the Note or any other document or instrument executed or delivered in connection with the Obligation, or made or furnished to Beneficiary by or on behalf of Trustor, that shall be or shall prove to have been false when made or furnished.
(d)	The filing by Trustor or any guarantor of the Obligation (or against Trustor or such guarantor to which Trustor or such endorser or guarantor acquiesces or that is not dismissed within forty-five (45) days after the filing thereof) of any proceeding under the federal bankruptcy laws now or hereafter existing or any other similar statute now or hereafter in effect; the entry of an order for relief under such laws with respect to Trustor or such guarantor; or the appointment of a receiver, trustee, custodian or conservator of all or any part of the assets of Trustor or such guarantor.
(e)	The insolvency of Trustor or any guarantor of the Obligation; or the execution by Trustor or such guarantor of an assignment for the benefit of creditors; or the convening by Trustor or such guarantor of a meeting of its creditors, or any class thereof, for purposes of effecting a moratorium upon or extension or composition of its debts; or the failure of Trustor or such guarantor to pay its debts as they mature; or if Trustor or such guarantor is generally not paying its debts as they mature.
(f)	The admission in writing by Trustor or any guarantor of the Obligation that it is unable to pay its debts as they mature or that it is generally not paying its debts as they mature.
(g)	The death or incapacity of Trustor or any guarantor of the Obligation, if an individual, or the liquidation, termination or dissolution of Trustor or any such guarantor, if a corporation, partnership or joint venture.
(h)	Any levy or execution upon, or judicial seizure of, any portion of the Trust Properly, the Personal Property, or any other collateral or security for the Obligation,
(i)	Any attachment or garnishment of, or the existence or filing of any lien or encumbrance other than any Permitted Exceptions against, any portion of the Trust Property, the Personal Property, or any other collateral or security for the Obligation that is not removed or corrected within fifteen (15) days after its creation.
(j)	The institution of any legal action or proceedings to enforce any lien or encumbrance upon any portion of the Trust Property, the Personal Property, or any other collateral or security for the Obligation that is not dismissed within fifteen (15) days after its institution.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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(k)	The abandonment by Trustor of all or any part of the Trust Property.
(l)	The existence of any encroachment upon the Trust Property that has occurred without the approval of Beneficiary that is not removed or corrected within thirty (30) days after its creation, or such longer period as may be required, provided Trustor commences such cure within such thirty (30) day period and diligently prosecutes the same to completion, but in no event to exceed ninety (90) days.
(m)	The demolition or destruction of, or any substantial damage to, any portion of the Trust Property that is not adequately covered by insurance, or the loss, theft or destruction of, or any substantial damage to, any portion of the Personal Property or any other collateral or security for the Obligation, that is not adequately covered by insurance.
(n)	The occurrence of any event of default under the Note or any other document or instrument executed or delivered in connection with the Obligation which is not timely cured after the expiration of any applicable grace period or after the giving of any required notice.
(o)	The occurrence of any material adverse change in the financial condition of Trustor that Beneficiary, in its reasonable discretion, deems material, or if Beneficiary in good faith shall believe that the prospect of payment or performance of the Obligation is impaired.

8.2 Upon the occurrence of any Event of Default, and at any time while such Event of Default is continuing, Beneficiary may do one or more of the following:

(a)

Declare the entire Obligation to be immediately due and payable, and the same, with all costs and charges, shall be collectible thereupon by action at law.

(b)

Give such notice of default and of election to cause the Trust Property to be sold as may be required by law or as may be necessary to cause Trustee to exercise the power of sale granted herein. Trustee shall then record and give such notice of trustee’s sale as then required by law and, after the expiration of such time as may be required by law, may sell the Trust Property at the time and place specified in the notice of sale, as a whole or in separate parcels as directed by Beneficiary, or by Trustor to the extent required by law, at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale, all in accordance with applicable law. Trustee, from time to time, may postpone or continue the sale of all or any portion of the Trust Property by public declaration at the time and place last appointed for the sale. No other notice of the postponed sale shall be required. Upon any sale, Trustee shall deliver its deed conveying the property sold, without any covenant or warranty, express or implied, to the purchaser or purchasers at the sale. The recitals in such deed of any matters or facts shall be conclusive as to the accuracy thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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(c)	Commence proceedings for foreclosure (either judicially or by Power of Sale as Beneficiary may determine in its sole discretion) of this Deed of Trust in the manner provided by law for the foreclosure of a real property mortgage.
(d)	Exercise any or all of the remedies of a secured party under the Uniform Commercial Code with respect to the Personal Property. If Beneficiary should proceed to dispose of any of the Personal Property in accordance with the provisions of the Uniform Commercial Code, five (5) days notice by Beneficiary to Trustor shall be deemed to be commercially reasonable notice under any provision of the Uniform Commercial Code requiring notice. Trustor, however, agrees that all property of every nature and description, whether real or personal, covered by this Deed of Trust, together with all personal property used on or in connection with the Premises or any business conducted thereon by the Trustor and covered by separate security agreements, is encumbered as one unit, that this Deed of Trust and such security interests, at Beneficiary’s option, may be foreclosed or sold in the same proceeding, and that all property encumbered (both realty and personality), at Beneficiary’s option, may be sold as such in one unit as a going business, subject to the provisions of applicable law.
(e)	Send notifications to any and all lessees and tenants under the Leases that all Rents shall be paid to Beneficiary. Thereafter, Beneficiary shall be entitled to collect the Rents until Trustor cures all Events of Default and may apply the Rents collected at its sole discretion to the maintenance of the Trust Property and/or the payment of the Obligation.
(f)	Apply any funds in the possession or control of Beneficiary under the provisions of Paragraph 5.5 hereof to the payment of the Obligation, in lieu of the purposes specified in that paragraph.
(g)	Without regard to the adequacy of any security for the Obligation, but subject to any rights of lessees or tenants on the Trust Property, enter upon and take possession of all or any part of the Trust Property, cither in person or by agent or employee, or by a receiver appointed by a court of competent jurisdiction; Trustor shall on demand peaceably surrender possession of the Trust Property to Beneficiary. Beneficiary, in its own name or in the name of Trustor, may operate and maintain all or any part of the Trust Property to such extent as Beneficiary deems advisable, may rent and lease the same to such persons, for such periods of time, and on such terms and conditions as Beneficiary in its sole discretion may determine, and may sue for or otherwise collect any and all Rents, including those past due and unpaid. In dealing with the Trust Property as a beneficiary in possession, Beneficiary shall not be subject to any liability, charge, or obligation therefor to Trustor, other than for willful misconduct, and shall be entitled to operate any business then being conducted or which could be conducted thereon or therewith at the expense of and for the account of Trustor (and all net losses, costs and expenses thereby incurred shall be advances governed by Paragraph 6.2 hereof), to the same extent as the owner thereof could do, and to apply the Rents

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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to pay the receiver’s expenses, if any, for the operation of the Trust Property and then in the manner provided in Paragraph 3.3 herein.

8.3	At any time after the recording by Trustee of notice of trustee’s sale or after the institution of foreclosure proceedings, upon application of Beneficiary, a receiver may be appointed by any court of competent jurisdiction to take charge of all the Trust Property, to manage, operate and carry on any business then being conducted or that could be conducted on the Premises, to carry on, protect, preserve, replace and repair the Trust Property, and receive and collect all Rents and to apply the same to pay the receiver’s expenses for the operation of the Trust Property and then in the manner provided in Paragraph 3.3 herein. Upon appointment of said receiver, Trustor shall immediately deliver possession of all of the Trust Property to such receiver.
8.4	Trustor shall pay all costs and expenses, including without limitation costs of title searches and title policy commitments, Uniform Commercial Code searches, court costs and actual attorneys’ fees, incurred by Beneficiary in enforcing payment and performance of the Obligation or in exercising the rights and remedies of Beneficiary hereunder. All such costs and expenses shall be secured by this Deed of Trust and by all other lien and security documents securing the Obligation. In the event of a dispute between Trustor and Beneficiary regarding the interpretation of this Deed of Trust the prevailing party shall be entitled to court costs and reasonable attorneys’ fees incurred resolving the interpretation and such court costs and attorneys’ fees shall be set by the court and not by jury (trial by jury being waived) and shall be included in any judgment obtained by Beneficiary.
8.5	In addition to any remedies provided herein for an Event of Default, Beneficiary shall have all other legal or equitable remedies allowed under applicable law (including specifically that of foreclosure of this instrument as though it were a mortgage). No failure on the part of Beneficiary 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 Beneficiary 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. Beneficiary may enforce any one or more remedies or rights hereunder successively or concurrently. By accepting payment or performance of any of the Obligation after its due date, Beneficiary shall not thereby waive the agreement contained herein that time is of the essence, nor shall Beneficiary waive either its right to require prompt payment or performance when due of the remainder of the Obligation or its right to consider the failure to so pay or perform an Event of Default.
8.6	In consideration of the limitation on personal liability as provided in the Note, Trustor agrees that to the extent Trustor is entitled to present competent evidence of the fair market value of the Premises as of the date of foreclosure or in connection with a bankruptcy proceeding affecting Trustor and/or the Premises, the Following shall be considered competent evidence for the fact finder’s determination of the fair market value of the Premises as of the date of the foreclosure sale;

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

21

(i)	the Premises shall be valued in an “as is” condition as of the date of the foreclosure sale, without any assumption or expectation that the Premises will be repaired or improved in any manner before a resale of the Premises after foreclosure;
(ii)	the valuation shall be based upon an assumption that the foreclosure purchaser desires a prompt resale of the Premises for cash promptly (but no later than twelve (12) months) following the foreclosure sale;
(iii)	all expenses to be incurred by ‘Beneficiary when the purchaser at the foreclosure sale resells the Premises, including reasonable closing costs customarily borne by the seller in a commercial real estate transaction, should be taken into account in such valuation, including, without limitation, brokerage commissions, title insurance, a survey of the Premises, tax prorations, attorneys’ fees, and marketing costs;
(iv)	the gross fair market value of the Premises shall be further discounted to account for any estimated holding costs associated with maintaining the Premises pending sale, including, without limitation, utilities expenses, property management fees, taxes and assessments (to the extent not accounted for in (iii) above), and other maintenance expenses; and
(v)	any expert opinion testimony given or considered in connection with a determination of the fair market value of the Premises must be given by persons having at least five (5) years experience in appraising similarly improved property in the vicinity where the Premises is located and being actively engaged therein at the time of such testimony.

SECTION 9 — GENERAL PROVISIONS

9.1 Trustor shall defend, indemnify and hold harmless Beneficiary, any successors to Beneficiary’s interest in the Trust Property, any purchaser of the Trust Property upon foreclosure, and all shareholders, directors, officers, employees and agents of all of the foregoing and their heirs, personal representatives, successors and assigns from and against all claims, costs, expenses, actions, suits, proceedings, losses, damages and liabilities of any kind whatsoever, including but not limited to all amounts paid in settlement of, and all costs and expenses (including actual and reasonable attorneys’ fees) (collectively, the “Losses”) incurred in defending or settling, any actual or threatened claim, action, suit or proceeding, directly or indirectly arising out of or relating to the Obligation, this Deed of Trust, or the Trust Property, including but not limited to (i) any use, generation, manufacture, production, storage, Release, threatened Release, or presence of a Regulated Substance on, under or about the Trust Property, (ii) any violation or claim of violation of any Environmental Law with respect to the Trust Property; or (iii) any breach of any of the warranties, representations and covenants contained herein. This indemnity provision shall continue in full force and effect and shall survive the payment and performance of the Obligation, the release of record of the

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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	lien of this Deed of Trust, any foreclosure (or action in lieu of foreclosure) of this Deed of Trust, the exercise by Beneficiary of any other remedy under this Deed of Trust or any other document or instrument evidencing or securing the Obligation, and any suit, proceeding or judgment against Trustor by Beneficiary hereon. The foregoing shall not apply to Losses resulting from Regulated Substances brought onto the Trust Property by Beneficiary nor shall it apply to Losses resulting from Regulated Substances brought or released onto the Trust Property after a transfer of the Trust Property to a third party or to Beneficiary.
9.2	The acceptance of this Deed of Trust by Beneficiary shall not be considered a waiver of or in any way to affect or impair any other security that Beneficiary may have, acquire simultaneously herewith, or hereafter acquire for the payment or performance of the Obligation, nor shall the taking by Beneficiary at any time of any such additional security be construed as a waiver of or in any way to affect or impair the security of this Deed of Trust; Beneficiary may resort, for the payment or performance of the Obligation, to its several securities therefor in such order and manner as it may determine.
9.3	Without notice or demand, without affecting the obligations of Trustor hereunder or the personal liability of any person for payment or performance of the Obligation, and without affecting the lien or the priority of the lien of this Deed of Trust, Beneficiary, from time to time, may: (i) extend the time for payment of all or any part of the Obligation, 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 Obligation; (ii) take and hold other security for the payment or performance of the Obligation and enforce, exchange, substitute, subordinate, waive or release any such security; (iii) consent to the making of any map or plat of the Trust Property; (iv) join in granting any easement on or in creating any covenants, conditions or restrictions affecting the use or occupancy of the Trust Property; (v) join in any extension or subordination agreement; or (vi) release or direct Trustee to release any part of the Trust Property from this Deed of Trust. Any such action by Beneficiary, or Trustee at Beneficiary’s direction, may be taken without the consent of any junior lienholder and shall not affect the priority of this Deed of Trust over any junior lien.
9.4	Trustor waives and agrees not to assert; (i) any right to require Beneficiary to proceed against any guarantor, to proceed against or exhaust any other security for the Obligation, to pursue any other remedy available to Beneficiary, 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) to the extent permitted by law, 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 Obligation; and (v) any benefit of, and any right to participate in, any other security now or hereafter held by Beneficiary.
9.5	Upon written request of Beneficiary stating that all of the Obligation has been paid, and upon surrender of this Deed of Trust and the Note to Trustee for cancellation and retention or, if requested, delivery, then Trustee (and Beneficiary if necessary to clear

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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	title), upon payment of Trustee’s fees, shall reconvey, without warranty, the Trust Property. The recitals in such reconveyance of any matters or facts shall be conclusive as to the accuracy thereof. The grantee in such reconveyance may be described as “the person or persons legally entitled thereto.” Five (5) years after issuance of such full reconveyance, Trustee may destroy the Note and this Deed of Trust (unless directed in such request to retain them), unless prior thereto Trustee has been directed to deliver them to the person or persons to whom the property was reconveyed.
9.6	Beneficiary or Trustee, or both, shall have the right to inspect the Trust Property at all reasonable times.
9.7	Time is of the essence hereof. If more than one Trustor is named herein, the word “Trustor” shall mean all and any one or more of them, severally and collectively, unless otherwise specifically provided. All liability hereunder shall be joint and several. This Deed of Trust shall be binding upon, and shall inure to the benefit of, the parties hereto and their heirs, personal representatives, successors and assigns. The term “Beneficiary” shall include not only the original Beneficiary hereunder but also any future owner and holder, including pledgees, of the Note. 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.
9.8	The acceptance by Trustee of this trust shall be evidenced when this Deed of Trust, duly executed and acknowledged, is made a public record as provided by law. The trust created hereby is irrevocable by Trustor. The Beneficiary shall have the right from time to time to substitute the trustee hereunder by an instrument in writing in any manner now or hereafter provided by law.
9.9	This Deed of Trust cannot be changed except by agreement, in writing, signed by Trustor and Beneficiary.
9.10	No setoff or claim that Trustor now has or may in the future have against Beneficiary shall relieve Trustor from paying or performing the Obligation.
9.11	Each term, condition and provision of this Deed of Trust shall be interpreted in such manner as to be effective and valid under applicable law but if any term, condition or provision of this Deed of Trust shall be held to be void or invalid, the same shall not affect the remainder hereof which shall be effective as though the void or invalid term, condition or provision had not been contained herein. In addition, should this instrument be or become ineffective as a deed of trust, then these presents shall be construed and enforced as a realty mortgage with the Trustor being the Mortgagor and Beneficiary being the Mortgagee.
9.12	This Deed of Trust, the Obligation and the agreements of any person or entity to pay or perform the Obligation shall be governed by and construed according to the laws of the State of Arizona. Venue shall be appropriate only in Tucson, Arizona.

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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9.13 All notices required or permitted to be given hereunder shall be in writing and may be given in person or by United States mail, by delivery service or by electronic transmission. Any notice directed to a party to this Deed of Trust shall become effective upon the earliest of the following: (i) actual receipt by that party; (ii) delivery to the designated address of that party, addressed to that party; or (iii) if given by certified or registered United States mail, twenty-four (24) hours after deposit with the United States Postal Service, postage prepaid, addressed to that party at its designated address. The designated address of a party shall be the address of that party shown at the beginning of this Deed of Trust with copies to the party listed below or such other address as that party, from time to time, may specify by notice to the other parties:

Daniel Kivel
10 Ocean Park Boulevard, #5
Santa Monica, California 90405

Deborah Oseran
Mendelsohn, Oseran & Eisner, P.C.
2730 East Broadway Boulevard, Suite 100
Tucson, Arizona 85716

9.14	As further security for the payment and performance of the Obligation, Beneficiary shall be subrogated to the lien, although released of record, of any and all encumbrances paid from the proceeds of any loan included in the Obligation.
9.15	Trustor’s liability for the payment of the indebtedness or performance of the Obligation shall be limited to Trustor’s interest in the Trust Property, subject to the exceptions and qualifications provided for in the Note.
9.16	Nothing contained in the Note or Deed of Trust shall be construed in a manner to create any relationship between Trustor and Beneficiary other than the relationship of borrower and lender and Trustor and Beneficiary shall not be considered partners or co-venturers for any purpose. The terms and provisions of the Note and Deed of Trust are for the benefit of Trustor, Beneficiary and their respective successors, assigns, endorsees and transferees and all persons claiming under or through them, and no other person shall have any right or cause of action on account thereof.
9.17	INTENTIONALLY OMITTED.
9.18	Trustor shall have the right to contest in good faith the validity or amount of any tax assessment or lien arising from any work performed at or materials furnished to the premises which right, however, is conditional upon (i) such contest having the effect of preventing the collection of the tax, assessment or lien so contested and the sale or forfeiture of the premises or any part thereof or interest therein to satisfy the same, (ii) Trustor giving Beneficiary written notice of its intention to contest the same in a timely manner, which, with respect to any contested tax or assessment, shall mean before any such tax, assessment or lien has been increased by any penalties or costs, and with

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Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

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respect to any contested mechanic’s lien claim, shall mean within thirty (30) days after Trustor receives actual notice of the filing thereof, (iii) Trustor making and thereafter maintaining with Beneficiary or such other depositary as Beneficiary may designate, a deposit of cash (or United States government securities, in discount form, or other security as may, in Beneficiary’s sole discretion, be acceptable to Beneficiary, and in either case having a present value equal to the amount herein specified) in an amount no less than One Hundred Fifty Percent (150%) of the amount which, in Beneficiary’s reasonable opinion, determined from time to time, shall be sufficient to pay in full such contested tax, assessment or lien and penalties, costs and interest that may become due thereon in the event of a final determination thereof adverse to Trustor or in the event Trustor fails to prosecute such contest as herein required, or in lieu thereof, Trustor providing to Beneficiary title insurance over such matters in form and substance reasonably acceptable to Beneficiary, and (iv) Trustor diligently prosecuting such contest by appropriate legal proceedings. In the event Trustor shall fail to prosecute such contest with reasonable diligence or shall fail to maintain sufficient funds, or other security as aforesaid, on deposit as hereinabove provided, Beneficiary may, at its option, liquidate the securities deposited with Beneficiary, and apply the proceeds thereof and other monies deposited with Beneficiary in payment of, or on account of, such taxes, assessments, or liens or any portion thereof then unpaid, including the payment of all penalties and interest thereon.

SECTION 10 — ARIZONA DEED OF TRUST

     Beneficiary and Trustee shall have all rights, benefits and remedies conferred or contemplated by A.R.S. § § 33-801 through 821 (the “Deed of Trust Act”). Notwithstanding the foregoing, Beneficiary may, at its option in its sole discretion, elect to foreclose this Deed of Trust judicially as authorized by A.R.S. § 33-807.

(a)

In addition to, and not in limitation of, any other remedy provided in or available under this Deed of Trust, Beneficiary shall have all the rights set forth in A.R.S. § 33-702B (as amended, supplemented or supplanted) regarding enforcement of the assignment of rents contained herein.

(b)

It is Trustor’s intention that the obligations of Trustor to pay and perform the Obligation secured by this Deed of Trust be governed according to the express, bargained-for terms hereof and of the other Loan Documents. The interest rate and terms applicable to the Note and the other Loan Documents have been negotiated and agreed to by Beneficiary upon that basis. Therefore, to the fullest extent allowable under Arizona law and subject to the limitations or recourse hereunder as set forth in Section 9.15 of this Deed of Trust and in the Note, Trustor hereby expressly waives all provisions of Arizona law (including without limitation those specifically referenced below) which might otherwise be construed, contrary to the terms of the Loan Documents, to limit the liability of Trustor with respect to the Obligation except as otherwise expressly provided in Section 9.15 of this Deed of Trust and in the Note, and hereby expressly agrees

05-115854.03
Deed of Trust
Crestline investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

26

that no such provision of law shall be applicable to such obligations. To that end, Trustor expressly:

(i)	agrees that the amount of any unpaid or unperformed Obligation remaining following any sale of collateral (herein referred to as the “Deficiency”) shall be determined, subject to Section 9.15 of this Deed of Trust and to the limitations in the Note, solely by the purchase price (whether cash, credit bid, or otherwise, and net of all costs and expenses of and relating to the sale) actually received for such collateral, and waives all provisions of A.R.S. §§ 12-1566, 33-725, 33-727 and 33-814 which might otherwise determine the Deficiency by the “fair market value” of the collateral sold or by any other valuation in excess of such actual net purchase price;
(ii)	waives all provisions of A.R.S. § 33-814 which purport to limit the time within which an action upon a Deficiency may be commenced, or to eliminate any Deficiency if such an action is not commenced within such time limits, and agrees that such provisions shall not apply to any Deficiency following a trustee’s sale under this Deed of Trust;
(iii)	agrees that if, notwithstanding the foregoing express intention and agreement of Trustor to the contrary, the provisions of A.R.S. § 33-814 are held by a court to be applicable, then:

(A)

for purposes of A.R.S. § 33-814(B), the ninety-day period within which an action for a deficiency judgment may be brought shall not begin until the date of the last trustee’s sale or other nonjudicial or judicial foreclosure sale of any real or personal property collateral under any of the Deeds of Trust which secure the Note, whether such collateral is located within or outside of Arizona;

(B)

the phrase “full satisfaction of the obligation” in A.R.S. § 33-814(D) shall be construed to refer solely to the obligation of Trustor to repay the site-specific monetary indebtedness evidenced by the Note, and not to any separate and independent obligations (1) of Trustor which are created by this Deed of Trust (including, without limitation, any covenants, agreements or indemnities which are expressly stated to survive any foreclosure hereof) or which are created under or evidenced or secured by any other Loan Document executed in connection herewith, or (2) of any other person which is directly, indirectly or contingently liable with respect to the Obligation (all such separate and independent obligations being referred to herein as the “Separate Obligations”); and

05-115854.03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

27

(C) notwithstanding any application of A.R.S. § 33-814(D) to limit or bar any action against Trustor with respect to the monetary indebtedness evidenced by the Note following a trustee’s sale or sales of the entire the Trust Property such Section shall not be applicable to, or in any way limit or impede any action with respect to, such Separate Obligations or any collateral which might now or hereafter be given by Trustor as security therefor;

(iv)	to the extent permitted by applicable law, waives all rights of reinstatement following acceleration of the obligations secured by this Deed of Trust, including any which might otherwise be available under A.R.S. § 33-813, it being agreed that Trustor has bargained for the notice and cure rights given to Trustor pursuant to Section 8.1 hereof and under the other Loan Documents; that such rights provide Trustor with sufficient opportunity to prevent acceleration following a breach or default which could become an Event of Default; and that Trustor has agreed in return to waive any further right of reinstatement following acceleration should no cure be timely made;
(v)	to the extent permitted by applicable law, waives all rights of redemption Trustor might otherwise have under Arizona law with respect to the Trust Property or any other collateral, whether by statute, by subrogation, or otherwise, including without limitation any rights under A.R.S. § 12-1281 through 12-1283;
(vi)	waives and agrees not to assert any and all rights, benefits and defenses which might otherwise be available under the provisions of A.R.S. §§ 12-1641, 12-1642, 44-141, 44-142 or 47-3605, or Arizona Rules of Civil Procedure Rule 17(I); and
(vii)	agrees to be and remain liable for the Obligation, and agrees (including as contemplated by A.R.S. §§ 12-1566(E) and 33-814(C) with respect to a guaranty) that this Deed of Trust may be enforced (and sale had hereunder or judgment given hereon) at any time and independent of any other action or judgment, all regardless of whether, or when, a trustee’s or foreclosure sale of any collateral given by Trustor or any other person is held or any other nonjudicial or judicial action to realize upon collateral, or against Trustor or any other person obligated with respect to the Obligation, is commenced, maintained, concluded, continued or discontinued.

(c) The statutes referred to above in this section shall include any further statutes amending, supplementing or supplanting same. The waivers contained in this section and elsewhere in this Deed of Trust are intended to be broadly and liberally construed in favor of Beneficiary.

05-115854 03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

28

(d) Notwithstanding any provision in this Section 10 to the contrary, it is expressly understood and agreed that (i) Beneficiary may not seek to enforce personal liability against Trustor beyond the limitations expressed in the Note, and (ii) Beneficiary may not seek to enforce personal liability against any guarantor of the Note or the Obligation or Separate Obligations except as set forth in any separate guaranty or indemnity agreement signed in connection with the Note or Obligations.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

05-115854.03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

29

IN WITNESS WHEREOF, these presents are executed as of the date indicated above.

CRESTLINE INVESTMENTS, L.L.C.,
an Arizona limited liability company

By:	/s/ Alvin Kivel
Name:	Alvin Kivel
Its:	Manager

STATE OF Arizona	)
	) ss.
COUNTY OF Pima	)

On July 5, 2002, before me, Lee Ann Edmond, personally appeared Alvin Kivel, the Manager of CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company, who is personally known to me (or has produced Arizona drivers license as identification) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same as the free and voluntary act of such party for the uses and purposes mentioned in the instrument in his duly authorized capacity.

WITNESS my hand and official seal.

(SEAL)
		/s/ Lee Ann Edmond (Print or type name of Notary) Lee Ann Edmond
		Notary Public, State of Arizona

My commission expires:

05-115854.03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

EXHIBIT A

A part of the Southwest quarter of Section 34, Township 13 South, Range 14 East, Gila and Salt River Meridian, Pima County, Arizona, described as follows:

COMMENCING at the Southwest corner of said Southwest quarter, monumented by a found brass cap in a handwell;

Thence North 00 degrees 28 minutes 39 seconds West along the West line of said Southwest quarter, a distance of 60.00 feet to a line 60.00 feet North of and parallel with the South line of said Southwest quarter;

Thence North 89 degrees 53 minutes 28 seconds East along the said parallel line a distance of 60.00 feet to the Point of Beginning on a 1/2” iron rod tagged LS 4399 on a line 60.00 feet East of and parallel with the West line of said Southwest quarter;

Thence North 00 degrees 28 minutes 39 seconds West along the said parallel line a distance of 15.00 feet to a 1/2” iron rod tagged LS 4399;

Thence North 04 degrees 05 minutes 42 seconds East 125.43 feet to a chiseled “X” in concrete on a line 70.00 feet East of and parallel with the West line of said Southwest quarter;

Thence North 00 degrees 28 minutes 39 seconds West along the said parallel line a distance of 124.78 feet;

Thence North 45 degrees 28 minutes 39 seconds West 14.14 feet to a 1/2” iron rod tagged LS 4399 on a line 60.00 feet East of and parallel with the West line of said Southwest quarter;

Thence North 00 degrees 28 minutes 39 seconds West along the said parallel line a distance of 305.16 feet to a concrete nail tagged LS 19324 on a line 20.00 feet South of and parallel with the North line of the Southwest quarter of the Southwest quarter of the Southwest quarter of Section 34;

Thence North 89 degrees 52 minutes 03 seconds East along the said parallel line a distance of 555.33 feet to a 1/2” iron rod tagged LS 4399 at a point of curvature of a tangent curve concave to the Southwest;

Thence Southeasterly along the arc of said curve, to the right, having a radius of 25.00 feet, with a chord of South 45 degrees 19 minutes 14 seconds East 35.24 feet, and a central angle of 89 degrees 37 minutes 25 seconds for an arc distance of 39.11 feet to a point of tangency on a 1/2” iron rod tagged LS 4399;

Thence South 00 degrees 30 minutes 32 seconds East 385.24 feet to a 1/2” iron rod tagged LS 4399;

Thence South 89 degrees 43 minutes 18 seconds East 19.91 feet to a 1/2” iron rod tagged LS 4399;

Thence South 00 degrees 28 minutes 56 seconds East 180.00 feet to a 1/2” iron rod tagged CE 1322 on a line 50.00 feet North of and parallel with the South line of said Southwest quarter;

Thence South 89 degrees 53 minutes 28 seconds West along thesaid parallel line a distance of 200.06 feet to a 1/2” iron rod tagged CE 1322;

Thence North 00 degrees 16 minutes 48 seconds West 10.00 feet to a line 60.00 feet North of and parallel with the South line of said Southwest quarter;

Thence South 89 degrees 53 minutes 28 seconds West along the said parallel line a distance of 400.29 feet to the POINT OF BEGINNING.

EXHIBIT B

RENT ROLL

The Rent Roll has been removed for recordation and can be found attached to the Affidavit and Solvency Certificate dated as of the date of this Deed of Trust executed in connection with the Loan for the benefit of the Beneficiary. The Rent Roll is incorporated into this Deed of Trust by reference.

05-115854.03
Deed of Trust
Crestline Investments, L.L.C.
Tucson, Arizona
Thrivent Loan No. 86070

EX-10.45

Exhibit 10.45

ENVIRONMENTAL INDEMNITY AGREEMENT

     THIS ENVIRONMENTAL INDEMNITY AGREEMENT (“Agreement”) made as of July 6, 2010, by TNP SRT NORTHGATE PLAZA TUCSON, LLC, a Delaware limited liability company (“Borrower”), and TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation (“Guarantor”) (Borrower and Guarantor are hereinafter collectively referred to as “Indemnitors”), in favor of THRIVENT FINANCIAL FOR LUTHERANS, a Wisconsin corporation (“Indemnitee”), and the other Indemnified Parties (defined below).

RECITALS

          A. Subject to the provisions of that certain Assumption and Second Modification Agreement of even date herewith (the “Assumption Agreement”), by and among CRESTLINE INVESTMENTS, L.L.C., an Arizona limited liability company (“Assignor”), as Assignor, Borrower, as Assignee, and Indemnitee, as Lender, Borrower is, or will be, the owner of the real property described in Exhibit A attached hereto and incorporated herein by this reference (the “Premises”).

     B. The Premises is subject to liens of, among other things, (i) that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated July 10, 2002 (the “Original Deed of Trust”), made by Assignor, as Trustor, to a trustee for the use and benefit of Indemnitee, as Beneficiary, and recorded July 10, 2002, in Docket 11838, page 269, in the office of the Pima County Recorder (all recording information contained herein refers to recordings in the office of the Pima County Recorder), as modified by that certain Modification Agreement dated June 22, 2004 (the “Modification”), by and between Indemnitee, as Lender, and Assignor, as Borrower, and recorded June 25, 2004, in Docket 12331, page 1269, (the Original Deed of Trust, as modified by the Modification, is hereinafter referred to as the “Security Instrument”); and (ii) that certain Assignment of Rents and Leases dated July 10, 2002 (the “Original Lease Assignment”), from Assignor, as Borrower, to Indemnitee, as Lender, and recorded July 10, 2002, in Docket 11838, page 302, as modified by the Modification, (the Original Lease Assignment, as modified by the Modification, is hereinafter referred to as the “Lease Assignment”), which are liens against the real property described in Exhibit A attached hereto and incorporated herein by this reference (the “Premises”). The Security Instrument and the Lease Assignment are sometimes hereinafter collectively referred to as the “Security Documents”.

     C. The Security Documents secure, among other things, payment of the indebtedness evidenced by that certain Promissory Note made by Assignor to the order of Indemnitee dated July 10, 2002 (the “Original Note”), in the face amount of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000), which Original Note was amended and restated by that certain Amended and Restated Promissory Note dated June 22, 2004 (the “Restated Note”), in the face amount of FIVE MILLION THREE HUNDRED THOUSAND DOLLARS ($5,300,000), made by Assignor to the

LOAN NO. 10-0086070

2324568.2/ENVIRONMENTAL INDEMNITY/CRESTLINE 2010 ASSUMPTION

order of Indemnitee, (the Original Note, as amended and restated by the Restated Note, is hereinafter referred to as the “Note”).

     D. Indemnitee consented to the transfer of the Premises from Assignor to Borrower (the “Transfer”), and the assumption by Borrower of the loan evidenced by the Note and secured by the Security Documents, on the terms and conditions contained in the Assumption Agreement and in that certain consent to transfer letter dated June 3, 2010 (the “Transfer Consent”), from Indemnitee to Assignor.

     E. Indemnitors enter into this Agreement to induce Indemnitee to consent to the Transfer and to satisfy certain of the conditions specified in the Transfer Consent. Indemnitors acknowledge that Indemnitee would not permit the Transfer unless Indemnitors execute and deliver this Agreement to Indemnitee, and intend that Indemnitee shall rely on this Agreement in consenting to the Transfer and permitting the Assumption.

AGREEMENT

     NOW THEREFORE, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Indemnitors hereby represent, warrant, covenant and agree for the benefit of Indemnified Parties as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the following meanings:

     (a) The term “Hazardous Substances or Wastes” includes but is not limited to any and all substances (whether solid, liquid or gas) defined, listed, or otherwise classified as pollutants, hazardous wastes, hazardous substances, hazardous materials, extremely hazardous wastes, or words of similar meaning or regulatory effect under any present or future Environmental Laws or that may have a negative impact on human health or the environment including, but not limited to, petroleum and petroleum products, asbestos and asbestos-containing materials, polychlorinated biphenyls, lead, radon, radioactive materials, flammables, explosives and mold.

     (b) The term “Environmental Law” means any present and future federal, state and local laws, statutes, ordinances, rules, regulations and the like, as well as common law, relating to protection of human health or the environment, relating to Hazardous Substances or Wastes, relating to liability for or costs of Remediation or prevention of Releases of Hazardous Substances or Wastes or relating to liability for or costs of other actual or threatened danger to human health or the environment. The term “Environmental Law” includes, but is not limited to, the following statutes, as amended, any successor thereto, and any regulations promulgated pursuant thereto, and any state or local statutes, ordinances, rules, regulations and the like addressing similar issues: the

2

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

     (c) The term “Release” with respect to any Hazardous Substances or Wastes includes, but is not limited to, any release, deposit, discharge, emission, leaking, leaching, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing or other movement of Hazardous Substances or Wastes.

     (d) The term “Remediation” includes but is not limited to any response, remedial, removal, or corrective action; any activity to clean up, detoxify, decontaminate, contain or otherwise remediate any Hazardous Substances or Wastes; any actions to prevent, cure or mitigate any Release of any Hazardous Substances or Wastes; any action to comply with any Environmental Laws or with any permits issued pursuant thereto; any inspection, investigation, study, monitoring, assessment, audit, sampling and testing, laboratory or other analysis, or evaluation relating to any Hazardous Substances or Wastes or to anything referred to herein.

     (e) The term “Legal Action” means any claim, suit or proceeding, whether administrative or judicial in nature.

     (f) The term “Indemnified Parties” includes Indemnitee, any person or entity who is or will have been involved in the origination of the Loan, any person or entity who is or will have been involved in the servicing of the Loan, any person or entity in whose name the encumbrance created by the Security Instrument is or will have been recorded, persons and entities who may hold or

3

acquire or will have held a full or partial interest in the Loan, including, but not limited to, custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties.

     (g) The term “Losses” includes any losses, damages, costs, fees, expenses, claims, suits, judgments, awards, liabilities (including, but not limited to, strict liabilities), obligations, debts, diminutions in value, fines, penalties, charges, costs of Remediation (whether or not performed voluntarily), amounts paid in settlement, foreseeable and unforeseeable consequential damages, litigation costs, attorneys’ fees, engineers’ fees, environmental consultants’ fees, and investigation costs (including, but not limited to, costs for sampling, testing and analysis of soil, water, air, building materials, and other materials and substances whether solid, liquid or gas), of whatever kind or nature, and whether or not incurred in connection with any judicial or administrative proceedings, actions, claims, suits, judgments or awards.

     2. Indemnitor Representations and Warranties. Each Indemnitor represents and warrants to Indemnitee that:

     (a) If Indemnitor is a corporation, partnership, limited liability company or trust, it is duly organized, validly existing and in good standing under the laws of the state of its organization, is duly qualified to do business in all states in which it is required to be so qualified, and has all requisite power and authority to enter into this Agreement and to perform its obligations hereunder; the execution, delivery and performance of this Agreement by Indemnitor has been duly and validly authorized; and all requisite action has been taken by Indemnitor to make this Agreement valid and binding upon Indemnitor, enforceable in accordance with its terms.

     (b) If Indemnitor is an individual, such individual is of legal age, is under no legal disability and is fully competent to make, execute and deliver this Agreement.

     (c) If Indemnitor is a corporation, partnership, limited liability company or trust, neither the execution and delivery of this Agreement nor the performance of the provisions of the agreements herein contained on the part of Indemnitor will contravene, violate or constitute a default under the organizational and other governing instruments of such Indemnitor or result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under any agreement, indenture, loan or credit agreement or other instrument to which Indemnitor or the Premises is subject or result in the violation of any law, rule, regulation, order, judgment or decree to which Indemnitor or the Premises is subject.

     (d) If Indemnitor is an individual, neither the execution and delivery of this Agreement nor the performance of the provisions of the agreements herein

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contained on the part of such Indemnitor will result in the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under any agreement, indenture, loan or credit agreement or other instrument to which Indemnitor or the Premises is subject or result in the violation of any law, rule, regulation, order, judgment or decree to which Indemnitor or the Premises is subject.

     (e) There are no (i) bankruptcy proceedings involving Indemnitor and none is contemplated; (ii) dissolution proceedings involving Indemnitor and none is contemplated; (iii) unsatisfied judgments of record against Indemnitor; or (iv) tax liens filed against Indemnitor.

     (f) This Agreement has been duly executed and delivered by Indemnitor and constitutes the legal, valid and binding obligation of Indemnitor, enforceable in accordance with its terms, except as to enforcement of remedies, as may be limited by bankruptcy, insolvency or similar laws affecting generally the exercise and enforcement of creditor’s rights and remedies.

     (g) There are no judgments, suits, actions or proceedings at law or in equity or by or before any governmental instrumentality or agency now pending against or, to the best of Indemnitor’s knowledge, threatened against or affecting Indemnitor or Indemnitor’s assets, or both, nor has any judgment, decree or order been issued against Indemnitor or Indemnitor’s assets, or both.

     (h) No consent or approval of any regulatory authority having jurisdiction over Indemnitor is necessary or required by law as a prerequisite to the execution, delivery and performance of the terms of this Agreement.

     (i) Indemnitor is not, to the extent such would have a material adverse effect on Indemnitor and as of the date hereof, (i) in default in the payment or performance of any of Indemnitor’s obligations in connection with borrowed money or any other major obligation, or (ii) in default under any other contract or agreement to which Indemnitor is a party.

     (j) Any and all balance sheets, net worth statements and other financial statements and data which have heretofore been given to Indemnitee with respect to Indemnitor fairly and accurately represent the financial condition of Indemnitor as of the date thereof, and, since the date thereof, there has been no material adverse change in the financial condition of Indemnitor.

     3. Environmental Representations and Warranties. To the best of Indemnitors’ knowledge, based solely upon the “Environmental Report” (as hereinafter defined), (a) there are no Hazardous Substances or Wastes or underground storage tanks in, on, or under the Premises, except those that are both (i) in compliance with all Environmental Laws and with permits issued pursuant thereto and (ii) fully disclosed to Indemnitee in writing pursuant to the written report(s) resulting from the environmental

5

assessment(s) of the Premises delivered to Indemnitee (such report(s) are identified in Exhibit “B” attached hereto and are referred to below collectively as the “Environmental Report”); (b) there are no past, present or threatened Releases of Hazardous Substances or Wastes in, on, under or from the Premises except as described in the Environmental Report; (c) there is no threat of any Release of Hazardous Substances or Wastes migrating to the Premises except as described in the Environmental Report; (d) there is no past or present non-compliance with Environmental Laws, or with permits issued pursuant thereto, in connection with the Premises, except as described in the Environmental Report; (e) Indemnitors do not know of, and have not received, any written notice or other communication from any person or entity (including, but not limited to, a governmental entity) relating to Hazardous Substances or Wastes or Remediation thereof, of possible liability of any person or entity pursuant to any Environmental Law, other environmental conditions in connection with the Premises, or any actual or potential administrative or judicial proceedings in connection with any of the foregoing; and (f) Indemnitors have truthfully and fully provided to Indemnitee, in writing, any and all information relating to conditions in, on, under or from the Premises that is known to any Indemnitor and that is contained in files and records of any Indemnitor including, but not limited to, any reports relating to Hazardous Substances or Wastes in, on, under or from the Premises and/or to the environmental condition of the Premises.

     4. Environmental Covenants. Indemnitors covenant and agree that: (a) all uses and operations on or of the Premises, by Indemnitors or any other person or entity, shall be in material compliance with all Environmental Laws and permits issued pursuant thereto; (b) there shall be no Releases of Hazardous Substances or Wastes in, on, under or from the Premises by Indemnitors or anyone controlled by, controlling or under common control with Indemnitors; (c) Indemnitors shall keep the Premises free and clear of all liens and other encumbrances imposed pursuant to any Environmental Law, whether due to any act or omission of Indemnitors or any other person or entity (the “Environmental Liens”); (d) Indemnitors shall, at their sole cost and expense, perform any environmental site assessment or other investigation of environmental conditions in connection with the Premises, pursuant to any written request of Indemnitee (provided that such request is made based upon Indemnitee’s reasonable belief that there are Hazardous Substances or Wastes in, or under the Premises which are not in compliance with Environmental Laws), and share with Indemnitee the reports and other results thereof, and Indemnitee and other Indemnified Parties shall be entitled to rely on such reports and other results thereof; (e) Indemnitors shall, at their sole cost and expense, comply with all written requests of Indemnitee to (i) effectuate Remediation of any condition (including, but not limited to, a Release of a Hazardous Substance) in, on, under or from the Premises; (ii) comply with any Environmental Law; (iii) comply with any directive from any governmental authority; and (iv) take any other action necessary or appropriate for protection of human health or the environment; (f) Indemnitors shall not do or knowingly allow any tenant or other user of the Premises to do any act that materially increases the dangers to human health or the environment, poses an unreasonable risk of harm to any person or entity (whether on or off the

6

Premises), impairs or may impair the value of the Premises, is contrary to any requirement of any insurer, constitutes a public or private nuisance, constitutes waste, or violates any covenant, condition, agreement or easement applicable to the Premises; and (g) Indemnitors shall immediately notify Indemnitee in writing of (i) any presence or Releases or threatened Releases of Hazardous Substances or Wastes in, on, under, from or migrating towards the Premises; (ii) any non-compliance with any Environmental Laws related in any way to the Premises; (iii) any actual or potential Environmental Lien; (iv) any required or proposed Remediation of environmental conditions relating to the Premises; and (v) any written or oral notice or other communication of which any Indemnitor becomes aware from any source whatsoever (including, but not limited to, a governmental entity) relating in any way to Hazardous Substances or Wastes or Remediation thereof, possible liability of any person or entity pursuant to any Environmental Law, other environmental conditions in connection with the Premises, or any actual or potential administrative or judicial proceedings in connection with anything referred to in this Agreement.

     5. Indemnified Parties’ Rights/Cooperation and Access. The Indemnified Parties and any other person or entity designated by Indemnified Parties (including, but not limited to, any receiver, any representative of a governmental entity and any environmental consultant), shall have the right but not the obligation to enter upon the Premises at all reasonable times to assess any and all aspects of the environmental condition of the Premises and its use including, but not limited to, conducting any environmental assessment or audit (the scope of which shall be determined in Indemnitee’s sole and absolute discretion) and taking samples of soil, groundwater or other water, air or building materials, and conducting other invasive testing; provided, however, that Indemnified Parties shall not conduct such testing or assessments unless there has been an Event of Default under the Loan Documents, or Indemnified Parties have a reasonable belief or expectation that there exists a violation of an Environmental Law or an actual or threatened release of Hazardous Substances or Wastes on the Premises. Indemnitors shall cooperate with and provide access to the Indemnified Parties and any such person or entity designated by the Indemnified Parties. All such investigations shall be performed at Indemnitors, sole cost and expense.

     6. Indemnification. Indemnitors covenant and agree at their sole cost and expense, to protect, defend, indemnify, release and hold Indemnified Parties harmless from and against and actually incurred by any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: (a) the past, present or future presence, Release or threatened Release of any Hazardous Substances or Wastes in, on, above, or under the Premises; (b) any past, present or threatened non-compliance or violations of any Environmental Laws (or permits issued pursuant to any Environmental Law) in connection with the Premises or operations thereon; (c) any legal or administrative processes or proceedings or judicial proceedings in any way connected with any matter addressed in this Agreement; (d) any personal injury, wrongful death, or property or other damage arising under any statutory or common law

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or tort law theory concerning Hazardous Substances or Wastes; and (e) any misrepresentation or inaccuracy in any representation or warranty or material breach or failure to perform any covenants or other obligations in this Agreement or any covenants which are related to Hazardous Substances or Wastes or Environmental Law.

     7. Duty to Defend and Attorneys and Other Fees and Expenses. Upon written request by any Indemnified Party, Indemnitors shall defend and provide legal representation for such Indemnified Party with respect to any of the matters referenced in Section 6 above (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, in their sole and absolute discretion, engage their own attorneys and other professionals to defend or assist them with respect to such matters, and, at the option of Indemnified Parties, their attorneys shall control the resolution of such matters. Upon demand, Indemnitors shall pay or, in the sole and absolute discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

     8. Unimpaired Liability. The liability of Indemnitors under this Agreement shall in no way be limited or impaired by, and Indemnitors hereby consent to and agree to be bound by, any amendment or modification of the provisions of the Note, the Security Instrument or any of the other “Loan Documents” (as hereinafter defined). In addition, the liability of Indemnitors under this Agreement shall in no way be limited or impaired by (i) any extensions of time for performance required by the Note, the Security Instrument or any of the other Loan Documents, (ii) any sale or transfer of all or part of the Premises, (iii) any exculpatory provision in the Note, the Security Instrument, or any of the other Loan Documents limiting Indemnitee’s recourse to the Premises or to any other security for the Note, or limiting Indemnitee’s rights to a deficiency judgment against Indemnitors, (iv)the accuracy or inaccuracy of the representations and warranties made by Indemnitors under the Note, the Security Instrument or any of the other Loan Documents or herein, (v) the release of any Indemnitor or any other person from performance or observance of any of the agreements, covenants, terms or condition contained in any of the other Loan Documents by operation of law, Indemnitee’s voluntary act, or otherwise, (vi) the release or substitution in whole or in part of any security for the Note, or (vii) Indemnitee’s failure to record the Security Instrument or file any UCC financing statements (or Indemnitee’s improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Note; and, in any such case, whether with or without notice to Indemnitors and with or without consideration.

     9. Enforcement. The Indemnified Parties may enforce the obligations of Indemnitors without first resorting to or exhausting any security or collateral or without first having recourse to the Note, the Security Instrument or any other Loan Documents or any of the Premises, through foreclosure proceedings or otherwise, provided,

8

however, that nothing herein shall inhibit or prevent Indemnitee from suing on the Note, foreclosing, or exercising any power of sale under, the Security Instrument, or exercising any other rights and remedies thereunder. This Agreement is not collateral or security for the debt of Indemnitors pursuant to the Loan. It is not necessary for an “Event of Default” (as defined in the Security Instrument) to have occurred for the Indemnified Parties to exercise their rights pursuant to this Agreement. Notwithstanding any provision of the Security Instrument, the obligations pursuant to this Agreement are exceptions to any non-recourse or exculpation provision of the Security Instrument; Indemnitors are fully and personally liable for such obligations, and Indemnitors, liability is not limited to the original or amortized principal balance of the Loan or the value of the Premises.

     10. Survival. The obligations and liabilities of Indemnitors under this Indemnity shall fully survive indefinitely notwithstanding any termination, satisfaction, assignment, entry of a judgment of foreclosure, exercise of any power of sale, or delivery of a deed in lieu of foreclosure of the Security Instrument.

     11. Interest. Any amounts payable to any Indemnified Parties under this Agreement shall become immediately due and payable on demand and, if not paid within ten (10) days of such demand therefor, shall bear interest at the rate of twelve percent (12%) per annum, from the date payment was due.

     12. Waivers. Indemnitors unconditionally waive the following defenses to enforcement of this Agreement: (i) all presentments, demands, demands for performance, notices of nonperformance, protests, notices of protest, dishonor, nonpayment, partial payment, default and protest, notices of acceptance of this Agreement and all other notices and formalities to which Indemnitors may be entitled; (ii) any right to require Indemnitee to proceed against Borrower or any guarantor or to proceed against or exhaust any collateral described in the Note, the Security Instrument or any other document securing the Loan (the “Loan Documents”); (iii) any defense arising by reason of any invalidity or unenforceability of any of the Loan Documents or any disability of Borrower or any guarantor; (iv) any defense arising by reason of the manner in which Indemnitee has exercised its remedies under the Loan Documents; (v) any defense based upon an election of remedies by Indemnitee; and (vi) any right of subrogation and any rights to enforce any remedy which Indemnitee now has or may hereafter have against Borrower and any benefit of, and any right to participate in, any security now or hereafter held by Indemnitee.

     13. Subrogation. Indemnitors shall take any and all actions, including institution of legal action against third-parties, necessary or appropriate to obtain reimbursement, payment or compensation from such persons responsible for the presence of any Hazardous Substances or Wastes at, in, on, under or near the Premises or otherwise obligated by law to bear the cost. The Indemnified Parties shall be and hereby are subrogated to all of Indemnitors’ rights now or hereafter in such claims.

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     14. Notice of Legal Actions. Each party hereto shall, within five (5) business days of receipt thereof, give written notice to the other party hereto of (i) any notice, advice or other communication from any governmental entity or any source whatsoever with respect to Hazardous Substances or Wastes on, from or affecting the Premises, and (ii) any Legal Action brought against such party or related to the Premises, with respect to which any Indemnitor may have liability under this Agreement. Such notice shall comply with the provisions of Section 26 hereof.

     15. Examination of Books and Records. The Indemnified Parties and their accountants shall have the right to examine the records, books, management and other papers of Indemnitors which reflect upon their financial condition, at the Premises or at any office regularly maintained by Indemnitors where the books and records are located. The Indemnified Parties and their accountants shall have the right to make copies and extracts from the foregoing records and other papers. In addition, the Indemnified Parties and their accountants shall have the right to examine and audit the books and records of Indemnitors pertaining to the income, expenses and operation of the Premises during reasonable business hours at any office of Indemnitors where the books and records are located.

     16. Survival of Indemnities. The indemnities given in this Agreement are in addition to and separate from those set forth in the Security Instrument. The indemnities given in this Agreement are given in consideration of Indemnitee making the Loan to Borrower but are not given as security for repayment of the Loan and shall fully survive repayment of the Loan, the foreclosure of the Security Instrument, and/or acceptance of a deed in lieu of foreclosure; provided, however, that Indemnitors obligations hereunder shall not extend to any violations of Environmental Law or Releases of Hazardous Substances or Wastes occurring after the date of any foreclosure sale, recordation of any deed in lieu of foreclosure or any other transfer of the Premises to a party which is not an affiliate of Indemnitors.

     17. Release of Liability. Any one or more parties liable upon or in respect of this Agreement may be released without affecting the liability of any party not so released.

     18. Governing Law. This Agreement and the rights and obligations of all parties hereunder shall be governed by and construed in accordance with the laws of the state or commonwealth in which the Premises are located.

     19. Jurisdiction. The parties hereto irrevocably (a) agree that any suit, action or other legal proceeding arising out of or relating to this Agreement may be brought in a court of record in the state or commonwealth in which the Premises are located or in the courts of the United States of America located in such state or commonwealth, (b) consent to the non-exclusive jurisdiction of each such court in any suit, action or proceeding, and (c) waive any objection which it may have to the laying of venue of any such suit, action or proceeding in any of such courts and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. Nothing contained

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herein shall prevent Indemnitee from bringing any action or exercising any rights against any security given to Indemnitee by Indemnitors, or against Indemnitors personally, or against any property of Indemnitors, within any other state. Commencement of any such action or proceeding in any other state shall not constitute a waiver of the agreement as to the laws of the state which shall govern the rights and obligations of Indemnitors and Indemnitee hereunder.

     20. Indemnitors Not Released. No delay or omission of Indemnitee to exercise any of its rights and remedies under this Agreement shall constitute a waiver of the right of Indemnitee to exercise such rights and remedies at a later time. The acceptance by Indemnitee of payment of any sum payable hereunder after the due date of such payment shall not be a waiver of Indemnitee’s right to either require prompt payment when due of all other sums payable hereunder or to declare a default for failure to make prompt payment.

     21. Captions. The captions to the Sections of this Agreement are for convenience only and shall not be deemed part of the text of the respective Sections and shall not vary, by implication or otherwise, any of the provisions of this Agreement.

     22. Severability. The parties hereto intend and believe that each provision of this Agreement comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or any portion of any provision contained in this Agreement is held by a court of law to be invalid, illegal, unlawful, void or unenforceable as written in any respect, then it is the intent of all parties hereto that such portion or provision shall be given force to the fullest possible extent that it is legal, valid and enforceable, that the remainder of the Agreement shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion or provision was not contained therein, and the rights, obligations and interests of Indemnitors and Indemnitee under the remainder of this Agreement shall continue in full force and effect.

     23. Successors and Assigns. The provisions of this Agreement shall be binding upon Indemnitors and upon Indemnitors’ heirs, administrators, representatives, executors, successors and assigns and shall inure to the benefit of Indemnitee and its successors and assigns. As used herein the words “successors and assigns” shall also be deemed to include the heirs, representatives, administrators and executors of any natural person who is a party to this Agreement.

     24. Remedies Cumulative. The remedies of Indemnitee as provided in this Agreement and in the Note, the Security Instrument and any other Loan Document and the warranties contained herein or therein shall be cumulative and concurrent, may be pursued singly, successively or together at the sole discretion of Indemnitee, may be exercised as often as occasion for their exercise shall occur and in no event shall the failure to exercise any such right or remedy be construed as a waiver or release of such right or remedy. No remedy under this Agreement or under the Note, the Security Instrument and any other Loan Document conferred upon or reserved to Indemnitee is intended to be exclusive of any other remedy provided in this Agreement or in any other

11

Loan Document or provided by law, but each shall be cumulative and shall be in addition to every other remedy given under this Agreement or in the Note, the Security Instrument and any other Loan Document or now or hereafter existing at law or in equity or by statute.

     25. No Oral Modification. No waiver, amendment, release or modification of this Agreement shall be made orally or shall be established by conduct, custom or course of dealing but only by an instrument in writing duly executed by Indemnitee and Indemnitors.

     26. Notices. Any notice which any party hereto may desire or may be required to give to any other party shall be in writing and either (a) mailed by certified mail, return receipt requested, or (b) sent by a nationally recognized overnight carrier which provides for a return receipt. Any such notice shall be sent to the respective party’s addresses as set forth below or to such other address as such party may, by notice in writing, designate as its address:

          Indemnitors: TNP SRT Northgate Plaza Tucson, LLC
c/o Thompson National Properties, LLC
1900 Main Street
Suite 700
Irvine, California 92614
Attention: Mr. Steve Corea

TNP Strategic Retail Trust, Inc.
c/o Thompson National Properties, LLC
1900 Main Street
Suite 700
Irvine, California 92614
Attention: Mr. Steve Corea

          Indemnitee: Thrivent Financial for Lutherans
Attention: Loan Administration — Mortgages and Real Estate
625 Fourth Avenue South
Minneapolis, Minnesota 55415

Any such notice shall constitute service of notice hereunder three (3) days after the mailing thereof by certified mail or one (1) day after the sending thereof by overnight carrier.

     27. Joint and Several Liability. The promises and agreements herein shall be construed to be and are hereby declared to be the joint and several promises and agreements of Indemnitors and shall constitute the joint and several obligations of Indemnitors and shall be fully binding upon and enforceable against all of Indemnitors. Neither the death nor release of any person or party to this Agreement shall affect or release the joint and several liability of any other person or party. Indemnitee may at its

12

option enforce this Agreement against one or all of Indemnitors, and Indemnitee shall not be required to resort to enforcement against each of Indemnitors and the failure to proceed against or join any of Indemnitors shall not affect the joint and several liability of any of the other Indemnitors.

     28. WAIVER OF JURY TRIAL. INDEMNITEE BY ITS ACCEPTANCE HEREOF AND INDEMNITORS HEREBY VOLUNTARILY, KNOWINGLY AND INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AGREEMENT, REGARDLESS OF WHETHER SUCH ACTION OR PROCEEDING CONCERNS ANY CONTRACTUAL OR TORTIOUS OR OTHER CLAIM. INDEMNITORS ACKNOWLEDGE THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO INDEMNITEE IN EXTENDING CREDIT TO BORROWER, THAT INDEMNITEE WOULD NOT HAVE EXTENDED SUCH CREDIT WITHOUT THIS JURY TRIAL WAIVER, AND THAT INDEMNITORS HAVE BEEN REPRESENTED BY AN ATTORNEY OR HAVE HAD AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS JURY TRIAL WAIVER AND UNDERSTAND THE LEGAL EFFECT OF THIS WAIVER.

     29. Counterparts. This Agreement may be executed in one or more counterparts by some or all of the parties hereto, each of which counterparts shall be an original and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder.

     30. Incorporation of State Law Provisions. Certain provisions/sections of this Agreement and certain additional provisions/sections that are required by laws of the State or Commonwealth in which the Premises are located may be amended, described and/or otherwise set forth in more detail on Exhibit “C” attached hereto, which such Exhibit by this reference, is incorporated into and made a part of this Agreement. In the event of any conflict between such state law provisions and any provision herein, the state law provisions shall control.

     31. Dating of this Agreement. Indemnitors hereby authorize Indemnitee to date this Agreement with the date on which the Assumption Agreement is offered for recordation in the office of the Pima County Recorder.

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     IN WITNESS WHEREOF, this Environmental Indemnity Agreement has been executed and delivered by Indemnitors to be effective (although not necessarily signed) as of the day and year first above written.

BORROWER
TNP SRT NORTHGATE PLAZA TUCSON, LLC, a Delaware limited liability company
By:	TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company Its Sole Member
	By:	TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership Its Sole Member
		By:	TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation General Partner
			By Name	/s/ Wendy Worcester Wendy Worcester
			Title	CFO
GUARANTOR
TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation
By	/s/ Wendy Worcester
	Name	Wendy Worcester
	Title	CFO

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STATE OF CALIFORNIA	)
	) ss.
County of Orange	)

     On June 29, 2010, before me, Bhriza Camacho, a Notary Public, personally appeared Wendy Worcester, who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

     I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

     WITNESS my hand and official seal.

Signature: /s/ Bhriza Camacho    
(Seal)

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LEGAL DESCRIPTION

The land referred to in this document is situated in the County of Pima, State of Arizona and is described as follows:

A portion of the Southwest quarter of the Southwest quarter of the Southwest quarter of Section 34, Township 13 South, Range 14 East, Gila and Salt River Base and Meridian, Pima County, Arizona, more particularly described as follows:

COMMENCING at the Southwest corner of said Section 34 being monumented by a brass cap in casting;

THENCE North 00 degrees 28 minutes 39 seconds West, along the West line of said Section 34, a distance of 60.00 feet;

THENCE North 89 degrees 53 minutes 28 seconds East, parallel to the South line of said Section 34, a distance of 60.00 feet to the POINT OF BEGINNING, monumented by a ¹/₂ inch rebar tagged “LS 4399”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to the West line of said Section 34, a distance of 15.00 feet to a point, monumented by a ¹/₂ inch rebar tagged “LS 4399”;

THENCE North 04 degrees 05 minutes 42 seconds East, a distance of 125.43 feet to a chiseled “X”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to the West line of said Section 34, a distance of 124.78 feet;

THENCE North 45 degrees 28 minutes 39 seconds West, a distance of 14.14 feet to a ¹/₂ inch rebar tagged “LS 4399”;

THENCE North 00 degrees 28 minutes 39 seconds West, parallel to and distant 60.00 feet Easterly of the West line of said Section 34, a distance of 305.16 feet to a concrete nail tagged “LS 19324”, being 20.00 feet Southerly of the North line of the Southwest quarter of the Southwest quarter of the Southwest quarter, of said Section 34;

THENCE North 89 degrees 52 minutes 03 seconds East, parallel to the North line of the Southwest quarter of the Southwest quarter of the Southwest quarter of said Section 34, a distance of 555.33 feet to the beginning of a horizontal curve concave Southwesterly and a ¹/₂ inch rebar tagged “LS 4399”;

EXHIBIT A

THENCE Southerly along said curve, an arc distance of 39.11 feet, said curve having a central angle of 89 degrees 37 minutes 25 seconds, and a radius of 25.00 feet, to a ¹/₂ inch rebar tagged “LS 4399”;

THENCE South 00 degrees 30 minutes 32 seconds East, a distance of 385.23 feet to a ¹/₂ inch rebar tagged “LS 4399”;

THENCE South 89 degrees 43 minutes 18 seconds East, a distance of 19.91 feet to a ¹/₂ inch rebar tagged “LS 4399”;

THENCE South 00 degrees 28 minutes 56 seconds East, a distance of 180.00 feet to a ¹/₂ inch rebar tagged “CE 1322” on the North right-of-way line of Grant Road;

THENCE South 89 degrees 53 minutes 28 seconds West, parallel to and distant 50.00 feet Northerly of the South line of said Section 34, a distance of 200.06 feet to a ¹/₂ inch rebar tagged “CE 1322”;

THENCE North 00 degrees 16 minutes 48 seconds West, a distance of 10.00 feet;

THENCE South 89 degrees 53 minutes 28 seconds West, parallel to and distant 60.00 feet Northerly of the South line of said Section 34, a distance of 400.30 feet to the POINT OF BEGINNING.

EXCEPT the certain above-ground improvements, buildings and/or structures conveyed in Deed recorded June 25, 2004 in Docket 12331 at page 1264

Tax Parcel Nos. 110-07-414C9
110-07-414D0
110-07-414E1
110-07-414F2

ii

EXHIBIT “B”
IDENTIFICATION OF ENVIRONMENTAL REPORT

     That certain Phase I Environmental Site Assessment Report Northgate Plaza prepared by CB Richard Ellis, CBRE File No. 10-460TX-0114.

EXHIBIT B

EXHIBIT “C”

APPLICABLE STATE LAW PROVISIONS

     C.1 Suretyship Waivers. Indemnitors hereby waive the benefits of the provisions of Arizona Revised Statutes, Sections 12-1641 et seq., Arizona Revised Statutes, Section 44-142, Arizona Revised Statutes, Section 47-3605, and 16 Arizona Revised Statutes, Rules of Civil Procedure, Rule 17(f).

     C.2 Legal Fees. It is understood and agreed that, in addition to those matters specified in this Agreement, Indemnitors shall also be responsible for paying all of Indemnitee’s actual court costs, witness fees and other litigation-related expenses.

     C.3 Agreement Not Secured. It is understood and agreed that this Agreement is not secured by the Security Instrument or any other Loan Document.

EXHIBIT C

EX-10.46

Exhibit 10.46

THIRD OMNIBUS AMENDMENT AND
REAFFIRMATION OF LOAN DOCUMENTS

     This Third Omnibus Amendment and Reaffirmation of Loan Documents (this “Amendment”) is dated as of the 6th day of July, 2010 (the “Effective Date”) by and among TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“Borrower”), TNP Strategic Retail Trust, Inc., a Maryland corporation having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (the “REIT”), Thompson National Properties, LLC, a Delaware limited liability company having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“TNP”), Anthony W. Thompson, an individual having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“Thompson”, and together with the REIT and TNP, the “Guarantors” and individually, a “Guarantor”), TNP SRT Northgate Plaza Tucson Holdings, LLC, a Delaware limited liability company, having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (the “Northgate Intermediate Entity”, and together with the Borrower and the Guarantors, the “Loan Parties” and individually, a “Loan Party”), and KeyBank National Association, a national banking association having a principal place of business at 225 Franklin Street, 18^th Floor, Boston, Massachusetts 02110, as agent (in such capacity, “Agent”) for itself and any other lenders who become lenders under the Credit Agreement (as hereinafter defined) collectively referred to as “Lenders” and each individually referred to as a “Lender”).

Witnesseth That:

     WHEREAS, the Borrower, the Agent and the Lenders are parties to that certain Revolving Credit Agreement dated as of November 12, 2009, as amended by that certain Omnibus Amendment and Reaffirmation of Loan Documents dated as of January 12, 2010 among the Borrower, the Guarantors and the Agent (the “First Omnibus Amendment”), as amended by that certain Second Omnibus Amendment and Reaffirmation of Loan Documents dated as of June 3, 2010 among the Borrower, the Guarantors and the Agent (the “Second Omnibus Amendment”, and together with the First Omnibus Amendment, the “Omnibus Amendments” and individually, an “Omnibus Amendment”) (and as further amended, restated and/or modified from time to time, the “Credit Agreement”), pursuant to which, among other things, the Lenders agreed to provide to the Borrower a revolving credit facility in the maximum principal amount of $15,000,000, and which obligations of the Borrower to the Lenders under the Credit Agreement are evidenced by, among other things, that certain Revolving Credit Note dated as of November 12, 2009 by the Borrower in favor of the Lenders and in the original principal amount of $15,000,000 (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “Note”), and are secured by, among other things, (a) that certain Pledge and Security Agreement dated as of November 12, 2009 by the Borrower in favor of the Agent for the benefit of the Lenders (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “Borrower Pledge Agreement”), (b) that certain Guaranty Agreement dated as of November 12, 2009 by the Guarantors in favor of the Agent for the benefit of the Lenders (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “Guaranty”), and (c) that certain Pledge and Security Agreement dated as of November 12, 2009 by the REIT in favor of the Agent for the benefit of the Lenders (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “REIT Pledge Agreement”);

     WHEREAS, in accordance with the terms and provisions of the Credit Agreement and the related Loan Documents (as defined in the Credit Agreement), the Borrower, from time to time, may acquire Properties (as defined in the Credit Agreement) and/or direct or indirect Equity Interests in various Entities (as defined in the Credit Agreement);

     WHEREAS, in connection with the acquisition of each Property and/or Equity Interests in an Entity, the Borrower has agreed to amend and supplement certain of the provisions, exhibits and schedules attached to the Credit Agreement and related Loan Documents;

     WHEREAS, the Borrower holds 100% of the Equity Interests in and to the Northgate Intermediate Entity, which Northgate Intermediate Entity holds 100% of the Equity Interests in and to TNP SRT Northgate Plaza Tucson, LLC, a Delaware limited liability company (the “Northgate Entity”);

     WHEREAS, pursuant to that certain Real Estate Purchase Agreement and Escrow Instructions dated as of April 6, 2010 (as amended from time to time) between the Northgate Entity (as assignee of TNP Acquisitions, LLC) and Crestline Investments, LLC, an Arizona limited liability company (the “Northgate Seller”), the Northgate Seller has agreed to sell, transfer and convey to the Northgate Entity, all of the Northgate Seller’s right, title and interest in and to the real property and improvements situated in the City of Tucson, County of Pima, State of Arizona and commonly known as “Northgate Plaza Shopping Center” (the “Northgate Property”);

     WHEREAS, Thrivent Financial for Lutherans, a Wisconsin corporation (the “Assumption Lender”) previously made a mortgage loan to the Northgate Seller in the original principal amount of $5,300,000 (the “Northgate Loan”), which Northgate Loan is evidenced by certain loan documents executed and delivered by the Northgate Seller to the Assumption Lender and more particularly described in the Assumption Agreement (as hereinafter defined) (collectively, the “Northgate Original Loan Documents”);

     WHEREAS, in connection with the acquisition of the Northgate Property, the Northgate Entity, the Assumption Lender and the Northgate Seller have entered into that certain Assumption and Second Modification Agreement dated on or about even date herewith (the “Assumption Agreement”, and together with the Northgate Original Loan Documents, the “Northgate Loan Documents”), pursuant to which the Northgate Entity agrees to assume all of the obligations of the Northgate Seller to the Assumption Lender under the Northgate Original Loan Documents;

     WHEREAS, in connection with the foregoing, the Borrower has requested, and the Agent has agreed to provide, certain amendments to the Loan Documents, all upon the terms and provisions more particularly set forth in this Amendment.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby amend the Loan Documents and agree as follows:

     1. Recitals and Definitions. The foregoing recitals are hereby incorporated by reference as if set forth at length herein. Capitalized terms used herein without definition shall have the meaning assigned to such terms in the Credit Agreement.

     2. Amendments to Credit Agreement. As of the Effective Date, each of the Loan Parties and the Agent agree that:

          (a) As of the date hereof, the Borrower has requested an advance in the original principal amount of One Million Nine Hundred Thousand and No/100 Dollars ($1,900,000) (the “Northgate Loan”), which Northgate Loan will be used by the Borrower (and/or the Northgate Entity) to fund a portion of the acquisition costs and expenses related to the acquisition of the Northgate Property. The Northgate Property does not satisfy the provisions of Section 2.7.1(b) of the Credit Agreement (related to the loan to value for the Proposed Property), as more particularly set forth in that certain

- 2 -

Request for Advance dated June 30, 2010. Notwithstanding the foregoing, the Agent has agreed to advance the Northgate Loan, upon the following terms and conditions:

          (i) The Northgate Loan, together with all interest, fees and expenses related to the Northgate Loan, shall be due and payable in full on or before August 6, 2010.

          (ii) For the avoidance of doubt, and for all other purposes of the Loan Documents, the Northgate Loan shall constitute an “Obligation” and a “Loan” under the terms and provisions of the Credit Agreement and the Loan Documents, and shall be secured by, and be entitled to the benefits of, the Security Documents, the Loan Documents and any other document and agreement executed in connection with any of the foregoing.

          (b) Pursuant to the terms of the Credit Agreement, upon the Borrower’s direct or indirect acquisition of an Entity and/or a Property, the Borrower agrees to update certain of the exhibits and schedules to the Credit Agreement. Accordingly, Exhibits B, C and E to the Credit Agreement are hereby amended and supplemented by adding thereto the information set forth on Schedule 1 attached to this Amendment, which information is true, correct and complete as of the Effective Date.

     3. Amendment to the Borrower Pledge Agreement. As of the Effective Date, each of the Loan Parties and the Agent agree that:

          (a) Contemporaneous with the execution and delivery of this Amendment, the Borrower is executing and delivering to the Agent a certain Addendum (as defined in the Borrower Pledge Agreement) to the Borrower Pledge Agreement, and which Addendum is attached hereto as Schedule II and is hereby made a part hereof. As of the Effective Date, Exhibit A to the Borrower Pledge Agreement is hereby amended and supplemented to add thereto the Equity Interests described and set forth in said Schedule II attached to this Amendment.

          (b) Additionally, contemporaneous with the execution and delivery of this Amendment, the Northgate Intermediate Entity is executing and delivering to the Agent a certain Joinder (as defined in the Borrower Pledge Agreement) to the Borrower Pledge Agreement, and which Joinder is attached hereto as Schedule III and is hereby made a part hereof. As of the Effective Date, Exhibit A to the Borrower Pledge Agreement is hereby further amended and supplemented to add thereto the Equity Interests described and set forth in said Schedule III attached to this Amendment.

          (c) Upon the repayment in full of the obligations due and owing by the Northgate Entity to the Assumption Lender under the Northgate Loan Documents, Exhibit A to the Borrower Pledge Agreement shall automatically be modified, amended and the lien granted to Agent under the Borrower Pledge Agreement shall be deemed to include (all without any further act, action, amendment, modification or alteration to the Borrower Pledge Agreement or any other Loan Document being required), all Equity Interests of (i) the Borrower in and to the Northgate Intermediate Entity and (ii) the Northgate Intermediate Entity in and to the Northgate Entity.

     4. References in Loan Documents. All references in any of the Loan Documents to the “Credit Agreement”, the “Note”, the “Guaranty”, the “Borrower Pledge Agreement”, the “REIT Pledge Agreement” or to the “Loan Documents”, shall, from and after the Effective Date be deemed to mean and refer to the Credit Agreement, the Note, the Guaranty, the Borrower Pledge Agreement, the REIT Pledge Agreement, or such Loan Document (as applicable) as amended and affected by this Amendment. This Amendment shall be deemed to be a “Loan Document” for the purposes of the Credit Agreement and the other Loan Documents.

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     5. Ratification by the Loan Parties. (a) Each Loan Party hereby ratifies, affirms and confirms the Loan Documents (as modified by this Amendment), and acknowledges and agrees that the Loan Documents (as modified by this Amendment) remain in full force and effect and are enforceable against such Loan Party and against the Collateral described therein in accordance with their respective terms. Each Loan Party hereby further acknowledges and agrees that, as of the Effective Date, the Loan Documents, as amended by this Amendment, are not subject to any defenses, rights of setoff, claims or counterclaims that might limit the enforceability thereof, the obligations created and evidenced thereby or the terms and provisions thereof.

     (b) In furtherance of the provisions of subsection (a) above, and not in limitation or derogation thereof, by its execution of this Amendment, each Guarantor hereby (a) acknowledges and consents to the terms and provisions of this Amendment; (b) ratifies, affirms and confirms the Guaranty; (c) agrees that the Guaranty is and shall remain in full force and effect and that the terms and provisions of the Guaranty covers and pertains to the Guaranteed Obligations (as defined in the Guaranty), Notes, Credit Agreement and other Loan Documents; (d) acknowledges that there are no claims or offsets against, or defenses or counterclaims to, the terms and provisions of the Guaranty or other obligations created and evidenced by the Guaranty; and (e) certifies that the representations and warranties contained in the Guaranty, the Credit Agreement, and the other Loan Documents with respect to each Guarantor remains the true and correct representations and warranties of such Guarantor as of the Effective Date.

     6. Security and Liens. All Obligations of the Loan Parties under the Loan Documents, each as amended by this Amendment, shall be secured by and be entitled to the benefits of, and the Collateral shall remain in all respects subject to the liens, charges and encumbrances of, the Security Documents and the other Loan Documents, and nothing herein contained, and nothing done pursuant hereto or in connection herewith shall affect or be construed to affect the liens, charges or encumbrances or conveyances effected thereby or the priority thereof or to release or affect the liability of any party or parties whomsoever may now, or hereafter be, liable on account of the Obligations.

     7. No Waiver. This Amendment is only a modification of the Loan Documents and is not intended to, and shall not be construed to, effect a novation of any Loan Document, or to constitute a modification of, or a course of dealing at variance with, the Loan Documents (each as amended by this Amendment), such as to require further notice by Lenders or Agent to require strict compliance with the terms the other Loan Documents in the future.

     8. Representations and Warranties. The Loan Parties hereby warrant that all of the representations and warranties contained in the Loan Documents are true and correct as of the Effective Date and that no Event of Default has occurred and is continuing or would result by the execution of this Amendment which constitutes an Event of Default under the Credit Agreement or any Loan Document or would constitute such an Event of Default but for the requirement that notice be given or time elapse or both. Each Loan Party further represents and warrants that the execution and delivery of this Amendment and all related documents have been duly authorized by each such Loan Party.

     9. Release; Set-off. Each Loan Party hereby unconditionally releases and forever discharges Agent, each Lender and their respective officers, directors, shareholders, and employees from any and all claims, demands, causes of action, expenses, losses and other damages of whatever kind, whether known or unknown, liquidated or unliquidated, at law or in equity, that exists as of the Effective Date in connection with the Credit Agreement, the Loan Documents and any other documents relating thereto.

     10. Miscellaneous. (a) all costs and expenses of Agent, including, without limitation, appraisal fees and reasonable attorney’s fees of counsel to Agent relating to the negotiation, preparation,

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execution and delivery of this Amendment and all instruments, agreements and documents contemplated hereby, shall be the responsibility of Borrower; (b) this Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts made and performed within such state; and (c) this Amendment may be executed in any number of counterparts, all of which when taken together shall constitute one agreement binding on the parties hereto, notwithstanding that all parties are not signatories to the same counterpart. Delivery of an executed signature page of this Amendment by facsimile transmission or by means of electronic mail (in so-called “pdf”, “TIF” or any similar format) shall be effective as an in-hand delivery of an original executed counterpart hereof.

[The Next Page is the Signature Page]

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     IN WITNESS WHEREOF, the Loan Parties and the Agent have caused this Amendment to be duly executed by their respective duly authorized officers, as an instrument under seal, as of the date and year first above written.

BORROWER:	TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership
	By:	TNP Strategic Retail Trust, Inc., a Maryland corporation, its general partner
		By	/s/ Christopher S. Cameron
		Name Christopher S. Cameron
		Title CFO, Secretary
AGENT AND LENDER:	KEYBANK NATIONAL ASSOCIATION
	By:	/s/ Christopher T. Neil
		Christopher T. Neil
		Senior Relationship Manager
GUARANTORS and OBLIGORS:	TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation
	By:	/s/ Christopher S. Cameron
	Print Name: Christopher S. Cameron
	Title: CFO, Secretary
	THOMPSON NATIONAL PROPERTIES, LLC, a Delaware limited liability company
	By:	/s/ Johna Howard
	Print Name: Johna Howard
	Title: CFO
	/s/ Anthony W. Thompson
	Anthony W. Thompson, an individual

** Signatures Continued on Next Page**

[Signature Page to Third Omnibus Amendment and Reaffirmation of Loan Documents]

TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company
By	TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership, its Sole Member
	By	TNP Strategic Retail Trust, Inc., a Maryland corporation, its general partner
	By:	/s/ Christopher S. Cameron
	Print Name: Christopher S. Cameron
	Title: CFO, Secretary

[Signature Page to Third Omnibus Amendment and Reaffirmation of Loan Documents]

Schedule 1

     (a) Exhibit B attached to the Credit Agreement is hereby amended and supplemented by adding thereto the following information:

					Percentage
		Jurisdiction	Certificate	Nature of	of
		of	Number(s)	Equity	Ownership	Description of any
	Name of Entity	Organization	(if any)	Interests	in Entity	Excluded Rights
3.	TNP SRT Northgate Plaza Tucson Holdings, LLC	Delaware	N/A	Membership interests	100%	(a) with respect to 51% of the membership interests, Voting Rights (to the extent that they are Excluded Rights) (b) with respect to 49% of the membership interests and the economic interests with respect to all membership interests, there are no Excluded Rights
4.	TNP SRT Northgate Plaza Tucson, LLC	Delaware	N/A	Membership interests	100%	(a) with respect to 51% of the membership interests, Voting Rights (to the extent that they are Excluded Rights) (b) with respect to 49% of the membership interests and the economic interests with respect to all membership interests, there are no Excluded Rights

     (b) Exhibit C attached to the Credit Agreement is hereby amended and supplemented by adding thereto the following information:

			Current Fair		Outstanding		Pending Sales or
		Location of	Market Value		Principal Balance of		Refinancings of
	Name of Entity	Property	of Property		the Property Loan		Property
3.	TNP SRT Northgate Plaza Tucson, LLC	Tucson, Arizona	$	8,142,270.00	$	4,422,000.00	None

     (c) Exhibit E attached to the Credit Agreement is hereby amended and supplemented by adding thereto the following information:

		Location of
	Name of Entity	Property	Environmental Reports
3.	TNP SRT Northgate Plaza Tucson, LLC	Tucson, Arizona	Phase I Environmental Site Assessment dated as of May 25, 2010, prepared by CB Richard Ellis, Inc. for TNP Acquisitions, LLC

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Schedule II

Pledge Agreement Addendum
to Borrower Pledge and Security Agreement

     The undersigned, being the Grantor under that certain Pledge and Security Agreement dated as of November 12, 2009 (as amended, restated and/or modified from time to time, the “Agreement”) in favor of KeyBank National Association, as Agent (“Agent”), by executing this Pledge Agreement Addendum, hereby acknowledges that Grantor legally and beneficially owns all of the Equity Interests in and to the Entity (or Entities) described below. Grantor hereby agrees and acknowledges that (a) the Equity Interests described below constitute “Collateral” for purposes of the Agreement, and shall be governed by, and subject to all of the terms, provisions and conditions of the Agreement, (b) Grantor hereby grants to the Agent, for the benefit of itself and the Lenders, a security interest in all of the Collateral of the Grantor on the terms and conditions set forth in the Agreement, (c) that this Addendum constitutes a “Pledge Agreement Addendum” for purposes of the Agreement and that the Agreement is hereby amended to include the hereinafter described Equity Interests and Collateral, and (d) that after giving effect to this Addendum, the representations and warranties set forth in the Agreement are materially true, complete and correct as of the date hereof. Capitalized terms used in this Addendum without definition shall have the meanings assigned to such terms in the Agreement.

		Certificate	Nature of	Percentage of
	Jurisdiction of	Number(s)	Equity	Ownership	Description of any
Name of Entity	Organization	(if any)	Interests	in Entity	Excluded Rights
TNP SRT Northgate Plaza Tucson Holdings, LLC	Delaware	None	Membership Interests	TNP Strategic Retail Operating Partnership, LP holds 100% of the membership interests in the Entity	(a) with respect to 51% of the membership interests, Voting Rights (to the extent that they are Excluded Rights) (b) with respect to 49% of the membership interests and the economic interests with respect to all membership interests, there are no Excluded Rights

The Next Page is the Signature Page

     IN WITNESS WHEREOF, Grantor has executed this Addendum this 1st day of July, 2010.

Grantor:
TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership
By:	TNP Strategic Retail Trust, Inc., a Maryland corporation, its general partner
	By:	/s/ Christopher S. Cameron
	Print Name: Christopher S. Cameron
	Title: CFO, Secretary

[for Grantor]

STATE OF COUNTY OF

     On                                          , 2010, before me, the undersigned notary public, personally appeared                     , the                      of TNP Strategic Retail Trust, Inc., a Maryland corporation, the general partner of TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said corporation and limited partnership, for its stated purpose.

Notary Public
Print Name My Commission Expires [SEAL]

[Signature Page to Borrower Pledge Agreement Addendum]

Consent, Acknowledgement and Agreement of
TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC

     Reference is made to that certain Pledge and Security Agreement dated as of November 12, 2009 by TNP Strategic Retail Operating Partnership, LP (the “Grantor”) to KeyBank National Association (“Agent”), for itself and the Lenders (as defined therein) (as amended, restated and/or modified from time to time, the “Agreement”).

     TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company (the “Entity”), hereby consents to the foregoing Pledge Agreement Addendum, with the express confirmation, warranty and representation that all restrictions on the transfer of the Collateral as set forth in the Entity Governance Documents (if any), have been waived to permit this pledge and grant of security interest and any subsequent foreclosure or other disposition of the Collateral by Agent in accordance with the terms and agreements set forth above, and with the express grant to Agent and any agent of Agent of the power of attorney set forth in Section 10 of the Agreement. Entity represents that it has not opted into Article 8 of the applicable Uniform Commercial Code for the Entity and agrees that the Entity Governance Documents for the Entity shall not be amended to insert such a provision without the prior written consent of Agent. Entity hereby acknowledges receipt of notice of the pledge and collateral assignment of the Collateral effected hereby and hereby agrees to register the Collateral as subject to the security interests and collateral assignments effected hereby. The Grantor has irrevocably authorized the Entity to accept and act upon, and the Entity hereby agrees to accept and act upon, all instructions and directions given by Agent to the Entity with respect to the Collateral in accordance with the Agreement and the Pledge Agreement Addendum without the necessity of further authorization or consent from, or notice to, the Grantor.

     Pursuant to the terms of the Entity Governance Documents, each of the undersigned, as a member of the Entity, hereby (a) consents to the pledge by Grantor of the Collateral to Agent as security for the Obligations and agrees that the Entity Governance Documents are hereby amended to permit and reflect the pledge of the Collateral by Grantor to Agent pursuant to the terms and provisions of the Agreement, the Pledge Agreement Addendum and this Consent, (b) instructs the Entity to register the lien created hereunder in the Collateral in the books and records maintained by the Entity, (c) in connection with the exercise by Agent of its rights and remedies under this Consent, consents to the foreclosure or other disposition or assignment of the Equity Interests and Collateral to any person or entity (an “Assignee”) and the substitution of such Assignee as a new member of the Entity, and (d) agrees that no such assignment or substitution and no foreclosure under the Agreement, the Consent or other remedies in respect thereof shall effect a termination or dissolution of the Entity.

     IN WITNESS WHEREOF, the undersigned has executed this Consent, Acknowledgement and Agreement, as an instrument under seal this 1st day of July, 2010.

Entity
TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company
By	TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership, its Sole Member
	By	TNP Strategic Retail Trust, Inc., a Maryland corporation, its general partner
	By:	/s/ Christopher S. Cameron
	Print Name: Christopher S. Cameron
	Title: CFO, Secretary

[for Entity]

STATE OF COUNTY OF

     On                                          , 2010, before me, the undersigned notary public, personally appeared                     , the                      of                     , a                      , proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said                     , for its stated purpose.

Notary Public
Print Name My Commission Expires [SEAL]

[Signature Page to Consent to Borrower Pledge Agreement Addendum]

Schedule III

Joinder to
Borrower Pledge and Security Agreement

     This Joinder to Pledge and Security Agreement (this “Agreement”) is dated as of July 6, 2010, by and among TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“Grantor”), TNP SRT Northgate Plaza Tucson Holdings, LLC, a Delaware limited liability company having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (the “New Grantor”) and KeyBank National Association, a national banking association having a principal place of business at 225 Franklin Street, 18^th Floor, Boston, Massachusetts 02110, as agent (in such capacity, “Agent”) for itself and any other lenders who become Lenders under the Credit Agreement (as hereinafter defined) collectively referred to as “Lenders” and each individually referred to as a “Lender”).

Witnesseth That:

     WHEREAS, the Grantor, the Lenders, and the Agent are parties to a certain Credit Agreement dated as of November 12, 2009 (as amended, restated, renewed, replaced, supplemented, extended or otherwise modified from time to time, the “Credit Agreement”) pursuant to which the Lenders have extended, and may from time to time hereafter extend, credit to the Grantor from time to time;

     WHEREAS, in connection with the transactions contemplated by Credit Agreement and in order to, inter alia, secure the obligations of the Grantor to the Lenders thereunder and under the Note (as defined in the Credit Agreement), the Grantor executed and delivered to the Agent, for the benefit of the Lenders, that certain Pledge and Security Agreement dated as of November 12, 2009 (as amended, restated, renewed, replaced, supplemented, extended or otherwise modified from time to time, the “Pledge Agreement”);

     WHEREAS, pursuant to the Pledge Agreement, the Grantor has agreed to pledge all of its right, title and interest in and to any Equity Interests (subject to any limitations set forth therein), and to cause any New Grantor to execute a joinder to such Pledge Agreement pursuant to which such New Grantor agrees to pledge, assign, transfer and deliver to the Agent, for the benefit of the Lenders, any and all Equity Interests of such New Grantor in and to any Entity, all as further security for the obligations of the Grantor to the Lenders under the Credit Agreement and the related Loan Documents (as defined in the Credit Agreement);

     WHEREAS, it is a condition to the Lenders’ willingness to continue to provide to the Grantor the financing contemplated by the Credit Agreement that the New Grantor grant to Agent for the benefit of Lenders a security interest in all of their Equity Interests.

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each of the parties hereto, the parties agree as follows:

     1. Definitions. Unless otherwise defined herein, all capitalized terms used herein shall have the identical meanings assigned to them in the Pledge Agreement.

     2. Incorporation by Reference. The foregoing recitals are hereby incorporated by reference as if set forth at length herein.

     3. Joinder. The New Grantor hereby, jointly and severally with the Grantor (or any other New Grantor under any Agreement executed from time to time), assumes, and hereby agrees to perform

and observe, each and every one of the covenants, rights, promises, agreements, terms, conditions, obligations, appointments, duties and liabilities of a “Grantor” under the Pledge Agreement applicable to it as a “Grantor” under the Pledge Agreement, and agrees to be bound by all of the liabilities and obligations which binds the Grantor under the Pledge Agreement, and agrees fully, completely and timely to perform, comply with and discharge each and all of the covenants, promises, obligations, duties and liabilities of the Grantor under the Pledge Agreement. Therefore, as of the date hereof, the New Grantor hereby joins in the execution of and agrees to be bound by, and is hereby deemed a “Grantor” under and party to, the Pledge Agreement, as a “Grantor” thereunder for all purposes thereof, and in furtherance of and not in limitation of the foregoing, and to secure the payment and performance of all Obligations as defined in the Pledge Agreement as supplemented hereby and by any other Joinder executed from time to time. The New Grantor hereby grants to the Agent for the benefit of itself and the Lenders a security interest in all of the Collateral of the New Grantor on the terms and conditions set forth in the Pledge Agreement as if it were an original signatory thereto and a Grantor thereunder.

     4. References to New Grantor. All references to the term “Grantor” in the Pledge Agreement or in any other document or agreement executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and include, the New Grantor.

     5. Pledge Agreement. As security for the Obligations, the New Grantor does hereby pledge, assign, transfer and deliver to Agent and does hereby grant to Agent a continuing security interest in the Collateral.

     6. Representations and Warranties of the New Grantor. All of the representations, warranties and covenants set forth in the Pledge Agreement are hereby incorporated by reference as if set forth at length herein. Additionally, the New Grantor hereby represents and warrants to the Agent and the Lenders as follows:

     (a) New Grantor is and shall be (i) the sole owner of the Equity Interests (as set forth in the Entity Governance Documents and as described on Exhibit A attached hereto and made a part hereof) and the Collateral free and clear of all pledges, liens, security interests and other encumbrances of every nature whatsoever, except in favor of Agent and (ii) the owner of the Excluded Rights, free and clear of all pledges, liens, security interests and other encumbrances of every nature whatsoever, except in favor of Agent and except as set forth in the provisions of the Permitted Additional Debt Documents and the Entity Governance Documents, copies of which provisions have been delivered to Agent.

     (b) New Grantor has the corporate power and authority to pledge the Collateral and to grant the security interest in the Collateral as herein provided.

     (c) There are no restrictions on the transfer of the Collateral to Agent hereunder or with respect to any subsequent transfer thereof or realization thereupon by Agent.

     (d) The execution, delivery and performance of this Agreement by New Grantor does not and shall not result in the violation of any mortgage, indenture, material contract, instrument, agreement, judgment, decree, order, statute, rule or regulation to which New Grantor is subject or by which it or any of its Entities is bound.

     7. Amendments to Exhibits.

     (a) Exhibit A to the Pledge Agreement is hereby amended and supplemented to add thereto the Equity Interests described and set forth on Exhibit A attached hereto and made a part hereof.

- 2 -

     8. No Further Amendments. Except for the amendments set forth herein or otherwise set forth in any agreement signed by the Agent and the Lenders and dated the date hereof, the Pledge Agreement shall remain unchanged and in full force and effect.

     9. Miscellaneous. (a) This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts made and performed in said state. It is intended that this Agreement shall take effect as a sealed instrument.

     (b) This Agreement may be executed by the parties hereto in several counterparts hereof and by the different parties hereto on separate counterparts hereof, each of which shall be an original and all of which shall together constitute one and the same agreement. Delivery of an executed signature page of this Agreement by facsimile transmission shall be effective as an in hand delivery of an original executed counterpart hereof.

*The Next Page is the Signature Page*

- 3 -

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

New Grantor:
TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company
By	TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership, its Sole Member
	By	TNP Strategic Retail Trust, Inc., a Maryland corporation, its general partner
	By:	/s/ Christopher S. Cameron
	Print Name: Christopher S. Cameron
	Title: CFO, Secretary
Grantor:
TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership
By:	TNP Strategic Retail Trust, Inc., a Maryland corporation, its general partner
	By:	/s/ Christopher S. Cameron
	Print Name: Christopher S. Cameron
	Title: CFO, Secretary
Agent:
KeyBank National Association
By	/s/ Christopher T. Neil
	Name Christopher T. Neil
	Title Senior Relationship Manager

[for New Grantor]

STATE OF COUNTY OF

     On                      , 20___, before me, the undersigned notary public, personally appeared                     , the                      of                     , a                      , proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said                     , for its stated purpose.

Notary Public
Print Name My Commission Expires [SEAL]

[for Grantor]

STATE OF COUNTY OF

     On                      , 20___, before me, the undersigned notary public, personally appeared                     , the                      of TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership, proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said limited partnership, for its stated purpose.

Notary Public
Print Name My Commission Expires [SEAL]

For KeyBank National Association]

COMMONWEALTH OF MASSACHUSETTS
COUNTY OF SUFFOLK

     On                      , 20___, before me, the undersigned notary public, personally appeared Christopher T. Neil, Senior Relationship Manager of KeyBank National Association, a national banking association, proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said bank, for its stated purpose.

Notary Public
Print Name My Commission Expires [SEAL]

Exhibit A to Joinder Agreement

List of Equity Interests

		Certificate	Nature of	Percentage of
	Jurisdiction of	Number(s)	Equity	Ownership in	Description of any
Name of Entity	Organization	(if any)	Interests	Entity	Excluded Rights
TNP SRT Northgate Plaza Tucson, LLC	Delaware	None	Membership Interests	TNP SRT Northgate Plaza Tucson Holdings, LLC holds 100% of the membership interests in the Entity	(a) with respect to 51% of the membership interests, Voting Rights (to the extent that they are Excluded Rights) (b) with respect to 49% of the membership interests and the economic interests with respect to all membership interests, there are no Excluded Rights

Consent, Acknowledgement and Agreement of
TNP SRT NORTHGATE PLAZA TUCSON, LLC

     Reference is made to that certain Pledge and Security Agreement dated as of November 12, 2009 by TNP Strategic Retail Operating Partnership, LP (the “Grantor”) to KeyBank National Association (“Agent”), for itself and the Lenders (as defined therein) (as amended, restated and/or modified from time to time, the “Agreement”).

     TNP SRT NORTHGATE PLAZA TUCSON, LLC, a Delaware limited liability company (the “Entity”), hereby consents to the foregoing Amendment and Addendum to Pledge Agreement Joinder, with the express confirmation, warranty and representation that all restrictions on the transfer of the Collateral as set forth in the Entity Governance Documents (if any), have been waived to permit this pledge and grant of security interest and any subsequent foreclosure or other disposition of the Collateral by Agent in accordance with the terms and agreements set forth above, and with the express grant to Agent and any agent of Agent of the power of attorney set forth in Section 10 of the Agreement. Entity represents that it has not opted into Article 8 of the applicable Uniform Commercial Code for the Entity and agrees that the Entity Governance Documents for the Entity shall not be amended to insert such a provision without the prior written consent of Agent. Entity hereby acknowledges receipt of notice of the pledge and collateral assignment of the Collateral effected hereby and hereby agrees to register the Collateral as subject to the security interests and collateral assignments effected hereby. The Grantor has irrevocably authorized the Entity to accept and act upon, and the Entity hereby agrees to accept and act upon, all instructions and directions given by Agent to the Entity with respect to the Collateral in accordance with the Agreement and the Pledge Agreement Addendum without the necessity of further authorization or consent from, or notice to, the Grantor.

     Pursuant to the terms of the Entity Governance Documents, each of the undersigned, as a member of the Entity, hereby (a) consents to the pledge by Grantor of the Collateral to Agent as security for the Obligations and agrees that the Entity Governance Documents are hereby amended to permit and reflect the pledge of the Collateral by Grantor to Agent pursuant to the terms and provisions of the Agreement, the Pledge Agreement Addendum and this Consent, (b) instructs the Entity to register the lien created hereunder in the Collateral in the books and records maintained by the Entity, (c) in connection with the exercise by Agent of its rights and remedies under this Consent, consents to the foreclosure or other disposition or assignment of the Equity Interests and Collateral to any person or entity (an “Assignee”) and the substitution of such Assignee as a new member of the Entity, and (d) agrees that no such assignment or substitution and no foreclosure under the Agreement, the Consent or other remedies in respect thereof shall effect a termination or dissolution of the Entity.

     IN WITNESS WHEREOF, the undersigned has executed this Consent, Acknowledgement and Agreement, as an instrument under seal this 6th day of July, 2010.

Entity
TNP SRT Northgate Plaza Tucson, LLC, a Delaware limited liability company
By:	TNP SRT Northgate Plaza Tucson Holdings, LLC, a Delaware limited liability company
	By	TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership, its Sole Member
		By	TNP Strategic Retail Trust, Inc., a Maryland corporation, its general partner
		By:	/s/ Christopher S. Cameron
		Print Name: Christopher S. Cameron
		Title: CFO, Secretary

[for Entity]

STATE OF COUNTY OF

     On                     , 2010, before me, the undersigned notary public, personally appeared                     , the                      of                     , a                      , proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said                     , for its stated purpose.

Notary Public
Print Name My Commission Expires [SEAL]

[Signature Page to Consent to Addendum to Borrower Pledge Agreement Joinder]

EX-10.47

Exhibit 10.47

AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
(CALIFORNIA)

by and between

QUALITY PROPERTIES ASSET MANAGEMENT
COMPANY

as Seller,

and

TNP ACQUISITIONS, LLC

as Buyer,

relating to

Retail Shopping Center and Related Improvements
San Jacinto, California

OREO# 31174343

dated as of

July 9, 2010

AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS

     This Agreement of Purchase and Sale and Joint Escrow Instructions (“Agreement”) is made and entered into as of July 9,2010, by and between QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation (“Seller”) and TNP ACQUISTIONS, LLC, a Delaware limited liability company (“Buyer”).

     Buyer and Seller agree as follows:

1. Definitions: For the purposes of this Agreement the following terms will be defined as follows:

          (a) “Actual Knowledge of Seller” shall mean and refer to, and shall he limited to, the current actual knowledge of Colin Bagwell, without having conducted or being under any obligation to conduct any independent inquiry or inspection.

          (b) “Broker” or “Brokers” shall mean and refer to Grubb & Ellis (Michelle Schierberl which represents Seller in this transaction.

          (c) “Closing Date” shall mean and refer to, and shall be, that date which is three (3) days after the end of the Due Diligence Period, but in no event later than July 31, 2010, and is the date on which the Closing/Close of Escrow shall occur.

          (d) “Closing” and “Close of Escrow” shall mean and refer to the consummation of the transaction described in this Agreement, and will be deemed to have occurred on that date when the Grant Deed is recorded in the official records of the county in which the Property is located. Closing and Close of Escrow are terms used interchangeably in this Agreement.

          (e) “Deposit” shall mean and refer to the sum of One Hundred Thousand Dollars ($100,000.00), which shall be delivered by Buyer to Escrow Holder in the Immediately Available Funds, as a condition to the Opening of Escrow, for Seller’s benefit, all as more particularly set forth below in sub-section 3.1.

          (f) “Due Diligence Period” shall mean and refer to the period beginning on the “Effective Date”, as defined below, and ending at 5:00 p.m. Pacific Time on the earlier to occur of (i) that date which is fifteen (15) days following the Effective Date, during which Buyer will undertake and have completed its due diligence as described in Section 9.

          (g) “Effective Date” shall mean and refer to the date of the mutual execution of this Agreement.

          (h) “Environmental Audit” shall have the meaning given thereto in Section 19 hereof.

          (i) “Environmental Law” shall have the meaning given thereto in Section 19 hereof.

          (j) “Environmental Reports” shall mean that certain Phase I Environmental Assessment, dated September 28, 2009, and prepared by Property Solutions, Inc., and denominated Bank of America Project No. 09-009749-ENV01-001, and that certain Limited Phase II Environmental Site

Assessment, dated December 15, 2009 and prepared by ENERCON, and denominated ENERCON Project No. BOAATL260, with respect to the Property.

          (k) “Escrow” shall have the meaning given thereto in Section 4 hereof.

          (l) “Escrow Holder” shall mean and refer to, and shall be:

First American Title Insurance Company
5 First American Way
Santa Ana, CA 92707
Phone (714) 250-8394
           (877) 372-0261
Attn: Ryan Hahn, CSEO
           Certified Senior Escrow Officer
Email: rhahn@firstam.com
Order No. NCS 420820-SA1

          (m) “Exhibits” shall mean and refer to, collectively, the following, each of which is attached hereto and incorporated herein by this reference:

Exhibit A —	Legal Description
Exhibit B —	Form of Deed
Exhibit C —	Bill of Sale
Exhibit D —	FIRPTA Affidavit
Exhibit E —	Disclosures
Exhibit F	Assignment of Leases and Rental Agreements

          (n) “FIRPTA Certificate” shall have the meaning given thereto in Section 6 hereof.

          (o) “Grant Deed” shall have the meaning given thereto in Section 6 hereof.

          (p) “Hazardous Substance” shall have the meaning given thereto in Section 19 hereof.

          (q) “Improvements” shall mean and refer to any and all improvements and fixtures comprising part of the Real Property, including without limitation the retail shopping center constructed thereon, and containing retail space and parking space, and all common areas, hardscape, and landscape areas in and around the building and related improvements.

          (r) “Notices” will be sent as follows to:

Seller:	QUALITY PROPERTIES ASSET MANAGEMENT
	COMPANY
	c/o Bank of America, N.A.
	600 Anton Blvd., Suite 100
	Costa Mesa, CA 92626
	Attn: Colin Bagwell
	Phone: (714) 327-4556
	Email: colin.bagwell@bankofamerica.com

with a copy to:	QUALITY PROPERTIES ASSET MANAGEMENT
	COMPANY
	c/o Bank of America, N.A.
	Legal Department
	555 S. Flower St., 8th Floor
	Los Angeles, CA 90071
	Attn: Kenneth W. Swenson, Esq.
	Facsimile: (213) 345-1181
With a copy to:	SNELL & WILMER L.L.P.
	600 Anton Blvd, Suite 1400
	Costa Mesa, CA 92626-7689
	Attn : Steven A. McHolm
	Phone: (714) 427-7004
	Facsimile: (714) 427-7799
	Email: smcholm@swlaw.com
Buyer:	TNP ACQUISITIONS, LLC
	C/O Thompson National Properties, LLC
	1900 Main Street, 7th Floor
	Irvine, CA 92614
	Phone: (949) 833-8252
	Facsimile: (949) 252-0212
	Email : scorea@tnpre.com
with a copy to:	GREGORY KAPLAN, PLC
	7 East Second Street
	Richmond, VA 23224
	Attn: Joseph J. McQuade
	Phone: (804) 916-9027
	Facsimile: (804) 916-9127
	Email: imequade@gregkaplaw.com
Escrow Holder:	at the address specified in the definition

          (t) “Opening of Escrow” shall have the meaning given thereto in Section 4 hereof.

          (u) “Permitted Exceptions” shall have the meaning given thereto in Section 7 hereof.

          (v) “Property” shall mean and refer to, collectively, (i) the Real Property, (ii) the Improvements, (iii) the Personal Property, and (iv) all membership interests and any other right, title or interest of Seller in or to any HOA or other owners association.

     Notwithstanding anything to the contrary herein, the Property purchased docs not include (i) any refunds of taxes, assessments, bonds or development, utility or other deposits which were paid by

Seller or Seller’s predecessor in interest, or paid on behalf of Seller’s predecessor in interest by its lender, the Seller’s predecessor’s principals, or another third party (collectively, “Paying Parties”), prior to the Closing Date, or of insurance premiums paid by any Paying Party and attributable to the period prior to the Closing Date (without regard to when such refunds or payments are received), (ii) condemnation or other awards which represent payments for losses relating to the Property and incurred prior to the Closing Date (other than amounts to be credited to Buyer or paid to Buyer pursuant to Section 13 of this Agreement), (iii) any claims of Seller existing as of the Closing Date against Tenants for delinquent rents. to the extent not subsequently paid or credited to Seller, and (iv) claims of Seller made pursuant to or arising in connection with any litigation matters set forth on Exhibit E attached hereto (the “Litigation Claims”).

     In the event that at any time Seller has initiated a challenge to a real property tax appraisal (whether by appeal or otherwise), real property taxes or assessment paid or claimed to he due, or any similar matter where the matter at issue relates to a period prior to the Close of Escrow, or partly before and partly after the Close of Escrow, as a matter of agreement between the parties which shall survive the close of escrow, and with which Escrow Holder is not to be concerned, Buyer agrees to cooperate with Seller in such matter, and specifically agrees that if the prosecution of the appeal or similar matter extends beyond the Close of Escrow, Seller shall continue to be the lead party, and Buyer will not interfere with such matters, and shall continue to allow Seller’s consultants in such matters, including without limitation Paradigm Tax Group, to prosecute the appeal or other matter on behalf of Seller, and if relevant, Buyer.

          (w) “Purchase Price” for the Property is and shall be the sum of Seven Million Eighty Eight Thousand U.S. Dollars (US $7,088,000.00).

          (x) “Real Property” shall mean and refer to that certain real property, commonly known as San Jacinto Esplanade, 2181-2291 West Esplanade, in the City of San Jacinto, in the County of Riverside, State of California, consisting a retail shopping center and other Improvements, legally described in Exhibit A attached hereto.

          (z) “Seller Party/Parties” shall have the meaning given thereto in Section 10.2 hereof.

(aa)	“Title Company” shall mean and refer to, and shall be,
	First American Title Insurance Company
	5 First American Way
	Santa Ana, CA 92707
	Attn: Bob Loera, Title Officer:
	Phone: (714) 250-8352
	Fax No.: (714) 481-2308
	E-Mail : rloera@firstam.com
	Order No. NCS 420820-SA1
(bb)	“Title Policy” shall have the meaning given thereto in Section 11 hereof.
(cc)	“Title Report” shall have the meaning given thereto in Section 7 hereof.

2. Purchase and Sale: Upon and subject to the terms and conditions set forth in this Agreement, Seller agrees to sell to Buyer and Buyer agrees to buy from Seller the Property, together with all casements, hereditaments, entitlements (to the extent transferable) and appurtenances thereto. In consideration of Seller’s sale of the Property to Buyer, Buyer will pay to Seller the Purchase Price at the Closing, and (b) perform all of Buyer’s other obligations hereunder, which will include the various indemnities set forth herein whether or not the Closing occurs hereunder. The Closing shall occur on the Closing Date.

3. Purchase Price: The Purchase Price for the Property will be paid as follows:

     3.1 Deposit. Within three (3) days of the execution by Buyer and Seller of an original or an originally executed counterpart of this Agreement, and as a condition to the effectiveness of this Agreement, Buyer shall deposit with Escrow Holder, in cash, by certified or bank cashier’s check made payable to Escrow Holder, or by a confirmed wire transfer of funds (hereinafter referred to as “Immediately Available Funds”), the Deposit. Except in the event or Seller’s default caused by its failure to convey the Property in accordance with this Agreement, or damage to the Property due to casualty sufficient to entitle Buyer to terminate n accordance with Paragraph 17, below, the Deposit shall be deemed earned by Seller upon such deposit, as compensation for its time and expenses in preparing for and negotiating this transaction. and providing Buyer with a limited period of exclusive negotiation and time to complete the purchase of the Property. Accordingly, Escrow Holder shall immediately distribute the Deposit to Seller, without need for further instructions. Following such distribution, Escrow Holder shall not be concerned with the Deposit except to debit and credit the parties appropriately at the time of the Closing. When it is earned, the Deposit, shall be nonrefundable to Buyer at all times. In the event that Buyer has elected to proceed with this transaction, the Deposit shall be applicable to the Purchase Price upon the Close of Escrow. In the event Buyer elects, or is deemed to have elected, to proceed with the Escrow, but then fails to Close the Escrow for any reason other than Seller’s default, the Deposit shall constitute “Liquidated Damages” as provided in and subject to the provisions of subparagraph 24.2, below.

     At any time following the third (3^rd) day after Seller has deposited a signed counterpart of this Agreement into Escrow, if Buyer has likewise not deposited a signed counterpart of this Agreement and the Deposit into Escrow, Seller shall have the right, in its sale and absolute discretion, to withdraw its documents from Escrow and no contract shall have been formed. Neither Seller’s execution of this Agreement, nor its delivery of same to Escrow Holder shall be deemed to be an offer to Buyer to deal on

the terms set forth herein, and no contract shall be formed unless and until both parties have deposit duly executed and unconditionally delivered originals or original counterparts of this Agreement into Escrow. In the event that Buyer has not made the Deposit in a timely manner, Seller shall have the right to terminate this Agreement by given written notice of its election to do so to Buyer and Escrow Holder.

     3.2 Cash Balance. No later than two (2) business days prior to the Closing Date, Buyer will deposit into the Escrow the balance of the Purchase Price due as of, and as a condition to, the Closing by confirmed wire transfer of Immediately Available Funds, together with Buyer’s share of closing costs and prorations.

4. Escrow: For purposes of this Agreement, as between the parties, the Escrow shall be deemed opened on the date Escrow Holder shall have received the Deposit from Buyer and a fully executed original or originally executed counterparts or this Agreement from Seller and Buyer (the “Opening of Escrow”). Escrow Holder shall notify Buyer and Seller, in writing, of the date Escrow is opened. The purchase and sale of the Property will be completed through the Escrow. Buyer and Seller agree to execute any additional instructions reasonably required by the Escrow Holder. If there is a conflict between any printed escrow instructions and this Agreement, the terms of this Agreement will govern.

5. Cancellation Fees and Expenses: If the Closing does not occur at the time and in the manner provided in this Agreement because of the default of one of the parties, the non-defaulting party has the right to cancel the Escrow by written notice to the defaulting party and to the Escrow Holder. All costs of cancellation, if any, will be paid by the defaulting party.

6. Deliveries to Escrow Holder:

     6.1 By Seller. On or prior to the Closing Date, Seller will deliver or cause to be delivered to Escrow Holder the following items:

          (a) A Grant Deed (“Grant Deed”), in the form attached to this Agreement as Exhibit B, duly executed and acknowledged by Seller and in recordable form.

          (b) A Bill of Sale in the form attached to this Agreement as Exhibit C, duly executed by Seller.

          (c) A Transferor’s Certificate of Non-Foreign Status attached to this Agreement as Exhibit D (“FIRPTA Certificate”) duly executed by Seller.

          (d) A duly executed California Form 593C.

          (e) An Assignment and Assumption of Leases and Rental Agreements, in the form of Exhibit F duly executed by Seller.

          (f) An Owner’s Affidavit and such other documents as are customarily required by title companies.

     6.2 By Buyer. On or prior to the Closing Date (or such other date as is specifically provided for in this Agreement), Buyer will deliver or cause to be delivered to Escrow Holder the following items:

          (a) The balance of the Purchase Price in accordance with Section 3.

          (b) The Grant Deed, acknowledged by Buyer.

          (c) The amount due Seller after the closing costs and prorations are allocated and computed in accordance with Sections 12 and 13.

          (d) Such corporate resolutions, certificates of good standing and/or other corporate or partnership documents, and documents concerning compliance with Section 25.2 below, as are reasonably required in connection with this transaction.

          (e) An Assignment and Assumption of Leases and Rental Agreements, in the form of Exhibit F, duly executed by Buyer.

     6.3 By Buyer and Seller. Buyer and Seller will each deposit such other documents and instruments, and do such other and further things, as are consistent with this Agreement and reasonably required, by Escrow Holder or otherwise, to Close Escrow. In addition, Seller and Buyer hereby designate Escrow Holder as the “Reporting Person” for the transaction pursuant to Section 6045(e) of the Internal Revenue Code.

7. Condition of Title: At the Close of Escrow, fee simple title to the Property will be conveyed to Buyer by Seller by Grant Deed, subject only to the following matters (“Permitted Exceptions”):

          (a) a lien for real property taxes and assessments not then delinquent;

          (b) matters of title respecting the Property shown in the Preliminary Title Report dated December 3, 2009, prepared by the Title Company under Order No. NCS 420820-SA 1 (“Title Report”);

          (c) matters affecting the condition of title to the Property created by or with the written consent of Buyer; and

          (d) any matters which would be shown by an inspection or a survey of the Property or by inquiry of persons in possession of the Property.

The parties agree that (i) except as specifically provided in the Grant Deed, Seller makes no express or implied warranties regarding the condition of title to the Property, and (ii) Buyer shall rely solely on the Title Policy for protection against any title defects.

8. Conditions to the Close of Escrow:

     8.1 Condition, Precedent to Buyer’s Obligations. As indicated below, the following conditions either have been satisfied, or must be satisfied not later than the Closing Date or such other period of time as may be specified below:

          8.1.1 Title. Seller has furnished or will cause to be furnished to Buyer the Title Report, together with copies of the documents described in such Report. During the Due Diligence Period, Buyer shall have the right to examine the Title Report and such documents, and to satisfy itself concerning the condition of title to the Property and Buyer’s ability to make arrangements with the Title Company to obtain such commitments and assurances from the Title Company as Buyer deems necessary concerning the Title

Company’s readiness to issue the Title Policy in a condition satisfactory to Buyer, effective upon the Closing. If Buyer is not satisfied with the condition of title or has not made such arrangements with Title Company as it deems necessary, Buyer shall have the right to terminate the Escrow and this Agreement by giving written Notice of same to Seller and Escrow Holder prior to the expiration of the Due Diligence Period, in which event it shall receive a return of the Deposit and any interest accrued thereon. Buyer’s failure to give such Notice shall be deemed to be Buyer’s approval of the condition of title and waiver of such contingency and condition.

          8.1.2 Inspections and Studies. Buyer will have approved the results of any and all inspections, investigations, tests and studies that Buyer may have elected to make or obtain within the Due Diligence Period. Buyer will pay for all such inspections, tests and studies. In the event this Agreement is terminated prior to Closing, Buyer will give copies of all inspections, investigations, tests or studies to Seller. Buyer acknowledges that if Buyer elects or is deemed to have elected to proceed to Close, Buyer is willing to accept the condition of the Property and all matters relating to the Property as referenced in Section 9.1.

          8.1.4 Representations, Warranties and Covenants of Seller. Seller will have duly performed each and every agreement to be performed by Seller hereunder and, subject to the provisions of Section 9.1. Seller’s express representations and warranties set forth in this Agreement will be true and correct as of the Closing Date.

          8.1.5 Seller’s Deliveries. Seller will have delivered the items described in Section 6.1.

          8.1.6 Title Insurance. As of the Close of Escrow, the Title Company will issue or have committed to issue to Buyer the Title Policy described in Section 11.

The conditions set forth in this Section 8.1 are solely for the benefit of Buyer and may be waived only by Buyer. At all times Buyer has the right to waive any condition. Except as otherwise expressly provided in this Agreement, such waiver or waivers must be in writing and directed to Seller. If any conditions are not satisfied or waived on or before the end of the Due Diligence Period, or the Closing Date, as applicable in accordance with the terms hereof, Seller will not be deemed to be in default hereof, and Buyer’s sale remedy will be to terminate this Agreement together with any interest accrued thereon.

     8.2 Conditions Precedent to Seller’s Obligations. The Close of Escrow and Seller’s obligations with respect to this transaction are subject to the following conditions precedent: (a) Buyer’s delivery to Escrow Holder on or before the Closing Date, of the Purchase Price and the other items described in Section 6.2, and (b) Buyer having duly performed each and every agreement to be performed by Buyer hereunder, and Buyer’s representations, warranties and covenants set forth in this Agreement, continuing to be true and correct as of the Closing Date. The conditions set forth in this Section 8.2 are solely for the benefit of Seller and may be waived only by Seller, with such waiver to be in writing to Buyer.

9. Due Diligence Period:

     9.1 Matters Reviewed. Buyer shall have the opportunity to review and to approve or disapprove each and all of the following matters prior to the end of the Due Diligence Period:

          (a) The physical condition of the Property, including without limitation:

               (i) soil, seismic (including whether or not the Property is situated in a Special Study Zone as designated under the Alquist-Priolo Special Earthquake Studies Zone Act, which may subject

construction or development of the Property to the findings of an acceptable geologic report), hydrological, geological and topographical conditions,

               (ii) the availability of adequate utilities and public access,

               (iii) the status and nature of any existing or proposed assessment districts and the amount of any assessment liability,

               (iv) the character and amount of any fee or charge which may be imposed in connection with the development of the Property,

               (v) whether or not the Property is located in a Special Flood Hazard Area,

               (vi) the status of the Property with respect to asbestos and other hazardous and toxic materials:

               (vii) all matters disclosed by any environmental report Buyer may elect to obtain;

               (viii) compliance of the Property with all applicable laws, including Environmental Laws (defined below), and

               (ix) any HOA Documents (as defined in Exhibit E) and the other documents, items and disclosures described and set forth on Exhibit E or the Title Report.

          (b) Applicable government ordinances, rules and regulations and evidence of compliance therewith, including without limitation zoning, entitlement, and building regulations.

          (c) All private restrictions applicable to the Property, including without limitation, declarations of covenants, conditions and restrictions, reciprocal casement and operating agreements, architectural restrictions and owners’ association governing documents.

          (d) All licenses, permits, subdivision maps and conditions, improvement agreements, bonds, development agreements, and any and all other governmental approvals and/or authorizations relating to the Property.

          (e) Leases, agreements (including rental agreements), contracts, documents, instruments, reports, surveys, rent roll, books and records relating to the Property.

          (f) Any and all other matters concerning the current and future use, feasibility or value, or governmental permissions or entitlements pertaining to the Property, or any other matter or circumstance relevant to Buyer in its discretion concerning the Property and its marketability.

In the event that Buyer wishes to disapprove any of the matters described in Section 9.1, it shall do so by providing written Notice to Seller and Escrow Holder, to be received by them prior to the end of the Due Diligence Period. Buyer’s failure to deliver such a notice in a strictly timely manner shall be deemed to constitute approval by Buyer of all such matters, and the Deposit shall then be non-refundable, and Buyer shall be obligated to proceed to Close the Escrow.

     9.2 Delivery of Copies. Seller has made available to Buyer for inspecting, and Buyer has approved, copies of all of the items described or enumerated on Exhibit E, except:

          (a) the contents of any loan files maintained by Seller or any affiliate of Seller pertaining to the financial condition of Seller’s borrower or any guarantor of such obligation:

          (b) appraisals: and

          (c) information which is privileged, confidential or proprietary, including, but not limited to: internal memoranda, analyses and business plans; financial information; and correspondence and other materials to or from Seller’s attorneys, Seller’s affiliates and potential third party buyers.

Buyer expressly agrees that copies of all such documents and information Seller has or will furnish to Buyer arc provided solely as a courtesy, for informational purposes only and without representation or warranty, express or implied, as to the accuracy or completeness of the contents of such materials or the information provided. Buyer acknowledges that Seller did not prepare any of the documents and is not the original source of any of the information, and is not, and has never been, the developer of the Property or the project of which it is a part. Buyer covenants and agrees that it will not rely on such documents and information and has conducted its own due diligence on all matters referred to in such documents and information, and otherwise relating to the Property, and in any manner of any concern or interest to Buyer with respect to the Property.

     9.3 Transaction Timing; Waiver of Disclosures. Buyer represents, warrants and acknowledges to Seller, without limiting all other representations, warranties and acknowledgements made by Buyer under this Agreement, that (a) Buyer is a sophisticated investor in real property assets of a nature similar to the Property, (b) Buyer is capable of determining, if it elects, or is deemed to have elected to proceed with this transaction and Close the Escrow, that the Property is appropriate for Buyer’s needs and objectives and that the amount of due diligence conducted by Buyer is entirely sufficient for Buyer’s purposes, and (c) Buyer hereby waives any and all disclosures that Seller would be obligated to make but that Seller did not make to Buyer Due to the short transaction schedule.

10. Property “As-Is”:

     10.1 NO SIDE AGREEMENTS OR REPRESENTATIONS; AS-IS PURCHASE. BUYER REPRESENTS, WARRANTS AND COVENANTS TO SELLER THAT BUYER HAS, DURING THE DUE DILIGENCE PERIOD, INDEPENDENTLY AND PERSONALLY INSPECTED THE PROPERTY AND IMPROVEMENTS, IF ANY, AND THAT BUYER HAS ENTERED INTO THIS AGREEMENT BASED UPON ITS RIGHTS TO HAVE MADE, AND HAVING MADE, SUCH PERSONAL EXAMINATION AND INSPECTION. BUYER AGREES THAT BUYER WILL ACCEPT THE PROPERTY, IN ITS THEN EXISTING CONDITION AS-IS AND WITH ALL ITS FAULTS. INCLUDING WITHOUT LIMITATION, ANY FAULTS AND CONDITIONS SPECIFICALLY REFERENCED IN THIS AGREEMENT. NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF, BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO:

          (I) THE VALUE OF THE PROPERTY;

          (II) THE INCOME TO BE DERIVED FROM THE PROPERTY;

          (III) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON, INCLUDING ANY DEVELOPMENT OF THE PROPERTY;

          (IV) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY;

          (V) THE MANNER,QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY;

          (VI) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, INCLUDING THE SOIL COMPACTION AND ANY GRADING OF THE PROPERTY;

          (VII) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL OR QUASI-GOVERNMENTAL AUTHORITY, AGENCY OR BODY;

          (VIII) THE MANNER, CONDITION OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY OR RELATED TO IT;

          (IX) COMPLIANCE WITH ANY FEDERAL, STATE, OR LOCAL ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATION, ORDERS OR REQUIREMENTS, INCLUDING BUT NOT LIMITED TO, THE ENDANGERED SPECIES ACT, TITLE III OF THE AMERICANS WITH DISABILITIES ACT OF 1990 OR ANY OTHER LAW, RULE OR REGULATION GOVERNING ACCESS BY DISABLED PERSONS, CALIFORNIA. HEALTH & SAFETY CODE, THE FEDERAL WATER POLLUTION CONTROL ACT, THE FEDERAL RESOURCE CONSERVATION AND RECOVERY ACT, THE US ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261 , THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE RESOURCES CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT, THE SAFE DRINKING WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, THE TOXIC SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE FOREGOING;

          (X) THE PRESENCE OR ABSENCE OR FORMER PRESENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, ABOUT OR ADJACENT TO THE PROPERTY;

          (XI) THE CONTENT, COMPLETENESS OR ACCURACY OF THE DUE DILIGENCE MATERIALS, INCLUDING ANY INFORMATIONAL PACKAGE, COST TO COMPLETE ESTIMATE OR OTHER MATERIALS PREPARED BY SELLER, IF ANY;

          (XII) THE CONFORMITY OF THE IMPROVEMENTS TO ANY PLANS OR SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAYBE PROVIDED TO BUYER;

          (XIII) THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING OR BUILDING REQUIREMENTS;

          (XIV) DEFICIENCY OF ANY UNDERSHORING;

          (XV) DEFICIENCY OF ANY DRAINAGE;

          (XVI) THE FACT THAT ALL OR A PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR AN EARTHQUAKE FAULT LINE OR LOCATED IN AN ALQUIST-PRIOLO SPECIAL STUDY ZONE;

          (XVII) THE EXISTENCE OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY,

          (XVIII) THE AVAILABILITY OF ANY FORM OF UTILITIES OR SERVICES TO THE PROPERTY, INCLUDING WATER, ELECTRICITY, STORM DRAINS, SEWERS, OR ANY OTHERS,

          (XIX) COMPLIANCE WITH ANY PRESENT OR FUTURE LAWS, RULES OR REGULATIONS CONCERNING AIR QUALITY OR GLOBAL WARMING OR SIMILAR ENVIRONMENTAL CONDITIONS WHETHER DIRECTLY OR INDIRECTLY RELATED TO THE PROPERTY, OR

          (XX) THE POSSIBILITY THAT THE PROPERTY IS OR EVER COULD BE A CONDOMINIUM, PLANNED UNIT DEVELOPMENT, FRACTIONAL INTEREST, TIME INTERVAL OWNERSHIP OR OTHER SIMILAR PROJECT OR DEVELOPMENT, INCLUDING THE LEGAL STATUS OR OTHER MEANING OF ANY CONDOMINIUM MAP FILED OR APPLIED FOR OR OTHERWISE EXISTING WITH RESPECT TO THE PROPERY OR ANY PORTION THEREOF, OR THE LEGAL STATUS OR PRACTICAL OR ECONOMIC FEASIBILITY OF, OR OTHER FACT OR FACTOR OR CONDITION CONCERNING, THE PRESENT STATUS OF, OR THE PRESENT OR FUTURE ABILITY OR POSSIBILITY OR LIKLIHOOD OF, THE PROPERTY OR ANY PART THEREOF, BEING OR BECOMING OR BEING LEGALLY TREATED AS A CONDOMINIUM, PLANNED UNIT DEVELOPMENT, FRACTIONAL OWNERSHIP OR TIME INTERVAL OWNERSHIP DEVELOPMENT OR PROJECT, OR ANY SIMILAR SET OF FACTS, LAWS OR RULES OR REGULATIONS WHICH WOULD PERMIT THE OFFERING FOR SALE, SALE, RESALE, MARKETING, OR ANY OTHER ACTION THAT WOULD STATE OR SUGGEST THAT THE PROPERTY IS, COULD BE, OR EVER WILL BE OTHER THAN A SINGLE LEGAL PARCEL OR THAT INDIVIDUAL UNITS OR SPACES CAN OR EVER IN THE FUTURE WILL LEGALLY BE ABLE TO BE SOLD SEPARATE AND APART FROM THE BALANCE OF THE PROPERTY.

          (XXI) ANY OTHER MATTER CONCERNING THE PROPERTY EXCEPT AS MAY BE OTHERWISE EXPRESSLY STATED HEREIN, INCLUDING ANY AND ALL SUCH MATTERS REFERENCED, DISCUSSED OR DISCLOSED IN ANY DOCUMENTS DELIVERED BY SELLER OR BROKER TO BUYER, INCLUDING WITHOUT LIMITATION IN ANY MARKETING OR OFFERING MATERIAL, IN ANY PUBLIC RECORDS OF ANY GOVERNMENTAL AGENCY OR ENTITY OR UTILITY COMPANY, OR IN ANY OTHER DOCUMENTS AVAILABLE TO BUYER.

BUYER FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY AND REVIEW INFORMATION AND DOCUMENTATION AFFECTING THE PROPERTY, BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND REVIEW OF SUCH INFORMATION AND

DOCUMENTATION, AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION MADE AVAILABLE TO BUYER OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS MAY OTHER WISE BE PROVIDED HEREIN. BUYER AGREES TO FULLY AND IRREVOCABLY RELEASE ALL SUCH SOURCES OF INFORMATION AND PREPARERS OF INFORMATION AND DOCUMENTATION TO THE EXTENT SUCH SOURCE OR PREPARER IS SELLER, OR ITS EMPLOYEES, OFFICERS, DIRECTORS, REPRESENTATIVES, AGENTS, SERVANTS, ATTORNEYS, AFFILIATES, PARENT COMPANIES, SUBSIDIARIES, SHAREHOLDERS, SUCCESSORS OR ASSIGNS FROM ANY AND ALL CLAIMS THAT THEY MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND PREPARERS OF INFORMATION FOR ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM SUCH INFORMATION OR DOCUMENTATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY OF THE FOREGOING ENTITIES AND INDIVIDUALS OR ANY OTHER INDIVIDUAL OR ENTITY. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN “AS-IS” CONDITION AND BASIS WITH ALL FAULTS, AND THAT SELLER HAS NO OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED HEREIN.

     10.2 DISCLAIMERS OF LIABILITY REGARDING CONSTRUCTION.

     (a) BUYER IS ADVISED THAT THE PROPERTY IS BEING OFFERED FOR SALE BY SELLER, (WHOSE AFFILIATE, BANK OF AMERICA, NATIONAL ASSOCIATION, WAS ONE OF THE CONSTRUCTION LENDERS FOR THE DEVELOPMENT OF THE PROPERTY,) AND NOT BY THE ORIGINAL DEVELOPER, SAN JACINTO RETAIL CENTER, LLC (“DEVELOPER”). SELLER ACQUIRED THE PROPERTY FROM DEVELOPER BY FORECLOSURE. PRIOR TO THE COMPLETION OF SELLER’S FORECLOSURE, DEVELOPER ACTED AS THE DEVELOPER AND BUILDER OF THE PROPERTY AND CAUSED THE COMPLETION OF ALL IMPROVEMENTS ON THE PROPERTY WHICH EXIST AS OF THE EFFECTIVE DATE.

          (i) SELLER IS NOT THE DEVELOPER OF THE LAND, NOR IS IT THE BUILDER OF THE PROPERTY OR ANY PART THEREOF. SELLER HAS NOT DESIGNED, DEVELOPED, CONSTRUCTED, OR THOROUGHLY INSPECTED THE PROPERTY, (WITH THE POSSIBLE EXCEPTION OF CAUSING MINOR COSMETIC AND CLEANUP WORK TO BE PERFORMED ON THE PROPERTY THAT WAS NEEDED TO PREPARE THE PROPERTY FOR SALE OR COMPLY WITH SAFETY REGULATIONS, AND PURCHASING AND PLACING FURNITURE AND REMOVABLE FIXTURES IN COMMON AREAS.) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER CONCERNING THE CONDITION OF THE PROPERTY OR ANY PART THEREOF, WHICH IS BEING SOLD TO BUYER “AS IS, WHERE IS, WITH ALL FAULTS.”

          (ii) WITHOUT LIMITING ANY OTHER PROVISION OF THIS AGREEMENT, SELLER SPECIFICALLY AND COMPLETELY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES, STATUTORY WARRANTIES, WARRANTIES ARISING BY OPERATION OF LAW, WARRANTIES

OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, QUALITY OF CONSTRUCTION, OR THE ABSENCE OF “CONSTRUCTION DEFECTS” (AS DEFINED BELOW) OR OTHERWISE.

          (iii) SELLER FURTHER ADVISES BUYER THAT PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1102, 1102.2, 1103.1(A), 3434 AND OTHER APPLICABLE PROVISIONS OF CALIFORNIA LAW, SELLER IS NOT LIABLE AND SHALL NOT BE HELD LIABLE FOR ANY LOSS OR DAMAGE OCCASIONED BY ANY CONSTRUCTION DEFECT OR OTHER DEFECT IN THE REAL OR PERSONAL PROPERTY SO DESIGNED, MANUFACTURED, CONSTRUCTED, REPAIRED, MODIFIED OR IMPROVED OR FOR ANY LOSS OR DAMAGE RESULTING FROM THE FAILURE OF DEVELOPER OR ANY OTHER PARTY THAT PARTICIPATED IN THE DESIGN OR CONSTRUCTION OF THE PROPERTY TO USE DUE CARE IN THE DESIGN, MANUFACTURE, CONSTRUCTION, REPAIR, MODIFICATION OR IMPROVEMENT OF SUCH REAL OR PERSONAL PROPERTY. “CONSTRUCTION DEFECT” SHALL MEAN ANY LATENT OR PATENT DEFECT OR FLAW IN THE DESIGN, MANUFACTURE, CONSTRUCTION, REPAIR, MODIFICATION OR IMPROVEMENT OF ANY OF THE IMPROVEMENTS LOCATED IN OR ON THE PROPERTY OR THE COMMUNITY, INCLUDING, WITHOUT LIMITATION, ANY DEVIATION IN MATERIALS OR CONSTRUCTION FROM THE PLANS AND SPECIFICATIONS FOR THE IMPROVEMENTS, ANY ERROR IN DESIGN, AND ANY DEFECT OR FLAW IN DESIGN, MATERIALS AND/OR CONSTRUCTION THAT RESULTS IN THE INCURSION OF WATER OR VAPOR OR THE COLLAPSE OR OTHER FAILURE OF ANY STRUCTURAL OR OTHER ELEMENT OF THE PROPERTY OR THE COMMUNITY.

     (b) BUYER ACKNOWLEDGES THAT THE CALIFORNIA STATUTES COMMONLY REFERRED TO AS “SB 800”. CONTAINED IN CALIFORNIA CIVIL CODE SECTION 895 ET SEQ., ARE NOT APPLICABLE TO THIS TRANSACTION, AND THAT SELLER SHALL HAVE NO LIABILITY OR OBLIGATION THEREUNDER.

     10.3 RELEASE (a) BUYER, ON BEHALF OF BUYER AND BUYER’S HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, “BUYER PARTIES”) AND ANYONE CLAIMING BY, THROUGH OR UNDER BUYER HEREBY FULLY AND IRREVOCABLY RELEASES SELLER AND SELLER’ S AFFILIATES, PARENT COMPANIES AND SUBSIDIARIES, AND EACH OF THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, SHAREHOLDERS, REPRESENTATIVES, AGENTS, SERVANTS, ATTORNEYS, SUCCESSORS AND ASSIGNS, AND ALL PERSONS, FIRMS, CORPORATIONS AND ORGANIZATIONS ACTING ON THE BEHALF OF EACH OF THE FOREGOING (COLLECTIVELY, THE “SELLER PARTIES”) FROM ANY AND ALL CLAIMS THAT BUYER, ANY BUYER PARTY OR ANYONE CLAIMING BY, THROUGH OR UNDER BUYER MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST ANY SELLER PARTY ARISING FROM OR RELATED TO ANY CONSTRUCTION DEFECTS, ERRORS, OMISSIONS OR OTHER CONDITIONS, LATENT OR OTHERWISE, WHETHER GEOTECHNICAL, SEISMIC OR OTHERWISE, AFFECTING THE PROPERTY OR ANY PORTION THEREOF OR ANY COMMON AREA ASSOCIATED THEREWITH, INCLUDING, WITHOUT LIMITATION, (1) ENVIRONMENTAL MATTERS WHICH WERE (i) DESCRIBED OR REFERRED TO IN ANY ENVIRONMENTAL REPORT OBTAINED BY BUYER; OR (ii) REASONABLY DISCOVERABLE BY PRUDENT INVESTIGATION DURING THE DUE DILIGENCE PERIOD; OR (iii) OTHERWISE DISCLOSED BY SELLER TO BUYER OR DISCOVERED BY BUYER AT ANY TIME PRIOR TO THE CLOSING; AND (2) THE ITEMS DESCRIBED IN SECTION 10.1 OR 10.2 ABOVE.

          (b) THIS RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY UNAWARE OR WHICH BUYER DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY BUYER, WOULD MATERIALLY AFFECT BUYER’S RELEASE TO SELLER. BUYER SPECIFICALLY ACKNOWLEDGES THAT BUYER HAS HAD THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL REGARDING THIS RELEASE AND HAS BEEN ADVISED BY BUYER’S LEGAL COUNSEL CONCERNING, AND HEREBY WAIVES, THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.

BUYER ALSO HEREBY EXPRESSLY WAIVES ANY RIGHT BUYER MAY HAVE UNDER ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT IN CONNECTION WITH THE RELEASE GIVEN IN THIS ARTICLE.

          (c) IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATIONS TO REFLECT THAT ALL OF THE PROPERTY IS SOLD BY SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING. IT IS NOT CONTEMPLATED THAT THE PURCHASE PRICE WILL BE INCREASED IF COSTS TO BUYER ASSOCIATED WITH THE PROPERTY PROVE TO BE LESS THAN EXPECTED NOR WILL THE PURCHASE PRICE BE REDUCED IF THE BUYER’S PLAN FOR OR OPERATION OR FURTHER DEVELOPMENT OF THE PROPERTY LEADS TO HIGHER COST PROJECTIONS.

/s/ Stephen Coree	/s/ Colin Bagwell
Buyer’s initials	Seller’s initials

     10.3 Disclosures. Buyer acknowledges the disclosures made by Seller that are set forth in Exhibit E attached hereto.

     10.4 Indemnity. In the event that the Close of Escrow and the consummation of the transaction contemplated by this Agreement occurs, Buyer hereby agrees to indemnify, defend (using counsel acceptable to Seller) and hold harmless Seller and each of the other Seller Parties from and against any and all demands, losses, claims, injuries, liabilities, obligations, damages, punitive damages, penalties, fines, costs, expenses, causes of action, litigation, administrative or other judicial or quasi-judicial proceedings, claims, of any nature whatsoever (collectively, “Claims”) asserted or alleged against any of the Seller Parties at any time by reason of or arising out of the construction or installation of any of the Improvements in, on or under the Property or any common area associated with the Property or any Construction Defects (as defined in Section 10.2 above) that may now or hereafter exist or be discovered in, on or under the Property or any common area associated with the Property, including without limitation any Claims arising out of or related to the conversion, attempted conversion of the Property to a condominium or planned unit development or fractional interest or time interval ownership project or development, or the sale or attempted to sale of all or any part of the Property as condominiums, or other common area subdivision units or the sale or attempted sale of fractional interests or time interval ownership interests in all or part of the Property, or Claims asserted or alleged against Seller Parties by purchasers of condominium units, common area subdivision units, fractional interests or time interval ownership interests or any other type of direct or indirect ownership or use interest in any or all of the Property.

     10.5 Survival. Each and all of the provisions of Article X shall survive the Close of Escrow and the recordation of the Grant Deed.

11. Title Insurance: At the Close of Escrow, as a condition precedent to Buyer’s obligation to close and pay the Purchase Price, the Title Company shall issue to Buyer the current form of ALTA Standard Coverage Owner’s Policy of Title Insurance with liability in an amount equal to the Purchase Price showing title to the Property vested in Buyer subject only to the Permitted Exceptions and the standard printed exceptions and conditions in the policy of title insurance (“Title Policy”). If Buyer elects to obtain any additional endorsements or an extended coverage policy, the additional premium and costs of survey for the extended coverage policy and the cost of any endorsements will be at Buyer’s sole cost and expense; however, Buyer’s election to obtain an extended coverage policy shall not delay the Closing and Buyer’s inability to obtain an extended coverage policy or any such endorsements shall not be deemed to be a failure of any condition to Closing. In addition, if the Title Company which issues the Title Policy is not the title company designated by Seller, then Seller’s obligation to pay for the Title Policy will be limited to the premium that Seller’s designated title company would have charged Seller for the Title Policy.

12. Costs and Expenses:

     (a) Seller will pay:

          (i) the premium for the Title Policy

          (ii) ¹/₂ of all escrow fees and costs;

          (iii) ¹/₂ of any additional Documentary Transfer Taxes or other similar assessments assessed;

          (v) Seller’s share of prorations;

          (vi) the commission payable to Brokers pursuant to the separate written agreement(s) between Seller and Broker(s).

     (b) Buyer will pay:

          (i) all city and county documentary transfer taxes;

          (ii) Documentary Transfer Tax assessed by the County of Riverside;

          (iii) all other Documentary Transfer Taxes or other similar assessments assessed by any other governmental agency, department or entity other than the standard Documentary Transfer Tax assessed by the County of Riverside;

          (iv) 1/2 of all escrow fees and costs;

          (v) the entire additional cost of any extended coverage title policy, the cost of any survey and, the cost of any endorsements required by Buyer;

          (vi) Buyer’s share of prorations, and

          (vi) any brokers’ commissions or finders fees or similar compensation arising out of or related to this transaction other than those described in sub-paragraph 12 (a) (vi), above.

     (c) Buyer and Seller will each pay all legal and professional fees and fees of other consultants incurred by Buyer and Seller, respectively. All other normal costs and expenses will be allocated between Buyer and Seller in accordance with the customary practice in the county in which the Property is located.

13. Prorations:

     13.1 Taxes and Assessments. All non-delinquent real estate taxes on the Property will be prorated as of the Close of Escrow based on the actual current tax bill. Assessments, including without limitation any HOA assessments, shall not be prorated, and Buyer shall purchase and take title to the Property subject to all current and delinquent assessments, including without limitation any delinquent HOA assessments, and shall indemnify, defend and bold harmless Seller from and against the same as provided in Section 18 below. All supplemental taxes billed after the Close of Escrow for periods prior to the Close of Escrow will be paid promptly by Seller. Any tax refunds received by Buyer which are allocable to the period prior to Closing will be paid by Buyer to Seller.

     13.2 Utilities. Seller will notify all utility companies servicing the Property of the sale of the Property to Buyer and will request that such companies send Seller a final bill for the period ending on the last day before the Close of Escrow. Buyer will notify the utility companies that Buyer is assuming responsibility as the owner of the Property, and that all utility bills for the period commencing on the Close of Escrow are to be sent to Buyer. In addition to the Purchase Price, Buyer will pay to Seller an amount equal to the total of any and all utility deposits held by utility companies and Seller will assign to Buyer all of Seller’s right, title and interest in any such utility deposits; provided, however, Seller reserves the right to receive a return of such utility deposits and in such event, Buyer will arrange for substitute deposits with the utility companies as may be required. If following the Close of Escrow either Buyer or Seller receives a bill for utilities or other services provided to the Property for the period in which the Close of Escrow occurred, Buyer and Seller will equitably prorate the bill.

     13.34 Method of Proration; Survival. All prorations will be made as of the date of Close of Escrow based on a 365 day year and actual days elapsed in the relevant period. The obligations of Seller and Buyer to prorate and adjust revenues and expenses of the Property shall survive the Closing.

     Rental income and other revenue from the Property shall be prorated, with Seller being credited with a prorated amount of all rents or other such income actually received by Seller as of the Closing. Said proration shall be done by crediting Seller with an amount equal to the total of such rental or other income actually received divided by the number of days in the month in which the Closing occurs, times the number of days following the date of the Closing remaining in said month. Buyer shall be debited for all rents and other income due as of the Closing but not yet collected from current tenants or contractors (i.e., those in possession of space in the building as of the Effective Date), and upon the receipt of payment of same, Buyer shall then be permitted to retain same without paying any prorated portion to Seller. All Security Deposits will be credited to Seller and retained by Seller and any landlord rights to same assigned to Buyer in accordance with an agreed schedule of same. Thereafter, Buyer shall have all rights and obligations with respect to such deposits, and Seller shall be relieved of same. Any reimbursements for utility or other expenses which are due in accordance with existing rental agreements or leases shall be prorated in the same manner as rent.

14. Disbursements and Other Actions by Escrow Holder: At the Close of Escrow. Escrow Holder will promptly undertake all of the following:

     14.1 Funds. Disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price for the Property as follows:

          (a) deliver to Seller the Purchase Price, less the net amount, if any, of all items, costs and prorations chargeable to the account of Seller; and

          (b) disburse the remaining balance, if any, of the funds deposited by Buyer to Buyer, less amounts chargeable to Buyer for escrow costs, prorations, or other items.

     14.2 Recording. Cause the Grant Deed (with documentary transfer tax information to be affixed after recording or on a separate document) to be recorded with the County Recorder and obtain conformed copies thereof for distribution to Buyer and Seller.

     14.3 Title Policy. Direct the Title Company to issue the Title Policy to Buyer.

     14.4 Delivery of Documents to Buyer or Seller. Deliver to Buyer the FIRPTA Certificate, the Bill of Sale, the Assignment and Assumption of Leases and Rental Agreements, and any other documents (or copies thereof) deposited into Escrow by Seller. Deliver to Seller the Assignment and Assumption of Leases and Rental Agreements, and any other documents (or copies thereof) deposited into Escrow by Buyer.

15. Joint Representations and Warranties: In addition to any express agreements of the parties contained herein, the following constitute representations and warranties or the parties each to the other, each of which will survive the Closing:

     15.1 Authority. Each party has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate this transaction.

     15.2 Actions. All requisite action (corporate, trust, partnership or otherwise) has been taken by each party in connection with the entering into of this Agreement, the instruments referenced herein, and the consummation of this transaction. No further consent of any partner, shareholder, creditor, investor, judicial or administrative body, governmental authority or other party is required.

     15.3 Due Execution. The individuals executing this Agreement and the instruments referenced herein on behalf of each party and the partners, officers or trustees of each party, if any, have the legal power, right, and actual authority to bind each party to the terms and conditions of those documents.

     15.4 Valid and Binding. This Agreement and all other documents required to close this transaction are and will be valid, legally binding obligations of and enforceable against each party in accordance with their terms, subject only to applicable bankruptcy, insolvency, reorganization, moratorium laws or similar laws or equitable principles affecting or limiting the rights of contracting parties generally.

16. Seller’s Representations and Warranties: Seller makes the following representations, covenants and warranties and acknowledges that Buyer will rely on such representations, covenants and warranties in acquiring the Property, each of which will survive the Closing for a period of 1 year, provided that any claims must be made in writing to Seller within the 1 year period.

     16.1 Non-Foreign Entity. Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Internal Revenue Code.

     16.2 Pre-Closing Covenants. So long as this Agreement remains in full force and effect:

          (a) Without the prior written consent of Buyer, except for the ongoing rental of retail space in the normal course of business, Seller will not convey any interest in the Property and will not subject the Property to any additional liens, encumbrances, covenants, conditions, easements, rights of way or similar matters after the date of this Agreement, except as may be otherwise provided for in this Agreement, which will not be eliminated prior to the Close of Escrow. However, neither this covenant nor anything else herein shall prevent Seller from having the right to continue to market the Property for sale or lease, provided that any rights granted as a result thereof (other than rental of retail space in the normal course of business) shall be subject to Buyer’s rights hereunder.

          (b) Seller will not make any material alterations to the Property without Buyer’s consent, which will not be unreasonably withheld, conditioned or delayed.

          (c) Seller will maintain the Property in condition that is not materially less favorable than the condition that exists as of the Effective Date, ordinary wear and tear and casualty damage excepted, and shall continue to manage the Property in accordance with Seller’s established practices.

          (d) Seller will keep and perform all of the obligations to be performed by Seller under any leases or contracts related to the Property. After expiration of the Due Diligence Period. (i) Seller will not enter into any contract or agreement providing for the provision of goods or services to or with respect to the Property or the operation thereof unless such contracts or agreements can be terminated without penalty by the Closing Date, without prior written consent of Buyer, which will not be unreasonably withheld, conditioned or delayed, and (ii) Seller will not enter into any new leases for any portion of the Property or extend the terms of any existing leases without Buyer’s written consent, which will not be unreasonably withheld or delayed.

     16.3 Litigation. To the Actual Knowledge of Seller, no litigation or other adversarial proceeding is pending against the Property or against Seller concerning the Property, except as described on Exhibit E.

17. Condemnation and Destruction:

     17.1 Eminent Domain or Taking. If proceedings under a power of eminent domain relating to the Property or any part thereof are commenced prior to Close of Escrow, Seller will promptly inform Buyer in writing.

          (a) If such proceedings involve the taking of title to all or a material portion of or interest in the Property, Buyer may elect to terminate this Agreement by notice in writing sent within 5 days of Seller’s written notice to Buyer, in which case the Deposit and any interest accrued thereon, less Buyer’s one-half share of cancellation costs, will be returned to Buyer, and neither party will have any further obligation to or rights against the other except any rights or obligations of either party which are expressly stated to survive termination of this Agreement.

          (b) If the proceedings do not involve the taking of title to all or a material portion of or interest in the Property, or if Buyer does not elect to terminate this Agreement, this transaction will be consummated as described herein and any award or settlement payable with respect to such proceeding will be paid or assigned to Buyer upon Close of Escrow.

          (c) If this sale is not consummated for any reason, any condemnation award or settlement will belong to Seller.

     17.2 Damage or Destruction. Except as provided in this Section, prior to the Close of Escrow the entire risk of loss of damage by earthquake, flood, landslide, fire or other casualty is borne and assumed by Seller. If, prior to the Close of Escrow, any part of the Improvements is damaged or destroyed by earthquake, flood, landslide, fire or other casualty, Seller will promptly inform Buyer of such fact in writing and advise Buyer as to the extent of the damage and whether it is, in Sellers reasonable opinion, material or not material.

          (a) If such damage or destruction is material, Buyer has the option to terminate this Agreement upon written notice to the Seller given not later than 10 days after receipt of Seller’s written notice to Buyer advising of such damage or destruction.

          (b) For purposes hereof, “material” is deemed to be any damage or destruction to the improvements where the cost of repair or replacement is estimated to be more than 25% of the Purchase Price of the Property and will take more than 60 days to repair.

          (c) If this Agreement is so terminated, the provisions of Section 5 will govern.

          (d) If Buyer does Dot elect to terminate this Agreement, or if the casualty is not material, Seller will reduce the Purchase Price by the value reasonably estimated by Seller to repair or restore the damaged portion of the Improvements, less any sums expended by Seller to make emergency repairs to the Improvements or the Property or otherwise protect the physical condition of the Improvements or the Property, and this transaction will close pursuant to the terms of this Agreement.

          (e) If the damage is not material, Seller’s notice to Buyer of the damage or destruction will also set forth Seller’s reduced Purchase Price and Seller’s allocation of value to the damaged portion of the Improvements. If Buyer does not accept Seller’s reduced Purchase Price, Buyer’s sole remedy will be to terminate this Agreement and the provisions of Section 5 will govern.

          (f) Whether or not the sale of the Property is consummated hereunder, all rights to insurance claims or proceeds in respect of damage or destruction to the Improvements occurring prior to the Close of Escrow will belong to Seller.

18. Indemnification: Buyer agrees to indemnify, defend and hold each Seller Party harmless for, from and against any and all Claims of any nature whatsoever arising out of (i) the entry on to the Property of Buyer or its agents, employees or consultants prior to the Close of Escrow, (ii) the ownership, development, sale and/or operation of the Property by Buyer or any affiliate of Buyer from and after the Closing Date, (iii) any misrepresentation or breach of warranty or covenant by Buyer in this Agreement or any document delivered to Seller pursuant to this Agreement, or (iv) if the Close of Escrow and the consummation of the transaction contemplated by this Agreement occurs, Buyer’s failure to pay any assessments or other amounts due and payable to any HOA or other similar owners’ association, no matter when such obligation may have arisen or may arise. The provisions of this Section 18 will survive the Close of Escrow.

19. Hazardous Substances:

     19. 1 Definitions. For the purposes of this Agreement, the following terms have the following meanings:

          (a) “Environmental Law” means any law, statute, ordinance or regulation pertaining to health, industrial hygiene or the environment including, without limitation CERCLA (Comprehensive Environmental Response, Compensation and Liability Act of 1980) and RCRA (Resources Conservation and Recovery Act of 1976).

          (b) “Hazardous Substance” means any substance, material or waste which is or becomes designated, classified or regulated as being “toxic” or “hazardous” or a “pollutant” or which is or becomes similarly designated, classified or regulated, under any Environmental Law, including without limitation asbestos, petroleum and petroleum products.

          (c) “Environmental Audit” means an environmental audit, review or testing of the Property performed by Buyer or any third party or consultant engaged by Buyer to conduct such study.

     19.2 Seller’s Representations and Warranties. As of the date of this Agreement, to the Actual Knowledge of Seller without any inquiry:

          (a) since the date of Seller’s acquisition of the Property, no Hazardous Substances are now or have been used or stored on or within any portion of the Property except those substances which are or have been used or stored on the Property in the normal course of use and operation of the Property and in compliance with all applicable Environmental Laws;

          (b) since the date of Seller’s acquisition of the Property, there are and have been no federal. state or local enforcement, clean-up, removal, remedial or other governmental or regulatory actions instituted or completed affecting the Property; and

          (c) no written claims have been received from any third party against Seller relating to any Hazardous Substances on or within the Property.

     19.3 Notices Regarding Hazardous Substances From the Effective Date through the Closing Date, Seller will promptly notify Buyer if to the Actual Knowledge of Seller any Hazardous Substance has been released on the Property, or in the soil, groundwater or soil vapor on or under the Property, or if Seller or the Property are subject to any threatened or pending investigation by any governmental agency under any law, regulation or ordinance pertaining to any Hazardous Substance.

     19.4 Environmental Release. No Seller Party will be liable to Buyer, and Buyer hereby releases each Seller Party from any and all liability, for any third party Claims or any other Claims (including Claims by Buyer) under any federal, state or local law which arc attributable to any environmental condition which:

          (i) was described or referred to in, or reasonable discernable from, any Environmental Audit or report obtained by Buyer; or

          (ii) was reasonably discoverable by prudent investigation during the Due Diligence Period; or

          (iii) was otherwise disclosed by Seller to Buyer, described or referred to or reasonably discernable from any of the documents or materials or information provided by or on behalf of Seller to Buyer, or discovered by Buyer at any time prior to the Closing.

The provisions of this Section 19.4 will survive the Close of Escrow. The provisions of this, Section 19.4 are not intended to diminish in any way the release set forth in Article 10 above.

     19.5 Environmental Audit. If during the Due Diligence Period Buyer elects to perform an Environmental Audit:

          (a) The Environmental Audit shall be conducted pursuant to standard quality control/quality assurance procedures for such Audits and in accordance with Section 23. Without limitation, intrusive sampling or testing of soil or subsurface conditions are at all times prior to the Closing subject to Seller’s prior written approval, which may be granted or withheld by Seller in its sole and absolute discretion.

          (b) If any report is prepared as the result of the Environmental Audit, such report will be conspicuously labeled as a draft, and Buyer will promptly give Seller a copy of the draft report if requested by Seller. Prior to the Closing, Buyer will keep the draft report and the information contained therein confidential and will not disclose it to any person or entity without Seller’s prior written consent; provided, however, that Buyer may furnish a copy of said draft report to any proposed lender in connection with prosecution of an application for a mortgage loan and to any person or entity contemplating an investment in the Property as a partner or permitted assignee of Buyer, or to any consultant engaged in, or commenting upon the results of, said draft report.

          (c) If the Closing fails to occur for any reason other than a default by Seller, then if requested by Seller, Buyer will deliver all copies of the draft report to, and they will become the property of, Seller, and in any event Buyer will not disclose to any party the contents of the draft report except pursuant to valid legal process or with the written consent of Seller.

          (d) Any ground water, sailor other samples taken from the Property will be properly disposed of by Buyer at Buyer’s sole cost and in accordance with all applicable laws.

20. DISPUTE RESOLUTION:

     20.1. Judicial Reference. Any controversy or Claim arising out of or relating to this Agreement or any agreements or instruments relating hereto or delivered in connection herewith, including, but not limited to a claim based on or arising from an alleged tort will, at the request of any party, be determined by general judicial reference pursuant to California Code of Civil Procedure Sections 638 and 640 through 645.1, and as modified or as otherwise provided in this Article. The parties to the dispute shall cooperate in good faith to ensure that all necessary and appropriate parties arc included in the judicial reference proceeding. A party hereto shall not be required to participate in the judicial reference proceeding if all parties against whom such party would have necessary or permissive cross-claims or counterclaims will not or cannot be joined in the judicial reference proceedings. Subject to the limitations set forth in this Article, the general referee shall have the authority to try all issues, whether of fact or law, and to report a statement of decision to the court. The referee shall be the only trier of fact or law in the reference proceeding and shall have no authority to further refer any issues of fact or law to any other party, without the mutual consent of all parties to the judicial reference proceeding.

     20.2. Place. The proceedings shall be heard in Los Angeles County, California.

     20.3. Referee. The referee shall be a retired judge with experience in relevant real estate matters. The referee shall not have any relationship to the parties to the dispute or interest in the

Property. The parties to the dispute participating in the judicial reference shall meet to select the referee within ten (10) days after service of the initial complaint on all defendants named therein. Any dispute regarding the selection of the referee shall be promptly resolved by the judge to whom the matter is assigned, or if there is none, to the presiding judge of the Superior Court of Los Angeles County, California, who shall select the referee.

     20.4. Commencement and Timing of Proceeding. The referee shall promptly commence the proceeding at the earliest convenient date in light of all of the facts and circumstances and shall conduct the proceeding without undue delay.

     20.5. Pre-hearing Conferences and Discovery. The referee may require one or more pre-hearing conferences. The parties to the judicial reference proceeding shall be entitled only to limited discovery, consisting of the exchange between such parties of only the following matters: (i) witness lists; (ii) expert witness designations; (iii) expert witness reports; (iv) exhibits; (v) reports of testing or inspections of the property subject to the dispute, including but not limited to, destructive or invasive testing, and (vi) trial briefs. Such parties shall also be entitled to conduct further tests and inspections as provided in this Article. Any other discovery provided for in the California Code of Civil Procedure shall be permitted by the referee upon a showing of good cause or based on the mutual agreement of the parties to the judicial reference proceeding. The referee shall oversee discovery and shall enforce all discovery orders in the same manner as any trial court judge.

     20.6. Remedies. The referee shall have the power to grant all legal and equitable remedies and award compensatory damages in the judicial reference proceeding.

     20.7. Motions. The referee shall have the power to hear and dispose of motions, including motions relating to provisional remedies, demurrers, motions to dismiss, motions for judgment on the pleadings and summary adjudication motions, in the same manner as a trial court judge, except the referee shall also have the power to adjudicate summarily issues of fact or law including the availability of remedies, whether or not the issue adjudicated could dispose of an entire cause of action or defense. Notwithstanding the foregoing, if prior to the selection of the referee as provided herein, any provisional remedies are sought by the parties to the dispute, such relief may be sought in the Superior Court of Los Angeles County, California.

     20.8. Rules of Law. The referee shall apply the laws of the State of California except as expressly provided herein including the rules of evidence, unless expressly waived by all parties to the judicial reference proceeding.

     20.9. Record. A stenographic record of the hearing shall be made, provided that the record shall remain confidential to the extent permitted by law except as may be necessary for post-hearing motions and any appeals.

     20.10. Statement of Decision. The referee’s statement of decision shall contain findings of fact and conclusions of law to the extent required by law if the case were tried to a judge. The decision of the referee shall stand as the decision of the court, and upon filing of the statement of decision with the clerk of the court, judgment may be entered thereon in the same manner as if the dispute had been tried by the court.

     20.11. Post-hearing Motions and Appeals. The referee shall have the authority to rule on all post-hearing motions in the same manner as a trial judge. The decision of the referee shall be subject to appeal in the same manner as if the dispute had been tried by the court.

     20.12. Expenses. The fees and costs of any judicial reference proceeding hereunder shall be paid as agreed by the parties to the judicial reference proceeding. If such parties cannot agree on the payment of such costs and fees, including ongoing costs and fees, then these costs and fees shall be paid as determined by the referee, with the overall costs and fees of the proceeding ultimately to he borne as determined by the referee. Each party to the judicial reference proceeding shall bear its own attorney’s fees and costs in connection with such proceeding.

     20.13 Jurisdiction: Designation of Agent for Service. The parties hereby agree to submit to the jurisdiction of the courts of the County of Los Angeles, the Stale of California and the United States of America. Buyer hereby designates Stephen Corea, whose complete address is shown in subparagraph 1 (s), above, as the agent upon whom process directed to Buyer may be served within the State of California, in the manner provided by law. Buyer irrevocably consents to service of process directed to it upon the agent designated above, and to service of process on the Secretary of State of the State of California if the agent so designated or the agent’s successor is no longer authorized to act or cannot be found at the address given.

     20.14. WAIVERS. THE PARTIES HERETO AGREE TO HAVE ANY DISPUTE RESOLVED ACCORDING TO THE PROVISIONS OF THIS ARTICLE AND WAIVE THEIR RESPECTIVE RIGHTS TO PURSUE ANY DISPUTE IN ANY MANNER OTHER THAN AS PROVIDED IN THIS ARTICLE. SUCH PARTIES ACKNOWLEDGE THAT BY AGREEING TO RESOLVE ALL DISPUTES AS PROVIDED IN THIS ARTICLE, THEY WILL NOT HAVE ANY RIGHT TO HAVE SUCH DISPUTES TRIED BEFORE A JURY AND THEREBY GIVE UP ANY RIGHT SUCH PARTIES MAY POSSESS TO SUCH REMEDY. WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES TO JUDICIAL REFERENCE AS PROVIDED ABOVE.

     Buyer’s Initials, Stephen Coree Seller’s Initials Colin Bagwell

21. Notices: All notices or other communications required or permitted hereunder must be in writing, and must be personally delivered (including by means of professional messenger service) or sent by overnight courier, or sent by registered or certified mail, postage prepaid, return receipt requested to the addresses set forth in Section 1. All notices sent by certified or registered mail will be deemed received upon receipt or first attempted delivery after mailing and all notices sent by other means permitted herein shall be deemed received on the date delivered.

22. Brokers: Seller will pay to Brokers a commission pursuant to a separate agreement or agreements between Seller and Brokers. Seller shall not have any obligation to pay any commission or any other compensation or amount whatsoever to Brokers in the event the Close of Escrow fails to occur for any reason, including, without limitation, Seller’s breach of this Agreement. Seller represents and warrants to Buyer, and Buyer represents and warrants to Seller, that no broker or finder has been engaged by the representing party, respectively, other than the Broker(s) whose name(s) appear in Section 1, in connection with any of the transactions contemplated by this Agreement, or to its knowledge is in any way connected with any of such transactions. Buyer will indemnify, save harmless and defend Seller from any liability, cost, or expense arising out of or connected with any claim for any commission or compensation made by Broker for any amount beyond that set forth in the agreement between Seller and Broker arising out of the act or omission of Buyer, or made by any other person or entity claiming to have been retained or contacted by Buyer in connection with this transaction. Seller will indemnify, save harmless and defend Buyer from any liability, cost, or expense arising out of or connected with any claim for any commission or compensation made by

Broker that is consistent with the agreement between Seller and Broker, or made by any other person or entity claiming to have been retained or contacted by Seller in connection with this transaction. This Section 22 shall survive the Closing or any earlier termination of this Agreement.

23. Entry: Buyer and Buyer’s representatives, agents and designees will have the right, at reasonable times and upon reasonable written notice to Seller, (which written notice shall be delivered not less than two (2) Business Days prior to the desired date of entry and must describe the scope of the planned testing and investigations) to enter upon the Property, in connection with Buyer’s proposed purchase of the Property. Buyer agrees, however, that with respect to any entry by Buyer or its representatives, agents or designees, whether prior to, on or after the Effective Date:

          (a) all tests and investigations will be at Buyer’s sole cost and expense;

          (b) the persons or entities performing such tests and investigations will be properly licensed and qualified and will have obtained all appropriate permits therefor;

          (c) Seller will have the right of approval, in Seller’s sale discretion, of any proposed physical testing, including. without limitation, any proposed borings or other intrusive sampling and testing methods made or utilized for the purpose of sampling and/or testing soil and/or water;

          (d) Buyer will advise Seller in advance of the dates of all tests and investigations and will schedule all tests and investigations during normal business hours whenever feasible unless otherwise requested by Seller;

          (e) Seller will have the right to have a representative of Seller accompany Buyer and Buyer’s representatives, agents or designees while they are on the Property;

          (f) any entry by Buyer, its representative, agents or designees will not interfere with Seller’s or any tenant’s use of the Property;

          (g) Buyer will indemnify, defend and hold Seller harmless for, from and against any and all Claims (including mechanics’ liens and matters related to Hazardous Materials) arising out of any entry by Buyer or its agents, designees or representatives, whether occurring before, on or after the Effective Date; and

          (h) Buyer will restore the Property at Buyer’s sale cost and expense if this transaction does not close. Until restoration is complete, Buyer will take all steps necessary to ensure that any conditions on the Property created by Buyer’s testing will not interfere with the normal operation of the Property or create any dangerous, unhealthy, unsightly or noisy conditions on or adjacent to the Property.

In addition, prior to any entry, Buyer will obtain, maintain and provide Seller, or shall cause any consultant, contractor or other person entering the Property to obtain, maintain and provide Seller, with proof of comprehensive general liability insurance in the amount of at least $1,000,000.00 combined, single limit coverage, naming Seller as an additional insured and with coverages reasonably satisfactory to Seller. The foregoing indemnity provision will survive the Closing or any earlier termination of this Agreement.

24. Legal and Equitable Enforcement of this Agreement:

     24.1 Waiver of Specific Performance and Lis Pendens. In the event the Close of Escrow and the consummation of the transaction contemplated by this Agreement do not occur by reason of material default

by Seller, Buyer as its sole remedy will be entitled to (i) the return of its Deposit, and (ii) payment of its reasonable out-of-pocket expenses incurred in connection with the transaction, up to a maximum aggregate amount of Five Thousand Dollars ($5,000). AS A MATERIAL INDUCEMENT TO, AND AS MATERIAL CONSIDERATION FOR SELLER’S ENTERING INTO THIS AGREEMENT WITH BUYER, BUYER WAIVES ANY RIGHT: (A) TO PURSUE AN ACTION FOR THE SPECIFIC PERFORMANCE OF THIS AGREEMENT; (B) TO RECORD OR FILE A NOTICE OF LIS PENDENS OR NOTICE OF PENDENCY OF ACTION OR SIMILAR NOTICE AGAINST ANY PORTION OF THE PROPERTY; (C) TO SEEK OR OBTAIN RESCISSION OF THE SALE; AND (D) TO RECOVER ANY PUNITIVE OR CONSEQUENTIAL DAMAGES AND ANY OTHER DAMAGES OR MONETARY COMPENSATION OTHER THAN THE AMOUNTS IDENTIFIED IN CLAUSES (i), (ii) AND (iii) OF THE FIRST SENTENCE OF THIS SECTION 24.1.

24.2 Default by Buyer. IN THE EVENT THE CLOSING AND THE CONSUMMATION OF THE TRANSACTION HEREIN CONTEMPLATED DOES NOT OCCUR AS HEREIN PROVIDED BY REASON OF ANY DEFAULT OF BUYER, BUYER AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES SUFFERED BY SELLER AS A RESULT OF BUYER’S FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO THIS AGREEMENT, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS AGREEMENT, THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENT A REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER WILL INCUR AS A RESULT OF SUCH FAILURE; PROVIDED, HOWEVER THAT THIS PROVISION WILL NOT LIMIT SELLER’S RIGHT TO RECEIVE REIMBURSEMENT FOR ATTORNEYS’ FEES, NOR WAIVE OR AFFECT OR LIMIT BUYER’S RELEASE OR INDEMNITY OBLIGATIONS AND SELLER’S RIGHTS TO THOSE RELEASE AND INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT, NOR WAIVE OR AFFECT BUYER’S OBLIGATIONS TO RETURN OR PROVIDE TO SELLER DOCUMENTS, REPORTS OR OTHER INFORMATION PROVIDED TO OR PREPARED BY OR FOR BUYER PURSUANT TO APPLICABLE PROVISIONS OF THIS AGREEMENT. THEREFORE, BUYER AND SELLER DO HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE PROPERTY IS AN AMOUNT EQUAL TO THE DEPOSIT (WHICH INCLUDES ANY ACCRUED INTEREST THEREON). SAID AMOUNT WILL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR THE BREACH OF THIS AGREEMENT BY BUYER. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA. CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. UPON DEFAULT BY BUYER, THIS AGREEMENT WILL BE TERMINATED AND, EXCEPT FOR BUYER’S INDEMNITY AND OTHER SPECIFIC OBLIGATIONS REFERRED TO HEREIN WHICH MAY BE ENFORCED BY SELLER (IN ADDITION TO COLLECTION AND RETENTION BY SELLER OF BUYER’S DEPOSIT AS PROVIDED HEREUNDER), NEITHER PARTY WILL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EACH TO THE OTHER EXCEPT FOR THE RIGHT OF SELLER TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER AND ESCROW HOLDER, OR TO EXERCISE ITS RIGHTS AND REMEDIES UNDER SURVIVING INDEMNITY PROVISIONS.

          Buyer’s Initials: Stephen Coree Seller’s Initials: Colin Bagwell

25. Assignment; OFAC:

     25.1 Assignment. Buyer will not assign this Agreement without obtaining Seller’s prior written consent, which consent may be withheld by Seller in its sole and absolute discretion for any reason whatsoever; provided, however, that Buyer shall have the one-time right to assign all of its right, title and interest in and to this Agreement without Seller’s consent to a reputable qualified intermediary to facilitate the completion of a 1031 exchange by Buyer, so long as (i) Buyer provides written notice to Seller concurrently with such assignment (including a copy of the fully executed assignment document, in the form specified below, and the full names and addresses of all individuals and entities that will have, as of the Closing Date, a direct or beneficial ownership interest in or to the assignee), (ii) the assignee entity agrees to assume all of Seller’s obligations and liabilities under this Agreement that are typically , (iii) neither the assignment nor the assignee violates Buyer’s representations and warranties contained in Section 25.2 below, and (iv) such assignment and assumption does not and shall not release Buyer from its obligations and liabilities under this Agreement. Any attempted assignment without Seller’s required prior written consent will, at Seller’s option, be voidable and constitute a material breach of this Agreement. If Seller consent to an assignment, the assignment will not be effective against Seller until Buyer delivers to Seller a fully executed copy of the assignment instrument, which instrument must be satisfactory to Seller in both form and substance and pursuant to which the assignee assumes and agrees to perform for the benefit of Seller the obligations of Buyer under this, Agreement, and pursuant to which the assignee makes the warranties and representations required of Buyer under this Agreement and such other representations and warranties as Seller may reasonably require (such instrument being referred to herein as an “Approved Assignment Form”). Notwithstanding anything else herein to the contrary, Buyer shall, on reasonable prior written Notice to Seller and Escrow Holder, have the right to assign this Agreement to an entity owned in its entirety, or controlled by, or under common control with Buyer, provided it does so in an Approved Assignment Form. As used herein. “controlled” shall mean and refer to an entity in which Buyer (or a parent entity, as the case may be) has a beneficial interest of not less than Fifty One Percent (51%), and Buyer (or a parent entity, as the case may be) has the right to control is business and operations. No assignment shall release Buyer from any of it, obligations under this Agreement.

     25.2 OFAC. Buyer represents and warrants the following to Seller as of the Effective Date and as of the date of the Closing concerning Buyer (which representations and warranties shall survive the Closing and which for this purpose includes any assignee of Buyer and Buyer’s and Buyer’s assignee’s officers, directors, and owners of direct or beneficial ownership interests and any other constituent entities): (a) the information concerning the identities of Buyer and Buyer’s officers, directors and owners supplied to Seller by Buyer is true, correct and complete; (b) Buyer is not a Prohibited Person (as defined below); (c) Buyer is currently in compliance with and will at all times during the term of this Agreement remain in compliance with the regulations of the Office of Foreign Asset Control of the Department of the Treasury and any statute, executive order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action relating thereto. “Prohibited Person” shall mean any person, organization, or entity: (i) listed in the Annex to, or is otherwise subject to, the provisions of Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001 , and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”); (ii) owned or controlled by, or acting for or on behalf of, any person or entity that is listed in the Annex to, or is otherwise subject to the provisions of, the Executive Order; (iii) with whom a party is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering legal requirements, including the PATRIOT Act and the Executive Order; (iv) that commits, threatens, or conspires to commit or supports “terrorism” as defined in the Executive Order; (v) that is named as a “specifically designated national” or “blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov/offices/eotffc/ofac/sdn, or at any replacement website or other replacement official publication of the list or is named on any other U.S. or foreign government or

regulatory list maintained for the purpose of preventing terrorism, money laundering, or similar activities; (vi) that is covered by IEEPA, OFAC, or any other law, regulation, or executive order relating to the imposition of economic sanctions against any country, region, or individual pursuant to United States law or United Nations resolution; or (vii) that is an affiliate (including any principal, officer, immediate family member, or close associate) of a person or entity described in one or more of the above clauses of this definition of Prohibited Person.

26. Miscellaneous:

     26.1 Counterparts. This Agreement may be executed in counterparts. Facsimile signatures on this Agreement shall be valid so long as wet signature originals are delivered not later than three (3) business days after the delivery of the facsimile signature version of the Agreement.

     26.2 Partial Invalidity. If any term or provision of this Agreement will be deemed to he invalid or unenforceable to any extent, the remainder of this Agreement will not be affected thereby, and each remaining term and provision of this Agreement will be valid and be enforced to the fullest extent permitted by law.

     26.3 Possession of the Property. Seller will deliver possession of the Property to Buyer upon the Close of Escrow, subject to the right of other parties pursuant to the Permitted Exceptions.

     26.4 Waivers. No waiver of any breach of any covenant or provision contained herein will be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision contained herein. No extension of time for performance of any obligation or act will be deemed an extension of the time for performance of any other obligation or act except those of the waiving party, which will be extended by a period of time equal to the period of the delay.

     26.5 Successors and Assigns. This Agreement is binding upon and inures to the benefit of the heirs, personal representatives, permitted successors and assigns of the parties hereto.

     26.6 Professional Fees. In the event of the bringing of any action, arbitration or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other party arising out of this Agreement, then in that event the prevailing party will be entitled to have the recovery of and from the other party all costs and expenses of the action, arbitration or suit, actual attorneys’ fees (including the allocated costs of Seller’s in-house counsel), witness fees and any other professional fees resulting there from.

     26.7 Entire Agreement. This Agreement (including all Exhibits attached hereto) constitutes the entire contract between the parties hereto with respect to the subject matter hereof and may not be modified except by an instrument in writing signed by the party to be charged.

     26.8 Time of Essence. Seller and Buyer hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof.

     26.9 Construction. This Agreement has been prepared by Seller and its professional advisors and reviewed by Buyer and its professional advisers. Seller and Buyer and their respective advisors believe that this Agreement is the product of all of their efforts, that it expresses their agreement and that it should not be interpreted in favor of or against either Buyer or Seller. The parties further agree that this Agreement will be construed to effectuate the normal and reasonable expectations of a sophisticated Seller and Buyer.

     26.10 Governing Law. The parties hereto expressly agree that this Agreement will be governed by, interpreted under, and construed and enforced in accordance with the laws of the State in which the Property is located.

     26.11 Confidentiality. Unless otherwise agreed to in writing by Seller and Buyer, each party will keep confidential all documents, financial statements, reports or other information provided to, or generated by the other party relating to the Property (excluding such documents, statement” reports or information provided to Seller under Section 9.1(a) and will not disclose any such information to any person other than (i) those employees and agents of Seller or Buyer; (ii) those who are actively and directly participating in the evaluation of the Property and the negotiation and execution of this Agreement or financing of the purchase of the Property and (iii) governmental, administrative, regulatory or judicial authorities in the investigation of the compliance of the Property with applicable legal requirements. However, Buyer expressly covenants and agrees that it will not disclose any code compliance, environmental or other regulatory matters to governmental or other authorities without the express prior written approval by Seller. Upon any termination of this Agreement for any reason, Buyer will promptly return to Seller copies of all documents or other information pertaining to the Property provided to Buyer by Seller, including, without limitation, pursuant to Section 9. The provisions of this Section will survive the termination of this Agreement other than by Closing.

     26.12 Wear and Tear. Buyer specifically acknowledges that Seller will continue to use the Property in the course of its business and accepts the fact that reasonable wear and tear will occur after the date of this Agreement. Buyer specifically agrees that Seller is not responsible for repairing such reasonable wear and tear and that Buyer is prohibited from raising such wear and tear as a reason for not consummating this transaction or for requesting a reduction in the Purchase Price.

     26.13 No Recordation. No memorandum or other document relating to this Agreement will be recorded without the prior written consent of Seller, and any such consent or approval will be conditioned upon Buyer providing Seller with a quitclaim deed fully executed and acknowledged by Buyer, quitclaiming any and all interests that it may have in the Property to Seller, which quitclaim deed Seller may record in the event that this Agreement is terminated or the transaction contemplated herein is not consummated.

     26.14 Financing. Buyer represents and warrants to Seller that Buyer, without the prior written consent of Seller, has not obtained and will not obtain any financing in connection with sale of the Property from BankAmerica Corporation or any subsidiary or affiliate of BankAmerica Corporation, including without limitation Bank of America, N.A.

     26.15 Survival. All obligations of the parties contained herein which by their terms do not arise until after the Close of Escrow and any other provisions of this Agreement which by their terms survives the Close of Escrow, shall survive the Close of Escrow.

     26.16 Not an Offer. Seller’s delivery of unsigned copies of this Agreement is solely for the purpose of review by the party to whom delivered, and neither the delivery nor any prior communications between the parties, whether oral or written, will in any way be construed as an offer by Seller, nor in any way imply that Seller is under any obligation to enter the transaction which is the subject of this Agreement. The signing of this Agreement by Buyer constitutes an offer which will not be deemed accepted by Seller unless and until Seller has signed this Agreement and delivered a duplicate original to Buyer.

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

“SELLER”		“BUYER”
QUALITY PROPERTIES ASSET		TNP ACQUISITIONS, LLC,
MANAGEMENT COMPANY,		a Delaware limited liability company
an Illinois corporation
		By:	Thompson National Properties, LLC,
			a Delaware limited liability company,
By:	/s/ Colin Bagwell		its sole member
	Name: Colin Bagwell
	Title: Assistant Vice President		By:	/s/ Stephen Coree
				Name: Stephen Coree
				Its: Svp Acquisitions

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

[TO BE PROVIDED THROUGH ESCROW]

END OF LEGAL DESCRIPTION

EXHIBIT B

FORM OF GRANT DEED

RECORDING REQUEST BY,
WHEN RECORDED MAIL TO AND:
MAIL TAX STATEMENTS TO:

TNP ACQUISITIONS, LLC,
a Delaware limited liability company
c/o Thompson National Properties
1900 Main Street, 7^th Floor
Irvine, CA 92614
Attn: Stephen Corea

(Space above line for Recorder’s use)

GRANT DEED

The undersigned grantor declares:
Documentary Transfer Tax not shown
pursuant to Section 11932 of the
California Revenue and Taxation Code

þ City of San Jacinto, California

     FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation (“Grantor”) does hereby GRANT to TNP ACQUISITIONS, LLC, a Delaware limited liability company (“Grantee”) the real property in the County of Riverside, State of California, described as follows:

SEE EXHIBIT “A” ATTACHED

APNS:

SUBJECT TO:

1. Non-delinquent general and special real property taxes and public and private assessments.

2. All other covenants, conditions, restrictions, easements, reservations, dedications, rights and rights-of-way of record, or discoverable by inspection or survey, including, without limitation, that certain Declaration of Covenants, Conditions and Restrictions and Establishment of Easements recorded on April 4, 2006 as Instrument No. 2006-0238823 in the Official Records of the County Recorder of Riverside County, California (“Declaration”), as amended by an Amendment to CCR’s recorded December 18, 2006 as Instrument No. 2006-0925048, and an Exclusive Uses Amendment recorded on August 16, 2007, as Instrument No. 2007-0529755.

3. This Deed is made and accepted upon all covenants, conditions, restrictions, dedications, reservations, casements and exceptions of record, including without limitation the casements, covenants,

conditions and restrictions set forth in the Declaration all of which are incorporated herein by reference to said Declaration with the same effect as though fully set forth herein.

4. Grantee. in accepting this Deed and the conveyance hereunder, docs hereby agree and confirm, jointly and severally for the benefit of Grantor, that Grantee has agreed with and for the benefit of Grantor as follows in connection with Grantee’s purchase of the above-described property, which provisions survive the closing of the sale and the delivery and recordation of this Deed:

     “A. BUYER IS ADVISED THAT THE PROPERTY IS BEING OFFERED FOR SALE BY SELLER, (WHOSE AFFILIATE, BANK OF AMERICA, NATIONAL ASSOCIATION, WAS ONE OF THE CONSTRUCTION LENDERS FOR THE DEVELOPMENT OF THE PROPERTY,) AND NOT BY THE ORIGINAL DEVELOPER, SAN JACINTO RETAIL CENTER, LLC (“DEVELOPER”). SELLER ACQUIRED THE PROPERTY FROM DEVELOPER BY FORECLOSURE. PRIOR TO THE COMPLETION OF SELLER’S FORECLOSURE, DEVELOPER ACTED AS THE BUILDER OF THE PROPERTY AND CAUSED THE COMPLETION OF ALL IMPROVEMENTS ON THE PROPERTY.

          (i) SELLER IS NOT THE DEVELOPER OF THE LAND, NOR IS IT THE BUILDER OF THE PROPERTY OR ANY PART THEREOF. SELLER HAS NOT DESIGNED, DEVELOPED, CONSTRUCTED, OR THOROUGHLY INSPECTED THE PROPERTY, (WITH THE POSSIBLE EXCEPTION OF CAUSING MINOR COSMETIC AND CLEANUP WORK TO BE PERFORMED ON THE PROPERTY THAT WAS NEEDED TO PREPARE THE PROPERTY FOR SALE OR COMPLY WITH SAFETY REGULATIONS, AND PURCHASING AND PLACING FURNITURE AND REMOVABLE FIXTURES IN COMMON AREAS.) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER CONCERNING THE CONDITION OF THE PROPERTY OR ANY PART THEREOF, WHICH IS BEING SOLD TO BUYER “AS IS, WHERE IS, WITH ALL FAULTS.”

          (ii) WITHOUT LIMITING ANY OTHER PROVISION OF THIS AGREEMENT, SELLER SPECIFICALLY AND COMPLETELY DISCLAIMS ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, IMPLIED WARRANTIES, STATUTORY WARRANTIES, WARRANTIES ARISING BY OPERATION OF LAW, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE. QUALITY OF CONSTRUCTION, THE ABSENCE OF “CONSTRUCTION DEFECTS” (AS DEFINED BELOW) OR OTHERWISE.

          (iii) SELLER FURTHER ADVISES BUYER THAT PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1102, 1103.1(A), 3434 AND OTHER APPLICABLE PROVISIONS OF CALIFORNIA LAW, SELLER IS NOT LIABLE AND SHALL NOT BE HELD LIABLE FOR ANY LOSS OR DAMAGE OCCASIONED BY ANY CONSTRUCTION DEFECT OR OTHER DEFECT IN THE REAL OR PERSONAL PROPERTY SO DESIGNED, MANUFACTURED, CONSTRUCTED, REPAIRED, MODIFIED OR IMPROVED OR FOR ANY LOSS OR DAMAGE RESULTING FROM THE FAILURE OF DEVELOPER OR ANY OTHER PARTY THAT PARTICIPATED IN THE DESIGN OR CONSTRUCTION OF THE PROPERTY TO USE DUE CARE IN THE DESIGN, MANUFACTURE, CONSTRUCTION, REPAIR, MODIFICATION OR IMPROVEMENT OF SUCH REAL OR PERSONAL PROPERTY. “CONSTRUCTION DEFECT” SHALL MEAN ANY LATENT OR PATENT DEFECT OR FLAW IN THE DESIGN, MANUFACTURE, CONSTRUCTION, REPAIR, MODIFICATION OR IMPROVEMENT OF ANY OF THE IMPROVEMENTS LOCATED IN OR ON THE PROPERTY OR THE COMMUNITY, INCLUDING, WITHOUT LIMITATION, ANY DEVIATION IN MATERIALS OR CONSTRUCTION FROM THE PLANS AND SPECIFICATIONS FOR THE IMPROVEMENTS, ANY ERROR IN DESIGN, AND ANY DEFECT OR FLAW IN DESIGN, MATERIALS AND/OR,

CONSTRUCTION THAT RESULTS IN THE INCURSION OF WATER OR VAPOR OR THE COLLAPSE OR OTHER FAILURE OF ANY STRUCTURAL OR OTHER ELEMENT OF THE PROPERTY OR THE COMMUNITY.

BUYER ACKNOWLEDGES THAT THE CALIFORNIA STATUTES COMMONLY REFERRED TO AS “SB 800”, CONTAINED IN CALIFORNIA CIVIL CODE SECTION 895 ET SEQ., ARE NOT APPLICABLE TO THIS TRANSACTION, AND THAT SELLER SHALL HAVE NO LIABILITY OR OBLIGATION THEREUNDER.

     B. RELEASE. (a) BUYER, ON BEHALF OF BUYER AND BUYER’S HEIRS, PERSONAL REPRESENTATIVES, SUCCESSORS AND ASSIGNS (COLLECTIVELY, “BUYER PARTIES”) AND ANYONE CLAIMING BY, THROUGH OR UNDER BUYER HEREBY FULLY AND IRREVOCABLY RELEASES SELLER AND SELLER’S AFFILIATES, PARENT COMPANIES AND SUBSIDIARIES, AND EACH OF THEIR RESPECTIVE EMPLOYEES, OFFICERS, DIRECTORS, SHAREHOLDERS, REPRESENTATIVES, AGENTS, SERVANTS, ATTORNEYS, SUCCESSORS AND ASSIGNS, AND ALL PERSONS, FIRMS, CORPORATIONS AND ORGANIZATIONS ACTING ON THE BEHALF OF EACH OF THE FOREGOING (COLLECTIVELY, THE “SELLER PARTIES”) FROM ANY AND ALL CLAIMS THAT BUYER, ANY BUYER PARTY OR ANYONE CLAIMING BY, THROUGH OR UNDER BUYER MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST ANY SELLER PARTY ARISING FROM OR RELATED TO ANY CONSTRUCTION DEFECTS, ERRORS, OMISSIONS OR OTHER CONDITIONS, LATENT OR OTHERWISE, WHETHER GEOTECHNICAL, SEISMIC OR OTHERWISE, AFFECTING THE PROPERTY OR ANY PORTION THEREOF OR ANY COMMON AREA ASSOCIATED THEREWITH, INCLUDING, WITHOUT LIMITATION, (1) ENVIRONMENTAL MATTERS WHICH WERE (i) DESCRIBED OR REFERRED TO IN ANY ENVIRONMENTAL REPORT OBTAINED BY BUYER; OR (ii) REASONABLY DISCOVERABLE BY PRUDENT INVESTIGATION DURING THE DUE DILIGENCE PERIOD; OR (iii) OTHERWISE DISCLOSED BY SELLER TO BUYER OR DISCOVERED BY BUYER AT ANY TIME PRIOR TO THE CLOSING; AND (2) THE ITEMS DESCRIBED IN SECTION A ABOVE.

          (b) THIS RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY UNAWARE OR WHICH BUYER DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY BUYER, WOULD MATERIALLY AFFECT BUYER’S RELEASE TO SELLER. BUYER SPECIFICALLY ACKNOWLEDGES THAT BUYER HAS HAD THE OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL REGARDING THIS RELEASE AND HAS BEEN ADVISED BY BUYER’S LEGAL COUNSEL CONCERNING, AND HEREBY WAIVES, THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED THE SETTLEMENT WITH THE DEBTOR.

BUYER ALSO HEREBY EXPRESSLY WAIVES ANY RIGHT BUYER MAY HAVE UNDER ANY OTHER STATUTE OR COMMON LAW PRINCIPLE OF SIMILAR EFFECT IN CONNECTION WITH THE RELEASE GIVEN IN THIS ARTICLE.

          (c) IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATIONS TO REFLECT THAT ALL OF THE PROPERTY IS

SOLD BY SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING. IT IS NOT CONTEMPLATED THAT THE PURCHASE PRICE WILL BE INCREASED IF COSTS TO BUYER ASSOCIATED WITH THE PROPERTY PROVE TO BE LESS THAN EXPECTED NOR WILL THE PURCHASE PRICE BE REDUCED IF THE BUYER’S PLAN FOR THE PROPERTY LEADS TO HIGHER COST PROJECTIONS.”

6. Each and all of the obligations, acknowledgments, waivers and releases of Grantee herein set forth shall be covenants running with the above-described property, it being understood that membership in the Association and the obligations thereof, as well as the obligations, acknowledgments, waivers and releases confirmed by Grantee herein, will automatically pass to and be binding upon Grantee’s successors in title in the above-described property, whether such successors acquire title by foreclosure or otherwise, and shall be binding upon the Grantee above named as well as Grantee’ s devisees, executors, administrators, successors and assigns.

Dated:                      ___, 2010

QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation
By:
	Name:
	Title:

Agreed and accepted as of
                      ___, 2010
Grantee:

TNP ACQUISITIONS, LLC,
a Delaware limited liability company

By  Thompson National Properties, LLC,
       a Delaware limited liability company,
       its sole member  

By:
	Name:
	Its:

ACKNOWLEDGMENT

STATE OF CALIFORNIA	)
	)
COUNTY OF	)

On                                            before me                                                                 the undersigned, a Notary Public in and for said State, personally appeared                                                                 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature
Name
(typed or printed)	(Seal)

Document No.                                            Date Recorded                                           

STATEMENT OF TAX DUE AND REQUEST THAT TAX DECLARATION
NOT BE MADE A PART OF THE PERMANENT RECORD
IN THE OFFICE OF THE COUNTY RECORDER

(Pursuant to Section 11932 R&T Code)

To:	Registrar-Recorder
	County of Riverside

Request is hereby made in accordance with the provisions of the Documentary Transfer Tax Act that the amount of tax due not be shown on the original document which names:

QUALITY PROPERTIES ASSET MANAGEMENT COMPANY
(as grantor)

and

TNP ACQUISTIONS, LLC
(as grantee)

Property described in the accompanying document is located in þ City of San Jacinto

The amount of tax due on the accompanying document is $                                           

þ Computed on full value of property conveyed, or

o Computed on full value less liens and encumbrances remaining at time of sale.

Signature of Declarant or Agent

Firm Name

EXHIBIT C

BILL OF SALE

BILL OF SALE

          For good and valuable consideration, the receipt of which is hereby acknowledged, QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation (“Seller”) does hereby sell, transfer, and convey to: TNP ACQUISTIONS, LLC, a Delaware limited liability company (“Buyer”), all personal property of Seller, if any, including, without limitation, the tangible personal property listed on Schedule 2 attached hereto, located on and used in connection with the operation of the improvements on the real property located in the City of San Jacinto, County of Riverside, State of California, as more particularly described onSchedule 1 attached hereto (the “Personal Property”), together with, to the extent the same is assignable, all of Seller’s right, title and interest, if any, in and to all intangible personal property, including, without limitation, all warranties, plans, blueprints, consultants ‘ reports, governmental approvals, and other intangible personal property used in connection with such Real Property (the “Intangible Personal Property”),

          Buyer accepts such Personal Property and Intangible Personal Property in its “AS-IS” condition and “WITH ALL FAULTS”. Seller specifically disclaims all express or implied warranties regarding the existence or condition of, such Personal Property and Intangible Personal Property, including, without limitation, the implied warranties of merchantability and suitability for a particular purpose.

Dated:                     , 2010

QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation
By:
	Name:
	Title:

Bill of Sale Schedule 1

List of Tangible Personal Property

[TO BE PROVIDED]

Bill of Sale Schedule 2

Legal Description of Real Property

EXHIBIT D

SELLER’S FIRPTA AFFIDAVIT

CERTIFICATION OF NON-FOREIGN STATUS

          Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation (“Transferor”), the undersigned hereby certifies the following on behalf of Transferor:

          1. Transferor is not a foreign corporation, foreign partnership, foreign trust and foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);

          2. Transferor’s U.S. employer identification number is                     ; and

          3. Transferor’s office address is 333 S. Hope Street, 11th Floor, Los Angeles, CA 90071.

          Transferor understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment or both.

          Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign the document on behalf of the Transferor.

QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation
By:
	Name:
	Title:

EXHIBIT E

1. Buyer has been provided access to Seller’s Due Diligence “War Room” internet site, http://grubb-ellis.listinglab.com/SanJacintoEsplanade which contains a substantial amount of information about the property, and Buyer has utilized the site and reviewed information contained therein. The items were provided as a courtesy only, without representation or warranty of any kind, including as to their accuracy or authenticity. Buyer has been advised by Seller to make its own independent inquiry into any matters or information covered in these items.

2. Either by access to the referenced site, or separately, Seller has provided the following materials to Buyer in order to disclose matters contained therein, but the items were provided as a courtesy only, without representation or warranty of any kind, including as to their accuracy or authenticity. Buyer has been advised by Seller to make its own independent inquiry into any matters or information covered in these items:

          (a) The Leases and any amendments or modifications thereto and any options to renew or extend the terms thereof.

          (b) To the extent actually known by Seller, without duty of inquiry, a schedule of any pending or incomplete tenant improvements and any unpaid tenant improvement costs and/or leasing commissions relating to the Leases or the Property and any unpaid pecuniary obligation to any Tenant or broker which has vested, accrued or arisen or is owed by Seller.

          (c) A current Rent Roll for the tenants of the Property showing suite number or pad designation, as applicable, and approximate rentable area, commencement date, term and minimum monthly rent.

          (d) Operating statements for February 2010 — present.

          (e) The most recent engineering, structural and environmental reports for the Property which are in Seller’s possession.

          (f) The general ledger for February 2010 — present, including without limitation any accounts payable and receivable.

          (g) Each tenant’s ledger for February 2010 — present.

          (h) Any current management, maintenance or service contracts, and bills for any services rendered thereunder from February 2010 — present.

          (i) Copies of any materials warranties and construction warranties related to the Property which are actually known to Seller and are in Seller’s possession.

          (j) Any rental agreements for personal property, including business equipment, used exclusively in the operation of the Property.

          (k) Any as-built drawings and base building prints (backgrounds) in hard copy and electronic formats which are in Seller’s possession,

          (l) To the extent same exists, and is in Seller’s possession, the most recent ALTA survey of the Property, but Seller has no obligation to update.

          (m) An aged receivables schedule\ Tenant delinquency report for February 2010 — present.

          (n) Seller’s utility bills for February 2010 — present.

          (o) All permits related to the Property in Seller’s possession.

EX-10.48

Exhibit 10.48

CONDITIONAL REINSTATEMENT AND FIRST AMENDMENT TO
AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS
(CALIFORNIA)

     THIS CONDITIONAL REINSTATEMENT AND FIRST AMENDMENT TO AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS (CALIFORNIA) (this “Amendment”) is entered into as of the 4^TH day of August, 2010 (the “Amendment Effective Date”), by and among QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation (“Seller”); and TNP ACQUISITIONS, LLC, a Delaware limited liability company (“Buyer”);

Recitals

     WHEREAS, Seller and Buyer entered into that certain Agreement of Purchase and Sale and Joint Escrow Instructions (California) dated as of July 9, 2010 (the “Original Agreement”) pursuant to which Seller agreed to sell, and Buyer agreed to purchase, certain real property located in San Jacinto, California as more particularly described in the Original Agreement (the “Property”); and

     WHEREAS, Seller and Buyer desire, subject to the express conditions precedent to same set forth herein, to reinstate the Original Agreement and amend the Original Agreement on the terms and conditions contained herein.

Agreement

     NOW, THEREFORE, in consideration of the promises and mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto do hereby agree as follows:

     1. Reinstatement of Original Agreement. If and only if Buyer delivers an executed copy of this Amendment AND the Additional Deposit, with no additional conditions or reservations, to Escrow Holder on or before 5PM Pacific Time on Thursday, August 5, 2010, and if and only if Buyer instructs and permits Escrow Holder to distribute the Additional Deposit to Seller as soon as possible, with no additional conditions to such delivery, then at the time of such delivery, the Original Agreement shall be reinstated, revived, and affirmed, as amended hereby. This Amendment shall be of no force or effect whatsoever, the Original Agreement shall not be Reinstated nor deemed amended if the delivery of the executed copy of this Amendment and the Additional Deposit does not occur in strict accordance with the time frame set forth in this paragraph. Time is absolutely and strictly of the essence of this Amendment and the failure of Buyer to comply with the covenants and agreements set forth herein shall be a complete failure of consideration to Seller, and no Reinstatement shall have occurred, nor will it occur, if performance is tendered at any other time.

     2. Due Diligence and Title. Buyer hereby states that it has completed its due diligence and title review, and is satisfied with same, and accordingly approves all of the Conditions to Buyer’s Obligations set forth in the Original Agreement, including those set forth in Sections 8 and 9 thereof, except for the performance of Seller required at the Closing, in accordance with the terms and conditions of the Original Agreement, as modified by this Amendment.

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     3. Additional Deposit. In exchange for the covenants and agreements of Seller contained in this Amendment, Buyer shall, concurrently with the execution hereof and as a condition to the effectiveness of this Amendment, deposit into Escrow in Immediately Available Funds the sum of Two Hundred Thousand Dollars ($200,000.00) (the “Additional Deposit”), which shall then be immediately disbursed to Seller by Escrow Holder without further instructions from either party. The Additional Deposit shall be treated in all respects like the Deposit, shall be deemed earned at the time of its deposit into Escrow as partial consideration for the extension of the Closing Date, as described below, and shall therefore be non-refundable in accordance with the terms of the Original Agreement. From and after the disbursement of the Additional Deposit, Escrow Holder shall not be concerned with the Additional Deposit, except to debit and credit the parties appropriately at the time of the Closing.

     4. Closing Date. Notwithstanding anything to the contrary contained in the Original Agreement, the “Closing Date” shall be extended to August 11, 2010.

     5. Amendment. The following provision is added to the Original Agreement as Section 26.17:

Rule 3-14 Audit and SEC Filing Requirements. Subsequent to the Closing Date and no later than one (1) calendar year subsequent to the Closing Date, Buyer’s auditor may conduct an audit, as may be required of Buyer pursuant to Rule 3-14 of Securities and Exchange Commission Regulation S-X (the “Audit”), of the income statements of the Property for the last complete fiscal year immediately preceding the Closing Date and the stub period through the Closing Date (the “Audit Period”). Seller shall reasonably cooperate (at no cost or liability of any kind to Seller) with Buyer’s auditor in the conduct of the Audit. Without limiting the foregoing, (a) Buyer or its designated independent or other auditor may audit the operating statements of the Property, at Buyer’s expense and, upon Buyer’s reasonable prior written request; Seller shall allow Buyer’s auditors reasonable access to such books and records maintained by Seller in respect to the Property and pertaining to the Audit Period as necessary to conduct the Audit; and (b) Seller shall use reasonable efforts to provide to Buyer such existing financial information as may be reasonably required by Buyer and required for Buyer’s auditors to conduct the Audit, provided, however, that the ongoing obligations of Seller shall be limited to providing such information or documentation as may be in the possession or control of Seller, the Seller’s accountants or the applicable property or asset manager, at no cost or liability of any kind to such parties, and in the format the Seller has maintained such information.

Nothing contained in this Section 26.17 shall be deemed to alter or amend any of Buyer’s acknowledgements, waivers, releases, indemnities or any other matter in the Original Agreement regarding the transaction being an AS-IS purchase and sale, without representation or warranty of any type or kind, including with respect to the completeness, accuracy or correctness of any of the books and records related to the Property, except as specifically set forth in the Original Agreement. Nothing contained in this Section 26.17 shall constitute an agreement on the part of Seller to provide access to Buyer or any other person or entity to any books and records not solely related to the Property, or belonging to anyone other than Seller, including Bank of America, N.A.

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     6. Assignment. Seller consents to the assignment of the Original Agreement, as amended by Buyer to TNP SRT San Jacinto, LLC, a Delaware limited liability company, and the assumption by TNP SRT San Jacinto, LLC of all of the obligations there under, provided that Buyer provides Seller with an Approved Assignment Form and the transferee conforms in all respects to the requirements for an affiliate transfer under the Original Agreement.

     7. Entire Agreement. The Original Agreement, as modified by this Amendment, constitutes the entire agreement between the parties hereto with respect to the transactions contemplated thereby, and it supersedes all prior discussions, understandings or agreements between the parties. Except as modified by this Amendment, the Original Agreement remains unchanged and unmodified, and the parties hereto hereby ratify and affirm the same.

     8. Counterparts. This Amendment may be executed in any number of counterparts, and it shall be sufficient that the signature of each party appear on one or more such counterparts. All counterparts shall collectively constitute this Amendment. Signatures transmitted by e-mail or facsimile shall constitute original signatures for all parties of this Amendment.

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of August 4, 2010.

SELLER:	QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, an Illinois corporation
	By:	/s/ Colin Bagwell
		Name:	Colin Bagwell
		Title:	Assistant Vice President
BUYER:	TNP ACQUISITIONS, LLC, a Delaware limited liability company
	By:	Thompson National Properties, LLC,
		a Delaware limited liability company
	Its:	Sole Member
	By:	/s/ Anthony W. Thompson
		Name:	Anthony W. Thompson
		Title:	CEO

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EX-10.49

Exhibit 10.49

ASSIGNMENT AND ASSUMPTION OF
AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
(CALIFORNIA)

     This Assignment and Assumption of Agreement of Purchase and Sale and Joint Escrow Instructions (California) (this “Assignment”) is made and entered into effective as of August 9, 2010 (the “Effective Date” hereof), by and between TNP ACQUISITIONS, LLC. a Delaware limited liability company (“Assignor”); and TNP SRT SAN JACINTO, LLC, a Delaware limited liability company (“Assignee”)

R E C I T A L S:

     WHEREAS, Assignor and Quality Properties Asset Management Company, an Illinois corporation (“Seller”) entered into that certain Agreement of Purchase and Sale and Joint Escrow Instructions (California) dated July 9, 2010, as reinstated and amended by that certain Conditional Reinstatement and First Amendment to the Agreement of Purchase and Sale and Joint Escrow Instructions (California) dated August 4, 2010 (the “Purchase Agreement”) for the sale of certain real property more particularly described therein (collectively, the “Property”); and

     WHEREAS, Assignor wishes to assign to Assignee, and Assignee wishes to take assignment of, Assignor’s rights pursuant to the Purchase Agreement.

     WHEREAS, Seller has been advised by Buyer that Assignee is under common control with Assignor, and pursuant to Paragraph 25.1 of the Purchase Agreement, Assignor has the right to make such an assignment without the consent of Seller. However, Seller agrees to acknowledge the assignment of the Purchase Agreement as set forth herein.

     NOW, THEREFORE, for and in consideration of the mutual promises set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree to as follows:

     1. Recitals. The above “Recitals” are hereby incorporated into this Assignment as if fully set forth herein.

     2. Assignment. Assignor hereby assigns to Assignee, and Assignee assumes, all of Assignor’s right, title and interest in and to the Purchase Agreement. Assignee hereby agrees to assume and perform all of Assignor’s obligations arising under the Purchase Agreement from and after the Effective Date hereof, jointly and severally with Assignor. Assignee executes this Assignment below for the purpose of evidencing its acceptance of the foregoing assignment.

     3. Representations. Assignor hereby makes the representations and warranties set forth in Section 15 of the Purchase Agreement for the benefit of Seller.

     4. Counterparts: Signatures. This Assignment may be executed in any number of counterparts, all of which taken together shall constitute this Assignment. Signatures transmitted by facsimile, e-mail or similar electronic means shall be deemed originals in all respects for purposes of this Assignment.

2

     IN WITNESS WHEREOF, Assignor and Assignee have caused this Assignment to be executed as of the date first Written above.

ASSIGNOR:
TNP ACQUISITIONS, LLC, a Delaware limited liability company
By:	THOMPSON NATIONAL PROPERTIES, LLC, a Delaware limited liability company
Its:	Sole Member
	By:	/s/ Wendy Worcester
		Name: Wendy Worcester
		Title: Chief Admin Officer

ASSIGNEE:
TNP SRT SAN JACINTO, LLC,
a Delaware limited liability company
By:	TNP STRATEGIC RETAIL OPERATING
	PARTNERSHIP, LP, a Delaware limited partnership
Its:	Sole Member
	By:	TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation
	Its:	General Partner
		By:	/s/ Christopher S. Cameron
			Name: Christopher S. Cameron
			Title: CFO, Secretory

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     This Assignment is hereby acknowledged by Seller as of the date first written above, based on Buyer’s representation of the relationship between Assignor and Assignee.

SELLER: QUALITY PROPERTIES ASSET MANAGEMENT COMPANY, An Illinois corporation
By:	/s/ Colin Bagwell
	Name:	Colin Bagwell
	Title:	Assistant Vice President

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EX-10.50

Exhibit 10.50

PROPERTY MANAGEMENT AGREEMENT

     THIS PROPERTY AND ASSET MANAGEMENT AGREEMENT (this “Agreement”) is made as of this 11th day of August, 2010 (the “Effective Date”), by and between TNP SRT San Jacinto, LLC, a Delaware limited liability company, its successors and assigns (the “Company”) and TNP Property Manager, LLC, a Delaware limited liability company (the “Property Manager”).

Recitals

     WHEREAS, Company owns that certain real property commonly known as San Jacinto Esplanade located at 2181-2291 West Esplanade Avenue, San Jacinto, Riverside County, California, and as further described in Exhibit “A” attached hereto and incorporated herein (the “Property”); and

     WHEREAS, Company desires to engage, and the Property Manager desires to be engaged, to supervise, manage, lease, operate and maintain the Property on the terms and conditions set forth in this Agreement.

Agreement

     NOW, THEREFORE, in consideration of the mutual promises and obligations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

     1. Commencement and Termination Dates. This Agreement shall commence on the Effective Date and shall terminate on the earlier to occur of: (i) the sale of the Property or any portion thereof (in which event only as to such portion of the Property sold); (ii) the termination of this Agreement pursuant to Section 15 below; or (iii) December 31, 2030 (the “Term”).

     2. Authority of Property Manager. Subject to the approval of Company where required hereunder, Property Manager shall have the power and authority to act on behalf of the Company with respect to the duties conferred upon Property Manager hereunder. The power and authority granted by Company to Property Manager hereunder shall include the power and authority to execute, acknowledge, and swear to the execution, acknowledgment of and the filing of, documents involving the ownership, financing, management and operation of the Property which are consistent with this Agreement, and any and all such other documents as may be necessary to implement the management powers of Property Manager set forth in this Agreement. If Company shall now or hereafter be comprised of more than one person or entity, any approval of Company required hereunder shall be deemed granted upon the affirmative consenting vote of persons or entities holding more than fifty percent (50%) of the interest in the Property.

     3. Status of the Property Manager. The Company and the Property Manager do not intend to form a joint venture, partnership or similar relationship. Instead, the parties intend that the Property Manager shall act solely in the capacity of an independent contractor for the Company. Nothing in this Agreement shall cause the Property Manager and the Company to be joint venturers or partners of each other, and neither shall have the power to bind or obligate the other party by virtue of this Agreement, except as expressly provided in this Agreement. Nothing in this Agreement shall deprive or otherwise affect the right of either party to own, invest in, manage, or operate, or to conduct business activities which compete with the business of, the Property.

     4. Property Manager’s Responsibilities

          4.1 Management. Property Manager shall manage, operate and maintain the Property in a diligent, professional and commercially reasonable manner, subject to the terms and provisions of this Agreement; provided, however, that Company shall make available to the Property Manager such sums as are reasonably necessary to pay the costs thereof. Property Manager may implement such procedures with respect to the Property as Property

Manager may deem advisable for the more efficient and economically sound management, operation and maintenance thereof.

          4.2 Employees and Third Party Contractors. At all times during the Term, Property Manager shall employ, directly or through third party contractors (e.g., employing a local property management and/or leasing company), a sufficient number of capable employees and/or third party contractors to enable Property Manager to properly, adequately, safely and economically manage, operate and maintain the Property. All matters pertaining to the supervision of such employees and/or third party contractors shall be the responsibility of Property Manager. All salaries and benefits of employees who perform work in connection with the Property shall be consistent with the Budget (as hereinafter defined).

          4.3 Compliance with Laws, Loan Documents and Other Matters.

               4.3.1 Property Manager shall use commercially reasonable efforts to comply with any applicable Loan Documents (as hereinafter defined) and governmental requirements relative to the performance of its duties hereunder. Expenses incurred to remedy any violations of laws or to comply with the Loan Documents shall be drawn from the Operating Account (as hereinafter defined); provided, however, that Property Manager shall not be obligated to expend funds to remedy any such violations if sufficient funds are not available in the Operating Account or if Company does not provide sufficient additional funds to do so.

               4.3.2 Promptly after receipt, Property Manager shall furnish to Company copies of any notices of violation of any governmental requirement, orders issued by any governmental entity and any notices of default from the Lender (as hereinafter defined).

          5. Budgets and Operating Plan.

               5.1 Property Manager shall prepare and submit to Company a capital and operating budget on a monthly, generally accepted accounting principles in the United States (“GAAP”) basis for the management, operation and maintenance of the Property for each calendar year (each, a “Budget”). The Budget for the initial calendar year shall be prepared by manager and submitted to Company within thirty days of the date of this Agreement and such initial Budget shall be reasonably acceptable to Lender as hereinafter defined. On or prior to December 15^th of the calendar year prior to all subsequent Budget years, or as soon as possible thereafter, Property Manager shall deliver to Company for approval a proposed Budget for the following calendar year. Company shall have fifteen (15) days after receipt of the same to approve or disapprove the proposed Budget (the “Budget Review Period”), and shall notify Property Manager of its approval or disapproval of the proposed Budget within the Budget Review Period. Any notice of disapproval shall set forth the grounds for such disapproval with specificity such that Property Manager may endeavor to address those grounds in a revised, proposed Budget to be thereafter submitted to Company. If Company fails to notify Property Manager of its disapproval of the Budget within the Budget Review Period, Company shall be deemed to have approved of the Budget. In the event a portion of any proposed Budget is disapproved, Property Manager may proceed under the proposed Budget for items that are not so disapproved and may take any actions permitted hereunder with respect to such items. In the event that any disapproved Budget items are operational expenditures, as opposed to capital expenditures, Property Manager shall be entitled to operate the Property using the prior year’s Budget for such items plus 5% until approval is obtained. Property Manager shall provide Company with such information regarding the Budget as may be, from time to time, reasonably requested by the Company. Property Manager shall charge all expenses to the proper account as specified in the approved Budget, provided that Property Manager may reallocate savings from one line item to other line items.

               5.2 At any time during the calendar year to which any particular Budget applies and prior to making any expenditure which is not within an approved Budget, Property Manager may submit a proposed revision to such Budget to the Company for its approval consistent with the terms set forth above. Notwithstanding anything to the contrary in this Agreement, Property Manager shall not be required to submit a proposed Budget revision to Company for approval if any such expenditure is (a) less than 10% of the total Budget; or (b) is, in Property Manager’s reasonable judgment, required to avoid personal injury, significant property damage, a default

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under any Loan Documents, a violation of applicable law or the suspension of a service (collectively, “Permitted Expenditures”).

               5.3 On or prior to December 15^th of the calendar year prior to all subsequent Budget years, or as soon as possible thereafter, Property Manager shall submit to the Company, for information purposes only, an operating plan for the general operation of the Property, including a proposed list of improvements to the Property, general insurance plan, marketing plan and plan for the general operation and maintenance of the Property (the “Operating Plan”). Property Manager may submit a revised Operating Plan to the Company at any time.

          6. Leasing.

               6.1 Company hereby approves (i) all leases of any portion of the Property (collectively, and together with any amendments thereto, assignments thereof and guaranties thereto pertaining, the “Leases”) in effect as of the Effective Date.

               6.2 Property Manager shall use commercially reasonable efforts to lease all vacant, leasable space in the Property and to renew Lease agreements in effect as of the Effective Date, and Company hereby grants Property Manager the power and authority to negotiate new Leases and Lease renewals and to take all actions as may be necessary or desirable, in Property Manager’s reasonable discretion, on behalf of Company, to accomplish the foregoing. Property Manager shall reasonably investigate all prospective Tenants (as hereinafter defined), and shall not lease to persons not meeting credit standards reasonable for the market. Property Manager may, in its discretion, obtain a credit check for any prospective Tenant through a credit check company. Property Manager shall retain such information for the duration of any ensuing tenancy, and shall make it available to Company upon reasonable notice, subject to compliance with any confidentiality restrictions required by any such Tenant or any credit check company. Notwithstanding the foregoing, Property Manager does not guarantee the accuracy of any such information or the financial condition of any Tenant.

               6.3 Property Manager shall provide Company with any proposed new Lease or Lease renewal for approval (each, a “Proposed Lease Transaction”). Company shall have five (5) business days after receipt of the Proposed Lease Transaction to approve or disapprove the Proposed Lease Transaction (the “Lease Review Period”), and shall notify Property Manager of its approval or disapproval of the Proposed Lease Transaction within the Lease Review Period. Any notice of disapproval shall set forth the grounds for such disapproval with specificity such that Property Manager may endeavor to address those grounds in a revised Proposed Lease Transaction to be thereafter submitted to Company. If Company fails to notify Property Manager of its disapproval of any Proposed Lease Transaction within the Lease Review Period, Company shall be deemed to have approved of the Proposed Lease Transaction.

               6.4 Property Manager will use commercially reasonable efforts (a) to develop and maintain good relations with the tenants under the Leases (each, a “Tenant,” and collectively, the “Tenants”); (b) to retain existing Tenants in the Property and, after completion of the initial leasing activity for new Tenants, to retain such new Tenants; (c) to secure compliance by the Tenants with the terms and conditions of their respective Leases; (d) to consider and record Tenant service requests in systematic fashion showing the action taken with respect to each, and thoroughly investigate all complaints of a nature which might have a material adverse effect on the Property or the Budget; and (e) to supervise the moving in and out of Tenants and arrange, to the extent possible, the dates thereof to minimize disturbance to the operation of the Property and inconvenience to other Tenants.

               6.5 Except as otherwise provided herein or upon the prior written consent of Company, Property Manager shall not lease any space in the Property to itself or to any of its affiliates or subsidiaries.

               6.6 Property Manager and Company agree that there shall be no discrimination against or segregation of any person or group of persons on account of age, race, color, religion, creed, handicap, sex or national origin in the leasing of the Property.

               6.7 Property Manager is hereby authorized to execute, on behalf of Company, any and all Service Contracts (hereinafter defined), Subordination and Non-Disturbance Agreements, Tenant Estoppel Certificates and Tenant Notices with respect to the Property, as well as notices, estoppels certificates and other

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documents relating to the Loan (hereafter defined) which are ministerial in nature.

               6.8 Property Manager shall coordinate and facilitate all tenant improvements contemplated by the Leases (collectively, “Tenant Improvements”) in accordance with the terms of this Agreement. For any Tenant Improvement contract requiring payment in excess of $100,000, the Property Manager shall follow the bidding requirements specified in Section 7.2.

          7. Collection of Rents and Other Income. Unless otherwise required by any Loan Documents, Property Manager shall bill all Tenants for, when appropriate, and shall use commercially reasonable efforts to collect, all rent and other charges due and payable from all Tenants. Property Manager shall have the authority to use all commercially reasonable methods to collect such rent and other charges due, including, without limitation, pursuing litigation against any Tenant. Property Manager shall deposit all monies so collected in the Operating Account.

          7.1 Repairs and Maintenance. Property Manager shall use commercially reasonable efforts to maintain and repair the buildings, appurtenances and grounds of the Property, other than areas which are the responsibility of Tenants, and to take precautions against fire at, vandalism of, burglary of and trespass to the Property. Such maintenance and repair obligations shall include, without limitation, janitorial services, painting, decorating, electrical, plumbing, carpentry, masonry, elevators and such other routine repairs as are necessary or reasonably appropriate in the course of maintenance of the Property.

          7.2 Capital Expenditures. Property Manager may make any capital expenditure within any Budget approved by the Company. All other capital expenditures, other than Permitted Expenditures, shall be subject to submittal of a revised Budget to Company for approval in accordance with the terms of this Agreement. Unless Company specifically waives such requirements, Property Manager shall award any contract for a capital improvement exceeding $100,000 in cost on the basis of competitive bidding, selected from a minimum of two (2) written bids. Property Manager shall accept the bid of the lowest bidder determined by Property Manager, in its sole discretion, to be responsible, qualified and capable of completing such capital improvements on a reasonable schedule and as bid.

          7.3 Service Contracts. Property Manager may enter into or renew any contract with any unrelated third party for cleaning, maintaining, repairing or servicing the Property or any portion thereof (including, but not limited to, contracts for fuel oil, security or other protection, or extermination, janitorial, landscaping, architectural or engineering services) (collectively, the “Service Contracts”) contemplated by the Budget and consistent with the Operating Plan. Each such Service Contract shall (a) be in the name of Company or in the name of Property Manager as agent for the Company; (b) be assignable to the nominee of the Company; and (c) be for a term not to exceed one (1) year, unless the circumstances require otherwise, in the sole discretion of Property Manager. Unless Company specifically waives such requirements, all Service Contracts for amounts in excess of $100,000 per year shall be subject to the bidding requirements specified in Section 7.2 above. If this Agreement expires or is terminated pursuant to Section 15 below, Property Manager shall assign to Company or the nominee of Company all, to the extent assignable, of Property Manager’s interest, if any, in and to the Service Contracts.

          7.4 Supplies and Equipment. Property Manager may purchase, provide and pay for out of the Operating Account (so long as contemplated by the Budget or deemed to be a Permitted Expenditure) all needed janitorial and maintenance supplies, tools and equipment, restroom and toilet supplies, light bulbs, paints and similar supplies necessary for the management, operation and maintenance of the Property (collectively, the “Supplies and Equipment”). Such Supplies and Equipment shall be the property of Company, shall be delivered to and stored at the Property and shall be used only in connection with the management, operation, and maintenance of the Property. Property Manager shall use commercially reasonable efforts to purchase all goods, supplies or services at the lowest cost reasonably available from reputable sources in the metropolitan area where the Property is located.

          7.5 Taxes. Property Manager shall obtain and verify bills for real estate and personal property taxes, general and special real property assessments and other like charges relating to the Property (collectively “Taxes”). If requested by Company, Property Manager will cooperate with Company to challenge the Taxes and the assessed valuation of the Property. To the extent contemplated by the Budget, Property Manager shall pay, within the time required to obtain discounts, from the Operating Account or funds provided by the Company, all Taxes.

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          7.6 Construction Management. Property Manager shall be responsible for coordinating and facilitating the planning and the performance of all construction including, without limitation, all maintenance, repairs, capital improvements, common area refurbishments and Tenant Improvements required to be constructed by Company after the Effective Date (collectively, “Construction Projects”), regardless of whether or not any of the Construction Projects arises out of a Lease executed prior to the Effective Date. Such coordination and facilitation services shall include, for example and not by any way of limitation, retaining architects, engineers or other consultants, assisting in the development of repair, capital improvement or Tenant space plans, cost estimating, advising Company with respect to the need for a general contractor, construction manager or other consultant, posting of appropriate notices of non-responsibility, providing notices of construction to affected Tenants and mitigating the effects of construction on such Tenants, and providing contractors, vendors and other Construction Property related personnel with access to the Property, parking and staging areas, necessary utilities and services. Property Manager shall be responsible for conducting meetings as deemed reasonably necessary by Property Manager, with the architect, contractor and consultants for all Construction Projects. Property Manager will also prepare a written report to Company as deemed reasonably necessary regarding the progress of each Construction Property in a format to be approved by the Company.

          7.7 Limitation. Notwithstanding anything to the contrary contained herein, Property Manager shall only provide services to Tenants which are customary to the management of similar properties in that geographic area of the Property and shall provide no other services to the Tenants on behalf of the Company.

     8. Basic Insurance.

          8.1 Insurance.

               8.1.1 Property Manager, at Company’s expense, will obtain and keep in force adequate insurance against physical damage (such as fire with extended coverage endorsement, boiler and machinery) and against liability for loss, damage or injury to property or persons that might arise out of the management, operation or maintenance of the Property, as contemplated by the Operating Plan and any Loan Documents. Property Manager shall not be required to maintain earthquake, flood or windstorm insurance unless expressly directed to do so by a specific written notice from Company or as required by any Loan Documents, but may do so in Property Manager’s reasonable discretion. Property Manager shall be a named insured on all property damage insurance and an additional insured on all liability insurance maintained with respect to the Property. In the event Property Manager receives insurance proceeds for the Property, the Property Manager will take any required actions as set forth in any Loan Documents affecting the Property. In the event that the Property Manager receives insurance proceeds that are not governed by the terms of any Loan Documents affecting the Property, the Property Manager, in its reasonable discretion, will either (a) use such proceeds to replace, repair or refurbish the Property or (b) distribute such proceeds to Company, as directed by Company. Any insurance proceeds distributed to Company will be distributed subject to the fees owed to Property Manager pursuant to this Agreement. Property Manager shall not knowingly permit the use of the Property for any purpose that might void any policy of insurance held by Company or which might render any loss thereunder uncollectible.

               8.1.2 Property Manager shall investigate and, as soon as is reasonably practicable thereafter, submit a written report describing the same to Company and the insurance carrier, if applicable, together with the estimated costs of repair thereof, and prepare and file with the insurance company in a timely manner required reports in connection therewith. Notwithstanding the foregoing, Property Manager shall not be required to give such notice to Company if the amount of such claims, damage or destruction, as reasonably estimated by the Property Manager, does not exceed $100,000 for any one occurrence. Property Manager shall settle all claims against insurance companies arising out of any policies, including the execution of proofs of loss, the adjustment of losses, signing and collection of receipts and collection of money, except that Property Manager shall not settle claims in excess of $100,000 without the prior approval of the Company.

          8.2 Contractor’s and Subcontractor’s Insurance. Property Manager shall require all contractors and subcontractors entering upon the Property to perform services to have insurance coverage, at such contractor’s or subcontractor’s expense, in the following minimum amounts: (a) worker’s compensation — statutory amount; (b) employer’s liability (if required under applicable law) — $500,000 (minimum); and (c) comprehensive general

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liability insurance, including comprehensive auto liability insurance covering the use of all owned, non-owned and hired automobiles, with bodily injury and property damage limits of $1,000,000 per occurrence and $2,000,000 in the aggregate. Property Manager shall obtain and keep on file a certificate of insurance that shows that each contractor and subcontractor is so insured. Property Manager may waive such requirements in its reasonable discretion.

          8.3 Waiver of Subrogation. To the extent available at commercially reasonable rates, all property damage insurance policies required hereunder shall contain language whereby the insurance carrier thereunder waives any right of subrogation it may have with respect to Company or Property Manager. Property Manager may waive such requirement in its reasonable discretion.

     9. Financial Reporting And Record Keeping.

          9.1 Books of Accounts. Property Manager shall maintain adequate and separate books and records for the Property with the entries supported by sufficient documentation to ascertain their accuracy. Such books and records shall contain a separate accounting of all items of income and expenses. Company agrees to provide Property Manager with any financial or other information reasonably requested by Property Manager to carry out its services hereunder. Property Manager shall maintain such books and records at the Property Manager’s office at the address as set forth in Section 18, or at the office of any local property manager or leasing company to whom Property Manager may have subcontracted its duties hereunder or at the Property. Property Manager shall bear losses arising from the fraud or gross negligence of Property Manager or any of its employees or agents relating to the books and records required to be maintained in accordance with this Section.

          9.2 Financial Reports. On or about the 45th day following the end of each calendar quarter, Property Manager shall furnish to the Company a report of all significant transactions occurring during such prior quarter, including, without limitation, a cash flow statement, a current rent roll and an update on the status of the Property. Within a reasonable time after (i) the close of a calendar year and (ii) the expiration or termination of this Agreement, Property Manager also shall deliver to Company an operating statement, a cash flow statement, a balance sheet for the Property and such other financial information as Property Manager, in its discretion, prepares. The financial statements and reports shall be prepared on a generally accepted accounting principles in the United States (“GAAP”) basis (unless the Loan Documents specify otherwise) and in compliance with all reporting requirements relating to the operations of the Property and required under then applicable Loan Documents.

          9.3 Supporting Documentation. Property Manager shall maintain and make available at Property Manager’s office at the address set forth in Section 18, or at the office of any local property manager or leasing company to whom Property Manager may have subcontracted its duties hereunder or at the Property, copies of the following: (a) all bank statements and bank reconciliations; (b) detailed cash receipts and disbursement records; (c) rent roll of tenants; and (d) paid invoices (or copies thereof); Property Manager shall deliver a copy of the documents described above to Company upon written request.

          9.4 Tax Information. Property Manager shall provide Company with sufficient information so that the Company can prepare its income tax returns.

     10. Right to Audit. Company and its representatives may examine all books, records and files maintained for Company by Property Manager. Company may perform any audit or investigations relating to the Property Manager’s activities regarding the Property at Property Manager’s office at the address as set forth in Section 18, or at the office of any local property manager or leasing company to whom Property Manager may have subcontracted its duties hereunder or at the Property. Should Company discover defects in internal control or errors in record keeping, Property Manager shall undertake, with all appropriate diligence, to correct such discrepancies either upon discovery or within a reasonable period of time thereafter. Property Manager shall inform Company in writing of the action taken to correct any audit discrepancies.

     11. Bank Accounts.

          11.1 Operating Account. To the extent funds are not required to be placed in a lockbox pursuant to

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any Loan Documents, Property Manager shall deposit all rents and other funds collected from the operation of the Property in a reputable bank or financial institution in a special trust or depository account or accounts for the Property maintained by Property Manager for the benefit of the Company (such accounts, together with any interest earned thereon, shall collectively be referred to herein as the “Operating Account”). Property Manager shall maintain books and records of the funds deposited in and withdrawals from the Operating Account. With funds from Company, Property Manager shall maintain the Operating Account so that an amount at least as great as the budgeted expenses for such month is in the Operating Account as of the first of each month. From the Operating Account, Property Manager shall pay the operating expenses of the Property and any other payments relative to the Property as required by this Agreement. If more than one account is necessary to operate the Property, each account shall have a unique name, except to the extent any Lender requires sub-accounts within any account. Within three (3) months after receipt by Property Manager, all rents and other funds collected in the Operating Account, after payment of all operating expenses, debt service and such amounts as may be determined by the Property Manager to be retained for reserves or improvements, shall be paid to the Company.

          11.2 Security Deposit Account. If applicable law or a Lender requires a segregated account of Tenant security deposits, Property Manager will open a separate account at a reputable bank or other financial institution. Property Manager may return such deposits to any Tenant in the ordinary course of business in accordance with the terms of the applicable Lease.

          11.3 Access to Account. As authorized by signature cards, representatives of Property Manager shall have access to and may draw upon all funds in the accounts described in Sections 11.1 and 11.2 without the approval of Company. Additionally, representatives of Property Manager shall have access to and may draw upon any funds escrowed or held in reserve for capital expenditures, without the approval of the Company, provided that the requirements of Section 7.2 and any additional Lender requirements with respect to such amounts are satisfied. Company may not withdraw funds from such accounts without the Property Manager’s prior written consent, except (a) following the Property Manager’s default, and then after expiration of all applicable notice and cure periods or (b) the expiration or earlier termination of this Agreement.

     12. Payments of Expenses.

          12.1 Eligible Costs. In accordance with the Budget and the terms of this Agreement, Property Manager shall pay all expenses of the management, operation, maintenance of the Property directly from the Operating Account or shall be reimbursed by the Company, including without limitation the following: (a) the cost to correct the violation of any governmental requirement relating to the leasing, use, repair and maintenance of the Property, or relating to the rules, regulations or orders of the local Board of Fire Underwriters or other similar body, if such cost is not the result of the Property Manager’s gross negligence or willful misconduct; (b) the actual and reasonable cost of making all repairs, decorations and alterations if such cost is not the result of the Property Manager’s gross negligence or willful misconduct; (c) cost incurred by Property Manager in connection with all Service Contracts, including costs under any agreement with the Property Manager; (d) the cost of collection or attempted collection of delinquent rents collected by a collection agency or attorney; (e) legal fees of attorneys; (f) the cost of capital expenditures subject to the restrictions in Section 7.2; (g) the cost of printed checks for each account required by the Property and Company; (h) the cost of utilities; (i) the cost of advertising; (j) the cost of printed forms and supplies required for use at the Property; (k) the costs of Property Manager’s compensation set forth in Section 14; (l) the cost of Tenant Improvements; (m) any third-party leasing commissions for services provided in leasing the Property; (n) any third-party construction management fees for services provided in supervising any construction or repair in or about the Property; (o) any third-party selling commissions for the sale, exchange, or transfer of the Property or any portion thereof; (p) debt service; (q) the cost of insurance; (r) reimbursement of the Property Manager’s out-of-pocket costs and expenses to the extent not prohibited by Section 7; (s) the cost of general accounting and reporting services within the reasonable scope of Property Manager’s responsibility to Company; (t) the cost of the Supplies and Equipment and forms, papers, ledgers and other supplies and equipment (including computer equipment) used in the Property Manager’s office at any location; (u) cost of electronic data processing equipment, including personal computers located at the Property Manager’s office at the Property for preparation of reports, information and returns to be prepared by the Property Manager under the terms of this Agreement; (v) cost of electronic data processing provided by computer service companies for preparation of reports, information and returns to be prepared by the Property Manager under the terms of this Agreement; (w) all

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non-overhead out of pocket expenses of the Property Manager.

          12.2 Operating Account Deficiency. If there are not sufficient funds in the Operating Account to make any payment referenced in Section 7, Property Manager shall notify Company, if possible, at least ten (10) days prior to any delinquency so that the Company has an opportunity to deposit sufficient funds in the Operating Account to allow for such payment prior to the imposition of any penalty or late charge. In no event shall Property Manager be required to expend any of its own funds for the operation or maintenance of the Property; provided, however, that should Property Manager do so, Property Manager shall be entitled to reimbursement from Company within thirty (30) days after such advance.

     13. Property Manager’s Costs Not to Be Reimbursed.

          13.1 Non-reimbursable Costs. The following expenses or costs incurred by or on behalf of the Property Manager in connection with its duties hereunder shall be at the sole cost and expense of the Property Manager and shall not be reimbursed by the Company: (a) costs attributable to losses arising from gross negligence, willful misconduct or fraud on the part of the Property Manager or its associates or employees; and (b) cost of insurance purchased by the Property Manager for its own account.

          13.2 Litigation. The Property Manager will be responsible for, and hold the Company harmless from, all costs relating to disputes with employees for worker’s compensation (to the extent not covered by insurance), discrimination or wrongful termination, including legal fees and other expenses.

     14 Compensation.

          14.1 Property Management Fee. For its services in managing the day-to-day operations of the Property in accordance with the terms of this Agreement, Company shall pay to Property Manager an annual property management fee (the “Property Management Fee”) equal to 5.0% of the Gross Revenue (as hereinafter defined). The Property Management Fee shall be prorated for any partial year and shall be payable in equal monthly installments, in advance. The Property Management Fee shall be payable on the first day of each month from the Operating Account or from other funds timely provided by the Company. Upon the expiration or earlier termination of this Agreement, the parties will prorate the Property Management Fee on a daily basis to the effective date of such expiration or termination. Notwithstanding the foregoing and in addition thereto, upon a sale of the Property, Company shall pay to Property Manager an amount equal to one monthly installment of the Property Management Fee as compensation for work to be performed in connection with the sale and/or completion of managing matters relating to each Tenant. For purposes of this Agreement, the term “Gross Revenue” shall mean all gross collections from the operations of the Property, including, without limitation, rental receipts, late fees, application fees, pet fees, damages, lease buy-out payments, reimbursements by Tenants for common area expenses, operating expenses and taxes and similar pass-through obligations paid by Tenants, but shall expressly exclude (i) security deposits received from Tenants and interest accrued thereon for the benefit of the Tenants until such deposits or interest are included in the taxable income of the Company; (ii) advance rents (but not lease buy-out payments) until the month in which payments are to apply as rental income; (iii) reimbursements by Tenants for work done for a particular Tenant; (iv) proceeds from the sale or other disposition of all or any portion of the Property; (v) insurance proceeds received by the Company as a result of any insured loss (except proceeds from rent insurance or the excess of insurance proceeds for repairs over the actual costs of such repairs); (vi) condemnation proceeds not attributable to rent; (vii) capital contributions made by the Company; (viii) proceeds from capital, financing and any other transactions not in the ordinary course of the operation of the Property; (ix) income derived from interest on investments or otherwise; (x) abatement of taxes, awards arising out of takings by eminent domain and discounts and dividends on insurance policies; and (xi) rental concessions not paid by third parties.

          14.2 [Intentionally Deleted.]

          14.3 [Intentionally Deleted.]

          14.4 [Intentionally Deleted]

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          14.5 [Intentionally Deleted]

          14.6 [Intentionally Deleted]

          14.7 Notwithstanding anything to the contrary in this Agreement, Property Manager shall have the right to designate another entity to receive any of the amounts to which Property Manager is entitled under this Agreement.

     15. Termination.

          15.1 Termination by Company. Company shall have the right to terminate this Agreement “for cause” upon thirty (30) days written notice to Property Manager. For purposes of this Agreement, termination “for cause” shall mean termination based upon (i) gross negligence or fraud by the Property Manager; (ii) willful misconduct or a willful breach of this Agreement by the Property Manager; or (iii) a bankruptcy filing, state of insolvency by the Property Manager or inability of the Property Manager to meet its financial or service obligations as they come due. Company shall not have the right to terminate this Agreement except in the event of a termination “for cause.”

          15.2 Termination by Property Manager.

               15.2.1 The Property Manager shall have the right to terminate this Agreement for any reason or no reason upon thirty (30) days written notice to the Company. In addition, the Property Manager shall have the right to terminate this Agreement “for cause”, provided that (i) the Company is in default in the performance of any of their obligations hereunder, and such default remains uncured for thirty (30) days following the Property Manager’s giving of written notice of such default to the Company or (ii) any governmental law, regulation, or ruling requires the Property Manager to so terminate this Agreement.

               15.2.2 Property Manager shall have the right to terminate this Agreement for any reason upon sixty (60) days written notice to Company.

     16. Final Accounting. Within forty-five (45) days after the expiration or earlier termination of this Agreement for any reason, Property Manager shall: (a) deliver to the Company a final accounting, setting forth the balance of income and expenses on the Property as of the date of expiration or termination; (b) transfer to any account indicated by the Company any balance or monies of the Company or Tenant security deposits held by the Property Manager with respect to the Property (or transfer the accounts in which such sums are held as instructed by the Company); and (c) deliver to any subsequent property manager or other agent indicated by the Company all materials and supplies, keys, books and records, Service Contracts, Leases, receipts for deposits, unpaid bills and other papers or documents in Property Manager’s possession that pertain to the Property. For a period of forty-five (45) days after such expiration or termination for any reason other than Company’s default, Property Manager shall (x) be available, through its senior executives familiar with the Property, to consult with and advise Company or any person or entity succeeding to Company as owner of the Property or such other person or persons selected by Company regarding the operation and maintenance of the Property; (y) cooperate with Company in notifying all Tenants of the expiration and termination of this Agreement; and (z) shall use commercially reasonable efforts to cooperate with Company to accomplish an orderly transfer of the operation and management of the Property to a party designated by the Company, and Company shall pay to Property Manager its prorated share of the Property Management Fee for such services through the conclusion of such forty-five (45) day period. On or prior to the expiration or earlier termination of this Agreement, Property Manager shall, at its cost and expense, remove all signs wherever located indicating that it is the property manager for the Property and shall replace and repair any damage resulting from such removal. Neither the expiration nor the termination of this Agreement shall release either party from liability for failure to perform any of the duties or obligations as expressed herein or required hereunder to be performed by such party for the period before the termination.

     17. Conflicts. The Property Manager shall not deal with or engage, or purchase goods or services from, any subsidiary or affiliated company of the Property Manager in connection with the management of the

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Property for amounts above market rates.

     18. Notices. Any notice to be given or other document or payment to be delivered by any party to any other party hereunder shall be addressed to the party for whom intended, as follows:

To the Property Manager at:

TNP Property Manager, LLC
c/o Thompson National Properties, LLC
1900 Main Street, 7^th Floor
Irvine, California 92614
Attn: Property Management

To the Company at:

TNP SRT San Jacinto, LLC
c/o Thompson National Properties, LLC
1900 Main Street, 7^th Floor
Irvine, California 92614
Attn: Asset Management

Any party hereto may from time to time, by written notice to the other, designate a different address which shall be substituted for the one above specified. Unless otherwise specifically provided for herein, all notices, payments, demands or other communications given hereunder shall be in writing and shall be deemed to have been duly given and received (i) upon personal delivery or refusal thereof; (ii) upon confirmation of transmission via facsimile from the sender’s facsimile machine; or (iii) the immediately succeeding business day after deposit with Federal Express or other similar overnight delivery system.

     19. Miscellaneous.

19.1 Assignment.

     19.1.1 By Property Manager. Property Manager may not assign this Agreement without the prior written consent of Company, which consent may be withheld in Company’s sole and absolute discretion. Notwithstanding the foregoing, without Company’s prior written consent and in Property Manager’s sole discretion, Property Manager shall be permitted to (a) assign this Agreement to an affiliate, including, but not limited to, a partially-owned or wholly-owned subsidiary of Property Manager; and (b) assign, subcontract or delegate the day-to-day management responsibilities, leasing services and/or disposition services to one or more local property managers or leasing companies, so long as Property Manager continues to supervise the overall management of the Property. Property Manager may lease space within the Property to any such local property manager or leasing company.

     19.1.2 By Company. Company may assign its rights under this Agreement to a party or parties acquiring Company’s interest in the Property (whether one or more, “Successor Company”). Successor Company shall take such interest subject to this Agreement, and Company and Successor Company shall execute an agreement whereby (i) Company assigns to Successor Company all of its right, title and interest in and to this Agreement; and (ii) Successor Company assumes, and agrees to perform faithfully and to be bound by, all of the terms, covenants, conditions, provisions and agreements of this Agreement with respect to the interest to be transferred. Upon execution of such assignment and assumption agreement, the assigning Company shall be relieved of all liability accruing after the effective date of the assignment and assumption agreement, and, without further action by Property Manager or Successor Company,

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Successor Company shall become a party to this Agreement and shall be treated as “Company” for all purposes hereunder as to its respective percentage interest in the Property.

          19.2 Gender. Each gender shall include each other gender. The singular shall include the plural and vice-versa.

          19.3 Amendments. Any purported amendments to or modifications of this Agreement shall not be effective unless approved by both of the parties in writing.

          19.4 Attorneys’ Fees. With regard to any action or proceeding between Property Manager and Company arising from or relating to this Agreement or the enforcement or interpretation hereof, the party prevailing in such action or proceeding shall be entitled to recover from the other party all of its reasonable attorneys’ fees and other costs and expenses of the action or proceeding.

          19.5 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the state in which the Property is located without regard to any choice of law rules.

          19.7 Headings. All headings are only for convenience and ease of reference and are irrelevant to the construction or interpretation of any provision of this Agreement.

          19.8 Time is of the Essence. Time is of the essence of each and every provision of this Agreement.

          19.9 Indemnification by Property Manager. Property Manager shall indemnify, defend and hold Company and its shareholders, officers, directors, members, partners and employees harmless from any and all claims, demands, causes of action, losses, damages, fines, penalties, liabilities, costs and expenses, including reasonable attorneys’ fees and court costs, sustained or incurred by or asserted against Company where it is determined by final judicial determination that such loss, cost or expense was the result of the acts or omissions of Property Manager which arise out of the gross negligence, willful misconduct or fraud of Property Manager, its agents or employees or Property Manager’s breach of this Agreement. If any person or entity makes a claim or institutes a suit against the Company on a matter for which the Company claims the benefit of the foregoing indemnification, then (a) the Company shall give the Property Manager prompt notice thereof in writing; (b) the Property Manager may defend such claim or action by counsel of its own choosing provided such counsel is reasonably satisfactory to the Company; and (c) neither the Company nor the Property Manager shall settle any claim without the other’s written consent.

          19.10 Indemnification by the Company. Company shall indemnify, defend and hold Property Manager, Thompson National Properties, LLC, and their shareholders, members, partners, officers, directors, managers and employees (each, an “Indemnified Party”) harmless from any and all claims, demands, causes of action, losses, damages, fines, penalties, liabilities, costs and expenses, including reasonable attorneys’ fees and court costs, sustained or incurred by or asserted against Indemnified Party (i) by reason of the operation, management, and maintenance of the Property and the performance by the Property Manager of the Property Manager’s obligations under this Agreement, including with respect to any injury, illness or death to any person or damage to any property from any cause whatsoever occurring in or upon or in any other way relating to the Property, except those instances which arise from the Property Manager’s gross negligence or fraud, (ii) for any failure on the part of the Company to comply with any of the covenants, terms, conditions, representations, warranties or indemnities of the Company contained in this Agreement; (iii) in connection with, related to, or arising directly or indirectly from any liabilities, duties, obligations, actions or omissions of any party operating, leasing or managing the Property prior to the Effective Date, including without limitation liabilities or claims arising in connection with any prior property manager’s business and its leasing and operation of the Property. If any person or entity makes a claim or institutes a suit against Indemnified Party on matter for which Indemnified Party claims the benefit of the foregoing indemnification, then (a) the Indemnified Party shall give Company prompt notice thereof in writing; (b) Company may defend such claim or action by counsel of its own choosing provided such counsel is reasonably satisfactory to the Indemnified Party; (c) neither Indemnified Party nor Company shall settle any claim without the other’s written consent; and (d) this subsection shall not be so construed as to release Company or Property Manager from any liability to the other for a breach of any of the covenants agreed to be performed under

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the terms of this Agreement.

          19.11 Complete Agreement. This Agreement shall supersede and take the place of any and all previous agreements entered into and discussions between the parties with respect to the Property, and this Agreement contains the entire agreement of the parties with respect to the matters herein contained.

          19.12 Severability. If any provisions of this Agreement or application to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement, then (a) the application of such provisions to any party or circumstances other than those as to which it is determined to be invalid or unenforceable shall not be affected thereby; and (b) the balance of this Agreement shall be valid and shall be enforced to the fullest extent permitted by law.

          19.13 No Waiver. The failure by either party to insist upon the strict performance of or to seek remedy of any one of the terms or conditions of this Agreement or to exercise any right, remedy or election set forth herein or permitted by law shall not constitute or be construed as a waiver or relinquishment for the future of such term, condition, right, remedy or election. All rights or remedies of the parties specified in this Agreement and all other rights or remedies that they may have at law, in equity or otherwise, shall be distinct, separate and cumulative rights or remedies, and no one of them, whether exercised or not, shall be deemed to be in exclusion of any other right or remedy of the parties.

          19.14 Binding Effect. This Agreement shall be binding and inure to the benefit of the parties and their respective heirs, successors and assigns.

          19.15 Enforcement of the Property Manager’s Rights. In any enforcement of its rights under this Agreement, Property Manager shall not seek or obtain a money judgment or any other right or remedy against any shareholders or disclosed or undisclosed principals of Company. Property Manager shall enforce its rights and remedies solely against the estate of Company in the Property or the proceeds of any sale thereof.

          19.16 Counterparts. This Agreement may be executed in several counterparts, and all so executed shall constitute one Agreement, binding on all of the parties hereto, notwithstanding that all of the parties are not a signatory to the same counterpart.

          19.17 Binding Arbitration. Any dispute, claim or controversy arising out of or related to this Agreement, the breach hereof, the termination, enforcement, interpretation or validity hereof, including the determination of the scope or applicability of this Agreement to arbitrate, shall be determined by arbitration in the county in which the Property is located. The arbitration shall be administered by JAMS pursuant to its Streamlined Arbitration Rules and Procedures. Judgment on the award may be entered in any court having jurisdiction. The arbitrator shall, in the award, allocate all of the costs of the arbitration (and the mediation, if applicable), including the fees of the arbitrator and the reasonable attorneys’ fees of the prevailing party, against the party who did not prevail. Notwithstanding the foregoing, upon the mutual agreement of the parties, the parties may submit any such dispute, claim or controversy to non-binding mediation prior to the commencement of arbitration.

     BY EXECUTING THIS AGREEMENT YOU ARE AGREEING TO HAVE CERTAIN DISPUTES DECIDED BY NEUTRAL ARBITRATION AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE SUCH DISPUTES LITIGATED IN A COURT OR JURY TRIAL. BY EXECUTING THIS AGREEMENT YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

          19.18 Equitable Relief. Each party to this Agreement acknowledges and agrees that remedies at law for a breach or threatened breach of any of the provisions of this Agreement may be inadequate and, in recognition of this fact, each party to this Agreement agrees that in addition to any remedies at law (including,

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without limitation, damages), equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy shall be available in the event of a breach or threatened breach of this Agreement.

     20. Special Lender Provisions.

          20.1 Company hereby grants to Property Manager, on behalf of Company, the power and authority to interface and communicate with, and Property Manager shall have responsibility for interfacing and communicating with, the holder of any deed of trust or mortgage now or hereafter encumbering the Property (whether one or more, and together with any successors or assigns, the “Lender”) securing any loan to Company (whether one or more, the “Loan”). With respect to interactions with the Lender, Property Manager shall (a) make all day-to-day business decisions customarily decided by a property manager; and (b) perform all services customarily performed by a property manager, including, without limitation, (i) designating changes in address; (ii) receiving any and all notices including, without limitation, default notices; (ii) requesting waivers of provisions in any documents executed by Company in conjunction with the Loan (collectively, the “Loan Documents”) and negotiating conditions to any such requested waivers; (iii) depositing rents or other revenues in any lockbox account maintained under such Loan Documents; (iv) receiving into the Operating Account all disbursements made out of any such lockbox to Company for the payment of operating expenses of the Property or otherwise to be made to or to the account of Company as such borrower under the Loan; and (v) requesting and receiving any amounts out of any reserve accounts or escrow accounts maintained by Lender on account of repairs, capital improvements, tenant improvements, leasing commissions, taxes and insurance proceeds or otherwise. Property Manager is expressly empowered and authorized to make disbursement requests from, and to receive draws or disbursements from, all reserve accounts and to receive disbursements from any lockboxes established under the Loan Documents. Company and any Successor Company by its execution or assumption hereof acknowledges and confirms the authorization hereby expressly given to the Lender to confer with Property Manager on all matters arising under the Loan Documents insofar as they relate to the management and operation of the Property and the obligations of Company to the Lender in connection therewith. Lender may rely upon the provisions of this Section 20.1, and the actions of the Property Manager taken pursuant thereto, without further inquiry, and Company shall be bound by any such action Property Manager may take; provided, however, that nothing set forth herein shall excuse the Property Manager from obtaining the consent of the Company if required hereunder.

          20.2 Notwithstanding any of the provisions of this Agreement, no power or authority granted by Company to Property Manager in this Agreement shall empower Property Manager to transfer or sell the Property or any portion thereof.

          20.3 Company and Property Manager hereby acknowledge and agree that their rights and remedies provided for anywhere in this Agreement, including, without limitation, all rights of indemnity or defense provided for above, and any and all fees payable hereunder, are subject and subordinate, as to payment and in all other respects, to the Loan and the Loan Documents; provided, however, that nothing set forth herein shall prohibit the current payment of amounts due under this Agreement. In addition, Property Manager hereby irrevocably agrees to stand still and not to enforce any of its legal rights or remedies hereunder, at law or in equity, including, without limitation, by bringing any legal action or proceeding (including, without limitation, any involuntary bankruptcy proceeding) or by prosecuting any claim in any foreclosure proceeding or other legal action or proceeding commenced by the Lender, until the Loan has been paid in full. Company and the Property Manager each agrees that all applicable statutes of limitation shall be tolled during any such stand still period. Company and the Property Manager hereby irrevocably assign to the Lender, during the term of the Loan, its right to vote in any bankruptcy or similar proceeding of Company or Property Manager.

          20.4 Property Manager shall provide to the Lender all reports and other information required to be provided to Lender pursuant to the terms of the Loan Documents. All reporting covenants contained in the Loan Documents, while constituting the obligation of Company thereunder, shall be performed by Property Manager on behalf of Company.

          20.5 Notwithstanding any provision contained herein to the contrary, in the event that the Lender or its successors or assigns becomes the title owner of the property through foreclosure or deed in lieu of foreclosure, Lender may terminate this Agreement with or without cause upon providing Property Manager with not

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less than thirty (30) days notice of its intent to so terminate this Agreement. In the event that Lender terminates this Agreement in accordance with the provisions of this Section 20.5 Lender shall not pay any termination fee or any other fees to Property Manager other than compensating Property Manager for the services it rendered on behalf of Lender pursuant to this Agreement up to the date of termination.

[Signatures to Follow on Next Page.]

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

PROPERTY MANAGER:

TNP PROPERTY MANAGER, LLC
a Delaware limited liability company
 

By:	THOMPSON NATIONAL PROPERTIES, LLC
	a Delaware limited liability company
	Its: Sole Member

By:	/s/ Johnna F. Howard
	Name:	Johnna F. Howard
	Its:	CFO

COMPANY:


TNP SRT SAN JACINTO, LLC,
a Delaware limited liability company
 

By:	TNP STRATEGIC RETAIL OPERATING
	PARTNERSHIP, LP,
	a Delaware limited partnership Its: Sole Member

By:	TNP STRATEGIC RETAIL TRUST,
	INC., a Maryland corporation
	Its: General Partner

By:	/s/ Christopher S. Cameron
	Name:	Christopher S. Cameron
	Its:	CFO, Secretary

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EXHIBIT A
LEGAL PROPERTY DESCRIPTION

(See attached)

EX-10.51

Exhibit 10.51

FOURTH OMNIBUS AMENDMENT AND
REAFFIRMATION OF LOAN DOCUMENTS

     This Fourth Omnibus Amendment and Reaffirmation of Loan Documents (this “Amendment”) is dated as of the 11th day of August, 2010 (the “Effective Date”) by and among TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“Original Borrower”), TNP Strategic Retail Trust, Inc., a Maryland corporation having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (the “REIT”), Thompson National Properties, LLC, a Delaware limited liability company having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“TNP”), Anthony W. Thompson, an individual having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“Thompson”, and together with the REIT and TNP, the “Guarantors” and individually, a “Guarantor”), TNP SRT Northgate Plaza Tucson Holdings, LLC, a Delaware limited liability company, having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (the “Northgate Intermediate Entity”), TNP SRT San Jacinto, LLC, a Delaware limited liability company, having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (the “San Jacinto Borrower”, and together with the Original Borrower, the Guarantors and the Northgate Intermediate Entity, the “Loan Parties” and individually, a “Loan Party”), and KeyBank National Association, a national banking association having a principal place of business at 225 Franklin Street, 18^th Floor, Boston, Massachusetts 02110, as agent (in such capacity, “Agent”) for itself and any other lenders who become lenders under the Credit Agreement (as hereinafter defined) collectively referred to as “Lenders” and each individually referred to as a “Lender”).

Witnesseth That:

     WHEREAS, the Original Borrower, the Agent and the Lenders are parties to that certain Revolving Credit Agreement dated as of November 12, 2009, as amended by that certain Omnibus Amendment and Reaffirmation of Loan Documents dated as of January 12, 2010 among the Original Borrower, the Guarantors and the Agent (the “First Omnibus Amendment”), as amended by that certain Second Omnibus Amendment and Reaffirmation of Loan Documents dated as of June 3, 2010 among the Original Borrower, the Guarantors and the Agent (the “Second Omnibus Amendment”, as amended by that certain Third Omnibus Amendment and Reaffirmation of Loan Documents dated as of July 6, 2010 among the Original Borrower, the Guarantors, the Northgate Intermediate Entity and the Agent (the “Third Omnibus Amendment”, and together with the First Omnibus Amendment and the Second Omnibus Amendment, the “Omnibus Amendments” and individually, an “Omnibus Amendment”) (and as further amended, restated and/or modified from time to time, the “Credit Agreement”), pursuant to which, among other things, the Lenders agreed to provide to the Original Borrower a revolving credit facility in the maximum principal amount of $15,000,000, and which obligations of the Original Borrower to the Lenders under the Credit Agreement are evidenced by, among other things, that certain Revolving Credit Note dated as of November 12, 2009 by the Original Borrower in favor of the Lenders and in the original principal amount of $15,000,000 (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “Note”), and are secured by, among other things, (a) that certain Pledge and Security Agreement dated as of November 12, 2009 by the Original Borrower and the Northgate Intermediate Entity in favor of the Agent for the benefit of the Lenders (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “Borrower Pledge Agreement”), (b) that certain Guaranty Agreement dated as of November 12, 2009 by the Guarantors in favor of the Agent for the benefit of the Lenders (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “Guaranty”), and (c) that certain Pledge and Security Agreement dated as of November 12, 2009 by the REIT in favor of the Agent for the benefit of the Lenders (as amended by the Omnibus Amendments and as further amended, restated and/or modified from time to time, the “REIT Pledge Agreement”);

     WHEREAS, in accordance with the terms and provisions of the Credit Agreement and the related Loan Documents (as defined in the Credit Agreement), the Original Borrower, from time to time, may acquire Properties (as defined in the Credit Agreement) and/or direct or indirect Equity Interests in various Entities (as defined in the Credit Agreement);

     WHEREAS, in connection with the acquisition of each Property and/or Equity Interests in an Entity, the Original Borrower has agreed to amend and supplement certain of the provisions, exhibits and schedules attached to the Credit Agreement and related Loan Documents;

     WHEREAS, the Original Borrower holds 100% of the Equity Interests in and to San Jacinto Borrower;

     WHEREAS, pursuant to that certain Agreement of Purchase and Sale and Joint Escrow Instructions (California) dated as of July 9, 2010 (as amended from time to time) between the San Jacinto Borrower (as assignee of TNP Acquisitions, LLC) and Quality Properties Asset Management Company, an Illinois corporation (the “San Jacinto Seller”), the San Jacinto Seller has agreed to sell, transfer and convey to the San Jacinto Borrower, all of the San Jacinto Seller’s right, title and interest in and to the real property and improvements situated in the City of San Jacinto, County of Riverside, State of California and commonly known as “San Jacinto Esplanade” (the “San Jacinto Property”);

     WHEREAS, in connection with the acquisition of the San Jacinto Property, the Original Borrower and the San Jacinto Borrower have requested the San Jacinto Loan (as hereinafter defined) and certain amendments to the provisions of the Loan Documents, and the Agent and Lender have agreed to provide the San Jacinto Loan and to make such amendments to the Loan Documents, all upon the terms and provisions more particularly set forth in this Amendment.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby amend the Loan Documents and agree as follows:

     1. Recitals and Definitions. The foregoing recitals are hereby incorporated by reference as if set forth at length herein. Capitalized terms used herein without definition shall have the meaning assigned to such terms in the Credit Agreement.

     2. San Jacinto Acquisition; San Jacinto Loan. As of the date hereof, the Original Borrower has requested an advance in the original principal amount of Six Million Six Hundred Thousand and No/100 Dollars ($6,600,000) (the “San Jacinto Loan”), which San Jacinto Loan will be used by the Original Borrower (and/or the San Jacinto Borrower) to fund a portion of the costs and expenses related to the acquisition of the San Jacinto Property. In connection with the San Jacinto Loan, the San Jacinto Borrower has agreed to (x) assume, on a joint and several basis, the obligations of the Original Borrower under the Loan Documents, all upon the terms and conditions set forth in this Amendment and (y) to provide certain additional documentation to secure the obligations of the Borrower, the San Jacinto Borrower and the Obligors under the Loan Documents.

     For the avoidance of doubt, and for all other purposes of the Loan Documents, (a) the San Jacinto Loan shall constitute an “Obligation” and a “Loan” under the terms and provisions of the Credit Agreement and the Loan Documents, and shall be secured by, and be entitled to the benefits of, the Security Documents (as such term is supplemented in this Amendment), the Loan Documents and any other document and agreement executed in connection with any of the foregoing, and (b) the San Jacinto Property shall be deemed a “Funded Property” for purposes of the Credit Agreement and the Loan Documents.

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     3. Joinder by San Jacinto Borrower. (a) As of the Effective Date, the San Jacinto Borrower hereby, jointly and severally with the Original Borrower, assumes, and hereby agrees to perform and observe, as a borrower and primary obligor, and not as a guarantor, indemnitor, or surety, each and every one of the covenants, rights, promises, agreements, terms, conditions, obligations, appointments, duties and liabilities of: (i) the “Borrower” under the Credit Agreement, the Notes and Loan Documents; and (ii) a “Grantor” under the Borrower Pledge Agreement; and agrees to be bound by all of the liabilities and obligations which binds “Borrower” under the Credit Agreement and the Loan Documents, and a Grantor under the Borrower Pledge Agreement, and agrees fully, completely and timely to perform, comply with and discharge each and all of the covenants, promises, obligations, duties and liabilities under the Credit Agreement, the Notes, the Borrower Pledge Agreement, and the Loan Documents.

          (b) In furtherance of the foregoing, as of the Effective Date, the San Jacinto Borrower hereby:

               (i) Joins in the execution of and agrees to be bound by, and is hereby deemed a “Borrower” under and party to, the Credit Agreement, the Notes and Loan Documents, as a “Borrower” thereunder for all purposes thereof, and in furtherance of and not in limitation of the foregoing, hereby jointly and severally with the other “Borrower” thereunder unconditionally and irrevocably assumes the due and punctual payment and performance by the Borrower of all of the indebtedness, liabilities and Obligations to the Lenders and the Agent under the Credit Agreement and such Notes as if it was an original signatory thereof. Any and all references to the term “Borrower” in the Credit Agreement, the Notes and the Loan Documents or in any other document or agreement executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and include, the San Jacinto Borrower.

               (ii) Joins in the execution of and agrees to be bound by, and is hereby deemed a “Grantor” under and party to, the Borrower Pledge Agreement, as a “Grantor” thereunder for all purposes thereof, and in furtherance of and not in limitation of the foregoing, and to secure the payment and performance of all Obligations (as defined in the Borrower Pledge Agreement), the San Jacinto Borrower does hereby pledge, assign, transfer and deliver to the Agent, and does hereby grant to Agent a continuing security interest in all of the Collateral (as defined in the Borrower Pledge Agreement) of the San Jacinto Borrower on the terms and conditions set forth in the Borrower Pledge Agreement, all as if such San Jacinto Borrower were an original signatory thereto.

          (c) As of the Effective Date, any and all references to the term “Borrower” in the Credit Agreement, the Notes and the Loan Documents (and to the term “Grantor” in the Borrower Pledge Agreement), or in any other document or agreement executed and delivered or furnished, or to be executed and delivered or furnished, in connection therewith shall be deemed to be a reference to, and include, the San Jacinto Borrower.

          (d) So long as no Event of Default exists at that time, in the event that the San Jacinto Property is sold and the San Jacinto Loan is repaid in full or at any other time that the San Jacinto Loan is repaid in full, the San Jacinto Borrower shall be released from all obligations under the Credit Agreement, the Notes and Loan Documents, and Agent agrees to execute any and all documents reasonably necessary to evidence such release.

          (e) As a result of the addition of the San Jacinto Borrower, the following changes shall be made to the Credit Agreement:

               (i) Section 1.2 is hereby amended to read as follows:

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     “1.2 Borrower. Original Borrower is a limited partnership organized under the laws of the State of Delaware. REIT is the holder of 100% of the general partnership and either directly, indirectly or through an affiliate, 75% of the limited partnership interests in and to Original Borrower. San Jacinto Borrower is a limited liability company organized under the laws of the State of Delaware. Original Borrower is the holder of 100% of the membership interests in and to San Jacinto Borrower.”

          (ii) The first sentence of Section 8.10.1(a) is hereby amended to change the reference from “Borrower” to “Original Borrower”. In addition, a new sentence is added which shall be inserted after the first sentence which shall read as follows:

“San Jacinto Borrower is a duly formed and a validly existing limited liability company under the laws of the State of Delaware.”

         (f) All references in the Loan Documents and this Amendment to matters, conditions or circumstances which could reasonably be expected to materially impair the ability of Borrower to pay and perform its obligations, or phrases of similar import, shall apply to Original Borrower and San Jacinto Borrower collectively, and not individually.

         (g) All references in the Loan Documents and this Amendment to a material adverse change with respect to the Borrower, or phrases of similar import, shall apply to Original Borrower and San Jacinto Borrower collectively, and not individually.

     4. Conditions Precedent to San Jacinto Loan. The Loan Parties acknowledge and agree that the Credit Agreement contemplates the acquisition of Equity Interests by the Borrower (or other Entities) in Entities owning Property. Notwithstanding the foregoing, the Borrower has requested, and the Agent and the Lenders have agreed to provide, the San Jacinto Loan for the acquisition of the San Jacinto Property by the San Jacinto Borrower. Accordingly, and in connection therewith, in addition to the Proposed Property Requirements set forth in Section 2.7 of the Credit Agreement, the Borrower agrees to deliver to the Agent the following, and acknowledges and agrees that the funding of the San Jacinto Loan is subject to satisfaction of the following conditions precedent:

     (a) The San Jacinto Documents and the other Loan Documents shall have been properly executed and delivered to Agent; the San Jacinto Deed of Trust and any Loan Documents to be recorded shall be acknowledged and delivered for recording, and shall have been recorded prior to or concurrently with the funding of the San Jacinto Loan.

     (b) Borrower shall have provided Lender with evidence satisfactory to Agent that Borrower has invested cash equity in the aggregate of at least $650,000 in the San Jacinto Property.

     (c) Agent shall have received a survey of the San Jacinto Property in form and substance reasonably acceptable to Agent and a title insurance policy evidencing that the San Jacinto Borrower has good title to the San Jacinto Property, free and clear of all mortgages, security interests, restrictions, liens and encumbrances of any kind (other than the Loan and the other matters listed on said title insurance policy), and containing affirmative insurance on such matters as Lender may reasonably require.

     (d) Agent shall have received evidence satisfactory to Agent in all respects of the Borrower’s compliance with the provisions of Section 9(a) of this Amendment (regarding the

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obligations of the Borrower to obtain and maintain the insurance coverages and policies more particularly described therein).

     (e) Agent shall have received and approved a copy of the fully executed organizational documents of the San Jacinto Borrower.

     (f) Agent shall have received and approved the closing statement (the “San Jacinto Closing Statement”) for the acquisition of the San Jacinto Property.

     (g) Agent shall have received and approved the flood hazard status certification and the property condition and environmental reports for the San Jacinto Property and a rent roll with respect to the San Jacinto Property.

     (h) Agent shall have received and approved (i) an opinion of DE counsel as to organizational, authorization and related matters for the San Jacinto Borrower and (ii) an opinion of local counsel admitted to practice in the State of California, as the validity and effectiveness of the San Jacinto Documents and covering such other matters of law in connection with the execution, delivery, recording and enforcement of the San Jacinto documents as Agent may reasonably request.

     (i) Borrower shall have paid (i) Agent’s legal fees and all other of Agent’s reasonable costs, fees and expenses incurred in connection with the making of the San Jacinto Loan and (ii) all other costs and expenses incurred in connection with the San Jacinto Closing Statement and the acquisition of the San Jacinto Property.

     (j) Agent shall have received all of the other documents listed in the closing checklist supplied by Agent to Borrower with respect to the San Jacinto Loan except for certain items, such as the appraisal for the San Jacinto Property, which are listed on Exhibit A of the Open Items Letter being executed as of even date and which must be supplied to and approved by Agent by the dates stated on the Open Items Letter.

     (k) no Default or Event of Default shall have occurred and be continuing under the terms and provisions of this Amendment, the Credit Agreement, the Note, or of any of the Loan Documents.

     (l) Agent shall have received such other documents and certificates as Agent may reasonably request from Borrower, any Guarantor, and any other Person, in form and content satisfactory to Agent.

     5. Repayment of the San Jacinto Loan. (a) Notwithstanding the provisions of Section 2.3.1 of the Credit Agreement, commencing on the Effective Date, and continuing until such time as the outstanding principal balance of the San Jacinto Loan is equal to the lesser of (i) fifty percent (50%) of the “as is” appraised value of the San Jacinto Property as shown on the appraisal described in Section 4(j) of this Amendment, (ii) fifty percent (50%) of the total acquisition costs as shown on the San Jacinto Closing Statement, or (iii) Three Million Five Hundred Thousand and No/100 Dollars ($3,500,000) (the “San Jacinto Minimum Balance”), all Net Proceeds derived from any Equity Issuance by the REIT, any Net Proceed derived from any Capital Event and any proceeds from any casualty or condemnation with respect to the San Jacinto Property shall be applied to the amounts outstanding under the San Jacinto Loan. Thereafter, at such time as the San Jacinto Minimum Balance has been achieved, all Net Proceeds derived from any Equity Issuance by the REIT, any Capital Event and/or any other casualty or condemnation with respect to the San Jacinto Property shall be applied to the then outstanding

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Obligations in the order and manner more particularly set forth in the Credit Agreement, except that any Net Proceeds from the sale of the San Jacinto Property or any other Property shall first be applied to the amounts outstanding under the San Jacinto Loan.

     (b) In the event that any pad site which is a portion of the San Jacinto Property is sold, the Agent agrees to release its lien on such pad site so long as Agent determines that the following conditions have been met:

          (i) no Default or Event of Default then exists under the Loan Documents;

          (ii) the pad site has been separately subdivided and the sale of it complies with all zoning and subdivision laws;

          (iii) the sale is an arms length sale to a third party and not to a Borrower, a Guarantor or any Affiliate thereof, and

          (iv) all proceeds from the sale of the pad sites less San Jacinto Borrower’s actual out-of-pocket closing costs (such as recording fees, documentary stamps, real estate tax adjustments incident to the closing, brokerage commissions and similar reasonable charges) are paid to Agent on behalf of Lenders and applied to repay the San Jacinto Loan, with the amount of any such proceeds being used to reduce the San Jacinto Minimum Balance as provided in Section 5(iii) above, it being the intent that any such sale proceeds shall not reduce the amount required to be repaid from the Net Proceeds derived from any Equity Issuance by the REIT or from any Capital Event.

     6. Additional Amendments to the Credit Agreement. As of the Effective Date, each of the Loan Parties and the Agent agree that:

          (a) Section 3.1 of the Credit Agreement is hereby amended and supplemented by adding thereto the following as Section 3.1.4:

“3.1.4. San Jacinto Documents. (a) a first priority Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated as of August 11, 2010 by the San Jacinto Borrower granted for the benefit of the Agent with respect to the San Jacinto Property (as amended from time to time, the “San Jacinto Deed of Trust”), (b) an Environmental and Hazardous Substances Indemnity Agreement dated as of August 11, 2010 by the San Jacinto Borrower in favor of the Agent for the benefit of the Lenders (the “San Jacinto Environmental Indemnity”), (c) an Assignment of Project Contracts dated as of August 11, 2010 by the San Jacinto Borrower in favor of the Agent for the benefit of the Lenders (the “San Jacinto Project Assignment”, and together with the San Jacinto Deed of Trust and the San Jacinto Environmental Indemnity, the “San Jacinto Documents”).”

          (b) Section 3.2 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

“3.2. Loan Documents and Security Documents. The Loans shall be made, evidenced, administered and governed by all of the terms, conditions and provisions of the “Loan Documents”, each as the same may be hereafter modified or amended, consisting of: (i) this Agreement; (ii) one or more Revolving Credit Notes in the original aggregate principal amount of up to Fifteen Million Dollars ($15,000,000) and payable to the order of the Lenders, as the same may be amended, replaced or substituted from time to time (collectively, the “Notes” and each individually a “Note”); (iii) the Pledge

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Agreement; (iv) the Guaranty; (v) the San Jacinto Documents; (vi) related UCC financing statements; and (vii) any other documents, instruments, or agreements now or hereafter executed to further evidence or secure the Loan. The Pledge Agreement, the Guaranty, the San Jacinto Deed of Trust, the San Jacinto Project Assignment and the UCC financing statements are sometimes collectively referred to as the “Security Documents”.”

          (c) Section 9.6.3 of the Credit Agreement is hereby amended by adding thereto the following:

     “9.6.3.8. Any Liens or encumbrances permitted pursuant to the San Jacinto Deed of Trust.”

          (d) Section 11.1 of the Credit Agreement is hereby amended by adding thereto the following:

     “11.1.10. Waste. Borrower has intentionally committed waste on or to the San Jacinto Property.”

          (d) The following is hereby added as Section 17 to the Credit Agreement:

     “17. Joint and Several Liability of Borrowers.

     (a) Joint and Several Liability. Each Borrower hereby agrees that such Borrower is jointly and severally liable for, and hereby absolutely and unconditionally guarantees to the Agent and Lenders and their respective successors and assigns, the full and prompt payment (whether at stated maturity, by acceleration or otherwise) and performance of, all Obligations owed or hereafter owing to the Agent and Lenders by each other Borrower. Although it is the express agreement and intent of Agent, Lenders and Borrowers that each Borrower is and shall be a primary obligor with respect to the obligations set forth herein and not a guarantor, indemnitor, surety or otherwise only secondarily liable for such obligations, in the event and to the extent that the obligations of such Borrower undertaken herein might in the future be construed to consist, in whole or in part, of the guaranty of obligations of the other Borrower, each Borrower consents and agrees that such guaranty obligation (as the same may be construed) is and shall be a continuing guaranty of payment and performance and not of collection, that its obligations under this Section 17 shall not be discharged until payment and performance, in full, of the Obligations has occurred, and that its obligations under this Section 17 shall be absolute, unconditional and irrevocable, irrespective of, and unaffected by, (i) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, any Obligation or any Loan Document, agreement, document or instrument to which any Borrower is or may become a party; (ii) the absence of any action to enforce any Obligation or Loan Document or the waiver or consent by the Agent or any Lender with respect to any of the provisions governing any Obligation or Loan Document; (iii) the insolvency of any Borrower, Guarantor or other Obligor; and (iv) any other action or circumstances that might otherwise constitute a legal or equitable discharge or defense of a surety or guarantor. Each Borrower shall be regarded, and shall be in the same position, as principal debtor with respect to the Obligations guaranteed hereunder.

     (b) Waivers by Borrowers. Each Borrower expressly waives all rights it may have now or in the future under any statute, or at common law, or at law or in equity, or otherwise, to compel the Agent or Lenders to marshal assets or to proceed in respect of

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the Obligations guaranteed hereunder against any other Borrower, Guarantor or Obligor, any other party or against any security for the payment and performance of the Obligations before proceeding against, or as a condition to proceeding against, such Borrower. Each Borrower consents and agrees that the Agent or the Lenders may, at any time and from time to time, without notice or demand, whether before or after an actual or purported termination, repudiation or revocation of this Agreement by any Borrower, and without affecting the enforceability or continuing effectiveness hereof as to such Borrower: (i) with the consent of each Borrower, supplement, restate, modify, amend, increase, decrease, extent, renew or otherwise change the time for payment or the terms of this Agreement, any Loan Document or any part thereof, including any increase or decrease of the rate(s) of interest thereon; (ii) with the consent of each Borrower, supplement, restate, modify, amend, increase, decrease, or enter into or give any agreement with respect to, this Agreement, any Loan Document or any part thereof, or any of the Security Documents; (iii) waive, approve or consent to any action, condition, covenant, default, remedy, right, representation or term of this Agreement or any other Loan Document; (iv) accept partial payments; (v) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer or enforce any security or guarantees, and apply any security and direct the order or manner of sale thereof as the Agents or Lenders in their sole and absolute discretion may determine; (vi) release any person from any personal liability with respect to this Agreement or any part thereof; (vii) settle, release on terms satisfactory to the Required Lenders or by operation of applicable Legal Requirements or otherwise liquidate or enforce any security or guaranty in any manner, consent to the transfer of any security and bid and purchase at any sale; or (viii) consent to the merger, change or any other restructuring or termination of the corporate or partnership existence of any Borrower or any other person, and correspondingly restructure the obligations evidenced hereby, and any such merger, change, restructuring or termination shall not affect the liability of any Borrower or the continuing effectiveness hereof, or the enforceability hereof with respect to all or any part of the obligations evidenced hereby. It is agreed among each Borrower, the Agent and Lenders that the foregoing consents and waivers are of the essence of the transaction contemplated by this Agreement and the other Loan Documents and that, but for the provisions of this Section 17 and such waivers, the Agent and Lenders would decline to enter into this Agreement.

     (c) Benefit. Each Borrower agrees that the provisions of this Section 17 are for the benefit of the Agent and the other Lenders and their respective successors, transferees, endorsees and assigns, and nothing herein contained shall impair, as between any other Borrower and the Agent or the other Lenders, the obligations of such other Borrower under the Loan Documents.

     (d) Waiver of Subrogation, Etc. Notwithstanding anything to the contrary in this Agreement or in any other Loan Document, and except as set forth in Section 17(g) of this Agreement, each Borrower hereby expressly and irrevocably waives any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off and any and all defenses available to a surety, guarantor or accommodation co-obligor. Each Borrower acknowledges and agrees that this waiver is intended to benefit the Agent and Lenders and shall not limit or otherwise affect such Borrower’s liability hereunder or the enforceability of this Section 17, and that the Agent, Lenders and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 17(d).

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     (e) Election of Remedies. If the Agent or any Lender may, under applicable law, proceed to realize its benefits under any of the Loan Documents, the Agent or any Lender may, at its sole option, determine which of its remedies or rights it may pursue without affecting any of its rights and remedies under this Section 17. If, in the exercise of any of its rights and remedies, the Agent or any Lender shall forfeit any of its rights or remedies, including its right to enter a deficiency judgment against any Borrower or any other Person, whether because of any applicable laws pertaining to “election of remedies” or the like, each Borrower hereby consents to such action by the Agent or such Lender and waives any claim based upon such action, even if such action by the Agent or such Lender shall result in a full or partial loss of any rights of subrogation that each Borrower might otherwise have had but for such action by the Agent or such Lender. Any election of remedies that results in the denial or impairment of the right of the Agent or any Lender to seek a deficiency judgment against any Borrower shall not impair any other Borrower’s obligation to pay the full amount of the Obligations.

     (f) Limitation. Notwithstanding any provision herein contained to the contrary, each Borrower’s liability under this Section 17 (which liability is in any event in addition to amounts for which such Borrower is primarily liable under Section 2 of this Agreement) shall be limited to an amount not to exceed as of any date of determination the greater of:

          (i) the net amount of all Loans advanced to any other Borrower under this Agreement and then re-loaned or otherwise transferred to, or for the benefit of, such Borrower; and

          (ii) the amount that could be claimed by the Agent and Lenders from such Borrower under this Section 17 without rendering such claim voidable or avoidable under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things, such Borrower’s right of contribution and indemnification from each other Borrower under Section 17(g) of this Agreement.

     (g) Contribution with Respect to Guaranty Obligations.

          (i) To the extent that any Borrower shall make a payment under this Section 17 of all or any of the Obligations (other than Obligations related to Loans and other extensions of credit made directly or indirectly to that Borrower, or on such Borrower’s behalf, in which case such Borrower shall be primarily liable) (a “Guarantor Payment”) that, taking into account all other Guarantor Payments then previously or concurrently made by any other Borrower, exceeds the amount that such Borrower would otherwise have paid if each Borrower had paid the aggregate Obligations satisfied by such Guarantor Payment in the same proportion that such Borrower’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Borrowers as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Obligations and termination of the Commitments, such Borrower shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Borrower for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

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          (ii) As of any date of determination, the “Allocable Amount” of any Borrower shall be equal to the maximum amount of the claim that could then be recovered from such Borrower under this Section 17 without rendering such claim voidable or avoidable under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.

          (iii) This Section 17(g) is intended only to define the relative rights of Borrowers and nothing set forth in this Section 17(g) is intended to or shall impair the obligations of Borrowers, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Agreement, including Section 17(a) of this Agreement. Nothing contained in this Section 17(g) shall limit the liability of any Borrower to pay the Loans made directly or indirectly to that Borrower, or on such Borrower’s behalf, and accrued interest, fees and expenses with respect thereto for which such Borrower shall be primarily liable.

          (iv) The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Borrower to which such contribution and indemnification is owing.

          (v) The rights of the indemnifying Borrowers against other Borrowers under this Section 17(g) shall be exercisable on or after the Termination Date, but shall in all respects be subordinate to any Obligations owing to the Lenders.

     (h) Liability Cumulative. The liability of Borrowers under this Section 17 is in addition to and shall be cumulative with all liabilities of each Borrower to the Agent and Lenders under this Agreement and the other Loan Documents to which such Borrower is a party or in respect of any Obligations or obligation of the other Borrower, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

     (i) Stay of Acceleration. If acceleration of the time for payment of any amount payable by the Borrowers under this Agreement is stayed upon the insolvency, bankruptcy or reorganization of any of the Borrowers, all such amounts otherwise subject to acceleration under the terms of this Agreement shall nonetheless be payable jointly and severally by the Borrower hereunder forthwith on demand by the Agent made at the request of the Required Lenders.

     (j) Benefit to Borrowers. All of the Borrowers and the Entities are engaged in related businesses and integrated to such an extent that the financial strength and flexibility of each such Person has a direct impact on the success of each other Person. Each Borrower and each Entity will derive substantial direct and indirect benefit from the extension of credit hereunder.”

          (e) Exhibit A to the Credit Agreement is hereby amended and supplemented by adding thereto the following defined terms, in the correct alphabetical order:

     “Lease means any lease, license agreement and other occupancy or use agreement (whether oral or written), now or hereafter existing, which cover or relate to the Property or any part thereof, together with all options therefor, amendments thereto and renewals, modifications and guaranties thereof, including any cash or security

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deposited under the Lease to secure performance by the tenants of its obligations under the Lease, whether such cash or security is to be held until the expiration of the terms of the Lease or applied to one or more of the installments of rent coming due thereunder.

     Major Lease means any Lease for all or any portion of a Property, and which (a) is in excess of 2,500 square feet, and (b) is not on a month-to-month basis.

     Rents means all rents, royalties, issues, profits, revenue, income, accounts, proceeds and other benefits of a Property, whether now due, past due or to become due, including all prepaid rents and security deposits

     San Jacinto Improvements means the Improvements, as defined and described in the San Jacinto Deed of Trust.”

          (f) Exhibits B, C, E and F to the Credit Agreement are hereby amended and supplemented by adding thereto the information set forth on Schedule I attached to this Amendment, which information is true, correct and complete as of the Effective Date.

     7. San Jacinto Leasing Matters.

          (a) Representations and Warranties Regarding Leases. With respect to the San Jacinto Property and the San Jacinto Improvements, Borrower represents and warrants to the Agent and the Lenders that: (i) Borrower has delivered to Agent a true and correct copy of each Lease and any guaranty(ies) thereof, affecting any part of the San Jacinto Property and/or the San Jacinto Improvements; (ii) no such Lease or guaranty contains any option or right of first refusal to purchase all or any portion of the San Jacinto Property and/or the San Jacinto Improvements, or any present or future interest therein, except for the right of first refusal to purchase in that certain lease agreement with Fresh N Easy (however, that right has terminated); (iii) Schedule II, attached to and made a part of this Amendment is, to the best of Borrower’s knowledge, a complete and correct rent roll for the San Jacinto Property as of the date hereof; (iv) to the best of Borrower’s knowledge the Leases are currently in full force and effect with no existing default on the part of the landlord thereunder and no condition existing with respect thereto which, with the giving of notice or the passage of time, could constitute such a default; and (v) to Borrower’s knowledge, there is no existing material default by any of the tenants under any of the Leases and no condition existing with respect thereto which, with the giving of notice or the passage of time, could constitute such a default, except as otherwise indicated on Schedule III.

          (b) Leasing Matters.

               (i) Agent’s Approval Required. As to any Major Lease executed after the Effective Date, the Agent’s prior written approval shall be required in each instance as to: (A) the terms of such Major Lease; (B) each tenant; (C) each guarantor of a tenant’s obligations; (D) any consent to subletting or assignment; (E) any modification or amendment of the term, rent and/or renewal option provisions of such Major Lease; and (F) any termination (excluding the expiration of the term of such lease on the expiration date, as set forth in the applicable lease agreement), cancellation or surrender of such Major Lease. Agent’s approval shall not be required in connection with any Lease that is not a Major Lease, any subletting or assignment under such Lease, and any modification, amendment, termination, cancellation or surrender of any such Lease.

     All references in the Credit Agreement and/or the Loan Documents to the term “Approved Lease” shall mean, when such reference is applicable to the San Jacinto Property, (a) any (i) Major Lease, or modification or amendment of the term, rent and/or renewal option provisions of such Major Lease,

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which has been so approved by the Agent or which does not require Agent’s approval hereunder, and (ii) as to which the tenant has executed a subordination, non-disturbance and attornment agreement and estoppel certificate reasonably acceptable to Agent, (b) any Lease that is not a Major Lease, (c) any subletting or assignment under a Lease that is not a Major Lease, and (d) any modification, amendment, termination, cancellation or surrender of any Lease that is not a Major Lease.

               (ii) Borrower’s Requests. Any request by the Borrower for an approval from the Agent with respect to any Major Lease shall be sent to the Agent and shall be accompanied, at a minimum, by the following: (A) the proposed Major Lease or amendment or modification of the term, rent and/or renewal option provisions of such Major Lease complete with all applicable schedules and exhibits; (B) a complete copy of any proposed guaranty; and (C) comprehensive financial information with respect to the proposed tenant and, if applicable, the proposed guarantor.

               (iii) Agent’s Response. The Agent shall act on requests from the Borrower for any approval of a Major Lease in a commercially reasonable manner and shall respond to any such request within ten (10) Business Days following the Agent’s receipt of all requested information in connection therewith. The Agent’s response may consist of an approval or disapproval of the request, or a conditional approval thereof subject to specified reasonable conditions, or a request for further data or information, or any combination thereof. In order to expedite the processing of requests for such approvals, the Borrower agrees to provide the Agent with as much advance information as is possible in a commercially reasonable manner in advance of the Borrower’s formal request for an approval.

          (c) SNDAs and Estoppels. The Agent shall have the right to request that each tenant execute and deliver to the Agent, and upon such request the Borrower agrees to use commercially reasonable efforts to obtain from such tenant, a subordination, non-disturbance of possession and attornment agreement substantially in the form, attached hereto as Schedule VI, and, from time to time, an estoppel certificate substantially in the form attached hereto as Schedule VII.

          (d) Additional Documentation. From time to time upon Agent’s request, Borrower shall promptly deliver to Agent (i) complete executed originals of each Lease of the San Jacinto Property, including any exhibits thereto and any guaranty(ies) thereof, (ii) a complete rent roll of the San Jacinto Property in such detail as Agent may require, together with such operating statements and leasing schedules and reports as Agent may require, (iii) any and all financial statements of the tenants, subtenants and any lease guarantors at the San Jacinto Property to the extent available to Borrower, and (iv) such other information regarding tenants and prospective tenants and other leasing information related to the San Jacinto Property as Agent may reasonably request. In addition, Borrower shall provide Agent with a copy of all Leases of the San Jacinto Property and amendments thereto executed after the date hereof promptly following their execution. Borrower shall have a reasonable time within which to respond to Agent’s request for information pursuant to this section.

          (e) Additional Agreements of Borrower. Borrower represents, covenants and warrants to the Agent and the Lenders that Borrower (i) will observe and perform all of the obligations imposed upon the landlord in the Leases of the San Jacinto Property and will not do or permit to be done anything to impair the security thereof; (ii) will use its best efforts to enforce or secure, or cause to be enforced or secured, the performance of each and every obligation and undertaking of the respective tenants under the Leases of the San Jacinto Property and will appear in and defend, at Borrower’s sole cost and expense, any action or proceeding arising under, or in any manner connected with, the Leases of the San Jacinto Property; (iii) will not collect any of the Rents in advance of the time when the same become due under the terms of the Leases of the San Jacinto Property; (iv) will not discount any future accruing Rents from the San Jacinto Property without Agent’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; (v) without the prior written consent of Agent, will

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not execute any assignment of the Leases or the Rents of the San Jacinto Property; (vi) will not add or modify any option or right of first refusal to purchase all or any portion of the San Jacinto Property or any present or future interest therein, without the prior written consent of Agent; and (g) will execute and deliver, at the request of Agent, all such assignments of the Leases and Rents of the San Jacinto Property in favor of Agent as Agent may from time to time require; and (h) shall notify Agent promptly in writing in the event a tenant under a Major Lease of the San Jacinto Property commits a material default under such Lease.

     8. Additional Representations and Warranties Regarding the San Jacinto Property. The representations and warranties of the Borrower as set forth in the Credit Agreement and related Loan Documents are hereby confirmed, affirmed and ratified by each of the Original Borrower and the San Jacinto Borrower, and each Borrower confirms and affirms that each such representation and warranty remains true and correct as of the Effective Date. Additionally, each Borrower hereby further warrants and represents to the Agent and the Lenders as follows:

          (a) Certificates of Occupancy. To Borrower’s knowledge, all certificates of occupancy and other permits and licenses necessary or required in connection with the use and occupancy of the San Jacinto Improvements have been validly issued and remain in full force and effect

          (b) Utilities; Roads; Access. To Borrower’s knowledge, all utility services necessary for the operation of the San Jacinto Improvements for their intended purposes have been fully installed, including telephone service, water supply, storm and sanitary sewer facilities, natural gas and electric facilities, including cabling for telephonic and data communication. To Borrower’s knowledge, all roads and other accesses necessary to serve the San Jacinto Property and San Jacinto Improvements have been completed, are serviceable in all weather typical for the area in which the San Jacinto Property is located (excluding any natural disasters), and where required by the appropriate Governmental Authority, have been dedicated to and formally accepted by such Governmental Authority.

          (c) Insurance Policies. The insurance policies required to be maintained pursuant to this Amendment are in full force and effect.

          (d) No Liens. Except for Permitted Title Exceptions and the Loan Documents, Borrower has not made, assumed or been assigned any contract or arrangement of any kind, the performance of which by the other party thereto would give rise to a Lien against all or any portion of the San Jacinto Property. There exists no Lien on any direct or indirect equity or beneficial interest in Borrower.

          (e) Casualty and Taking. To Borrower’s knowledge, no casualty has occurred to any material portion of the San Jacinto Property. To Borrower’s knowledge, no condemnation of any portion of the San Jacinto Property, or modification, realignment or relocation of any streets or roadways abutting the San Jacinto Property which could reasonably result in the denial of material access to the San Jacinto Property from a public or private point, has occurred or is threatened or pending.

          (f) Property Not Border Zone. To Borrower’s knowledge, the San Jacinto Property has not been designated as “border zone property” under the provisions of California Health and Safety Code Sections 25220 et seq., or any regulation adopted in accordance therewith, and there has been no occurrence or condition on any real property adjoining or in the vicinity of the San Jacinto Property that could cause the San Jacinto Property or any part thereof to be designated as “border zone property”.

          (g) Good Title and No Liens. The San Jacinto Borrower is the lawful current owner of the San Jacinto Property. To Borrower’s knowledge, the San Jacinto Borrower has permanent non-

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cancelable appurtenant rights with respect to all areas over, under or on which support, utility, drainage, passage or other access easements are required to make use of the San Jacinto Property and all required parking as contemplated hereby, and by all Legal Requirements

          (h) No Litigation. There is no litigation now pending, or, to the best of Borrower’s knowledge, threatened, against Borrower, any Guarantor, any other Obligor or with respect to the San Jacinto Property which if adversely decided could reasonably be expected to materially impair the ability of the Borrower to pay and perform its obligations hereunder or under the Loan Documents.

     9. Additional Covenants and Agreements Regarding the San Jacinto Property.

          (a) Insurance. Borrower shall maintain, at its sole cost and expense, the insurance coverages, policies and limits more particularly set forth on Schedule IV attached to, and made a part of, this Amendment. Each policy of insurance (i) shall be issued by one or more insurance companies each acceptable to the Agent, (ii) shall provide that such policy shall not be canceled or modified for nonpayment of premiums without at least ten (10) days prior written notice to Agent, or for any other reason without at least thirty (30) days prior written notice to Agent, and (iii) shall provide that any loss otherwise payable thereunder shall be payable notwithstanding any act or negligence of Borrower which might, absent such agreement, result in a forfeiture of all or a part of such insurance payment. Borrower shall promptly pay all premiums when due on such insurance and, not less than ten (10) days prior to the expiration dates of each such policy, Borrower will deliver to Agent acceptable evidence of insurance, such as a renewal policy or policies marked “premium paid” or other evidence satisfactory to Agent reflecting that all required insurance is current and in force. Borrower will immediately give written notice to Agent of any cancellation of, or change in, any insurance policy. Agent shall not, because of accepting, rejecting, approving or obtaining insurance, incur any liability for (A) the existence, nonexistence, form or legal sufficiency thereof, (B) the solvency of any insurer, or (C) the payment of losses. Borrower may satisfy any insurance requirement hereunder by providing one or more “blanket” insurance policies, subject to Agent’s approval in each instance as to limits, coverages, forms, deductibles, inception and expiration dates, and cancellation provisions. Notwithstanding anything set forth herein to the contrary, Agent has approved the insurance coverage for the San Jacinto Property evidenced by the insurance certificates provided by Borrower to Agent prior to the date hereof.

          (b) Casualty and Condemnation. Notwithstanding the provisions of Section 14 of the Credit Agreement, the Borrower shall comply with the terms and provisions of the San Jacinto Deed of Trust with respect to any casualty or condemnation on or with respect to the San Jacinto Property and/or the San Jacinto Improvements, including, without limitation, any and all restoration obligations contained therein.

          (c) Additional Improvements. Other than routine work done in the ordinary course of business pursuant to reasonable business practices, Borrower will not undertake or permit any construction, renovation, alteration or expansion of the San Jacinto Improvements without Agent’s prior written approval.

          (e) Property Management. Borrower shall provide for the competent and responsible management and operation of the San Jacinto Property and/or the San Jacinto Improvements; Borrower will not enter into any property management, construction management, leasing, brokerage or any other similar agreement affecting the San Jacinto Property and/or the San Jacinto Improvements without Agent’s prior written consent, and all such agreements shall, in any event, be subject to the semi-annual review and approval of Agent. Any such agreement which is entered into with an affiliate of Borrower shall (i) be specifically disclosed to and approved by Agent, and (ii) contain a specific waiver by such vendor of any available lien rights otherwise available. Agent has approved the Property and

- 14 -

Asset Management Agreement by and between San Jacinto Borrower and TNP Property Manager LLC dated of even date herewith.

     10. Additional Amendment to the Borrower Pledge Agreement. Contemporaneous with the execution and delivery of this Amendment, the Original Borrower is executing and delivering to the Agent a certain Addendum (as defined in the Borrower Pledge Agreement) to the Borrower Pledge Agreement, and which Addendum is attached hereto as Schedule V and is hereby made a part hereof. As of the Effective Date, each of the Loan Parties and the Agent agree that Exhibit A to the Borrower Pledge Agreement is hereby amended and supplemented to add thereto the Equity Interests described and set forth in said Schedule V attached to this Amendment.

     11. References in Loan Documents. All references in any of the Loan Documents to the “Credit Agreement”, the “Note”, the “Guaranty”, the “Borrower Pledge Agreement”, the “REIT Pledge Agreement”, the “Security Documents” or to the “Loan Documents”, shall, from and after the Effective Date be deemed to mean and refer to the Credit Agreement, the Note, the Guaranty, the Borrower Pledge Agreement, the REIT Pledge Agreement, the San Jacinto Documents and each other Security Document or such Loan Document (as applicable) as amended and affected by this Amendment. This Amendment shall be deemed to be a “Loan Document” for the purposes of the Credit Agreement and the other Loan Documents.

     12. Ratification by the Loan Parties. (a) Each Loan Party hereby ratifies, affirms and confirms the Loan Documents (as modified by this Amendment), and acknowledges and agrees that the Loan Documents (as modified by this Amendment) remain in full force and effect and are enforceable against such Loan Party and against the Collateral described therein in accordance with their respective terms. Each Loan Party hereby further acknowledges and agrees that, as of the Effective Date, the Loan Documents, as amended by this Amendment, are not subject to any defenses, rights of setoff, claims or counterclaims that might limit the enforceability thereof, the obligations created and evidenced thereby or the terms and provisions thereof.

     (b) In furtherance of the provisions of subsection (a) above, and not in limitation or derogation thereof, by its execution of this Amendment, each Guarantor hereby (a) acknowledges and consents to the terms and provisions of this Amendment; (b) ratifies, affirms and confirms the Guaranty; (c) agrees that the Guaranty is and shall remain in full force and effect and that the terms and provisions of the Guaranty covers and pertains to the Guaranteed Obligations (as defined in the Guaranty), Notes, Credit Agreement and other Loan Documents; (d) acknowledges that there are no claims or offsets against, or defenses or counterclaims to, the terms and provisions of the Guaranty or other obligations created and evidenced by the Guaranty; and (e) certifies that the representations and warranties contained in the Guaranty, the Credit Agreement, and the other Loan Documents with respect to each Guarantor remains the true and correct representations and warranties of such Guarantor as of the Effective Date.

     13. Security and Liens. All Obligations of the Loan Parties under the Loan Documents, each as amended by this Amendment, shall be secured by and be entitled to the benefits of, and the Collateral shall remain in all respects subject to the liens, charges and encumbrances of, the Security Documents and the other Loan Documents, and nothing herein contained, and nothing done pursuant hereto or in connection herewith shall affect or be construed to affect the liens, charges or encumbrances or conveyances effected thereby or the priority thereof or to release or affect the liability of any party or parties whomsoever may now, or hereafter be, liable on account of the Obligations.

     14. No Waiver. This Amendment is only a modification of the Loan Documents and is not intended to, and shall not be construed to, effect a novation of any Loan Document, or to constitute a modification of, or a course of dealing at variance with, the Loan Documents (each as amended by this

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Amendment), such as to require further notice by Lenders or Agent to require strict compliance with the terms the other Loan Documents in the future.

     15. Representations and Warranties. The Loan Parties hereby warrant that all of the representations and warranties contained in the Loan Documents are true and correct as of the Effective Date and that no Event of Default has occurred and is continuing or would result by the execution of this Amendment which constitutes an Event of Default under the Credit Agreement or any Loan Document or would constitute such an Event of Default but for the requirement that notice be given or time elapse or both. Each Loan Party further represents and warrants that the execution and delivery of this Amendment and all related documents have been duly authorized by each such Loan Party.

     16. Release; Set-off. Each Loan Party hereby unconditionally releases and forever discharges Agent, each Lender and their respective officers, directors, shareholders, and employees from any and all claims, demands, causes of action, expenses, losses and other damages of whatever kind, whether known or unknown, liquidated or unliquidated, at law or in equity, that exists as of the Effective Date in connection with the Credit Agreement, the Loan Documents and any other documents relating thereto.

     17. Additional Waivers and Agreements.

          (a) Notwithstanding any provision contained in this Amendment or any other Loan Document to the contrary, it is the intention and agreement of each Borrower, Guarantor, Obligor and the Agent that the obligations of each Borrower, Guarantor and Obligor under the Loan Documents shall be valid and enforceable against each Borrower, Guarantor and Obligor to the maximum extent permitted by applicable law. Accordingly, if any provision of this Amendment or any other Loan Document creating any obligation of a Borrower, Guarantor or Obligor in favor of any Lender shall be declared to be invalid or unenforceable in any respect or to any extent, it is the stated intention and agreement of each Borrower, Guarantor, Obligor and Lender that any balance of the obligation created by such provision and all other obligations of each Borrower, Guarantor and Obligor to Lenders created by other provisions of the Loan Documents shall remain valid and enforceable. Likewise, if any sums which a Lender may be otherwise entitled to collect from a Borrower, Guarantor or Obligor under the Loan Documents shall be declared to be in excess of those permitted under any law (including any federal or state fraudulent conveyance or like statute or rule of law) applicable to the Obligations and/or the Guaranteed Obligations of such Borrower, Guarantor and Obligor, it is the stated intention and agreement of such Borrower, Guarantor and Obligor and the Lenders that all sums not in excess of those permitted under such applicable law shall remain fully collectible by Lenders from such Borrower, Guarantor and Obligor and such excess sums shall nevertheless survive as a subordinate obligation of such Borrower, Guarantor and Obligor, junior in right to the claims of general unsecured creditors, but prior to the claims of equityholders in such Borrower, Guarantor and Obligor. This provision shall control every other provision of the Loan Documents.

          (b) Each Borrower, Guarantor and Obligor under the Loan Documents hereby waives:

               (i) any defense based upon Agent or any Lender’s election of any remedy against any Borrower, any Guarantor or any Obligor, including without limitation, the defense to enforcement of this Agreement (the “Gradsky” defense based upon Union Bank v. Gradsky, 265 Cal. App. 2d 40 (1968) or subsequent cases) which, absent this waiver, a guarantor or indemnitor would have by virtue of an election by Agent or any Lender to conduct a non-judicial foreclosure sale of any Property securing the Obligations, it being understood by each Borrower, Guarantor and Obligor that any such non-judicial foreclosure sale will destroy, by operation of California Civil Code of Civil Procedure

- 16 -

Section 580d, all rights of any party to a deficiency judgment against any Borrower, and, as a consequence, will destroy all rights which a guarantor or indemnitor would otherwise have (including, without limitation, the right of subrogation, the right of reimbursement, and the right of contribution) to proceed against any Borrower and to recover any such amount, and that Agent and Lenders could be otherwise estopped from pursuing guarantor or indemnitor for a deficiency judgment after a non-judicial foreclosure sale on the theory that a guarantor or indemnitor should be exonerated if a lender elects a remedy that eliminates the guarantor’s or indemnitor’s subrogation, reimbursement or contribution rights;

               (ii) any rights under California Code of Civil Procedure Sections 580a and 726b, which provide, among other things: that a creditor must file a complaint for deficiency within three (3) months of non-judicial foreclosure sale or judicial foreclosure sale, as applicable; that a fair market value hearing must be held; and that the amount of the deficiency judgment shall be limited to the amount by which the unpaid debt exceeds the fair market value of the security, but not more that the amount by which the unpaid debt exceeds the sale price of the security;

               (iii) any rights, under Sections 2845 or 2850 of the California Civil Code, or otherwise, to require Agent to institute suit against, or to exhaust any rights and remedies which Agent or the Lenders has or may have against any Borrower, any Guarantor or any Obligor, or against any collateral for the Obligations provided by any Borrower, any Guarantor, or any Obligor and any defense arising by reason of any disability or other defense (other than the defense that the Obligations shall have been fully and finally performed and indefeasibly paid) of Borrowers, Guarantor, or Obligors or by reason of the cessation from any cause whatsoever of the liability of any Borrower, any Guarantor, or any Obligor in respect thereof; and

               (iv) (1) any rights to assert against Agent and Lenders any defense (legal or equitable), set-off, counterclaim, or claim which any Guarantor may now or at any time hereafter have against Borrowers or any other Person liable to Agent and Lenders; (2) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Obligations or any security therefor; (3) any defense any Guarantor has to performance hereunder, and any right any Guarantor has to be exonerated, provided by Sections 2819, 2822, or 2825 of the California Civil Code, or otherwise, arising by reason of: the impairment or suspension of the Agent’s or Lenders’ rights or remedies against any Borrower; the alteration by Agent or Lenders of the Obligations; any discharge of any Borrower’s obligations to Agent or Lenders by operation of law as a result of any intervention or omission; or the acceptance by Agent or Lenders of anything in partial satisfaction of the Obligations; (4) the benefit of any statute of limitations affecting any Guarantor’s liability under the Loan Documents or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Obligations shall similarly operate to defer or delay the operation of such statute of limitations applicable to any Guarantor’s liability under the Loan Documents.

               (v) Each Guarantor absolutely, unconditionally, knowingly, and expressly waives any defense arising by reason of or deriving from election of remedies by the Agent and Lenders including any election by Agent or any Lender under Bankruptcy Code Section 1111 (b) to limit the amount of, or any collateral securing, its claim against Borrowers.

               (vi) without limiting the generality of the foregoing or any other provision hereof, each Borrower, Guarantor and Obligor absolutely, knowingly, unconditionally, and expressly waives any and all benefits or defenses which might otherwise be available to such Borrower, Guarantor or Obligor under any one or more of California Civil Code Sections 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2825, 2839, 2845, 2848, 2849, and 2850, California Code of Civil Procedure Sections

- 17 -

580a, 580b, 580c, 580d, and 726, California Uniform Commercial Code Sections 3116, 3118, 3119, 3419, 3605, 9504, and 9507, and Chapter 2 of Title 14 of Part 4 of Division 3 of the California Civil Code.

               (vii) Each Guarantor hereby acknowledges and agrees that neither Agent, any Lender nor any other Person shall be under any obligation (i) to marshal any assets in favor of Guarantors or in payment of any or all of the liabilities of Borrowers under the Guaranty or the obligations of Guarantors hereunder or (ii) to pursue any other remedy that Guarantors may or may not be able to pursue themselves, any right to which each Guarantor hereby waives.

               (viii) Each Guarantor warrants and agrees that each of the waivers set forth in this Section 17 is made with full knowledge of its significance and consequences and after consultation with legal counsel, and that if any of such waivers are determined to be contrary to any applicable law or public policy, such waivers shall be effective only to the maximum extent permitted by applicable law.

          (c) The Loan Documents currently contain jury trial waivers. Such waivers shall continue to apply to the fullest extent now or hereafter permitted by applicable law. BORROWERS, AGENT AND LENDERS PREFER THAT ANY DISPUTE BETWEEN THEM BE RESOLVED IN LITIGATION SUBJECT TO A JURY TRIAL WAIVER AS SET FORTH IN THE LOAN DOCUMENTS. IF, HOWEVER, UNDER THEN APPLICABLE LAW, A PRE-DISPUTE JURY TRIAL WAIVER OF THE TYPE PROVIDED FOR IN THE LOAN DOCUMENTS IS UNENFORCEABLE IN LITIGATION IF SUCH LITIGATION OCCURS IN CALIFORNIA (ALTHOUGH THE PARTIES DO NOT INTEND HEREBY TO WAIVE THEIR CONSENT TO JURISDICTION AND VENUE IN THE COMMONWEALTH OF MASSACHUSETTS), TO RESOLVE ANY DISPUTE, CLAIM, CAUSE OF ACTION OR CONTROVERSY UNDER THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE ENVIRONMENTAL AGREEMENT (EACH, A “CLAIM”), THEN, UPON THE WRITTEN REQUEST OF ANY PARTY TO SUCH LITIGATION, SUCH CLAIM, INCLUDING ANY AND ALL QUESTIONS OF LAW OR FACT RELATING THERETO, SHALL BE DETERMINED EXCLUSIVELY BY A JUDICIAL REFERENCE PROCEEDING. EXCEPT AS OTHERWISE PROVIDED IN THE PREVIOUS PARAGRAPH, VENUE FOR ANY SUCH REFERENCE PROCEEDING SHALL BE IN THE STATE OR FEDERAL COURT IN THE COUNTY OR DISTRICT WHERE VENUE IS APPROPRIATE UNDER APPLICABLE LAW (THE “COURT”). THE PARTIES SHALL SELECT A SINGLE NEUTRAL REFEREE, WHO SHALL BE A RETIRED STATE OR FEDERAL JUDGE. IF THE PARTIES CANNOT AGREE UPON A REFEREE, THE COURT SHALL APPOINT THE REFEREE. THE REFEREE SHALL REPORT A STATEMENT OF DECISION TO THE COURT. NOTHING IN THIS PARAGRAPH, HOWEVER, SHALL LIMIT THE RIGHT OF ANY PARTY AT ANY TIME TO EXERCISE SELF-HELP REMEDIES, FORECLOSE AGAINST COLLATERAL OR OBTAIN PROVISIONAL REMEDIES (INCLUDING, WITHOUT LIMITATION, REPLEVIN, INJUNCTIVE RELIEF, ATTACHMENT OR THE APPOINTMENT OF A RECEIVER). THE PARTIES SHALL BEAR THE FEES AND EXPENSES OF THE REFEREE EQUALLY UNLESS THE REFEREE ORDERS OTHERWISE. THE REFEREE ALSO SHALL DETERMINE ALL ISSUES RELATING TO THE APPLICABILITY, INTERPRETATION, AND ENFORCEABILITY OF THIS PARAGRAPH. THE PARTIES ACKNOWLEDGE THAT ANY CLAIM DETERMINED BY REFERENCE PURSUANT TO THIS PARAGRAPH SHALL NOT BE ADJUDICATED BY A JURY.

     18. Miscellaneous. (a) all costs and expenses of Agent, including, without limitation, appraisal fees and reasonable attorney’s fees of counsel to Agent relating to the negotiation, preparation, execution and delivery of this Amendment and all instruments, agreements and documents contemplated hereby, shall be the responsibility of Borrower; (b) this Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts applicable to contracts made and

- 18 -

performed within such state; and (c) this Amendment may be executed in any number of counterparts, all of which when taken together shall constitute one agreement binding on the parties hereto, notwithstanding that all parties are not signatories to the same counterpart. Delivery of an executed signature page of this Amendment by facsimile transmission or by means of electronic mail (in so-called “pdf”, “TIF” or any similar format) shall be effective as an in-hand delivery of an original executed counterpart hereof.

[The Next Page is the Signature Page]

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     IN WITNESS WHEREOF, the Loan Parties and the Agent have caused this Amendment to be duly executed by their respective duly authorized officers, as an instrument under seal, as of the date and year first above written.

BORROWER:	TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership
	By:	TNP Strategic Retail Trust, Inc., a Maryland
		corporation, its general partner

By	/s/ Christopher S. Cameron
	Print Name	Christopher S. Cameron
	Title	CFO, Secretary

TNP SRT SAN JACINTO, LLC, a Delaware limited liability company
By	TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership, its Sole Member

By	TNP Strategic Retail Trust, Inc., a
	Maryland corporation, its general partner

By	/s/ Christopher S. Cameron
	Print Name:	Christopher S. Cameron
	Title:	CFO, Secretary

AGENT AND LENDER:	KEYBANK NATIONAL ASSOCIATION
	By:	/s/ Christopher T. Neil
		Christopher T. Neil
		Senior Relationship Manager

GUARANTORS and OBLIGORS:	TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation
	By:	/s/ Christopher S. Cameron
		Print Name:	Christopher S. Cameron
		Title:	CFO, Secretary

** Signatures Continued on Next Page**

[Signature Page to Fourth Omnibus Amendment and Reaffirmation of Loan Documents]

THOMPSON NATIONAL PROPERTIES, LLC, a Delaware limited liability company
By:	/s/ Johnna F. Howard
	Print Name: Johnna F. Howard
	Title:	CFO

/s/ Anthony W. Thompson 

Anthony W. Thompson, an individual 

TNP SRT NORTHGATE PLAZA TUCSON HOLDINGS, LLC, a Delaware limited liability company
By	TNP Strategic Retail Operating Partnership, LP,  a Delaware limited partnership, its Sole Member

By   TNP Strategic Retail Trust, Inc., a  Maryland corporation, its general partner 

By	/s/ Christopher S. Cameron
	Print Name: Christopher S. Cameron
	Title:	CFO, Secretary

[Signature Page to Fourth Omnibus Amendment and Reaffirmation of Loan Documents]

Schedule I

     (a) Exhibit B attached to the Credit Agreement is hereby amended and supplemented by adding thereto the following information:

		Jurisdiction of	Certificate	Nature of Equity	Percentage of	Description of any
	Name of Entity	Organization	Number(s) (if any)	Interests	Ownership in Entity	Excluded Rights
5.	TNP SRT San	Delaware	N/A	Membership interests	100%	None
	Jacinto, LLC

     (b) Exhibit C attached to the Credit Agreement is hereby amended and supplemented by adding thereto the following information:

				Outstanding	Pending Sales or
			Current Fair Market	Principal Balance of	Refinancings of
	Name of Entity	Location of Property	Value of Property	the Property Loan	Property
4.	TNP SRT San	San Jacinto,	$$7,088,000	$0	None
	Jacinto, LLC	California

     (c) Exhibit E attached to the Credit Agreement is hereby amended and supplemented by adding thereto the following information:

	Name of Entity	Location of Property	Environmental Reports
4.	TNP SRT San Jacinto, LLC	San Jacinto, California	Phase I Environmental Assessment dated as of September 28, 2009, prepared by Property Solutions Inc. for Bank of America, and Phase II Environmental Site Assessment dated December 15, 2009 prepared by Enercon.

     (d) Exhibit F attached to the Credit Agreement is hereby amended and supplemented to add that the San Jacinto Borrower’s Taxpayer Identification Number is 27-3186823.

Schedule II

Rent Roll for San Jacinto Property

[attached hereto]

Schedule III

Tenant Delinquency Report for San Jacinto Property

[attached hereto]

Schedule IV

Insurance Requirements

Named Insured (Borrower): TNP SRT San Jacinto, LLC, a Delaware limited liability company

Property Address:	2181 — 2291 Esplanade Avenue, San Jacinto, California
Mortgagee:	KeyBank National Association, its successors and/or assignees,
	for itself and, when applicable, as agent for other participating lenders
Mortgagee address:	225 Franklin Street, 18th Floor, Boston, Massachusetts 02110

Deductible under any line of coverage must not exceed: $

PROPERTY

Causes of loss insured against:	•	“Special Form” equivalent to ISO standard, or “Risks of loss not otherwise excluded” for coverage comparable to ISO Special Form, including damage from windstorm and hail
	•	Boiler & Machinery or Breakdown coverage for buildings with elevators and central HVAC (not required for per-unit HVAC)
Additional causes of loss if specified:	___ Flood — mandatory at NFIP limits ($250,000 per residential bldg., $500,000 per commercial bldg.) if        building will be in Special Flood Hazard Area
	___ Additional flood limits: $_________________________
	___ Earthquake $_________________________
	___ Terrorism: ___ certified only ___ certified and non-certified
	___ Ordinance or Law: (A) Loss of value of undamaged part — within building limit; (B) Demolition and (C) Increased Cost of Construction:
	$___________________
	___ Other ____________________
Amount of insurance:	Building: Sufficient to cover insurable value (cost to construct less standard exclusions such as
	foundation): $___________________________
	Business interruption: Sufficient to cover 12 months’ revenue or rental income:
	$________________________
Additional coverage conditions:	•	Replacement cost valuation for building
	•	Actual loss sustained valuation for business interruption/loss of rents
	•	No coinsurance / coinsurance waived
Mortgagee Clause:	Mortgagee identified as above. Mortgagee provisions must match standard clause of ISO forms or Lender’s Loss Payable clause per section C of ISO form CP 12 18

Documentation:	Acord 28 Evidence of Property Insurance extending at least 30 days’ notice of cancellation (45 days in Washington state) except 10 days’ notice for non-payment of premium.
	•	All details specified above must be specifically addressed.
	•	All deductibles and any sub-limits must be disclosed.
	•	If program is blanket over other locations as well as loan property, show policy limits along with values reported to insurer for the subject location.
	The use of any form other than Acord 28 (2003/10) may result in agent and/or insurer having to provide additional coverage documentation.

INSURANCE REQUIREMENTS FOR COMMERCIAL REAL ESTATE LOANS
PERMANENT LOAN
- - continued -

GENERAL LIABILITY

Coverage form:	Commercial General Liability — equivalent to ISO standard occurrence-based form, including BI, PD, PI/AI, Contractual
Limit of liability per occurrence:	Not less than $                                                             combining primary and excess
Mortgagee as Additional Insured:	Mortgagee identified on page 1.
	Coverage granted per ISO form CG 20 18 or CG 20 26, or equivalent. Copy of endorsement or verification of underwriter’s intent to issue must be attached to Certificate of Liability Insurance
Documentation:	Acord 25 Certificate of Liability Insurance extending at least 30 days’ notice of cancellation.

BORROWER’S PROPERTY, GENERAL LIABILITY AND UMBRELLA/EXCESS INSURERS MUST HAVE BEST’S RATINGS NOT LESS THAN A:X UNLESS OTHERWISE AGREED TO BY LENDER.

OTHER COVERAGES

Workers’ Compensation:	Statutory benefits for the state where the building is located. This requirement may be waived if borrowing entity has no employees and general contractor produces evidence of workers’ compensation coverage.
Employer’s Liability:	$100,000 per accident for accidental injury; $100,000 per employee and $100,000 aggregate for occupational illness or disease.
Business Auto Liability:	Covering owned, non-owned and hired/rented vehicles
Environmental Liability:	___ Requirement applies only if checked. Form should cover liability for bodily injury and property damage claims, both on and off site, and include mortgagee as an insured along with borrower. Full quote and specimen forms must be submitted for lender approval.
	Required limit: $

Schedule V

Pledge Agreement Addendum
to Borrower Pledge and Security Agreement

     The undersigned, being the Grantor under that certain Pledge and Security Agreement dated as of November 12, 2009 (as amended, restated and/or modified from time to time, the “Agreement”) in favor of KeyBank National Association, as Agent (“Agent”), by executing this Pledge Agreement Addendum, hereby acknowledges that Grantor legally and beneficially owns all of the Equity Interests in and to the Entity (or Entities) described below. Grantor hereby agrees and acknowledges that (a) the Equity Interests described below constitute “Collateral” for purposes of the Agreement, and shall be governed by, and subject to all of the terms, provisions and conditions of the Agreement, (b) Grantor hereby grants to the Agent, for the benefit of itself and the Lenders, a security interest in all of the Collateral of the Grantor on the terms and conditions set forth in the Agreement, (c) that this Addendum constitutes a “Pledge Agreement Addendum” for purposes of the Agreement and that the Agreement is hereby amended to include the hereinafter described Equity Interests and Collateral, and (d) that after giving effect to this Addendum, the representations and warranties set forth in the Agreement are materially true, complete and correct as of the date hereof. Capitalized terms used in this Addendum without definition shall have the meanings assigned to such terms in the Agreement.

	Jurisdiction of	Certificate	Nature of Equity	Percentage of	Description of any
Name of Entity	Organization	Number(s) (if any)	Interests	Ownership in Entity	Excluded Rights
TNP SRT San Jacinto, LLC	Delaware	None	Membership Interests	TNP Strategic Retail Operating Partnership, LP holds 100% of the membership interests in the Entity	None

The Next Page is the Signature Page

     IN WITNESS WHEREOF, Grantor has executed this Addendum this ______ day of August, 2010.

Grantor: TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership
By:	TNP Strategic Retail Trust, Inc., a Maryland
	corporation, its general partner

By
	Name
	Title

[for Grantor]

STATE OF                                           
COUNTY OF                                           

     On August ___, 2010, before me, the undersigned notary public, personally appeared _____________________, the ______________________of TNP Strategic Retail Trust, Inc., a Maryland corporation, the general partner of TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said corporation and limited partnership, for its stated purpose.

Notary Public 

Print Name My Commission Expires [SEAL] 

[Signature Page to Borrower Pledge Agreement Addendum]

Consent, Acknowledgement and Agreement of
TNP SRT San Jacinto, LLC

     Reference is made to that certain Pledge and Security Agreement dated as of November 12, 2009 by TNP Strategic Retail Operating Partnership, LP (the “Grantor”) to KeyBank National Association (“Agent”), for itself and the Lenders (as defined therein) (as amended, restated and/or modified from time to time, the “Agreement”).

     TNP SRT San Jacinto, LLC, a Delaware limited liability company (the “Entity”), hereby consents to the foregoing Pledge Agreement Addendum, with the express confirmation, warranty and representation that all restrictions on the transfer of the Collateral as set forth in the Entity Governance Documents (if any), have been waived to permit this pledge and grant of security interest and any subsequent foreclosure or other disposition of the Collateral by Agent in accordance with the terms and agreements set forth above, and with the express grant to Agent and any agent of Agent of the power of attorney set forth in Section 10 of the Agreement. Entity represents that it has not opted into Article 8 of the applicable Uniform Commercial Code for the Entity and agrees that the Entity Governance Documents for the Entity shall not be amended to insert such a provision without the prior written consent of Agent. Entity hereby acknowledges receipt of notice of the pledge and collateral assignment of the Collateral effected hereby and hereby agrees to register the Collateral as subject to the security interests and collateral assignments effected hereby. The Grantor has irrevocably authorized the Entity to accept and act upon, and the Entity hereby agrees to accept and act upon, all instructions and directions given by Agent to the Entity with respect to the Collateral in accordance with the Agreement and the Pledge Agreement Addendum without the necessity of further authorization or consent from, or notice to, the Grantor.

     Pursuant to the terms of the Entity Governance Documents, each of the undersigned, as a member of the Entity, hereby (a) consents to the pledge by Grantor of the Collateral to Agent as security for the Obligations and agrees that the Entity Governance Documents are hereby amended to permit and reflect the pledge of the Collateral by Grantor to Agent pursuant to the terms and provisions of the Agreement, the Pledge Agreement Addendum and this Consent, (b) instructs the Entity to register the lien created hereunder in the Collateral in the books and records maintained by the Entity, (c) in connection with the exercise by Agent of its rights and remedies under this Consent, consents to the foreclosure or other disposition or assignment of the Equity Interests and Collateral to any person or entity (an “Assignee”) and the substitution of such Assignee as a new member of the Entity, and (d) agrees that no such assignment or substitution and no foreclosure under the Agreement, the Consent or other remedies in respect thereof shall effect a termination or dissolution of the Entity.

     IN WITNESS WHEREOF, the undersigned has executed this Consent, Acknowledgement and Agreement, as an instrument under seal this ______ day of August, 2010.

Entity TNP SRT San Jacinto, LLC, a Delaware limited liability company
By	TNP Strategic Retail Operating Partnership, LP, a
	Delaware limited partnership, its Sole Member

	By   TNP Strategic Retail Trust, Inc., a
Maryland corporation, its general partner

By
	Print Name:
	Title:

[for Entity]

STATE OF                                         
COUNTY OF                                         

     On August ___, 2010, before me, the undersigned notary public, personally appeared ________________________, the _______________________of TNP Strategic Retail Trust, a Maryland corporation, the general partner of TNP Strategic Retail Operating Partnership, L.P., a Delaware limited partnership, the sole member of TNP SRT San Jacinto, LLC, a Delaware limited liability company, proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said entities, for its stated purpose.

Notary Public 

Print Name My Commission Expires [SEAL] 

[Signature Page to Consent to Borrower Pledge Agreement Addendum]

Schedule VI

Form of SNDA

Recorded at the Request of and After Recording Return to:

Gail E. McCann, Esq.
Edwards Angell Palmer & Dodge LLP
2800 Financial Plaza
Providence, RI 02903

SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT

Grantor #1 (Landlord):	TNP SRT SAN JACINTO, LLC
Grantor #2 (Tenant):
Grantee (Agent):	KEYBANK NATIONAL ASSOCIATION, as Agent, its successors and assigns
Abbreviated Legal Description:
	Official Legal Description on Exhibit A
Assessor’s Tax Parcel ID #	APN: 436-710-001-0 and 436-710-002-1 and 436-710-003-2 and 436-710-004-3 and 436-710-005-4 and 436-710-006-5 and 436-710-007-6 and 436-710-008-7 and 436-710-010-8
Reference No.	N/A

SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

          THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT’ AGREEMENT (the “Agreement”) is made as of the ____ day of _______ 2010 by and between:

KEYBANK NATIONAL ASSOCIATION,
a national banking association,
having an address at
127 Public Square
Cleveland, Ohio 44114
(“Agent”),

and

having an address at

(“Tenant”).

RECITALS:

     A. Tenant is the holder of a leasehold estate in a portion of those certain premises located in the City of San Jacinto, the County of Riverside, State of California, and more particularly described on Exhibit A attached hereto and made a part hereof (the “Property”) under and pursuant to the provisions of a certain lease dated _______________ between _____________________ as landlord, as later assumed by Borrower (as defined below) and Tenant, as tenant (the “Lease”); and

     B. Agent and other lenders (“Lenders”) have made a loan or are about to make a loan to TNP SRT San Jacinto, LLC, a limited liability company organized under the laws of the State of Delaware, having its principal place of business at 1900 Main Street, Suite 700 Irvine, California 92614 (“Borrower”), evidenced or to be evidenced by a revolving credit loan made by TNP Strategic Retail Operating Partnership, LP and later assumed by Borrower as a Co-Borrower to the order of KeyBank National Association and other Lenders (the “Note”) and secured or to be secured by a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing (the “Security Instrument”) granted by Borrower to or for the benefit of Agent and encumbering the Property; and

     C. Borrower is, or is about to become, the owner in fee simple of the Property and the landlord under the Lease (“Landlord”); and

     D. Tenant has agreed to subordinate the Lease to the Security Instrument and to the lien thereof, and Agent has agreed to grant non-disturbance to Tenant under the Lease on the terms and conditions hereinafter set forth.

AGREEMENT:

For good and valuable consideration, Tenant and Agent agree as follows:

     1. SUBORDINATION. The Lease and all of the terms, covenants and provisions thereof and all rights, remedies and options of Tenant thereunder are and shall at all times continue to be subject and subordinate in all respects to the terms, covenants and provisions of the Security Instrument and to the lien thereof, including without limitation, all renewals, increases, modifications, spreaders, consolidations, replacements and extensions thereof and to all sums secured thereby and advances made thereunder with the same force and effect as if the Security Instrument had been executed, delivered and recorded prior to the execution and delivery of the Lease.

     2. NON-DISTURBANCE. If any action or proceeding is commenced by Agent for the foreclosure of the Security Instrument or the sale of the Property, Tenant shall not be named as a party therein unless such joinder shall be required by law, provided, however, such joinder shall not result in the termination of the Lease or disturb the Tenant’s possession or use of the premises demised thereunder, and the sale of the Property in any such action or proceeding and the exercise by Agent of any of its other rights under the Note or the Security Instrument shall be made subject to all rights of Tenant under the Lease, provided that at the time of the commencement of any such action or proceeding or at the time of any such sale or exercise of any such other rights Tenant shall not be in default under any of the terms, covenants or conditions of the Lease or of this Agreement on Tenant’s part to be observed or performed beyond any applicable notice or grace period.

     3. ATTORNMENT. If Agent or any other subsequent purchaser of the Property shall become the owner of the Property by reason of the foreclosure of the Security Instrument or the acceptance of a deed or assignment in lieu of foreclosure or by reason of any other enforcement of the Security Instrument (Agent or such other purchaser being hereinafter referred as “Purchaser”), and the conditions set forth in Section 2 above have been met at the time Purchaser becomes owner of the Property, the Lease shall not be terminated or affected thereby but shall continue in full force and effect as a direct lease between Purchaser and Tenant upon all of the terms, covenants and conditions set forth in the Lease and in that event, Tenant agrees to attorn to Purchaser and Purchaser by virtue of such acquisition of the Property shall be deemed to have agreed to accept such attornment, whereupon, subject to the observance and performance by Tenant of all the terms, covenants and conditions of the Lease on the part of Tenant to be observed and performed, Purchaser shall recognize the leasehold estate of Tenant under all of the terms, covenants and conditions of the Lease for the remaining balance of the term with the same force and effect as if Purchaser were the lessor under the Lease subject to the terms of Section 4 of this Agreement; provided, however, that Purchaser shall not be:

(a)

liable for the failure of any prior landlord (any such prior landlord, including Landlord and any successor landlord, being hereinafter referred to as a “Prior Landlord”) to perform any of its obligations under the Lease which have accrued prior to the date on which Purchaser shall become the owner of the Property, provided that the foregoing shall not limit Purchaser’s obligations under the Lease to correct any conditions that (i) existed as of the date Purchaser shall become the owner of the Property and (ii) violate Purchaser’s obligations as landlord under the Lease; provided further, however, that Purchaser shall have received written notice of such omissions, conditions or violations and has had a reasonable opportunity to cure the same, all pursuant to the terms and conditions of the Lease;

(b)

subject to any offsets, defenses, abatements or counterclaims which shall have accrued in favor of Tenant against any Prior Landlord prior to the date upon which Purchaser shall become the owner of the Property;

(c)	liable for the return of rental security deposits, if any, paid by Tenant to any Prior Landlord in accordance with the Lease unless such sums are actually received by Purchaser;
(d)	bound by any payment of rents, additional rents or other sums which Tenant may have paid more than one (1) month in advance to any Prior Landlord unless (i) such sums are actually received by Purchaser or (ii) such prepayment shall have been expressly approved of by Purchaser;
(e)	bound by any agreement terminating or amending or modifying the rent, term, commencement date or other material term of the Lease, or any voluntary surrender of the premises demised under the Lease, made without Agent’s or Purchaser’s prior written consent prior to the time Purchaser succeeded to Landlord’s interest; or
(f)	responsible for the making of repairs in or to the Property in the case of damage or destruction to the Property or any part thereof due to fire or other casualty or by reason of condemnation unless Purchaser is obligated under the Lease to make such repairs and Purchaser receives insurance proceeds or condemnation awards sufficient to finance the completion of such repairs.

     In the event that any liability of Purchaser does arise pursuant to this Agreement, such liability shall be limited and restricted to Purchaser’s interest in the Property and shall in no event exceed such interest.

     4. NOTICE TO TENANT. After notice is given to Tenant by Agent that the Landlord is in default under the Note and the Security Instrument and that the rentals under the Lease should be paid to Agent pursuant to the terms of the assignment of leases and rents executed and delivered by Landlord to Agent in connection therewith, Tenant shall thereafter pay to Agent or as directed by the Agent, all rentals and all other monies due or to become due to Landlord under the Lease and Landlord hereby expressly authorizes Tenant to make such payments to Agent and hereby releases and discharges Tenant from any liability to Landlord on account of any such payments.

     5. NOTICE TO AGENT AND RIGHT TO CURE. Tenant agrees to notify Agent by certified mail, return receipt requested, with postage prepaid, of any default on the part of Landlord under the Lease which would entitle Tenant to cancel or terminate the Lease or to abate or reduce the rent payable thereunder, and Tenant further agrees that, notwithstanding any provisions of the Lease, no cancellation or termination of the Lease and no abatement or reduction of the rent payable thereunder shall be effective unless Agent has received notice of the same and has failed within thirty (30) days after both Agent’s receipt of said notice and the time when Agent shall have become entitled under the Security Instrument (as hereinafter defined) to remedy the same, to commence to cure the default which gave rise to the cancellation or termination of the Lease or abatement or reduction of the rent payable thereunder and thereafter diligently prosecutes such cure to completion, provided that in the event Agent cannot commence such cure without possession of the Property, no cancellation or termination of the Lease and no abatement or reduction of the rent payable thereunder shall be effective if Agent commences judicial or non-judicial proceedings to obtain possession within such period and thereafter diligently prosecutes such efforts and cure to completion. In addition, if such default is not susceptible of cure by Agent and Agent obtains possession of the Property, such default shall be waived. Notwithstanding the foregoing, Agent shall have no obligation to cure any default by Landlord except as provided in Section 3 in the event Agent shall become the owner of the Property by reason of the foreclosure of the Security Instrument or the acceptance of a deed or assignment in lieu of foreclosure or by reason of any other enforcement of the Security Instrument.

     6. NOTICES. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

If to Tenant:
	Attention:
If to Agent:	KeyBank National Association
	225 Franklin Street, 18th Floor
	Boston, MA 02110
	Attention: Christopher T. Neil

or addressed as such party may from time to time designate by written notice to the other parties. For purposes of this Section 6, the term “Business Day” shall mean a day on which commercial banks are not authorized or required by law to close in the state where the Property is located. Either party by notice to the other may designate additional or different addresses for subsequent notices or communications.

          7. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of Agent, Lenders, Tenant and Purchaser and their respective successors and assigns.

          8. GOVERNING LAW. This Agreement shall be deemed to be a contract entered into pursuant to the laws of California and shall in all respects be governed, construed, applied and enforced in accordance with the laws of the State of California.

          9. MISCELLANEOUS. This Agreement may not be modified in any manner or terminated except by an instrument in writing executed by the parties hereto. If any term, covenant or condition of this Agreement is held to be invalid, illegal or unenforceable in any respect, this Agreement shall be construed without such provision. This Agreement may be executed in any number of duplicate originals and each duplicate original shall be deemed to be an original. This Agreement may be executed in several counterparts, each of which counterparts shall be deemed an original instrument and all of which together shall constitute a single Agreement. The failure of any party hereto to execute this Agreement, or any counterpart hereof, shall not relieve the other signatories from their obligations hereunder. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa.

(Signatures on Next Page)

     IN WITNESS WHEREOF, Agent and Tenant have duly executed this Agreement as an instrument under seal as of the date first above written.

AGENT: KEYBANK NATIONAL ASSOCIATION, a national banking association
By:
	Name:
	Its:
TENANT:
By:
	Name:
	Its:

The undersigned hereby joins in the execution of this Agreement in order to evidence its acceptance of, and agreement to, the provisions of Section 4 hereof.

BORROWER/LANDLORD: TNP SRT SAN JACINTO, LLC, a Delaware limited liability company
By:	TNP Strategic Retail Operating Partnership, LP, a Delaware limited liability company, its Sole Member

By:   TNP Strategic Retail Trust, Inc., a Maryland corporation, its General Partner  

By:
	Name:
	Title:

STATE OF CALIFORNIA
COUNTY OF                                         

     On August ____, 2010, before me, the undersigned notary public, personally appeared ________________, the _______________ of TNP Strategic Realty Trust, Inc., a Maryland corporation and the General Partner of TNP Strategic Retail Operating Partnership, LP, a Delaware limited liability company and Sole Member of TNP SRT San Jacinto, LLC, a Delaware limited liability company proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said limited liability companies, for its stated purpose.

Notary Public

Print Name                                                                

My Commission Expires                                          

[SEAL]

(The balance of this page intentionally is blank.)

EXHIBIT A

LEGAL DESCRIPTION

PARCEL “A”

PARCEL A AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 4 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF SAID PARCEL 4 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, NORTH 89° 54’ 46” WEST A DISTANCE OF 83.32 FEET;

THENCE LEAVING SAID SOUTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 124.09 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 4;

THENCE ALONG THE EASTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID PARCEL 4 SOUTH 89° 54’ 46” EAST A DISTANCE OF 234.80 FEET;

THENCE LEAVING SAID PROLONGATION SOUTH 00° 05’ 14” WEST A DISTANCE OF 107.09 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE SOUTHERLY LINE OF SAID

PARCEL MAP NO. 33196 THE FOLLOWING COURSES:

SOUTH 45° 05’ 14” WEST A DISTANCE OF 24.04 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 134.48 FEET TO THE POINT OF BEGINNING.

PARCEL “B”

PARCEL B AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 6, 7 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216, PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST NORTHWESTERLY CORNER OF PARCEL 6 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING THE NORTHWEST CORNER OF SAID PARCEL MAP NO. 33196, SAID POINT ALSO BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196 SOUTH 89° 54’ 40” EAST A DISTANCE OF 389.59 FEET;

THENCE LEAVING SAID NORTHERLY LINE, SOUTH 00° 05’ 14” WEST A DISTANCE OF 151.01 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 56.33 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 108.16 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 83.75 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL 7;

THENCE ALONG THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID PARCEL 7 NORTH 00° 05’ 14” EAST A DISTANCE OF 130.00 FEET;

THENCE LEAVING SAID NORTHERLY PROLONGATION

NORTH 89° 54’ 46” WEST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 107.17 FEET;

THENCE NORTH 89° 54’ 40” WEST A DISTANCE OF 231.52 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL MAP NO. 33196 SAID POINT BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID SANDERSON AVENUE, NORTH 00° 06’ 56” EAST A DISTANCE OF 21.00 FEET TO THE POINT OF BEGINNING.

PARCEL “C”

PARCEL C AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 4, 6, 7, AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID PARCEL 2 THE FOLLOWING COURSES:

NORTH 00° 05’ 14” EAST A DISTANCE OF 132.26 FEET;

THENCE NORTH 89°54’ 46” WEST A DISTANCE OF 28.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 30.00 FEET THE NORTHEAST CORNER OF SAID PARCEL 2, SAID POINT BEING ON THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID PARCEL 6;

THENCE ALONG SAID WESTERLY PROLONGATION, SOUTH 89° 54’ 46” EAST A DISTANCE OF 28.00 FEET TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 6;

THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 6 THE FOLLOWING COURSE:

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 42.50 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 66.50 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 6.92 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 30.00 FEET WITH A RADIAL BEARING OF SOUTH 89° 54’ 46” EAST;

THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 94° 54’ 51” AN ARC LENGTH OF 49.70 FEET;

THENCE SOUTH 85° 10’ 23” WEST A DISTANCE OF 119.40 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 50.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL MAP NO. 33196 SAID POINT BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID SANDERSON AVENUE, NORTH 00° 06’ 56” EAST A DISTANCE OF 25.02 FEET;

THENCE LEAVING SAID EASTERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 231.52 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 107.17 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET TO A POINT ON THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID PARCEL 7;

THENCE ALONG SAID NORTHERLY PROLONGATION, SOUTH 00° 05’ 14” WEST A DISTANCE OF 130.00 FEET;

THENCE LEAVING THE WEST LINE OF SAID LOT 7,

SOUTH 89° 54’ 46” EAST A DISTANCE OF 83.75 FEET TO A POINT 10.00 FEET WEST OF THE SOUTHERLY PROLONGATION OF THE EASTERLY LINE OF SAID PARCEL 6;

THENCE ON A LINE PARALLEL WITH AND 10.00 FEET DISTANT FROM THE EASTERLY LINE OF SAID PARCEL 6 NORTH 00° 05’ 14” EAST A DISTANCE OF 108.16 FEET;

THENCE LEAVING SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 56.33 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 179.76 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 16.80 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 112.56 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 38.75 FEET;

THENCE LEAVING SAID PARALLEL LINE, SOUTH 00° 05’ 14” WEST A DISTANCE OF 162.53 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL 4, SAID POINT BEING ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 56.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID SOUTHERLY LINE THE FOLLOWING COURSE:

NORTH 89° 54’ 46” WEST A DISTANCE OF 94.81 FEET;

THENCE NORTH 44° 54’ 46” WEST A DISTANCE OF 24.04 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 42.00 FEET TO THE SOUTHWEST CORNER OF SAID PARCEL 4, SAID POINT ALSO BEING THE SOUTHEAST CORNER OF PARCEL 3 OF SAID PARCEL MAP NO. 33196;

THENCE LEAVING SAID SOUTHERLY LINE, ALONG THE EASTERLY LINE OF SAID PARCEL 3;

NORTH 00° 05’ 14” EAST A DISTANCE OF 107.09 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE CONTINUING ALONG THE EASTERLY LINE OF SAID PARCEL 3 THE FOLLOWING COURSES:

NORTH 00° 05’ 14” EAST A DISTANCE OF 204.87 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 74.22 FEET;

THENCE NORTH 00° 5’ 14” EAST A DISTANCE OF 39.13 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL 2;

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL 2 SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET TO THE POINT OF BEGINNING.

PARCEL “D”

PARCEL D AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 6 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID PARCEL 8 OF PARCEL MAP NO. 33196, SAID POINT BEING ON THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 135.33 FEET TO THE TRUE POINT OF BEGINNING;

THENCE LEAVING SAID NORTHERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 329.77 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 16.80 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 112.56 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP

NO. 33196;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 130.00 FEET;

THENCE LEAVING SAID PARALLEL LINE, NORTH 00° 05’ 14” EAST A DISTANCE OF 119.33 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 20.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 61.33 FEET;

THENCE NORTH 72° 23’ 24” EAST A DISTANCE OF 16.23 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 32.65 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 22.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 224.08 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID NORTHERLY LINE NORTH 89° 54’ 40” WEST A DISTANCE OF 126.67 FEET TO THE TRUE POINT OF BEGINNING.

PARCEL “E”

PARCEL E AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 8, 9, AND 10 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 8 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING ON THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 133.50 FEET TO A POINT 11.75 FEET WEST OF THE NORTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A LINE PARALLEL WITH AND 11.75 FEET DISTANT FROM THE EASTERLY LINE OF SAID PARCEL 9 SOUTH 00° 05’ 14” WEST A DISTANCE OF 253.17 FEET TO A POINT ON THE EASTERLY LINE OF SAID PARCEL 9;

THENCE ALONG SAID EASTERLY LINE, LEAVING SAID PARALLEL LINE SOUTH 25° 06’ 15” WEST A DISTANCE OF 5.32 FEET TO AN ANGLE POINT ON THE EASTERLY LINE OF SAID PARCEL 9;

THENCE ALONG SAID EASTERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 36.00 FEET TO THE SOUTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A SOUTHERLY PROJECTION OF THE EASTERLY LINE OF SAID PARCEL 9 SOUTH 00° 05’ 14” WEST A DISTANCE OF 42.17 FEET;

THENCE LEAVING SAID SOUTHERLY PROJECTION NORTH 89° 54’ 46” WEST A DISTANCE OF 73.00 FEET TO A POINT ON THE EASTERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID EASTERLY LINE THE FOLLOWING COURSES:

SOUTH 00° 05’ 14” WEST A DISTANCE OF 119.83 FEET;

THENCE SOUTH 04° 39’ 40” WEST A DISTANCE OF 25.08 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 106.86 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196, SAID POINT BEING THE SOUTHEAST CORNER OF SAID PARCEL 8;

THENCE ALONG SAID SOUTHERLY LINE NORTH 89° 54’ 46” WEST A DISTANCE OF 40.00 FEET TO AN ANGLE POINT OF SAID SOUTHERLY LINE;

THENCE LEAVING SAID SOUTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 107.09 FEET TO A POINT ON THE EASTERLY PROLONGATION OF THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID EASTERLY PROLONGATION NORTH 89° 54’ 46” WEST A DISTANCE OF 143.61 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 4;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 4 NORTH 89° 54’ 46” WEST A DISTANCE OF 91.19 FEET;

THENCE LEAVING SAID NORTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 38.44 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF SAID PARCEL 4;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 91.25 FEET;

THENCE LEAVING SAID PARALLEL LINE, NORTH 00° 05’ 14” EAST A DISTANCE OF 119.33 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 20.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 61.33 FEET;

THENCE NORTH 72° 23’ 24” EAST A DISTANCE OF 16.23 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 32.65 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 22.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 224.08 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 113.83 FEET TO THE POINT OF BEGINNING.

PARCEL “F”

PARCEL F AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 9 AND 10 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY

MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 10 OF SAID PARCEL MAP 33196, SAID POINT BEING THE NORTHEAST CORNER OF SAID PARCEL MAP NO. 33196.

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 10 NORTH 89° 54’ 40” WEST A DISTANCE OF 179.96 FEET TO A POINT 11.75 FEET WEST OF THE NORTHWEST CORNER OF SAID PARCEL 10;

THENCE LEAVING SAID NORTHERLY LINE, ON A LINE PARALLEL WITH AND 11.75 FEET DISTANT FROM THE WESTERLY LINE OF SAID PARCEL 10, SOUTH 00° 05’ 14” WEST A DISTANCE OF 253.17 FEET; TO A POINT ON THE WESTERLY LINE OF PARCEL 10;

THENCE ALONG SAID WESTERLY LINE, LEAVING SAID PARALLEL LINE, SOUTH 25° 06’ 15” WEST A DISTANCE OF 5.32 FEET; TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 10;

THENCE ALONG SAID WESTERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 36.00 FEET TO THE SOUTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A SOUTHERLY PROJECTION OF THE WESTERLY LINE OF SAID PARCEL 10 SOUTH 00° 05’ 14” WEST A DISTANCE OF 42.17 FEET;

THENCE LEAVING SAID SOUTHERLY PROJECTION NORTH 89° 54’ 46” WEST A DISTANCE OF 73.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL 10;

THENCE ALONG THE WESTERLY LINE OF THE FOLLOWING COURSES:

SOUTH 00° 05’ 14” WEST A DISTANCE OF 119.83 FEET;

THENCE SOUTH 04° 39’ 40” WEST A DISTANCE OF 25.08 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 106.86 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196 SAID POINT BEING THE SOUTHWEST CORNER OF SAID

PARCEL 10;

THENCE ALONG SAID SOUTHERLY LINE SOUTH 89° 54’ 46” EAST A DISTANCE OF 28.00 FEET TO THE SOUTHWEST CORNER OF PARCEL 5 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 5 NORTH 00° 05’ 14” EAST A DISTANCE OF 136.36 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 5;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 5 SOUTH 89° 54’ 46” EAST A DISTANCE OF 228.92 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 5, SAID POINT BEING ON THE EASTERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG SAID EASTERLY LINE NORTH 00° 07’ 25” EAST A DISTANCE OF 451.49 FEET TO THE POINT OF BEGINNING.

PARCEL “G”

PARCELS 1 AND 2 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, AS SHOWN ON A MAP FILED IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL “H”

PARCEL 5 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, AS SHOWN ON A MAP FILED IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL “I”

NON-EXCLUSIVE, PERPETUAL EASEMENTS FOR THE PURPOSES OF PEDESTRIAN AND VEHICULAR INGRESS AND EGRESS, DRAINAGE AND UTILITIES ALONG WITH NON-EXCLUSIVE EASEMENTS FOR PARKING, BUILDING ENCROACHMENTS AND SIGN MAINTENANCE AS FURTHER DESCRIBED AND SET FORTH IN A DOCUMENT ENTITLED “DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RECIPROCAL EASEMENT AGREEMENT” RECORDED APRIL 4, 2006 AS INSTRUMENT NO. 2006-0238823 OF OFFICIAL RECORDS.

APN: 436-710-001-0 and 436-710-002-1 and 436-710-003-2 and 436-710-004-3 and 436-710-005-4 and 436-710-006-5 and 436-710-007-6 and 436-710-008-7 and 436-710-010-8

Schedule VII

Form of Estoppel

TENANT:

PROJECT:

TENANT ESTOPPEL CERTIFICATE

To:	KeyBank National Association, as Agent, its successors and assigns
	Re:  Lease Pertaining to                                          (the “Project”)

Ladies and Gentlemen:

The undersigned, as tenant (“Tenant”), hereby states and declares as follows:

1.	Tenant is the lessee under that certain lease (the “Lease”) pertaining to the Project which is dated                     .
2.	The name of the current Landlord is:                     .
3.	The Lease is for the following portion of the Project                                         (the “Demised Premises”) (if the entire Project, so state):
4.	The Lease has not been modified or amended except by the following documents (if none, so state):
5.	The initial term of the Lease commenced on                     , 2                     and shall expire on                     , 2                    , unless sooner terminated in accordance with the terms of the Lease. Tenant has no option to renew or extend the term of the Lease, except as follows (if none, so state):
6.	The Lease, as it may have been modified or amended, contains the entire agreement of Landlord and Tenant with respect to the Demised Premises, and is in full force and effect.
7.	As of the date hereof, Tenant is occupying the Demised Premises and is paying rent on a current basis under the Lease.

(a)	The minimum monthly or base rent currently being paid by Tenant for the Demised Premises pursuant to the terms of the Lease is $                     per month.
(b)	Percentage rent (“Percentage Rent”), if any, due under the Lease has been paid through                      and the amount of Percentage Rent for the last period paid was $                    .

(c) Common area maintenance, taxes, insurance and other charges (the “Reimbursables”), if any, due under the Lease have been paid through

8.	Tenant has accepted possession of the Demised Premises, and all items of an executory nature relating thereto to be performed by Landlord have been completed, including, but not limited to, completion of construction thereof (and all other improvements required under the Lease) in accordance with the terms of the Lease and within the time periods set forth in the Lease. Landlord has paid in full any required contribution towards work to be performed by Tenant under the Lease, except as follows (if none, so state):
9.	The Demised Premises shall be expanded by the addition of the following space on the dates hereinafter indicated (if none, so state):                                         .
10.	No default or event that with the passage of time or notice would constitute a default (hereinafter collectively a “Default”) on the part of Tenant exists under the Lease in the performance of the terms, covenants and conditions of the Lease required to be performed on the part of Tenant.
11.	To the best of Tenant’s knowledge, no Default on the part of Landlord exists under the Lease in the performance of the terms, covenants and conditions of the Lease required to be performed on the part of Landlord.
12.	Tenant has no option or right to purchase all or any part of the Project.
13.	Tenant has not assigned, sublet, transferred, hypothecated or otherwise disposed of its interest in the Lease and/or the Premises, or any part thereof.
14.	Neither the Lease nor any obligations of Tenant thereunder have been guaranteed by any person or entity, except as follows (if none, so state):                                         .
15.	No hazardous substances are being generated, used, handled, stored or disposed of by Tenant on the Demised Premises or on the Project in violation of any applicable laws, rules or regulations or the terms of the Lease.
16.	No rentals are accrued and unpaid under the Lease, except for Percentage Rent, if any, or Reimbursables, if any, which are not yet due and payable.
17.	No prepayments of rentals due under the Lease have been made for more than one month in advance. No security or similar deposit has been made under the Lease, except for the sum of $                     which has been deposited by Tenant with Landlord pursuant to the terms of the Lease.
18.	Tenant has no defense as to its obligations under the Lease and asserts no setoff, claim or counterclaim against Landlord.
19.	Tenant has not received notice of any assignment, hypothecation, mortgage or pledge of Landlord’s interest in the Lease or the rents or other amounts payable thereunder, except as follows (if none, so state):                     .
20.	Tenant understands and acknowledges that you are about to make a loan to Landlord and receive as part of the security for such loan (i) a Mortgage [Deed of Trust] encumbering Landlord’s fee interest in the Property and the rents, issues and profits of the Lease (the “Security Instrument”), and (ii) an Assignment of Leases and Rents (“Assignment of Leases”) which affects the Lease, and that you (and persons or entities to whom the Security Instrument and/or Assignment of

	Leases may subsequently be assigned) are relying upon the representations and warranties contained herein in making such loan. Further, Tenant has received notice that the Lease and the rent and all other sums due thereunder have been assigned or are to be assigned to you as security for the aforesaid loan secured by the Security Instrument. In the event that you (or any person or entity to whom the Security Instrument and/or Assignment of Leases may subsequently be assigned) notify Tenant of a default under the Security Instrument or Assignment of Leases and demand that Tenant pay its rent and all other sums due under the Lease to you (or such future lender), Tenant shall honor such demand without inquiry and pay its rent and all other sums due under the Lease directly to you (or such future lender) or as otherwise required pursuant to such notice and shall not thereby incur any obligation or liability to Landlord.
21.	The undersigned is authorized to execute this Tenant Estoppel Certificate on behalf of Tenant.
22.	This Tenant Estoppel Certificate may be executed in any number of separate counterparts, each of which shall be deemed an original, but all of which, collectively and separately, shall constitute one and the same instrument.

Very truly yours, TENANT:
		,
a
By
	Name:
	Its:

     Landlord, as landlord under the Lease and mortgagor or grantor under the Security Instrument, hereby acknowledges and agrees for itself and its heirs, successors and assigns, that in the event of a default under the Security Instrument and/or Assignment of Leases, Tenant may pay all rent and all other sums due under the Lease to KeyBank National Association or to such person or entity to whom KeyBank National Association (or subsequent holder of the Security Instrument) may assign the Security Instrument or as directed by them, without incurring any obligation or liability to Landlord as provided in this Tenant Estoppel Certificate, the Security Instrument or any other document signed by Landlord.

LANDLORD:
a
By:
	Name:
	Title:

EX-10.52

Exhibit 10.52

APN: 436-710-001-0 and 436-710-002-1 and
436-710-003-2 and 436-710-004-3 and 436-
710-005-4 and 436-710-006-5 and 436-710-
007-6 and 436-710-008-7 and 436-710-010-8

PREPARED BY AND UPON
RECORDATION RETURN TO:

Edwards Angell Palmer & Dodge LLP
2800 Financial Plaza
Providence, RI 02903
Attention: Gail E. McCann, Esq.

DEED OF TRUST
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING

Project Commonly Known As
“San Jacinto Esplanade Retail Center, San Jacinto, Riverside County, California”

made by

TNP SRT SAN JACINTO, LLC,

as Grantor
to

FIRST AMERICAN TITLE INSURANCE COMPANY,

solely as Trustee
for the benefit of

KEYBANK NATIONAL ASSOCIATION,

as Agent for Lenders,
as Beneficiary

     NOTE: THIS DEED OF TRUST SECURES A PROMISSORY NOTE WHICH BEARS INTEREST AT RATES WHICH VARY ACCORDING TO CHANGES IN THE “PRIME RATE” AND THE “LIBOR RATE”, AS DEFINED IN THE NOTE (AS HEREINAFTER DEFINED) AND/OR A BALLOON PAYMENT.

     This instrument is to be filed and indexed in the real estate records and is also to be indexed in the Index of Financing Statements of Riverside County, California under the name of TNP SRT SAN JACINTO, LLC, as “debtor,” and KeyBank National Association, as Agent, as “secured party.” Grantor’s (as defined herein) organizational number in Delaware is 4850435.

Information concerning the security interest may be obtained from Beneficiary at the following address: 225 Franklin Street, 18^th Floor, Boston Massachusetts 02110.

     THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this “Deed of Trust”) is made as of August 11, 2010, by TNP SRT SAN JACINTO, LLC, a Delaware limited liability company (“Grantor”), whose address is 1900 Main Street, Suite 700, Irvine, CA 92614, in favor of FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation, its successors and assigns (“Trustee”), whose address is 5 First American Way, Santa Ana, California 92707, solely as trustee, for the benefit of KEYBANK NATIONAL ASSOCIATION, as Agent (in such capacity, “Beneficiary”), its successors and assigns, for itself and any other lenders who become Lenders under the Loan Agreement (as hereinafter defined) (collectively referred to as “Lenders” and each individually referred to as a “Lender”).

     Capitalized terms used herein shall have the meanings set forth in Schedule 1 of this Deed of Trust or in the specific sections of this Deed of Trust. Initially capitalized terms used and not otherwise defined in this Agreement shall have the meanings respectively ascribed to them in the Loan Agreement. Any terms used or defined in the California Uniform Commercial Code, as in effect from time to time, and not defined in this Deed of Trust has the meaning given to the term in the California Uniform Commercial Code, as in effect from time to time, when used in this Deed of Trust.

1. Grant and Secured Obligations.

     1.1 Grant. For the purpose of securing payment and performance of the Secured Obligations defined and described in Section 1.2 of this Deed of Trust, Grantor, as debtor hereby irrevocably and unconditionally grants, bargains, sells, conveys, mortgages and warrants to Trustee in trust, for the benefit of the Beneficiary, as secured party, with power of sale and with right of entry and possession, all estate, right, title and interest which Grantor now has or may later acquire in and to the following property (all or any part of such property, or any interest in all or any part of it, as the context may require, the “Property”):

     (a) The real property located in the County of Riverside, State of California, as described in Exhibit A, together with all existing and future easements and rights affording access to it (the “Premises”);

     (b) All buildings, structures and improvements now located or later to be constructed on the Premises (the “Improvements”);

     (c) All existing and future appurtenances, privileges, easements, franchises and tenements of the Premises, including all minerals, oil, gas, other hydrocarbons and associated substances, sulphur, nitrogen, carbon dioxide, helium and other commercially valuable substances which may be in, under or produced from any part of the Premises, all development rights and credits, air rights, water, water rights (whether riparian, appropriative or otherwise, and whether or not appurtenant) and water stock, and any Premises lying in the streets, roads or avenues, open or proposed, in front of or adjoining the Premises and Improvements;

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     (d) All existing and future leases, subleases, subtenancies, licenses, occupancy agreements and concessions (collectively, “Leases”) relating to the use and enjoyment of all or any part of the Premises and Improvements, and any and all guaranties and other agreements relating to or made in connection with any of such Leases;

     (e) All real property and improvements on it, and all appurtenances and other property and interests of any kind or character, whether described in Exhibit A or not, which may be reasonably necessary or desirable to promote the present and any reasonable future beneficial use and enjoyment of the Premises and Improvements;

     (f) All goods, materials, supplies, chattels, furniture, fixtures, equipment, inventory, machinery and articles of personal property, of every kind and character, tangible and intangible (including software embedded therein), now owned or hereafter acquired by Grantor now or later to be attached to, placed in or on, or used in connection with the use, enjoyment, occupancy or operation of all or any part of the Premises and Improvements, whether stored on the Premises or elsewhere, including all pumping plants, engines, pipes, ditches and flumes, and also all gas, electric, cooking, heating, cooling, air conditioning, lighting, refrigeration and plumbing fixtures and equipment, all of which shall be considered to the fullest extent of the law to be real property for purposes of this Deed of Trust;

     (g) All building materials, equipment, work in process or other personal property of any kind, whether stored on the Premises or elsewhere, which have been or later will be acquired for the purpose of being delivered to, incorporated into or installed in or about the Premises or Improvements;

     (h) All rights to the payment of money, accounts (including any rent concession account), funds, deposit accounts, operating accounts, bank accounts, tenant security accounts, accounts receivable, reserves, deferred payments, refunds, cost savings, payments and deposits, whether now or later to be received from third parties (including all earnest money sales deposits) or deposited by Grantor with third parties (including all utility deposits), contract rights, construction contracts, commercial paper, warranties, development and use rights, governmental permits and licenses, development rights, applications, architectural and engineering plans, specifications and drawings, as-built drawings, chattel paper, tangible chattel paper, electronic chattel paper, instruments, documents, notes, acceptances, bonuses, actions, rights, drafts, general intangibles, payment intangibles, software, trade names, trademarks, commercial tort claims, letter of credit rights and proceeds, investment property, supporting obligations of every kind and nature;

     (i) All insurance policies pertaining to the Premises and all proceeds, including all claims to and demands for them, of the voluntary or involuntary conversion of any of the Premises, Improvements or the other property described above into cash or liquidated claims, including proceeds of all present and future fire, hazard or casualty insurance policies, to the extent permitted by law, and all condemnation awards, to the extent permitted by law, or payments now or later to be made by any public body or decree by any court of competent jurisdiction for any taking or in connection with any

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condemnation or eminent domain proceeding, to the extent permitted by law, and all causes of action and their proceeds for any damage or injury to the Premises, Improvements or the other property described above or any part of them, or breach of warranty in connection with the construction of the Improvements, including causes of action arising in tort, contract, fraud or concealment of a material fact;

     (j) All of Grantor’s rights in and to all Interest Rate Agreements, if any;

     (k) All books and records pertaining to any and all of the property described above, including computer-readable memory and any computer hardware or software necessary to access and process such memory (“Books and Records”); and

     (l) All products, proceeds of, additions and accretions to, substitutions and replacements for, and changes in any of the property described above.

     1.2 Secured Obligations.

     (a) Grantor makes the grant, conveyance, and mortgage set forth in Section 1.1 above, and grants the security interest set forth in Section 3 of this Deed of Trust for the purpose of securing the following obligations (the “Secured Obligations”) in any order of priority that Beneficiary may choose:

     (i) Payment of all obligations at any time owing under a Revolving Credit Note (as amended, restated and/or modified from time to time, the “Note”) dated as of November 12, 2009, payable by TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership (“Original Borrower”) (later amended to include Grantor and any other Borrower) as maker in the stated maximum principal amount of Fifteen Million Dollars ($15,000,000) to the order of Beneficiary;

     (ii) Payment and performance of all obligations of Grantor under this Deed of Trust;

     (iii) Payment and performance of all obligations of Original Borrower, Grantor and any other borrowers (collectively “Borrowers”), Beneficiary, and the Lenders under a Revolving Credit Agreement dated as of November 12, 2009 (as amended, restated and/or modified from time to time, the “Loan Agreement”);

     (iv) Payment and performance of any obligations of Original Borrower, Grantor and any other Borrower under any Loan Documents (except the San Jacinto Environmental Indemnity Agreement and the Guaranty (each as defined in the Loan Agreement), which shall remain unsecured), which are executed by Original Borrower and Grantor;

     (v) Payment and performance of all obligations of Original Borrower, Grantor and any other Borrower arising from any Interest Rate Agreement;

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     (vi) Payment and performance of all future loans, advances and other obligations that Grantor, Original Borrower or any other Borrower may agree to pay and/or perform (whether as principal, surety or guarantor) for the benefit of Beneficiary, when a writing evidences the parties’ agreement that the advance or obligation be secured by this Deed of Trust.

     (vii) Payment and performance of all modifications, amendments, extensions, and renewals, however evidenced, of any of the Secured Obligations.

Notwithstanding any other provision of this Deed of Trust or the other Loan Documents to the contrary, this Deed of Trust does not secure any of the obligations of Grantor under the San Jacinto Environmental Indemnity, it being the intent and agreement of the parties that the obligations of Grantor under the San Jacinto Environmental Indemnity be and remain unsecured by any interest in the Property. It is the intent of the parties that the Property shall secure all of the Secured Obligations presently or hereafter owed, and that the priority of the lien created by this Deed of Trust for all such Secured Obligations shall be as of the time of recording of this Deed of Trust. In addition, this Deed of Trust shall also secure the unpaid balances of all future advances (i) made by Beneficiary and Lenders as further advances of loan proceeds under the Loan Agreement, (ii) made by Beneficiary and Lenders with respect to the Property for the payment of taxes, assessments, insurance premiums, costs or any other advances incurred for the protection of the Property, and/or (ii) otherwise made by Beneficiary and Lenders as contemplated by this Deed of Trust or any of the other Loan Documents, together with interest thereon until paid at the Default Rate, all as contemplated in this Deed of Trust and the other Loan Documents, all of which shall constitute a part of the Secured Obligations. THIS SECTION SHALL SERVE AS NOTICE TO ALL PERSONS WHO MAY SEEK OR OBTAIN A LIEN ON THE TRUST ESTATE SUBSEQUENT TO THE DATE OF RECORDING OF THIS DEED OF TRUST, THAT UNTIL THIS DEED OF TRUST IS RELEASED, ANY DEBT OWED BENEFICIARY BY ORIGINAL BORROWER, GRANTOR, OR ANY OTHER BORROWER, INCLUDING ADVANCES MADE SUBSEQUENT TO THE RECORDING OF THIS DEED OF TRUST, SHALL BE SECURED WITH THE PRIORITY AFFORDED THIS DEED OF TRUST AS AND WHEN RECORDED.

     (b) All persons who may have or acquire an interest in all or any part of the Property will be considered to have notice of, and will be bound by, the terms of the Secured Obligations and each other agreement or instrument made or entered into in connection with each of the Secured Obligations. Such terms include any provisions in the Note or the Loan Agreement which permit borrowing, repayment and reborrowing, or which provide that the interest rate on one or more of the Secured Obligations may vary from time to time.

2. Assignment of Rents.

     2.1 Assignment. Grantor hereby irrevocably, absolutely, presently and unconditionally assigns to Beneficiary all rents, royalties, issues, profits, revenue, income, accounts, proceeds and other benefits of the Property, whether now due, past due or to become due, including all prepaid rents and security deposits (some or all collectively, as the context may require, “Rents”).

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     2.2 Grant of License. This assignment of Leases and Rents constitutes an absolute, irrevocable and present assignment, but Beneficiary hereby confers upon Grantor a license (“License”) to collect and retain the Rents as they become due and payable, so long as no Event of Default, as defined in Section 6.2 of this Deed of Trust, shall exist and be continuing. If an Event of Default has occurred and is continuing, Beneficiary shall have the right, which it may choose to exercise in its sole discretion, to terminate this License without notice to or demand upon Grantor, and without regard to the adequacy of Beneficiary’s security under this Deed of Trust.

     2.3 Collection and Application of Rents. Upon termination of the License granted to Grantor under Section 2.2 of this Deed of Trust, Beneficiary has the right, power and authority to collect any and all Rents. Effective upon such termination, Grantor hereby appoints Beneficiary its attorney-in-fact to perform any and all of the following acts, if and at the times when Beneficiary in its sole discretion may so choose:

     (a) Demand, receive and enforce payment of any and all Rents;

     (b) Give receipts, releases and satisfactions for any and all Rents; and

     (c) Sue either in the name of Grantor or in the name of Beneficiary for any and all Rents.

Beneficiary and Grantor agree that the mere recordation of the assignment granted herein entitles Beneficiary immediately to collect and receive rents upon the occurrence and during the continuance of an Event of Default, as defined in Section 6.2 of this Deed of Trust, without first taking any acts of enforcement under applicable law, such as, but not limited to, providing notice to Grantor, filing foreclosure proceedings, or seeking and/or, except as required by applicable law, obtaining the appointment of a receiver. Further, Beneficiary’s right to the Rents does not depend on whether or not Beneficiary takes possession of the Property as permitted under Subsection 6.3(c) of this Deed of Trust. In Beneficiary’s sole discretion, Beneficiary may choose to collect Rents either with or without taking possession of the Property. Beneficiary shall apply all Rents collected by it in the manner provided under Section 6.6 of this Deed of Trust. If an Event of Default occurs while Beneficiary is in possession of all or part of the Property and is collecting and applying Rents as permitted under this Deed of Trust, Beneficiary and any receiver shall nevertheless be entitled to exercise and invoke every right and remedy afforded any of them under this Deed of Trust and at law or in equity.

     2.4 Beneficiary Not Responsible. Under no circumstances shall Beneficiary have any duty to produce Rents from the Property. Regardless of whether or not Beneficiary, in person or by agent, takes actual possession of the Premises and Improvements, unless Beneficiary agrees in writing to the contrary, Beneficiary is not and shall not be deemed to be:

     (a) A “mortgagee in possession” for any purpose; or

     (b) Responsible for performing any of the obligations of the lessor under any lease; or

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     (c) Responsible for any waste committed by lessees or any other parties, any dangerous or defective condition of the Property, or any negligence in the management, upkeep, repair or control of the Property; or

     (d) Liable in any manner for the Property or the use, occupancy, enjoyment or operation of all or any part of it except in the event of gross negligence or willful misconduct of Beneficiary.

     2.5 Leasing. Grantor shall not accept any deposit or prepayment of Rents (excluding security deposits) under the leases for any rental period exceeding one (1) month without Beneficiary’s prior written consent. Grantor shall not lease the Property or any part of it except in accordance with the provisions of the Loan Agreement.

3. Grant of Security Interest.

     3.1 Security Agreement. The parties intend for this Deed of Trust to create a lien on the Property, and an absolute assignment of the Rents, all in favor of Beneficiary. The parties acknowledge that some of the Property and some or all of the Rents may be determined under applicable law to be personal property or fixtures. To the extent that any Property or Rents may be or be determined to be personal property, Grantor as debtor hereby grants Beneficiary as secured party a security interest in all such Property and Rents, including all products and proceeds thereof, and all supporting obligations ancillary to or arising in any way in connection therewith to secure payment and performance of the Secured Obligations. This Deed of Trust constitutes a security agreement under the Uniform Commercial Code of the State in which the Property is located, covering all such Property and Rents.

     3.2 Financing Statements.

     This Deed of Trust constitutes and is effective as a financing statement covering any of the Property which is personal property or otherwise subject to Article 9 of the Uniform Commercial Code. For this purpose, the respective addresses of Grantor, as debtor, and Beneficiary and Trustee, as secured parties, are as set forth in the preamble of this Deed of Trust. In addition to the foregoing, Grantor hereby authorizes Beneficiary to file one or more financing statements. In addition, Grantor shall execute such other documents as Beneficiary may from time to time require to perfect or continue the perfection of Beneficiary’s security interest in any Property or Rents. As provided in Section 5.9 of this Deed of Trust, Grantor shall pay all fees and costs that Beneficiary may incur in filing such documents in public offices and in obtaining such record searches as Beneficiary may reasonably require. In case Grantor fails to execute any financing statements or other documents for the perfection or continuation of any security interest, Grantor hereby appoints Beneficiary as its true and lawful attorney-in-fact to execute any such documents on its behalf. If any financing statement or other document is filed in the records normally pertaining to personal property, that filing shall never be construed as in any way derogating from or impairing this Deed of Trust or the rights or obligations of the parties under it.

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4. Fixture Filing.

     This Deed of Trust constitutes a financing statement filed as a fixture filing under Article 9 of the Uniform Commercial Code in the State in which the Property is located, as amended or recodified from time to time, covering any Property which now is or later may become fixtures attached to the Premises or Improvements. For this purpose, the respective addresses of Grantor, as debtor, and Beneficiary and Trustee, as secured parties, are as set forth in the preamble of this Deed of Trust.

5. Rights and Duties of the Parties.

     5.1 Representations and Warranties. Grantor represents and warrants that:

     (a) Grantor lawfully possesses and holds, and covenants to maintain, lawful, good and marketable fee simple title to all of the Premises and Improvements;

     (b) To Grantor’s knowledge, Grantor has, and covenants to maintain, good title to all Property other than the Premises and Improvements;

     (c) Grantor has the full and unlimited power, right and authority to encumber the Property and assign the Rents;

     (d) This Deed of Trust creates a first priority lien on the Property except for the Permitted Encumbrances;

     (e) The Property includes all property and rights which may be reasonably necessary or desirable to promote the present and any reasonable future beneficial use and enjoyment of the Premises and Improvements;

     (f) Except for the Permitted Encumbrances, to Grantor’s knowledge, Grantor owns any Property which is personal property free and clear of any security agreements, liens, security interests, encumbrances, reservations of title or conditional sales contracts, and, to Grantor’s knowledge, there is no financing statement affecting such personal property on file in any public office; and

     (g) Grantor’s place of business, or its chief executive office if it has more than one place of business, is located at the addresses specified below.

     5.2 Taxes, and Assessments. Grantor shall pay (or shall cause to be paid) all real estate taxes and assessments and charges of every kind upon the Property before the same become delinquent, provided, however, that Grantor shall have the right to pay such tax under protest or to otherwise contest any such tax or assessment, but only if (i) such contest has the effect of preventing the collection of such taxes so contested and also of preventing the sale or forfeiture of the Property or any part thereof or any interest therein, (ii) Grantor has notified Beneficiary of Grantor’s intent to contest such taxes, and (iii) Grantor has deposited security in form and amount satisfactory to Lender, in its reasonable discretion, and has increased the amount of such security so deposited promptly after Beneficiary’s request therefor. If Grantor fails to commence such contest or, having commenced to contest the same, and having deposited

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such security required by Beneficiary for its full amount, shall thereafter fail to prosecute such contest in good faith or with due diligence, or, upon adverse conclusion of any such contest, shall fail to pay such tax, assessment or charge, Beneficiary may, at its election (but shall not be required to), pay and discharge any such tax, assessment or charge, and any interest or penalty thereon, and any amounts so expended by Beneficiary shall be deemed to constitute Secured Obligations hereunder (even if the total amount of disbursements would exceed the face amount of the Note) and shall be secured by this Deed of Trust and the Loan Documents. Upon written request of Beneficiary, Grantor shall furnish to Beneficiary evidence that taxes are paid at least five (5) days prior to the last date for payment of such taxes and before imposition of any penalty or accrual of interest.

     5.3 Performance of Secured Obligations. Grantor shall promptly pay and perform (or shall cause to be promptly paid and performed) each Secured Obligation in accordance with its terms.

     5.4 Liens, Charges and Encumbrances. Grantor will not suffer or permit any mechanics’ lien, voluntary or involuntary lien, lien, encumbrance, security interest, claim, charge, conditional sale or other title retention document to be filed or otherwise asserted against the Property (or any portion thereof), and will promptly discharge the same in case of the filing of any claims for lien or proceedings for the enforcement thereof, provided, however, that Grantor shall have the right to contest in good faith and with reasonable diligence the validity of any such lien or claim provided that Grantor posts a statutory lien bond which removes such lien from title to the Property within ten (10) days after Grantor’s receipt of notice of the recording of such lien. If Grantor shall fail promptly either (i) to discharge any such lien, or (ii) post a statutory lien bond in the manner provided above, Beneficiary may, at its election (but shall not be required to), procure the release and discharge of any such claim and any judgment or decree thereon and, further, may in its sole discretion effect any settlement or compromise of the same, or may furnish such security or indemnity to the applicable insurance company, and any amounts so expended by Beneficiary, including premiums paid or security furnished in connection with the issuance of any surety company bonds, shall be deemed to constitute Secured Obligations secured by this Deed of Trust and the Loan Documents. In settling, compromising or discharging any claims for lien, Beneficiary shall not be required to inquire into the validity or amount of any such claim.

     5.5 Insurance and Condemnation.

          (a) Insurance. Grantor shall obtain and maintain (or shall cause to be obtained and maintained) at Grantor’s sole expense the insurance required to be obtained and maintained pursuant to the Loan Agreement. Upon any foreclosure hereof or transfer of title to the Property in extinguishment of the whole or any part of the Secured Obligations, all of Grantor’s right, title and interest in and to the insurance policies referred to in this Section (including unearned premiums) and all proceeds payable thereunder shall thereupon vest in the purchaser at foreclosure or other such transferee, to the extent permissible under such policies. Beneficiary shall have the right (but not the obligation) to make proof of loss for, settle and adjust any claim under, and receive the proceeds of, all insurance for loss of or damage to the Property, regardless of whether or not such insurance policies are required by Beneficiary, and the expenses incurred by Beneficiary in the adjustment and collection of insurance proceeds shall

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be a part of the Secured Obligations and shall be due and payable to Beneficiary on demand to the extent permitted by law. Beneficiary shall not be, under any circumstances, liable or responsible for failure to collect or exercise diligence in the collection of any of such proceeds or for the obtaining, maintaining or adequacy of any insurance or for failure to see to the proper application of any amount paid over to Grantor. In the event of any casualty to the Property or any portion thereof, any such proceeds received by Beneficiary shall within sixty (60) days following the event of casualty, after deduction therefrom of all reasonable expenses actually incurred by Beneficiary, including attorneys’ fees, at Beneficiary’s option be (1) released to Grantor in accordance with the rights of Grantor, or (2) applied (upon compliance with the terms and conditions set forth in Section 5.5(c) of this Deed of Trust) to the repair or restoration, either partly or entirely, of the Property so damaged, or (3) applied to the payment of the Secured Obligations in such order and manner as Beneficiary, in its sole discretion, may elect, whether or not due; provided, however, that Grantor shall have the right to require the release of such proceeds if Grantor can demonstrate satisfaction of the conditions set forth in Section 5.5(c) of this Deed of Trust and any release of such proceeds shall be upon the terms and conditions more particularly set forth in said Section 5.5(c). In any event, the unpaid portion of the Secured Obligations shall remain in full force and effect and the payment thereof shall not be excused. Grantor shall at all times comply with the requirements of the insurance policies required hereunder and of the issuers of such policies and of any board of fire underwriters or similar body as applicable to or affecting the Property.

          (b) Condemnation. Grantor shall notify Beneficiary immediately of any threatened or pending proceeding for condemnation affecting the Property or arising out of damage to the Property, and Grantor shall, at Grantor’s expense, diligently prosecute any such proceedings. Beneficiary shall have the right (but not the obligation) to participate in any such proceeding and to be represented by counsel of its own choice. To the extent permitted by law, Beneficiary shall be entitled to receive all sums which may be awarded or become payable to Grantor for the condemnation of the Property, or any part thereof, for public or quasi-public use, or by virtue of private sale in lieu thereof, and any sums which may be awarded or become payable to Grantor for injury or damage to the Property. Grantor shall, promptly upon request of Beneficiary, execute such additional assignments and other documents as may be necessary from time to time to permit such participation and to enable Beneficiary to collect and receipt for any such sums. All such sums are hereby assigned to Beneficiary, and shall within sixty (60) days following such taking, after deduction therefrom of all reasonable expenses actually incurred by Beneficiary, including attorneys’ fees, at Beneficiary’s option be (1) applied (upon compliance with the terms and conditions set forth in Section 5.5(c) of this Deed of Trust) to the repair or restoration of the Property so affected, or (2) applied to the payment of the Secured Obligations in such order and manner as Beneficiary, in its sole discretion, may elect, whether or not due; provided, however, that Grantor shall have the right to require the release of such proceeds if Grantor can demonstrate satisfaction of the conditions set forth in Section 5.5(c) of this Deed of Trust and any release of such proceeds shall be upon the terms and conditions more particularly set forth in said Section 5.5(c). In any event the unpaid portion of the Secured Obligations shall remain in full force and effect and the payment thereof shall not be excused. Beneficiary shall not be, under any circumstances, liable or responsible for failure to collect or to exercise diligence in the collection of any such sum or for failure to see to the proper application of any amount paid over to Grantor. Beneficiary is hereby authorized, in the name of Grantor, to execute and deliver valid acquittances for, and to appeal from, any such award, judgment or

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decree. All reasonable costs and expenses (including but not limited to attorneys’ fees) incurred by Beneficiary in connection with any condemnation shall be a demand obligation owing by Grantor (which Grantor hereby promises to pay) to Beneficiary pursuant to this Deed of Trust.

          (c) Restoration. In the event there shall be a casualty loss or a condemnation, and Grantor requests or Beneficiary elects to cause the applicable insurance proceeds or condemnation award to be applied to restore, repair or replace the Property (“Restoration”), Beneficiary agrees to disburse such insurance proceeds or condemnation award in accordance with disbursement procedures reasonably acceptable to Beneficiary, including, without limitation, such procedures as are customarily utilized by construction lenders to insure the lien free completion of construction projects. No such insurance proceeds or condemnation award shall be disbursed unless the following conditions are satisfied promptly upon the occurrence of the casualty loss or condemnation (but in no event later than ninety (90) days following such occurrence):

     (i) no Event of Default is in existence as of the date of such casualty or condemnation or on the date of any applicable disbursement of any insurance proceeds or condemnation award to the Grantor (excluding any Event of Default relating to such casualty or condemnation);

     (ii) Beneficiary is reasonably satisfied that all payments to be made by Grantor under the Note will be made in a timely manner;

     (iii) Beneficiary shall have received and approved complete plans and specifications for the Restoration;

     (iv) Beneficiary shall have received and approved a construction contract for the work of Restoration with a contractor reasonably acceptable to Beneficiary;

     (v) Beneficiary shall have received copies of all permits and approvals required in connection with the Restoration;

     (vi) Beneficiary shall be satisfied that the amount of the insurance proceeds or condemnation award actually received plus any amounts pledged to the Beneficiary by the Grantor, are sufficient to pay all costs of the Restoration (as evidenced by a cost estimate prepared by an architect or engineer reasonably acceptable to Beneficiary);

     (vii) Beneficiary shall be satisfied that after the Restoration is completed, the value of the Property, upon completion of the Restoration, will equal or exceed such value immediately prior to the applicable casualty loss or condemnation; and

     (viii) Beneficiary shall be satisfied that such Restoration can be completed prior to the Maturity Date (as defined in the Note).

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     5.6 Maintenance and Preservation of Property.

     (a) Grantor shall insure (or shall cause to be insured) the Property as required by the Loan Agreement and keep the Property in materially good condition and repair and materially in accordance with terms of any Major Lease, as applicable.

     (b) Grantor shall not remove or demolish the Property or any part of in a material respect, or alter, restore or add to the Property in a material respect, or initiate or allow any change or variance in any zoning or other Premises use classification which affects the Property or any part of it, except as permitted or required by the Loan Agreement or with Beneficiary’s express prior written consent in each instance

     (c) If all or part of the Property becomes damaged or destroyed, Grantor shall promptly and completely repair and/or restore the Property in a good and workmanlike manner in accordance with sound building practices, provided that Beneficiary agrees to disburse to Grantor Proceeds or other sums to pay costs of the work of repair or reconstruction under Section 5.5 of this Deed of Trust so long as the conditions therein are satisfied.

     (d) Grantor shall not commit or allow any act upon or use of the Property which would violate, in a material respect: (i) any applicable Laws or order of any Governmental Authority, whether now existing or later to be enacted and whether foreseen or unforeseen; or (ii) any public or private covenant, condition, restriction or equitable servitude affecting the Property. Grantor shall not bring or keep any article on the Property or cause or allow any condition to exist on it, if that could invalidate or would be prohibited by any insurance coverage required to be maintained by Grantor on the Property or any part of it under the Loan Agreement.

     (e) Grantor shall not commit or allow waste of the Property, including those acts or omissions characterized under the Loan Agreement as waste which arises out of Hazardous Material to the extent the same would be reasonably likely to have a material impact on the Property.

     (f) Grantor shall perform (or shall cause to be performed) all other acts which from the character or use of the Property may be reasonably necessary to maintain and preserve its value to the extent the failure to do so would be reasonably likely to have a material impact on the Property.

     (g) If Grantor receives a notice or claim from any person that the Property, or any use, activity, operation or maintenance thereof or thereon, is not in compliance with any Legal Requirement in a material respect, Grantor will promptly furnish a copy of such notice or claim to Beneficiary. Grantor has received no notice and has no knowledge of any such noncompliance.

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     5.7 Releases, Extensions, Modifications and Additional Security. From time to time, Beneficiary may perform any of the following acts without incurring any liability or giving notice to any person:

     (a) Release any person liable for payment of any Secured Obligation;

     (b) Extend the time for payment, or otherwise alter the terms of payment, of any Secured Obligation;

     (c) Accept additional real or personal property of any kind as security for any Secured Obligation, whether evidenced by deeds of trust, mortgages, security agreements or any other instruments of security;

     (d) Alter, substitute or release any property securing the Secured Obligations;

     (e) Consent to the making of any plat or map of the Property or any part of it;

     (f) Join in granting any easement or creating any restriction affecting the Property;

     (g) Join in any subordination or other agreement affecting this Deed of Trust or the lien of it; or

     (h) Release the Property or any part of it.

     5.8 Release. When all of the Secured Obligations have been paid in full and all fees and other sums owed by Grantor under Section 5.9 of this Deed of Trust and the other Loan Documents have been received, Beneficiary and Trustee shall release this Deed of Trust, the lien created thereby, and all notes and instruments evidencing the Secured Obligations. Grantor shall pay any costs of preparation and recordation of such release.

     5.9 Compensation; Exculpation.

     (a) Grantor agrees to pay reasonable fees actually incurred by Beneficiary when the law provides no maximum limit, for any services that Beneficiary or Trustee may render in connection with this Deed of Trust, including providing a statement of the Secured Obligations or providing the release pursuant to Section 5.8 of this Deed of Trust. Grantor shall also pay or reimburse all of Beneficiary’s and Trustee’s costs and expenses which may be incurred in rendering any such services. Grantor further agrees to pay or reimburse Beneficiary for all reasonable costs, expenses and other advances which may be incurred or made by Beneficiary or Trustee in any efforts to enforce any terms of this Deed of Trust, including any rights or remedies afforded to Beneficiary and Trustee under Section 6.3 of this Deed of Trust, whether any lawsuit is filed or not, or in defending any action or proceeding arising under or relating to this Deed of Trust, including attorneys’ fees and other legal costs, costs of any Foreclosure Sale (as defined in Subsection 6.3(i) of this Deed of Trust) and any cost of evidence of title. If Beneficiary and/or Trustee, as required by applicable law, chooses to dispose of Property through more than one Foreclosure Sale, Grantor shall pay all reasonable costs, expenses

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or other advances that may be incurred or made by Beneficiary and/or Trustee in each of such Foreclosure Sales. In any suit to foreclose the lien hereof or enforce any other remedy of Trustee or Beneficiary under this Deed of Trust or the Note, there shall be allowed and included as additional indebtedness in the decree for sale or other judgment or decree all expenditures and expenses which may be paid or incurred by or on behalf of Trustee and Beneficiary for reasonable attorneys’ costs and fees (including the costs and fees of paralegals), survey charges, appraiser’s fees, inspecting engineer’s and/or architect’s fees, fees for environmental studies and assessments and all additional expenses incurred by Trustee and Beneficiary with respect to environmental matters, outlays for documentary and expert evidence, stenographers’ charges, publication costs, and costs (which may be estimated as to items to be expended after entry of the decree) of procuring all such abstracts of title, title searches and examinations, title insurance policies, Torrens certificates and similar data and assurances with respect to title as Trustee and Beneficiary may deem reasonably necessary either to prosecute such suit or to evidence to bidders at any sale which may be had pursuant to such decree the true condition of the title to, the value of or the environmental condition of the Property. All expenditures and expenses of the nature in this Subsection mentioned, and such expenses and fees as may be incurred in the protection of the Property and maintenance of the lien of this Deed of Trust, including the fees of any attorney (including the costs and fees of paralegals) employed by Trustee or Beneficiary in any litigation or proceeding affecting this Deed of Trust, the Note or the Property, including probate and bankruptcy proceedings, or in preparation for the commencement or defense of any proceeding or threatened suit or proceeding, shall be reasonable, and shall be immediately due and payable by Grantor, with interest thereon at the Default Rate and shall be secured by this Deed of Trust. Any fees, costs or expenses described in this Section 5.9(a) shall be subject to such limitations as may be imposed by applicable California law.

     (b) Neither Beneficiary nor Trustee shall be directly or indirectly liable to Grantor or any other person as a consequence of any of the following:

     (i) Beneficiary’s or Trustee’s exercise of or failure to exercise any rights, remedies or powers granted to Beneficiary and/or Trustee in this Deed of Trust;

     (ii) Beneficiary’s failure or refusal to perform or discharge any obligation or liability of Grantor under any agreement related to the Property or under this Deed of Trust; or

     (iii) Any loss sustained by Grantor or any third party resulting from Beneficiary’s failure to lease the Property, or from any other act or omission of Beneficiary in managing the Property, after an Event of Default, unless the loss is caused by the willful misconduct and bad faith of Beneficiary.

Grantor hereby expressly waives and releases all liability of the types described above, and agrees that no such liability shall be asserted against or imposed upon Beneficiary or Trustee.

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     (c) Grantor will indemnify and hold harmless Beneficiary from and against, and reimburse them on demand for, any and all Indemnified Matters (hereinafter defined). For purposes of this Section 5.9, the term “Beneficiary” shall include the directors, officers, partners, employees and agents of Beneficiary and any persons owned or controlled by, owning or controlling, or under common control or affiliated with Beneficiary and the directors, officers, partners, employees, attorneys, agents and representatives of Beneficiary. Without limitation, the foregoing indemnities shall apply to each indemnified person with respect to matters which in whole or in part are caused by or arise out of the negligence of such (and/or any other) indemnified person. However, such indemnities shall not apply to a particular indemnified person to the extent that the subject of the indemnification is caused by or arises out of the gross negligence or willful misconduct of that indemnified person. Any amount to be paid under this Section 5.9 by Grantor to Beneficiary shall be a demand obligation owing by Grantor (which Grantor hereby promises to pay) to Beneficiary pursuant to this Deed of Trust. Nothing in this paragraph, elsewhere in this Deed of Trust or in any other Loan Document shall limit or impair any rights or remedies of Beneficiary (including without limitation any rights of contribution or indemnification) against Grantor or any other person under any other provision of this Deed of Trust, any other Loan Document, any other agreement or any applicable Legal Requirement.

     As used in this Deed of Trust, the term “Indemnified Matters” means any and all claims, demands, liabilities (including strict liability), losses, damages (including consequential damages), causes of action, judgments, penalties, fines, costs and expenses (including without limitation, reasonable fees and expenses of attorneys and other professional consultants and experts, and of the investigation and defense of any claim, whether or not such claim is ultimately defeated, and the settlement of any claim or judgment including all value paid or given in settlement) of every kind, known or unknown, foreseeable or unforeseeable, which may be imposed upon, asserted against or incurred or paid by Beneficiary at any time and from time to time, whenever imposed, asserted or incurred, because of, resulting from, in connection with, or arising out of any transaction, act, omission, event or circumstance in any way connected with the Property or with this Deed of Trust or any other Loan Document, including but not limited to any bodily injury or death or property damage occurring in or upon or in the vicinity of the Property through any cause whatsoever, any act performed or omitted to be performed hereunder or under any other Loan Document, any breach by Grantor of any representation, warranty, covenant, agreement or condition contained in this Deed of Trust or in any other Loan Document, any default as defined herein, any claim under or with respect to any Lease or arising under the Environmental Agreement. Notwithstanding anything to the contrary herein, in no event shall Grantor be liable to, or required to indemnify, Beneficiary for matters arising from or relating to the gross negligence or willful misconduct of Beneficiary. The provisions of this Section 5.9 will survive the repayment of the Secured Obligations, the foreclosure of this Deed of Trust or conveyance in lieu of foreclosure, the termination of any and all Interest Rate Agreements, the discharge and release of this Deed of Trust and the other Loan Documents, any bankruptcy or other debtor relief proceeding, and any other event whatsoever.

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     (d) Grantor shall pay all obligations to pay money arising under this Section 5.9 immediately upon demand by Beneficiary. Each such obligation shall be added to, and considered to be part of, the principal of the Note, shall bear interest from the date the obligation arises at the Default Rate and shall be secured by this Deed of Trust and the other Loan Documents.

     5.10 Defense and Notice of Claims and Actions. At Grantor’s sole expense, Grantor shall protect, preserve and defend the Property and title to and right of possession of the Property, and the security of this Deed of Trust and the rights and powers of Beneficiary created under it, against all adverse claims of a material nature. Grantor shall give Beneficiary prompt notice in writing if any claim is asserted which does or could affect any such matters, or if any action or proceeding is commenced which alleges or relates to any such claim.

     5.11 Subrogation. Beneficiary shall be subrogated to the liens of all encumbrances, whether released of record or not, which are discharged in whole or in part by Beneficiary in accordance with this Deed of Trust or with the proceeds of any loan secured by this Deed of Trust.

     5.12 Site Visits, Observation and Testing. Subject to the rights of any tenant of the Property, thereunder, Beneficiary and its agents and representatives shall have the right at any reasonable time to enter and visit the Property for the purpose of performing appraisals, observing the Property, taking and removing soil or groundwater samples, and conducting tests on any part of the Property. Beneficiary has no duty, however, to visit or observe the Property or to conduct tests, and no site visit, observation or testing by Beneficiary, its agents or representatives shall impose any liability on any of Beneficiary, its agents or representatives. In no event shall any site visit, observation or testing by Beneficiary, its agents or representatives be a representation that Hazardous Material are or are not present in, on or under the Property, or that there has been or shall be compliance with any law, regulation or ordinance pertaining to Hazardous Material or any other applicable governmental law. Neither Grantor nor any other party is entitled to rely on any site visit, observation or testing by any of Beneficiary, its agents or representatives. Neither Beneficiary, its agents or representatives owe any duty of care to protect Grantor or any other party against, or to inform Grantor or any other party of, any Hazardous Material or any other adverse condition affecting the Property. Except in the event of any emergency, Beneficiary shall give Grantor reasonable notice before entering the Property. Beneficiary shall make reasonable efforts to avoid interfering with Grantor’s use of the Property in exercising any rights provided in this Section 5.12.

     5.13 Books and Records. Unless otherwise approved by Beneficiary in writing, all Property that consists of personal property (other than the Books and Records) will be located on the Premises and all Books and Records will be located at Grantor’s place of business or chief executive office if Grantor has more than one place of business.

     5.14 Leasing Restrictions: Default Under Leases. To the extent prohibited by the Loan Agreement, without the prior written consent of Beneficiary, Grantor and Grantor’s agents shall not (i) enter into any additional Leases, (ii) modify, amend or terminate any Lease, or (iii) accept any rental payment in advance of its due date.

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     5.15 Maintenance, Repair and Restoration. In all material respects, Grantor will keep the Property (or will cause the Property to be kept, as applicable) in first class order, repair, operating condition and appearance, causing all necessary repairs, renewals, replacements, additions and improvements to be promptly made, and will not allow any of the Property to be misused, abused or wasted or to deteriorate. Notwithstanding the foregoing, Grantor will not, without the prior written consent of Beneficiary, (i) remove from the Property any fixtures or personal property covered by this Deed of Trust except such as is replaced by Grantor by an article of substantially equal suitability and value, owned by Grantor, free and clear of any lien or security interest (except that created by this Deed of Trust), or (ii) make any structural alteration to the Property or any other alteration thereto which materially negatively impairs the value thereof. If any act or occurrence of a material nature (including any condemnation or any casualty for which insurance was not obtained or obtainable) shall result in damage to or loss or destruction of the Property, Grantor shall give prompt notice thereof to Beneficiary and Grantor shall promptly, at Grantor’s sole cost and expense, secure the Property as necessary and commence and continue diligently to completion to restore, repair, replace and rebuild the Property as nearly as possible to its value, condition and character immediately prior to the damage, loss or destruction.

     5.16 Operation of Property. In all material respects, Grantor will operate the Property (or will cause the Property to be operated, as applicable) in a good and workmanlike manner and in accordance with all Legal Requirements and will pay all fees or charges of any kind in connection therewith. Grantor will keep the Property occupied so as not to impair the insurance carried thereon. Grantor will not use or occupy or conduct any activity on, or allow the use or occupancy of or the conduct of any activity on, the Property in any manner which violates any Legal Requirement in a material respect or which constitutes a public or private nuisance or which makes void, voidable or cancelable, or increases the premium of, any insurance then in force with respect thereto. Grantor will not initiate or permit any zoning reclassification of the Property or seek any variance under existing zoning ordinances applicable to the Property or use or permit the use of the Property in such a manner which would result in such use becoming a nonconforming use under applicable zoning ordinances or other Legal Requirement. Grantor will not impose any easement, restrictive covenant or encumbrance upon the Property, execute or file any subdivision plat or condominium declaration affecting the Property or consent to the annexation of the Property to any municipality, without the prior written consent of Beneficiary, to the extent the foregoing would have a material adverse effect on the Property. Grantor will not do or suffer to be done any act whereby the value of any part of the Property may be materially lessened. Grantor will preserve, protect, renew, extend and retain all material rights and privileges granted for or applicable to the Property. Except as permitted by the Permitted Encumbrances, without the prior written consent of Beneficiary, there shall be no drilling or exploration for or extraction, removal or production of any mineral, hydrocarbon, gas, natural element, compound or substance (including sand and gravel) from the surface or subsurface of the Land regardless of the depth thereof or the method of mining or extraction thereof. Grantor will cause all debts and liabilities of any character (including without limitation all debts and liabilities for labor, material and equipment (including software embedded therein) and all debts and charges for utilities servicing the Property) incurred in the construction, maintenance, operation and development of the Property to be promptly paid.

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     5.17 Financial Matters. Grantor is solvent after giving effect to all borrowings contemplated by the Loan Documents and no proceeding under any Debtor Relief Law is pending (or, to Grantor’s knowledge, threatened) by or against Grantor, or any Affiliate of Grantor, as a debtor. All reports, statements, plans, budgets, applications, agreements and other data and information heretofore furnished or hereafter to be furnished by or on behalf of Grantor to Beneficiary in connection with the loan or loans evidenced by the Loan Documents (including, without limitation, all financial statements and financial information) are and will be true, correct and complete in all material respects as of their respective dates and do not and will not omit to state any fact or circumstance necessary to make the statements contained therein not misleading. No material adverse change has occurred since the dates of such reports, statements and other data in the financial condition of Grantor or, to Grantor’s knowledge, of any tenant under any lease described therein.

     5.18 Status of Grantor; Suits and Claims; Loan Documents. Grantor is and will continue to be (i) duly organized, validly existing and in good standing under the laws of its state of organization, (ii) authorized to do business in, and in good standing in, each state in which the Property is located, and (iii) possessed of all requisite power and authority to carry on its business and to own, operate and lease the Property. Each Loan Document executed by Grantor has been duly authorized, executed and delivered by Grantor, and the obligations thereunder and the performance thereof by Grantor in accordance with their terms are and will continue to be within Grantor’s power and authority (without the necessity of joinder or consent of any other person), are not and will not be in contravention of any Legal Requirement or any other document or agreement to which Grantor or the Property is subject, and do not and will not result in the creation of any encumbrance against any assets or properties of Grantor, or any other person liable, directly or indirectly, for any of the Secured Obligations, except as expressly contemplated by the Loan Documents. There is no suit, action, claim, investigation, inquiry, proceeding or demand pending (or, to Grantor’s knowledge, threatened) against Grantor or, to Grantor’s knowledge which affects the Property (including, without limitation, any which challenges or otherwise pertains to Grantor’s title to the Property) or the validity, enforceability or priority of any of the Loan Documents. There is no judicial or administrative action, suit or proceeding pending (or, to Grantor’s knowledge, threatened) against Grantor, except as has been disclosed in writing to Beneficiary in connection with the loan evidenced by the Note. The Loan Documents constitute legal, valid and binding obligations of Grantor (and of each guarantor, if any) enforceable in accordance with their terms, except as the enforceability thereof may be limited by Debtor Relief Laws (hereinafter defined) and except as the availability of certain remedies may be limited by general principles of equity. Grantor is not a “foreign person” within the meaning of the Internal Revenue Code of 1986, as amended, Sections 1445 and 7701 (i.e. Grantor is not a non-resident alien, foreign corporation, foreign partnership, foreign trust or foreign estate as those terms are defined therein and in any regulations promulgated thereunder). The loan evidenced by the Note is solely for business and/or investment purposes, and is not intended for personal, family, household or agricultural purposes. Grantor further warrants that the proceeds of the Note shall be used for commercial purposes and stipulates that the loan evidenced by the Note shall be construed for all purposes as a commercial loan. Grantor’s exact legal name is correctly set forth at the end of this Deed of Trust. If Grantor is not an individual, Grantor is an organization of the type and (if not an unregistered entity) is incorporated in or organized under the laws of the state specified in the introductory paragraph of this Deed of Trust. If Grantor is an unregistered entity (including, without limitation, a general partnership) it

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is organized under the laws of the state specified in the introductory paragraph of this Deed of Trust. Grantor will not cause or permit any change to be made in its name, identity (including its trade name or names), unless Grantor shall have notified Beneficiary in writing of such change at least 30 days prior to the effective date of such change, and shall have first taken all action required by Beneficiary for the purpose of further perfecting or protecting the lien and security interest of Beneficiary in the Property. Grantor’s principal place of business and chief executive office, and the place where Grantor keeps its books and records, including recorded data of any kind or nature, regardless of the medium of recording including, without limitation, software, writings, plans, specifications and schematics concerning the Property, has for the preceding four months (or, if less, the entire period of the existence of Grantor) been and will continue to be (unless Grantor notifies Beneficiary of any change in writing at least 30 days prior to the date of such change) the address of Grantor set forth at the end of this Deed of Trust. If Grantor is an individual, Grantor’s principal residence has for the preceding four months been and will continue to be (unless Grantor notifies Beneficiary of any change in writing at least 30 days prior to the date of such change) the address of the principal residence of Grantor set forth at the end of this Deed of Trust. Grantor’s organizational identification number, if any, assigned by the state of incorporation or organization is correctly set forth on the first page of this Deed of Trust. Grantor shall promptly notify Beneficiary (i) of any change of its organizational identification number, or (ii) if Grantor does not now have an organization identification number and later obtains one, of such organizational identification number.

     5.19 Certain Environmental Matters. Grantor shall comply with the terms and covenants of the San Jacinto Environmental Indemnity Agreement.

     5.20 Further Assurances. Grantor will, promptly on any reasonable request of Beneficiary, (i) correct any defect, error or omission which may be discovered in the contents, execution or acknowledgment of this Deed of Trust or any other Loan Document; (ii) execute, acknowledge, deliver, procure and record and/or file such further documents (including, without limitation, further deeds of trust, security agreements, and assignments of rents or leases) and do such further acts as may be necessary, desirable or proper to carry out more effectively the purposes of this Deed of Trust and the other Loan Documents, to more fully identify and subject to the liens and security interests hereof any property intended to be covered hereby (including specifically, but without limitation, any renewals, additions, substitutions, replacements, or appurtenances to the Property) or as deemed advisable by Beneficiary to protect the lien or the security interest hereunder against the rights or interests of third persons; and (iii) provide such certificates, documents, reports, information, affidavits and other instruments and do such further acts as may be necessary, desirable or proper in the reasonable determination of Beneficiary to enable Beneficiary to comply with the requirements or requests of any agency having jurisdiction over Beneficiary or any examiners of such agencies with respect to the indebtedness secured hereby, Grantor or the Property. Grantor shall pay all costs connected with any of the foregoing, which shall be a demand obligation owing by Grantor (which Grantor hereby promises to pay) to Beneficiary pursuant to this Deed of Trust.

     5.21 Fees and Expenses. Without limitation of any other provision of this Deed of Trust or of any other Loan Document and to the extent reasonable and not prohibited by applicable law, Grantor will pay, and will reimburse to Beneficiary on demand to the extent paid by Beneficiary: (i) all appraisal fees, filing, registration and recording fees, recordation, transfer

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and other taxes, brokerage fees and commissions, abstract fees, title search or examination fees, title policy and endorsement premiums and fees, uniform commercial code search fees, judgment and tax lien search fees, escrow fees, attorneys’ fees, architect fees, engineer fees, construction consultant fees, environmental inspection fees, survey fees, and all other costs and expenses of every character incurred by Grantor or Beneficiary in connection with the preparation of the Loan Documents, the evaluation, closing and funding of the loan evidenced by the Loan Documents, and any and all amendments and supplements to this Deed of Trust, the Note or any other Loan Documents or any approval, consent, waiver, release or other matter requested or required hereunder or thereunder, or otherwise attributable or chargeable to Grantor as owner of the Property; and (ii) all costs and expenses, including attorneys’ fees and expenses, incurred or expended in connection with the exercise of any right or remedy, or the defense of any right or remedy or the enforcement of any obligation of Grantor, hereunder or under any other Loan Document.

6. Accelerating Transfers; Default and Remedies.

     6.1 Accelerating Transfers.

     (a) “Accelerating Transfer” means any Transfer other than a Permitted Transfer permitted under Section 9.6.3 of the Loan Agreement.

     (b) Grantor acknowledges that Beneficiary is making one or more advances under the Loan Agreement in reliance on the expertise, skill and experience of Grantor; thus, the Secured Obligations include material elements similar in nature to a personal service contract. In consideration of Beneficiary’s reliance, Grantor agrees that Grantor shall not make any Accelerating Transfer, unless the transfer is preceded by Beneficiary’s express written consent to the particular transaction and transferee. Beneficiary may withhold such consent in its sole discretion. If any Accelerating Transfer occurs, Beneficiary in its sole discretion may declare all of the Secured Obligations to be immediately due and payable, and Beneficiary may invoke any rights and remedies provided by Section 6.3 of this Deed of Trust.

     6.2 Events of Default. Grantor will be in default under this Deed of Trust upon the occurrence of any one or more of the following events (collectively, “Events of Default;” any one singly, an “Event of Default”).

     (a) Failure to Pay Indebtedness. Any of the Secured Obligations is not paid when due, regardless of how such amount may have become due, after the expiration of any applicable grace or notice periods.

     (b) Nonperformance of Covenants. Any covenant, agreement or condition herein (other than covenants otherwise addressed in another paragraph of this Section, such as covenants to pay the Secured Obligations) is not fully and timely performed, observed or kept, and such failure is not cured within the applicable notice and cure period (if any) provided for herein, in Section 11.2.4 of the Loan Agreement, or in such other Loan Document.

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     (c) Default under other Loan Documents. The occurrence of any Event of Default under any other Loan Document.

     (d) Representations. Any material statement, representation or warranty herein, or in any financial statement or any other writing heretofore or hereafter delivered to Beneficiary in connection herewith is false, misleading or erroneous in any material respect on the date as of which such statement, representation or warranty is made, which continues for a period of thirty (30) days after receipt of written notice from Agent (except that no notice is required for those related to financial information).

     (e) Bankruptcy or Insolvency. Grantor:

     (i) (A) Executes an assignment for the benefit of creditors, or takes any action in furtherance thereof; or (B) admits in writing its inability to pay, or fails to pay, its debts generally as they become due; or (C) as a debtor, files a petition, case, proceeding or other action pursuant to, or voluntarily seeks the benefit or benefits of, any Debtor Relief Law, or takes any action in furtherance thereof; or (D) seeks the appointment of a receiver, trustee, custodian or liquidator of the Property or any part thereof or of any significant portion of its other property; or

     (ii) Suffers the filing of a petition, case, proceeding or other action against it as a debtor under any Debtor Relief Law or seeking appointment of a receiver, trustee, custodian or liquidator of the Property or any part thereof or of any significant portion of its other property, and (A) admits, acquiesces in or fails to contest diligently the material allegations thereof, or (B) the petition, case, proceeding or other action results in entry of any order for relief or order granting relief sought against it, or (C) in a proceeding under Debtor Relief Laws, the case is converted from one chapter to another, or (D) fails to have the petition, case, proceeding or other action permanently dismissed or discharged on or before the earlier of trial thereon or sixty (60) days next following the date of its filing; or

     (iii) Conceals, removes, or permits to be concealed or removed, any part of its property, with intent to hinder, delay or defraud its creditors or any of them, or makes or suffers a transfer of any of its property which may be fraudulent under any bankruptcy, fraudulent conveyance or similar law; or makes any transfer of its property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid; or suffers or permits, while insolvent, any creditor to obtain a lien (other than as described in subparagraph (iv) below) upon any of its property through legal proceedings which are not vacated and such lien discharged prior to enforcement thereof and in any event within sixty (60) days from the date thereof; or

     (iv) Fails to have discharged (or bonded) within a period of ten (10) days any attachment, sequestration, or similar writ levied upon any of its property; or

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     (v) Fails to pay immediately any final money judgment against it.

     (f) Transfer of the Property. Any sale, lease, conveyance, assignment, pledge, encumbrance, or transfer of all or any part of the Property or any interest therein, voluntarily or involuntarily, whether by operation of law or otherwise, except as may be permitted under (and in such case, in accordance with) the provisions of the Loan Agreement.

     (g) Transfer of Assets. Any sale, lease, conveyance, assignment, pledge, encumbrance, or transfer of all or any part of the other assets of Grantor, excluding the Property, voluntarily or involuntarily, whether by operation of law or otherwise, except: (i) sales or transfers in the ordinary course of Grantor’s business; (ii) sales or transfers for which Grantor receives consideration substantially equivalent to the fair market value of the transferred asset; and (iii) sales or transfers permitted under any Loan Document.

     (h) Transfer of Ownership of Grantor. Except as permitted under the Loan Documents, the sale, pledge, encumbrance, assignment or transfer, voluntarily or involuntarily, whether by operation of law or otherwise, of any interest in Grantor (if Grantor is not a natural person but is a corporation, partnership, limited liability company, trust or other legal entity), without the prior written consent of Beneficiary (including, without limitation, if Grantor is a partnership or joint venture, the withdrawal from or admission into it of any general partner or joint venturer).

     (i) Grant of Easement, Etc. Without the prior written consent of Beneficiary, Grantor grants any easement or dedication, files any plat, condominium declaration, or restriction, or otherwise encumbers the Property, or seeks or permits any zoning reclassification or variance, unless such action is expressly permitted by the Loan Documents, or does not materially adversely affect the Property, which encumbrance is not removed or rescinded within thirty (30) days after receipt of written notice from Agent.

     (j) Abandonment. The owner of the Property abandons any of the Property.

     (k) Default Under Other Lien. A default or event of default occurs under any lien, security interest or assignment covering the Property or any part thereof (whether or not Beneficiary has consented, and without hereby implying Beneficiary’s consent, to any such lien, security interest or assignment not created hereunder), or the holder of any such lien, security interest or assignment declares a default or institutes foreclosure or other proceedings for the enforcement of its remedies thereunder.

     (l) Destruction. The Property is so demolished, destroyed or damaged that, in the reasonable opinion of Beneficiary, it cannot be restored or rebuilt with available funds to a profitable condition within a reasonable period of time and in any event, prior to the final maturity date of the Note; provided, however, that this subsection shall not be an Event of Default if no other Event of Default then exists and the San Jacinto Loan is repaid in full at that time in which case Agent shall execute a discharge of this Deed of Trust.

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     (m) Condemnation. (i) Any governmental authority shall require, or commence any proceeding for, the demolition of any building or structure comprising a part of the Premises or Improvements to the extent the same would have a material impact on the Property, or (ii) there is commenced any proceeding to condemn or otherwise take pursuant to the power of eminent domain, or a contract for sale or a conveyance in lieu of such a taking is executed which provides for the transfer of, a material portion of the Premises or Improvements, including but not limited to the taking (or transfer in lieu thereof) of any portion which would result in the blockage or substantial impairment of access or utility service to the Improvements or which would cause the Premises to fail to comply with any Legal Requirement; provided, however, that this subsection shall not be an Event of Default if no other Event of Default then exists and the San Jacinto Loan is repaid in full at that time in which case Agent shall execute a discharge of this Deed of Trust.

     (n) Enforceability; Priority. Any Loan Document shall for any reason without Beneficiary’s specific written consent cease to be in full force and effect, or shall be declared null and void or unenforceable in whole or in part, or the validity or enforceability thereof, in whole or in part, shall be challenged or denied by any party thereto other than Beneficiary; or the liens, mortgages or security interests of Beneficiary in any of the Property become unenforceable in whole or in part, or cease to be of the priority herein required, or the validity or enforceability thereof, in whole or in part, shall be challenged or denied by Grantor or any person obligated to pay any part of the Secured Obligations.

     (o) Loan Documents. Any Event of Default occurs under (and as defined in) the Loan Agreement, the Note or any other Loan Document.

     6.3 Remedies. At any time after an Event of Default, Beneficiary shall be entitled to invoke any and all of the rights and remedies described below, in addition to all other rights and remedies available to Beneficiary at law or in equity. All of such rights and remedies shall be cumulative, and the exercise of any one or more of them shall not constitute an election of remedies.

     (a) Acceleration. Beneficiary may declare any or all of the Secured Obligations to be due and payable immediately and may terminate any and all Interest Rate Agreements. Upon any such declaration, such Secured Obligations shall thereupon be immediately due and payable, and such Interest Rate Agreement shall immediately terminate, without presentment, demand, protest, notice of protest, notice of acceleration or of intention to accelerate or any other notice or declaration of any kind, all of which are hereby expressly waived by Grantor. Without limitation of the foregoing, upon the occurrence of a default described in Section 6.2(e)(i)(A), (C) or (D) of this Deed of Trust, all of the Secured Obligations shall thereupon be immediately due and payable, without presentment, demand, protest, notice of protest, declaration or notice of acceleration or intention to accelerate, or any other notice, declaration or act of any kind, all of which are hereby expressly waived by Grantor.

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     (b) Receiver. Subject to the requirements (including procedural requirements) of applicable law, Beneficiary shall, as a matter of right, without notice and without giving bond to Grantor or anyone claiming by, under or through Grantor, and without regard for the solvency or insolvency of Grantor or the then value of the Property, to the extent permitted by applicable law, be entitled to have a receiver appointed for all or any part of the Property and the Rents, and the proceeds, issues and profits thereof, with the rights and powers referenced below and such other rights and powers as the court making such appointment shall confer, and Grantor hereby consents to the appointment of such receiver and shall not oppose any such appointment. Such receiver shall have all powers and duties prescribed by applicable law, all other powers which are necessary or usual in such cases for the protection, possession, control, management and operation of the Property, and such rights and powers as Beneficiary would have, upon entering and taking possession of the Property under subsection (c) below.

     (c) Entry. Beneficiary, in person, by agent or by court-appointed receiver, may enter, take possession of, manage and operate all or any part of the Property, and may also do any and all other things in connection with those actions that Beneficiary may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust and the Property. Such other things may include: taking and possessing all of Grantor’s or the then owner’s Books and Records; entering into, enforcing, modifying or canceling leases on such terms and conditions as Beneficiary may consider proper; obtaining and evicting tenants; fixing or modifying Rents; collecting and receiving any payment of money owing to Beneficiary; completing any unfinished construction; and/or contracting for and making repairs and alterations. If Beneficiary so requests, Grantor shall assemble all of the Property that has been removed from the Premises and make all of it available to Beneficiary at the site of the Premises. Grantor hereby irrevocably constitutes and appoints Beneficiary as Grantor’s attorney-in-fact to perform such acts and execute such documents as Beneficiary in its sole discretion may consider to be appropriate in connection with taking these measures, including endorsement of Grantor’s name on any instruments.

     (d) Cure; Protection of Security. Beneficiary may cure any breach or default of Grantor, and if it chooses to do so in connection with any such cure, Beneficiary may also enter the Property and/or do any and all other things which it may in its sole discretion consider necessary and appropriate to protect the security of this Deed of Trust and the Property. Such other things may include: appearing in and/or defending any action or proceeding which purports to affect the security of, or the rights or powers of Beneficiary under, this Deed of Trust; paying, purchasing, contesting or compromising any encumbrance, charge, lien or claim of lien which in Beneficiary’s sole judgment is or may be senior in priority to this Deed of Trust, such judgment of Beneficiary to be conclusive as among the parties to this Deed of Trust; obtaining insurance and/or paying any premiums or charges for insurance required to be carried under the Loan Agreement; otherwise caring for and protecting any and all of the Property; and/or employing counsel, accountants, contractors and other appropriate persons to assist Beneficiary. Beneficiary may take any of the actions permitted under this Subsection 6.3(d) either with or without giving notice to any person. Any amounts expended by Beneficiary

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under this Subsection 6.3(d) shall be deemed Secured Obligations and shall be secured by this Deed of Trust and the Loan Documents.

     (e) Uniform Commercial Code Remedies; Leases. (i) Beneficiary may exercise any or all of the remedies granted to a secured party under the Uniform Commercial Code in the State in which the Property is located.

     (ii) Additionally, prior or subsequent to taking possession of any portion of the Property or taking any action with respect to such possession, Beneficiary may: (1) collect and/or sue for the Rents in Beneficiary’s own name, give receipts and releases therefor, and after deducting all expenses of collection, including attorneys’ fees and expenses, apply the net proceeds thereof to the Secured Obligations in such manner and order as Beneficiary may elect and/or to the operation and management of the Property, including the payment of management, brokerage and attorney’s fees and expenses; and (2) require Grantor to transfer all security deposits and records thereof to Holder together with original counterparts of the Leases.

     (iii) It is the express understanding and intent of the parties that as to any personal property interests subject to Article 9 of the UCC, Beneficiary, upon an Event of Default, may proceed under the UCC or may proceed as to both real and personal property interests in accordance with the provisions of this Deed of Trust and its rights and remedies in respect to real property, as specifically permitted under Section 9-604 of the UCC.

     (f) Foreclosure; Lawsuits. Beneficiary shall have the right, in one or several concurrent or consecutive proceedings, to foreclose the lien hereof upon the Property or any part thereof, for the Secured Obligations, or any part thereof, by any proceedings appropriate under applicable law. Beneficiary or its nominee may bid and become the purchaser of all or any part of the Property at any foreclosure or other sale hereunder, and the amount of Beneficiary’s successful bid shall, to the extent permitted by applicable law, be credited on the Secured Obligations. In addition to the right provided in Section 6.3(a) of this Deed of Trust, upon, or at any time after the filing of a complaint to foreclose this Deed of Trust, Trustee and Beneficiary shall be entitled to the appointment of a receiver of the Property by the court in which such complaint is filed, and Grantor hereby consents to such appointment. A sale may cover not only the real property but also the personal property and other interests which are a part of the Property, or any part thereof, as a unit and as a part of a single sale, or the sale may be of any part of the Property separately from the remainder of the Property.

     (g) Exercise of Power of Sale. Exercise the power of sale contained in this Deed of Trust and deliver to Trustee a written statement of breach, notice of default and election to cause Grantor’s interest in the Property to be sold, all in accordance with applicable law.

     (i) If Beneficiary elects to exercise the power of sale contained in this Deed of Trust, Beneficiary shall notify Trustee and shall deposit with Trustee

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copies of this Deed of Trust and the Notes and such receipts and evidence of expenditures made and secured hereby as Trustee may require.

     (ii) Upon receipt of such notice from Beneficiary and at the direction of Beneficiary, Trustee shall cause to be recorded, published or delivered such notices of default and notices of sale as may then be required by law or this Deed of Trust. Trustee shall, only at the direction of Beneficiary and without demand on Grantor, after such time as may then be required by law and after recordation of such notice of default and after notice of sale having been given as required by law, sell Grantor’s interest in the Property at the time and place of sale fixed by it in such notice of sale, either as a whole, or in separate lots or parcels or items as Beneficiary shall deem expedient, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States payable at the time of sale, or as otherwise may then be required by law. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Grantor, Trustee, Beneficiary, or any Lender, may purchase at such sale, and Grantor covenants to warrant and defend the title of such purchaser or purchasers. Beneficiary and Lenders shall have the right to credit bid at any such sale.

     (iii) Trustee or Beneficiary may sell not only the real property but also the personal property and other interests which are a part of the Property, or any part thereof, as a unit and as a part of a single sale, or may sell any part of the Property separately from the remainder of the Property. Neither Trustee nor Beneficiary shall be required to take possession of any part of the Property or to have any of the personal property present at any sale of the Property. Trustee or Beneficiary may appoint or delegate any one or more persons as agent to perform any act or acts necessary or incident to any sale held by Trustee or Beneficiary, including the posting of notices and the conduct of sale, but in the name and on behalf of Beneficiary. If any sale hereunder is not completed or is defective in the opinion of Trustee or Beneficiary, such sale shall not exhaust the power of sale hereunder, and Trustee or Beneficiary shall have the right to cause a subsequent sale or sales to be made hereunder.

     (iv) As may be permitted by, but subject to, applicable law, after deducting all costs, fees and expenses of Trustee and of this Deed of Trust, including costs of evidence of title in connection with sale, Trustee or Beneficiary shall apply the proceeds of sale (A) first, to payment of all costs, fees and expenses, including attorneys’ fees and expenses incurred by Beneficiary in exercising the power of sale or foreclosing this Deed of Trust, (B) second, to the payment of the Secured Obligations (including, without limitation, the principal, accrued interest and other sums due and owing under the Notes and the amounts due and owing to Beneficiary and Lenders under this Deed of Trust) in such

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manner and order as Beneficiary may elect, and (C) third, the remainder, if any, shall be paid to Grantor, or such other persons as may be legally entitled thereto.

     (v) Trustee may, in the manner provided by law, postpone sale of all or any portion of the Property by public announcement at such time and place of sale, and from time to time thereafter may postpone such sale by public announcement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale.

     (h) Other Remedies. In addition to any other right, with or without a foreclosure, Beneficiary may institute a judicial action for the foreclosure or enforcement of the assignments, liens, and security interests hereof subject to the terms of the Loan Documents and applicable California law. Beneficiary may exercise all rights and remedies contained in any other instrument, document, agreement or other writing heretofore, concurrently or in the future executed by Grantor or any other person or entity in favor of Beneficiary in connection with the Secured Obligations or any part thereof, without prejudice to the right of Beneficiary thereafter to enforce any appropriate remedy against Grantor. Beneficiary shall have the right to pursue all remedies afforded to a Beneficiary under applicable law or in equity or otherwise, and shall have the benefit of all of the provisions of such applicable law, including all amendments thereto which may become effective from time to time after the date hereof. Subject to applicable California law, every right, power and remedy granted to Trustee or Beneficiary in this Deed of Trust shall be cumulative and not exclusive, and in addition to all right, powers and remedies granted at law or in equity or by statute, and the exercise of any such right, power or remedy shall not be deemed a waiver of the right to exercise, at the same time or thereafter, any other right, power or remedy.

     (i) Sale of Personal Property. Beneficiary and/or Trustee, as required by applicable law, shall have the discretionary right to cause some or all of the Property, which constitutes personal property, to be sold or otherwise disposed of in any combination and in any manner permitted by applicable law.

     (i) For purposes of this power of sale, Beneficiary and/or Trustee, as required by applicable law, may elect to treat as personal property any Property which is intangible or which can be severed from the Premises or Improvements without causing structural damage. If it chooses to do so, Beneficiary and/or Trustee, as required by applicable law, may dispose of any personal property, in any manner permitted by Article 9 of the Uniform Commercial Code of the State in which the Property is located, including any public or private sale, or in any manner permitted by any other applicable law.

     (ii) In connection with any sale or other disposition of such Property, Grantor agrees that the following procedures constitute a commercially reasonable sale: Beneficiary shall mail written notice of the sale to Grantor not later than thirty (30) days prior to such sale. Beneficiary will publish notice of the sale in a local daily newspaper of general circulation. Upon receipt of any written

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request, Beneficiary will make the Property available to any bona fide prospective purchaser for inspection during reasonable business hours. Notwithstanding, Beneficiary shall be under no obligation to consummate a sale if, in its judgment, none of the offers received by it equals the fair value of the Property offered for sale. The foregoing procedures do not constitute the only procedures that may be commercially reasonable.

     (iii) Multiple Security. If (a) the Property shall consist of one or more parcels, whether or not contiguous and whether or not located in the same county, or (b) in addition to this Deed of Trust, Beneficiary shall now or hereafter hold or be the beneficiary of one or more additional mortgages, liens, deeds of trust or other security (directly or indirectly) for the Secured Obligations upon other property in the state in which the Premises are located (whether or not such property is owned by Grantor or by others) or (c) both the circumstances described in clauses (a) and (b) shall be true, then to the fullest extent permitted by law, Beneficiary may, at its election, commence or consolidate in a single trustee’s sale or foreclosure action all of the trustee’s sale or foreclosure proceedings against all such collateral securing the Secured Obligations (including the Property), which action may be brought or consolidated in the courts of, or sale conducted in, any county in which any of such collateral is located. Grantor acknowledges that the right to maintain a consolidated trustee’s sale or foreclosure action is a specific inducement to Beneficiary to enter into certain agreements with Grantor, and for Beneficiary to enter into the Loan Agreement and the other Loan Documents, and Grantor expressly and irrevocably waives any objections to the commencement or consolidation of the foreclosure proceedings in a single action and any objections to the laying of venue or based on the grounds of forum non conveniens which it may now or hereafter have. Grantor further agrees that if Beneficiary shall be prosecuting one or more foreclosure or other proceedings against a portion of the Property or against any collateral other than the Property, which collateral directly or indirectly secures the Secured Obligations, or if Beneficiary shall have obtained a judgment of foreclosure and sale or similar judgment against such collateral (or, in the case of a trustee’s sale, shall have met the statutory requirements therefor with respect to such collateral), then, whether or not such proceedings are being maintained or judgments were obtained in or outside the state in which the Premises are located, Beneficiary may commence or continue any trustee’s sale or foreclosure proceedings and exercise its other remedies granted in this Deed of Trust against all or any part of the Property and Grantor waives any objections to the commencement or continuation of a foreclosure of this Deed of Trust or exercise of any other remedies hereunder based on such other proceedings or judgments, and waives any right to seek to dismiss, stay the execution of, remove, transfer or consolidate either any action under this Deed of Trust or such other proceedings on such basis. Neither the commencement nor continuation of proceedings to sell the Property in a trustee’s sale, to foreclose this Deed of Trust nor the exercise of any other rights hereunder nor the recovery of any judgment by Beneficiary nor the occurrence of any sale by Beneficiary or any Lender in any such proceedings shall prejudice, limit or preclude Beneficiary’s right to commence or continue one

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or more trustee’s sales, foreclosure or other proceedings or obtain a judgment against (or, in the case of a trustee’s sale, to meet the statutory requirements for, any such sale of) any other collateral (either in or outside the state in which the Premises are located) which directly or indirectly secures the Secured Obligations, and Grantor expressly waives any objections to the commencement of, continuation of, or entry of a judgment in such other sales or proceedings or exercise of any remedies in such sales or proceedings based upon any action or judgment connected to this Deed of Trust, and Grantor also waives any right to seek to dismiss, stay the execution of, remove, transfer or consolidate either such other sales or proceedings or any sale or action under this Deed of Trust on such basis. It is expressly understood and agreed that to the fullest extent permitted by applicable law, Beneficiary may, at its election, cause the sale of all collateral which is the subject of a single trustee’s sale or foreclosure action at either a single sale or at multiple sales conducted simultaneously and take such other measures as are appropriate in order to effect the agreement of the parties to dispose of and administer all collateral securing the Secured Obligations (directly or indirectly) in the most economical and least time-consuming manner

     6.4 Application of Rents and Other Sums. Beneficiary shall apply any and all Rents collected by it, and any and all sums other than proceeds of a Foreclosure Sale which Beneficiary may receive or collect under Section 6.3 of this Deed of Trust, in the following manner:

     (a) First, to pay the portion of the Secured Obligations attributable to the costs and expenses of operation and collection that may be incurred by Beneficiary or any receiver;

     (b) Second, to pay all other Secured Obligations in any order and proportions as Beneficiary in its sole discretion may choose; and

     (c) Third, to remit the remainder, if any, to the person or persons entitled to it.

Beneficiary shall have no liability for any funds which it does not actually receive.

7. The Trustee.

     7.1 Rights and Obligations of Trustee. Trustee accepts the trusts hereby created and agrees to perform its duties in this Deed of Trust for the benefit of Beneficiary. To the extent permitted by and consistent with applicable law, Trustee will not exercise its rights under this Deed of Trust except upon written direction from Beneficiary.

     7.2 Successor Trustee. Beneficiary may, from time to time, by a written instrument executed and acknowledged by Beneficiary, mailed to Grantor and recorded in the county in which the Property is located and by otherwise complying with the provisions of applicable law, substitute a successor or successors to any Trustee named herein or acting hereunder, and such successor(s) shall, without conveyance from the Trustee predecessor, succeed to all title, estate, rights, powers and duties of such predecessor.

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     7.3 Payment of Trustee’s Compensation. Grantor shall pay or cause to be paid the compensation to which Trustee is entitled hereunder and all proper disbursements and expenses incurred by Trustee hereunder, to the extent permitted by applicable law.

8. Miscellaneous Provisions.

     8.1 Additional Provisions. The Loan Documents fully state all of the terms and conditions of the parties’ agreement regarding the matters mentioned in or incidental to this Deed of Trust. The Loan Documents also grant further rights to Beneficiary and contain further agreements and affirmative and negative covenants by Grantor which apply to this Deed of Trust and to the Property.

     8.2 No Waiver or Cure.

     (a) Each waiver by Beneficiary must be in writing, and no waiver shall be construed as a continuing waiver. No waiver shall be implied from any delay or failure by Beneficiary to take action on account of any default of Grantor. Consent by Beneficiary to any act or omission by Grantor shall not be construed as a consent to any other or subsequent act or omission or to waive the requirement for Beneficiary’s consent to be obtained in any future or other instance.

     (b) If any of the events described below occurs, that event alone shall not: cure or waive any breach, Event of Default or notice of default under this Deed of Trust or invalidate any act performed pursuant to any such default or notice; or nullify the effect of any notice of default or sale (unless all Secured Obligations then due have been paid and performed and all other defaults under the Loan Documents have been cured); or impair the security of this Deed of Trust; or prejudice Beneficiary or any receiver in the exercise of any right or remedy afforded any of them under this Deed of Trust; or be construed as an affirmation by Beneficiary of any tenancy, lease or option, or a subordination of the lien of this Deed of Trust.

     (i) Trustee or Beneficiary, its agent or a receiver takes possession of all or any part of the Property in the manner provided in Subsection 6.3(c).

     (ii) Beneficiary collects and applies Rents as permitted under Sections 2.3 and 6.6 of this Deed of Trust, either with or without taking possession of all or any part of the Property.

     (iii) Beneficiary or Trustee receives and applies to any Secured Obligation any proceeds of any Property, including any proceeds of insurance policies, condemnation awards, or other claims, property or rights assigned to Beneficiary under Section 5.5 of this Deed of Trust.

     (iv) Beneficiary makes a site visit, observes the Property and/or conducts tests as permitted under Section 5.12 of this Deed of Trust.

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     (v) Beneficiary or Trustee receives any sums under this Deed of Trust or any proceeds of any collateral held for any of the Secured Obligations, and applies them to one or more Secured Obligations.

     (vi) Beneficiary, Trustee or any receiver invokes any right or remedy provided under this Deed of Trust.

     8.3 Powers of Beneficiary.

     (a) If Beneficiary performs any act which it is empowered or authorized to perform under this Deed of Trust, including any act permitted by Section 5.7 or Subsection 6.3(d) of this Deed of Trust, that act alone shall not release or change the personal liability of any person for the payment and performance of the Secured Obligations then outstanding, or the lien of this Deed of Trust on all or the remainder of the Property for full payment and performance of all outstanding Secured Obligations. The liability of the original Grantor shall not be released or changed if Beneficiary grants any successor in interest to Grantor any extension of time for payment, or modification of the terms of payment, of any Secured Obligation. Beneficiary shall not be required to comply with any demand by the original Grantor that Beneficiary refuse to grant such an extension or modification to, or commence proceedings against, any such successor in interest.

     (b) Following an Event of Default that remains uncured, Beneficiary may take any of the actions permitted under Subsections 6.3(b) and/or 6.3(c) of this Deed of Trust regardless of the adequacy of the security for the Secured Obligations, or whether any or all of the Secured Obligations have been declared to be immediately due and payable, or whether notice of default and election to sell has been given under this Deed of Trust.

     (c) From time to time, Beneficiary may apply to any court of competent jurisdiction for aid and direction in executing and enforcing the rights and remedies created under this Deed of Trust. Beneficiary may from time to time obtain orders or decrees directing, confirming or approving acts in executing and enforcing these rights and remedies.

     8.4 Merger. The parties to this Deed of Trust intend that no merger shall occur as a result of Beneficiary’s acquiring any other estate in or any other lien on the Property unless Beneficiary consents to a merger in writing.

     8.5 Joint and Several Liability. If Grantor consists of more than one person, each shall be jointly and severally liable for the faithful performance of all of Grantor’s obligations under this Deed of Trust.

     8.6 Applicable Law. The creation, perfection and enforcement of the lien of this Deed of Trust shall be governed by the law of the State in which the property is located. Subject to the foregoing, in all other respects, this Deed of Trust shall be exclusively governed by the substantive laws of the State of California.

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     8.7 Successors in Interest. The terms, covenants and conditions of this Deed of Trust shall be binding upon and inure to the benefit of the heirs, successors and assigns of the parties. However, this Section 8.7 does not waive the provisions of Section 6.1 of this Deed of Trust.

     8.8 Interpretation.

     (a) Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the sections of this Deed of Trust are for convenience only and do not define or limit any terms or provisions. The word “include(s)” means “include(s), without limitation,” and the word “including” means “including, but not limited to.”

     (b) The word “obligations” is used in its broadest and most comprehensive sense, and includes all primary, secondary, direct, indirect, fixed and contingent obligations. It further includes all principal, interest, prepayment charges, late charges, loan fees and any other fees and charges accruing or assessed at any time, as well as all obligations to perform acts or satisfy conditions.

     (c) No listing of specific instances, items or matters in any way limits the scope or generality of any language of this Deed of Trust. The Exhibits to this Deed of Trust are hereby incorporated in this Deed of Trust.

     8.9 In-House Counsel Fees. Whenever Grantor is obligated to pay or reimburse Beneficiary for any attorneys’ fees, those fees shall include the reasonable allocated costs for services of in-house counsel.

     8.10 Waiver of Statutory Rights. To the extent permitted by law, Grantor hereby agrees that it shall not and will not apply for or avail itself of any appraisement, valuation, stay, extension or exemption laws, or any so-called “Moratorium Laws,” now existing or hereafter enacted, in order to prevent or hinder the enforcement or foreclosure of this Deed of Trust, but hereby waives the benefit of such laws to the extent permitted by law. Grantor for itself and all who may claim through or under it waives any and all right to have the property and estates comprising the Property marshalled upon any foreclosure of the lien hereof and agrees that any court having jurisdiction to foreclose such lien may order the Property sold as an entirety. To the extent permitted by law, Grantor hereby waives any and all rights of redemption from sale under any judgment of foreclosure of this Deed of Trust on behalf of Grantor and on behalf of each and every person acquiring any interest in or title to the Property of any nature whatsoever, subsequent to the date of this Deed of Trust. The foregoing waiver of right of redemption is made pursuant to the provisions of applicable law.

     8.11 Severability. If any provision of this Deed of Trust should be held unenforceable or void, that provision shall be deemed severable from the remaining provisions and shall in no way affect the validity of this Deed of Trust except that if such provision relates to the payment of any monetary sum, then Beneficiary may, at its option, declare all Secured Obligations immediately due and payable.

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     8.12 Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

Grantor:	TNP SRT San Jacinto, LLC
	1900 Main Street, Suite 700
	Irvine, CA 92614
	Attention: C.J. Osbrink
	Telephone      949.833.8252
	Facsimile       949.252.0212
With a copy to:	Gregory Kaplan, PLC
	7 East Second Street
	Richmond, VA 23224
	Joseph J. McQuade, Esq.
	Telephone       804.916.9027
	Facsimile        804.916.9127
Trustee:	First American Title Insurance Company
	5 First American Way
	Santa Ana, CA 92707
Beneficiary:	KeyBank National Association
	225 Franklin Street, 18th Floor
	Boston, MA 02110
	Attention: Commercial Real Estate Department
	Telephone       617.385.6202
	Facsimile        617.385.6293
With a copy to:	Edwards Angell Palmer & Dodge LLP
	2800 Financial Plaza
	Providence, RI 02903
	Attention: Gail E. McCann, Esq.
	Telephone       401.276-6527
	Facsimile        888.325-9041

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice.

     Any notice or demand delivered to the person or entity named above to accept notices and demands for Grantor shall constitute notice or demand duly delivered to Grantor, even if delivery is refused.

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     8.13 Future Advances. The total amount of indebtedness secured hereby may increase or decrease from time to time, but the total unpaid principal balance of indebtedness secured hereby (including disbursements that Lenders and Beneficiary may, but shall not be obligated to, make under this Deed of Trust, the Loan Documents or any other document with respect thereto) at any one time outstanding may be substantially less but the maximum principal amount to be secured shall not exceed Fifteen Million Dollars ($15,000,000), plus interest thereon, and any disbursements made for the enforcement of this Deed of Trust and any remedies hereunder, payment of taxes, special assessments, utilities or insurance on the Property, any other protective advances made relating to the Property, and interest on such disbursements and all disbursements by Lenders and Beneficiary pursuant to applicable law (all such indebtedness being hereinafter referred to as the maximum amount secured hereby). This Deed of Trust shall be valid and have priority to the extent of the maximum amount secured hereby over all subsequent liens and encumbrances, including statutory liens, excepting solely taxes and assessments levied on the Property given priority by law.

     8.14 Beneficiary’s Lien for Service Charge and Expenses. At all times, regardless of whether any Loan proceeds have been disbursed, this Deed of Trust secures (in addition to any Loan proceeds disbursed from time to time) the payment of any and all loan commissions, service charges, liquidated damages, expenses and advances due to or incurred by Beneficiary not to exceed the maximum amount secured hereby. For purposes hereof, all obligations of Grantor to Beneficiary under all Interest Rate Agreements and any indebtedness or obligation contained therein or evidenced thereby shall be considered an obligation of Grantor secured hereby.

     8.15 WAIVER OF TRIAL BY JURY. GRANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS DEED OF TRUST, THE NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS, THE LOAN OR ANY OTHER STATEMENTS OR ACTIONS OF GRANTOR OR BENEFICIARY. GRANTOR ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS DEED OF TRUST AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. GRANTOR FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER IS A MATERIAL INDUCEMENT FOR BENEFICIARY TO MAKE THE LOAN, ENTER INTO THIS DEED OF TRUST AND EACH OF THE OTHER LOAN DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

     8.16 Inconsistencies.

     In the event of any inconsistency between this Deed of Trust and the Loan Agreement, the terms hereof shall be controlling as necessary to create, preserve and/or maintain a valid security interest upon the Property, otherwise the provisions of the Loan Agreement shall be controlling.

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     8.17 UCC Financing Statements.

     Grantor hereby authorizes Beneficiary to file Uniform Commercial Code financing statements to perfect Beneficiary’s security interest in any part of the Property. In addition, Grantor agrees to sign any and all other documents that Beneficiary deems necessary in its sole discretion to perfect, protect, and continue Beneficiary’s lien and security interest in the Property.

9. State Specific Provisions.

     9.1 Principles Of Construction. In the event of any inconsistencies between the terms and conditions of this Article 9 and the other terms and conditions of this Deed of Trust, the terms and conditions of this Article 9 shall control and be binding.

     9.2 No “Mortgagee-In-Possession” Status. Neither the assignment of Leases and Rents contained in this Deed of Trust, nor the exercise by Beneficiary of any of its rights or remedies under this Deed of Trust shall be deemed to make Beneficiary a “mortgagee-in-possession” or otherwise liable in any manner with respect to the Property, unless Beneficiary, in person or by agent, assumes actual possession thereof. Nor shall appointment of a receiver for the Property by any court at the request of Beneficiary or by agreement with Grantor, or the entering into possession of the Property by such receiver, be deemed to make Beneficiary a “mortgagee-in-possession” or otherwise liable in any manner with respect to the Property.

     9.3 Environmental Provisions.

          (a) Beneficiary may waive its lien against the Property or any portion thereof, whether fixtures or personal property, to the extent such property is found to be “environmentally impaired” or an “affected parcel” in accordance with California Code of Civil Procedure Section 726.5 and may exercise any and all rights and remedies of an unsecured creditor against Grantor and all of Grantor’s assets and property for the recovery of any deficiency and Environmental Costs (as hereafter defined), including, but not limited to, seeking an attachment order under California Code of Civil Procedure Section 483.010. The term “Environmental Costs” shall mean any costs, damages, expenses, fees, penalties, fines, judgments, indemnification payments to third parties, and other out-of-pocket costs or expenses actually incurred or advanced by Beneficiary relating to the cleanup, remediation or other response action required by Environmental Laws or which Beneficiary reasonably believes necessary to protect the Property. As between Beneficiary and Grantor, for purposes of California Code of Civil Procedure Section 726.5, Grantor shall have the burden of proving that Grantor or any related party (or any Affiliate or agent of Grantor or any related party) was not in any way negligent in permitting the release or threatened release of the Hazardous Substances. Grantor acknowledges and agrees that, if this clause (a) applies, then notwithstanding any term or provision contained herein or in the Loan Documents, all judgments and awards entered against Grantor shall be exceptions to any nonrecourse or exculpatory provision of the Loan Documents, and Grantor shall be fully and personally liable for all judgments and awards entered against Grantor relating to Environmental Costs and such liability shall not be limited to the original principal amount of the obligations secured by this Deed of Trust and Grantor’s obligations shall survive the foreclosure, deed in lieu of foreclosure, release, reconveyance, or any other transfer of the Property or this Deed of Trust.

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For the purposes of any action brought by or on behalf of Beneficiary under this Section 9.4, Grantor hereby waives the defense of laches and any applicable statute of limitations.

          (b) In the event Beneficiary elects, in accordance with California Code of Civil Procedure Section 726.5, to waive all or part of the security of this Deed of Trust and proceed against Grantor on an unsecured basis, the valuation of the Property, the determination of the environmentally impaired status of such security and any cause of action for a money judgment shall, at the request of Beneficiary, be referred to a referee in accordance with California Code of Civil Procedure Sections 638 et seq. Such referee shall be an impartial M.A.I. appraiser selected by Beneficiary and approved by Grantor, which approval shall not be unreasonably withheld or delayed. If the parties cannot agree on an M.A.I. appraiser approved by Grantor, either party may apply to the presiding judge of the Superior Court in which the Property is located to make such appointment. The decision of such referee shall be binding upon both Grantor and Beneficiary, and judgment upon the award rendered by such referee shall be entered in the court in which such proceeding was commenced in accordance with California Code of Civil Procedure Sections 644 and 645. Grantor shall pay all reasonable costs and expenses incurred by Beneficiary in connection with any proceeding under California Code of Civil Procedure 726.5, as such Section may be amended from time to time.

          (c) Beneficiary or its agents, acting by themselves or through a court appointed receiver, may upon reasonable advance notice to Grantor, enter upon the Property or any part thereof and may perform such acts and things as Beneficiary deems reasonably necessary or desirable to inspect, investigate, assess, and protect the security hereof, including without limitation of any of its other rights: (i) obtain a court order to enforce Beneficiary’s right to enter and inspect the Premises under California Civil Code Section 2929.5, to which the decision of Beneficiary as to whether there exists a release or threatened release of any Hazardous Substance onto the Premises shall be deemed reasonable and conclusive as between the parties hereto; and (ii) have a receiver appointed under California Code of Civil Procedure Section 564 to enforce Beneficiary’s right to enter and inspect the Premises for Hazardous Substances. Subject to the Loan Documents, all reasonable costs and expenses incurred by Beneficiary with respect to the audits, tests, inspections, and examinations which Beneficiary or its agents or employees may conduct, including the reasonable fees of the engineers, laboratories, contractors, consultants and attorneys, shall become part of the indebtedness secured hereby and shall be paid by Grantor upon demand with interest at the Default Rate from the date when paid by Beneficiary.

          (d) Beneficiary may seek a judgment that Grantor has breached its covenants, representations, warranties and/or other provisions with respect to this Deed of Trust or the other Loan Documents by commencing and maintaining an action or actions in any court of competent jurisdiction for breach of contract pursuant to California Code of Civil Procedure Section 736, whether commenced prior to or after foreclosure of the Property, and may seek the recovery of Environmental Costs, it being conclusively presumed between Beneficiary and Grantor that all such Environmental Costs incurred or advanced by Beneficiary relating to the cleanup, remediation or other response action of or to the Premises were made by Beneficiary in good faith. Grantor acknowledges that such an action shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d or 726(b)

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of the California Code of Civil Procedure. All Environmental Costs incurred by Beneficiary (including court costs, consultant fees and reasonable attorneys’ fees and disbursements, whether incurred in litigation or not and whether before or after judgment) shall bear interest at the Default Rate from the date of expenditure until said sums have been paid. Beneficiary shall be entitled to bid, at the sale of the Property held under any provision of this Deed of Trust, the amount of said costs, expenses and interest in addition to the amount of the other obligations hereby secured as a credit bid, the equivalent of cash.

          (e) Without limiting any of the remedies provided in the Loan Documents, Grantor acknowledges and agrees that the provisions of this Section 9.4 and the Environmental Indemnity executed in connection herewith are “environmental provisions” (as defined in Section 736(t)(2) of the California Code of Civil Procedure) made by Grantor relating to the Premises (the “Environmental Provisions”). Grantor’s breach or a failure to comply with the Environmental Provisions shall constitute a breach of contract entitling Beneficiary to all remedies provided under Section 736 of the California Code of Civil Procedure for the recovery of damages and for the enforcement of the Environmental Provisions. Pursuant to Section 736, Beneficiary’s action for recovery of damages or enforcement of the Environmental Provisions shall not constitute an action within the meaning of Section 726(a) of the California Code of Civil Procedure or constitute a money judgment for a deficiency or a deficiency judgment within the meaning of Sections 580a, 580b, 580d and 726(b) of the California Code of Civil Procedure. The rights and remedies provided for under the Loan Documents are separate and distinct causes of action that shall not be abrogated, modified, limited or otherwise affected by the remedies provided under Section 736(a) of the California Code of Civil Procedure.

          (f) Nothing herein shall be deemed to limit the right of Beneficiary to recover, in accordance with California Code of Civil Procedure Section 736 (as such Section may be amended from time to time), any reasonable costs, expenses, liabilities or damages, including reasonable attorneys’ fees and costs, incurred by Beneficiary and arising from any covenant, obligation, liability, representation or warranty contained in any Loan Document given to Beneficiary (including, without limitation, the Environmental Indemnity), or any order, consent decree or settlement relating to the cleanup of Hazardous Substances or any other “environmental provision” (as defined in such Section 736) relating to the Property or any portion thereof or the right of Beneficiary to waive, in accordance with the California Code of Civil Procedure Section 726.5 (as such Section may be amended from time to time), the security of this Deed of Trust as to any parcel of the Property that is “environmentally impaired” or is an “affected parcel” (as such terms are defined in such Section 726.5), and as to any personal property attached to such parcel, and thereafter to exercise against Grantor, to the extent permitted by such Section 726.5, the rights and remedies of any unsecured creditor, including reduction of Beneficiary’s claim against Grantor to judgment, and any other rights and remedies permitted by law.

     9.4 Trustee’s Deed Recitals. The recitals of facts in any instrument delivered upon completion of any sales, as described in Section 6.3, above, such as the existence of a default, the giving of written notice of default and notice of sale, and other facts affecting the regularity or validity of such sale or disposition, shall be conclusive proof of the trust of such facts and any such instruments shall be conclusive against all persons as to such fact recited therein.

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     9.5 Right Of Entry. In addition to any other rights or remedies granted under this Deed of Trust but subject to the terms and conditions of the Loan Agreement and the rights of lessees, Beneficiary and its agents, acting by themselves or through a court appointed receiver, upon reasonable advance notice to Grantor and an opportunity to be present, shall have the right to enter upon the Property or any part thereof and perform such acts and things as Beneficiary deems necessary or desirable to inspect, investigate, assess, and protect the security thereof Without limitation of any of its other rights and subject to the provisions of the Loan Agreement, Beneficiary shall have the right to: (i) obtain a court order to enforce Beneficiary’s right to enter and inspect the Property under California Civil Code Section 2929.5 to which the decision of Beneficiary as to whether there exists a release or threatened release of Hazardous Substances onto the Property shall be deemed reasonable and conclusive as between the parties hereto and (ii) have a receiver appointed under California Code of Civil Procedure Section 564 to enforce Beneficiary’s right to enter and inspect the Property for Hazardous Substances. Subject to the Loan Agreement, all reasonable costs and expenses incurred by Beneficiary with respect to the audits, tests, inspections, and examinations which Beneficiary or its agents or employees may conduct, including the reasonable fees of the engineers, laboratories, contractors, consultants, and attorneys, shall be paid by Grantor five (5) Business Days following demand with interest at the Default Rate from the date paid by Beneficiary. Such costs, if not paid for by Grantor following demand, may be added to the principal balance of the sums due under the Note and this Deed of Trust and shall bear interest thereafter until paid at the Default Rate.

     9.6 Reconveyance. If the Obligations are paid and all obligations secured by this Deed of Trust are fully performed in accordance with the terms of this Deed of Trust, the Note and the other Loan Documents, then Beneficiary agrees to request Trustee to reconvey the Property or any applicable portion thereof in accordance with the provisions of the Loan Agreement upon payment by Grantor of Trustee’s fees and all other sums owing to it under this Deed of Trust and the other Loan Documents, Trustee will reconvey the Property without warranty to the person or persons legally entitled thereto. The grantee in the reconveyance may be described as “the person or persons legally entitled thereto.” No reconveyance hereof shall impair Grantor’s warranties and indemnities contained herein.

     9.7 Border Zone Property. To Grantor’s actual knowledge and except as disclosed in the Environmental Report, Grantor represents and warrants that the Premises have not been designated as Border Zone Property under the provisions of California Health and Safety Code, Sections 25220 et seq. or any regulation adopted in accordance therewith, and there has been no occurrence or condition on any real property adjoining the Premises that is reasonably likely to cause the Premises or any part thereof to be designated as Border Zone Property.

     9.8 Insurance Notice. Beneficiary hereby notifies Grantor of the provisions of Section 2955.5(a) of the California Civil Code, which reads as follows:

“No lender shall require a borrower, as a condition of receiving or maintaining a loan secured by real property, to provide hazard insurance coverage against risks to the improvements on that real property in an amount exceeding the replacement value of the improvements on the property.”

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This disclosure is being made by Beneficiary to Grantor pursuant to Section 2955.5(b) of the California Civil Code. Grantor hereby acknowledges receipt of this disclosure and acknowledges that this disclosure has been made by Beneficiary before execution of any note or security document evidencing or securing the Loan.

     9.9 Commercial Loan. Grantor represents and warrants that the Loan is for commercial purposes, and not for personal, household or consumer purposes.

     9.10 Remedies, Generally. Notwithstanding anything to the contrary contained in this Deed of Trust or any of the other Loan Documents, Agent and Lenders shall have the right to exercise any and all of their rights and remedies granted them hereunder, as well as all remedies available to it under California Civil Code Section 2938 or any successor statute.

     9.11 Financing Statement. This Deed of Trust shall constitute a financing statement pursuant to California UCC §9-402(b), and shall be filed as a fixture filing in the Official Records of the County Register of the County in which the Property is located and covers goods which are or are to become fixtures on the Premises.

     9.12 Remedies, Mixed Collateral. Agent and Lenders may exercise all of the rights and remedies of a secured party under the California UCC with respect to the Property. Pursuant to Section 9-604(a) of the California UCC, Agent and Lenders shall have an option to proceed with respect to both the real property portion of the Property and the personal property portion of the Property, in accordance with its rights, powers and remedies with respect to the real property. Such Section 9-604(a) also permits Agent and Lenders to proceed separately against the Property in accordance with the remedy and enforcement provisions of the California UCC. If Agent and Lenders shall elect to proceed against the Property separately from any proceeding with respect to the real property, Grantor agrees that 10 days notice of the sale of the Property shall be reasonable notice.

(Signature on next page)

-39-

     IN WITNESS WHEREOF, Grantor has executed this Deed of Trust as an instrument under seal as of the date first above written.

Grantor:
TNP SRT SAN JACINTO, LLC, a Delaware
limited liability company
By:	TNP Strategic Retail Operating Partnership,
	LP, a Delaware limited liability company, its
	Sole Member
	By:	TNP Strategic Retail Trust, Inc.,
		a Maryland corporation, its General Partner
		By:	/s/ Christopher S. Cameron
			Name: Christopher S. Cameron
			Title: CFO, Secretary

STATE OF CALIFORNIA
COUNTY OF                                         

     On August ____, 2010, before me, the undersigned notary public, personally appeared ________________, the _______________ of TNP Strategic Realty Trust, Inc., a Maryland corporation and the General Partner of TNP Strategic Retail Operating Partnership, LP, a Delaware limited liability company, and Sole Member of TNP SRT San Jacinto, LLC, a Delaware limited liability company, proved to me through satisfactory evidence of identification, being (check whichever applies): o driver’s license or other state or federal governmental document bearing a photographic image, o oath or affirmation of a credible witness known to me who knows the above signatory, or o my own personal knowledge of the identity of the signatory, to be the person whose name is signed above, and acknowledged the foregoing to be signed by him/her voluntarily in said capacity and the free act and deed of said limited liability companies, for its stated purpose.

Notary Public

Print Name                                         

My Commission Expires                     

[SEAL]

[Signature Page to Deed of Trust]

Schedule 1

Defined Terms

     “Debtor Relief Laws” means collectively, Title 11 of the United States Code as now or hereafter in effect or any other federal, state or local law, domestic or foreign, as now or hereafter in effect relating to bankruptcy, insolvency, liquidation, receivership, reorganization, arrangement, composition, extension or adjustment of debts, or similar laws affecting the rights of creditors.

     “Governmental Authority” means any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court, administrative tribunal, or public utility.

     “Hazardous Material” means and includes gasoline, petroleum, asbestos containing materials, explosives, radioactive materials or any hazardous or toxic material, substance or waste which is defined by those or similar terms or is regulated as such under any Law of any Governmental Authority having jurisdiction over the Property or any portion thereof or its use, including: (i) any “hazardous substance” defined as such in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.A. § 9601(14) as may be amended from time to time, or any so-called “superfund” or “superlien” Law, including the judicial interpretation thereof; (ii) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (iii) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (iv) any petroleum, including crude oil or any fraction thereof; (v) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel; (vi) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910; and (vii) any other toxic substance or contaminant that is subject to any other Law or other past or present requirement of any Governmental Authority.

     “Interest Rate Agreement” shall mean an interest rate hedging program through the purchase by Grantor, Original Borrower or another Borrower from Beneficiary of an interest rate swap, cap, or such other interest rate protection product with respect to the Note.

     “Laws” means, collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial and administrative decrees and opinions or precedential authority in the applicable jurisdiction. Any reference above to a Law, includes the same as it may be amended from time to time, including the judicial interpretation thereof.

     “Legal Requirement” means any Law, agreement, covenant, restriction, easement or condition (including, without limitation of the foregoing, any condition or requirement imposed by any insurance or surety company), as any of the same now exists or may be changed or amended or come into effect in the future.

     “Permitted Encumbrances” means those matters listed on Exhibit B attached hereto and made a part hereof.

     “Transfer” means any sale, transfer, lease (other than a Lease approved or deemed approved by Agent), conveyance, alienation, pledge, assignment, mortgage, encumbrance hypothecation or other disposition of (a) all or any portion of the Property or any portion of any other security for the Secured Obligations, (b) all or any portion of the Borrower’s right, title and interest (legal or equitable) in and to the Property or any portion of any other security for the Secured Obligations other than Permitted Encumbrances, or (c) any interest in any Borrower or any interest in any entity which directly or indirectly holds an interest in, or directly or indirectly controls, any Borrower.

     “UCC” means the Uniform Commercial Code, as adopted in the State of California, as it may be amended from time to time.

EXHIBIT A

LEGAL DESCRIPTION

PARCEL “A”

PARCEL A AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 4 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF SAID PARCEL 4 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, NORTH 89° 54’ 46” WEST A DISTANCE OF 83.32 FEET;

THENCE LEAVING SAID SOUTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 124.09 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 4;

THENCE ALONG THE EASTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID PARCEL 4 SOUTH 89° 54’ 46” EAST A DISTANCE OF 234.80 FEET;

THENCE LEAVING SAID PROLONGATION SOUTH 00° 05’ 14” WEST A DISTANCE OF 107.09 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196 THE FOLLOWING COURSES:

SOUTH 45° 05’ 14” WEST A DISTANCE OF 24.04 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 134.48 FEET TO THE POINT OF BEGINNING.

PARCEL “B”

PARCEL B AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 6, 7 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216, PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST NORTHWESTERLY CORNER OF PARCEL 6 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING THE NORTHWEST CORNER OF SAID PARCEL MAP NO. 33196, SAID POINT ALSO BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196 SOUTH 89° 54’ 40” EAST A DISTANCE OF 389.59 FEET;

THENCE LEAVING SAID NORTHERLY LINE, SOUTH 00° 05’ 14” WEST A DISTANCE OF 151.01 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 56.33 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 108.16 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 83.75 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL 7;

THENCE ALONG THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID PARCEL 7 NORTH 00° 05’ 14” EAST A DISTANCE OF 130.00 FEET;

THENCE LEAVING SAID NORTHERLY PROLONGATION NORTH 89° 54’ 46” WEST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 107.17 FEET;

THENCE NORTH 89° 54’ 40” WEST A DISTANCE OF 231.52 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL MAP NO. 33196 SAID POINT BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID SANDERSON AVENUE, NORTH 00° 06’ 56” EAST A DISTANCE OF 21.00 FEET TO THE POINT OF BEGINNING.

PARCEL “C”

PARCEL C AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 4, 6, 7, AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID PARCEL 2 THE FOLLOWING COURSES:

NORTH 00° 05’ 14” EAST A DISTANCE OF 132.26 FEET;

THENCE NORTH 89°54’ 46” WEST A DISTANCE OF 28.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 30.00 FEET THE NORTHEAST CORNER OF SAID PARCEL 2, SAID POINT BEING ON THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID PARCEL 6;

THENCE ALONG SAID WESTERLY PROLONGATION, SOUTH 89° 54’ 46” EAST A DISTANCE OF 28.00 FEET TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 6;

THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 6 THE FOLLOWING COURSE:

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 42.50 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 66.50 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 6.92 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 30.00 FEET WITH A RADIAL BEARING OF SOUTH 89° 54’ 46” EAST;

THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 94° 54’ 51” AN ARC LENGTH OF 49.70 FEET;

THENCE SOUTH 85° 10’ 23” WEST A DISTANCE OF 119.40 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 50.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL MAP NO. 33196 SAID POINT BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID SANDERSON AVENUE, NORTH 00° 06’ 56” EAST A DISTANCE OF 25.02 FEET;

THENCE LEAVING SAID EASTERLY LINE SOUTH 89° 54’ 4O” EAST A DISTANCE OF 231.52 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 107.17 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET TO A POINT ON THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID PARCEL 7;

THENCE ALONG SAID NORTHERLY PROLONGATION, SOUTH 00° 05’ 14” WEST A DISTANCE OF 130.00 FEET;

THENCE LEAVING THE WEST LINE OF SAID LOT 7, SOUTH 89° 54’ 46” EAST A DISTANCE OF 83.75 FEET TO A POINT 10.00 FEET WEST OF THE SOUTHERLY PROLONGATION OF THE EASTERLY LINE OF SAID PARCEL 6;

THENCE ON A LINE PARALLEL WITH AND 10.00 FEET DISTANT FROM THE EASTERLY LINE OF SAID PARCEL 6 NORTH 00° 05’

14” EAST A DISTANCE OF 108.16 FEET;

THENCE LEAVING SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 56.33 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 179.76 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 16.80 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 112.56 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 38.75 FEET;

THENCE LEAVING SAID PARALLEL LINE, SOUTH 00° 05’ 14” WEST A DISTANCE OF 162.53 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL 4, SAID POINT BEING ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 56.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID SOUTHERLY LINE THE FOLLOWING COURSE:

NORTH 89° 54’ 46” WEST A DISTANCE OF 94.81 FEET;

THENCE NORTH 44° 54’ 46” WEST A DISTANCE OF 24.04 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 42.00 FEET TO THE SOUTHWEST CORNER OF SAID PARCEL 4, SAID POINT ALSO BEING THE SOUTHEAST CORNER OF PARCEL 3 OF SAID PARCEL MAP NO. 33196;

THENCE LEAVING SAID SOUTHERLY LINE, ALONG THE EASTERLY LINE OF SAID PARCEL 3;

NORTH 00° 05’ 14” EAST A DISTANCE OF 107.09 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE CONTINUING ALONG THE EASTERLY LINE OF SAID PARCEL 3 THE FOLLOWING COURSES:

NORTH 00° 05’ 14” EAST A DISTANCE OF 204.87 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 74.22 FEET;

THENCE NORTH 00° 5’ 14” EAST A DISTANCE OF 39.13 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL 2;

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL 2 SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET TO THE POINT OF BEGINNING.

PARCEL “D”

PARCEL D AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 6 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID PARCEL 8 OF PARCEL MAP NO. 33196, SAID POINT BEING ON THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 135.33 FEET TO THE TRUE POINT OF BEGINNING;

THENCE LEAVING SAID NORTHERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 329.77 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 16.80 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 112.56 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 130.00 FEET;

THENCE LEAVING SAID PARALLEL LINE, NORTH 00° 05’ 14” EAST A DISTANCE OF 119.33 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 20.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 61.33 FEET;

THENCE NORTH 72° 23’ 24” EAST A DISTANCE OF 16.23 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 32.65 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 22.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 224.08 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID NORTHERLY LINE NORTH 89° 54’ 40” WEST A DISTANCE OF 126.67 FEET TO THE TRUE POINT OF BEGINNING.

PARCEL “E”

PARCEL E AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 8, 9, AND 10 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 8 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING ON THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 133.50 FEET TO A POINT 11.75 FEET WEST OF THE NORTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A LINE PARALLEL WITH AND 11.75 FEET DISTANT FROM THE EASTERLY LINE OF SAID PARCEL 9 SOUTH 00° 05’ 14” WEST A DISTANCE OF 253.17 FEET TO A POINT ON THE EASTERLY LINE OF SAID PARCEL 9;

THENCE ALONG SAID EASTERLY LINE, LEAVING SAID PARALLEL LINE SOUTH 25° 06’ 15” WEST A DISTANCE OF 5.32 FEET TO AN ANGLE POINT ON THE EASTERLY LINE OF SAID PARCEL 9;

THENCE ALONG SAID EASTERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 36.00 FEET TO THE SOUTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A SOUTHERLY PROJECTION OF THE EASTERLY LINE OF SAID PARCEL 9 SOUTH 00° 05’ 14” WEST A DISTANCE OF 42.17 FEET;

THENCE LEAVING SAID SOUTHERLY PROJECTION NORTH 89° 54’ 46” WEST A DISTANCE OF 73.00 FEET TO A POINT ON THE EASTERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID EASTERLY LINE THE FOLLOWING COURSES:

SOUTH 00° 05’ 14” WEST A DISTANCE OF 119.83 FEET;

THENCE SOUTH 04° 39’ 40” WEST A DISTANCE OF 25.08 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 106.86 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196, SAID POINT BEING THE SOUTHEAST CORNER OF SAID PARCEL 8;

THENCE ALONG SAID SOUTHERLY LINE NORTH 89° 54’ 46” WEST A DISTANCE OF 40.00 FEET TO AN ANGLE POINT OF SAID SOUTHERLY LINE;

THENCE LEAVING SAID SOUTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 107.09 FEET TO A POINT ON THE EASTERLY PROLONGATION OF THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID EASTERLY PROLONGATION NORTH 89° 54’ 46” WEST A DISTANCE OF 143.61 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 4;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 4 NORTH 89° 54’ 46” WEST A DISTANCE OF 91.19 FEET;

THENCE LEAVING SAID NORTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 38.44 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF SAID PARCEL 4;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 91.25 FEET;

THENCE LEAVING SAID PARALLEL LINE, NORTH 00° 05’ 14” EAST A DISTANCE OF 119.33 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 20.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 61.33 FEET;

THENCE NORTH 72° 23’ 24” EAST A DISTANCE OF 16.23 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 32.65 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 22.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 224.08 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 113.83 FEET TO THE POINT OF BEGINNING.

PARCEL “F”

PARCEL F AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 9 AND 10 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 10 OF SAID PARCEL MAP 33196, SAID POINT BEING THE NORTHEAST CORNER OF SAID PARCEL MAP NO. 33196.

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 10 NORTH 89° 54’ 40” WEST A DISTANCE OF 179.96 FEET TO A POINT 11.75 FEET WEST OF THE NORTHWEST CORNER OF SAID PARCEL 10;

THENCE LEAVING SAID NORTHERLY LINE, ON A LINE PARALLEL WITH AND 11.75 FEET DISTANT FROM THE WESTERLY LINE OF SAID PARCEL 10, SOUTH 00° 05’ 14” WEST A DISTANCE OF 253.17 FEET; TO A POINT ON THE WESTERLY LINE OF PARCEL 10;

THENCE ALONG SAID WESTERLY LINE, LEAVING SAID PARALLEL LINE, SOUTH 25° 06’ 15” WEST A DISTANCE OF 5.32 FEET; TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 10;

THENCE ALONG SAID WESTERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 36.00 FEET TO THE SOUTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A SOUTHERLY PROJECTION OF THE WESTERLY LINE OF SAID PARCEL 10 SOUTH 00° 05’ 14” WEST A DISTANCE OF 42.17 FEET;

THENCE LEAVING SAID SOUTHERLY PROJECTION NORTH 89° 54’ 46” WEST A DISTANCE OF 73.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL 10;

THENCE ALONG THE WESTERLY LINE OF THE FOLLOWING COURSES:

SOUTH 00° 05’ 14” WEST A DISTANCE OF 119.83 FEET;

THENCE SOUTH 04° 39’ 40” WEST A DISTANCE OF 25.08 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 106.86 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196 SAID POINT BEING THE SOUTHWEST CORNER OF SAID PARCEL 10;

THENCE ALONG SAID SOUTHERLY LINE SOUTH 89° 54’ 46” EAST A DISTANCE OF 28.00 FEET TO THE SOUTHWEST CORNER OF PARCEL 5 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 5 NORTH 00° 05’ 14” EAST A DISTANCE OF 136.36 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 5;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 5 SOUTH 89° 54’ 46” EAST A DISTANCE OF 228.92 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 5, SAID POINT BEING ON THE EASTERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG SAID EASTERLY LINE NORTH 00° 07’ 25” EAST A DISTANCE OF 451.49 FEET TO THE POINT OF BEGINNING.

PARCEL “G”

PARCELS 1 AND 2 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, AS SHOWN ON A MAP FILED IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL “H”

PARCEL 5 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, AS SHOWN ON A MAP FILED IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL “I”

NON-EXCLUSIVE, PERPETUAL EASEMENTS FOR THE PURPOSES OF PEDESTRIAN AND VEHICULAR INGRESS AND EGRESS, DRAINAGE AND UTILITIES ALONG WITH NON-EXCLUSIVE EASEMENTS FOR PARKING, BUILDING ENCROACHMENTS AND SIGN MAINTENANCE AS FURTHER DESCRIBED AND SET FORTH IN A DOCUMENT ENTITLED “DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RECIPROCAL EASEMENT AGREEMENT” RECORDED APRIL 4, 2006 AS INSTRUMENT NO. 2006-0238823 OF OFFICIAL RECORDS.

APN: 436-710-001-0 and 436-710-002-1 and 436-710-003-2 and 436-710-004-3 and 436-710-005-4 and 436-710-006-5 and 436-710-007-6 and 436-710-008-7 and 436-710-010-8

Exhibit B

Permitted Encumbrances

Those encumbrances listed in the title insurance policy for the Premises being issued as of even date by First American Title Insurance Company for the benefit of the Beneficiary.

EX-10.53

Exhibit 10.53

ENVIRONMENTAL AND HAZARDOUS
SUBSTANCES INDEMNITY AGREEMENT

Project Commonly Known As
“San Jacinto Esplanade Retail Center, San Jacinto, Riverside County, California”

     This Environmental and Hazardous Substances Indemnity Agreement (this “Indemnity Agreement”) is executed and delivered as of the 11th day of August, 2010, by TNP SRT SAN JACINTO, LLC, a Delaware limited liability company having an address of 1900 Main Street, Suite 700, Irvine, California 92614 (“Property Borrower”), TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership having an address at 1900 Main Street, Suite 700, Irvine, California 92614 (“Original Borrower”), and TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation having an address at 1900 Main Street, Suite 700, Irvine, California 92614 (“REIT”) (collectively, Property Borrower, Original Borrower, and the REIT are referred to herein as, the “Indemnitors” and individually as an “Indemnitor”), to and for the benefit of KEYBANK NATIONAL ASSOCIATION, a national banking association, as Agent (in such capacity, “Agent”), its successors and assigns, for itself and any other lenders who become Lenders under the Loan Agreement (as hereinafter defined) (collectively referred to as “Lenders” and each individually referred to as a “Lender”).

R E C I T A L S:

     A. Property Borrower, Original Borrower, Agent and Lenders are parties to that certain Revolving Credit Agreement dated as of November 12, 2009 (as amended, restated and/or modified from time to time, the “Loan Agreement”) whereby Lenders agree to provide to Original Borrower, Property Borrower and any other borrowers (collectively “Borrowers”) who become Borrowers under the revolving credit facility in a maximum principal amount of FIFTEEN MILLION DOLLARS ($15,000,000), and which obligations of Original Borrower, Property Borrower and any other Borrowers to the Lenders under the Loan Agreement are evidenced by, among other things, that certain Revolving Credit Note dated as of November 12, 2009 by Original Borrower (later amended to include Property Borrower and any other Borrowers) in favor of the Lenders and in the original principal amount of FIFTEEN MILLION DOLLARS ($15,000,000) (as amended, restated and/or modified from time to time, the “Note”). Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Loan Agreement.

     B. A portion of the Loan is being used by Property Borrower to finance its acquisition of approximately 11.54 acres of land located at 2181-2291 Esplanade Avenue, City of San Jacinto, County of Riverside, State of California, and more particularly described on Exhibit A attached hereto (the “Land”), which Land has been improved by approximately 56,473 square feet in several buildings, together with surface parking for vehicles and additional improvements which may exist now or which are hereafter constructed (collectively, the “Improvements”). The Land and the Improvements shall be collectively referred to herein as the “Property”).

     C. As security for the Loan (but excluding the obligations of Borrowers under this Indemnity Agreement), Property Borrower has executed and delivered to Agent (i) that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing dated of even date herewith made by Property Borrower in favor of First American Title Insurance Company, as trustee for the benefit of the Agent (as amended, restated and/or modified from time to time the “Deed of Trust” with respect to the Property, and (ii) the other Loan Documents (as defined in the Loan Agreement).

     D. Borrowers and the REIT will derive financial benefit from the Loan evidenced and secured by the Note, the Deed of Trust and the other Loan Documents.

     E. As a condition to making the Loan, Agent and Lenders require the Indemnitors to indemnify Agent and Lenders upon the occurrence of certain events.

     F. Lenders have relied on the statements and agreements contained herein in agreeing to make the Loan. The execution and delivery of this Indemnity Agreement by Indemnitors is a condition precedent to the making of the Loan by Lenders.

A G R E E M E N T S:

     In consideration of the Recitals set forth above and hereby incorporated herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Indemnitors hereby agree as follows:

     1. Definitions. (a) Capitalized terms used herein shall have the meanings set forth in Section 1(b) of this Indemnity Agreement or in the specific sections of this Indemnity Agreement. Initially capitalized terms used and not otherwise defined in this Agreement shall have the meanings respectively ascribed to them in the Loan Agreement.

     (b) For purposes of this Indemnity Agreement, the following terms shall have the meanings as hereinafter set forth:

          “Environmental Laws” means, collectively, all Laws related to or regulating or otherwise related to Hazardous Material, drinking water, groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid waste, waste water, storm water run-off, waste emissions or wells. Without limiting the generality of the foregoing, the term shall encompass each of the following statutes, and regulations promulgated thereunder, and amendments and successors to such statutes and regulations, as may be enacted and promulgated from time to time: the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.), the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), the Public Health Service Act (42 U.S.C. §300(f) et seq.), the Pollution Prevention Act (42 U.S.C. §13101 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. 5136 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), the Federal Clean Water Act (33 U.S.C. §1251 et seq.), the Federal Clean Air Act (42 U.S.C. §7401 et seq.), and any and all applicable California and/or Federal statutes, laws and regulations regarding Hazardous Materials, as amended or restated from time to time including any successor thereto, and any regulations promulgated pursuant thereto

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          “Environmental Proceedings” means any proceedings, hearings or meetings, whether civil (including actions by private parties), criminal, or administrative proceedings, relating to the environmental conditions or any Hazardous Material at, under, upon, emanating to or from or otherwise related to the Property.

          “Governmental Authority” means any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court, administrative tribunal, or public utility.

          “Hazardous Material” means and includes gasoline, petroleum, asbestos containing materials, explosives, radioactive materials or any hazardous or toxic material, substance or waste which is defined by those or similar terms or is regulated as such under any Law of any Governmental Authority having jurisdiction over the Property or any portion thereof or its use, including: (i) any “hazardous substance” defined as such in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C.A. § 9601(14) as may be amended from time to time, or any so-called “superfund” or “superlien” Law, including the judicial interpretation thereof; (ii) any “pollutant or contaminant” as defined in 42 U.S.C.A. § 9601(33); (iii) any material now defined as “hazardous waste” pursuant to 40 C.F.R. Part 260; (iv) any petroleum, including crude oil or any fraction thereof; (v) natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel; (vi) any “hazardous chemical” as defined pursuant to 29 C.F.R. Part 1910; and (vii) any other toxic substance or contaminant that is subject to any other Law or other past or present requirement of any Governmental Authority.

          “Indemnified Parties” means Agent, each Lender, Agent’s and each Lender’s parent, subsidiaries and affiliates, each of their respective shareholders, directors, officers, employees and agents, and the successors and assigns of any of them; and “Indemnified Party” shall mean any one of the Indemnified Parties.

          “Laws” means, collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial and administrative decrees and opinions or precedential authority in the applicable jurisdiction. Any reference above to a Law, includes the same as it may be amended from time to time, including the judicial interpretation thereof.

          “Release” shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, storing, escaping, leaching, dumping, or discarding, burying, abandoning, or disposing into the environment.

          “Threat of Release” shall mean a substantial likelihood of a Release which requires action to prevent or mitigate damage to the environment which may result from such Release.

     2. Representations and Warranties. Each Indemnitor hereby represents and warrants to Agent and Lenders (i) that, except as specifically disclosed in the Environmental Reports listed in Exhibit B attached hereto and delivered on or before the date of this Indemnity

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Agreement (the “Environmental Documents”) to the best of its knowledge, (a) the Property has been and is free from contamination by Hazardous Material, and (b) no Release of any Hazardous Material has occurred on, onto or about the Property; (ii) that to its knowledge, except as specifically disclosed in the Environmental Documents or the Loan Documents, the Property currently complies, and will comply based on its anticipated use, with all Environmental Laws; (iii) that, to Indemnitor’s knowledge in connection with the ownership, operation, and use of the Property, all necessary notices have been filed and all required permits, licenses and other authorizations have been obtained, including those relating to the generation, treatment, storage, disposal or use of Hazardous Material; (iv) that to the best of its knowledge, except as disclosed in the Environmental Documents, there is no present, past or threatened investigation, inquiry, judicial or administrative proceeding, complaint, action, notice, order or claim relating to the environmental condition of, or to events on or about, the Property; (v) except for the release and indemnifications by Property Borrower in favor of the seller set forth in the Agreement of Purchase and Sale and Joint Escrow Instructions pursuant to which Property Borrower is acquiring the Property, it has not, nor will it, release or waive the liability of any previous owner, lessee or operator of the Property or any party who may be potentially responsible for the presence of or removal of Hazardous Material from the Property, nor has it made promises of indemnification regarding Hazardous Material on the Property to any party, except as contained herein and in the Loan Documents; (vi) to its knowledge, there are no existing or closed underground storage tanks or other underground storage receptacles for Hazardous Materials on the Property; (vii) to its knowledge, except as disclosed in the Environmental Documents, no notice received of a claim by any party that any use, operation or condition of the Property or any of the Property Borrower’s operations has caused any nuisance or any other liability or adverse condition on any other property nor does the Property Borrower know of any basis for such a claim; and (viii) to its knowledge, except as disclosed in the Environmental Documents, there are no agreements, consent orders, decrees, judgments, license or permit conditions or other orders or directives of any federal, state or local court, Governmental Authority or agreements, whether settlement agreements or otherwise, with any third parties relating to the ownership, use, operation, sale, transfer or conveyance of the Property that require any change in the present condition of the Property or any work, repairs, construction, containment, clean up, investigations, studies, removal or other remedial action or capital expenditures with respect to the Property.

     3. Covenants. Indemnitors shall

     (a) comply, and cause all other persons and entities on or occupying the Property to comply, with all Environmental Laws in all material respects;

     (b) not install, use, generate, manufacture, store, treat, release or dispose of, nor permit the installation, use, generation, storage, treatment, release or disposal of, Hazardous Material on, under or about the Property except in compliance with all Environmental Laws;

     (c) immediately advise Agent in writing of:

     (i) any and all Environmental Proceedings;

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     (ii) the presence of any Hazardous Material in violation of any Environmental Law on, under or about the Property of which Agent has not previously been advised in writing;

     (iii) any remedial action taken by, or on behalf of, any Indemnitor in response to any Hazardous Material on, under or about the Property or to any Environmental Proceedings of which Agent has not previously been advised in writing;

     (iv) the discovery by any Indemnitor of the presence of any Hazardous Material on, under or about any real property or bodies of water immediately adjoining the Property in violation of any Environmental Law; and

     (v) the discovery by any Indemnitor of any occurrence or condition on any real property adjoining or in the vicinity of the Property that could cause the Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of the Property under any Environmental Law;

For the purposes hereof, the term “discovery” shall mean the date that Indemnitor acquires actual knowledge of such fact or circumstance.

     (d) provide Agent with copies of all reports, analyses, notices, licenses, approvals, orders, correspondences or other written materials in its possession or control relating to the presence of Hazardous Material at the Property in violation of any Environmental Law or Environmental Proceedings immediately upon receipt, completion or delivery of such materials;

     (e) not install or allow to be installed any tanks on, at or under the Property in violation of any Environmental Law;

     (f) not create or permit to continue in existence any lien (whether or not such lien has priority over the lien created by the Deed of Trust) upon the Property imposed pursuant to any Environmental Law;

     (g) not change or alter the present use of the Property unless Indemnitors shall have notified Agent thereof in writing and Agent shall have determined, in its sole and absolute discretion, that such change or modification will not result in the presence of Hazardous Material in violation of any Environmental Law on the Property in such a level that would increase the potential liability for Environmental Proceedings; and

     (h) upon demand by an Indemnified Party, diligently defend any Environmental Proceeding or claim related to the noncompliance of any Environmental Law with respect to the Property or the use thereof, all at the Indemnitors’ own cost and expense and by counsel approved by Agent in the exercise of its reasonable judgment; provided, however, that Agent may elect, at any time, to conduct its own defense through counsel selected by Agent at the sole cost and expense of the Indemnitors.

     4. Right of Entry and Disclosure of Environmental Reports. Subject to the Leases (as defined in the Deed of Trust) and the rights of tenants thereunder, Property Borrower hereby grants to Agent its agents, employees, consultants and contractors, an irrevocable license and authorization to enter upon and inspect the Property, at reasonable times and upon

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reasonable advance notice, and to conduct such environmental audits and tests, including, without limitation, subsurface testing, soils and groundwater testing, and other tests which may physically invade the Property, which Agent, in its reasonable discretion, determines are necessary or desirable. With respect to invasive testing, such as soil borings, Agent shall consult with Property Borrower in advance of such tests. Agent agrees, however, that it shall not conduct any such audits, unless an Event of Default exists under the Loan Documents or Agent has reason to believe that such audit may disclose the Release, Threat of Release and/or presence of Hazardous Material or unless any previously conducted environmental audit deems further testing necessary. Without limiting the generality of the foregoing, Property Borrower agrees that Agent shall have the right to appoint a receiver to enforce this right to enter and inspect the Property to the extent such authority is provided under applicable law. All reasonable out-of-pocket costs and expenses incurred by Agent in connection with any inspection, audit or testing conducted in accordance with this Section 4 shall be paid by the Indemnitors upon demand by Agent. The results of all investigations and reports prepared by Agent shall be and at all times remain the property of Agent and under no circumstances shall Agent have any obligation whatsoever to disclose or otherwise make available to Indemnitors or any other party such results or any other information obtained by it in connection with such investigations and reports; provided, however, that if there exists no Event of Default under the Loan Documents, if requested by Property Borrower, Agent shall provide to Property Borrower a copy of the written report with respect to any inspection, audit or testing for which Property Borrower has paid hereunder. Agent hereby reserves the right, and Indemnitors hereby expressly authorize Agent to make available to any party in connection with a sale of the Property any and all reports, whether prepared by Agent or prepared by Property Borrower and provided to Agent (collectively, the “Environmental Reports”) which Agent may have with respect to the Property. Each Indemnitor consents to Agent notifying any party under such circumstances of the availability of any or all of the Environmental Reports and the information contained therein. Each Indemnitor further agrees that Agent may disclose such Environmental Reports to any governmental agency or authority if they reasonably believe that they are required to disclose any matter contained therein to such agency or authority; provided that Agent shall give Property Borrower at least 48 hours prior written notice before so doing. Each Indemnitor acknowledges that Agent cannot control or otherwise assure the truthfulness or accuracy of the Environmental Reports, and that the release of the Environmental Reports, or any information contained therein, to prospective bidders at any foreclosure sale of the Property may have a material and adverse effect upon the amount which a party may bid at such sale. Each Indemnitor agrees that Agent (i) owes no duty of care to protect the Indemnitors or any other Person from, or to inform the Indemnitors or any other Person of, any Hazardous Material or any other environmental condition affecting the Property and (ii) shall not have any liability whatsoever as a result of delivering any or all of the Environmental Reports or any information contained therein to any Indemnitor or any other Person, and each Indemnitor hereby releases and forever discharges Agent and Lenders from any and all claims, damages, or causes of action arising out of connected with or incidental to the Environmental Reports or the delivery thereof.

     5. Indemnitor’s Remedial Work. Indemnitors shall promptly perform or with respect to the corrective actions, if any, described in the Environmental Documents, cause to be performed any and all necessary remedial work (“Remedial Work”) in response to any Environmental Proceedings and/or required by applicable governmental authority having jurisdiction or the presence, storage, use, disposal, transportation, discharge or release of any

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Hazardous Material on, under or about any of the Property; provided, however, that Property Borrower shall perform or cause to be performed such Remedial Work so as to minimize any impairment to Agent’s security under the Loan Documents.

     All Remedial Work shall be conducted:

     a. in a diligent and timely fashion by licensed contractors acting under the supervision of a consulting environmental engineer;

     b. pursuant to a detailed written plan for the Remedial Work approved by any public or private agencies or persons with a legal or contractual right to such approval;

     c. with such insurance coverage pertaining to liabilities arising out of the Remedial Work as is then customarily maintained with respect to such activities; and

     d. only following receipt of any required permits, licenses or approvals.

     The selection of the Remedial Work contractors and consulting environmental engineer, the contracts entered into with such parties, any disclosures to or agreements with any public or private agencies or parties relating to Remedial Work and the written plan for the Remedial Work (and any changes thereto) shall each be subject to Agent’s prior written approval, which shall not be unreasonably withheld or delayed. In addition, Indemnitors shall submit to Agent, promptly upon receipt or preparation, copies of any and all reports, studies, analyses, correspondence, governmental comments or approvals, proposed removal or other Remedial Work contracts and similar information prepared or received by Indemnitors in connection with any Remedial Work, or Hazardous Material relating to the Property. All costs and expenses of such Remedial Work shall be paid by Indemnitors, including, without limitation, the charges of the Remedial Work contractors and the consulting environmental engineer, any taxes or penalties assessed in connection with the Remedial Work and Agent’s reasonable fees and out-of-pocket costs incurred in connection with monitoring or review of such Remedial Work. Agent shall have the right but not the obligation to join and participate in, as a party if it so elects, any legal proceedings or actions initiated in connection with any Environmental Proceedings.

     6. Indemnity. Indemnitors, each jointly and severally, covenant and agree, at their sole cost and expense, to indemnify, defend (at trial and appellate levels and with attorneys, consultants and experts reasonably acceptable to Agent) and hold each Indemnified Party harmless against and from any and all liens, damages, losses, liabilities, obligations, settlement payments, penalties, assessments, citations, directives, claims, litigation, demands, defenses, judgments, suits, proceedings, costs, disbursements or expenses of any kind or of any nature whatsoever (including, without limitation, reasonable attorneys’, consultants’ and experts’ fees and disbursements incurred in investigating, defending against, settling or prosecuting any claim, litigation or proceeding) (collectively, “Expenses”) which may at any time be imposed upon, incurred by or asserted or awarded against such Indemnified Party or the Property, and arising directly or indirectly from or out of: (A) the Release or Threat of Release of any Hazardous Materials on, in, under or affecting all or any portion of the Property or emanating from the Property and affecting any areas surrounding the Property, regardless of whether or not caused

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by or within the control of Property Borrower; (B) a material violation of any Environmental Law applicable to the Property or the Property Borrower, whether or not caused by or within the control of Property Borrower; (C) the failure of Property Borrower to comply with the terms and conditions of this Agreement in all material respects; (D) the violation of any Laws in connection with other real property of Property Borrower which gives or may give rise to any rights whatsoever in any party with respect to the Property by virtue of any Environmental Laws; (E) the enforcement of this Agreement, including, without limitation, (i) the reasonable costs of assessment, containment and/or removal of any and all Hazardous Materials in violation of any Environmental Law from all or any portion of the Property or any surrounding areas impacted by any Hazardous Materials emanating from the Property in violation of any Environmental Law, (ii) the costs of any reasonable actions taken in response to a Release or Threat of Release of any Hazardous Materials on, in, under or affecting all or any portion of the Property to prevent or minimize such Release or Threat of Release, if required by applicable Environmental Laws, and (iii) reasonable costs actually incurred to comply with all Laws (including all Environmental Laws) in connection with all or any portion of the Property or any surrounding areas impacted by any Hazardous Materials emanating from the Property; or (F) all foreseeable and all unforeseeable Expenses arising out of: Environmental Proceedings or the use, generation, storage, discharge or disposal of Hazardous Material in violation of any Environmental Law by Indemnitors, any prior owner or operator of the Project or any person on or about the Project; (ii) any residual contamination affecting any natural resource or the environment in violation of any Environmental Law; or (iii) any exercise by Agent of any of its rights and remedies hereunder; and

     Indemnitors’ liability to the aforementioned indemnified parties shall arise upon the earlier to occur of (1) discovery of any Hazardous Material in violation of any Environmental Law on, under or about the Property, or (2) the institution of any Environmental Proceedings, and not upon the realization of loss or damage, and Indemnitors shall pay to Agent from time to time, immediately upon request, an amount equal to such Expenses, as reasonably determined by Agent. In addition, in the event any Hazardous Material is removed, or caused to be removed from the Property, by Indemnitors, Agent or any other person, the number assigned by the U.S. Environmental Protection Agency to such Environmental Proceedings or any similar identification shall in no event be in the name of Agent or identify the Agent as a generator, arranger or other designation. The foregoing indemnity shall not include Expenses arising solely from Hazardous Material which first exist on the Property following the date on which the Agent takes title to the Property, whether by foreclosure of the Deed of Trust, deed-in-lieu thereof or otherwise.

     7. Remedies Upon Default. In addition to any other rights or remedies Agent may have under this Indemnity Agreement, at law or in equity, in the event that Indemnitors shall fail to timely comply with any of the provisions hereof, or in the event that any representation or warranty made herein proves to be false or misleading when made in a material respect, then, in such event, after (i) delivering written notice to Indemnitors, which notice specifically states that Indemnitors have failed to comply with the provisions of this Indemnity Agreement; and (ii) the expiration of the later to occur of the thirty (30) day period after receipt of such notice or the cure period, if any, permitted under any applicable law, rule, regulation or order with which Indemnitors shall have failed to comply, Agent may declare an Event of Default under the Loan Documents and exercise any and all remedies provided for therein,

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and/or do or cause to be done whatever is reasonably necessary to cause the Property to comply with all Environmental Laws and the cost thereof shall constitute an Expense hereunder and shall become immediately due and payable without notice and with interest thereon at the Default Rate until paid. Subject to the Leases and rights of tenants thereunder, Indemnitors shall give to Agent and its agents and employees access to the Property for the purpose of effecting such compliance and hereby specifically grant to Agent a license, effective upon expiration of the applicable period as described above, if any, to do whatever is necessary to cause the Property to so comply, including, without limitation, to enter the Property and remove therefrom any Hazardous Material in violation of an Environmental Law or otherwise comply with any Environmental Laws.

     8. Obligations. The obligations set forth herein, including, without limitation, Indemnitors’ obligation to pay Expenses hereunder, are collectively referred to as, the “Environmental Obligations”. Notwithstanding any term or provision contained herein or in the Loan Documents, the Environmental Obligations are unconditional. Indemnitors shall be fully and personally liable for the Environmental Obligations hereunder, and such liability shall not be limited to the original principal amount of the Loan. The Environmental Obligations shall survive the repayment of the Loan and any foreclosure, deed-in-lieu of foreclosure or similar proceedings by or through which Agent, and Lender, or any of their affiliates, nominees, successors or assigns or any other person bidding at a foreclosure sale may obtain title to the Property or any portion thereof.

     The liabilities of Indemnitors under this Agreement shall in no way be limited or impaired by, and each Indemnitor hereby consents to and agrees to be bound by, any amendment or modification of the provisions of the Loan Documents to or with Agent by Property Borrower, Original Borrower or any Borrower or Guarantor or any related party to or affiliate of Agent or any Lender who succeeds Property Borrower as owner of the Property. In addition, notwithstanding any terms of any of the Loan Documents to the contrary, the liability of each Indemnitor under this Indemnity Agreement shall in no way be limited or impaired by: (i) any extensions of time for performance required by any of the Loan Documents; (ii) any sale, assignment or foreclosure of the Note or the Deed of Trust or any sale or transfer of all or part of the Property; (iii) any exculpatory provision in any of the Loan Documents limiting Agent’s or any Lender’s recourse to property encumbered by the Deed of Trust or to any other security, or limiting Agent’s or any Lender’s rights to a deficiency judgment against Property Borrower or any other Borrower; (iv) the accuracy or inaccuracy of the representations and warranties made by Property Borrower or any Borrower or Guarantor under any of the Loan Documents; (v) the release of Property Borrower, any Borrower or Guarantor or any other person from performance or observance of any of the agreements, covenants, terms or conditions contained in the Loan Documents by operation of law, Agent’s or any Lender’s voluntary act, or otherwise; (vi) the release or substitution, in whole or in part, of any security for the Note; or (vii) Agent’s failure to record the Deed of Trust or file any UCC-1 financing statements (or Agent’s improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given as security for the Note; and, in any such case, whether with or without notice to Property Borrower or any Guarantor and with or without consideration.

     Each Indemnitor waives any right or claim of right to cause a marshalling of Property Borrower’s or any other Borrower’s assets or to cause Agent to proceed against any of the security for the Loan before proceeding under this Indemnity Agreement against any Indemnitor

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or to proceed against any Indemnitor in any particular order; each Indemnitor agrees that any payments required to be made hereunder shall become due on demand; each Indemnitor expressly waive and relinquish all rights and remedies (including any rights of subrogation) accorded by applicable law to indemnitors or guarantors.

     9. Waiver. No waiver of any provision of this Indemnity Agreement nor consent to any departure by Indemnitors therefrom shall in any event be effective unless the same shall be in writing and signed by Agent and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No notice to or demand on Indemnitors shall in any case entitle Indemnitors to any other or further notice or demand in similar or other circumstances.

     10. Exercise of Remedies. No failure on the part of Agent to exercise and no delay in exercising any right or remedy hereunder, at law or in equity, shall operate as a waiver thereof. Agent shall not be estopped to exercise any such right or remedy at any future time because of any such failure or delay; nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise of such right or remedy or the exercise of any other right or remedy.

     11. Assignment. Agent may assign its interest under this Indemnity Agreement to any successor to its respective interests in the Property or the Loan Documents. This Indemnity Agreement may not be assigned or transferred, in whole or in part, by any Indemnitor and any purported assignment by any Indemnitor of this Indemnity Agreement shall be void ab initio and of no force or effect.

     12. Counterparts. This Indemnity Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of such counterparts taken together shall constitute but one and the same instrument.

     13. Governing Law. This Indemnity Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of California.

     14. Modifications. This Indemnity Agreement may be amended or modified only by an instrument in writing which by its express terms refers to this Indemnity Agreement and which is duly executed by Indemnitors and consented to in writing by Agent.

     15. Attorneys’ Fees. If Agent commences litigation for the interpretation, enforcement, termination, cancellation or rescission of this Indemnity Agreement, or for damages for the breach of this Indemnity Agreement, Agent shall be entitled to its reasonable attorneys’ fees (including, but not limited to, in-house counsel fees) and court and other costs incurred in connection therewith.

     16. Interpretation. This Indemnity Agreement has been negotiated by parties knowledgeable in the matters contained herein, with the advice of counsel, is to be construed and interpreted in absolute parity, and shall not be construed or interpreted against any party by reason of such party’s preparation of the initial or any subsequent draft of the Loan Documents or this Indemnity Agreement.

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     17. Severability. If any term or provision of this Indemnity Agreement shall be determined to be illegal or unenforceable, all other terms and provisions in this Indemnity Agreement shall nevertheless remain effective and shall be enforced to the fullest extent permitted by law.

     18. Other Laws. Nothing in this Indemnity Agreement, and no exercise by Agent of its rights or remedies under this Indemnity Agreement, shall impair, constitute a waiver of, or in any way affect Agent’s rights and remedies with respect to Indemnitors under any Environmental Laws, including without limitation, contribution provisions or private right of action provisions under such Environmental Laws.

     19. Notices. Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing; (c) if by Federal Express or other reliable overnight courier service, on the next Business Day after delivered to such courier service; or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

Property Borrower:	TNP SRT San Jacinto, LLC
	1900 Main Street, Suite 700
	Irvine, CA 92614
	Attention: C.J. Osbrink
	Telephone: (949) 833-8252
	Facsimile: (949) 252-0212
Original Borrower:	TNP Strategic Retail Operating Partnership, LP
	1900 Main Street, Suite 700
	Irvine, CA 92614
	Attention: C.J. Osbrink
	Telephone: (949) 833-8252
	Facsimile: (949) 252-0212
REIT:	TNP Strategic Retail Trust, Inc.
	1900 Main Street, Suite 700
	Irvine, CA 92614
	Attention: C.J. Osbrink
	Telephone: (949) 833-8252
	Facsimile: (949) 252-0212
Agent:	KeyBank National Association
	225 Franklin Street, 18th Floor
	Boston, Massachusetts 02110
	Attention: Christopher T. Neil, Senior Relationship Manager
	Telephone (617) 385-6202
	Facsimile (216) 385-6293

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with a copy (which shall not constitute notice) to:

Edwards Angell Palmer & Dodge LLP

2800 Financial Plaza

Providence, RI 02903

Attention: Gail E. McCann, Esq.

Telephone (401) 276-6527

Facsimile (888) 325-9041

or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice.

     20. Joint and Several Liability. Indemnitors agree that they shall each be jointly and severally liable for the performance of the Environmental Obligations and all other obligations of Indemnitors contained in this Indemnity Agreement.

     21. California Provisions. (a) The purpose of this Agreement is to protect Agent and Lenders against liability, loss, damage, cost or expense with respect to Hazardous Materials and Environmental Laws relating to the Property as provided in this Agreement, and not as security for payment of the indebtedness of Borrowers to Lenders evidenced by the Notes or performance of the obligations under the Deed of Trust. The obligations of Indemnitors under this Agreement are separate from, independent of and in addition to the indebtedness and obligations under the Notes and the Deed of Trust. The liability of Indemnitors under this Agreement shall not be limited to or measured by the amount of the indebtedness owed under the Notes or the Deed of Trust or the value of the Property. This Agreement is intended to be supplemental, and not in derogation of, Agents and Lenders’ rights under California Civil Code Section 2929.5 and California Code of Civil Procedure Sections 564, 726.5 and 736 and any successor sections thereof. This Agreement is not, and shall not be deemed to be, secured by the Deed of Trust. Indemnitors shall be fully, personally, jointly, and severally liable for all obligations of Indemnitors under this Agreement and a separate action may be brought and prosecuted against Indemnitors on this Agreement.

     (b) The liability of Indemnitors under the Agreement shall not be subject to any limitation set forth in the Notes, the Deed of Trust, or any of them, on personal liability for the payment of the indebtedness evidenced by the Notes, or the remedies of Agent and Lenders for enforcement of the obligations under the Notes or the Deed of Trust, or the recourse of Lender for satisfaction of such obligations. Each Indemnitor acknowledges that no action for the enforcement of, or recovery of damages under, this Agreement shall constitute either an action or a failure to foreclose first against the Deed of Trust within the meaning of California Code of Civil Procedure Section 726, which shall not apply to this Agreement, and no judgment against any Indemnitors in any action pursuant to this Agreement shall constitute a money judgment or a deficiency judgment within the meaning of California Code of Civil Procedure Sections 580a, 580b, 580d or 726. This Agreement and the obligations of Indemnitors hereunder shall survive, and remain in full force and effect after a full conveyance of any foreclosure sale under the Deed of Trust (whether by judicial action, exercise of the power of sale, or otherwise) with respect to any release or threatened releases or any past, present or future violation of any Environmental Laws at the Property which occurred, or the onset of which occurred, before the reconveyance or

12

foreclosure sale, and Agent and Lenders shall have the right to enforce this Agreement after any such reconveyance or foreclosure sale.

     (c) This Agreement shall not affect, impair or waive any rights or remedies of Agent and Lenders or any obligations of Indemnitors with respect to Hazardous Materials created or imposed by Environmental Laws (including Agent’s and Lenders’ rights of reimbursement or contribution under any Environmental Law). The remedies in the Agreement are cumulative and in addition to all remedies provided by law.

     (d) Property Borrower represents and warranties that, to its knowledge, (i) the Land has not been designated as “border zone property” under the provisions of California Health and Safety Code Section 25220 et seq. or any regulation adopted in accordance therewith; and (ii) and there has been no occurrence or condition on any real property adjoining or in the vicinity of the Land that is reasonably likely to cause the Land or any part thereof to be designated as border zone property.

     (e) Each Indemnitor hereby waives and relinquishes to the fullest extent now or hereafter not prohibited by applicable law all suretyship defenses and defenses in the nature thereof, including without limitation any such defenses that may arise under or by reason of California Civil Code Sections 2787 to 2855, inclusive. In addition, the provisions of Article 17 of the Fourth Omnibus Amendment And Reaffirmation Of Loan Documents (which is one of the amendments to the Loan Agreement) dated as of even date and the waivers in the Guaranty (as defined in the Loan Agreement) are hereby incorporated herein by reference.

This Section is an unconditional and irrevocable waiver of any rights and defenses any Indemnitor may have in the event that the Loan is secured by real property. These rights and defenses include, but are not limited to, any rights or defenses based upon Sections 580a, 580b, 580d, or 726 of the California Code of Civil Procedure.

     22. Captions. The headings of each section herein are for convenience only and do not limit or construe the contents of any provisions of this Indemnity Agreement.

     23. Full Recourse; Survival. The indemnity and other obligations contained in this Agreement are not subject to any non-recourse or other limitation of liability provisions contained in any of the Loan Documents, and the liability of Borrowers and REIT pursuant to this Agreement shall not be limited by any such non-recourse or similar limitation of liability provisions. All representations, warranties, covenants, and obligations of Borrowers and REIT in this Agreement shall survive the payment or other satisfaction of the Loan.

     24. Environmental Indemnity Not Secured by Liens. By acceptance of this Agreement, Agent and Lenders confirm their agreement and understanding that the obligations of Borrowers and REIT under this Agreement be and remain unsecured by any interest in the Property. In this regard, Agent’s appraisal of the value of the Property is such that Agent and Lenders are not willing to accept the consequences, under California’s “One Form of Action” Rule (i.e., Section 726 of the Code of Civil Procedure) and “Anti-Deficiency Rules” (i.e., Sections 580a, 580b and 580d of the Code of Civil Procedure) of inclusion of this Agreement among the obligations secured by the Deed of Trust. Borrowersand REIT acknowledge that

13

Agent and Lenders are unwilling to accept such consequences and that Lenders would not make the Loan but for the personal unsecured liability undertaken by Borrowers and REIT .

     25. Independent Obligations; Conflict; Joint and Several Liability. The obligations of Borrowers and REIT and the rights and remedies of Agent and Lenders in this Agreement are independent from and are in addition to those pursuant to any of the other Loan Documents. Each party executing this Agreement shall be jointly and severally liable for all Borrower and REIT obligations under this Agreement.

(Signatures on Next Page)

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     IN WITNESS WHEREOF, Indemnitors have caused this Indemnity Agreement to be executed as an instrument under seal, as of the day and year first above written.

PROPERTY BORROWER: TNP SRT SAN JACINTO, LLC, a Delaware limited liability company
By:	TNP Strategic Retail Operating Partnership, LP, a Delaware
	limited liability company, its Sole Member

By:	TNP Strategic Retail Trust, Inc., a Maryland
	corporation, its General Partner

By:	/s/ Christopher S. Cameron
	Name:	Christopher S. Cameron
	Title:	CFO, Secretary

ORIGINAL BORROWER: TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP, a Delaware limited partnership
By:	TNP Strategic Retail Trust, Inc., a Maryland
	corporation, its General Partners

By:	/s/ Christopher S. Cameron
	Name:	Christopher S. Cameron
	Title:	CFO, Secretary

REIT: TNP STRATEGIC RETAIL TRUST, INC., a Maryland corporation
By:	/s/ Christopher S. Cameron
	Name:	Christopher S. Cameron
	Title:	CFO, Secretary

[Signature Page to Environmental Indemnity Agreement]

EXHIBIT A

LEGAL DESCRIPTION

PARCEL “A”

PARCEL A AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 4 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF SAID PARCEL 4 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, NORTH 89° 54’ 46” WEST A DISTANCE OF 83.32 FEET;

THENCE LEAVING SAID SOUTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 124.09 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 4;

THENCE ALONG THE EASTERLY PROLONGATION OF THE NORTHERLY LINE OF SAID PARCEL 4 SOUTH 89° 54’ 46” EAST A DISTANCE OF 234.80 FEET;

THENCE LEAVING SAID PROLONGATION SOUTH 00° 05’ 14” WEST A DISTANCE OF 107.09 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196 THE FOLLOWING COURSES:

SOUTH 45° 05’ 14” WEST A DISTANCE OF 24.04 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 134.48 FEET TO THE POINT OF BEGINNING.

PARCEL “B”

PARCEL B AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 6, 7 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216, PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE MOST NORTHWESTERLY CORNER OF PARCEL 6 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING THE NORTHWEST CORNER OF SAID PARCEL MAP NO. 33196, SAID POINT ALSO BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196 SOUTH 89° 54’ 40” EAST A DISTANCE OF 389.59 FEET;

THENCE LEAVING SAID NORTHERLY LINE, SOUTH 00° 05’ 14” WEST A DISTANCE OF 151.01 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 56.33 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 108.16 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 83.75 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL 7;

THENCE ALONG THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID PARCEL 7 NORTH 00° 05’ 14” EAST A DISTANCE OF 130.00 FEET;

THENCE LEAVING SAID NORTHERLY PROLONGATION NORTH 89° 54’ 46” WEST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 107.17 FEET;

THENCE NORTH 89° 54’ 40” WEST A DISTANCE OF 231.52 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL MAP NO. 33196 SAID POINT BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

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THENCE ALONG THE EASTERLY LINE OF SAID SANDERSON AVENUE, NORTH 00° 06’ 56” EAST A DISTANCE OF 21.00 FEET TO THE POINT OF BEGINNING.

PARCEL “C”

PARCEL C AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 4, 6, 7, AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE SOUTHEAST CORNER OF PARCEL 2 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID PARCEL 2 THE FOLLOWING COURSES:

NORTH 00° 05’ 14” EAST A DISTANCE OF 132.26 FEET;

THENCE NORTH 89°54’ 46” WEST A DISTANCE OF 28.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 30.00 FEET THE NORTHEAST CORNER OF SAID PARCEL 2, SAID POINT BEING ON THE WESTERLY PROLONGATION OF THE SOUTHERLY LINE OF SAID PARCEL 6;

THENCE ALONG SAID WESTERLY PROLONGATION, SOUTH 89° 54’ 46” EAST A DISTANCE OF 28.00 FEET TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 6;

THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 6 THE FOLLOWING COURSE:

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 42.50 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 66.50 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 6.92 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY HAVING A RADIUS OF 30.00 FEET WITH A

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RADIAL BEARING OF SOUTH 89° 54’ 46” EAST;

THENCE NORTHWESTERLY AND WESTERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 94° 54’ 51” AN ARC LENGTH OF 49.70 FEET;

THENCE SOUTH 85° 10’ 23” WEST A DISTANCE OF 119.40 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 50.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL MAP NO. 33196 SAID POINT BEING 78.00 FEET EAST OF THE CENTERLINE OF SANDERSON AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG THE EASTERLY LINE OF SAID SANDERSON AVENUE, NORTH 00° 06’ 56” EAST A DISTANCE OF 25.02 FEET;

THENCE LEAVING SAID EASTERLY LINE SOUTH 89° 54’ 4O” EAST A DISTANCE OF 231.52 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 107.17 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET TO A POINT ON THE NORTHERLY PROLONGATION OF THE WESTERLY LINE OF SAID PARCEL 7;

THENCE ALONG SAID NORTHERLY PROLONGATION, SOUTH 00° 05’ 14” WEST A DISTANCE OF 130.00 FEET;

THENCE LEAVING THE WEST LINE OF SAID LOT 7, SOUTH 89° 54’ 46” EAST A DISTANCE OF 83.75 FEET TO A POINT 10.00 FEET WEST OF THE SOUTHERLY PROLONGATION OF THE EASTERLY LINE OF SAID PARCEL 6;

THENCE ON A LINE PARALLEL WITH AND 10.00 FEET DISTANT FROM THE EASTERLY LINE OF SAID PARCEL 6 NORTH 00° 05’ 14” EAST A DISTANCE OF 108.16 FEET;

THENCE LEAVING SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 56.33 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 179.76 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 16.80 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 112.56 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST

5

A DISTANCE OF 38.75 FEET;

THENCE LEAVING SAID PARALLEL LINE, SOUTH 00° 05’ 14” WEST A DISTANCE OF 162.53 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL 4, SAID POINT BEING ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 56.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID SOUTHERLY LINE THE FOLLOWING COURSE:

NORTH 89° 54’ 46” WEST A DISTANCE OF 94.81 FEET;

THENCE NORTH 44° 54’ 46” WEST A DISTANCE OF 24.04 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 42.00 FEET TO THE SOUTHWEST CORNER OF SAID PARCEL 4, SAID POINT ALSO BEING THE SOUTHEAST CORNER OF PARCEL 3 OF SAID PARCEL MAP NO. 33196;

THENCE LEAVING SAID SOUTHERLY LINE, ALONG THE EASTERLY LINE OF SAID PARCEL 3;

NORTH 00° 05’ 14” EAST A DISTANCE OF 107.09 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE CONTINUING ALONG THE EASTERLY LINE OF SAID PARCEL 3 THE FOLLOWING COURSES:

NORTH 00° 05’ 14” EAST A DISTANCE OF 204.87 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 74.22 FEET;

THENCE NORTH 00° 5’ 14” EAST A DISTANCE OF 39.13 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL 2;

THENCE ALONG THE SOUTHERLY LINE OF SAID PARCEL 2 SOUTH 89° 54’ 46” EAST A DISTANCE OF 18.00 FEET TO THE POINT OF BEGINNING.

PARCEL “D”

PARCEL D AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 6 AND 8 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES

6

72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE NORTHEAST CORNER OF SAID PARCEL 8 OF PARCEL MAP NO. 33196, SAID POINT BEING ON THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 135.33 FEET TO THE TRUE POINT OF BEGINNING;

THENCE LEAVING SAID NORTHERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 329.77 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 16.80 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 112.56 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 130.00 FEET;

THENCE LEAVING SAID PARALLEL LINE, NORTH 00° 05’ 14” EAST A DISTANCE OF 119.33 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 20.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 61.33 FEET;

THENCE NORTH 72° 23’ 24” EAST A DISTANCE OF 16.23 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 32.65 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 22.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 224.08 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID NORTHERLY LINE NORTH 89° 54’ 40” WEST A DISTANCE OF 126.67 FEET TO THE TRUE POINT OF BEGINNING.

PARCEL “E”

PARCEL E AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

7

PORTIONS OF PARCELS 8, 9, AND 10 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 8 OF SAID PARCEL MAP NO. 33196, SAID POINT BEING ON THE NORTHERLY LINE OF SAID PARCEL MAP NO. 33196

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 133.50 FEET TO A POINT 11.75 FEET WEST OF THE NORTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A LINE PARALLEL WITH AND 11.75 FEET DISTANT FROM THE EASTERLY LINE OF SAID PARCEL 9 SOUTH 00° 05’ 14” WEST A DISTANCE OF 253.17 FEET TO A POINT ON THE EASTERLY LINE OF SAID PARCEL 9;

THENCE ALONG SAID EASTERLY LINE, LEAVING SAID PARALLEL LINE SOUTH 25° 06’ 15” WEST A DISTANCE OF 5.32 FEET TO AN ANGLE POINT ON THE EASTERLY LINE OF SAID PARCEL 9;

THENCE ALONG SAID EASTERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 36.00 FEET TO THE SOUTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A SOUTHERLY PROJECTION OF THE EASTERLY LINE OF SAID PARCEL 9 SOUTH 00° 05’ 14” WEST A DISTANCE OF 42.17 FEET;

THENCE LEAVING SAID SOUTHERLY PROJECTION NORTH 89° 54’ 46” WEST A DISTANCE OF 73.00 FEET TO A POINT ON THE EASTERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID EASTERLY LINE THE FOLLOWING COURSES:

SOUTH 00° 05’ 14” WEST A DISTANCE OF 119.83 FEET;

THENCE SOUTH 04° 39’ 40” WEST A DISTANCE OF 25.08 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 106.86 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196, SAID POINT BEING THE SOUTHEAST CORNER OF SAID PARCEL 8;

THENCE ALONG SAID SOUTHERLY LINE NORTH 89° 54’ 46” WEST A DISTANCE OF 40.00 FEET TO AN ANGLE POINT OF

8

SAID SOUTHERLY LINE;

THENCE LEAVING SAID SOUTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 107.09 FEET TO A POINT ON THE EASTERLY PROLONGATION OF THE NORTHERLY LINE OF PARCEL 4 OF SAID PARCEL MAP NO. 33196;

THENCE ALONG SAID EASTERLY PROLONGATION NORTH 89° 54’ 46” WEST A DISTANCE OF 143.61 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 4;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 4 NORTH 89° 54’ 46” WEST A DISTANCE OF 91.19 FEET;

THENCE LEAVING SAID NORTHERLY LINE NORTH 00° 05’ 14” EAST A DISTANCE OF 38.44 FEET TO A POINT ON A LINE THAT IS PARALLEL WITH AND 38.44 FEET DISTANT NORTHERLY FROM THE NORTHERLY LINE OF SAID PARCEL 4;

THENCE ALONG SAID PARALLEL LINE, SOUTH 89° 54’ 46” EAST A DISTANCE OF 91.25 FEET;

THENCE LEAVING SAID PARALLEL LINE, NORTH 00° 05’ 14” EAST A DISTANCE OF 119.33 FEET;

THENCE SOUTH 89° 54’ 46” EAST A DISTANCE OF 20.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 61.33 FEET;

THENCE NORTH 72° 23’ 24” EAST A DISTANCE OF 16.23 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 32.65 FEET;

THENCE NORTH 89° 54’ 46” WEST A DISTANCE OF 22.00 FEET;

THENCE NORTH 00° 05’ 14” EAST A DISTANCE OF 224.08 FEET TO A POINT ON THE NORTHERLY LINE OF SAID PARCEL 8;

THENCE ALONG SAID NORTHERLY LINE SOUTH 89° 54’ 40” EAST A DISTANCE OF 113.83 FEET TO THE POINT OF BEGINNING.

PARCEL “F”

PARCEL F AS SHOWN ON EXHIBIT “B” OF LOT LINE ADJUSTMENT NO. 07-02 AS EVIDENCED BY DOCUMENT RECORDED MARCH 28, 2007 AS INSTRUMENT NO. 2007-0211022 OF OFFICIAL RECORDS, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS;

PORTIONS OF PARCELS 9 AND 10 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP IN FILE IN BOOK 216 PAGES 72 AND 73, OF PARCEL MAPS, IN THE OFFICE OF THE

9

COUNTY RECORDER OF SAID COUNTY, LYING WITHIN SECTION 32, TOWNSHIP 4 SOUTH, RANGE 1 WEST, SAN BERNARDINO MERIDIAN, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

BEGINNING AT THE NORTHEAST CORNER OF SAID PARCEL 10 OF SAID PARCEL MAP 33196, SAID POINT BEING THE NORTHEAST CORNER OF SAID PARCEL MAP NO. 33196.

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 10 NORTH 89° 54’ 40” WEST A DISTANCE OF 179.96 FEET TO A POINT 11.75 FEET WEST OF THE NORTHWEST CORNER OF SAID PARCEL 10;

THENCE LEAVING SAID NORTHERLY LINE, ON A LINE PARALLEL WITH AND 11.75 FEET DISTANT FROM THE WESTERLY LINE OF SAID PARCEL 10, SOUTH 00° 05’ 14” WEST A DISTANCE OF 253.17 FEET; TO A POINT ON THE WESTERLY LINE OF PARCEL 10;

THENCE ALONG SAID WESTERLY LINE, LEAVING SAID PARALLEL LINE, SOUTH 25° 06’ 15” WEST A DISTANCE OF 5.32 FEET; TO AN ANGLE POINT ON THE WESTERLY LINE OF SAID PARCEL 10;

THENCE ALONG SAID WESTERLY LINE SOUTH 00° 05’ 14” WEST A DISTANCE OF 36.00 FEET TO THE SOUTHEAST CORNER OF SAID PARCEL 9;

THENCE ON A SOUTHERLY PROJECTION OF THE WESTERLY LINE OF SAID PARCEL 10 SOUTH 00° 05’ 14” WEST A DISTANCE OF 42.17 FEET;

THENCE LEAVING SAID SOUTHERLY PROJECTION NORTH 89° 54’ 46” WEST A DISTANCE OF 73.00 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL 10;

THENCE ALONG THE WESTERLY LINE OF THE FOLLOWING COURSES:

SOUTH 00° 05’ 14” WEST A DISTANCE OF 119.83 FEET;

THENCE SOUTH 04° 39’ 40” WEST A DISTANCE OF 25.08 FEET;

THENCE SOUTH 00° 05’ 14” WEST A DISTANCE OF 106.86 FEET TO A POINT ON THE SOUTHERLY LINE OF SAID PARCEL MAP NO. 33196, SAID LINE BEING 73.00 FEET NORTH OF THE CENTERLINE OF ESPLANADE AVENUE AS SHOWN ON SAID PARCEL MAP NO. 33196 SAID POINT BEING THE SOUTHWEST CORNER OF SAID PARCEL 10;

THENCE ALONG SAID SOUTHERLY LINE SOUTH 89° 54’ 46” EAST A DISTANCE OF 28.00 FEET TO THE SOUTHWEST CORNER OF PARCEL 5 OF SAID PARCEL MAP NO. 33196;

10

THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 5 NORTH 00° 05’ 14” EAST A DISTANCE OF 136.36 FEET TO THE NORTHWEST CORNER OF SAID PARCEL 5;

THENCE ALONG THE NORTHERLY LINE OF SAID PARCEL 5 SOUTH 89° 54’ 46” EAST A DISTANCE OF 228.92 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 5, SAID POINT BEING ON THE EASTERLY LINE OF SAID PARCEL MAP NO. 33196.

THENCE ALONG SAID EASTERLY LINE NORTH 00° 07’ 25” EAST A DISTANCE OF 451.49 FEET TO THE POINT OF BEGINNING.

PARCEL “G”

PARCELS 1 AND 2 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, AS SHOWN ON A MAP FILED IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL “H”

PARCEL 5 OF PARCEL MAP NO. 33196, IN THE CITY OF SAN JACINTO, AS SHOWN ON A MAP FILED IN BOOK 216, PAGES 72 AND 73 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

PARCEL “I”

NON-EXCLUSIVE, PERPETUAL EASEMENTS FOR THE PURPOSES OF PEDESTRIAN AND VEHICULAR INGRESS AND EGRESS, DRAINAGE AND UTILITIES ALONG WITH NON-EXCLUSIVE EASEMENTS FOR PARKING, BUILDING ENCROACHMENTS AND SIGN MAINTENANCE AS FURTHER DESCRIBED AND SET FORTH IN A DOCUMENT ENTITLED “DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS AND RECIPROCAL EASEMENT AGREEMENT” RECORDED APRIL 4, 2006 AS INSTRUMENT NO. 2006-0238823 OF OFFICIAL RECORDS.

APN: 436-710-001-0 and 436-710-002-1 and 436-710-003-2 and 436-710-004-3 and 436-710-005-4 and 436-710-006-5 and 436-710-007-6 and 436-710-008-7 and 436-710-010-8

11

Exhibit B

Environmental Documents

Phase I Environmental Assessment dated September 28. 2009 prepared by Property Solutions Inc.

Limited Phase II Environmental Site Assessment dated December 15, 2009 prepared by Enercon.

EX-21

EXHIBIT 21

Subsidiaries

TNP Strategic Retail Operating Partnership, LP (Delaware)
TNP SRT Moreno Marketplace, LLC (Delaware)
TNP SRT Waianae Mall, LLC (Delaware)
TNP SRT Northgate Plaza Tucson Holdings, LLC (Delaware)
TNP SRT Northgate Plaza Tucson, LLC (Delaware)
TNP SRT San Jacinto, LLC (Delaware)

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting firm

The Board of Directors
TNP Strategic Retail Trust, Inc.:

     We consent to the incorporation by reference in the post-effective amendment No. 4 to the registration statement (No. 333-154975) on Form S-11 of TNP Strategic Retail Trust, Inc. of our report dated March 31, 2010, except as to Note 1 and Note 7, which are as of May 17, 2010, with respect to the consolidated balance sheets of TNP Strategic Retail Trust, Inc. and subsidiaries as of December 31, 2009 and 2008, and the related consolidated statements of operations, equity, and cash flows for the year ended December 31, 2009 and for the period from September 18, 2008 (date of inception) through December 31, 2008, and the financial statement schedule III as of December 31, 2009, which report appears in the December 31, 2009 annual report on Form 10-K/A of TNP Strategic Retail Trust, Inc. We further consent to the reference to our firm under the heading “Experts” in the prospectus.

/s/ KPMG LLP

Irvine, California
September 1, 2010

EX-23.4

EXHIBIT 23.4

Consent of Independent Audit Firm

To the Board of Directors
TNP Strategic Retail Trust, Inc.

     We consent to the incorporation by reference in this Post-Effective Amendment No. 4 to Registration Statement (No. 333-154975) on Form S-11 of our report dated January 22, 2010, with respect to the Statement of Revenues and Certain Expenses for the period from November 10, 2008 (date of commencement of operations) to September 30, 2009, for Moreno Marketplace. We further consent to the reference to us under the heading “Experts” in the prospectus.

/s/ KMJ Corbin & Company LLP

Costa Mesa, California
September 1, 2010

EX-23.5

EXHIBIT 23.5

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in this Post-Effective Amendment No. 4 to the Registration Statement (No. 333-154975) on Form S-11 of TNP Strategic Retail Trust Inc., of our report, dated August 20, 2010, relating to our audit of the statement of revenues and certain expenses of the Waianae Mall Property for the year ended December 31, 2009, which appears in the Form 8-K/A of TNP Strategic Retail Trust, Inc. filed on August 20, 2010. We further consent to the reference to us under the heading “Experts” in the prospectus.

/s/ MCGLADREY & PULLEN, LLP

Irvine, California
September 1, 2010