As filed with the Securities and Exchange Commission on August 14, 1998

Registration No. 333-32099

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

----------

POST-EFFECTIVE AMENDMENT NO. 3 TO
FORM S-11
REGISTRATION STATEMENT
Under
The Securities Act of 1933

----------

WELLS REAL ESTATE INVESTMENT TRUST, INC.
(Exact Name of Registrant as Specified in Its Governing Instruments)

3885 Holcomb Bridge Road
Norcross, Georgia 30092
(770) 449-7800
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal executive offices)

Brian M. Conlon, Executive Vice President
Wells Real Estate Investment Trust, Inc.
3885 Holcomb Bridge Road
Norcross, Georgia 30092
(770) 449-7800
(Name, Address, Including Zip Code and Telephone Number, Including Area Code,
of Agent for Service)

Copies to:

Donald Kennicott, Esq.
Michael K. Rafter, Esq.
Holland & Knight LLP
One Atlantic Center, Suite 2000
1201 West Peachtree Street, N.E.
Atlanta, Georgia 30309-3400

-------------------------------------------

Maryland                                 58-2328421
(State or Other Jurisdiction                     (I.R.S. Employer
of Incorporation)                      Identification Number)

-------------------------------------------

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

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 statement number of the earlier effective registration statement
for the same offering. |_|______________________

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 statement number of the earlier effective registration statement
for the same offering. |_|______________________

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

WELLS REAL ESTATE INVESTMENT TRUST, INC.
CROSS REFERENCE SHEET PURSUANT TO ITEM 501(b) OF REGULATION S-K

Registration Statement Item and Heading    Location of Heading in Prospectus
---------------------------------------    ---------------------------------

1.  Forepart of Registration Statement and     Facing Page, Cover Page of
Outside Front Cover Page of Prospectus ..  Prospectus                

2.  Inside Front and Outside Back Cover        Inside Front Cover and Outside 
Pages of Prospectus .....................  Back Cover Page of Prospectus  

3.  Summary Information, Risk Factors          Outside Front Cover Page of      
and Ratio of Earnings to Fixed Charges ..  Prospectus; Summary of the       
Offering; Risk Factors; Estimated
Use of Proceeds; Management      
Compensation                     

4.  Determination of Offering Price .........  Risk Factors

5.  Dilution ................................  Risk Factors

6.  Selling Security Holders ................  *

7.  Plan of Distribution ....................  Outside Front Cover Page of
Prospectus; Summary of the
Offering; Estimated Use of
Proceeds; Plan of Distribution;
Supplement No. 1

8.  Use of Proceeds .........................  Estimated Use of Proceeds;
Investment Objectives and
Criteria

9.  Selected Financial Data .................  *

10. Management's Discussion and Analysis       Management's Discussions and    
of Financial Condition and Results of      Analysis of Financial Condition 
Operations ..............................  and Results of Operations;      
Supplement No. 2; Supplement
No. 3

11. General Information as to Registrant ....  Summary of the Offering;
Management; The Advisor and the
Advisory Agreement; Description
of Capital Stock; Partnership
Agreement; Supplement No. 2;
Supplement No. 3

12. Policy with Respect to Certain             Investment Objectives and        
Activities ..............................  Criteria; Summary of Reinvestment
Plan

13. Investment Policies of Registrant .......  Investment Objectives and
Criteria; Real Property
Investments; Conflicts of
Interest; Supplement No. 2;
Supplement No. 3

14. Description of Real Estate ..............  Investment Objectives and
Criteria; Real Property
Investments; Supplement No. 2;
Supplement No. 3

15. Operating Data ..........................  *

16. Tax Treatment of Registrant and its        Federal Income Tax   
Security Holders ........................  Considerations; ERISA
Considerations            

17. Market Price of and Dividends on the       
Registrant's Common Entry and Related
Stockholder Matters.....................   *

18. Description of Registrant's Securities ..  Description of Capital Stock;
Distribution Policy; Partnership
Agreement

19. Legal Proceedings .......................  Management; The Advisor and the
Advisory Agreement; Legal Matters

20. Security Ownership of Certain Beneficial   Management Compensation;       
Owners and Management....................  Management; The Advisor and the
Advisory Agreement

21. Directors and Executive Officers ........  Management; Supplement No. 2

22. Executive Compensation ..................  Management Compensation;
Conflicts of Interest; Management

23. Certain Relationships and Related          Management Compensation;     
Transactions ............................  Conflicts of Interest;        
Management; Supplement No. 2;
Supplement No. 3             

24. Selection, Management and Custody of       Management Compensation;         
Registrant's Investments.................  Conflicts of Interest; Investment
Objectives and Criteria; Real
Property Investments; Plan of
Distribution; Supplement No. 2;
Supplement No. 3

25. Policies with Respect to Certain           Management Compensation;         
Transactions ............................  Conflicts of Interest; Management

26. Limitations of Liability.................  Description of Capital Stock;
Partnership Agreement

27. Financial Statements and Information.....  Appendix I: Exhibit A; Supplement
No. 1; Supplement No. 2;
Supplement No. 3

28. Interestrs of Named Experts and Counsel .  Conflicts of Interest; Experts

29. Disclosure of Commission Position on       
Indemnification for Securities Act 
Liabilities .............................  *

*Not Applicable

[The following is text to a sticker to be attached to the front cover page of
the Prospectus in a manner that will not obscure the Risk Factors:]

SUPPLEMENTAL INFORMATION - The Prospectus of Wells Real Estate Investment
Trust, Inc. consists of this sticker, the Prospectus dated January 30, 1998,
Supplement No. 1 dated April 20, 1998, Supplement No. 2 dated June 30, 1998 and
Supplement No. 3 dated August 12, 1998 (the Supplements are contained inside the
back cover page of the Prospectus). Supplement No. 1 includes updated Prior
Performance Tables and certain revisions to the Prospectus. Supplement No. 2
includes descriptions of the acquisition of ownership interests in certain real
properties and revisions to the Prospectus to reflect the increase in the size
of the Board of Directors. Supplement No. 3 includes descriptions of
transactions involving joint ventures with Affiliates and acquisitions of
certain real properties.

WELLS REAL ESTATE INVESTMENT TRUST, INC.
SHARES OF COMMON STOCK
$1,250,000  MINIMUM

Wells Real Estate Investment Trust, Inc. (the "Company") is a newly
organized Maryland corporation which intends to qualify as a real estate
investment trust ("REIT").  The Company has been formed to acquire and operate
commercial properties, including properties which are under development or
construction, are newly constructed or have been constructed and have operating
histories and some of which may have tenants subject to "triple net" leases
(individually, a "property," collectively, "properties").  The Company's
operations will be managed by Wells Capital, Inc., a Georgia corporation (the
"Advisor"), an Affiliate (as defined herein) of the Company.

The Company hereby offers, pursuant to this Prospectus (the "Prospectus"),
for sale to the public up to a maximum of 16,500,000 shares and a minimum of
125,000 shares of its common stock, $.01 par value per share (the "Shares").
All of the Shares offered hereby are being offered by the Company.  The minimum
purchase is 100 Shares ($1,000) (except in certain states as described herein).

An investment in Shares involves significant risks (See Risk Factors at page 8),
including the following:

. The Company's Articles of Incorporation impose restrictions on ownership and
transfers of Shares, and no public market for the Shares currently exists, and
there is no assurance that one will develop.

. The Company may purchase properties from its Affiliates (generally without
profit to such selling Affiliates), and enter into joint venture agreements
with its Affiliates and with the Prior Wells Public Programs (as defined
herein) for the acquisition and development of properties.  Accordingly,
because such transactions will not be on an arm's-length basis, the Company
will face inherent conflicts of interest based on such relationships.

. The Advisor and other Affiliates of the Company are involved in
partnerships with investment objectives similar to the Company's, and
therefore will face conflicts of interest in managing the Company's operations
and those of such other activities. Accordingly, such conflicts may affect
negatively the Company's financial performance and Cash Available for
Distribution to Investors (as defined herein).

. If the Company sells only the minimum amount of Shares required to close the
Offering, the Company may be able to acquire only an estimated three or fewer
properties, and thus the Company would have very limited asset diversification
and possibly no geographic diversification.

. Certain real estate investment programs previously sponsored by the Advisor
and distributions to investors therein have experienced fluctuating financial
performance based on varying occupancy levels, amounts of capital improvements
and other necessary expenses for each property owned by such other programs.

. The Company does not own any real property, and the Advisor has not identified
any properties in which there is a reasonable probability that the Company
will invest.  Accordingly, investors in the Company ("Investors") will not
have the opportunity to evaluate the properties that the Company will acquire
and must rely totally upon the ability of the Advisor with respect to the
acquisition of properties.

. Failure by the Company to qualify as a REIT for federal income tax purposes
will cause it to be taxed as a regular corporation under federal income tax
laws, which would materially reduce the Company's Cash Available for
Distribution to Investors.

. The Company may incur indebtedness of up to 50% of the properties' aggregate
value, though such debt limitation does not apply to individual properties.
Accordingly, the Company and its properties may be moderately leveraged, which
could have adverse consequences to the Company.

. Of the proceeds from the sale of the Shares, approximately 84% will be used to
acquire properties, and the balance will be paid as commissions and fees to
certain Affiliates of the Company for their services and as reimbursement for
certain organizational and offering expenses, though some of such amounts will
be reallowed or paid directly to participating broker-dealers.

The Company has registered an offering of 16,500,000 Shares, with 1,500,000 of
such Shares available only to shareholders purchasing Shares in this initial
public offering who receive a copy of this Prospectus and who elect to
Any than By participating in this Offering must be made pursuant to a separate
prospectus.  See "Summary of Reinvestment Plan" and Exhibit C hereto.

The Company's Affiliates include Wells Capital, Inc.--the Advisor, Wells
Investment Securities, Inc.--the Dealer Manager (the "Dealer Manager"), Wells
Management Company, Inc.--the property manager (the "Management Company"), Wells
Operating Partnership, L.P.--the partnership that will own the properties (the
"Operating Partnership"), and Wells Development Corporation--a property
development company (the "Development Company") .  The Shares are being placed
for the Company by the Dealer Manager on a "best efforts" basis.  See "Plan of
Distribution."

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS ANY SUCH
AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.  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.

=====================================================================

Proceeds to
Price to                                         Company
Public (1)              Selling Commissions        (2)(3)
-------------              -------------------     ------------

Per Share.................................           $10.00                     $      0.70        $       9.30
Total Minimum.............................       $1,250,000                     $    87,500        $  1,162,500
Total Maximum (4).........................     $165,000,000                     $11,550,000        $153,450,000

=====================================================================

(See footnotes on following page)
WELLS INVESTMENT SECURITIES, INC.

The date of this Prospectus is January 30, 1998.

(Cover Page Continued From Previous Page)
Footnotes:
(1)  Price to Public and Selling Commissions may be reduced in connection with
certain large volume purchases and under other circumstances described
herein; however, in no event will the proceeds to the Company be reduced
thereby.  In addition to Selling Commissions in the amount of up to 7% of
the Gross Offering Proceeds, the Company will reimburse the Dealer Manager
and nonaffiliated broker-dealers participating in this Offering for actual
expenses paid for marketing support and due diligence purposes, up to a
maximum of 2.5% of the Gross Offering Proceeds (the "Marketing and Due
Diligence Fee").  The Company also will issue to participating dealers a
warrant to purchase one Share at a price of $12.00 per Share for every 25
Shares sold (the "Soliciting Dealer Warrants").  See "Plan of
Distribution."

(2)  These figures are before deducting other expenses of the Offering to be
paid by the Company in an estimated amount equal to 3% of Gross Offering
Proceeds -- $4,500,000 if the maximum amount under the Offering is sold and
$37,500 if the minimum amount is sold -- which amount does not include
Selling Commissions or amounts reimbursed for due diligence expenses.
Includes Selling Commissions equal to 7% of the aggregate Gross Offering
Proceeds (which commissions may be reduced under certain circumstances),
but excludes the Marketing and Due Diligence Fee of up to 2.5% of Gross
Offering Proceeds, both of which are payable to the Dealer Manager, an
Affiliate of the Company.  The Dealer Manager, in its sole discretion, may
reallow Selling Commissions of up to 7% of Gross Offering Proceeds to other
broker-dealers participating in this Offering attributable to shares sold
by them, and may reallow the Marketing and Due Diligence Fee (up to 2.5% of
Gross Offering Proceeds) as reimbursements to the Dealer Manager and
broker-dealers participating in this Offering based on such factors as the
volume of shares sold by such participating broker-dealers, marketing
support provided by such participating broker-dealers and bona fide
conference fees incurred.  See "Estimated Use of Proceeds" and "Plan of
Distribution."

(3)  In addition, assuming all 600,000 Soliciting Dealer Warrants are issued to
the Dealer Manager, $480 of additional proceeds will be raised, based on a
purchase price of $.0008 per share.  Assuming all such warrants are
exercised at the exercise price of $12.00, an additional $1,200,000 will be
raised.  No Selling Commission will be paid in connection with the issuance
of the Soliciting Dealer Warrants or the Shares issuable upon the exercise
thereof.

(4)  The maximum number of Shares to be sold hereunder is 16,500,000, which
includes 1,500,000 Shares that may be issued pursuant to the Company's
Dividend Reinvestment Plan (the "Reinvestment Plan"), and 600,000 shares
that may be issued upon exercise of the Soliciting Dealer Warrants.  Those
shareholders who elect to participate in the Reinvestment Plan will have
their dividends reinvested in additional Shares.  The Soliciting Dealer
Warrants may not be exercised for one year from the date of issuance, and
are subject to restrictions on transfer.  See "Description of Capital
Stock-Soliciting Dealer Warrants."

The Offering will commence upon the effective date of this Prospectus and
will continue until and terminate upon the earlier of (i) January 30, 2000 (two
years after the initial date of this Prospectus), or (ii) the date on which an
aggregate of 15,000,000 Shares (excluding any Shares sold pursuant to the
Reinvestment Plan) (the "Maximum Offering") have been sold.  Subscription
proceeds will be placed in an interest-bearing escrow account with NationsBank,
N.A., Atlanta, Georgia (the "Escrow Agent"), until subscriptions for at least
125,000 Shares (the "Minimum Offering") have been received and accepted by the
Company, at which time the proceeds will be released to the Company to be held
in trust for the benefit of investors.  If the Minimum Offering is not met by
January 30, 1999 (one year after the date of this Prospectus), the Offering will
be terminated and subscriber's funds (plus interest and without deducting for
escrow expenses) will be promptly refunded.

THE USE OF PROJECTIONS OR FORECASTS IN THIS OFFERING IS PROHIBITED.  ANY
REPRESENTATIONS 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 AN INVESTMENT IN THE COMPANY ARE NOT PERMITTED.

TABLE OF CONTENTS
Page
----

SUMMARY OF THE OFFERING..................................................  1
RISK FACTORS.............................................................  9
Investment Risks......................................................  9
Lack of Liquidity of Shares........................................  9
Total Reliance on the Advisor......................................  9
Conflicts of Interest Related to the Company's Affiliates..........  9
Possible Lack of Diversification Resulting from
Subscriptions for Less than the Maximum Number of Shares......... 10
Substantial Management Compensation.............................. 10
No Identified Sources for Funding of Future
Capital Needs.................................................... 10
Joint Ventures May Negatively Affect the
Company.......................................................... 10
Anti-Takeover Effects of Governing Documents
and Maryland Law................................................. 11
Reinvestment Plan Proceeds May Not be Used
to Acquire Properties............................................ 11
Real Estate Risks..................................................... 11
Fluctuating Financial Performance of
Previously Sponsored Programs.................................... 11
Potential Adverse Economic and Regulatory
Changes.......................................................... 11
Blind Pool Offering; Lack of Properties Requires
Total Reliance on Abilities of Advisor........................... 11
Indebtedness on Properties Brings Risks............................ 12
Potential Increased Costs and Delays
Related to Property Development.................................. 12
Competition for Investments........................................ 12
Potential Adverse Effects of Delays in
Investments...................................................... 12
Failure to List and Resulting Liquidation May
Adversely Affect Returns to Stockholders......................... 12
Potential Liabilities Related to Environmental
Matters.......................................................... 13
Uninsured Losses................................................... 13
Tax Risks............................................................. 13
Failure to Qualify as a REIT....................................... 13
REIT Minimum Distribution Requirements;
Possible Incurrence of Additional Debt........................... 13
Failure of the Operating Partnership to be
Classified as a Partnership for Federal
Income Tax Purposes; Impact on REIT
Status............................................................. 14
ERISA Risks........................................................ 14
INVESTOR SUITABILITY STANDARDS........................................... 15
ESTIMATED USE OF PROCEEDS................................................ 17
MANAGEMENT COMPENSATION.................................................. 19
CONFLICTS OF INTEREST.................................................... 21
Interests in Other Companies.......................................... 21
Other Activities of the Advisor and its Affiliates.................... 22
Competition........................................................... 22
Affiliated Dealer Manager............................................. 23
Affiliated Property Manager........................................... 23
Affiliated Developer.................................................. 23
Lack of Separate Representation....................................... 23
Joint Ventures with Affiliates of the Advisor......................... 23
Receipt of Fees and Other Compensation by Advisor
and Affiliates...................................................... 23
Certain Conflict Resolution Procedures................................ 23
SUMMARY OF REINVESTMENT PLAN............................................. 25
General............................................................... 25
Investment of Distributions........................................... 25
Participant Accounts, Fee, and Allocation of Shares................... 25
Reports to Participants............................................... 26
Election to Participate or Terminate Participation.................... 26
Federal Income Tax Considerations..................................... 27
Amendments and Termination............................................ 27
SHARE REPURCHASE PROGRAM................................................. 27
PRIOR PERFORMANCE SUMMARY................................................ 28
Prior Wells Public Programs........................................... 28
MANAGEMENT............................................................... 32
General............................................................... 32
Fiduciary Responsibility of the Board of Directors.................... 32
Directors and Executive Officers...................................... 33
Committees............................................................ 35
Compensation of Directors and Officers................................ 35
THE ADVISOR AND THE ADVISORY AGREEMENT................................... 36
The Advisor........................................................... 36
The Advisory Agreement................................................ 37
WELLS MANAGEMENT......................................................... 39
INVESTMENT OBJECTIVES AND CRITERIA....................................... 40
General............................................................... 40
Acquisition and Investment Policies................................... 40
Development and Construction of Properties............................ 42
Terms of Leases and Lessee Creditworthiness........................... 42
Borrowing Policies.................................................... 43
Joint Venture Investments............................................. 43
Other Policies........................................................ 44
REAL PROPERTY INVESTMENTS................................................ 45
DISTRIBUTION POLICY...................................................... 45
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................... 46
DESCRIPTION OF CAPITAL STOCK............................................. 46
Common Stock.......................................................... 46
Preferred Stock....................................................... 47
Soliciting Dealer Warrants............................................ 47
Articles of Incorporation and Bylaw Provisions........................ 47
Limitation of Liability and Indemnification........................... 50
Business Combinations................................................. 51
Control Share Acquisition Statute..................................... 51
Amendment to the Articles of Incorporation............................ 52
Dissolution of the Company............................................ 52
Advance Notice of Director Nominations and New
Business............................................................ 53

(i)

Meeting of Stockholders.............................................. 53
Operations........................................................... 53
Inspection of Books and Records...................................... 53
Restrictions on "Roll-Up" Transactions............................... 53
FEDERAL INCOME TAX CONSIDERATIONS....................................... 55
Taxation of the Company.............................................. 55
Requirements for Qualification....................................... 56
Failure to Qualify................................................... 61
Taxation of Taxable U.S. Shareholders................................ 62
Taxation of Shareholders on the Disposition of the
Shares............................................................. 63
Capital Gains and Losses............................................. 63
Information Reporting Requirements and Backup Withholding............ 63
Taxation of Tax-Exempt Shareholders.................................. 63
Taxation of Non-U.S. Shareholders.................................... 64
Other Tax Consequences............................................... 65
Tax Aspects of the Operating Partnership............................. 65
Sale of the Operating Partnership's Property......................... 68
ERISA CONSIDERATIONS.................................................... 68
Employee Benefit Plans, Tax-Qualified Retirement
Plans, and IRAs.................................................... 69
Status of the Company and the Operating Partnership
under ERISA........................................................ 69
PARTNERSHIP AGREEMENT................................................... 71
Management........................................................... 71
Transferability of Interests in the Operating Partnership............ 71
Capital Contribution................................................. 71
Redemption Rights.................................................... 71
Operations........................................................... 72
Distributions and Allocations........................................ 72
Term................................................................. 73
Tax Matters.......................................................... 73
PLAN OF DISTRIBUTION.................................................... 73
SUPPLEMENTAL SALES MATERIAL............................................. 77
LEGAL MATTERS........................................................... 77
EXPERTS................................................................. 78
ADDITIONAL INFORMATION.................................................. 78
GLOSSARY................................................................ 78

FINANCIAL STATEMENTS............................................ APPENDIX I
PRIOR PERFORMANCE TABLES........................................  EXHIBIT A
FORM OF SUBSCRIPTION AGREEMENT AND
SUBSCRIPTION AGREEMENT SIGNATURE
PAGE...........................................................  EXHIBIT B
DIVIDEND REINVESTMENT PLAN......................................  EXHIBIT C

(ii)

SUMMARY OF THE OFFERING

The following summary is qualified in its entirety by the more detailed
information and financial statements appearing elsewhere in this Prospectus.
Unless the context requires otherwise, the term "Company" includes Wells
Operating Partnership, L.P., a Delaware limited partnership (the "Operating
Partnership").  See "Glossary" for the definitions of certain terms used in this
Prospectus.  Investors should carefully consider the information set forth under
the heading "Risk Factors."

THE COMPANY:            Wells Real Estate Investment Trust, Inc. was
incorporated in July 1997 as a Maryland corporation, and
intends to qualify as a REIT. The Company's principal
place of business and registered office is located at
the office of the Advisor: 3885 Holcomb Bridge Road,
Norcross, Georgia 30092, and its telephone number at
that office is 800-448-1010. The Company intends to
operate as an "Up-REIT" through the use of the Operating
Partnership for acquisitions of properties.

ADVISOR:                Wells Capital, Inc., incorporated in Georgia in April
1984, is the Advisor and will make all investment
decisions for the Company, subject to approval by the
Board of Directors in certain circumstances. See "The
Advisor and the Advisory Agreement." The Advisor is an
affiliate of the Company. See "Conflicts of Interest."
For information regarding the previous experience of the
Advisor and its Affiliates in the management of real
estate limited partnerships, see "Prior Performance
Summary."

SECURITIES OFFERED:     A Minimum Offering of 125,000 Shares and a Maximum
Offering of 16,500,000 Shares (the "Maximum Offering").
The Maximum Offering includes up to 1,500,000 Shares to
be issued pursuant to the Reinvestment Plan and up to
600,000 shares to be issued pursuant to the Soliciting
Dealer Warrants. The Shares issued in this Offering and
under the Reinvestment Plan are offered at a price of
$10 per share.

RISK FACTORS:           An investment in the Shares involves various risks
including the following:

.  To ensure that the Company will not fail to qualify
as a REIT, the Articles of Incorporation, subject to
certain exceptions, will limit any person from
owning, directly or indirectly, more than 9.8% of the
outstanding Shares or more than 9.8% of the number of
outstanding shares of any class of the Company's
preferred stock.

.  Initially, the Shares will not be listed (and
therefore not traded) on a securities exchange or any
over-the-counter market. However, the Board of
Directors may elect to so list the Shares in the
future (the "Listing") though there can be no
assurances that the Company will ever qualify for
such a Listing. Listing does not assure liquidity.
There can be no assurance that a market for the
Shares will develop. In the event that Listing does
not occur by January 30, 2008 (ten years after the
initial date of this Prospectus), the Company will be
dissolved. See "Description of Capital Stock--
Articles of Incorporation and Bylaw Provisions."

.  Shareholders must rely on the Advisor and the Board
of Directors, who will have full responsibility for
the day-to-day management of the Company.

.  The number of properties that the Company will
acquire and the diversification of its investments
will be reduced to the extent that less than the
maximum number of Shares are sold. Lack of
diversification of 

1

the Company's investments will increase the risks
associated with an investment in the Shares.

.  This Offering involves payment of substantial fees to
the Advisor and other Affiliates, some of which will
be payable regardless of the success or failure of
the Company.

. Distributions to investors in certain real estate
programs previously sponsored by the Advisor and its
Affiliates have fluctuated with real estate business
cycles and other external market conditions, as well
as varying occupancy levels, amounts of capital
improvements and other necessary expenses for each
property owned by such other programs. Accordingly,
there are no assurances that properties acquired by
the Company will be profitable. See "Prior
Performance Summary."

. The Company will be subject to market and economic
risks associated with investments in real estate,
which means that both the amount of cash the Company
will receive from the lessees of its properties and
the future value of its properties cannot be
predicted. Accordingly, Cash Available for
Distribution and the value of the Company's real
estate investments will be dependent upon fluctuating
market and economic conditions.

. The Company does not own any real property, and the
Advisor has not identified any properties in which
there is a reasonable probability that the Company
will invest. Accordingly, investors will not have the
opportunity to evaluate the properties that the
Company will acquire and must rely totally upon the
ability of the Advisor and the Board of Directors
with respect to the acquisition of properties.

.  A portion of the proceeds available for Investment in
properties may be invested in the acquisition and
construction of undeveloped properties, which involve
risks relating to the builder's ability to control
construction costs, failure to perform, or failure to
build in conformity with plan specifications and
timetables, thus potentially subjecting the Company
to cost overruns and time delays for properties under
construction. Increased costs of newly constructed
properties may have the effect of reducing Cash
Available for Distribution, while construction delays
may have the effect of delaying cash flow from the
operation of such properties.

.  As a result of the fact that the Advisor and its
Affiliates serve as general partners of real estate
limited partnerships with investment objectives
similar to the Company's and will continue to engage
in other business activities, the Advisor will have
conflicts of interest in allocating its time between
the Company and such partnerships and activities. The
Advisor also will have conflicts of interest when
evaluating potential investments for the Company in
deciding which entity will acquire a particular
property, and in leasing properties in the event that
the Company and another program managed by the
Advisor or its Affiliates were to compete for the
same tenants in negotiating leases.

.  The Company intends to borrow money in connection
with the construction and development of properties.
Accordingly, the Company will be subject to risks
normally associated with debt financing, including

2

the risk that the Company will not be able to meet
its debt service obligations, and, to the extent that
it cannot, the risk that the Company may lose its
investment in any properties encumbered by debt.

.  The Company intends to elect to be taxed as a REIT
for federal income tax purposes. In order to qualify
to be taxed as a REIT, the Company must meet numerous
organizational and operating requirements. While the
Company has received an opinion of counsel that it
will qualify to be taxed as a REIT, this opinion is
not binding on the Service or any court. In the event
that the Company fails to qualify as a REIT, it will
be taxed as a corporation, which could have a
material adverse effect on the Company's Cash
Available for Distribution.

See "Risk Factors" for a discussion of the risk
factors relating to an investment in the Shares.

TERMS OF THE OFFERING:     The Offering will commence upon the date of this
Prospectus and will continue until and terminate upon
the earlier of (i) two years after the date of this
Prospectus, or (ii) the date on which an aggregate of
15,000,000 Shares (excluding Shares sold pursuant to
the Dividend Reinvestment Plan) have been sold,
provided, that if the Minimum Offering is not sold
within one year of the date of this Prospectus, the
Offering will be terminated and investors' funds,
with interest and not net of escrow expenses, will be
returned promptly. Subscription proceeds will be held
in escrow until investors are admitted as
shareholders, which will occur no less often than
quarterly.

PROPERTIES:                The Company will seek to acquire and operate
commercial properties, including without limitation,
office buildings, shopping centers, business and
industrial parks and other commercial and industrial
properties, including properties which are under
construction or development, are newly constructed,
or have been constructed and have operating
histories. All such properties may be acquired,
developed and operated by the Company alone or
jointly with another party. The Company is likely to
enter into one or more joint ventures with certain of
its Affiliates and the present and future real estate
limited partnership sponsored by the Advisor for the
acquisition of properties. As of the date of this
Prospectus, the Company has neither purchased nor
contracted to purchase any properties, nor has the
Advisor identified any properties in which there is a
reasonable probability that the Company will invest.
The Company may incur indebtedness of up to 50% of
its properties' aggregate value. Such limitation,
however, does not apply to individual properties. The
Company intends to use the straight-line depreciation
method for its properties. See "Real Property
Investments," "Investment Objectives and Criteria,"
"Conflicts of Interest," and "Glossary."

ESTIMATED USE OF
PROCEEDS OF OFFERING:     It is anticipated that approximately 84% of the
proceeds of this Offering will actually be invested
in properties, and the remainder will be used to pay
selling commissions and fees and expenses relating to
the selection and acquisition of properties and the
costs of organizing the Company and the Offering. See
"Estimated Use of Proceeds" for a more detailed
discussion of the Company's estimated use of the
proceeds of the Offering, which includes proceeds
from shares

3

sold pursuant to the Reinvestment Plan, but excludes
proceeds from shares sold pursuant to the Soliciting
Dealer Warrants. See also "Management Compensation"
regarding the compensation and fees to be paid to the
Advisor and other Affiliates.

INVESTMENT OBJECTIVES:     The Company's objectives are: (i) to preserve,
protect and return the Invested Capital (as defined
herein) of the shareholders; (ii) to maximize Cash
Available for Distribution; (iii) to realize capital
appreciation upon the ultimate sale of Company's
properties; and (iv) to provide shareholders with
liquidity of their investment within ten years after
the commencement of the Offering through either (a)
the Listing of the Shares, or (b) if Listing does not
occur within ten years following the commencement of
the Offering, the dissolution of the Company and
orderly liquidation of its assets. Distributions to
investors in certain real estate investment programs
previously sponsored by the Advisor, as shown in the
Prior Performance Tables included as Exhibit A
hereto, have fluctuated with real estate business
cycles and other external market conditions, as well
as varying occupancy levels, amounts of capital
improvements and other necessary expenses for each
property owned by such other programs. Many of the
real properties in which such prior programs have
invested have experienced the same economic problems
as other real estate investments in recent years,
including without limitation, general over-building
and an excess of supply in many markets, along with
increased operating costs and a general downturn in
the real estate industry. These prior Funds have not
yet sold any real property investments and thus no
evaluation can be made as to whether these prior
programs will achieve their objectives of returning
capital contributions or realizing capital
appreciation upon the sale of such properties. See
"Investment Objectives and Criteria" and "Prior
Performance Summary."

CONFLICTS OF INTEREST:     The Advisor and other Affiliates will experience
conflicts of interest in connection
with the management of the Company,
including the following:

.    The Advisor and certain of its Affiliates serve
as general partners of real estate limited
partnerships that have objectives similar to the
Company's and expect that they will organize
additional real estate partnerships in the
future. As a result, investors should be aware
that the Advisor will have to allocate its time
between the Company and such partnerships and
activities and may have conflicts of interest in
deciding which entity will acquire a particular
property.

.    The Company may acquire properties in the same
geographic areas where other properties owned or
managed by the Advisor or other Affiliates are
located, resulting in potential conflicts in the
leasing or resale of the Company's properties in
the event that the Company and another program
managed by the Advisor were to attempt to
compete for the same tenants in negotiating
leases or to sell similar properties at the same
time.

.    Since it is anticipated that the Company's
properties will be managed by the Management
Company, an Affiliate of the Advisor, the
Company will not have the benefit of independent
property management, and investors must rely on
the Advisor and the Management Company, for
management of the Company's properties.

.   The Company is likely to enter into one or more
joint ventures for the acquisition and operation
of specific properties with one or more real
estate limited partnerships sponsored by the
Advisor and other Affiliates,

4

resulting in potential conflicts of interest in
determining which program should enter into a
particular joint venture, in structuring the
terms of the relationship and in managing the
joint venture. In addition, the Company may
purchase properties from the Advisor and other
Affiliates (with no profit to the Advisor or
such selling Affiliate), resulting in conflicts
of the Advisor based on its relationship with
both parties to such transactions. See
"Conflicts of Interest."

.   Fees payable to the Advisor and other Affiliates
in connection with Company transactions
involving the purchase, management and sale of
Company properties are not the result of arm's-
length negotiations and will be payable
regardless of the quality of the property
acquired or the services provided to the
Company.

.   The conflicts of interest created at the time of
a sale of a property by: (a) the loss of
management fees by the Management Company
conflicting with the brokerage fee which may be
received by the Advisor, and (b) the receipt of
brokerage fees by the Advisor conflicting with
the advisability of such a sale.

.   The Company's Affiliates include Wells Capital,
Inc.--the Advisor, Wells Investment Securities,
Inc.--the Dealer Manager, Wells Management
Company, Inc.--the Management Company, Wells
Operating Partnership, L.P.--the Operating
Partnership, and Wells Development Corporation--
the Development Company.

See "Conflicts of Interest" for a discussion of the
various conflicts of interest relating to an
investment in the Shares.

PRIOR OFFERING SUMMARY:     The Advisor and its Affiliates have previously
sponsored eleven publicly offered real estate
limited partnerships on an unspecified property or
"blind pool" basis (the "Prior Wells Public
Programs"). The total amount of funds raised from
the approximately 24,000 investors in the Prior
Wells Public Programs as of August 31, 1997 was
approximately $257,000,000, and the amount of such
funds invested in properties as of August 31, 1997,
was approximately $200,000,000. Distributions to
investors in certain real estate investment programs
previously sponsored by the Advisor have fluctuated
with real estate business cycles and other external
market conditions, as well as varying occupancy
levels, amounts of capital improvements and other
necessary expenses for each property owned by such
other programs. The "Prior Performance Summary"
section of this Prospectus contains a discussion of
the Prior Wells Public Programs. Certain statistical
data relating to the Prior Wells Public Programs are
contained in the Prior Performance Tables included
as Exhibit A to this Prospectus.

COMPENSATION TO ADVISOR     The Advisor and other Affiliates will receive 
AND OTHER AFFILIATES:      compensation and fees for services relating to this
Offering and in connection with the investment and
management of the Company's assets, which are not
the result of arm's-length negotiations and will be
paid regardless of the quality of the property
acquired or the services provided to the Company.
The most significant items of compensation are:

Offering Stage: Selling Commissions of 7%
($10,500,000 at the Maximum Offering and $87,500 at
the Minimum Offering) payable to the Dealer Manager;
one Soliciting Dealer Warrant for every 25 Shares
sold, issuable to the Dealer

5

Manager, all or a part of which may be reallowed to
unaffiliated participating broker-dealers; a
Marketing and Due Diligence Fee for marketing
support and due diligence reimbursements of up to
2.5%, comprised of .5% for due diligence
reimbursements and 2% for marketing support
($3,750,000 at the Maximum Offering and $31,250 at
the Minimum Offering); and up to 3% ($4,500,000 at
the Maximum Offering and $37,500 at the Minimum
Offering) of Gross Offering Proceeds as a
reimbursement of costs and expenses of organizing
the Company, including legal, accounting, printing,
marketing and other offering expenses (the
"Organization and Offering Expense Fee"), a majority
of which will be paid to third parties unaffiliated
with the Advisor.

Acquisition Stage: A fee of up to 3% ($4,500,000) of
Gross Offering Proceeds in connection with the
selection, valuation and acquisition of properties
(subject to certain overall limitations) (the
"Acquisition and Advisory Fees"), which is payable
to the Advisor (an Affiliate of the Company)
regardless of the quality of the properties acquired
by the Company; and reimbursement of costs and
expenses for the acquisition of properties.

Operational Stage: Property management fee (the
"Management Fee") payable to the Management Company
in an amount equal to 4.5% of the gross rental
income from each property, approximately 2% to 3% of
which is expected to be generated from direct tenant
chargebacks, resulting in a net amount payable by
each property of approximately 1.5% to 2.5%; and in
the case of leases to new tenants, an initial
leasing fee equal to the lesser of (i) the first
month's rent under the applicable lease or (ii) the
amounts charged by unaffiliated persons rendering
comparable services in the same geographic area. A
real estate brokerage commission of up to 3% of the
sale price of properties sold by the Company will be
payable to the Advisor.

Also, a Listing Fee shall be payable to the Advisor
generally equal to 10% of the amount by which the
adjusted market value of the Company exceeds the
adjusted amount of capital invested in the Company.

Liquidation Stage: After all shareholders have
received a return of their Invested Capital and an
8% per annum cumulative, noncompounded return on
their Invested Capital from inception until the date
of the property sale (the "Common Return"), then the
Advisor is entitled to receive (a) a return of
contributed capital in Liquidating Distributions,
and (b) 10% of remaining amounts of Nonliquidating
Net Sale Proceeds and Liquidating Distributions
available for distribution. Payment of certain fees
is subject to conditions and restrictions or to
change under certain specified circumstances. The
Advisor and other Affiliates also may receive
reimbursement for out-of-pocket expenses that they
incur on behalf of the Company, subject to certain
expense limitations, and a subordinated incentive
fee if Listing occurs.

SHARE REDEMPTION:           The Company may use proceeds received from sales of
Shares pursuant to the Reinvestment Plan to redeem
Shares at its sole discretion. Shareholders will
have no right to request that the Company redeem
their Shares after Listing.

DIVIDEND REINVESTMENT PLAN: The Company will establish the Reinvestment Plan
pursuant to which shareholders who elect to
participate may have their dividends from the
Company automatically invested in Shares.
Shareholders who participate in the Reinvestment
Plan will be

6

allocated their share of the Company's taxable
income even though such shareholders will receive no
cash distributions from the Company, which may
result in tax liability for such participants even
though they would receive no cash distributions with
which to pay such tax liability. The Company may
terminate the Reinvestment Plan for any reason at
any time with ten days' prior notice to
participants. See "Dividend Reinvestment Plan" and
"Risk Factors--Fed eral Income Tax Risks."

DISTRIBUTION POLICY:        As a REIT, the Company will be required to
distribute to its shareholders at least 95% of its
annual net taxable income. Because the Company has
not identified any probable acquisitions, there can
be no assurances as to when the Company will begin
to generate net taxable income and to make 
distributions.

TAX STATUS:                 The Company intends to qualify and will elect to be
taxed as a REIT under sections 856 through 860 of
the Code, commencing with the taxable year ending
December 31 of the year in which the Offering is
closed. If the Company qualifies for taxation as a
REIT, the Company generally will not be subject to
federal corporate income tax on its taxable income
that is distributed to its shareholders. A REIT is
subject to a number of organizational and
operational requirements, including a requirement
that it currently distribute at least 95% of its
annual taxable income. Although the Company does not
intend to request a ruling from the Internal Revenue
Service (the "Service) as to its REIT status, the
Company has received an opinion of Hunton &
Williams, its legal counsel, that the Company will
qualify as a REIT for its taxable year ending
December 31 of the year in which the Offering is
closed, and the Company's organization and proposed
method of operation will enable it to continue to
qualify as a REIT, which opinion is based on certain
assumptions and representations about the Company's
ongoing businesses and investment activities and
other matters. No complete assurance can be given
that the Company will be able to comply with such
assumptions and representations in the future.
Furthermore, such opinion is not binding on the
Service or on any court. Even if the Company
qualifies for taxation as a REIT, the Company may be
subject to certain federal state and local taxes on
its income and property. Failure to qualify as a
REIT would render the Company subject to federal
income tax (including any applicable alternative
minimum tax) on its taxable income at regular
corporate rates and distributions to the Company's
shareholders in any such year would not be
deductible. See "Risk Factors--Legal Risks--Tax
Risks" and "Federal Income Tax Considerations --
Taxation of the Company."

OPERATING PARTNERSHIP:      The Company intends to own its properties through
the Operating Partnership. Initially, the Company
will be the sole general partner of the Operating
Partnership, and the Advisor will contribute
$200,000 to the Operating Partnership and will be
the sole limited partner thereof. This "UPREIT"
structure will allow the Company to acquire
properties by exchanging units of limited
partnership interest in the Operating Partnership
("OP Units") for interests in properties, which
generally will allow sellers of properties to defer
gain recognition with respect to such properties.
Holders may redeem OP Units for cash equal to the
value of one Share or, at the option of the Company,
holders may receive one Share for each tendered OP
Unit.

7

LISTING:                    Initially, the Company's Shares will not be listed,
but the Board of Directors may elect to effect the
Listing of the Shares at any time following the
completion of the Offering, though there can be no
assurances that the Board of Directors will make
such election or that the Company will ever qualify
for Listing. In the event that the Listing does not
occur on or before January 30, 2008 (ten years after
the date of the Prospectus), the Company will
automatically terminate and dissolve, unless the
shareholders holding a majority of the Common Shares
vote to extend the duration of the Company.

8

RISK FACTORS

The purchase of Shares involves a number of risks.  In addition to the
factors set forth elsewhere in this Prospectus, prospective investors should
consider specifically the following:

INVESTMENT RISKS

LACK OF LIQUIDITY OF SHARES.  Shareholders may not be able to sell their
Shares promptly at a desired price; therefore, the Shares should be considered
as a long-term investment only.  Currently there is no public market for the
Shares.  The Board of Directors, with or without the consent of the
shareholders, may apply for Listing of the Shares if the Board of Directors
(including a majority of Independent Directors) determines Listing to be in the
best interests of the shareholders.  There can be no assurance, however, that
the Company will apply for Listing, that any such application will be made
before the passage of a significant period of time, that any application will be
accepted or, even if accepted, that a public trading market will develop,  In
any event, the Articles of Incorporation provide that the Company will not apply
for Listing before the completion or termination of the Offering.  See
"Description of Capital Stock."

TOTAL RELIANCE ON THE ADVISOR.  All decisions with respect to the
management of the Company will be made by the Advisor, with oversight from the
Board of Directors.  The shareholders will have no right or power to take part
in the management of the Company except through the exercise of their voting
rights, which are limited.  The Advisor may be removed under certain conditions,
as set forth in the Advisory Agreement, subject to payment and release from all
obligations incurred by the Advisor in connection with its role as advisor.
Further, the Advisor has the ability to assign the Advisory Agreement to an
affiliate, subject to approval by the Company's Independent Directors.  In such
case, the shareholders will not be able to vote on such new Advisor, and there
can be no assurances that such new Advisor will perform satisfactorily.  See
"Management," "Management Compensation" and "The Advisor and the Advisory
Agreement."

CONFLICTS OF INTEREST RELATED TO THE COMPANY'S AFFILIATES. In connection
with its relationship with the Advisor and other Affiliates, the Company has
several conflicts of interest, including the following: (a) The Advisor and
certain of its Affiliates serve as general partners of real estate limited
partnerships that have objectives similar to the Company's and expect that they
will organize additional real estate partnerships in the future. As a result,
investors should be aware that the Advisor will have to allocate its time
between the Company and such partnerships and activities and may have conflicts
of interest in deciding which entity will acquire a particular property; (b) The
Company may acquire properties in the same geographic areas where other
properties owned or managed by the Advisor or other Affiliates are located,
resulting in potential conflicts in the leasing or resale of the Company's
properties in the event that the Company and another program managed by the
Advisor were to attempt to compete for the same tenants in negotiating leases or
to sell similar properties at the same time; (c) Since it is anticipated that
the Company's properties will be managed by the Management Company, an Affiliate
of the Advisor, the Company will not have the benefit of independent property
management, and investors must rely on the Advisor and the Management Company,
for management of the Company's properties; (d) The Company is likely to enter
into one or more joint ventures for the acquisition and operation of specific
properties with one or more real estate limited partnerships sponsored by the
Advisor and other Affiliates, resulting in potential conflicts of interest in
determining which program should enter into a particular joint venture, in
structuring the terms of the relationship and in managing the joint venture. In
addition, the Company may purchase properties from the Advisor and other
Affiliates (without profit to such selling Affiliates) resulting in conflicts of
the Advisor based on its relationship with both parties to such transactions;
(e) Fees payable to the Advisor and other Affiliates in connection with Company
transactions involving the purchase, management and sale of Company properties
are not the result of arm's-length negotiations and will be payable regardless
of the quality of the property acquired or the services provided to the Company;
(f) The conflicts of interest created at the time of a sale of a property by:
(i) the loss of management fees by the Management Company conflicting with the
brokerage fee which may be received by the Advisor, and (ii) the receipt of
brokerage fees by the Advisor conflicting with the advisability of such a sale.
The Company's Affiliates include Wells Capital, Inc.--the Advisor, Wells
Investment Securities, Inc.--the Dealer Manager, Wells Management Company, Inc.
- --the Management Company, Wells Operating Partnership, L.P.--the Operating
Partnership, and Wells Development Corporation--the Development Company.
Collectively, these several

9

relationships among the Company and the Affiliates reduce substantially the
presence of independent, arm's length managerial and advisory influence on the
operations of the Company. Consequently, such affiliated relationships and
conflicts of interest have the potential to reduce the Company's financial
performance and return to investors. See "Conflicts of Interest" and "The
Advisor and Advisory Agreement."

POSSIBLE LACK OF DIVERSIFICATION RESULTING FROM SUBSCRIPTIONS FOR LESS THAN
THE MAXIMUM NUMBER OF SHARES.  To the extent that less than the Maximum Offering
is sold, the diversification of the Company's investments will be decreased and
the extent to which the Company's profitability will be affected by any one of
its investments will increase.  Specifically, the various types of real estate
assets in which the Company invests and the geographic diversity of such assets
will be reduced proportionally.  Consequently, the effects of the financial
performance of such fewer assets will be concentrated and thus the risks of poor
financial performance will be increased.  Further, reduced geographic diversity
of the Company's properties will increase the Company's reliance on (and
therefore risks) related to regional economic conditions.  Accordingly, lack of
diversification of the Company's investments will have the effect of increasing
the risks associated with an investment in the Shares.  See "Estimated Use of
Proceeds" and "Investment Objectives and Criteria."

SUBSTANTIAL MANAGEMENT COMPENSATION; PROCEEDS TO BENEFIT AFFILIATED
PARTIES.  The Advisor and the other Affiliates will perform services for the
Company in connection with the offer and sale of Shares, the selection and
acquisition of the Company's properties, and the management and leasing of the
Company's properties, and will receive substantial compensation from the Company
in consideration for these services.  In connection with the Offering, the
Dealer Manager will receive 7% ($10,500,000 at the Maximum Offering) of the
Gross Offering Proceeds as a Selling Commission and a Marketing and Due
Diligence Fee equal to 2.5% ($3,750,000 at the Maximum Offering) for marketing
and due diligence reimbursements, substantially all of which is expected to be
reallowed to participating broker-dealers.  In connection with the review and
evaluation of potential acquisitions, the Advisor will receive Acquisition and
Advisory Fees equal to 3% ($4,500,000 at the Maximum Offering) of the Gross
Offering Proceeds.  In connection with the management and leasing of properties,
the Management Company will receive a fee equal to 4.5% of the gross rental
income from each property as well as certain leasing fees, though approximately
2% to 3% of such 4.5% fee is expected to be generated from direct chargebacks to
tenants of such properties, resulting in a net fee payable by the properties of
1.5% to 2.5%.  The amount of such compensation has not been determined in arm's-
length negotiations, and such amounts will be payable regardless of the quality
of services provided to the Company.  Further, the Selling Commission, Marketing
and Due Diligence Fee, Organization and Offering Expense Fee and the initial
Acquisition and Advisory Fees will be paid to Affiliates prior to any
distributions to shareholders.  See "Management Compensation" and "Conflicts of
Interest."

NO IDENTIFIED SOURCES FOR FUNDING OF FUTURE CAPITAL NEEDS.  As the Company
raises capital from investors, substantially all of the Gross Proceeds of the
Offering will be used for investment in properties and for payment of various
fees and expenses.  See "Estimated Use Of Proceeds."  In order to qualify as a
REIT, the Company must distribute to its shareholders at least 95% of its annual
taxable income.  Therefore, it is not anticipated that the Company will maintain
any meaningful permanent working capital reserves.  Accordingly, in the event
that the Company develops a need for additional capital in the future for the
improvement of its properties or for any other reason, no sources for such
funding have been identified, and no assurance can be made that such sources of
funding will be available to the Company for potential capital needs in the
future or, if available, that such funds can be obtained on economically
feasible terms.  See "Estimated Use of Proceeds" and "Investment Objectives and
Criteria."

JOINT VENTURES MAY NEGATIVELY AFFECT THE COMPANY.  The Company is likely to
enter into one or more joint ventures with Affiliates for the acquisition,
development or improvement of properties.  In this regard, the Company may enter
into joint ventures with future programs sponsored by the Advisors or other
Affiliates or with one or more Prior Wells Public Programs.  The Company may
purchase and develop properties in joint ventures or in partnerships, co-
tenancies or other co-ownership arrangements with the Advisor or other
Affiliates, the sellers of the properties, affiliates of the sellers, developers
or other persons.  Such investments may, under certain circumstances, involve
risks not otherwise present, including, for example, the possibility that the
Company's co-venturer, co-tenant or partner in an investment might become
bankrupt, that such co-venturer, co-tenant or partner may at any time have
economic or business interests or goals which are inconsistent with the business
interests or goals of the Company, or that such co-venturer, co-tenant or
partner may be in a position to take action contrary to the instructions or the
requests of the Company or contrary to the Company's policies or objectives.
Actions by such a co-venturer, co-tenant or partner might

10

have the result of subjecting the applicable property to liabilities in excess
of those otherwise contemplated and may have the effect of reducing Cash
Available for Distribution. In the event a co-venturer has a right of first
refusal to buy out the other co-venturer, it may be unable to finance such buy-
out at that time. It may also be difficult for the Company to sell its interest
in any such joint venture or partnership or as a co-tenant in such property. In
addition, to the extent that the Company's co-venturer or partner is the Advisor
or one of its Affiliates, certain conflicts of interest will exist. See
"Conflicts of Interest--Joint Ventures with the Advisor and other Affiliates."

ANTI-TAKEOVER EFFECTS OF GOVERNING DOCUMENTS AND MARYLAND LAW.  Certain
provisions of the Company's Articles of Incorporation, including the ownership
limitations, transfer restrictions and ability to issue preferential preferred
stock, may have the effect of preventing, delaying or discouraging takeovers of
the Company by third parties.  In addition, certain provisions of the Maryland
General Corporation Law ("MGCL"), including the restrictions on certain business
combinations and control share acquisitions, may have a similar effect.  See
"Description of Capital Stock."

REINVESTMENT PLAN PROCEEDS MAY NOT BE USED TO ACQUIRE PROPERTIES.  Proceeds
from sale of Shares in the Reinvestment Plan may, in the Advisor's discretion,
be used to fund the Share Repurchase Program rather than for the funding of real
estate investment.  In such case, the Company's real estate investments, and
therefore the underlying value of the Shares and potential distributions to
shareholders, will not be increased by the amount of net proceeds so directed
into the Share Repurchase Program.  See "Summary of Reinvestment Plan."

REAL ESTATE RISKS

FLUCTUATING FINANCIAL PERFORMANCE OF PREVIOUSLY SPONSORED PROGRAMS.
Distributions to investors in certain real estate investment programs previously
sponsored by the Advisor have fluctuated with real estate business cycles and
other external market conditions, as well as varying occupancy levels, amounts
of capital improvements and other necessary expenses for each property owned by
such other programs. The real properties in which the Prior Wells Public
Programs have invested have experienced the same economic problems as other real
estate investments in recent years, including, without limitation, general over-
building and an excess of supply in many markets, along with increased operating
costs and a general downturn in the real estate industry. The historical
fluctuations in net income of the Prior Wells Public Programs were primarily due
to tenant turnover, resulting in increased vacancies and the requirement to
expend funds for tenant refurbishments, and increases in administrative and
other operating expenses. Specifically, certain of the Prior Wells Public
Programs suffered decreases in net income during the real estate recession of
the late 1980s and early 1990s, which decreases were generally attributable to
the overall downturn in the economy and in the real estate market in particular.
Because of the cyclical nature of the real estate market, such downturns in the
performance of a real estate program could occur at any time in the future when
economic conditions decline. None of the Prior Wells Public Programs has
liquidated or sold any of its real properties to date and, accordingly, no
assurance can be made that such programs will ultimately be successful in
meeting their investment objectives. There are no assurances that properties
acquired by the Company will not also experience fluctuating financial
performance. See "Prior Performance Summary" and the Prior Performance Tables
included as Exhibit A hereto.

POTENTIAL ADVERSE ECONOMIC AND REGULATORY CHANGES.  The Company will be
subject to risks generally incident to the ownership of real estate, including
changes in general economic or local conditions, changes in supply of or demand
for similar or competing properties in an area, changes in interest rates and
availability of permanent mortgage funds which may render the sale of a property
difficult or unattractive, and changes in tax, real estate, environmental and
zoning laws.  Periods of high interest rates and tight money supply may make the
sale of properties more difficult.  For these and other reasons, no assurance of
profitable operation or realization of gains from the sales of the Company's
properties can be given.  See "Investment Objectives and Criteria."

"BLIND POOL" OFFERING; LACK OF PROPERTIES REQUIRES TOTAL RELIANCE ON
ABILITIES OF ADVISOR.  This Offering is commonly referred to as a "blind pool"
offering in that the Advisor has not identified any properties in which there is
a reasonable probability that the Company will invest.  Investors must rely upon
the ability of the Advisor and the Board of Directors with respect to the
investment of the proceeds of this Offering and the management of the
unspecified properties and will not have an opportunity to evaluate for
themselves the relevant economic, financial and other information regarding the
specific properties in which the proceeds of this Offering will be invested.
Accordingly, the

11

risk of investing in the Shares may be increased. No assurance can be given that
the Company will be successful in obtaining suitable investments or that, if
investments are made, the objectives of the Company will be achieved. See
"Estimated Use of Proceeds," "The Advisor and Advisory Agreement" and
"Investment Objectives and Criteria."

INDEBTEDNESS ON PROPERTIES BRINGS RISKS.  The Company intends to borrow
money in connection with the construction and development of properties.
Accordingly, the Company will be subject to risks normally associated with debt
financing, including the risk that the Company will not be able to meet its debt
service obligations, and, to the extent that it cannot, the risk that the
Company may lose its investment in any properties encumbered by debt.  The
Company may incur indebtedness of up to 50% of the properties' aggregate value,
though such debt limitation does not apply to individual properties.  However,
the Company expects that its aggregate indebtedness generally will not exceed
such 50% limit.  Accordingly, the Company and its properties may be moderately
leveraged, which could have adverse consequences to the Company, including the
potential for loss of one or more properties if any such secured debt is
defaulted upon and imposition of operating restrictions on the Company by such
lenders.  See "Investment Objectives and Criteria--Borrowing Policies."

POTENTIAL INCREASED COSTS AND DELAYS RELATED TO PROPERTY DEVELOPMENT.  The
Company may invest some or all of the net proceeds of this Offering in the
acquisition and development of properties upon which it will develop and
construct improvements at a fixed contract price, provided that the Company may
not invest more than 10% of is total assets in properties which are not expected
to produce income within two years of their acquisition.  In this regard, the
Company will be subject to risks relating to the builder's ability to control
construction costs or to build in conformity with plans, specifications and
timetables.  The builder's failure to perform may necessitate legal action by
the Company to rescind its purchase or the construction contract or to compel
performance.  Performance also may be affected or delayed by conditions beyond
the builder's control.  Delays in completion of construction could also give
lessees the right to terminate preconstruction leases for space at a newly
developed project.  Additional risks may be incurred where the Company makes
periodic progress payments or other advances to such builders prior to
completion of construction.  However, the Company will make such payments only
after having received a certification from an independent architect or an
independent engineer, or both, as to the percentage of the project which has
been completed and as to the dollar amount of the construction then completed.
Factors such as those discussed above can result in increased costs of a project
and a corresponding depletion of the Company's working capital reserves or loss
of the Company's investment.  In addition, the Company will be subject to normal
lease-up risks relating to newly constructed projects.  Furthermore, the price
to be paid for a property upon which improvements are to be constructed or
completed, which price is normally agreed upon at the time of acquisition, of
necessity must be based upon projections of rental income and expenses or fair
market value of the property upon completion of construction, which are not
certain until after a number of months of actual operation.  See "Investment
Objectives and Criteria--Development and Construction of Properties."

COMPETITION FOR INVESTMENTS.  The Company will experience competition for
real property investments from individuals, corporations and bank and insurance
company investment accounts, as well as other real estate investment
partnerships, including the Prior Wells Public Programs, real estate investment
trusts and other entities engaged in real estate investment activities.  For
example, one Prior Wells Public Program has approximately $11,000,000 available
for real estate investments, and another will be seeking up to $35,000,000 in
investments, both of which will compete with the Company for real estate
investment opportunities and both of which are managed by the Advisor.
Competition for investments may have the effect of increasing costs and reducing
Cash Available for Distribution.  See "Conflicts of Interest."

POTENTIAL ADVERSE EFFECTS OF DELAYS IN INVESTMENTS.  Delays which may take
place in the selection, acquisition and development of properties could
adversely affect the per Share Cash Available for Distribution as a result of
the lower returns that will be received by the Company if it is required to
invest in short-term investments.  Also, where properties are acquired prior to
the commencement of construction or during the early stages of construction, it
will typically take several months to complete construction and rent available
space.  See "Investment Objectives and Criteria."

FAILURE TO LIST AND RESULTING LIQUIDATION MAY ADVERSELY AFFECT RETURNS TO
STOCKHOLDERS.  The Company intends, to the extent consistent with its objective
of qualifying as a REIT, to reinvest Net Sales Proceeds from the sale of its
properties in additional properties for at least the first five to ten years
after commencement of the Offering.

12

Unless Listing occurs within ten years after commencement of the Offering, the
Company will undertake, to the extent consistent with the Company's objective of
qualifying as a REIT, the orderly sale of the Company's assets, the distribution
of the Net Sales Proceeds of such sales to stockholders, and will engage only in
activities related to its orderly liquidation unless the stockholders elect
otherwise. If Listing occurs, the Company will become a perpetual life entity,
and Net Sales Proceeds may be reinvested in other properties for an indefinite
period of time. Neither the Advisor nor the Board of Directors may be able to
control the timing of sales due to market conditions, and there can be no
assurance that the Company will be able to sell its assets so as to return
stockholders' aggregate Invested Capital, or to generate a profit for the
stockholders. Invested Capital, in the aggregate, will be returned to
shareholders upon disposition of the Company's properties only if the properties
are sold for more than their original purchase price, although return of
capital, for federal income tax purposes, is not necessarily limited to
stockholder distributions following sales of properties. See "Federal Income Tax
Considerations." In the event that a purchase money obligation is taken in
partial payment of the sales price of a property, the proceeds of the sale will
be realized over a period of years.

POTENTIAL LIABILITIES RELATED TO ENVIRONMENTAL MATTERS.  Under various
federal, state and local environmental laws, ordinances and regulations, a
current or previous owner or operator of real property may be liable for the
cost of removal or remediation of hazardous or toxic substances on, under or in
such 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.  Environmental laws also may impose restrictions on the manner
in which property may be used or businesses may be operated.  Environmental laws
provide for sanctions in the event of noncompliance and may be enforced by
governmental agencies or, in certain circumstances, by private parties.  In
connection with the acquisition and ownership of its properties, the Company may
be potentially liable for such costs.  The cost of defending against claims of
liability, of compliance with environmental regulatory requirements or of
remediating any contaminated property could materially adversely affect the
business, assets or results of operations of the Company and, consequently, Cash
Available for Distribution.  See "Real Property Investments."

UNINSURED LOSSES.  Material damages at one or more of its Properties that
are not covered, or not adequately covered, by insurance could have a material
adverse effect on the Company.  Although the Company believes it is adequately
insured, there can be no assurances that material uninsured losses will not
occur in the future.

TAX RISKS

FAILURE TO QUALIFY AS A REIT.  The Company intends to operate so as to
qualify as a REIT for federal income tax purposes.  Although the Company has not
requested, and does not expect to request, a ruling from the Service that it
qualifies as a REIT, it has received an opinion of its counsel that, based on
certain assumptions and representations, it so qualifies.  Investors should be
aware, however, that opinions of counsel are not binding on the Service or any
court.  The REIT qualification opinion only represents the view of counsel to
the Company based on counsel's review and analysis of existing law, which
includes no controlling precedent.  Furthermore, both the validity of the
opinion and the qualification of the Company as a REIT will depend on the
Company's continuing ability to meet various requirements concerning, among
other things, the ownership of its outstanding stock, the nature of its assets,
the sources of its income, and the amount of its distributions to its
shareholders.  See "Federal Income Tax Considerations--Taxation of the Company."

If the Company were to fail to qualify as a REIT for any taxable year, the
Company would not be allowed a deduction for distributions to its shareholders
in computing its taxable income and would be subject to federal income tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates.  Unless entitled to relief under certain Code
provisions, the Company also would be disqualified from treatment as a REIT for
the four taxable years following the year during which qualification was lost.
As a result, Cash Available for Distribution would be reduced for each of the
years involved.  Although the Company intends to operate in a manner intended to
allow it to qualify as a REIT, it is possible that future economic, market,
legal, tax or other considerations may cause the Board of Directors to revoke
the Company's REIT election.  See "Federal Income Tax Considerations."

REIT MINIMUM DISTRIBUTION REQUIREMENTS; POSSIBLE INCURRENCE OF ADDITIONAL
DEBT.  In order to qualify as a REIT, the Company generally will be required
each year to distribute to its shareholders at least 95% of its net taxable

13

income (excluding any net capital gain).  In addition, the Company will be
subject to a 4% nondeductible excise tax on the amount, if any, by which certain
distributions paid by it with respect to any calendar year are less than the sum
of (i) 85% of its ordinary income for that year, (ii) 95% of its capital gain
net income for that year, and (iii) 100% of its undistributed taxable income
from prior years.

The Company intends to make distributions to its shareholders to comply
with the 95% distribution requirement and to avoid the nondeductible excise tax.
The Company's income will consist primarily of its share of the income of the
Operating Partnership, and the Cash Available for Distribution by the Company to
its shareholders will consist of its share of cash distributions from the
Operating Partnership.  Differences in timing between (i) the actual receipt of
income and actual payment of deductible expenses and (ii) the inclusion of such
income and deduction of such expenses in arriving at taxable income of the
Company could require the Company, through the Operating Partnership, to borrow
funds on a short-term basis to meet the 95% distribution requirement and to
avoid the nondeductible excise tax.  The requirement to distribute a substantial
portion of the Company's net taxable income could cause the Company to
distribute amounts that otherwise would be spent on future acquisitions,
unanticipated capital expenditures or repayment of debt, which would require the
Company to borrow funds or to sell assets to fund the costs of such items. See
"Federal Income Tax Considerations --Taxation of the Company."

FAILURE OF THE OPERATING PARTNERSHIP TO BE CLASSIFIED AS A PARTNERSHIP FOR
FEDERAL INCOME TAX PURPOSES; IMPACT ON REIT STATUS.  Although the Company has
not requested, and does not expect to request, a ruling from the Service that
the Operating Partnership will be classified as a partnership for federal income
tax purposes, the Company has received an opinion of its counsel stating that
the Operating Partnership will be classified as a partnership, and not as a
corporation or association taxable as a corporation for federal income tax
purposes.  If the Service were to challenge successfully the tax status of the
Operating Partnership as a partnership for federal income tax purposes, the
Operating Partnership would be taxable as a corporation.  In such event, the
Company likely would cease to qualify as a REIT for a variety of reasons.
Furthermore, the imposition of a corporate income tax on the Operating
Partnership would reduce substantially the amount of Cash Available for
Distribution.  See "Federal Income Tax Considerations --Tax Aspects of the
Operating Partnership."

ERISA RISKS.  The Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and section 4975 of the Code prohibit certain transactions
that involve (i) certain pension, profit-sharing, employee benefit, or
retirement plans or individual retirement accounts (each, a "Plan") and (ii) the
assets of a Plan.  A "party in interest" or "disqualified person" with respect
to a Plan will be subject to (x) an initial 5% excise tax on the amount involved
in any prohibited transaction involving the assets of the Plan and (y) an excise
tax equal to 100% of the amount involved if any prohibited transaction is not
corrected.  Consequently, the fiduciary of a Plan contemplating an investment in
the Shares should consider whether the Company, any other person associated with
the issuance of the Shares, or any affiliate of the foregoing is or might become
a "party in interest" or "disqualified person" with respect to the Plan.  In
such a case, the acquisition or holding of Shares by or on behalf of the Plan
could be considered to give rise to a prohibited transaction under ERISA and the
Code.  See "ERISA Considerations--Employee Benefit Plans, Tax-Qualified
Retirement Plans, and IRAs" herein.

Regulations of the Department of Labor that define "plan assets" (the "Plan
Asset Regulations") provide that in some situations, when a Plan acquires an
equity interest in an entity, the Plan's assets include both the equity interest
and an undivided interest in each of the underlying assets of the entity, unless
one or more exceptions specified in the Plan Asset Regulations are satisfied.
In such a case, certain transactions that the Company might enter into in the
ordinary course of its business and operations might constitute "prohibited
transactions" under ERISA and the Code.  The assets of the Company should not be
deemed to be "plan assets" of any Plan that invests in the Shares.  See "ERISA
Considerations --Status of the Company and the Operating Partnership under
ERISA."

14

INVESTOR SUITABILITY STANDARDS

An investment in the Company involves significant risk.  An investment in
the Shares is suitable only for persons who have adequate financial means and
desire a relatively long-term investment with respect to which they do not
anticipate any need for immediate liquidity.

If the investor is an individual (including an individual beneficiary of a
purchasing IRA), or if the investor is a fiduciary (such as a trustee of a trust
or corporate pension or profit sharing plan, or other tax-exempt organization,
or a custodian under a Uniform Gifts to Minors Act), such individual or
fiduciary, as the case may be, must represent that he meets certain
requirements, as set forth in the Subscription Agreement attached as Exhibit B
to this Prospectus, including the following:

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

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

Under the laws of certain states, transferees will also be required to
comply with applicable standards, except for intra-family transfers and
transfers made by gift, inheritance or family dissolution.

The minimum purchase is 100 Shares ($1,000) (except in certain states as
described below).  No transfers will be permitted of less than the minimum
required purchase, nor (except in very limited circumstances) may an investor
transfer, fractionalize or subdivide such Shares so as to retain less than such
minimum number thereof.  For purposes of satisfying the minimum investment
requirement for Retirement Plans, unless otherwise prohibited by state law, a
husband and wife may jointly contribute funds from their separate Individual
Retirement Accounts ("IRAs"), provided that each such contribution is made in
increments of at least $100.  It should be noted, however, that an investment in
the Company will not, in itself, create a Retirement Plan for any investor and
that, in order to create a Retirement Plan, an investor must comply with all
applicable provisions of the Code.  Except in Maine, Minnesota and Washington,
investors who have satisfied the minimum purchase requirements and have
purchased units in Prior Wells Public Programs may purchase less than the
minimum number of Shares set forth above, but in no event less than 10 Shares
($100).  The minimum purchase for New York investors is 250 Shares ($2,500),
however, the minimum investment for New York IRAs is 100 Shares ($1,000).  After
an investor has purchased the minimum investment, any additional investments
must be made in increments of at least 10 Shares ($100), except for (i) those
made by investors in Maine, who must still meet the minimum investment
requirement for Maine residents of $1,000 for IRAs and $2,500 for non-IRAs, (ii)
purchases of Shares pursuant to the Reinvestment Plan, which may be in lesser
amounts, and (iii) minimum purchase for Minnesota investors is 250 Shares
($2,500), however, the minimum investment for Minnesota IRAs and qualified plans
may be 200 Shares ($2,000).

Various states have established suitability standards for individual
investors and subsequent transferees different from those set by the Company.
Those requirements are set forth below.

ARIZONA, IOWA, MASSACHUSETTS, MISSOURI, NORTH CAROLINA AND TENNESSEE -- The
investor has either (i) a net worth (exclusive of home, furnishings, and
personal automobiles) of at least $60,000 and an annual gross income of at least
$60,000, or (ii) a net worth (exclusive of home, furnishings, and personal
automobiles) of at least $225,000.

MAINE -- The investor has either (i) a net worth (exclusive of home,
furnishings, and personal automobiles) of at least $50,000 and an annual gross
income of at least $50,000, or (ii) a net worth (exclusive of home, furnishings,
and personal automobiles) of at least $200,000.

15

MASSACHUSETTS -- The investor has either (i) a net worth (exclusive of
home, furnishings, and personal automobiles) of at least $100,000 and an annual
gross income of at least $100,000, or (ii) a net worth (exclusive of home,
furnishings, and personal automobiles) of at least $250,000.

NEW HAMPSHIRE -- The investor has either (i) a net worth (exclusive of
home, furnishings, and personal automobiles) of at least $125,000 and an annual
gross income of at least $50,000, or (ii) a net worth (exclusive of home,
furnishings, and personal automobiles) of at least $250,000.

NEW YORK -- The investor has either (i) a net worth (exclusive of home,
furnishings, and personal automobiles) of at least $35,000 and an annual gross
income of at least $35,000, or (ii) a net worth (exclusive of home, furnishings,
and personal automobiles) of at least $100,000.

OHIO -- The investor's investment in the Shares shall not exceed 10% of the
investor's net worth (exclusive of home, furnishings, and personal automobiles.)

PENNSYLVANIA AND OREGON -- The investor has (i) a net worth (exclusive of
home, furnishings, and personal automobiles) of at least ten times the
investor's investment in the Company, and (ii) either (a) a net worth (exclusive
of home, furnishings, and personal automobiles) of at least $45,000 and an
annual gross income of at least $45,000, or (b) a net worth (exclusive of home,
furnishings, and personal automobiles) of at least $150,000.  Because the
minimum offering of Shares of the Company is less than $16,500,000, Pennsylvania
investors are cautioned to evaluate carefully the Company's ability to fully
accomplish its stated objectives and to inquire as to the current dollar volume
of the Company's subscription proceeds.

NET WORTH IN ALL CASES EXCLUDES HOME, FURNISHINGS AND AUTOMOBILES.

In order to assure adherence to the suitability standards described above,
requisite suitability standards must be met as set forth in the Subscription
Agreement and Subscription Agreement Signature Page (collectively, the
"Subscription Agreement"), which is attached as Exhibit B to this Prospectus.
The Company and each person selling Shares on behalf of the Company are required
to (i) make reasonable efforts to assure that each person purchasing Shares in
the Company is suitable in light of such person's age, educational level,
knowledge of investments, financial means and other pertinent factors and (ii)
maintain records for at least six years of the information used to determine
that an investment in Shares is suitable and appropriate for each investor.  The
agreements with the selling broker-dealers require such broker-dealers to (i)
make inquiries diligently as required by law of all prospective investors in
order to ascertain whether a purchase of the Shares is suitable for the
investor, and (ii) transmit promptly to the Company all fully completed and duly
executed Subscription Agreements.

16

ESTIMATED USE OF PROCEEDS

The following table sets forth information concerning the estimated use of
the Gross Proceeds of the Offering of Shares made hereby.  Many of the figures
set forth below represent the best estimate of the Company since they cannot be
precisely calculated at this time.  The percentage of the Gross Proceeds of the
Offering of Shares to be invested in Company properties is estimated to be
approximately 84%.

MINIMUM OFFERING       MAXIMUM OFFERING(1)
---------------------  -----------------------
Amount     Percent      Amount      Percent
-----------  --------  -------------  --------

Gross Offering Proceeds (2)                        $1,250,000       100%  $151,200,000       100%
Less Public Offering Expenses:
Selling Commissions (3)                              87,500         7%    10,080,000       6.7%
Organization and Offering Expenses (4)               37,500         3%     4,500,000         3%
Marketing support and due diligence                  31,250       2.5%     3,750,000       2.5%
reimbursement fee(5)                            ----------      ----   ------------      ----
Amount Available for Investment (6)                $1,093,750      87.5%  $132,870,000      87.8%
==========      ====   ============      ====
Acquisition and Development:
Acquisition and Advisory Fees (7)                  $   37,500         3%  $  4,500,000         3%
Acquisition Expenses (8)                                6,250       0.5%       750,000       0.5%
Initial Working Capital Reserve (9)                        (9)        -             (9)        -
Amount Invested in Properties (6)(10)              $1,050,000        84%  $127,620,000      84.4%
==========      ====   ============      ====

- ---------------
(1) Excludes 1,500,000 Shares that may be sold pursuant to the Reinvestment
Plan, but includes 600,000 Shares which may be issued pursuant to the
Soliciting Dealer Warrants.

(2) The amounts shown for Gross Offering Proceeds do not reflect the possible
discounts in commissions and other fees as described in "Plan Of
Distribution."

(3) Includes Selling Commissions equal to 7% of aggregate Gross Offering
Proceeds (which commissions may be reduced under certain circumstances)
which are payable to the Dealer Manager, an Affiliate.  The Company also
will issue to the Dealer Manager one Soliciting Dealer Warrant for every 25
Shares sold.  The Dealer Manager, in its sole discretion, may reallow
Selling Commissions of up to 7% of Gross Offering Proceeds and Soliciting
Dealer Warrants to other broker-dealers participating in this Offering
attributable to the Shares sold by them.  In no event shall the total
underwriting compensation, including Selling Commissions, and expense
reimbursements, exceed 7% of Gross Offering Proceeds, except for an
additional Marketing and Due Diligence Fee equal to 2.5% of Gross Offering
Proceeds which may be paid as a reimbursement of expenses incurred for
marketing support (2%) and due diligence (.5%) purposes.  See "Plan of
Distribution."

(4) These amounts represent the Advisor's best estimates of the Organization and
Offering Expenses to be incurred in connection with the Offering.
Organization and Offering Expenses consist of estimated legal, accounting,
printing and other accountable offering expenses (other than Selling
Commissions and the Marketing and Due Diligence Fee).  The Advisor and other
Affiliates will be responsible for the payment of Organization and Offering
Expenses (other than Selling Commissions and the marketing support and due
diligence reimbursement fee) to the extent they exceed 3% of Gross Offering
Proceeds, without recourse against or reimbursement by the Company.

(5) All or a portion of the Marketing and Due Diligence Fee may be reallowed to
the non-affiliated Dealers which will assist the Dealer Manager in the
distribution of Shares (the "Soliciting Dealers") for bona fide due
diligence expenses.  Up to .5% of the Marketing and Due Diligence Fee may be
paid as a reimbursement of due diligence expenses and up to 2% of the
Marketing and Due Diligence Fee may be paid as a reimbursement of marketing
support expenses in connection with the Offering.

(6) Until required in connection with the acquisition and development of
properties, substantially all of the net proceeds of the Offering and,
thereafter, the working capital reserves of the Company, may be invested in
short-

17

term, highly-liquid investments including government obligations, bank
certificates of deposit, short-term debt obligations and interest-bearing
accounts.

(7)  The Company will pay Acquisition and Advisory Fees to the Advisor or other
Affiliates in connection with the acquisition of properties up to a maximum
amount of 3% of Gross Offering Proceeds.  Acquisition and Advisory Fees do
not include Acquisition Expenses.

(8)  Includes legal fees and expenses, travel and communication expenses, costs
of appraisals, nonrefundable option payments, accounting fees and expenses,
title insurance premiums and other closing costs and miscellaneous expenses
relating to the selection, acquisition and development of properties that
ultimately are not acquired by the Company. With respect to successful
acquisitions, such costs generally will be included in the purchase price
of the applicable property. It is anticipated that substantially all of
such items will be directly related to the acquisition of specific
properties and will be capitalized rather than currently deducted by the
Company.

(9)  Because the vast majority of leases for the properties acquired by the
Company will provide for tenant reimbursement of operating expenses, it is
not anticipated that a permanent reserve for maintenance and repairs of the
Company's properties will be established.  However, to the extent that the
Company has insufficient funds for such purposes, the Company may apply an
aggregate amount of up to 1% of Gross Offering Proceeds for maintenance and
repairs of the Company's properties.  The Company also may, but is not
required to, establish reserves from Gross Offering Proceeds, out of cash
flow generated by operations properties or out of Nonliquidating Net Sale
Proceeds.

(10) Includes amounts anticipated to be invested in properties net of fees and
expenses.  It is estimated that approximately 84% of the proceeds of this
Offering will be used to acquire properties.

18

MANAGEMENT COMPENSATION

The following table summarizes and discloses all of the compensation and
fees (including reimbursement of expenses) to be paid by the Company to the
Dealer Manager, the Soliciting Dealers, the Advisor and the Management Company
during the various phases of the organization and operation of the Company.

FORM OF COMPENSATION                               DETERMINATION                                           ESTIMATED MAXIMUM
AND ENTITY RECEIVING                                OF AMOUNT                                             DOLLAR AMOUNT (1)(2)
- --------------------                               -------------                                          --------------------

ORGANIZATIONAL AND OFFERING STAGE
---------------------------------

Selling Commissions - The         Up to 7% of Gross Offering Proceeds before                         $10,500,000 at the Maximum 
Dealer Manager                   reallowance of commissions earned by participating                 Offering and $87,500 at    
broker-dealers. The Dealer Manager intends to                      the Minimum Offering        
reallow 100% of commissions earned by participating 
broker-dealers.                                      

Reimbursement of Organization     Up to 3% of Gross Offering Proceeds. All                           $4,500,000 at the Maximum  
and Offering Expenses - The       Organization and Offering Expenses (excluding                      Offering and $37,500 at    
Advisor and its Affiliates        Selling Commissions) will be advanced by the Advisor               the Minimum Offering.      
and its Affiliates and reimbursed by the Company.    

Marketing support and due         Up to 2.5% of Gross Offering Proceeds for                          $3,750,000 at the Maximum 
diligence expense - Dealer        reimbursement of bona fide marketing and due                       Offering and $31,250 at   
Manager and Soliciting            diligence expenses.                                                the Minimum Offering.      
Dealers

ACQUISITION AND DEVELOPMENT STAGE
---------------------------------
Acquisition and Advisory Fees     For the review and evaluation of potential real                    $4,500,000 at the Maximum 
- - The Advisor or its              property acquisitions, a fee of up to 3% of Gross                  Offering and $43,750 at   
Affiliates                        Offering Proceeds, plus reimbursement of costs and                 the Minimum Offering.     
expenses for the acquisition of properties.         

Reimbursement of Acquisition      Up to .5% of the Gross Offering Proceeds for                       $750,000 at the Maximum    
Expenses - The Advisor           reimbursement of expenses related to real property                 Offering and $6,250 at the 
acquisitions, such as legal fees, travel and                       Minimum Offering.          
communication expenses, title insurance premiums   
expenses.                                           

OPERATIONAL STAGE
-----------------

Property Management and           For supervising the management of the Company's                    Actual amounts are        
Leasing Fees - The                properties, a fee equal to 4.5% of the gross rental                dependent upon results of 
Management Company                incomes (approximately 2% - 3% of which is expected                operations and therefore  
to come from direct tenant chargebacks resulting in                cannot be determined at   
a net fee payable by each property of 1.5% to 2.5%),               the present time.          
and in the case of leases to new tenants, an initial 
leasing fee equal to the lesser of (i) the first     
month's rent under the applicable lease or (ii) the  
amounts charged by unaffiliated persons rendering    
comparable services in the same geographic area.      

Real Estate Commissions - The     In connection with the sale of any Company property,               Actual amounts are        
Advisor or Its Affiliates         an amount not exceeding the lesser of: (A) 50% of                  dependent upon results of 
the reasonable, customary and Competitive Real                     operations and therefore  
Estate Brokerage Commissions customarily paid for                  cannot be determined at   
the sale of a comparable property in light of the                  the present time.         
size, type and location of the property, or (B) 3%   
of the gross sales price of each property (subject   
to limitationslimitations), subordinated to          
distributions toshareholders from Sale Proceeds of   
an amount which,together with prior distributions    
to the shareholders, will equal (i) 100% of their    
InvestedCapital plus (ii) an 8% per annum cumulative 
(noncompounded) return on their Invested Capital     
(their "Common Return").                              

19

Subordinated Incentive fee        Upon Listing, a fee equal to 10% of the amount by which (i)        Actual amounts are 
upon Listing - The Advisor        the market value of the Company plus the total distributions       dependent upon results of
made to shareholders from the Company's inception until the        operations and therefore
date of Listing exceeds (ii) the sum of (A) 100% of Invested       cannot be determined at 
Capital and (B) the total distributions required to pay the        the present time.       
Common Return to the shareholders from inception through the 
date on which the market value is determined.                 

LIQUIDATION/TERMINATION STAGE
-----------------------------

Subordinated Participation in     After all shareholders have received a return of                   Actual amounts are         
Nonliquidating Net Sale           their Invested Capital and their Common Return, then               dependent upon results of  
Proceeds and Liquidating          the Advisor is entitled to receive the following                   operations and therefore   
Distributions - The Advisor       amounts: (a) an amount equal to the capital                        cannot be determined at     
contributed by the Advisor to the Operating                        the present time.           
Partnership, (b) then, 10% of remaining Residual        
Proceeds available for distribution.                     

The Company may not make reimbursements to any
entity for operating expenses in excess of 2%
of Average Invested Assets or 25% of Net
Income for such year.

_________________________
(1)  Assumes that the maximum number of 15,000,000 Shares is sold (excluding any
Shares sold pursuant to the Reinvestment Plan).

(2)  The Company may not make reimbursements to any entity for operating
expenses in excess of 2% of Average Invested Assets or 25% of Net Income
for such year.

In addition, the Advisor and its Affiliates will be reimbursed only for the
actual cost of goods, services and materials used for or by the Company as set
forth in Section 10 of the Advisory Agreement.  The Advisor may be reimbursed
for the administrative services, including personnel costs, necessary to the
prudent operation of the Company, provided that the reimbursement shall be at
the lower of the Advisor's actual cost or the amount the Company would be
required to pay to independent parties for comparable administrative services in
the same geographic location.  No payment or reimbursement will be made for
services or personnel costs for which the Advisor is entitled to compensation by
way of a separate fee.  If the Subordinated Incentive Fee is paid to the
Advisor, no other performance fee will be paid to the Advisor; if the
Subordinated Participation Fee is paid to the Advisor, no Net Sales Proceeds
will be paid to the Advisor.

Since the Advisor and its Affiliates are entitled to differing levels of
compensation for undertaking different transactions on behalf of the Company,
such as the property management fees for operating the Company's properties and
the subordinated participation in proceeds from the sale of the Company's
properties, the Advisor has the ability to affect the nature of the compensation
it receives by undertaking different transactions.  However, the Advisor is
obligated to exercise good faith and integrity in all its dealings with respect
to Company affairs pursuant to its fiduciary duties to the shareholders.  See
"The Advisor and the Advisory Agreement."  As noted above, there are ceilings on
certain categories of fees or expenses payable to the Advisor and its
Affiliates.  Because these fees or expenses are payable only with respect to
certain transactions or services, they may not be recovered by the Advisor or
their Affiliates by reclassifying them under a different category.  The Company
may not make reimbursements to any entity for operating expenses in excess of 2%
of Average Invested Assets or 25% of Net Income for such year.

20

CONFLICTS OF INTEREST

The Company is subject to various conflicts of interest arising out of its
relationship with the Advisor and its Affiliates, including conflicts related to
the arrangements pursuant to which the Advisor and its Affiliates will be
compensated by the Company.  See "Management."

The following chart indicates the relationship between Wells Real Estate
Funds, Inc., the parent corporation of the Advisor and the Affiliates of the
Advisor which will be providing services to the Company.

================================================================================
|                        WELLS REAL ESTATE FUNDS, INC.                         |
================================================================================
|                             |                           |
| 100%                        | 100%                      | 100%
|                             |                           |
=======================   ==============================  ===================
|  WELLS CAPITAL, INC.|   |WELLS INVESTMENT SECURITIES,|  |WELLS MANAGEMENT  |
|                     |   |   INC. (DEALER MANAGER)    |  |   COMPANY, INC.  |
|                     |   |                            |  |(PROPERTY MANAGER)|
=======================   ==============================  ===================
|                                                         |
|                                                         |
|  Advisory Agreement                                     | 100%
|                                                         |
=======================                                   ====================
|     WELLS REIT      |                                   |WELLS DEVELOPMENT |
|                     |                                   |   CORPORATION    |
=======================                                   ====================

INTERESTS IN OTHER COMPANIES

The Advisor and its Affiliates are also general partners of other real
estate limited partnerships, including partnerships which have investment
objectives substantially identical to those of the Company, and it is expected
that they will organize other such partnerships in the future.

As described in the "Prior Performance Summary," the Advisor and its
Affiliates have sponsored the following twelve public partnerships with
substantially identical investment objectives as those of the Company: (i) Wells
Real Estate Fund I ("Wells Fund I"), (ii) Wells Real Estate Fund II ("Wells Fund
II"), (iii) Wells Real Estate Fund II-OW ("Wells Fund II-OW"), (iv) Wells Real
Estate Fund III, L.P. ("Wells Fund III"), (v) Wells Real Estate Fund IV, L.P.
("Wells Fund IV"), (vi) Wells Real Estate Fund V, L.P. ("Wells Fund V"), (vii)
Wells Real Estate Fund VI, L.P. ("Wells Fund VI"), (viii) Wells Real Estate Fund
VII, L.P. ("Wells Fund VII"), (ix) Wells Real Estate Fund VIII, L.P. ("Wells
Fund VIII"), (x) Wells Real Estate Fund IX, L.P. ("Wells Fund IX"), (xi) Wells
Real Estate Fund X, L.P. ("Wells Fund X") and Wells Real Estate Fund XI, L.P.
("Wells Fund XI").  All of the proceeds of the offerings of Wells Fund I, Wells
Fund II, Wells Fund II-OW, Wells Fund III, Wells Fund IV, Wells Fund V and Wells
Fund VI available for investment in real properties have been invested.  In
addition, all of the proceeds of the offering of Wells Fund VII available for
investment in real properties have been invested in properties.  In addition,
all of the proceeds of the offering of Wells Fund VIII available for investment
in real properties have been either invested or are committed for investment in
properties.  As of August 31, 1997, approximately 74% and 50% of the proceeds of
the offerings of Wells Fund IX and Wells Fund X, respectively, available for
investment in real properties had either been invested in properties or were
committed for investment in properties.  Wells Fund XI began to offer its
securities in January 1998.

The Advisor also may be subject to potential conflicts of interest at such
time as the Company wishes to acquire a property that also would be suitable for
acquisition by an Affiliate of the Advisor.  Affiliates of the Advisor serve as
Directors of the Company, and, in this capacity, have a fiduciary obligation to
act in the best interest of the

21

stockholders of the Company and, as general partners or directors of the Prior
Wells Public Programs, to act in the best interests of the partners in other
programs with investments that may be similar to those of the Company and will
use their best efforts to assure that the Company will be treated as favorably
as any such other program. See "Management-- Fiduciary Responsibility of the
Board of Directors." In addition, the Company has developed procedures to
resolve potential conflicts of interest in the allocation of properties between
the Company and certain of its Affiliates. See "Certain Conflict Resolution
Procedures" below. The Company will supplement this Prospectus during the
Offering period to disclose the acquisition of a material property at such time
as the Advisor believes that a reasonable probability exists that the Company
will acquire a property, including an acquisition from the Advisor or its
Affiliates.

OTHER ACTIVITIES OF THE ADVISOR AND ITS AFFILIATES

The Company will rely on the Advisor for the day-to-day operation of the
Company and the management of its assets.  As a result of its interests in other
partnerships and the fact that it has also engaged and will continue to engage
in other business activities, the Advisor and its Affiliates and certain of the
Directors will have conflicts of interest in allocating their time between the
Company and other partnerships and activities in which they are involved.
However, the Advisor believes that it and its Affiliates have sufficient
personnel to discharge fully their responsibilities to all partnerships and
ventures in which they are involved.

The Company may (i) purchase or lease any property in which the Advisor or
any of its Affiliates have an interest, (ii) temporarily enter into contracts
relating to investment in properties to be assigned to the Company prior to
closing or may purchase property in their own name and temporarily hold title
for the Company, and (iii) enter into joint ventures with Affiliates of the
Advisor to acquire properties held by such Affiliates, provided that in any case
such transaction shall be made upon a finding by a majority of Directors
(including a majority of Independent Directors) not otherwise interested in the
transaction that such transaction is competitive and commercially reasonable to
the Company and at a price to the Company no greater than the cost of the asset
to the Advisor or such Affiliate (including acquisition and carrying costs), or,
if the price to the Company is in excess of such cost, that substantial
justification for such excess exists and such excess is reasonable and only if
the possibility of such acquisition(s) is disclosed, and there is appropriate
disclosure of the material facts concerning each such investment.  In no event
shall the cost of such asset to the Company exceed its current appraised value.
The Advisor or such Affiliate may not hold title to any such property on behalf
of the Company or an Affiliated joint venture for more than 12 months, and
further the Advisor or its Affiliates shall not sell property to the Company or
an Affiliated joint venture if the cost of the property exceeds the funds
reasonably anticipated to be available for the Company to purchase any such
property, and that all profits and losses during the period any such property is
held by the Advisor or the Affiliate will accrue to the Company or the
Affiliated joint venture, as applicable.  In no event may the Company (i) sell
or lease real property to the Advisor or any of its Affiliates (unless a
majority of the Independent Directors determine that the transaction is fair and
reasonable to the Company); (ii) loan Company funds to the Advisor or any of its
Affiliates; (iii) obtain appraisals of real properties from the Advisor or any
of their Affiliates; or (iv) enter into agreements with the Advisor or its
Affiliates for the provision of insurance covering the Company or any property
owned by the Company.

COMPETITION

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

22

AFFILIATED DEALER MANAGER

Because the Dealer Manager is an Affiliate of the Advisor, the Company 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 the offering of securities.  See "Plan of Distribution."

AFFILIATED PROPERTY MANAGER

Since it is anticipated that the Company's properties will be managed and
leased by the Management Company, an Affiliate of the Advisor, the Company will
not have the benefit of independent property management.  See "Management
Compensation."

AFFILIATED DEVELOPER

It is expected that Wells Development, an Affiliate of the Advisor, will
serve as the developer of certain unimproved properties acquired by the Company,
but will not receive any profit from the development of such properties.

LACK OF SEPARATE REPRESENTATION

Hunton & Williams is counsel to the Company, the Advisor, the Dealer
Manager and their Affiliates in connection with this Offering and may in the
future act as counsel to the Company, the Advisor, the Dealer Manager and their
Affiliates.  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 the Company, the Advisor, the Dealer Manager or their Affiliates, the
Advisor will cause the Company to retain separate counsel for such matters as
and when appropriate.

JOINT VENTURES WITH AFFILIATES OF THE ADVISOR

The Company is likely to enter into one or more joint venture agreements
with Affiliates of the Advisor for the acquisition, development or improvement
of properties.  See "Investment Objectives and Criteria--Joint Venture
Investments."  The Advisor and its Affiliates may have conflicts of interest in
determining which partnerships should enter into any joint venture agreement.
Should any such joint venture be consummated, the Advisor may face a conflict in
structuring the terms of the relationship between the interest of the Company
and the interest of the affiliated co-venturer.  Since the Advisor and its
Affiliates will control both the Company and the affiliated co-venturer,
agreements and transactions between the co-venturers with respect to any such
joint venture will not have the benefit of arm's-length negotiation of the type
normally conducted between unrelated co-venturers.

RECEIPT OF FEES AND OTHER COMPENSATION BY ADVISOR AND AFFILIATES

Company transactions involving the purchase and sale of the Company's
properties may result in the receipt of commissions, fees and other compensation
by the Advisor and its Affiliates, including Acquisition and Advisory Fees,
property management and leasing fees, real estate brokerage commissions, and
participation in distributions of Nonliquidating Net Sale Proceeds and
Liquidating Distributions.  However, the fees and compensation payable to the
Advisor and its Affiliates relating to sale of the Company's properties are
subordinated to the return to the shareholders of their Invested Capital plus
cumulative returns thereon.  Subject to the oversight of the Board of Directors,
the Advisor has considerable discretion with respect to all decisions relating
to the terms and timing of all Company transactions.  Therefore, the Advisor may
have conflicts of interest concerning certain actions taken on behalf of the
Company, particularly due to the fact that such fees will generally be payable
to the Advisor and its Affiliates regardless of the quality of the properties
acquired or the services provided to the Company.  See "Management
Compensation."

CERTAIN CONFLICT RESOLUTION PROCEDURES

In order to reduce or eliminate certain potential conflicts of interest,
the Articles of Incorporation contain a number of restrictions relating to (i)
transactions between the Company and the Advisor or its Affiliates, (ii) certain

23

future offerings, and (iii) allocation of properties among certain affiliated
entities.  These restrictions include, among others, the following:

1.  No goods or services will be provided by the Advisor or its Affiliates
to the Company except for transactions in which the Advisor or its Affiliates
provide goods or services to the Company in accordance with the Articles of
Incorporation which provides that a majority of the Directors (including a
majority of the Independent Directors) not otherwise interested in such
transactions must approve such transactions as fair and reasonable to the
Company and on terms and conditions not less favorable to the Company than those
available from unaffiliated third parties and not less favorable than those
available from the Advisor or its Affiliates in transactions with unaffiliated
third parties.

2.  The Company will not purchase or lease properties in which the Advisor
or its Affiliates has an interest without the determination, by a majority of
the Directors (including a majority of the Independent Directors) not otherwise
interested in such transaction, that such transaction is competitive and
commercially reasonable to the Company and at a price to the Company no greater
than the cost of the asset to the Advisor or its Affiliate unless there is
substantial justification for any amount that exceeds such cost and such excess
amount is determined to be reasonable.  In no event shall the Company acquire
any such asset at an amount in excess of its appraised value.  The Company will
not sell or lease properties to the Advisor, Directors, or any Affiliates unless
a majority of the Directors (including a majority of the Independent Directors)
not interested in the transaction determine the transaction is fair and
reasonable to the Company.  The Company will not purchase or lease properties
from the Advisor, Directors, or any Affiliate without the approval of a majority
of the Directors (including the Independent Directors).

3.  The Company will not make any loans to the Advisor, Directors or any
Affiliates.  The Advisor and its Affiliates will not make loans to the Company,
or to joint ventures in which the Company is a co-venturer, for the purpose of
acquiring properties.  Any loans to the Company by the Advisor, Directors, or
any Affiliates for other purposes must be approved by a majority of the
Directors (including a majority of the Independent Directors) not otherwise
interested in such transaction as fair, competitive, and commercially
reasonable, and no less favorable to the Company than comparable loans between
unaffiliated parties.  It is anticipated that the Advisor or its Affiliates
shall be entitled to reimbursement, at cost, for actual expenses incurred by
them on behalf of the Company or joint ventures in which the Company is a co-
venturer, subject to the 2%/25% Guidelines (2% of Average Invested Assets or 25%
of Net Income) described under "The Advisor and the Advisory Agreement--The
Advisory Agreement."

4.  The Board of Directors and the Advisor have agreed that, in the event
than an investment opportunity becomes available which is suitable for both the
Company and a public or private entity with which the Advisor or its Affiliates
are affiliated, for which both entities have sufficient uninvested funds, then
the entity which has had the longest period of time elapse since it was offered
an investment opportunity will first be offered the investment opportunity.  An
investment opportunity will not be considered suitable for a program if the
requirements of Item 3 above could not be satisfied if the program were to make
the investment.  In determining whether or not an investment opportunity is
suitable for more than one program, the Board of Directors and the Advisor will
examine such factors, among others, as the cash requirements of each program,
the effect of the acquisition both on diversification of each program's
investments by types of commercial office properties and geographic area, and on
diversification of the tenants of its properties (which also may affect the need
for one of the programs to prepare or produce audited financial statements for a
property or a tenant), the anticipated cash flow of each program, the size of
the investment, the amount of funds available to each program, and the length of
time such funds have been available for investment.  If a subsequent
development, such as a delay in the closing of a property or a delay in the
construction of a property, causes any such investment, in the opinion of the
Board of Directors and the Advisor, to be more appropriate for an entity other
than the entity which committed to make the investment, however, the Advisor has
the right to agree that the other entity affiliated with the Advisor or its
Affiliates may make the investment.  It shall be the duty of the Directors
(including the Independent Directors) to insure that the method for the
allocation of the acquisition of properties by two or more programs of the same
Advisor seeking to acquire similar types of assets shall be reasonable.  The
Advisor and certain other Affiliates of the Company are affiliated with Wells
Fund X, a prior public program which terminated its offering in December 1997.
In addition, the Advisor and its Affiliates are affiliated with Wells Fund XI, a
publicly registered partnership that has not offered any securities to date.  As
of August 31, 1997, Wells Fund X had approximately $ 10,979,538 available for
investment.

24

SUMMARY OF REINVESTMENT PLAN

The Company has adopted the Reinvestment Plan pursuant to which
stockholders may elect to have the full amount of their cash distributions from
the Company reinvested in additional Shares of the Company.  The following
discussion summarizes the principal terms of the Reinvestment Plan.  The
Reinvestment Plan and the Prospectus to be used in connection with certain sales
of the Company's stock are attached hereto as Exhibit C.

GENERAL

Shareholders who have received a copy of this Prospectus and participate in
this Offering can elect to participate in and purchase Shares through the
Reinvestment Plan at any time and will not need to receive a separate prospectus
relating solely to the Reinvestment Plan.  A person who becomes a stockholder
otherwise than by participating in this Offering may purchase Shares through the
Reinvestment Plan only after receipt of a separate prospectus relating solely to
the Reinvestment Plan.

The price per Share purchased pursuant to the Reinvestment Plan shall be
the Offering price, which is $10.00 per Share, until all of the Shares in this
Offering that are reserved for the Reinvestment Plan have been sold thereunder.
After such time, Shares for the Reinvestment Plan may be acquired by the Company
either through purchases on the open market and/or additional registrations
relating to the Reinvestment Plan, in either case at a per Share price equal to
the then-prevailing market price on the securities exchange or over-the-counter
market on which the Shares are listed at the date of purchase.  The Company is
unable to predict the effect which such a Listing would have on the price of the
Shares acquired through the Reinvestment Plan.

INVESTMENT OF DISTRIBUTIONS

Distributions will be used to purchase Shares on behalf of the Participants
from the Company.  All such distributions shall be invested in Shares within 30
days after such payment date.  Any distributions not so invested will be
returned to Participants.

At this time, Participants will not have the option to make voluntary
contributions to the Reinvestment Plan to purchase Shares in excess of the
amount of Shares that can be purchased with their distributions.  The Board of
Directors reserves the right, however, to amend the Reinvestment Plan in the
future to permit voluntary contributions to the Reinvestment Plan by
Participants, to the extent consistent with the Company's objective of
qualifying as a REIT.

PARTICIPANT ACCOUNTS, FEE, AND ALLOCATION OF SHARES

For each Participant, the Company will maintain a record which shall
reflect for each fiscal quarter the distributions received by the Company on
behalf of such Participant.  Any interest earned on such Distributions will be
paid to the Company to defray certain costs relating to the Reinvestment Plan.

The Company will use the aggregate amount of distributions to all
Participants for each fiscal quarter to purchase Shares for the Participants.
If the aggregate amount of distributions to Participants exceeds the amount
required to purchase all Shares then available for purchase, the Company will
purchase all available Shares and will return all remaining distributions to the
Participants within 30 days after the date such distributions are made.  The
purchased Shares will be allocated among the Participants based on the portion
of the aggregate distributions received on behalf of each Participant, as
reflected in the records maintained by the Company.  The ownership of the Shares
purchased pursuant to the Reinvestment Plan shall be reflected on the books of
the Company.

Shares acquired pursuant to the Reinvestment Plan will entitle the
Participant to the same rights and to be treated in the same manner as those
purchased by the Participants in the Offering.  Accordingly, the Company will
pay the following commissions and fees in connection with Shares sold under the
Reinvestment Plan (until all such Shares are sold):  the Selling Commissions of
7% (subject to reduction under the circumstances provided under "The Offering--
Plan of Distribution"), the Marketing and Due Diligence Fee of 2.5%, and the
Acquisition and Advisory Fees of 3% of the purchase price of the Shares sold
pursuant to the Reinvestment Plan.  In connection with investments by

25

Ohio investors, the Company will pay only Acquisition and Advisory Fees of 3% of
the purchase price of the Shares sold pursuant to the Reinvestment Plan.
Thereafter, Acquisition and Advisory Fees will be paid by the Company only in
the event that proceeds of the sale of Shares are used to acquire properties. As
a result, aggregate fees payable to Affiliates of the Company will total between
9% and 12.5% of the proceeds of reinvested distributions, up to 7% of which may
be reallowed to Soliciting Dealers.

The allocation of Shares among Participants may result in the ownership of
fractional Shares, computed to four decimal places.

REPORTS TO PARTICIPANTS

Within 60 days after the end of each fiscal quarter, the Company will mail
to each Participant a statement of account describing, as to such Participant,
the distributions reinvested during the quarter, the number of Shares purchased
during the quarter, the per Share purchase price for such Shares, the total
administrative charge paid by the Company on behalf of each Participant (see "--
Participant Accounts, Fees and Allocation of Shares" above), and the total
number of Shares purchased on behalf of the Participant pursuant to the
Reinvestment Plan.  See "--General" above.

Tax information with respect to income earned on Shares under the
Reinvestment Plan for the calendar year will be sent to each participant by the
Company.

ELECTION TO PARTICIPATE OR TERMINATE PARTICIPATION

Stockholders of the Company who purchase Shares in this Offering may become
Participants in the Reinvestment Plan by making a written election to
participate on their Subscription Agreements at the time they subscribe for
Shares.  Any other stockholder who receives a copy of this Prospectus or a
separate prospectus relating solely to the Reinvestment Plan and who has not
previously elected to participate in the Reinvestment Plan may so elect at any
time by completing the enrollment form attached to such prospectus or by other
appropriate written notice to the Plan Administrator or Company of such
stockholder's desire to participate in the Reinvestment Plan.  Participation in
the Reinvestment Plan will commence with the next distribution made after
receipt of the Participant's notice, provided it is received at least ten days
prior to the record date for such distribution.  Subject to the preceding
sentence, the election to participate in the Reinvestment Plan will apply to all
distributions attributable to the fiscal quarter in which the stockholder made
such written election to participate in the Reinvestment Plan and to all fiscal
quarters thereafter, whether made (i) upon subscription or subsequently for
stockholders who participate in this offering, or (ii) upon receipt of a
separate prospectus relating solely to the Reinvestment Plan for stockholders
who do not participate in this offering.  Participants will be able to terminate
their participation in the Reinvestment Plan at any time without penalty by
delivering written notice to the Plan Administrator or Company no less than ten
days prior to the next record date.  The Company may also terminate the
Reinvestment Plan for any reason at any time, upon 10 days' prior written notice
to all Participants.

A Participant who chooses to terminate participation in the Reinvestment
Plan must terminate his or her entire participation in the Reinvestment Plan and
will not be allowed to terminate in part.  If the Reinvestment Plan is
terminated, the Company will update its stock records to account for all whole
shares purchased by the participant(s) in the Plan, and if any fractional shares
exist, the Company may either (a) send you a check in payment for any fractional
shares in your account based in the then-current market price for the shares, or
(b) credit your stock ownership account with any such fractional shares. There
are no fees associated with a Participant's terminating his interest in the
Reinvestment Plan or the Company's termination of the plan.  A Participant in
the Reinvestment Plan who terminates his interest in the Reinvestment Plan will
be allowed to participate in the Reinvestment Plan again by notifying the
Company and completing any required forms.

The Board of Directors reserves the right to prohibit Qualified Plans from
participating in the Reinvestment Plan if such participation would cause the
underlying assets of the Company to constitute "plan assets" of Qualified Plans.
See "Federal Income Tax Considerations --Taxation of Tax-Exempt Shareholders."

26

FEDERAL INCOME TAX CONSIDERATIONS

Stockholders subject to federal income taxation who elect to participate in
the Reinvestment Plan will incur a tax liability for distributions allocated to
them even though they have elected not to receive their distributions in cash
but rather to have their distributions held pursuant to the Reinvestment Plan.
Specifically, stockholders will be treated as if they have received the
distribution from the Company and then applied such Distribution to purchase
Shares in the Reinvestment Plan.  A stockholder designating a distribution for
reinvestment will be taxed on the amount of such distribution as ordinary income
to the extent such distribution is from current or accumulated earnings and
profits, unless the Company has designated all or a portion of the distribution
as a capital gain dividend.  In such case, such designated portion of the
distribution will be taxed as long-term capital gain.

AMENDMENTS AND TERMINATION

The Company reserves the right to amend any aspect of the Reinvestment Plan
without the consent of stockholders, provided that notice of the amendment is
sent to Participants at least 30 days prior to the effective date thereof.  The
Company also reserves the right to terminate the Reinvestment Plan for any
reason at any time by ten days' prior written notice of termination to all
Participants.  The Company may terminate a Participant's participation in the
Plan immediately if in the Company's judgment such Participant's participation
jeopardizes in any way the Company's status as a real estate investment trust.

SHARE REPURCHASE PROGRAM

The Share Repurchase Program ("SRP") may, subject to certain restrictions,
provide eligible stockholders with limited, interim liquidity by enabling them
to sell Shares back to the Company at a price during the period of this Offering
equal to $8.40 per Share.  After the Offering, the price per Share pursuant to
the SRP will be set from time to time by the Board of Directors in its sole
discretion.  In such cases, the Board of Directors will consider the Company's
net asset value, recent comparable offerings and other factors which the Board
of Directors, in its sole discretion, deems relevant.  Repurchase prices are
expected to be available on the Company's Internet/World Wide Web site
(www.wellsref.com), and will be given by telephone upon request.

Repurchases under the SRP, when done, will be made quarterly by the Company
in its sole discretion on a first-come, first-served basis, and will be limited
in the following ways:  (i) not more than $500,000 worth of the outstanding
Shares will be repurchased in any given year; and (ii) the funds available for
repurchase will be limited to available proceeds received by the Company from
the sale of Shares under the Reinvestment Plan.  The determination of available
funds from sales under the Reinvestment Plan and the decision to repurchase
Shares will be at the sole discretion of the Board.  In making this
determination, the Board will consider the need to use proceeds from the Share
sales under the Reinvestment Plan for investment in additional properties, or
for maintenance or repair of existing properties.  Such property-related uses
will have priority over the need to allocate funds to the SRP.  To be eligible
to offer Shares for purchase to the SRP, the stockholder must have beneficially
held the Shares for at least one year.

The Company cannot guarantee that funds will be available for repurchase.
If no funds are available for the SRP at the time when repurchase is requested,
the stockholder could: (i) withdraw his request for repurchase; or (ii) ask that
the Company honor the request at such time, if any, when funds are available.
Such pending requests will be honored on a first-come, first-served basis.
There is no requirement that stockholders sell their Shares to the Company.  The
SRP is only intended to provide interim liquidity for stockholders until a
secondary market develops for the Shares.  No such market presently exists and
no assurance can be given that one will develop.  The SRP will exist during the
Offering period and will be terminated following the close of the Offering
period upon the Listing.

Shares purchased by the Company under the SRP will be canceled, and will
have the status of authorized but unissued Shares.  Shares acquired by the
Company through the SRP will not be reissued unless they are first registered
with the Commission under the Act and under appropriate state securities laws or
otherwise issued in compliance with such laws.

27

PRIOR PERFORMANCE SUMMARY

THE INFORMATION PRESENTED IN THIS SECTION REPRESENTS THE HISTORICAL
EXPERIENCE OF REAL ESTATE PROGRAMS MANAGED BY THE ADVISOR AND ITS AFFILIATES.
INVESTORS IN THE COMPANY SHOULD NOT ASSUME THAT THEY WILL EXPERIENCE RETURNS, IF
ANY, COMPARABLE TO THOSE EXPERIENCED BY INVESTORS IN SUCH PRIOR REAL ESTATE
PROGRAMS.

The Advisor serves as a general partner of a total of twelve real estate
limited partnerships, eleven of which have completed offerings and one of which
has commenced but not completed its public offering.  A twelfth partnership is
in registration with the Commission and thus has not commenced.  These limited
partnerships and the year in which their offerings were completed are as
follows:

1.   Wells Real Estate Fund I (1986)
2.   Wells Real Estate Fund II (1988)
3.   Wells Real Estate Fund II-OW (1988)
4.   Wells Real Estate Fund III, L.P. (1990)
5.   Wells Real Estate Fund IV, L.P. (1992)
6.   Wells Real Estate Fund V, L.P. (1993)
7.   Wells Real Estate Fund VI, L.P. (1994)
8.   Wells Real Estate Fund VII, L.P. (1995)
9.   Wells Real Estate Fund VIII, L.P. (1996)
10.  Wells Real Estate Fund IX, L.P. (1996)
11.  Wells Real Estate Fund X, L.P. (1997)
12.  Wells Real Estate Fund XI, L.P. (offering commenced 12-31-97)

The tables included in Exhibit A attached hereto set forth information as
of the dates indicated regarding certain of these prior programs as to (i)
experience in raising and investing funds (Table I); (ii) compensation to
sponsor (Table II); and (iii) annual operating results of prior programs (Table
III).  No information is given as to results of completed programs or sales or
disposals of property because, to date, none of the prior programs have sold any
of their properties.

PRIOR WELLS PUBLIC PROGRAMS

The Advisor and its Affiliates sponsored the Prior Wells Public Programs,
all of which were offered on an unspecified property or "blind pool" basis.  The
total amount of funds raised from investors in the offerings of the Prior Wells
Public Programs, as of August 31, 1997, was approximately $257,000,000, and the
total number of investors in such partnerships was approximately 24,000.

The investment objectives of the Prior Wells Public Programs are
substantially identical to the investment objectives of the Company.  All of the
proceeds of the offerings of Wells Fund I, Wells Fund II, Wells Fund II-OW,
Wells Fund III, Wells Fund IV, Wells Fund V, Wells Fund VI and Wells Fund VII
available for investment in real properties have been invested in properties.
In addition, all of the proceeds of the offering of Wells Fund VIII available
for investment in real properties have either been invested or are committed for
investment in properties.  As of August 31, 1997, approximately 74% and 50% of
the proceeds of the offerings of Wells Fund IX and Wells Fund X, respectively,
available for investment in real properties had either been invested in
properties or were committed for investment in properties.  Wells Fund XI
commenced its offering in January 1998 and thus has no funds available for
investment as of the date of this Prospectus.  For the fiscal year ended
December 31, 1996, approximately two-thirds of the aggregate gross rental income
of ten of these eleven publicly offered partnerships was derived from tenants
which are U.S. corporations, each of which the Company believes has net worth of
at least $100,000,000 or whose lease obligations are guaranteed by another
corporation with a net worth of at least $100,000,000.

28

The Prior Wells Public Programs have acquired a total of 31 properties in
the following U.S. regions:  24 in the Southeast, one in the Northeast, two in
Southcentral, one in Northcentral and two in the West.  Each Prior Wells Public
Program has used only proceeds from its respective offering to finance its
acquisitions of properties.

The real properties in which the Prior Wells Public Programs have invested
have experienced the same economic problems as other real estate investments in
recent years, including without limitation, general over-building and an excess
supply in many markets, along with increased operating costs and a general
downturn in the real estate industry.  As a result, certain of these public
partnerships have experienced increases in expenses and decreases in net income.
These fluctuations were primarily due to tenant turnover, resulting in increased
vacancies and the requirement to expend funds for tenant refurbishments, and
increases in administrative and other operating expenses.  See the Prior
Performance Tables included as Exhibit A hereto.  Additionally, while overall
occupancy rates have not decreased significantly at the properties owned by the
Prior Wells Public Programs, some of these properties have experienced high
tenant turnover, and the partnerships owning these properties have generally
been unable to raise rental rates and have been required to make expenditures
for tenant improvements and to grant free rent and other concessions in order to
attract new tenants.  Specifically, certain of the Prior Wells Public Programs
suffered decreases in net income during the real estate recession of the late
1980s and early 1990s, which decreases were generally attributable to the
overall downturn in the economy and in the real estate market in particular.
Because of the cyclical nature of the real estate market, such decreases in net
income of the public partnerships could occur at any time in the future when
economic conditions decline.  None of these prior programs has liquidated or
sold any of its real properties to date and, accordingly, no assurance can be
made that prior programs will ultimately be successful in meeting their
investment objectives.  See "Risk Factors."

The aggregate dollar amount of the acquisition and development costs of the
properties purchased by the Prior Wells Public Programs, as of August 31, 1997,
was approximately $196,419,519, of which $4,254,000 (or approximately 2.2%) had
not yet been expended on the development of certain of the projects which are
still under construction.  Of the aggregate amount, approximately 65.0% was or
will be spent on acquiring or developing office buildings, and approximately
35.0% was or will be spent on acquiring or developing shopping centers.  Of the
aggregate amount, approximately 4% was or will be spent on new properties, 38%
on existing or used properties and 58% on construction properties.  Following is
a table showing a breakdown of the aggregate amount of the acquisition and
development costs of the properties purchased by the eleven Prior Wells Public
Programs as of October 31, 1997:

Type of Property              New          Existing    Construction
- ----------------             -----         --------    ------------ 
Office Buildings             4%             26%           35%
Shopping Centers             ---            11%           24%

Wells Fund I terminated its offering on September 5, 1986, and received
gross proceeds of $35,321,000 representing subscriptions from 4,895 limited
partners.  $24,679,000 of the gross proceeds were attributable to sales of Class
A Limited Partnership Units ("Class A Units"), and $10,642,000 of the gross
proceeds were attributable to sales of Class B Limited Partnership Units ("Class
B Units" and, collectively with the Class A Units, "Units").  Limited partners
in Wells Fund I have no right to change the status of their Units from Class A
to Class B or vice versa.  Wells Fund I owns interests in the following
properties: (i) a medical office building in Atlanta, Georgia; (ii) two
commercial office buildings in Atlanta, Georgia; (iii) a shopping center in
DeKalb County, Georgia; (iv) a shopping center in Knoxville, Tennessee; (v) a
shopping center in Cherokee County, Georgia; and (vi) a project consisting of
seven office buildings and a shopping center in Tucker, Georgia.  The prospectus
of Wells Fund I provided that the properties purchased by Wells Fund I would
typically be held for a period of eight to twelve years, but that the general
partners may exercise their discretion as to whether and when to sell the
properties owned by Wells Fund I and the partnership will have no obligation to
sell properties at any particular time.  Wells Fund I acquired its properties
between 1985 and 1987, and has not yet liquidated or sold any of its properties.

Wells Fund II and Wells Fund II-OW terminated their offerings on September
7, 1988, and received aggregate gross proceeds of $36,870,250 representing
subscriptions from 4,659 limited partners.  $28,829,000 of the gross proceeds
were attributable to sales of Class A Units, and $8,041,250 of the gross
proceeds were attributable to sales of

29

Class B Units. Limited partners in Wells Fund II and Wells Fund II-OW have no
right to change the status of their Units from Class A to Class B or vice versa.
Wells Fund II and Wells Fund II-OW own all of their properties through a joint
venture, which owns interests in the following properties: (i) a shopping center
in Cherokee County, Georgia; (ii) a project consisting of seven office buildings
and a shopping center in Tucker, Georgia; (iii) a two story office building in
Charlotte, North Carolina; (iv) a four story office building in Houston, Texas;
(v) a restaurant in Roswell, Georgia; and (vi) a combined retail and office
development in Roswell, Georgia.

Wells Fund III terminated its offering on October 23, 1990, and received
gross proceeds of $22,206,310 representing subscriptions from 2,700 limited
partners.  $19,661,770 of the gross proceeds were attributable to sales of Class
A Units, and $2,544,540 of the gross proceeds were attributable to sales of
Class B Units.  Limited partners in Wells Fund III have no right to change the
status of their Units from Class A to Class B or vice versa.  Wells Fund III
owns interests in the following properties: (i) a four story office building in
Houston, Texas; (ii) a restaurant in Roswell, Georgia; (iii) a combined retail
and office development in Roswell, Georgia; (iv) a two story office building in
Greenville, North Carolina; (v) a shopping center in Stockbridge, Georgia; and
(vi) a two story office building in Richmond, Virginia.

Wells Fund IV terminated its offering on February 29, 1992, and received
gross proceeds of $13,614,655 representing subscriptions from 1,286 limited
partners.  $13,229,150 of the gross proceeds were attributable to sales of Class
A Units, and $385,505 of the gross proceeds were attributable to sales of Class
B Units.  Limited partners in Wells Fund IV have no right to change the status
of their Units from Class A to Class B or vice versa.  Wells Fund IV owns
interests in the following properties: (i) a shopping center in Stockbridge,
Georgia; (ii) a four story office building in Jacksonville, Florida; (iii) a two
story office building in Richmond, Virginia; and (iv) two two-story office
buildings in Stockbridge, Georgia.

Wells Fund V terminated its offering on March 3, 1993, and received gross
proceeds of $17,006,020 representing subscriptions from 1,667 limited partners.
$15,209,666 of the gross proceeds were attributable to sales of Class A Units,
and $1,796,354 of the gross proceeds were attributable to sales of Class B
Units.  Limited partners in Wells Fund V who purchased Class B Units are
entitled to change the status of their Units to Class A, but limited partners
who purchased Class A Units are not entitled to change the status of their Units
to Class B.  After taking into effect conversion elections made by limited
partners subsequent to their subscription for Units, as of October 31, 1997,
$15,514,160 of Units of Wells Fund V were treated as Class A Units, and
$1,491,860 of Units were treated as Class B Units.  Wells Fund V owns interests
in the following properties: (i) a four story office building in Jacksonville,
Florida; (ii) two two-story office buildings in Stockbridge, Georgia; (iii) a
four story office building in Hartford, Connecticut; (iv) two restaurants in
Stockbridge, Georgia; and (v) a three story office building in Appleton,
Wisconsin.   Since its inception in 1992, Wells Fund V reported a net loss of
$18,089 in 1992, and net income of $354,999, $561,721, $689,639 and $505,650 in
years 1993 through 1996, respectively.  In such years, Wells Fund V distributed
a total of $151,336, $643,334, $969,011 and $1,007,107, respectively, to
investors (excluding returns of capital and distributions from prior year
operations).  See "Exhibit A--Prior Performance Tables" attached to this
Prospectus for further detail on the performance of Wells Fund V.

Wells Fund VI terminated its offering on April 4, 1994, and received gross
proceeds of $25,000,000 representing subscriptions from 1,793 limited partners.
$19,332,176 of the gross proceeds were attributable to sales of Class A Units,
and $5,667,824 of the gross proceeds were attributable to sales of Class B
Units.  Limited partners in Wells Fund VI are entitled to change the status of
their Units from Class A to Class B and vice versa.  After taking into effect
conversion elections made by limited partners subsequent to their subscription
for Units, as of October 31, 1997, $21,538,950 of Units of Wells Fund VI were
treated as Class A Units, and $3,461,050 of Units were treated as Class B Units.
Wells Fund VI owns interests in the following properties: (i) a four story
office building in Hartford, Connecticut; (ii) two restaurants in Stockbridge,
Georgia; (iii) another restaurant and a retail building in Stockbridge, Georgia;
(iv) a shopping center in Stockbridge, Georgia; (v) a three story office
building in Appleton, Wisconsin; (vi) a shopping center in Cherokee County,
Georgia; (vii) a combined retail and office development in Roswell, Georgia;
(viii) a four story office building in Jacksonville, Florida; and (ix) a
shopping center in Clemmons, North Carolina.  Since its inception in 1993, Wells
Fund VI reported net income of $31,428, $700,896, $901,828 and $589,053 in years
1993 through 1996, respectively.  In such years, Wells Fund VI distributed a
total of $0, $245,800, $1,044,940 and $1,042,175, respectively, to investors
(excluding returns of capital and distributions from prior year operations).
See "Exhibit A--Prior Performance Tables" attached hereto for further detail on
the performance of Wells Fund VI.

30

Wells Fund VII terminated its offering on January 5, 1995, and received
gross proceeds of $24,180,174 representing subscriptions from 1,910 limited
partners.  $16,788,095 of the gross proceeds were attributable to sales of Class
A Units, and $7,392,079 of the gross proceeds were attributable to sales of
Class B Units.  Limited partners in Wells Fund VII are entitled to change the
status of their Units from Class A to Class B and vice versa.  After taking into
effect conversion elections made by limited partners subsequent to their
subscriptions for Units, as of October 31, 1997, $18,656,280 of Units in Wells
Fund VII were treated as Class A Units, and $5,523,890 of Units were treated as
Class B Units.  Wells Fund VII owns interests in the following properties: (i) a
three story office building in Appleton, Wisconsin; (ii) a restaurant and a
retail building in Stockbridge, Georgia; (iii) a shopping center in Stockbridge,
Georgia; (iv) a shopping center in Cherokee County, Georgia; (v) a combined
retail and office development in Roswell, Georgia; (vi) a two story office
building in Alachua County, Florida near Gainesville; (vii) a four story office
building in Jacksonville, Florida; (viii) a shopping center in Clemmons, North
Carolina; and (ix) a retail development in Clayton County, Georgia.  Since its
inception in 1994, Wells Fund VII has reported net income of $203,263, $804,043
and $452,776 in years 1994 through 1996, respectively.  In such years, Wells
Fund VII distributed a total of $52,195, $856,032 and $781,511, respectively, to
investors (excluding returns of capital and distributions from prior year
operations).  See "Exhibit A--Prior Performance Tables" attached to this
Prospectus for further detail on the performance of Wells Fund VII.

Wells Fund VIII terminated its offering on January 4, 1996, and received
gross proceeds of $32,042,689 representing subscriptions from 2,241 limited
partners.  $26,135,339 of the gross proceeds were attributable to sales of Class
A Status Units, and $5,907,350 were attributable to sales of Class B Status
Units.  Limited partners in Wells Fund VIII are entitled to change the status of
their Units from Class A to Class B and vice versa.  After taking into effect
conversion elections made by limited partners subsequent to their subscriptions
for Units, as of October 31, 1997, $26,353,280 of Units in Wells Fund VIII were
treated as Class A Status Units, and $5,679,410 of Units were treated as Class B
Status Units.  Wells Fund VIII owns interests in the following properties: (i) a
two story office building in Alachua County, Florida near Gainesville; (ii) a
four story office building in Jacksonville, Florida; (iii) a shopping center in
Clemmons, North Carolina; (iv) a retail development in Clayton County, Georgia;
(v) a four story office building in Madison, Wisconsin; and (vi) a one-story
office building in Farmers Branch, Texas; (vii) a two story office building in
Orange County, California; and (viii) a two story office building in Boulder
County, Colorado.  Since its inception in 1995, Wells Fund VIII has reported net
income of $273,914 and $936,590 in years 1995 and 1996, respectively.  In such
years, Wells Fund VIII distributed a total of $0 and $903,252, respectively
(excluding returns of capital and distributions from prior year operations).
See "Exhibit A--Prior Performance Tables" attached to this Prospectus for
further detail on the performance of Wells Fund VIII.

Wells Fund IX terminated its offering on December 30, 1996, and received
gross proceeds of $35,000,000 representing subscriptions from 2,095 limited
partners.  $29,359,270 of the gross proceeds were attributable to sales of Class
A Units and $5,640,730 were attributable to sales of Class B Units.  Wells Fund
IX owns interests in (i) a four story office building in Madison, Wisconsin;
(ii) a one story office building in Farmers Branch, Texas; (iii) a two story
office building in Orange County, California; (iv) a two story office building
in Boulder County, Colorado; and (v) an interest in a joint venture (in which
Wells Fund X is a partner), which owns a tract of land in Knox County, Tennessee
in the Knoxville metropolitan area, upon which a three story office building is
being developed (the "Knoxville Joint Venture").  Wells Fund IX, which commenced
operations in 1996, reported net income of $298,756 and distributed a total of
$149,425 to investors in that year.  See "Exhibit A--Prior Performance Tables"
attached to this Prospectus for further detail on the performance of Wells Fund
IX.

Wells Fund X commenced a public offering of up to $35,000,000 of limited
partnership units on December 31, 1996, and terminated its offering on December
30, 1997.  As of November 30, 1997, Wells Fund X had received gross proceeds of
$23,058,019 representing subscriptions from 1,632 limited partners.  $18,589,699
of the gross proceeds were attributable to sales of Class A Status Units, and
$4,468,320 were attributable to sales of Class B Status Units.  Wells Fund X
owns an interest in the Knoxville Joint Venture.

THE INFORMATION SET FORTH ABOVE SHOULD NOT BE CONSIDERED INDICATIVE OF
RESULTS TO BE EXPECTED FROM THE COMPANY.

The foregoing properties in which the Prior Wells Public Programs have
invested have all been acquired and developed on an all cash basis.

31

The Advisor is the general partner of Wells Partners L.P., which is a
general partner of the Operating Partnership, which is a general partner of
Wells Fund IV, Wells Fund V, Wells Fund VI, Wells Fund VII, Wells Fund VIII,
Wells Fund IX, Wells Fund X and Wells Fund XI.  The Advisor is a general partner
of Wells Fund I, Wells Fund II, Wells Fund II-OW and Wells Fund III.  Leo F.
Wells, III, the President and a Director of the Company, is a general partner in
each of the Prior Wells Public Programs and the sole shareholder and Director of
Wells Real Estate Funds, Inc., the parent corporation of the Advisor.

Potential investors are encouraged to examine the Prior Performance Tables
attached as Exhibit A hereto for more detailed information regarding the prior
experience of the Advisor.  In addition, upon request, prospective investors may
obtain from the Advisor without charge copies of offering materials and any
reports prepared in connection with any of the Prior Wells Public Programs,
including a copy of the most recent Annual Report on Form 10-K filed with the
Commission.  For a reasonable fee, the Company will also furnish upon request
copies of the exhibits to any such Form 10-K.  Any such request should be
directed to the Advisor.  Additionally, Table VI contained in Part II of the
Registration Statement (which is not part of this Prospectus) gives certain
additional information relating to properties acquired by the Prior Wells Public
Programs.  The Company will furnish, without charge, copies of such table upon
request.

MANAGEMENT

GENERAL

The Company will operate under the direction of the Board of Directors, the
members of which are accountable to the Company as fiduciaries.  As required by
applicable regulations, a majority of the Independent Directors and a majority
of the Directors have reviewed and ratified the Articles of Incorporation and
have adopted the Bylaws.

The Company currently has five Directors; it may have no fewer than three
Directors and no more than fifteen.  Directors will be elected annually, and
each Director will hold office until the next annual meeting of stockholders or
until his successor has been duly elected and qualified.  There is no limit on
the number of times that a Director may be elected to office.  Although the
number of Directors may be increased or decreased as discussed above, a decrease
shall 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 Shares outstanding and entitled to vote at a meeting called for this
purpose.  The notice of such meeting shall indicate that the purpose, or one of
the purposes, of such meeting is to determine if a Director shall be removed.

FIDUCIARY RESPONSIBILITY OF THE BOARD OF DIRECTORS

The Board of Directors will be responsible for the management and control
of the affairs of the Company; however, the Board of Directors will retain the
Advisor to manage the Company's day-to-day affairs and the acquisition and
disposition of investments, subject to the supervision of the Board of
Directors.

The Directors are not required to devote all of their time to the Company
and are only required to devote such of their time to the affairs of the Company
as their duties require.  The Board of Directors will meet quarterly in person
or by telephone, or more frequently if necessary.  It is not expected that the
Directors will be required to devote a substantial portion of their time to
discharge their duties as directors.  Consequently, in the exercise of their
fiduciary responsibilities, the Directors will rely heavily on the Advisor.  In
this regard, the Advisor, in addition to the Directors, will have a fiduciary
duty to the Company.

The Directors will monitor the administrative procedures, investment
operations, and performance of the Company and the Advisor to assure that such
policies are in the best interest of the stockholders and are fulfilled.  Until

32

modified by the Directors, the Company will follow the policies on investments
set forth in this Prospectus.  See "Investment Objectives and Policies."

The Independent Directors are responsible for reviewing the fees and
expenses of the Company at least annually or with sufficient frequency to
determine that the total fees and expenses of the Company are reasonable in
light of the Company's investment performance, Net Assets, Net Income, and the
fees and expenses of other comparable unaffiliated real estate investment
trusts.  This determination shall be reflected in the minutes of the meetings of
the Board of Directors.  For purposes of this determination, Net Assets are the
Company's total assets (other than intangibles), calculated at cost before
deducting depreciation or other non-cash reserves, less total liabilities, and
computed at least quarterly on a basis consistently applied.  Such determination
will be reflected in the minutes of the meetings of the Board of Directors.  In
addition, a majority of the Independent Directors and a majority of Directors
not otherwise interested in the transaction must approve each transaction with
the Advisor or its Affiliates.  The Board of Directors also will be responsible
for reviewing and evaluating the performance of the Advisor before entering into
or renewing an advisory agreement.  The Independent Directors shall determine
from time to time and at least annually that compensation to be paid to the
Advisor is reasonable in relation to the nature and quality of services to be
performed and shall supervise the performance of the Advisor and the
compensation paid to it by the Company to determine that the provisions of the
Advisory Agreement are being carried out.  Specifically, the Independent
Directors will consider factors such as the capital, Net Assets and Net Income
of the Company, amount of the fee paid to the Advisor in relation to the size,
composition and performance of the Company's investments, the success of the
Advisor in generating appropriate investment opportunities, rates charged to
other comparable REITs and other investors by advisors performing similar
services, additional revenues realized by the Advisor and its Affiliates through
their relationship with the Company, whether paid by the Company or by others
with whom the Company does business, the quality and extent of service and
advice furnished by the Advisor, the performance of the investment portfolio of
the Company and the quality of the portfolio of the Company relative to the
investments generated by the Advisor for its own account.  Such review and
evaluation will be reflected in the minutes of the meetings of the Board of
Directors.  The Board of Directors shall determine that any successor Advisor
possesses sufficient qualifications to (i) perform the advisory function for the
Company and (ii) justify the compensation provided for in its contract with the
Company.

The liability of the officers and Directors while serving in such capacity
is limited in accordance with the Articles of Incorporation, Bylaws and
applicable law.  See "Description of Capital Stock -- Limitation of Liability
and Indemnification."

DIRECTORS AND EXECUTIVE OFFICERS

The Directors and executive officers of the Company are listed below:

Name                   Age     Positions
----                   ---     ---------
Leo F. Wells, III      53      President and Director
Brian M. Conlon        39      Executive Vice President, Treasurer,
Secretary and Director
John L. Bell           57      Independent Director
Richard W. Carpenter   60      Independent Director
Walter W. Sessoms      63      Independent Director

LEO F. WELLS, III is the President and a Director of the Company and the
President and sole Director of the Advisor.  He is also the sole shareholder and
Director of Wells Real Estate Funds, Inc., the parent corporation of the
Advisor.  In addition, he is President of Wells & Associates, Inc., a real
estate brokerage and investment company formed in 1976 and incorporated in 1978,
for which he serves as principal broker.  He is also the sole Director and
President of Wells Management Company, Inc., a property management company he
founded in 1983; the Dealer Manager, a registered securities broker-dealer he
formed in 1984; and Wells Advisors, Inc., a company he organized in 1991 to act
as a non-bank custodian for IRAs.  Mr. Wells was a real estate salesman and
property manager from 1970 to 1973 for Roy D. Warren & Company, an Atlanta real
estate company, and he was associated from 1973 to 1976 with

33

Sax Gaskin Real Estate Company, during which time he became a Life Member of the
Atlanta Board of Realtors Million Dollar Club. From 1980 to February 1985, he
served as Vice President of Hill-Johnson, Inc., a Georgia corporation engaged in
the construction business. Mr. Wells holds a Bachelor of Business Administration
degree in Economics from the University of Georgia. Mr. Wells is a member of the
International Association for Financial Planning and a registered NASD
principal.

Mr. Wells has over 25 years of experience in real estate sales, management
and brokerage services.  He is currently a co-general partner in a total of 26
real estate limited partnerships formed for the purpose of acquiring, developing
and operating office buildings and other commercial properties, a majority of
which are located in suburban areas of metropolitan Atlanta, Georgia.  As of
March 31, 1997, these 23 real estate limited partnerships represented
investments totaling $255,433,723 from 23,741 investors.  See "Prior Performance
Summary."

BRIAN M. CONLON is the Executive Vice President and a Director of the
Company.  He also serves in the same capacity for the Advisor.  Mr. Conlon
joined the Advisor in 1985 as a Regional Vice President, and served as Vice
President and National Marketing Director from 1991 until April 1996 when he
assumed his current position.  Previously, Mr. Conlon was Director of Business
Development for Tishman Midwest Management & Leasing Services Corp. where he was
responsible for marketing the firm's property management and leasing services to
institutions.  Mr. Conlon also spent two years as an Investment Property
Specialist with Carter & Associates where he specialized in acquisitions and
dispositions of office and retail properties for institutional clients.  Mr.
Conlon received a Bachelor of Business Administration degree from Georgia State
University and a Master of Business Administration degree from the University of
Dallas.  Mr. Conlon is a member of the International Association for Financial
Planning (IAFP), a general securities principal and a Georgia real estate
broker.  Mr. Conlon also holds the certified commercial investment member (CCIM)
designation of the Commercial Investment Real Estate Institute and the certified
financial planner (CFP) designation of the Certified Financial Planner Board of
Standards, Inc.

JOHN L. BELL.  From February 1971 to February 1996 Mr. Bell was the owner
and Chairman of Bell-Mann, Inc., the largest commercial flooring contractor in
the Southeast ("Bell-Mann").  Mr. Bell also served on the board of directors of
Realty South Investors, a REIT on the American Stock Exchange and was the
founder and served as a director of both the Chattahoochee Bank and the Buckhead
Bank.  In 1997 Mr. Bell initiated and implemented Shaw Industries' Dealer
Acquisition Plan which included the acquisition of Bell-Mann.

Mr. Bell currently serves on the advisory boards of Windsor Capital,
Mountain Top Boys Home and the Eagle Ranch Boys Home.  Mr. Bell is also
extensively involved in buying and selling real estate individually and in
partnership with others.  Mr. Bell graduated from Florida State University
majoring in Accounting and Marketing.

RICHARD W. CARPENTER served as General Vice President, Real Estate Finance,
of the Citizens and Southern National Bank from 1975 to 1979, during which time
his duties included the supervision and establishment of the co-mingled United
Kingdom Pension Fund, U.K.-American Properties, Inc. established for the purpose
of investment primarily in United States commercial real estate.

Mr. Carpenter is presently President and director of Realmark Holdings
Corp., a residential and commercial developer, and has served in that position
since October 1983.  He is also President and director of Leisure Technology,
Inc., a retirement community developer, a position which he has held since March
1993, Managing Partner of Carpenter Properties, L.P., a real estate limited
partnership and President and director of the oil refining companies Wyatt
Energy, Inc. and Commonwealth Oil Refining Company, Inc., positions which he has
held since 1995 and 1984 respectively.

Mr. Carpenter is a director of both Tara Corp., a steel manufacturing
company, and Environmental Compliance Corp., an environmental firm.  Mr.
Carpenter also serves as Vice Chairman and director of both First Liberty
Financial Corp. and Liberty Savings Bank, F.S.B.  He has been a member of The
National Association of Real Estate Investment Trusts and served as President
and Chairman of the Board of Southmark Properties, an Atlanta based real estate
investment trust investing in commercial properties, until 1981.  Mr. Carpenter
is a past Chairman of the American Bankers Association Housing and Real Estate
Finance Division Executive Committee.  Mr. Carpenter holds a Bachelor of Science
degree from Florida State University, where he was named the outstanding alumni
of the School of Business in 1973.

34

WALTER W. SESSOMS was employed by BellSouth Telecommunications, Inc.
("BellSouth") from 1971 until his retirement in June 1997.  While at BellSouth
Mr. Sessoms served in a number of key positions including Vice President-
Residence for the State of Georgia from June 1979 to July 1981, Vice President-
Transitional Planning Officer from July 1981 to February 1982, Vice President-
Georgia from February 1982 until June 1989, Senior Vice President-Regulatory and
External Affairs from June 1989 until November 1991 and Group President-Services
from December 1991 until his retirement on June 30, 1997.

Mr. Sessoms currently serves as a director of the Georgia Chamber of
Commerce for which he is a past Chairman of the Board, the Atlanta Civic
Enterprises and the Salvation Army's Board of Visitors of the Southeast Region.
Mr. Sessoms is also a past executive advisory council member for the University
of Georgia College of Business Administration and past member of the executive
committee of the Atlanta Chamber of Commerce.  Mr. Sessoms is a graduate of
Wofford College where he earned a degree in economics and business
administration and is currently a practitioner/lecturer at the University of
Georgia.

COMMITTEES

The Audit Committee will consist of a majority of Independent Directors.
If the Listing occurs, the Audit Committee will consist entirely of Independent
Directors.  The Audit Committee will make recommendations concerning the
engagement of independent public accountants, review with the independent public
accountants the plans and results of the audit engagement, approve professional
services provided by the independent public accountants, review the independence
of the independent public accountants, consider the range of audit and non-audit
fees and review the adequacy of the Company's internal accounting controls.

In the event that the Listing occurs, the Board of Directors will establish
a Compensation Committee, which will oversee the compensation of the Company's
executive officers and which will consist of three Independent Directors.

The Company may from time to time form other committees as circumstances
warrant.  Such committees will have authority and responsibility as delegated by
the Board of Directors.  At least a majority of the members of each committee of
the Board of Directors will be Independent Directors.

COMPENSATION OF DIRECTORS AND OFFICERS

The Board of Directors shall determine the amount of compensation to be
received by each non-employee director for serving on the Board of Directors.
Such compensation, including fees for attending meetings, will not exceed $7,500
annually.  The Company will not pay any compensation to officers and directors
of the Company who also serve as officers and directors of the Advisor.

35

THE ADVISOR AND THE ADVISORY AGREEMENT

THE ADVISOR

The Advisor is a Georgia corporation organized in 1984.  The Company has
entered into the Advisory Agreement effective as of the date hereof.  The
Advisor has a fiduciary responsibility to the Company and its stockholders.

The directors and officers of the Advisor are as follows:

Leo F. Wells, III             President and sole Director
Brian M. Conlon               Executive Vice President
Louis A. Trahant              Vice President of Sales and Operations
Kim R. Comer                  National Vice President of Marketing
Edna B. King                  Vice President of Investor Services
Linda L. Carson               Vice President of Accounting

The backgrounds of Messrs. Wells and Conlon are described above under
"Management--Directors and Executive Officers."

LOUIS A. TRAHANT (age 51) is Vice President of Sales and Operations for the
Advisor.  He is responsible for the internal sales support provided to regional
vice presidents and to registered representatives of broker-dealers
participating in other public offerings by the Wells Prior Public Program.  Mr.
Trahant is also responsible for statistical analysis of sales-related
activities, development of office and communication systems, and hiring of
administrative personnel.  Mr. Trahant joined the Advisor in 1993 as Vice
President for Marketing of the Southern Region and assumed his current position
in 1995.  Prior to joining the Advisor, Mr. Trahant had extensive sales and
marketing experience in the commercial lighting industry.  He is a graduate of
Southeastern Louisiana University, a member of the International Association for
Financial Planning (IAFP) and the American Management Association, and holds a
Series 22 license.

KIM R. COMER (age 43) rejoined the Advisor as National Vice President of
Marketing in April 1997, after working for the Company in similar capacities
from January 1992 through September 1995.  He is responsible for all investor,
financial advisor, and broker-dealer communications and broker-dealer relations.
In prior positions with the Advisor, Mr. Comer served as Vice President of
Marketing for the southeast and northeast regions at the Advisor's' home office.
He has ten years of experience in the securities industry and is a licensed
registered representative and financial principal with the NASD.  Additionally,
he brings strong financial experience to his marketing position with the
Advisor, including experience as controller and Chief Financial Officer of two
regional broker-dealers.  In 1976, Mr. Comer graduated with honors from Georgia
State University with a BBA degree in accounting.

EDNA B. KING (age 60) is the Vice President of Investor Services for the
Advisor.  She is responsible for processing new investments, sales reporting,
and investor communications.  Prior to joining the Advisor in 1985, Ms. King
served as the Southeast Service Coordinator for Beckman Instruments and as
office manager for a regional office of Commerce Clearing House.  Ms. King holds
an Associate Degree in Business Administration from DeKalb Community College in
Atlanta, Georgia, and has completed various courses at the University of North
Carolina at Wilmington.

LINDA L. CARSON (age 54) is Vice President of Accounting for the Advisor.
She is responsible for fund, property, and corporate accounting, SEC reporting
and coordination of the audit with its independent auditors.  Ms. Carson joined
The Advisor in 1989 as Staff Accountant, became Controller in 1991, and assumed
her current position in

36

1996. Prior to joining the Advisor, Ms. Carson was an accountant with an
electrical distributor. She is a graduate of City College of New York and has
completed additional accounting courses at Kennesaw State. She is a member of
the National Society of Accountants.

The Advisor employs personnel, in addition to the directors and executive
officers listed above, who have extensive experience in selecting and managing
commercial properties similar to the properties sought to be acquired by the
Company.

The Advisor currently owns 20,000 OP Units, for which it contributed
$200,000 to the capital of the Operating Partnership.  The Advisor may not sell
these OP Units while the Advisory Agreement is in effect, although the Advisor
may transfer such OP Units to Affiliates.  Neither the Advisor, a Director, nor
any Affiliate may vote or consent on matters submitted to the stockholders
regarding removal of the Advisor, or any transaction between the Company and the
Advisor, Directors, or an Affiliate.  In determining the requisite percentage in
interest of Shares necessary to approve a matter on which the Advisor,
Directors, and any Affiliate may not vote or consent, any Shares owned by any of
them will not be included.

THE ADVISORY AGREEMENT

Under the terms of the Advisory Agreement, the Advisor (acting in the
capacity of Sponsor) has responsibility for the day-to-day operations of the
Company, administers the Company's bookkeeping and accounting functions, serves
as the Company's consultant in connection with policy decisions to be made by
the Board of Directors, manages the Company's properties and renders other
services as the Board of Directors deems appropriate.  The Advisor is subject to
the supervision of the Company's Board of Directors and has only such functions
as are delegated to it.

The Company will reimburse the Advisor for all of the costs it incurs in
connection with the services it provides to the Company, including, but not
limited to:  (i) Organizational and Offering Expenses, which are defined to
include expenses attributable to preparing the documents relating to this
Offering, the formation and organization of the Company, qualification of the
Shares for sale in the states, escrow arrangements, filing fees and expenses
attributable to the sale of the Shares, (ii) Selling Commissions, advertising
expenses, expense reimbursements, and legal and accounting fees, (iii) the
actual cost of goods and materials used by the Company and obtained from
entities not affiliated with the Advisor, including brokerage fees paid in
connection with the purchase and sale of securities, (iv) administrative
services (including 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 a separate fee), and (v)
Acquisition Expenses, which are defined to include expenses related to the
selection and acquisition of properties, at the lesser of actual cost or 90% of
the competitive rate charged by unaffiliated persons providing similar goods and
services in the same geographic location.

The Company shall not reimburse the Advisor at the end of any fiscal
quarter for operating expenses that, in 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.  If the Advisor receives an incentive fee, Net Income, for purposes
of calculating operating expenses, shall exclude any gain from the sale of the
Company's assets.  Any Excess Amount paid to the Advisor during a fiscal quarter
shall be repaid to the Company within sixty (60) days after the end of the
fiscal year.

The Company will not reimburse the Advisor or its Affiliates for services
for which the Advisor or its Affiliates are entitled to compensation in the form
of a separate fee.

Pursuant to the Advisory Agreement, the Advisor is entitled to receive
certain fees and reimbursements, as listed in "Management Compensation."  The
Subordinated Incentive Fee, which is payable to the Advisor under certain
circumstances if Listing occurs, may be paid, at the option of the Company, in
cash, in Shares, by delivery of a promissory note payable to the Advisor, or by
any combination thereof.  In the event the Subordinated Incentive Fee is paid to
the Advisor following Listing, no other performance fee will be paid to the
Advisor; and in the event the Subordinated Participation Fee is paid to the
Advisor, no Net Sales Proceeds will be paid to the Advisor.  The Acquisition
Fees payable to the Advisor in connection with the selection or acquisition of
any property shall be reduced 

37

to the extent that, and if necessary to limit, the total compensation paid to
all persons involved in the acquisition of such property to the amount
customarily charged in arm's-length transactions by other persons or entities
rendering similar services as an ongoing public activity in the same
geographical location and for comparable types of properties, and to the extent
that other acquisition fees, finder's fees, real estate commissions, or other
similar fees or commissions are paid by any person in connection with the
transaction.

If the Advisor or an Affiliate performs services that are outside of the
scope of the Advisory Agreement, compensation will be at such rates and in such
amounts as are agreed to by the Advisor and the Independent Directors of the
Company.

Further, if Listing occurs, the Company automatically will become a
perpetual life entity.  At such time, the Company and the Advisor will negotiate
in good faith a fee structure appropriate for an entity with a perpetual life,
subject to approval by a majority of the Independent Directors.  In negotiating
a new fee structure, the Independent Directors shall consider all of the factors
they deem relevant.  These are expected to include, but will not necessarily be
limited to:  (i) the amount of the advisory fee in relation to the asset value,
composition, and profitability of the Company's portfolio; (ii) the success of
the Advisor in generating opportunities that meet the investment objectives of
the Company; (iii) the rates charged to other REITs and to investors other than
REITs by advisors that perform the same or similar services; (iv) additional
revenues realized by the Advisor and its Affiliates through their relationship
with the Company, including loan administration, underwriting or broker
commissions, servicing, engineering, inspection and other fees, whether paid by
the Company or by others with whom the Company does business; (v) the quality
and extent of service and advice furnished by the Advisor; (vi) the performance
of the investment portfolio of the Company, including income, conservation or
appreciation of capital, and number and frequency of problem investments; and
(vii) the quality of the portfolio of the Company in relationship to the
investments generated by the Advisor for its own account.  The Board of
Directors, including a majority of the Independent Directors, may not approve a
new fee structure that, in its judgment, is more favorable to the Advisor than
the current fee structure.

The Company also shall pay the Advisor a deferred, subordinated real
estate disposition fee upon sale of one or more Properties, in an amount equal
to the lesser of (i) one-half (1/2) of a Competitive Real Estate Brokerage
Commission, or (ii) three percent (3%) of the sales price of such Property or
Properties.  In addition, the amount paid when added to the sums paid to
unaffiliated parties in such a capacity shall not exceed the lesser of the
Competitive Real Estate Brokerage Commission or an amount equal to 6% of the
sales price of such Property or Properties.  Payment of such fee shall be made
only if the Advisor provides a substantial amount of services in connection with
the Sale of a Property or Properties and shall be subordinated to receipt by the
stockholders of distributions equal to the sum of (i) their aggregate Common
Return and (ii) their aggregate invested capital.  If, at the time of a sale of
one or more Properties, payment of such disposition fee is deferred because the
subordination conditions have not been satisfied, then the disposition fee shall
be paid at such later time as the subordination conditions are satisfied.  Upon
Listing, if the Advisor has accrued but not been paid such real estate
disposition fee, then for purposes of determining whether the subordination
conditions have been satisfied, Stockholders will be deemed to have received a
Distribution in the amount equal to the product of the total number of Shares
outstanding and the average closing price of the Shares over a period, beginning
180 days after Listing, of 30 days during which the Shares are traded.

The Advisory Agreement, which was entered into by the Company with the
unanimous approval of the Board of Directors, including the Independent
Directors, expires one year after the date hereof on January 30, 1999, subject
to successive one-year renewals upon mutual consent of the parties.  In the
event that a new Advisor is retained, the previous Advisor has agreed to
cooperate with the Company and the Directors in effecting an orderly transition
of the advisory functions.  The Board of Directors (including a majority of the
Independent Directors) shall approve a successor Advisor only upon a
determination that such successor Advisor possesses sufficient qualifications to
perform the advisory functions for the Company and that the compensation to be
received by the new Advisor pursuant to the new Advisory Agreement is justified.

The Advisory Agreement may be terminated without cause or penalty by either
party, or by the mutual consent of the parties (by a majority of the Independent
Directors of the Company or a majority of the directors of the Advisor, as the
case may be), upon 60 days' prior written notice.  The Advisor shall be entitled
to receive all accrued but unpaid compensation and expense reimbursements in
cash within 30 days of the effective date of termination of the Advisory

38

Agreement.  All other amounts payable to the Advisor in the event of a
termination shall be evidenced by a promissory note and shall be payable from
time to time.

The Advisor has the right to assign the Advisory Agreement to an Affiliate
subject to approval by the Independent Directors of the Company.  The Company
has the right to assign the Advisory Agreement to any successor to all of its
assets, rights, and obligations.

The Advisor will not be liable to the Company or its stockholders or
others, except by reason of acts constituting bad faith, fraud, misconduct, or
negligence, and will not be responsible for any action of the Board of Directors
in following or declining to follow any advice or recommendation given by it.
The Company has agreed to indemnify the Advisor with respect to acts or
omissions of the Advisor undertaken in good faith, in accordance with the
foregoing standards and pursuant to the authority set forth in the Advisory
Agreement.  Any indemnification made to the Advisor may be made only out of the
net assets of the Company and not from stockholders.

WELLS MANAGEMENT

It is expected that substantially all of the Company's properties will be
managed by the Management Company. The officers of the Management Company are as
follows:

Leo F. Wells, III     President
Brian M. Conlon       Executive Vice President
Michael C. Berndt     Vice President and Chief Financial Officer
M. Scott Meadows      Vice President - Property Management
Michael L. Watson     Vice President - Construction
Robert H. Stroud      Vice President - Leasing

The backgrounds of Messrs. Wells and Conlon are described above under
"Management--Directors and Executive Officers."

MICHAEL C. BERNDT (50), Vice President and Chief Financial Officer of the
Management Company, joined in 1996.  He is responsible for asset management of
the Prior Wells Public Program portfolios.  Mr. Berndt is an attorney and a
Certified Public Accountant.  From 1990 to 1995, Mr. Berndt was with the
Investigations Unit of the Resolution Trust Corporation.  From 1985 to 1989, Mr.
Berndt was an independent real estate syndicator.  From 1982 to 1985, he was
President of Phoenix Financial Corporation, an NASD broker-dealer.  Previously,
he served as an accountant, attorney and securities analyst for various firms.
Mr. Berndt holds a B.S. in Accounting from Samford University, a J.D. from
Cumberland Law School and an L.L.M. in Taxation from New York University School
of Law.

M. SCOTT MEADOWS (33) is Vice President of Property Management for the
Management Company.  He is responsible for overseeing a 1.8 million square foot
portfolio of office and retail properties.  Prior to joining the Management
Company, Mr. Meadows served as Senior Property Manager for The Griffin Company,
a full-service commercial real estate firm in Atlanta, where he was responsible
for managing a half million square foot office and retail portfolio.  He also
served several years as Property Management for Sea Pines Plantation Company,
managing real estate around Harbour Town.  Mr. Meadows received a Bachelor of
Business Administration degree from the University of Georgia.  He is a Georgia
real estate broker and holds the Real Property Administrator (RPA) designation
of the Building Owners and Managers Institute International.

39

MICHAEL WATSON (age 52) is Vice President of Construction for the
Management Company.  Mr. Watson is responsible for overseeing construction and
tenant improvement projects for the Prior Wells Public Programs, including
design, engineering, and progress-monitoring functions.  With more than 25 years
of experience in the construction industry, Mr. Watson has supervised projects
ranging from high rises to neighborhood shopping centers.  Prior to joining the
Management Company in 1995, he was senior project management with Abrams
Construction in Atlanta.  Mr. Watson received a Bachelor's degree in civil
engineering from the University of Miami and keeps up with current practices by
periodically enrolling in supplemental college courses.

ROBERT H. STROUD (age 56), Vice President of Leasing and Associate Broker
for Wells & Associates, Inc., joined the Management Company in 1987.  Mr. Stroud
is responsible for leasing Atlanta office and retail properties on behalf of the
Prior Wells Public Programs.  With more than 20 years in commercial and
investment real estate, Mr. Stroud is experienced in many facets of the real
estate industry, including site selection, tenant and landlord representation,
investment sales, and assemblage and property management.  Prior to joining the
Management Company, Mr. Stroud was investment properties consultant with Royal
LePage Commercial Real Estate Services.  He received a Bachelor's degree in
management from Georgia State University and earned the MCRE Commercial Real
Estate designation from the University of Toronto.

INVESTMENT OBJECTIVES AND CRITERIA

GENERAL

The Company is a corporation that intends to elect to be taxed as a REIT
for federal income tax purposes.  The Company was organized to invest in
commercial real properties, including properties which are under development or
construction, are newly constructed or have been constructed and have operating
histories.  The Company's objectives are: (i) to maximize Cash Available for
Distribution; (ii) to preserve, protect and return the Invested Capital of the
shareholders; (iii) to realize capital appreciation upon the ultimate sale of
the Company's properties; and (iv) to provide shareholders with liquidity of
their investment, within 10 years after commencement of the Offering, through
either (a) the listing of the Shares, or (b) if Listing does not occur within
ten years following the commencement of the Offering, the dissolution of the
Company and the orderly liquidation of its assets.  No assurance can be given
that these objectives will be attained.

Decisions relating to the purchase or sale of the Company's properties will
be made by the Advisor, subject to the oversight of the Board of Directors.  See
"The Advisor and the Advisory Agreement" for a description of the background and
experience of the Advisor.

ACQUISITION AND INVESTMENT POLICIES

The Company will seek to invest substantially all of the net Offering
proceeds available for Investment in properties in the acquisition of commercial
real properties, which are under development or construction, are newly
constructed or which have been previously constructed and have operating
histories.  While not limited to such investments, the Advisor will generally
seek to invest in commercial properties such as office buildings, shopping
centers and industrial properties which are less than five years old, the space
in which has been leased or preleased to one or more large corporate tenants who
satisfy the Advisor' standards of creditworthiness.  Based on the Advisor's
prior experience with the Prior Wells Public Programs, the Company anticipates
that a majority of the tenants of the Company's properties will be U.S.
corporations (or other entities) each of which has a net worth in excess of
$100,000,000 or whose lease obligations are guaranteed by another corporation or
entity with a net worth in excess of $100,000,000.  The Company may, however,
invest in office buildings, shopping centers or industrial properties which are
not preleased to such tenants or in other types of commercial or industrial
properties such as hotels, motels, restaurants or business or industrial parks.
Notwithstanding the foregoing, under the REIT qualification rules, the Company
may not be actively engaged in the business of operating hotels, motels or
similar properties.

While the Company will seek to invest in properties that will satisfy the
primary objective of providing distributions of current cash flow to investors,
due to the fact that a significant factor in the valuation of income-producing
real properties is their potential for future income, the Advisor anticipates
that the majority of properties 

40

acquired by the Company will satisfy both attributes of providing potential for
capital appreciation and providing distributions of current cash flow to
investors. To the extent feasible, the Advisor will strive to invest in a
diversified portfolio of properties that will satisfy the Company's investment
objectives of maximizing Cash Available for Distribution, preserving investors'
capital and realizing capital appreciation upon the ultimate sale of the
Company's properties.

It is anticipated that approximately 84% of the Gross Proceeds of the
Offering will be used to acquire properties and the balance will be used to pay
various fees and expenses.  See "Estimated Use of Proceeds."

The Company may not invest more than 10% of its total assets in Unimproved
Real Property.  A property which is expected to produce income within two years
of its acquisition will not be considered a non-income producing property.

Investment in property generally will take the form of fee title or of a
leasehold estate having a term, including renewal periods, of at least 40 years,
and may be made either directly or indirectly through investments in joint
ventures, general partnerships, co-tenancies or other co-ownership arrangements
with the developers of the properties, Affiliates of the Advisor or other
persons.  See "Joint Venture Investments" below.  In addition, the Company may
purchase properties and lease them back to the sellers of such properties.
While the Advisor will use its best efforts to structure any such sale-leaseback
transaction such that the lease will be characterized as a "true lease" and so
that the Company will be treated as the owner of the property for federal income
tax purposes, no assurance can be given that the Service will not challenge such
characterization.  In the event that any such sale-leaseback transaction is
recharacterized as a financing transaction for federal income tax purposes,
deductions for depreciation and cost recovery relating to such property would be
disallowed or significantly reduced.  See "Federal Income Tax Considerations."

The Company is not limited as to the geographic area where it may conduct
its operations, but the Advisor intends to cause the Company to invest primarily
in properties located in the United States.

There are no specific limitations on the number or size of properties to be
acquired by the Company or on the percentage of net proceeds of this Offering
which may be invested in a single property.  The number and mix of properties
acquired will depend upon real estate and market conditions and other
circumstances existing at the time the Company is acquiring its properties and
the amount of the net proceeds of this Offering.

In making investment decisions for the Company, the Advisor will consider
relevant real property and financial factors, including the location of the
property, its suitability for any development contemplated or in progress, its
income-producing capacity, the prospects for long-range appreciation, its
liquidity and income tax considerations.  In this regard, the Advisor will have
substantial discretion with respect to the selection of specific Company
investments.

The Company will obtain independent appraisals for each property in which
it invests, and the purchase price of each such property will not exceed its
appraised value.  However, the Advisor and the Board of Directors will rely on
their own independent analysis and not on such appraisals in determining whether
to invest in a particular property.  It should be noted that appraisals are
estimates of value and should not be relied upon as measures of true worth or
realizable value.  Copies of these appraisals will be available for review and
duplication by shareholders at the office of the Company and will be retained
for at least five years.

The Company's obligation to close the purchase of any investment will
generally be conditioned 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 only to such liens and encumbrances as are acceptable to the Advisor),
audited financial statements covering recent operations of any properties having
operating histories (unless such statements are not required to be filed with
the Securities and Exchange Commission and delivered to investors), title and
liability insurance policies and opinions of counsel in certain circumstances.
The Company will not close the purchase of any property unless and until it
obtains an environmental assessment (a minimum of a Phase I review) for each
property purchased and the Advisor is generally satisfied with the environmental
status of the property.

41

The Company may also 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 the Company a sum necessary to reach the specified
cash flow level, subject in some cases to negotiated dollar limitations.

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

In purchasing, leasing and developing real properties, the Company will be
subject to risks generally incident to the ownership of real estate, including
changes in general economic or local conditions, changes in supply of or demand
for similar or competing properties in an area, changes in interest rates and
availability of permanent mortgage funds which may render the sale of a property
difficult or unattractive, and changes in tax, real estate, environmental and
zoning laws.  Periods of high interest rates and tight money supply may make the
sale of properties more difficult.  The Company may experience difficulty in
keeping the properties fully leased due to tenant turnover, general overbuilding
or excess supply in the market area.  Development of real properties is subject
to risks relating to the builders' ability to control construction costs or to
build in conformity with plans, specifications and timetables.  See "Risk
Factors--Real Estate Risks."

DEVELOPMENT AND CONSTRUCTION OF PROPERTIES

The Company may invest substantially all of the net proceeds available for
Investment in properties on which improvements are to be constructed or
completed although the Company may not invest in excess of 10% of total assets
in properties which are not expected to produce income within two years of their
acquisition.  To help ensure performance by the builders of properties which are
under construction and completion of properties under construction, the Advisor
may rely upon the substantial net worth of the contractor or developer or a
personal guarantee accompanied by financial statements showing a substantial net
worth provided by an Affiliate of the person entering into the construction or
development contract, or, in certain circumstances, the Advisor may require an
adequate completion bond or performance bond.

The Company may make periodic progress payments or other cash advances to
developers and builders of its properties prior to completion of construction
only upon receipt of an architect's certification as to the percentage of the
project then completed and as to the dollar amount of the construction then
completed.  The Company intends to use such additional controls on its
disbursements to builders and developers as it deems necessary or prudent.

The Company may directly employ one or more project managers to plan,
supervise and implement the development of any Unimproved Real Properties which
it may acquire.  Such persons would be compensated directly by the Company and,
other than through such employment, will not be affiliated with the Advisor.

TERMS OF LEASES AND LESSEE CREDITWORTHINESS

The terms and conditions of any lease entered into by the Company with
regard to a tenant may vary substantially from those described herein.  However,
a majority of leases are expected to be what is generally referred to as "triple
net" leases, which means that the lessee will be required to pay or reimburse
the Company for all real estate taxes, sales and use taxes, special assessments,
utilities, insurance and building repairs as well as lease payments.

The Advisor has developed specific standards for determining the
creditworthiness of potential lessees of Company Properties.  While authorized
to enter into leases with any type of lessee, the Advisor anticipates that a
majority of the tenants of the Company Properties will be top U.S. corporations
or other entities each of which has a net worth in excess of $100,000,000 or
whose lease obligations are guaranteed by another corporation or entity with a
net worth in excess of $100,000,000.

42

BORROWING POLICIES

The Company may incur indebtedness in connection with the development or
acquisition of properties, which indebtedness may be secured by one or more of
the Company's properties.  The Company also may borrow funds (a) for Company
operating purposes in the event of unexpected circumstances in which the
Company's working capital reserves and other cash resources available to the
Company become insufficient for the maintenance and repair of its properties or
for the protection or replacement of the Company's assets, and (b) in order to
finance improvement of and improvements to its properties, when the Advisor
deems such improvements to be necessary or appropriate to protect the capital
previously invested in the properties, to protect the value of the Company's
investment in a particular property, or to make a particular property more
attractive for sale or lease.  The aggregate borrowing of the Company, secured
and unsecured, shall be reasonable in relation to Net Assets of the Company and
shall be reviewed by the Board of Directors at least quarterly.  Such
indebtedness may be in the form of secured and unsecured bank borrowings, and
publicly and privately placed debt offerings.  Borrowings may be incurred
through either the Operating Partnership or the Company.  The Board of Directors
anticipates that the aggregate amount of any borrowing will not exceed 50% of
the aggregate value of the Company's aggregate properties, provided, however,
--------          
that such level may be exceeded on an individual property basis.

JOINT VENTURE INVESTMENTS

The Company is likely to enter into one or more joint ventures with
Affiliated entities for the acquisition, development or improvement of
properties, under the conditions described below.  The Company may invest some
or all of the proceeds of the Offering in such joint ventures.  In this
connection, the Company may enter into joint ventures with future programs
sponsored by the Advisor or its Affiliates or Prior Wells Public Programs.  The
Advisor also has the authority to enter into joint ventures, general
partnerships, co-tenancies and other participations with real estate developers,
owners and others for the purpose of developing, owning and operating properties
in accordance with the Company's investment policies.  See "Risk Factors" and
"Conflicts of Interest."  In determining whether to invest in a particular joint
venture, the Advisor will evaluate the real property which such joint venture
owns or is being formed to own under the same criteria described herein for the
selection of real property investments of the Company.  The Company shall not
invest in joint ventures with the Advisor, any Directors or any Affiliate
thereof, unless a majority of the Directors (including a majority of the
Independent Directors) not otherwise interested in such transactions, approve
the transaction as being fair and reasonable to the Company and on substantially
the same terms and conditions as those received by other joint venturers.  See
"--Acquisition and Investment Policies," "--Development and Construction of
Properties," "--Terms of Leases and Lessee Creditworthiness," and "--Borrowing
Policies."

At such time as the Advisor believes that a reasonable probability exists
that the Company will enter into a joint venture with a Prior Wells Public
Program for the acquisition or development of a specific material property, this
Prospectus will be supplemented to disclose the terms of such proposed
investment transaction.  Based upon the Advisor's experience, in connection with
the development of a property which is currently owned by a Prior Wells Public
Program, this would normally occur upon the signing of legally binding leases
with one or more major tenants for commercial space to be developed on such
property, but may occur before or after any such signing, depending upon the
particular circumstances surrounding each potential investment.  It should be
understood that the initial disclosure of any such proposed transaction cannot
be relied upon as an assurance that the Company will ultimately consummate such
proposed transaction nor that the information provided in any such supplement to
this Prospectus concerning any such proposed transaction will not change after
the date of the supplement.

The Company may enter into a partnership, joint venture or co-tenancy with
unrelated parties if (i) the management of such partnership, joint venture or
co-tenancy is under the control of the Company; (ii) the Company, as a result of
such joint ownership or partnership ownership of a property, is not charged,
directly or indirectly, more than once for the same services; (iii) the joint
ownership, partnership or co-tenancy agreement does not authorize or require the
Company to do anything as a partner, joint venturer or co-tenant with respect to
the property which the Company or the Advisor could not do directly because of
the Company's Articles of Incorporation; and (iv) the Advisor and its Affiliates
are prohibited from receiving any compensation, fees or expenses which are not
permitted to be paid under the Advisory Agreement.  In the event that any such
co-ownership arrangement contains a provision giving each party a right of first
refusal to purchase the other party's interest, the Company may not have
sufficient capital to finance any such buy-out.  See "Risk Factors."

43

The Company intends to enter into joint ventures with other publicly
registered Affiliated entities for the acquisition of properties, but may only
do so provided that (i) each such co-venturer has substantially identical
investment objectives as those of the Company; (ii) the Company, as a result of
such joint ownership or partnership ownership of a property, is not charged,
directly or indirectly, more than once for the same services; (iii) compensation
payable to the Company by such Affiliate is substantially identical to that
payable to the Advisor by the Company; (iv) the Company will have a right of
first refusal to buy if such co-venturer elects to sell its interest in the
property held by the joint venture; and (v) the investment by the Company and
such Affiliate are on substantially the same terms and conditions, and each such
entity's ownership interest in such joint venture or partnership shall be based
upon the respective proportion of funds invested in such joint venture or
partnership by the Company and such Affiliate.  In the event that the co-
venturer were to elect to sell property held in any such joint venture, however,
the Company may not have sufficient funds to exercise its right of first refusal
to buy the other co-venturer's interest in the property held by the joint
venture.  In the event that any joint venture with an Affiliated entity holds
interests in more than one property, the interest in each such property may be
specially allocated based upon the respective proportion of funds invested by
each co-venturer in each such property.  Entering into such joint ventures with
Affiliated entities will result in certain conflicts of interest.  See "Risk
Factors" and "Conflicts of Interest--Joint Ventures with Affiliates of the
Advisor."

OTHER POLICIES

The Company will not invest as a limited partner in limited partnerships,
except such investments acquired through the Operating Partnership.  The Company
may in the future issue senior securities.  The Company may, pursuant to the
Reinvestment Plan, repurchase or otherwise reacquire its common stock.

Except in connection with sales of properties by the Company where purchase
money obligations may be taken by the Company as partial payment, the Company
will not make loans to any person, nor will the Company underwrite securities of
other issuers, in exchange for property, or invest in securities of other
issuers for the purpose of exercising control.  Notwithstanding the foregoing,
the Company may invest in joint ventures or partnerships as described above and
in a corporation where real estate is the principal asset and its acquisition
can best be effected by the acquisition of the stock of such corporation,
subject to the limitations set forth below.

The Company will not: (i) make or invest in real estate mortgage loans
(except in connection with the sale or other disposition of a property); (ii)
make loans to the Advisor or other Affiliates, or to any director, officer or
principal of the Company or any of its Affiliates; (iii) invest in commodities
or commodity future contracts (does not apply to future contracts, when used
solely for hedging purposes in connection with the Company's ordinary business
of investing in real estate assets and mortgages); (iv) issue redeemable equity
securities; (v) issue debt securities unless the historical debt service
coverage (in the most recently completed fiscal year), as adjusted for known
changes, is sufficient to properly service that higher level of debt; (vi) issue
options or warrants to purchase its Shares to the Advisor, Directors, or any
Affiliate thereof except on the same terms as such options or warrants may be
sold to the general public, any such options or warrants issued to the Advisor,
Directors, or any Affiliate shall not exceed an amount equal to 10% of the
outstanding Shares of the Company on the date of grant; (vii) issue its shares
on a deferred payment basis or other similar arrangement; (viii) invest in or
underwrite the securities of other issuers, including any publicly offered or
traded limited partnership interests, except for investments in joint ventures
as described herein, and except for permitted temporary investments pending
utilization of Company funds, provided that following one year after the
commencement of operations of the Company no more than 45% of the value of the
Company's total assets (exclusive of Government securities and cash items) will
consist of, and no more than 45% of the Company's net income after taxes (for
the last four fiscal quarters combined) will be derived from, securities other
than (A) Government securities, or (B) securities in a corporation where real
estate is the principal asset and the acquisition of such real estate can best
be effected by the acquisition of the stock of such corporation, provided that
any such corporation is either (x) a corporation which is a majority owned
subsidiary of the Company and which is not an investment company as defined by
the Investment Company Act of 1940, as amended, or (y) a corporation which is
controlled primarily by the Company, through which corporation the Company
engages in the business of acquisition and operation of real estate and which is
not an investment company.

44

REAL PROPERTY INVESTMENTS

As of the date of this Prospectus, the Company has not acquired nor
contracted to acquire any specific real properties.  The Advisor is continually
evaluating various potential property investments and engaging in discussions
and negotiations with sellers, developers and potential tenants regarding the
purchase and development of properties for the Company and prior programs.  At
such time during the negotiations for a specific property as the Advisor
believes that a reasonable probability exists that the Company will acquire such
property, this Prospectus will be supplemented to disclose the negotiations and
pending acquisition.  Based upon the Advisor's experience and acquisition
methods, this will normally occur on the signing of a legally binding purchase
agreement for the acquisition of a specific property, but may occur before or
after such signing or upon the satisfaction or expiration of major contingencies
in any such purchase agreement, depending on the particular circumstances
surrounding each potential investment.  A supplement to this Prospectus will
describe any improvements proposed to be constructed thereon and other
information considered appropriate for an understanding of the transaction.
Further data will be made available after any pending acquisition is
consummated, also by means of a supplement to this Prospectus, if appropriate.
IT SHOULD BE UNDERSTOOD THAT THE INITIAL DISCLOSURE OF ANY PROPOSED ACQUISITION
CANNOT BE RELIED UPON AS AN ASSURANCE THAT THE COMPANY WILL ULTIMATELY
CONSUMMATE SUCH PROPOSED ACQUISITION NOR THAT THE INFORMATION PROVIDED
CONCERNING THE PROPOSED ACQUISITION WILL NOT CHANGE BETWEEN THE DATE OF SUCH
SUPPLEMENT AND ACTUAL PURCHASE.

It is intended that the proceeds of this Offering will be invested in
properties in accordance with the Company's investment policies.  Funds
available for Investment in properties which are not expended or committed to
the acquisition or development of specific real properties on or before the
later of the second anniversary of the effective date of the Registration
Statement or one year after the termination of the Offering and not reserved for
working capital purposes will be returned to the shareholders.

The Company intends to obtain adequate insurance coverage for all
properties in which it invests.

DISTRIBUTION POLICY

REIT STATUS

In order to qualify as a REIT for federal income tax purposes, among  other
things, the Company must make distributions each taxable year (not including any
return of capital for federal income tax purposes) equal to at least 95% of its
real estate investment trust taxable income, although the Board of Directors, in
its discretion, may increase that percentage as it deems appropriate.  See
"Federal Income Tax Considerations--Requirements for Qualification."  The
declaration of distributions is within the discretion of the Board of Directors
and depends upon the Company's Cash Available for Distribution, current and
projected cash requirements, tax considerations and other factors.

The Company intends to make regular quarterly distributions to holders of
the Shares.  Distributions will be made to those stockholders who are
stockholders as of the record date selected by the Directors.  Distributions
will be declared monthly and paid on a quarterly basis during the Offering
period and declared and paid quarterly thereafter.  Generally, income
distributed to stockholders will not be taxable to the Company under federal
income tax laws if the Company distributes at least 95% of its annual taxable
income.  If Cash Available for Distribution is insufficient to pay such
distributions, the Company may obtain the necessary funds by borrowing, issuing
new securities, or selling assets.  These methods of obtaining funds could
affect future distributions by increasing operating costs.  To the extent that
distributions to stockholders exceed the Company's current and accumulated
earnings and profits, such amounts will constitute a return of capital for
federal income tax purposes, although such distributions will not reduce
stockholders' aggregate Invested Capital.

Distributions will be made at the discretion of the Directors, depending
primarily on Cash Available for Distribution and the general financial condition
of the Company, subject to the obligation of the Directors to cause the Company
to qualify and remain qualified as a REIT for federal income tax purposes.  The
Company intends to increase distributions in accordance with increases in Cash
Available for Distribution.

45

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As of the date of this Prospectus, the Company had not yet commenced active
operations.  Subscription proceeds may be released to the Company as accepted
and applied to investment in properties and the payment or reimbursement of
Selling Commissions and other Organization and Offering Expenses.  See
"Estimated Use of Proceeds."  The Company will experience a relative increase in
liquidity as additional subscriptions for Shares are received, and a relative
decrease in liquidity as net Offering proceeds are expended in connection with
the acquisition, development and operation of properties.

As of the initial date of this Prospectus, the Company has not entered into
any arrangements creating a reasonable probability that any specific property
will be acquired by the Company.  The number of Company properties to be
acquired by the Company will depend upon the number of Shares sold and the
resulting amount of the net proceeds available for investment in properties
available to the Company.  See "Risk Factors."

The Company is not aware of any material trends or uncertainties, favorable
or unfavorable, other than national economic conditions affecting real estate
generally, which may be reasonably anticipated to have a material impact on
either capital resources or the revenues or income to be derived from the
operation of the Company's properties.

Until required for the acquisition, development or operation of properties,
net Offering proceeds will be kept in short-term, liquid investments.  Because
the vast majority of leases for the properties acquired by the Company will
provide for tenant reimbursement of operating expenses, it is not anticipated
that a permanent reserve for maintenance and repairs of Company properties will
be established.  However, to the extent that the Company has insufficient funds
for such purposes, the Advisor may contribute to the Company an aggregate amount
of up to 1% of Gross Offering Proceeds for maintenance and repairs of the
Company's properties.  The Advisor also may, but is not required to, establish
reserves from Gross Offering Proceeds, out of cash flow generated by operating
properties or out of Nonliquidating Net Sale Proceeds.

DESCRIPTION OF CAPITAL STOCK

The following summary of certain provisions of the Company's Articles of
Incorporation and Bylaws and Maryland law is subject to and qualified in its
entirety by reference to such documents, copies of which are Exhibits to the
Registration Statement of which this Prospectus is a part.

Under its Articles of Incorporation, the Company has authority to issue a
total of 90,000,000 shares of capital stock, of which 40,000,000 shares are
designated as common stock, $.01 par value per share (the "Common Stock"),
5,000,000 shares of which are designated are preferred stock, $.01 par value per
share (the "Preferred Stock"), and 45,000,000 shares are designated as Shares-
in-Trust (as described in "-- Articles of Incorporation and Bylaw Provisions."

COMMON STOCK

The holders of Shares are entitled to one vote per share on all matters
voted on by shareholders, including elections of directors.  Except as otherwise
required by law or provided in any resolution adopted by the Board of Directors
with respect to any series of Preferred Stock, the holders of such shares
exclusively possess all voting power.  The Articles of Incorporation do not
provide for cumulative voting in the election of directors.  Subject to any
preferential rights of any outstanding series of Preferred Stock, the holders of
Shares are entitled to such dividends as may be declared from time to time by
the Board of Directors from funds available therefor, and upon liquidation are
entitled to receive pro rata all assets of the Company available for
distribution to such holders.  All Shares issued in the Offering will be fully
paid and nonassessable and the holders thereof will not have preemptive rights.

46

PREFERRED STOCK

The Articles of Incorporation authorize the Board of Directors to designate
and issue from time to time one or more classes or series of Preferred Stock
without stockholder approval.  The Board of Directors may determine the relative
rights, preferences and privileges of each class or series of Preferred Stock so
issued, which may be more beneficial than those of the Common Stock.  However,
the voting rights for each share of Preferred Stock shall not exceed voting
rights of the Common Stock.  The issuance of Preferred Stock could have the
effect of delaying or preventing a change in control of the Company.  The Board
of Directors has no present plans to issue any Preferred Stock, but may
nevertheless do so in the future.

SOLICITING DEALER WARRANTS

The Company has agreed to issue and sell, and the Dealer Manager has agreed
to purchase for the price of $.0008 per warrant, warrants (the "Soliciting
Dealer Warrants") to purchase one Share per Soliciting Dealer Warrant for each
Share sold by the Dealer Manager (and/or the Soliciting Dealers), up to a
maximum of 600,000 Soliciting Dealer Warrants.  The Soliciting Dealer Warrants
will be issued on a quarterly basis commencing 60 days after the date on which
the Shares are first sold pursuant to this Offering.  The Dealer Manager may
retain or reallow all Soliciting Dealer Warrants to the Soliciting Dealers
(except Soliciting Dealers in Minnesota), unless such issuance of the Soliciting
Dealer Warrants is prohibited by either federal or state securities laws.  The
Shares issuable upon exercise of the Soliciting Dealer Warrants are being
registered as part of this Offering.

Each Soliciting Dealer will receive from the Dealer Manager one Soliciting
Dealer Warrant for each 25 Shares sold by such Soliciting Dealer during this
Offering.  All Shares sold by the Company other than through the Reinvestment
Plan will be included in the computation of the number of Shares sold to
determine the number of Soliciting Dealer Warrants to be issued.  The holder of
a Soliciting Dealer Warrant will be entitled to purchase one Share from the
Company at a price of $12 (120% of the public offering price per Share) during
the time period beginning one year from the effective date of this Offering and
ending five years after the effective date of this Offering (the "Exercise
Period").  A Soliciting Dealer Warrant may not be exercised unless the Shares to
be issued upon the exercise of the Soliciting Dealer Warrant have been
registered or are exempt from registration in the state of residence of the
holder of the Soliciting Dealer Warrant or if a prospectus required under the
laws of such state cannot be delivered to the buyer on behalf of the Company.
Notwithstanding the foregoing, no Soliciting Dealer Warrants will be exercisable
until one year from the effective date of the Offering.  In addition, holders of
Soliciting Dealer Warrants may not exercise the Soliciting Dealer Warrants to
the extent such exercise would jeopardize the Company's status as a REIT under
the Code.

The terms of the Soliciting Dealer Warrants, including the exercise price
and the number and type of securities issuable upon exercise of a Soliciting
Dealer Warrant and the number of such warrants may be adjusted in the event of
stock dividends, stock splits, or a merger, consolidation, reclassification,
reorganization, recapitalization, or sale of assets.  Soliciting Dealer Warrants
are not transferable or assignable except by the Dealer Manager, the Soliciting
Dealers, their successors in interest, or to individuals who are officers of
such a person.  Exercise of these Soliciting Dealer Warrants will be under the
terms and conditions detailed in this Prospectus and in the Warrant Purchase
Agreement, which is an exhibit to the Registration Statement.

Holders of Soliciting Dealer Warrants do not have the rights of
stockholders, may not vote on Company matters and are not entitled to receive
distributions until such time as such warrants are exercised.

ARTICLES OF INCORPORATION AND BYLAW PROVISIONS

Restrictions on Ownership and Transfer

For the Company to qualify as a REIT under the Code, it must meet certain
requirements concerning the ownership of its outstanding shares of capital
stock.  Specifically, not more than 50% in value of the Company's outstanding
shares of capital stock may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities) during the last
half of a taxable year, and the Company must be beneficially owned by

47

100 or more persons during at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year. See "Federal Income Tax
Considerations -- Requirements for Qualification." In addition, the Company must
meet certain requirements regarding the nature of its gross income in order to
qualify as a REIT. One such requirement is that at least 75% of the Company's
gross income for each year must consist of "rents from real property" and income
from certain other real property investments. No rent that the Company receives
from a tenant in which it owns 10% or more of the ownership interests will
qualify as "rents from real property." See "Federal Income Tax Considerations --
Requirements for Qualification -- Income Tests."

Because the Board of Directors believes it is essential for the Company to
continue to qualify as a REIT, the Articles of Incorporation, subject to certain
exceptions described below, provide that no person may own, or be deemed to own
by virtue of the attribution provisions of the Code, more than 9.8% (the
"Ownership Limitation") of the number of outstanding shares of Common Stock or
more than 9.8% of the number of outstanding shares of any class of Preferred
Stock.

Any transfer of Shares that would (i) result in any person owning, directly
or indirectly, Shares in excess of the Ownership Limitation, (ii) result in
Shares being owned by fewer than 100 persons (determined without reference to
any rules of attribution), (iii) result in the Company being "closely held"
within the meaning of section 856(h) of the Code, or (iv) cause the Company to
own, actually or constructively, 10% or more of the ownership interests in a
tenant of the Company's or the Operating Partnership's real property, within the
meaning of section 856(d)(2)(B) of the Code, will be null and void, and the
intended transferee will acquire no rights in such Shares.

Subject to certain exceptions described below, any purported transfer of
Shares that would (i) result in any person owning, directly or indirectly,
Shares in excess of the Ownership Limitation, (ii) result in the Shares being
owned by fewer than 100 persons (determined without reference to any rules of
attribution), (iii) result in the Company being "closely held" within the
meaning of section 856(h) of the Code, or (iv) cause the Company to own,
actually or constructively, 10% or more of the ownership interests in a tenant
of the Company's or the Operating Partnership's real property, within the
meaning of section 856(d)(2)(B) of the Code, will be designated as "Shares-in-
Trust" and will be transferred automatically to a trust (a "Trust"), effective
on the day before the purported transfer of such Shares.  The record holder of
the Shares that are designated as Shares-in-Trust (the "Prohibited Owner") will
be required to submit such number of Shares to the Company for registration in
the name of the trustee of the Trust (the "Trustee").  The Trustee will be
designated by the Company, but will not be affiliated with the Company.  The
beneficiary of a Trust (the "Beneficiary") will be one or more charitable
organizations named by the Company.

Shares-in-Trust will remain issued and outstanding Shares and will be
entitled to the same rights and privileges as all other shares of the same class
or series.  The Trustee will receive all dividends and distributions on the
Shares-in-Trust and will hold such dividends or distributions in trust for the
benefit of the Beneficiary.  The Trustee will vote all Shares-in-Trust.  The
Trustee will designate a permitted transferee of the Shares-in-Trust, provided
that the permitted transferee (i) purchases such Shares-in-Trust for valuable
consideration and (ii) acquires such Shares-in-Trust without such acquisition
resulting in another transfer to another Trust.

The Prohibited Owner with respect to Shares-in-Trust will be required to
repay to the Trustee the amount of any dividends or distributions received by
the Prohibited Owner (i) that are attributable to any Shares-in-Trust and (ii)
the record date of which was on or after the date that such shares became
Shares-in-Trust.  Within 20 days of receiving notice from the Company that
shares of the Company's common stock have been transferred to the Trust, the
Company shall, at its sole option, either (i) repurchase such Shares-in-Trust
from the Prohibited Owner, or (ii) cause the Trustee to sell the Shares-in-Trust
on behalf of the Prohibited Owner to a third party (the "Option").  The
Prohibited Owner shall receive from the Trustee the lesser of (i) the price per
share in the transaction that created such Shares-in-Trust (or, in the case of a
gift or devise, the Market Price (as defined below) per share on the date of
such transfer) or (ii) the Market Price per share on the date that the Company,
or its designee, accepts such offer.  Any amounts received by the Trustee in
excess of the amounts to be paid to the Prohibited Owner will be distributed to
the Beneficiary.  Such purchase price amount shall be sent to the Prohibited
Owner within five business days from the close of such sale transaction.

In connection with the Option described above, the Shares-in-Trust will be
deemed to have been offered for sale to the Company, or its designee.  The
Company will have the right to accept such offer for a period of 20 days after

48

the later of (i) the date of the purported transfer which resulted in such
Shares-in-Trust or (ii) the date the Company determines in good faith that a
transfer resulting in such Shares-in-Trust occurred.

"Market Price" on any date shall mean the average of the Closing Price for
the five consecutive Trading Days ending on such date.  The "Closing Price" on
any date shall mean the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the NYSE or, if the Shares are not listed or admitted to trading on
the NYSE, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Shares are listed or admitted to trading or, if the Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotations system that may then be
in use or, if the Shares are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Shares selected by the Board of Directors, or, if no such
market maker exists, as determined in good faith by the Board of Directors.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Shares are listed or admitted to trading is open for the
transaction of business or, if the Shares are not listed or admitted to trading
on any national securities exchange, shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.

Any person who (a) acquires Shares in violation of the foregoing
restrictions or who owned Shares that were transferred to a Trust is required to
give immediately written notice to the Company of such event, and (b) transfers
or receives (or attempts to transfer or receive) Shares subject to such
limitations is required to give the Company at least 15 days written notice
prior to such transaction, and in both cases such persons shall provide to the
Company such other information as the Company may request in order to determine
the effect, if any, of such transfer on the Company's status as a REIT.

All persons who own, directly or indirectly, more than 5% (or such lower
percentages as required pursuant to regulations under the Code) of the
outstanding Shares must, within 30 days after January 1 of each year, provide to
the Company a written statement or affidavit stating (i) the name and address of
such direct or indirect owner, (ii) the number of Shares owned directly or
indirectly, and (iii) a description of how such shares are held.  In addition,
each direct or indirect shareholder shall provide to the Company such additional
information as the Company may request in order to determine the effect, if any,
of such ownership on the Company's status as a REIT and to ensure compliance
with the Ownership Limitation.

The Ownership Limitation generally will not apply to the acquisition of
Shares by an underwriter that participates in a public offering of such shares.
In addition, the Board of Directors, upon receipt of a ruling from the Service
or an opinion of counsel and upon such other conditions as the Board of
Directors may direct, may exempt a person from the Ownership Limitation under
certain circumstances.  The foregoing restrictions will continue to apply until
(i) the Board of Directors determines that it is no longer in the best interests
of the Company to attempt to qualify, or to continue to qualify, as a REIT and
(ii) there is an affirmative vote of a majority of the number of Shares entitled
to vote on such matter at a regular or special meeting of the shareholders of
the Company.

All certificates representing Shares will bear a legend referring to the
restrictions described above.

The Ownership Limitation could have the effect of discouraging a takeover
or other transaction in which holders of some, or a majority, of the Shares
might receive a premium from their Shares over the then prevailing market price
or which such holders might believe to be otherwise in their best interest.

Number of Directors; Removal; Filling Vacancies

The Articles of Incorporation and Bylaws provide that the number of
directors will consist of not less than 3 nor more than 15 persons, subject to
increase or decrease by the affirmative vote of 80% of the members of the entire

49

Board of Directors.  At all times a majority of the directors shall be
Independent Directors, except that upon the death, removal or resignation of an
Independent Director, such requirement shall not be applicable for 90 days.
Upon completion of the Offering, there will be five directors, three of whom
shall be Independent Directors.  The shareholders shall be entitled to vote on
the election or removal of directors, with each share entitled to one vote.  The
Articles of Incorporation provide that, subject to any rights of holders of any
class of preferred stock, and unless the Board of Directors otherwise
determines, any vacancies will be filled by the affirmative vote of a majority
of the remaining directors, though less than a quorum, provided that Independent
Directors shall nominate and approve directors to fill vacancies created by
Independent Directors.  Accordingly, the Board of Directors could temporarily
prevent any shareholder from enlarging the Board of Directors and filling the
new directorships with such shareholder's own nominees.  Any directors so
elected shall hold office until the next annual meeting of shareholders.

A director may be removed with or without cause by the vote of the holders
of a majority of the outstanding shares of capital stock entitled to vote for
the election of directors at a special meeting of the shareholders called for
the purpose of removing such director.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The MGCL permits a Maryland corporation to include in its Articles of
Incorporation 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 as being material to the cause of action.

Subject to the conditions set forth below, the Articles of Incorporation
provides that the Company shall indemnify and hold harmless a Director, Advisor
or Affiliate against any or all losses or liabilities reasonably incurred by
such Director, Advisor or Affiliate in connection with or by reason of any act
or omission performed or omitted to be performed on behalf of the Company in
such capacity.

Under the Company's Articles of Incorporation, the Company shall not
indemnify its Directors, Advisor or any Affiliate for any liability or loss
suffered by the Directors, Advisors or Affiliates, nor shall it provide that the
Directors, Advisors or Affiliates be held harmless for any loss or liability
suffered by the Company, unless all of the following conditions are met: (i) the
Directors, Advisor or Affiliates have determined, in good faith, that the course
of conduct which caused the loss or liability was in the best interests of the
Company; (ii) the Directors, Advisor or Affiliates were acting on behalf of or
performing services of the Company; (iii) such liability or loss was not the
result of (A) negligence or misconduct by the Directors, excluding the
Independent Directors, Advisors or Affiliates; or (B) gross negligence or
willful misconduct by the Independent Directors; (iv) such indemnification or
agreement to hold harmless is recoverable only out of the Company's net assets
and not from Shareholders.  Notwithstanding the foregoing, the Directors,
Advisors or Affiliates and any persons acting as a broker-dealer shall not be
indemnified by the Company for any losses, liability or expenses arising from or
out of an alleged violation of federal or state securities laws by such party
unless one or more of the following conditions are met: (i) there has been a
successful adjudication on the merits of each count involving alleged securities
law violations as to the particular indemnitee; (ii) such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction as
to the particular indemnitee; (iii) 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 for indemnification has been advised of the
position of the SEC and of the published position of any state securities
regulatory authority in which securities of the Company were offered or sold as
to indemnification for violations of securities laws.

The Articles of Incorporation provides that the advancement of Company
funds to the Directors, Advisors or Affiliates 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: (i) the legal action relates to acts or omissions with respect to the
performance of duties or services on behalf of the Company; (ii) the legal
action is initiated by a third party who is not a Shareholder or the legal
action is initiated by a Shareholder acting in his or her capacity as such and a
court of competent jurisdiction specifically approves such advancement; (iii)
the Directors, Advisor or Affiliates undertake to repay the advanced funds to
the Company together with the applicable legal rate of interest thereon, in
cases in which such Directors, Advisor or Affiliates are found not to be
entitled to indemnification.

50

The MGCL requires a Maryland corporation (unless its Articles of
Incorporation provide otherwise, which the Company's Articles of Incorporation
do not) to indemnify a director or officer who has been successful, on the
merits or otherwise, in the defense of any proceeding to which he is made a
party by reason of his service in that capacity.  The MGCL permits a Maryland
corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that (a) the act or omission of the director or officer was
material to the matter giving rise to the proceeding and (i) was committed in
bad faith or (ii) was the result of active and deliberate dishonesty, (b) the
director or officer actually received an improper personal benefit in money,
property or services or (c) in the case of any criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was
unlawful.  However, under the MGCL a Maryland corporation may not indemnify for
an adverse judgment in a suit by or in the right of the corporation or for a
judgment of liability on the basis that personal benefit was improperly
received, unless in either case a court orders indemnification and then only for
expenses.  In addition, the MGCL permits a corporation to advance reasonable
expenses to a director or officer upon the corporation's receipt of (a) a
written affirmation by the director or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification by the Company as
authorized by the Bylaws and (b) a written undertaking by or on his behalf to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that the standard of conduct was not met.  Indemnification under the
provisions of the MGCL is not deemed exclusive of any other rights, by
indemnification or otherwise, to which an officer or director may be entitled
under the Company's Articles of Incorporation or Bylaws, or under resolutions of
stockholders or directors, contract or otherwise.  It is the position of the
Commission that indemnification of directors an officers for liabilities arising
under the Securities Act is against public policy and is unenforceable pursuant
to Section 14 of the Securities Act.

The Company intends to purchased and maintain insurance on behalf of all of
its directors and executive officers against liability asserted against or
incurred by them in their official capacities with the Company, whether or not
the Company is required or has the power to indemnify them against the same
liability.

Causes of action resulting from violations of federal or state securities
law shall be governed by such law.

BUSINESS COMBINATIONS

Under the MGCL, certain "business combinations" (including a merger,
consolidation, share exchange or, in certain circumstances, an asset transfer or
issuance or reclassification of equity securities) between a Maryland
corporation and any person who beneficially owns 10% or more of the voting power
of such corporation's shares or an affiliate of such 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
voting shares of such corporation (an "Interested Stockholder") or an affiliate
thereof, are prohibited for five years after the most recent date on which the
Interested Stockholder became an Interested Stockholder.  Thereafter, any such
business combination must be recommended by the board of directors of such
corporation and approved by the affirmative vote of at least (a) 80% of the
votes entitled to be cast by holders of outstanding shares of voting stock of
the corporation and (b) two-thirds of the votes entitled to be cast by holders
of voting shares of such corporation other than shares held by the Interested
Stockholder with whom (or with whose affiliate) the business combination is to
be effected, unless, among other conditions, the corporation's common
stockholders receive a minimum price (as defined in the MGCL) for their shares
and the consideration is received in cash or in the same form as previously paid
by the Interested Stockholder for its shares.  These provisions of the MGCL do
not 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.

CONTROL SHARE ACQUISITION STATUTE

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,
excluding shares owned by the acquiror, by officers or by directors who are
employees of the corporation.  "Control Shares" are voting shares which, if
aggregated with all other such shares previously acquired by the acquiror, or in
respect of which the acquiror is able to exercise or direct the exercise of
voting power (except solely by virtue of a revocable proxy), would entitle the
acquiror to exercise voting power in electing directors within one of the
following

51

ranges of voting power: (i) one-fifth or more but less than one-third, (ii) one-
third or more but less than a majority, or (iii) a majority or more of all
voting power. Control Shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained stockholder approval.
A "control share acquisition" means the acquisition of control shares, subject
to certain exceptions.

A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses),
may compel the board of directors of the corporation to call a special meeting
of stockholders to be held within 50 days of demand to consider the voting
rights of the shares.  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 at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute, then
subject to certain conditions and limitations, the corporation may redeem any or
all of the control shares (except those for which voting rights have previously
been approved) for fair value determined, without regard to the absence of
voting rights for the control shares, as of the date of the last control share
acquisition by the acquiror or of any meeting of stockholders at which the
voting rights of such 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 entitled to vote, all other
stockholders may exercise appraisal rights.  The fair value of the shares as
determined for purposes of such appraisal rights may not be less than the
highest price per share paid by the acquiror in the control share acquisition.

The control share acquisition statute does not apply to shares acquired in
a merger, consolidation or share exchange, if the corporation is a party to the
transaction, or to acquisitions approved or exempted by the Articles of
Incorporation or bylaws of the corporation.

The Articles of Incorporation and Bylaws of the Company contain a provision
exempting from the control share acquisition statute any and all acquisitions by
any person of the Company's capital stock.  There can be no assurance that such
provision will not be amended or eliminated at any time in the future.

AMENDMENT TO THE ARTICLES OF INCORPORATION

The Articles of Incorporation of the Company may be amended by the
affirmative vote by holders of a majority of the shares then outstanding and
entitled to vote thereon, without the concurrence of the Board of Directors,
provided, however, (i)  no amendment may be made which would change any rights
with respect to any outstanding class of securities by reducing the amount
payable thereon upon liquidation or by diminishing or eliminating any voting
rights pertaining thereto; (ii) the provisions pertaining to amending the
Articles of Incorporation and reorganizations shall not be amended, (iii) no
term or provision of the Articles of Incorporation may be added, amended or
repealed in any respect that would, in the determination of the Board of
Directors, cause the Company not to qualify as a REIT under the Code, (iv)
certain provisions of the Articles of Incorporation, including provisions
relating to the removal of directors, Independent Directors, preemptive rights
of holders of stock and the indemnification and limitation of liability of
officers and directors may not be amended or repealed and (v) provisions
imposing cumulative voting in the election of directors may not be added to the
Articles of Incorporation, unless, in each such case, such action is approved by
the affirmative vote of the holders of not less than a majority of all the votes
entitled to be cast thereon.  The Board of Directors may amend the Articles of
Incorporation (without the concurrence by the stockholders) only to enable the
Company to qualify as a real estate investment trust under the Code.

DISSOLUTION OF THE COMPANY

The dissolution of the Company must be approved by the affirmative vote of
the holders of not less than a majority of all of the votes entitled to be cast
on the matter.  Under the Articles of Incorporation, the Company will
automatically terminate and dissolve on January 30, 2008 (ten years after the
initial date of this Prospectus), unless the Listing occurs, in which event the
Company will automatically become a perpetual life entity.

52

ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS

The Bylaws of the Company provide that (a) with respect to an annual
meeting of stockholders, nominations of persons for election to the Board of
Directors and the proposal of business to be considered by stockholders may be
made only (i) pursuant to the Company's notice of the meeting, (ii) by or at the
direction of the Board of Directors or (iii) by a stockholder who is entitled to
vote at the meeting and has complied with the advance notice procedures set
forth in the Bylaws and (b) with respect to special meetings of stockholders,
only the business specified in the Company's notice of meeting may be brought
before the meeting of stockholders and nominations of persons for election to
the Board of Directors may be made only (i) pursuant to the Company's notice of
the meeting, (ii) by or at the direction of the Board of Directors or (iii)
provided that the Board of Directors has determined that directors shall be
elected at such meeting, by a stockholder who is entitled to vote at the meeting
and has complied with the advance notice provisions set forth in the Bylaws.

MEETING OF STOCKHOLDERS

The Company's Bylaws provide that annual meetings of stockholders shall be
held on a date and at the time set by the Board of Directors.  The Board of
Directors (including the Independent Directors) will take reasonable steps to
ensure that the annual stockholders meeting shall be set within a reasonable
period (not less than 30 days) following delivery of the annual report.  Special
meetings of the stockholders may be called by (i) the President of the Company,
(ii) the Chief Executive Officer or (iii) the Board of Directors.  As permitted
by the MGCL, the Bylaws of the Company provide that special meetings must be
called by the Secretary of the Company upon the written request of the holders
of shares entitled to cast not less than a majority of all votes entitled to be
cast at the meeting.

OPERATIONS

The Articles of Incorporation require the Board of Directors generally to
use its best efforts to cause the Company to qualify as a REIT.  Although the
Company has opted to not be governed by Maryland's business combination and
control share acquisition statutes, if the Company's Articles of Incorporation
and Bylaws are amended to include them, such provisions of the MGCL could delay,
defer or prevent a transaction or a change in control of the Company that might
involve a premium price for holders of Shares or otherwise be in their best
interests.

INSPECTION OF BOOKS AND RECORDS

The Advisor will keep, or cause to be kept, on behalf of the Company, full
and true books of account on an accrual basis of accounting, in accordance with
generally accepted accounting principles.  All of such books of account,
together with all other records of the Company, including a copy of the Articles
of Incorporation and any amendments thereto, will at all times be maintained at
the principal office of the Company, and will be open to inspection,
examination, and, for a reasonable charge, duplication upon reasonable notice
and during normal business hours by a stockholder or his agent.

As a part of its books and records, the Company will maintain at its
principal office an alphabetical list of names of stockholders, along with their
addresses and telephone numbers and the number of Shares held by each
stockholder.  Such list shall be updated at least quarterly and shall be
available for inspection at the Company's home office by a stockholder or his or
her designated agent upon such stockholder's request.  Such list also shall be
mailed to any stockholder requesting the list within 10 days of a request.  The
Company may require the stockholder requesting the stockholder list to represent
that the list is not requested for a commercial purpose unrelated to the
stockholder's interest in the Company and that he or she will not make any
commercial distribution of such list or the information disclosed through such
inspection.  The Company may impose a reasonable charge for expenses incurred in
reproducing such list.  The list may not be sold or used for commercial
purposes.

RESTRICTIONS ON "ROLL-UP" TRANSACTIONS

In connection with a proposed "Roll-Up Transaction," which, in general
terms, is any transaction involving the acquisition, merger, conversion, or
consolidation, directly or indirectly, of the Company and the issuance of
securities of 

53

an entity that would be created or would survive after the
successful completion of the Roll-Up Transaction (a "Roll-Up Entity"), an
appraisal of all of the Company's properties shall be obtained from an
independent appraiser.  In order to qualify as an independent appraiser for this
purpose(s), the person or entity shall have no material current or prior
business or personal relationship with the Advisor or Directors and shall be
engaged to a substantial extent in the business of rendering opinions regarding
the value of assets of the type held by the Company.  The Company's properties
shall be appraised on a consistent basis, and the appraisal shall be based on
the evaluation of all relevant information and shall indicate the value of the
Company's properties as of a date immediately prior to the announcement of the
proposed Roll-Up Transaction.  The appraisal shall assume an orderly liquidation
of properties over a 12-month period.  The terms of the engagement of such
Independent Expert shall clearly state that the engagement is for the benefit of
the Company and the stockholders.  A summary of the independent appraisal,
indicating all material assumptions underlying the appraisal, shall be included
in a report to stockholders in connection with a proposed Roll-Up Transaction.
In connection with a proposed Roll-Up Transaction, the person sponsoring the
Roll-Up Transaction shall offer to stockholders who vote against the proposal
the choice of:

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

(ii)  one of the following:

a.  remaining stockholders of the Company and preserving their
interests therein on the same terms and conditions as existed previously;
or

b.  receiving cash in an amount equal to the stockholder's pro
rata share of the appraised value of the net assets of the Company.

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

(i) which would result in the stockholders having democracy rights in the
Roll-Up Entity that are less than those provided in the Company's Articles of
Incorporation and described elsewhere in this Prospectus, including rights with
respect to the election and removal of Directors, annual reports, annual and
special meetings, amendment of the Articles of Incorporation, and dissolution of
the Company;

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

(iii)  in which investor's rights to access of records of the Roll-Up
Entity will be less than those provided in the Company's Articles of
Incorporation and described in "Inspection of Books and Records," above; or

(iv) in which any of the costs of the Roll-Up Transaction would be borne by
the Company if the Roll-Up Transaction is not approved by the stockholders.

54

FEDERAL INCOME TAX CONSIDERATIONS

The following is a summary of material federal income tax considerations
that may be relevant to a prospective holder of Shares in the Company.  Hunton &
Williams has acted as counsel to the Company and has reviewed this summary and
is of the opinion that it fairly summarizes the federal income tax
considerations that will be material to a holder of Shares. The discussion
contained herein does not address all aspects of taxation that may be relevant
to particular shareholders in light of their personal investment or tax
circumstances, or to certain types of shareholders (including insurance
companies, tax-exempt organizations, financial institutions or broker-dealers,
foreign corporations, and persons who are not citizens or residents of the
United States) subject to special treatment under the federal income tax laws.

The statements in this discussion and the opinion of Hunton & Williams are
based on current provisions of the Code, existing, temporary, and currently
proposed Treasury Regulations promulgated under the Code, the legislative
history of the Code, existing administrative rulings and practices of the
Service, and judicial decisions.  No assurance can be given that future
legislative, judicial, or administrative actions or decisions, which may be
retroactive in effect, will not affect the accuracy of any statements in this
Prospectus with respect to the transactions entered into or contemplated prior
to the effective date of such changes.

EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OF THE PURCHASE, OWNERSHIP, AND
SALE OF SHARES AND OF THE COMPANY'S 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.

TAXATION OF THE COMPANY

The Company currently has in effect an election to be taxed as a pass-
through entity under Subchapter S of the Code, but intends to revoke its S
election on the day prior to the date on which the Offering commences.  The
Company plans to make an election to be taxed as a REIT under sections 856
through 860 of the Code, effective for its short taxable year beginning on the
day prior to the date on which the Offering commences and ending on December 31,
1998.  The Company believes that, commencing with such taxable year, it will be
organized and will operate in such a manner as to qualify for taxation as a REIT
under the Code, and the Company intends to continue to operate in such a manner,
but no assurance can be given that the Company will operate in a manner so as to
qualify or remain qualified as a REIT.

The sections of the Code relating to qualification and operation as a REIT
are highly technical and complex.  The following discussion sets forth the
material aspects of the Code sections that govern the federal income tax
treatment of a REIT and its shareholders.  The discussion is qualified in its
entirety by the applicable Code provisions, Treasury Regulations promulgated
thereunder, and administrative and judicial interpretations thereof, all of
which are subject to change prospectively or retroactively.

Hunton & Williams has acted as counsel to the Company in connection with
the Offering and the Company's election to be taxed as a REIT.  In the opinion
of Hunton & Williams, assuming that the elections and other procedural steps
described in this discussion of "Federal Income Tax Considerations" are
completed by the Company in a timely fashion,  the Company's organization and
proposed method of operation will enable it to qualify to be taxed as a REIT
under the Code commencing with the Company's short taxable year beginning the
day prior to the date on which the Offering commences and ending December 31,
1998, and for its future taxable years.  Investors should be aware, however,
that opinions of counsel are not binding upon the Service or any court.  It must
be emphasized that Hunton & Williams' opinion is based on various assumptions
and is conditioned upon certain representations made by the Company as to
factual matters, including representations regarding the nature of the Company's
properties and the future conduct of its business.  Such factual assumptions and
representations are described below in this discussion of "Federal Income Tax
Considerations" and are set out in the federal income tax opinion that has been
delivered by Hunton & Williams.  Moreover, such qualification and taxation as a
REIT depends upon the Company's ability to meet on a 

55

continuing basis, through actual annual operating results, distribution levels,
and share ownership, the various qualification tests imposed under the Code
discussed below. Hunton & Williams will not review the Company's compliance with
those tests on a continuing basis. Accordingly, no assurance can be given that
the actual results of the Company's operations for any particular taxable year
will satisfy such requirements. For a discussion of the tax consequences of
failure to qualify as a REIT, see "Failure to Qualify."

If the Company qualifies for taxation as a REIT, it generally will not be
subject to federal corporate income tax on its net income that is distributed
currently to its shareholders.  That treatment substantially eliminates the
"double taxation" (i.e., taxation at both the corporate and shareholder levels)
that generally results from investment in a corporation.  However, the Company
will be subject to federal income tax in the following circumstances.  First,
the Company will be taxed at regular corporate rates on any undistributed REIT
taxable income, including undistributed net capital gains.  Second, under
certain circumstances, the Company may be subject to the "alternative minimum
tax" on its undistributed items of tax preference, if any.  Third, if the
Company has (i) net income from the sale or other disposition of "foreclosure
property" that is held primarily for sale to customers in the ordinary course of
business or (ii) other nonqualifying income from foreclosure property, it will
be subject to tax at the highest corporate rate on such income.  Fourth, if the
Company has net income from prohibited transactions (which are, in general,
certain sales or other dispositions of property (other than foreclosure
property) held primarily for sale to customers in the ordinary course of
business), such income will be subject to a 100% tax.  Fifth, if the Company
should fail to satisfy the 75% gross income test or the 95% gross income test
(as discussed below), and nonetheless has maintained its qualification as a REIT
because certain other requirements have been met, it will be subject to a 100%
tax on the net income attributable to the greater of the amount by which the
Company fails the 75% or 95% gross income test. Sixth, if the Company should
fail to distribute during each calendar year at least the sum of (i) 85% of its
REIT ordinary income for such year, (ii) 95% of its REIT capital gain net income
for such year, and (iii) any undistributed taxable income from prior periods,
the Company would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed.  Seventh, the Company may
elect to retain and pay income tax on the net long-term capital gain it receives
in a taxable year.  Finally, if the Company acquires any asset from a C
corporation (i.e., a corporation generally subject to full corporate-level tax)
in a transaction in which the basis of the asset in the Company's hands is
determined by reference to the basis of the asset (or any other asset) in the
hands of the C corporation and the Company recognizes gain on the disposition of
such asset during the 10-year period beginning on the date on which such asset
was acquired by the Company, then to the extent of such asset's "built-in-gain"
(i.e., the excess of the fair market value of such asset at the time of
acquisition by the Company over the adjusted basis in such asset at such time),
such gain will be subject to tax at the highest regular corporate rate
applicable (as provided in Treasury Regulations that have not yet been
promulgated).  The results described above with respect to the recognition of
"built-in-gain" assume that the Company will make an election pursuant to IRS
Notice 88-19 if it were to make any such acquisition.

REQUIREMENTS FOR QUALIFICATION

The Code defines a REIT as a corporation, trust, or association (i) that is
managed by one or more trustees or directors; (ii) the beneficial ownership of
which is evidenced by transferable shares, or by transferable certificates of
beneficial interest; (iii) that would be taxable as a domestic corporation, but
for sections 856 through 860 of the Code; (iv) that is neither a financial
institution nor an insurance company subject to certain provisions of the Code;
(v) the beneficial ownership of which is held by 100 or more persons; (vi) not
more than 50% in value of the outstanding shares of which is owned, directly or
indirectly, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of each taxable year (the "5/50 Rule");
(vii) that makes an election to be a REIT (or has made such election for a
previous taxable year) and satisfies all relevant filing and other
administrative requirements established by the Service that must be met in order
to elect and maintain REIT status; (viii) that uses a calendar year for federal
income tax purposes and complies with the recordkeeping requirements of the Code
and Treasury Regulations promulgated thereunder; and (ix) that meets certain
other tests, described below, regarding the nature of its income and assets.
The Code provides that conditions (i) to (iv), inclusive, must be met during the
entire taxable year and that condition (v) must be met during at least 335 days
of a taxable year of 12 months, or during a proportionate part of a taxable year
of less than 12 months.  Conditions (v) and (vi) will not apply until after the
first taxable year for which an election is made by the Company to be taxed as a
REIT.  For purposes of determining stock ownership under the 5/50 Rule, a
supplemental unemployment compensation benefits plan, a private foundation, or a
portion of a trust permanently set aside or used exclusively for charitable
purposes generally is considered an individual.  A trust that is a qualified
trust under Code section 401(a), however, generally is not considered an
individual and beneficiaries of such 

56

trust are treated as holding shares of a REIT in proportion to their actuarial
interests in such trust for purposes of the 5/50 Rule.

The Company anticipates issuing sufficient Shares with sufficient diversity
of ownership pursuant to the Offering to allow it to satisfy requirements (v)
and (vi) after its 1998 taxable year.  In addition, the Company's Articles of
Incorporation provide for restrictions regarding transfer of Shares that are
intended to assist the Company in continuing to satisfy the share ownership
requirements described in clauses (v) and (vi) above.  Such transfer
restrictions are described in "Description of Capital Stock -- Articles of
Incorporation and Bylaw Provisions -- Restrictions on Ownership and Transfer."

The Company currently does not have any corporate subsidiaries, but may
have corporate subsidiaries in the future.  Code section 856(i) provides that a
corporation that is a "qualified REIT subsidiary" will not be treated as a
separate corporation, and all assets, liabilities, and items of income,
deduction, and credit of a "qualified REIT subsidiary" will be treated as
assets, liabilities, and items of income, deduction, and credit of the REIT.  A
"qualified REIT subsidiary" is a corporation, all of the capital stock of which
is owned by the REIT.  Thus, in applying the requirements described herein, any
qualified REIT subsidiaries of the Company will be ignored and all assets,
liabilities, and items of income, deduction, and credit of such subsidiaries
will be treated as assets, liabilities, and items of income, deduction, and
credit of the Company.

In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the gross
income of the partnership attributable to such share.  In addition, the assets
and gross income of the partnership will retain the same character in the hands
of the REIT for purposes of section 856 of the Code, including satisfying the
gross income and asset tests described below.  Thus, the Company's proportionate
share of the assets, liabilities and items of income of the Operating
Partnership will be treated as assets, liabilities and items of income of the
Company for purposes of applying the requirements described herein

Income Tests

In order for the Company to qualify and to maintain its qualification as a
REIT, two requirements relating to the Company's gross income must be satisfied
annually.  First, at least 75% of the Company's gross income (excluding gross
income from prohibited transactions) for each taxable year must consist of
defined types of income derived directly or indirectly from investments relating
to real property or mortgages on real property (including "rents from real
property" and, in certain circumstances, interest) or temporary investment
income.  Second, at least 95% of the Company's gross income (excluding gross
income from prohibited transactions) for each taxable year must be derived from
such real property or temporary investments, and from dividends, other types of
interest, and gain from the sale or disposition of stock or securities, or from
any combination of the foregoing.   The specific application of these tests to
the Company is discussed below.

The rent received by the Company from its tenants ("Rent") will qualify as
"rents from real property" in satisfying the gross income requirements for a
REIT described above only if several conditions are met.  First, the amount of
rent 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 receipts or sales.  Second, the Code provides
that rents received from a tenant will not qualify as "rents from real property"
in satisfying the gross income tests if the Company, or a direct or indirect
owner of 10% or more of the Company, directly or constructively owns 10% or more
of such tenant (a "Related Party Tenant").  Third, if rent attributable to
personal property, leased in connection with a lease of real property, is
greater than 15% of the total rent received under the lease, then the portion of
rent attributable to such personal property will not qualify as "rents from real
property."  Finally, for the Rent to qualify as "rents from real property," the
Company generally must not operate or manage its properties or furnish or render
services to the tenants of such properties, other than through an "independent
contractor" who is adequately compensated and from whom the Company derives no
revenue.  The "independent contractor" requirement, however, does not apply to
the extent the services provided by the Company are "usually or customarily
rendered" in connection with the rental of space for occupancy only and are not
otherwise considered "rendered to the occupant."  In addition, The Company may
render a de minimus amount of 

57

noncustomary services to its tenants, or manage or operate property, as long as
the amount received with respect to the services or management does not exceed
1% of the Company's income from the property.

The Company has represented that it will not charge Rent for any portion of
any property that is based, in whole or in part, on the income or profits of any
person to the extent that the receipt of such Rent would jeopardize the
Company's status as a REIT.  In addition, the Company has represented that, to
the extent that it receives Rent from a Related Party Tenant, such Rent will not
cause the Company to fail to satisfy either the 75% or 95% gross income test.
The Company also has represented that it will not allow the Rent attributable to
personal property leased in connection with any lease of real property to exceed
15% of the total Rent received under the lease, if the receipt of such Rent
would cause the Company to fail to satisfy either the 75% or 95% gross income
test.

The Company may provide certain services to its tenants.  The Company
believes and has represented that all such services will be considered "usually
or customarily rendered" in connection with the rental of space for occupancy
only and will not otherwise be considered "rendered to the occupant," so that
the provision of such services will not jeopardize the qualification of the Rent
as "rents from real property."  In the case of any services that are not "usual
and customary" under the foregoing rules, the Company intends to employ
qualifying independent contractors to provide such services to the extent that
the provision of such services would cause the Company to fail to satisfy either
the 75% or 95% gross income test.

If any portion of the Rent does not qualify as "rents from real property"
because the Rent attributable to personal property leased in connection with any
lease of real property exceeds 15% of the total Rent received under the lease
for a taxable year, the portion of the Rent that is attributable to personal
property will not be qualifying income for purposes of either the 75% or 95%
gross income test.  Thus, if the Rent attributable to personal property, plus
any other income received by the Company during a taxable year that is not
qualifying income for purposes of the 95% gross income test, exceeds 5% of the
Company's gross income during such year, the Company likely would lose its REIT
status.  If, however, any portion of the Rent received under a lease does not
qualify as "rents from real property" because either (i) the Rent is considered
based on the income or profits of any person or (ii) the tenant is a Related
Party Tenant, none of the Rent received by the Company under such lease would
qualify as "rents from real property."  In that case, if the Rent received by
the Company under such lease, plus any other income received by the Company
during the taxable year that is not qualifying income for purposes of the 95%
gross income test, exceeds 5% of the Company's gross income for such year, the
Company likely would lose its REIT status.  Finally, if any portion of the Rent
does not qualify as "rents from real property" because the Company furnishes
noncustomary services with respect to a property other than through a qualifying
independent contractor, and the amount received with respect to the services
exceeds 1% of the Company's income from the property, none of the Rent received
by the Company with respect to the related property would qualify as "rents from
real property."  In that case, if the Rent received by the Company with respect
to the related property, plus any other income received by the Company during
the taxable year that is not qualifying income for purposes of the 95% gross
income test, exceeds 5% of the Company's gross income for such year, the Company
would lose its REIT status.

In addition to the Rent, the Company's tenants will be required to pay
additional charges, such as late fees (the "Additional Charges").  To the extent
that the Additional Charges represent either (i) reimbursements of amounts that
a tenant is obligated to pay to third parties or (ii) penalties for nonpayment
or late payment of such amounts, the Additional Charges should qualify as "rents
from real property."  To the extent that Additional Charges represent interest
that is accrued on the late payment of the Rent or Additional Charges, such
Additional Charges should be treated as interest that qualifies for the 95%
gross income test, but not the 75% gross income test.

The term "interest" generally does not include any amount received or
accrued (directly or indirectly) if the determination of such amount depends 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 "interest"
solely by reason of being based on a fixed percentage or percentages of receipts
or sales.  Furthermore, to the extent that interest from a loan that is based on
the residual cash proceeds from sale of the property securing the loan
constitutes a "shared appreciation provision" (as defined in the Code), income
attributable to such participation feature will be treated as gain from the sale
of the secured property.

58

The net income derived from any prohibited transaction is subject to a 100%
tax.  The term "prohibited transaction" generally includes a sale or other
disposition (whether by the Company or the Operating Partnership) of property
(other than foreclosure property) that is held primarily for sale to customers
in the ordinary course of a trade or business.  The Company believes no asset
owned by the Company or the Operating Partnership will be held for sale to
customers and that a sale of any such asset will not be in the ordinary course
of business of the Company or the Operating Partnership.  Whether property is
held "primarily for sale to customers in the ordinary course of a trade or
business" depends, however, on the facts and circumstances in effect from time
to time, including those related to a particular property.  Nevertheless, the
Company will attempt to comply with the terms of safe-harbor provisions in the
Code prescribing when asset sales will not be characterized as prohibited
transactions.  Complete assurance cannot be given, however, that the Company can
comply with the safe-harbor provisions of the Code or avoid owning property that
may be characterized as property held "primarily for sale to customers in the
ordinary course of a trade or business."

The Company will be subject to tax at the maximum corporate rate on any
income from foreclosure property (other than income that would be qualified
income under the 75% gross income test), less expenses directly connected with
the production of such income.  However, gross income from such foreclosure
property will be qualifying income under the 75% and 95% gross income tests.
"Foreclosure property" is defined as any real property (including interests in
real property) and any personal property incident to such real property (i) that
is acquired by a REIT as the result of such REIT having bid in such property at
foreclosure, or having otherwise reduced such property to ownership or
possession by agreement or process of law, after there was a default (or default
was imminent) on a lease of such property or on an indebtedness that such
property secured and (ii) for which such REIT makes a proper election to treat
such property as foreclosure property.  However, a REIT will not be considered
to have foreclosed on a property where such REIT takes control of the property
as a mortgagee-in-possession and cannot receive any profit or sustain any loss
except as a creditor of the mortgagor.  Under the Code, property generally
ceases to be foreclosure property with respect to a REIT on the date that is two
years after the date such REIT acquired such property (or longer if an extension
is granted by the Secretary of the Treasury).  The foregoing grace period is
terminated and foreclosure property ceases to be foreclosure property on the
first day (i) on which a lease is entered into with respect to such property
that, by its terms, will give rise to income that does not qualify under the 75%
gross income test or any amount is received or accrued, directly or indirectly,
pursuant to a lease entered into on or after such day that will give rise to
income that does not qualify under the 75% gross income test, (ii) on which any
construction takes place on such property (other than completion of a building,
or any other improvement, where more than 10% of the construction of such
building or other improvement was completed before default became imminent) or
(iii) which is more than 90 days after the day on which such property was
acquired by the REIT and the property is used in a trade or business that is
conducted by the REIT (other than through an independent contractor from whom
the REIT itself does not derive or receive any income).

It is possible that, from time to time, the Company will enter into hedging
transactions with respect to one or more of its assets or liabilities.  Any such
hedging transactions could take a variety of forms, including interest rate swap
contracts, interest rate cap or floor contracts, futures or forward contracts,
and options.  To the extent that the Company enters into an interest rate swap
or cap contract, option, futures contract, forward rate agreement or similar
financial instrument to reduce its interest rate risk with respect to
indebtedness incurred or to be incurred to acquire or carry real estate assets,
any periodic income or gain from the disposition of such contract should be
qualifying income for purposes of the 95% gross income test, but not the 75%
gross income test.  To the extent that the Company hedges with other types of
financial instruments or in other situations, it may not be entirely clear how
the income from those transactions will be treated for purposes of the various
income tests that apply to REITs under the Code.  The Company intends to
structure any hedging transactions in a manner that does not jeopardize its
status as a REIT.

If the Company fails to satisfy one or both of the 75% or 95% gross income
tests for any taxable year, it nevertheless may qualify as a REIT for such year
if it is entitled to relief under certain provisions of the Code.  Those relief
provisions generally will be available if the Company's failure to meet such
tests is due to reasonable cause and not due to willful neglect, the Company
attaches a schedule of the sources of its income to its return, and any
incorrect information on the schedule was not due to fraud with intent to evade
tax.  It is not possible, however, to state whether in all circumstances the
Company would be entitled to the benefit of those relief provisions.  As
discussed above in "Federal Income Tax Considerations -- Taxation of the
Company," even if those relief provisions apply, a 100% tax would be imposed on
the net income attributable to the greater of the amount by which the Company
fails the 75% or 95% gross income test.

59

Asset Tests

The Company, at the close of each quarter of each taxable year, also must
satisfy two tests relating to the nature of its assets. First, at least 75% of
the value of the Company's total assets must be represented by cash or cash
items (including certain receivables), government securities, "real estate
assets," or, in cases where the Company raises new capital through stock or
long-term (at least five-year) debt offerings, temporary investments in stock or
debt instruments during the one-year period following the Company's receipt of
such capital.  The term "real estate assets" includes interests in real
property, interests in mortgages on real property to the extent the principal
balance of a mortgage does not exceed the value of the associated real property,
and shares of other REITs. For purposes of the 75% asset test, the term
"interest in real property" includes an interest in land and improvements
thereon, such as buildings or other inherently permanent structures (including
items that are structural components of such buildings or structures), a
leasehold of real property, and an option to acquire real property (or a
leasehold of real property).  Second, of the investments not included in the 75%
asset class, the value of any one issuer's securities owned by the Company may
not exceed 5% of the value of the Company's total assets and the Company may not
own more than 10% of any one issuer's outstanding voting securities (except for
its interests in the Operating Partnership and any qualified REIT subsidiary).

The Company has represented that (i) at least 75% of the value of its total
assets will be represented by real estate assets, cash and cash items (including
receivables), and government securities and (ii) it will not own (A) securities
of any one issuer the value of which exceeds 5% of the value of the Company's
total assets or (B) more than 10% of any one issuer's outstanding voting
securities (except for its interests in the Operating Partnership and any
qualified REIT subsidiary).  In addition, the Company has represented that it
will not acquire or dispose, or cause the Operating Partnership to acquire or
dispose, of assets in the future in a way that would cause it to violate either
asset test.

If the Company should fail to satisfy the asset tests at the end of a
calendar quarter, such a failure would not cause it to lose its REIT status if
(i) it satisfied the asset tests at the close of the preceding calendar quarter
and (ii) the discrepancy between the value of the Company's assets and the asset
test requirements arose from changes in the market values of its assets and was
not wholly or partly caused by an acquisition of one or more nonqualifying
assets.  If the condition described in clause (ii) of the preceding sentence
were not satisfied, the Company still could avoid disqualification by
eliminating any discrepancy within 30 days after the close of the calendar
quarter in which it arose.

Distribution Requirements

The Company, in order to avoid corporate income taxation of the earnings it
distributes, is required to distribute with respect to each taxable year
dividends (other than capital gain dividends and retained earnings) to its
shareholders in an aggregate amount at least equal to (i) the sum of (A) 95% of
its "REIT taxable income" (computed without regard to the dividends paid
deduction and its net capital gain) and (B) 95% of the net income (after tax),
if any, from foreclosure property, minus (ii) the sum of certain items of
noncash income.  Such distributions must be paid in the taxable year to which
they relate, or in the following taxable year if declared before the Company
timely files its federal income tax return for such year and if paid on or
before the first regular dividend payment date after such declaration. To the
extent that the Company does not distribute all of its net capital gain or
distributes at least 95%, but less than 100%, of its "REIT taxable income," as
adjusted, it will be subject to tax thereon at regular ordinary and capital
gains corporate tax rates. Furthermore, if the Company should fail to distribute
during each calendar year at least the sum of (i) 85% of its REIT ordinary
income for such year, (ii) 95% of its REIT capital gain income for such year,
and (iii) any undistributed taxable income from prior periods, the Company would
be subject to a 4% nondeductible excise tax on the excess of such required
distribution over the amounts actually distributed.  The Company may elect to
retain and pay income on the net long-term capital gain it receives in a taxable
year.  Any such retained capital gain will be treated as if it had been
distributed to the Company's shareholders for purposes of the 4% excise tax.
The Company intends to make timely distributions sufficient to satisfy the
annual distribution requirements.

It is possible that, from time to time, the Company may experience timing
differences between (i) the actual receipt of income and actual payment of
deductible expenses and (ii) the inclusion of that income and deduction of such
expenses in arriving at its REIT taxable income.  Further, it is possible that,
from time to time, the Company may be allocated a share of net capital gain
attributable to the sale of depreciated property that exceeds its allocable
share of cash attributable to that sale. Therefore, the Company may have less
cash than is necessary to meet its annual 95% 

60

distribution requirement or to avoid corporate income tax or the excise tax
imposed on certain undistributed income. In such a situation, the Company may
find it necessary to arrange for short-term (or possibly long-term) borrowings
or to raise funds through the issuance of additional Shares.

Under certain circumstances, the Company may be able to rectify a failure
to meet the distribution requirements for a year by paying "deficiency
dividends" to its shareholders in a later year, which may be included in the
Company's deduction for dividends paid for the earlier year.  Although the
Company may be able to avoid being taxed on amounts distributed as deficiency
dividends, it will be required to pay to the Service interest based upon the
amount of any deduction taken for deficiency dividends.

Recordkeeping Requirements

Pursuant to applicable Treasury Regulations, in order to be able to elect
to be taxed as a REIT, the Company must maintain certain records.  In addition,
in order to avoid a monetary penalty, the Company must request, on an annual
basis, certain information from its shareholders designed to disclose the actual
ownership of its outstanding shares.  The Company intends to comply with such
requirements.

Partnership Anti-Abuse Rule

The U.S. Department of the Treasury has issued a final regulation (the
"Anti-Abuse Rule") under the partnership provisions of the Code (the
"Partnership Provisions") that authorizes the Service, in certain abusive
transactions involving partnerships, to disregard the form of the transaction
and recast it for federal tax purposes as the Service deems appropriate. The
Anti-Abuse Rule applies where a partnership is formed or utilized in connection
with a transaction (or series of related transactions) with a principal purpose
of substantially reducing the present value of the partners' aggregate federal
tax liability in a manner inconsistent with the intent of the Partnership
Provisions.  The Anti-Abuse Rule states that the Partnership Provisions are
intended to permit taxpayers to conduct joint business (including investment)
activities though a flexible arrangement that accurately reflects the partners'
economic agreement and clearly reflects the partners' income without incurring
any entity-level tax.  The purposes for structuring a transaction involving a
partnership are determined based on all of the facts and circumstances,
including a comparison of the purported business purpose for a transaction and
the claimed tax benefits resulting from the transaction.  A reduction in the
present value of the partners' aggregate federal tax liability through the use
of a partnership does not, by itself, establish inconsistency with the intent of
the Partnership Provisions.

The Anti-Abuse Rule contains an example in which a corporation that elects
to be treated as a REIT contributes substantially all of the proceeds from a
public offering to a partnership in exchange for a general partnership interest.
The limited partners of the partnership contribute real property assets to the
partnership, subject to liabilities that exceed their respective aggregate bases
in such property.  In addition, some of the limited partners have the right,
beginning two years after the formation of the partnership, to require the
redemption of their limited partnership interests in exchange for cash or REIT
stock (at the REIT's option) equal to the fair market value of their respective
interests in the partnership at the time of the redemption.  The example
concludes that the use of the partnership is not inconsistent with the intent of
the Partnership Provisions and, thus, cannot be recast by the Service.  However,
the redemption rights associated with the OP Units will not conform in all
respects to the redemption rights contained in the foregoing example.  Moreover,
the Anti-Abuse Rule is extraordinarily broad in scope and is applied based on an
analysis of all of the facts and circumstances.  As a result, there can be no
assurance that the Service will not attempt to apply the Anti-Abuse Rule to the
Company.  If the conditions of the Anti-Abuse Rule are met, the Service is
authorized to take appropriate enforcement action, including disregarding the
Operating Partnership for federal tax purposes or treating one or more of the
partners as nonpartners.  Any such action potentially could jeopardize the
Company's status as a REIT.

FAILURE TO QUALIFY

If the Company fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, the Company will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Distributions to the Company's shareholders in any year
in which the Company fails to qualify will not be deductible by the Company nor
will they be required to be made.  In such event, to the extent of current and

61

accumulated earnings and profits, all distributions to shareholders will be
taxable as ordinary income and, subject to certain limitations of the Code,
corporate distributees may be eligible for the dividends received deduction.
Unless entitled to relief under specific statutory provisions, the Company also
will be disqualified from taxation as a REIT for the four taxable years
following the year during which the Company ceased to qualify as a REIT.  It is
not possible to state whether in all circumstances the Company would be entitled
to such statutory relief.

TAXATION OF TAXABLE U.S. SHAREHOLDERS

As long as the Company qualifies as a REIT, distributions made to the
Company's taxable U.S. shareholders out of current or accumulated earnings and
profits (and not designated as capital gain dividends or retained capital gains)
will be taken into account by such U.S. shareholders as ordinary income and will
not be eligible for the dividends received deduction generally available to
corporations. As used herein, the term "U.S. shareholder" means a holder of
Shares that for U.S. federal income tax purposes is (i) a citizen or resident of
the U.S., (ii) a corporation, partnership, or other entity created or organized
in or under the laws of the U.S. or of any political subdivision thereof, or
(iii) an estate whose income from sources without the United States is
includible in gross income for U.S. federal income tax purposes regardless of
its connection with the conduct of a trade or business within the United States,
or (iv) any trust with respect to which (A) a U.S. court is able to exercise
primary supervision over the administration of such trust and (B) one or more
U.S. fiduciaries have the authority to control all substantial decisions of the
trust.

Distributions that are designated as capital gain dividends will be taxed
as long-term capital gains (to the extent they do not exceed the Company's
actual net capital gain for the taxable year) without regard to the period for
which the shareholder has held his Shares.  However, corporate shareholders may
be required to treat up to 20% of certain capital gain dividends as ordinary
income.  The Company may elect to retain and pay income tax on the net long-term
capital gain if received in a taxable year.  In that case, the Company's
shareholders would include in income as long-term capital gain their
proportionate share of the Company's retained long-term capital gain.  In
addition, the shareholders would be deemed to have paid their proportionate
share of the tax paid by the Company, which amount would be credited or refunded
to the shareholders.  Each shareholder's basis in his Shares would be increased
by the amount of the undistributed long-term capital gain included in the
shareholder's income, less the shareholder's share of the tax paid by the
Company.

Distributions in excess of current and accumulated earnings and profits
will not be taxable to a shareholder to the extent that they do not exceed the
adjusted basis of the shareholder's Shares, but rather will reduce the adjusted
basis of such Shares. To the extent that such distributions in excess of current
and accumulated earnings and profits exceed the adjusted basis of a
shareholder's Shares, such distributions will be included in income as long-term
capital gain (or short-term capital gain if the Shares have been held for one
year or less), assuming the Shares are capital assets in the hands of the
shareholder. In addition, any distribution declared by the Company in October,
November, or December of any year and payable to a shareholder of record on a
specified date in any such month shall be treated as both paid by the Company
and received by the shareholder on December 31 of such year, provided that the
distribution is actually paid by the Company during January of the following
calendar year.

Shareholders may not include in their individual income tax returns any net
operating losses or capital losses of the Company. Instead, such losses would be
carried over by the Company for potential offset against its future income
(subject to certain limitations).  Taxable distributions from the Company and
gain from the disposition of the Shares will not be treated as passive activity
income and, therefore, shareholders generally will not be able to apply any
"passive activity losses" (such as losses from certain types of limited
partnerships in which a shareholder is a limited partner) against such income.
In addition, taxable distributions from the Company generally will be treated as
investment income for purposes of the investment interest limitations.  Capital
gains from the disposition of Shares (or distributions treated as such),
however, will be treated as investment income only if the shareholder so elects,
in which case such capital gains will be taxed at ordinary income rates.  The
Company will notify shareholders after the close of the Company's taxable year
as to the portions of the distributions attributable to that year that
constitute ordinary income, return of capital, and capital gain.

62

TAXATION OF SHAREHOLDERS ON THE DISPOSITION OF THE SHARES

In general, any gain or loss realized upon a taxable disposition of Shares
by a shareholder who is not a dealer in securities will be treated as long-term
capital gain or loss if such Shares have been held for more than one year and
otherwise as short-term capital gain or loss.  However, any loss upon a sale or
exchange of Shares by a shareholder who has held such shares for six months or
less (after applying certain holding period rules), will be treated as a long-
term capital loss to the extent of distributions from the Company required to be
treated by such shareholder as long-term capital gain.  All or a portion of any
loss realized upon a taxable disposition of Shares may be disallowed if other
Shares are purchased within 30 days before or after the disposition.

CAPITAL GAINS AND LOSSES

A capital asset generally must be held for more than one year in order for
gain or loss derived from its sale or exchange to be treated as long-term
capital gain or loss.  The highest marginal individual income tax rate is 39.6%.
The maximum tax rate on net capital gains applicable to noncorporate taxpayers
is 28% for sales and exchanges of assets held for more than one year, but not
more than 18 months, and 20% for sales and exchanges of assets held for more
than 18 months.  The maximum tax rate applicable to noncorporate taxpayers on
long-term capital gain from the sale of "Section 1250 property" (depreciable
real property) is 25% to the extent such gain would have been treated as
ordinary income if the property were "Section 1245 property."  With respect to
distributions designated by the Company as capital gain dividends and deemed
distributions of retained capital gains, the Company may designate (subject to
certain limits) whether such a distribution is taxable to shareholders at a 20%,
25% or 28% rate.  Thus, the tax rate differential between capital gain and
ordinary income for individuals may be significant.  In addition, the
characterization of income as capital or ordinary may affect the deductibility
of capital losses.  Capital losses not offset by capital gains may be deducted
against an individual's ordinary income only up to a maximum annual amount of
$3,000.  Unused capital losses may be carried forward.  All net capital gain of
a corporate taxpayer is subject to tax at ordinary corporate rates. A corporate
taxpayer can deduct capital losses only to the extent of capital gains, with
unused losses being carried back three years and forward five years.

INFORMATION REPORTING REQUIREMENTS AND BACKUP WITHHOLDING

The Company will report to its U.S. shareholders and to the Service the
amount of distributions paid during each calendar year, and the amount of tax
withheld, if any.  Under the backup withholding rules, a shareholder may be
subject to backup withholding at the rate of 31% with respect to distributions
paid unless such holder (i) is a corporation or comes within certain other
exempt categories and, when required, demonstrates this fact or (ii) provides a
taxpayer identification number, certifies as to no loss of exemption from backup
withholding, and otherwise complies with the applicable requirements of the
backup withholding rules.  A shareholder who does not provide the Company with
his correct taxpayer identification number also may be subject to penalties
imposed by the Service.  Any amount paid as backup withholding will be
creditable against the shareholder's income tax liability.  In addition, the
Company may be required to withhold a portion of capital gain distributions to
any shareholders who fail to certify their nonforeign status to the Company.
The Service has issued final regulations regarding the backup withholding rules
as applied to Non-U.S. shareholders.  Those regulations would alter the current
system of backup withholding compliance and will be effective for distributions
made after December 31, 1998.  See "--Taxation of Non-U.S. shareholders."

TAXATION OF TAX-EXEMPT SHAREHOLDERS

Tax-exempt entities, including qualified employee pension and profit
sharing trusts and individual retirement accounts ("Exempt Organizations"),
generally are exempt from federal income taxation. However, they are subject to
taxation on their unrelated business taxable income ("UBTI").  While many
investments in real estate generate UBTI, the Service has issued a published
ruling that dividend distributions from a REIT to an exempt employee pension
trust do not constitute UBTI, provided that the shares of the REIT are not
otherwise used in an unrelated trade or business of the exempt employee pension
trust.  Based on that ruling, amounts distributed by the Company to Exempt
Organizations generally should not constitute UBTI.  However, if an Exempt
Organization finances its acquisition of Shares with debt, a portion of its
income from the Company will constitute UBTI pursuant to the "debt-financed
property" rules.  Furthermore, social clubs, voluntary employee benefit
associations, supplemental unemployment benefit trusts, and qualified group
legal services plans that are exempt from taxation under paragraphs (7), (9),
(17), and (20), respectively, 

63

of Code section 501(c) are subject to different UBTI rules, which generally will
require them to characterize distributions from the Company as UBTI. In
addition, in certain circumstances, a pension trust that owns more than 10% of
the Company's shares is required to treat a percentage of the dividends from the
Company as UBTI (the "UBTI Percentage"). The UBTI Percentage is the gross income
derived by the Company from an unrelated trade or business (determined as if the
Company were a pension trust) divided by the gross income of the Company for the
year in which the dividends are paid. The UBTI rule applies to a pension trust
holding more than 10% of the Company's stock only if (i) the UBTI Percentage is
at least 5%, (ii) the Company qualifies as a REIT by reason of the modification
of the 5/50 Rule that allows the beneficiaries of the pension trust to be
treated as holding shares of the Company in proportion to their actuarial
interests in the pension trust, and (iii) either (A) one pension trust owns more
than 25% of the value of the Company's shares or (B) a group of pension trusts
individually holding more than 10% of the value of the Company's shares
collectively owns more than 50% of the value of the Company's shares. Because
the Ownership Limitation prohibits any shareholder from owning more than 9.8% of
the number of outstanding Shares or more than 9.8% of the number of outstanding
Shares of any class of preferred stock, no pension trust should hold more than
10% of the value of the Company's Shares.

TAXATION OF NON-U.S. SHAREHOLDERS

The rules governing U.S. federal income taxation of nonresident alien
individuals, foreign corporations, foreign partnerships, and other foreign
shareholders (collectively, "Non-U.S. shareholders") are complex and no attempt
will be made herein to provide more than a summary of such rules.  PROSPECTIVE
NON-U.S. SHAREHOLDERS SHOULD CONSULT WITH THEIR OWN TAX ADVISORS TO DETERMINE
THE IMPACT OF FEDERAL, STATE, AND LOCAL INCOME TAX LAWS WITH REGARD TO AN
INVESTMENT IN THE SHARES, INCLUDING ANY REPORTING REQUIREMENTS.

Distributions to Non-U.S. shareholders that are not attributable to gain
from sales or exchanges by the Company of U.S. real property interests and are
not designated by the Company as capital gains dividends or retained capital
gains will be treated as dividends of ordinary income to the extent that they
are made out of current or accumulated earnings and profits of the Company.
Such distributions ordinarily will be subject to a withholding tax equal to 30%
of the gross amount of the distribution unless an applicable tax treaty reduces
or eliminates that tax.  However, if income from the investment in the Shares is
treated as effectively connected with the Non-U.S. Shareholder's conduct of a
U.S. trade or business, the Non-U.S. Shareholder generally will be subject to
federal income tax at graduated rates, in the same manner as U.S. shareholders
are taxed with respect to such distributions (and also may be subject to the 30%
branch profits tax in the case of a Non-U.S. Shareholder that is a non-U.S.
corporation).  The Company expects to withhold U.S. income tax at the rate of
30% on the gross amount of any such distributions made to a Non-U.S. Shareholder
unless (i) a lower treaty rate applies and any required form evidencing
eligibility for that reduced rate is filed with the Company or (ii) the Non-U.S.
Shareholder files an IRS Form 4224 with the Company claiming that the
distribution is effectively connected income.  The Service has issued
regulations that modify the manner in which the Company complies with the
withholding requirements.  Those regulations are effective for distributions
made after December 31, 1998.  Distributions in excess of current and
accumulated earnings and profits of the Company will not be taxable to a
shareholder to the extent that such distributions do not exceed the adjusted
basis of the shareholder's Shares, but rather will reduce the adjusted basis of
such shares. To the extent that distributions in excess of current and
accumulated earnings and profits exceed the adjusted basis of a Non-U.S.
Shareholder's Shares, such distributions will give rise to tax liability if the
Non-U.S. Shareholder would otherwise be subject to tax on any gain from the sale
or disposition of his Shares, as described below.  Because it generally cannot
be determined at the time a distribution is made whether or not such
distribution will be in excess of current and accumulated earnings and profits,
the entire amount of any distribution normally will be subject to withholding at
the same rate as a dividend.  However, amounts so withheld are refundable to the
extent it is determined subsequently that such distribution was, in fact, in
excess of current and accumulated earnings and profits of the Company.

The Company is required to withhold 10% of any distribution in excess of
its current and accumulated earnings and profits.  Consequently, although the
Company intends to withhold at a rate of 30% on the entire amount of any
distribution, to the extent that the Company does not do so, any portion of a
distribution not subject to withholding at a rate of 30% will be subject to
withholding at a rate of 10%.

64

For any year in which the Company qualifies as a REIT, distributions that
are attributable to gain from sales or exchanges by the Company of U.S. real
property interests will be taxed to a Non-U.S. Shareholder under the provisions
of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA").  Under
FIRPTA, distributions attributable to gain from sales of U.S. real property
interests are taxed to a Non-U.S. Shareholder as if such gain were effectively
connected with a U.S. business.  Non-U.S. shareholders thus would be taxed at
the normal capital gain rates applicable to U.S. shareholders (subject to
applicable alternative minimum tax and a special alternative minimum tax in the
case of nonresident alien individuals).  Distributions subject to FIRPTA also
may be subject to the 30% branch profits tax in the hands of a non-U.S.
corporate shareholder not entitled to treaty relief or exemption. The Company is
required to withhold 35% of any distribution that is or could be designated by
the Company as a capital gains dividend.  The amount withheld is creditable
against the Non-U.S. Shareholder's FIRPTA tax liability.

Gain recognized by a Non-U.S. Shareholder upon a sale of his Shares
generally will not be taxed under FIRPTA if the Company is a "domestically
controlled REIT," defined generally as a REIT in which at all times during a
specified testing period less than 50% in value of the stock was held directly
or indirectly by non-U.S. persons.  However, no assurance can be given that the
Company will be a "domestically controlled REIT." Furthermore, gain not subject
to FIRPTA will be taxable to a Non-U.S. Shareholder if (i) investment in Shares
is effectively connected with the Non-U.S. Shareholder's U.S. trade or business,
in which case the Non-U.S. Shareholder will be subject to the same treatment as
U.S. shareholders with respect to such gain, or (ii) the Non-U.S. Shareholder is
a nonresident alien individual who was present in the U.S. for 183 days or more
during the taxable year and certain other conditions apply, in which case the
nonresident alien individual will be subject to a 30% tax on the individual's
capital gains.  If the gain on the sale of Shares were to be subject to taxation
under FIRPTA, the Non-U.S. Shareholder would be subject to the same treatment as
U.S. shareholders with respect to such gain (subject to applicable alternative
minimum tax, a special alternative minimum tax in the case of nonresident alien
individuals, and the possible application of the 30% branch profits tax in the
case of non-U.S. corporations).

OTHER TAX CONSEQUENCES

The Company, the Operating Partnership, or the Company's shareholders may
be subject to state or local taxation in various state or local jurisdictions,
including those in which it or they own property, transact business, or reside.
The state and local tax treatment of the Company and its shareholders may not
conform to the federal income tax consequences discussed above.  CONSEQUENTLY,
PROSPECTIVE SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE
EFFECT OF STATE AND LOCAL TAX LAWS ON AN INVESTMENT IN THE COMPANY.

TAX ASPECTS OF THE OPERATING PARTNERSHIP

The following discussion summarizes certain federal income tax
considerations applicable to the Company's direct or indirect investment in the
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

The Company will be entitled to include in its income its distributive
share of the Operating Partnership's income and to deduct its distributive share
of the Operating Partnership's losses only if the Operating Partnership is
classified for federal income tax purposes as a partnership rather than as a
corporation or an association taxable as a corporation.  An entity will be
classified as a partnership rather than as a corporation or an association
taxable as a corporation for federal income tax purposes if the entity (i) is
treated as a partnership under Treasury regulations, effective January 1, 1997,
relating to entity classification (the "Check-the-Box Regulations") and (ii) is
not a "publicly traded" partnership.  In general, under the Check-the-Box
Regulations, an unincorporated entity with at least two members may elect to be
classified either as an association taxable as a corporation or as a
partnership.  If such an entity fails to make an election, it generally will be
treated as a partnership for federal income tax purposes.  The 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.

65

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).  A publicly traded partnership
will be treated as a corporation for federal income tax purposes unless at least
90% of such partnership's gross income for a taxable year consists of
"qualifying income" under Section 7704(d) of the Code, which generally includes
any income that is qualifying income for purposes of the 95% gross income test
applicable to REITs (the "90% Passive-Type Income Exception").  See "--
Requirements for Qualification -- Income Tests."  The U.S. Treasury Department
has issued regulations (the "PTP Regulations") that provide limited safe harbors
from the definition of a publicly traded partnership.  Pursuant to one of those
safe harbors (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 (i) all interests in the partnership were issued in a
transaction (or transactions) that was not required to be registered under the
Securities Act of 1933, as amended, and (ii) 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 (i.e., 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 interest
(direct or indirect) 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.  The Operating Partnership qualifies for the Private
Placement Exclusion.  If the Operating Partnership is considered a publicly
traded partnership under the PTP Regulations because it is deemed to have more
than 100 partners, the Operating Partnership should not be treated as a
corporation because it should be eligible for the 90% Passive-Type Income
Exception.

The Company has not requested, and does not intend to request, a ruling
from the Service that the Operating Partnership will be classified as a
partnership for federal income tax purposes.  Instead, Hunton & Williams is of
the opinion that, based on certain factual assumptions and representations, the
Operating Partnership will be treated for federal income tax purposes as a
partnership and not as a corporation or an association taxable as a corporation,
or as a publicly traded partnership.  Unlike a tax ruling, an opinion of counsel
is not binding upon the Service, and no assurance can be given that the Service
will not challenge the status of the Operating Partnership as a partnership for
federal income tax purposes.  If such challenge were sustained by a court, the
Operating Partnership would be treated as a corporation for federal income tax
purposes, as described below.  In addition, the opinion of Hunton & Williams is
based on existing law, which is to a great extent the result of administrative
and judicial interpretation.  No assurance can be given that administrative or
judicial changes would not modify the conclusions expressed in the opinion.

If for any reason the Operating Partnership were taxable as a corporation,
rather than as a partnership, for federal income tax purposes, the Company would
not be able to qualify as a REIT.  See "Federal Income Tax Considerations --
Requirements for Qualification -- Income Tests" and "-- Requirements for
Qualification -- Asset Tests." In addition, any change in the Operating
Partnership's status for tax purposes might be treated as a taxable event, in
which case the Company might incur a tax liability without any related cash
distribution. See "Federal Income Tax Considerations -- Requirements for
Qualification -- Distribution Requirements." Further, items of income and
deduction of the Operating Partnership would not pass through to its partners,
and its partners would be treated as shareholders for tax purposes.
Consequently, the Operating Partnership would be required to pay income tax at
corporate tax rates on its net income, and distributions to its partners would
constitute dividends that would not be deductible in computing the Operating
Partnership's taxable income.

Income Taxation of the Operating Partnerships and its Partners

Partners, Not a Partnership, Subject to Tax.  A partnership is not a
taxable entity for federal income tax purposes.  Rather, the Company will be
required to take into account its allocable share of the Operating Partnership's
income, gains, losses, deductions, and credits for any taxable year of the
Operating Partnership ending within or with the taxable year of the Company,
without regard to whether the Company has received or will receive any
distribution from the Operating Partnership.

Partnership Allocations.  Although a partnership agreement generally will
determine the allocation of income and losses among partners, such allocations
will be disregarded for tax purposes under section 704(b) of the Code if they do
not comply with the provisions of section 704(b) of the 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 partners' interests in the partnership, which
will be determined by taking into account all of the facts 

66

and circumstances relating to the economic arrangement of the partners with
respect to such item. The Operating Partnership's allocations of taxable income
and loss are intended to comply with the requirements of section 704(b) of the
Code and the Treasury Regulations promulgated thereunder.

Tax Allocations With Respect to Contributed Properties.  Pursuant to
section 704(c) of the 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 such 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.  The Treasury Department has issued
regulations requiring partnerships to use a "reasonable method" for allocating
items affected by section 704(c) of the Code and outlining several reasonable
allocation methods.  The Operating Partnership plans to elect to use the
traditional method for allocating Code section 704(c) items with respect to any
properties it acquires in exchange for OP Units.

Under the Operating Partnership Agreement, depreciation or amortization
deductions of the Operating Partnership generally will be allocated among the
partners in accordance with their respective interests in the Operating
Partnership, except to the extent that the Operating Partnership is required
under Code section 704(c) to use a method for allocating tax depreciation
deductions attributable to its properties that results in the Company receiving
a disproportionately large share of such deductions.  Depending on the
allocation method elected under Code section 704(c), it is possible that the
Company (i) may be allocated lower amounts of depreciation deductions for tax
purposes with respect to contributed properties than would be allocated to the
Company if such properties were to have a tax basis equal to their fair market
value at the time of contribution and (ii) may be allocated taxable gain in the
event of a sale of such contributed properties in excess of the economic profit
allocated to the Company as a result of such sale.  These allocations may cause
the Company to recognize taxable income in excess of cash proceeds, which might
adversely affect the Company's ability to comply with the REIT distribution
requirements, although the Company does not anticipate that this event will
occur.  The foregoing principles also will affect the calculation of the
Company's earnings and profits for purposes of determining which portion of the
Company's distributions is taxable as a dividend.  The allocations described in
this paragraph may result in a higher portion of the Company's distributions
being taxed as a dividend than would have occurred had the Company purchased
such properties for cash.

Basis in Operating Partnership Interest.  The Company's adjusted tax basis
in its partnership interest in the Operating Partnership generally is equal to
(i) the amount of cash and the basis of any other property contributed to the
Operating Partnership by the Company, (ii) increased by (A) its allocable share
of the Operating Partnership's income and (B) its allocable share of
indebtedness of the Operating Partnership, and (iii) reduced, but not below
zero, by (A) the Company's allocable share of the Operating Partnership's loss
and (B) the amount of cash distributed to the Company, including constructive
cash distributions resulting from a reduction in the Company's share of
indebtedness of the Operating Partnership.

If the allocation of the Company's distributive share of the Operating
Partnership's loss would reduce the adjusted tax basis of the Company's
partnership interest in the Operating Partnership below zero, the recognition of
such loss will be deferred until such time as the recognition of such loss would
not reduce the Company's adjusted tax basis below zero.  To the extent that the
Operating Partnership's distributions, or any decrease in the Company's share of
the indebtedness of the Operating Partnership (such decrease being considered a
constructive cash distribution to the partners), would reduce the Company's
adjusted tax basis below zero, such distributions (including such constructive
distributions) will constitute taxable income to the Company.  Such
distributions and constructive distributions normally will be characterized as
capital gain, and, if the Company's partnership interest in the Operating
Partnership has been held for longer than the long-term capital gain holding
period (currently one year), the distributions and constructive distributions
will constitute long-term capital gain.

Depreciation Deductions Available to the Operating Partnership.  Assuming
that the Minimum Offering is reached, immediately upon accepting a subscription,
the Company will make a cash contribution to the Operating Partnership in
exchange for a general partnership interest in the Operating Partnership.  The
Operating Partnership will use a portion of such contributions to acquire
interests in properties.  To the extent that the Operating Partnership acquires
properties for cash, the Operating Partnership's initial basis in such
properties for federal income tax purposes 

67

generally will be equal to the purchase price paid by the Operating Partnership.
The Operating Partnership plans to depreciate such depreciable property for
federal income tax purposes under the alternative depreciation system of
depreciation ("ADS"). Under ADS, the Operating Partnership generally will
depreciate such 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 the
Operating Partnership acquires properties in exchange for OP Units, the
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 the Operating Partnership. Although the law is not
entirely clear, the 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 THE OPERATING PARTNERSHIP'S PROPERTY

Generally, any gain realized by the 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.  Any gain recognized by the Operating Partnership upon the
disposition of a property acquired by the Operating Partnership for cash will be
allocated among the partners in accordance with their respective percentage
interests in the Operating Partnership.  The Bylaws of the Company provide that
any decision to sell any real estate asset in which a director, or officer of
the Company, or any Affiliate of the foregoing, has a direct or indirect
interest, will be made by a majority of the Directors including a majority of
the Independent Directors.  See "Policies with Respect to Certain Activities --
Conflict of Interest Policies -- Articles of Incorporation and Bylaw
Provisions."

The Company's share of any gain realized by the Operating Partnership on
the sale of any property held by the Operating Partnership as inventory or other
property held primarily for sale to customers in the ordinary course of the
Operating Partnership's trade or business will be treated as income from a
prohibited transaction that is subject to a 100% penalty tax.  Such prohibited
transaction income also may have an adverse effect upon the Company's ability to
satisfy the income tests for REIT status.  See "Federal Income Tax
Considerations -- Requirements For Qualification -- Income Tests" above.  The
Company, however, does not presently intend to acquire or hold or allow the
Operating Partnership to acquire or hold any property that represents inventory
or other property held primarily for sale to customers in the ordinary course of
the Company's or the Operating Partnership's trade or business.

ERISA CONSIDERATIONS

The following is a summary of material considerations arising under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the
prohibited transaction provisions of section 4975 of the Code that may be
relevant to a prospective purchaser of Shares (including, with respect to the
discussion contained in "ERISA Considerations--Status of the Company and the
Operating Partnership under ERISA," to a prospective purchaser that is not an
employee benefit plan, another tax-qualified retirement plan, or an individual
retirement account or an individual retirement annuity ("IRA")).  The discussion
does not purport to deal with all aspects of ERISA or section 4975 of the Code
or, to the extent not preempted, state law that may be relevant to particular
shareholders (including plans subject to Title I of ERISA, other retirement
employee benefit plans and IRAs subject to the prohibited transaction provisions
of section 4975 of the Code, and governmental plans or church plans that are
exempt from ERISA and section 4975 of the Code but that may be subject to state
law requirements) in light of their particular circumstances.

The discussion is based on current provisions of ERISA and the Code,
existing and currently proposed regulations under ERISA and the Code, the
legislative history of ERISA and the Code, existing administrative rulings of
the Department of Labor ("DOL") and reported judicial decisions.  No assurance
can be given that legislative, judicial, or administrative changes will not
affect the accuracy of any statements herein with respect to transactions
entered into or contemplated prior to the effective date of such changes.

A FIDUCIARY MAKING THE DECISION TO INVEST IN THE SHARES ON BEHALF OF A
PROSPECTIVE PURCHASER THAT IS AN EMPLOYEE BENEFIT PLAN, A TAX-QUALIFIED
RETIREMENT PLAN, OR AN IRA SHOULD CONSULT ITS OWN LEGAL ADVISOR REGARDING THE
SPECIFIC 

68

CONSIDERATIONS ARISING UNDER ERISA, SECTION 4975 OF THE CODE, AND STATE LAW WITH
RESPECT TO THE PURCHASE, OWNERSHIP, OR SALE OF THE SHARES BY SUCH PLAN OR IRA.

EMPLOYEE BENEFIT PLANS, TAX-QUALIFIED RETIREMENT PLANS, AND IRAS

Each fiduciary of a pension, profit-sharing, or other employee benefit plan
(an "ERISA Plan") subject to Title I of ERISA should consider carefully whether
an investment in the Shares is consistent with his fiduciary responsibilities
under ERISA.  In particular, the fiduciary requirements of Part 4 of Title I of
ERISA require an ERISA Plan's investments to be (i) prudent and in the best
interests of the ERISA Plan, its participants, and its beneficiaries, (ii)
diversified in order to minimize the risk of large losses, unless it is clearly
prudent not to do so, and (iii) authorized under the terms of the ERISA Plan's
governing documents (provided the documents are consistent with ERISA).  In
determining whether an investment in the Shares is prudent for purposes of
ERISA, the appropriate fiduciary of an ERISA Plan should consider all of the
facts and circumstances, including whether the investment is reasonably
designed, as a part of the ERISA Plan's portfolio for which the fiduciary has
investment responsibility, to meet the objectives of the ERISA Plan, taking into
consideration the risk of loss and opportunity for gain (or other return) from
the investment, the diversification, cash flow, and funding requirements of the
ERISA Plan, and the liquidity and current return of the ERISA Plan's portfolio.
A fiduciary also should take into account the nature of the Company's business,
the management of the Company, the Company's lack of operating history, the fact
that investment properties have not been identified yet, the possibility of the
recognition of UBTI, and other matters described under "Risk Factors."

The fiduciary of an IRA or of a qualified retirement plan not subject to
Title I of ERISA because it is a governmental or church plan or because it does
not cover common law employees (a "Non-ERISA Plan") should consider that such an
IRA or Non-ERISA Plan may only make investments that are authorized by the
appropriate governing documents and under applicable state law.

Fiduciaries of ERISA Plans and persons making the investment decision for
an IRA or other Non-ERISA Plan should consider the application of the prohibited
transaction provisions of ERISA and the Code in making their investment
decision.  A "party in interest" or "disqualified person" with respect to an
ERISA Plan or with respect to a Non-ERISA Plan or IRA subject to Code section
4975 is subject to (i) an initial 15% excise tax on the amount involved in any
prohibited transaction involving the assets of the plan or IRA and (ii) an
excise tax equal to 100% of the amount involved if any prohibited transaction is
not corrected.  If the disqualified person who engages in the transaction is the
individual on behalf of whom an IRA is maintained (or his beneficiary), the IRA
will lose its tax-exempt status and its assets will be deemed to have been
distributed to such individual in a taxable distribution (and no excise tax will
be imposed) on account of the prohibited transaction.  In addition, a fiduciary
who permits an ERISA Plan to engage in a transaction that the fiduciary knows or
should know is a prohibited transaction may be liable to the ERISA Plan for any
loss the ERISA Plan incurs as a result of the transaction or for any profits
earned by the fiduciary in the transaction.

STATUS OF THE COMPANY AND THE OPERATING PARTNERSHIP UNDER ERISA

The following section discusses certain principles that apply in
determining whether the fiduciary requirements of ERISA and the prohibited
transaction provisions of ERISA and the Code apply to an entity because one or
more investors in the equity interests in the entity is an ERISA Plan or is a
Non-ERISA Plan or IRA subject to section 4975 of the Code.  An ERISA Plan
fiduciary also should consider the relevance of those principles to ERISA's
prohibition on improper delegation of control over or responsibility for "plan
assets" and ERISA's imposition of co-fiduciary liability on a fiduciary who
participates in, permits (by action or inaction) the occurrence of, or fails to
remedy a known breach by another fiduciary.

If the assets of the Company are deemed to be "plan assets" under ERISA,
(i) the prudence standards and other provisions of Part 4 of Title I of ERISA
would be applicable to any transactions involving the Company's assets, (ii)
persons who exercise any authority over the Company's assets, or who provide
investment advice to the Company, would (for purposes of the fiduciary
responsibility provisions of ERISA) be fiduciaries of each ERISA Plan that
acquires Shares, and transactions involving the Company's assets undertaken at
their direction or pursuant to their advice might violate their fiduciary
responsibilities under ERISA, especially with regard to conflicts of interest,
(iii) a fiduciary exercising his investment discretion over the assets of an
ERISA Plan to cause it to acquire or hold the Shares could be 

69

liable under Part 4 of Title I of ERISA for transactions entered into by the
Company that do not conform to ERISA standards of prudence and fiduciary
responsibility, and (iv) certain transactions that the Company might enter into
in the ordinary course of its business and operations might constitute
"prohibited transactions" under ERISA and the Code.

Regulations of the DOL defining "plan assets" (the "Plan Asset
Regulations") generally provide that when an ERISA Plan or Non-ERISA Plan or IRA
acquires a security that is an equity interest in an entity and the security is
neither a "publicly-offered security" nor a security issued by an investment
company registered under the Investment Company Act of 1940, the ERISA or Non-
ERISA Plan's or IRA's assets include both the equity interest and an undivided
interest in each of the underlying assets of the issuer of such equity interest,
unless one or more exceptions specified in the Plan Asset Regulations are
satisfied.

The Plan Asset Regulations define a publicly-offered security as a security
that is (i) "widely-held," (ii) "freely transferable," and (iii) either (A) part
of a class of securities registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or (B) sold
pursuant to an effective registration statement under the Securities Act
(provided the securities are registered under the Exchange Act within 120 days
after the end of the fiscal year of the issuer during which the offering
occurred, or such longer period as may be allowed by the Commission).  The
Shares are being sold pursuant to an effective registration statement under the
Securities Act and will be registered under the Exchange Act.  The Plan Asset
Regulations provide that a security is "widely held" only if it is part of a
class of securities that is owned by 100 or more investors independent of the
issuer and of one another.  A security will not fail to be widely held because
the number of independent investors falls below 100 subsequent to the initial
public offering as a result of events beyond the issuer's control.  The Company
anticipates that upon completion of the Offering, the Shares will be "widely
held."

The Plan Asset Regulations provide that whether a security is "freely
transferable" is a factual question to be determined on the basis of all
relevant facts and circumstances.  The Plan Asset Regulations further provide
that where a security is part of an offering in which the minimum investment is
$10,000 or less (as is the case with this Offering), certain restrictions
ordinarily will not, alone or in combination, affect a finding that such
securities are freely transferable.  The restrictions on transfer enumerated in
the Plan Asset Regulations as not affecting that finding include: (i) any
restriction on or prohibition against any transfer or assignment that would
result in the termination or reclassification of an entity for federal or state
tax purposes, or that otherwise would violate any federal or state law or court
order, (ii) any requirement that advance notice of a transfer or assignment be
given to the issuer, (iii) any administrative procedure that establishes an
effective date, or an event (such as completion of an offering), prior to which
a transfer or assignment will not be effective, and (iv) any limitation or
restriction on transfer or assignment that is not imposed by the issuer or a
person acting on behalf of the issuer.  The Company believes that the
restrictions imposed under the Articles of Incorporation on the transfer of the
Shares will not result in the failure of the Shares to be "freely transferable."
The Company also is not aware of any other facts or circumstances limiting the
transferability of the Shares that are not enumerated in the Plan Asset
Regulations as those not affecting free transferability, and the Company does
not intend to impose in the future (or to permit any person to impose on its
behalf) any limitations or restrictions on transfer that would not be among the
enumerated permissible limitations or restrictions.  The Plan Asset Regulations
only establish a presumption in favor of a finding of free transferability, and
no assurance can be given that the DOL or the Treasury Department will not reach
a contrary conclusion.

Assuming that the Shares will be "widely held" and that no other facts and
circumstances other than those referred to in the preceding paragraph exist that
restrict transferability of the Shares, the Shares should be publicly offered
securities and the assets of the Company should not be deemed to be "plan
assets" of any ERISA Plan, IRA, or Non-ERISA Plan that invests in the Shares.

The Plan Asset Regulations also will apply in determining whether the
assets of the Operating Partnership will be deemed to be "plan assets."  The
partnership interests in the Operating Partnership will not be publicly-offered
securities.  Nevertheless, if the Shares constitute publicly-offered securities,
the indirect investment in the Operating Partnership by ERISA Plans, IRAs, or
Non-ERISA Plans subject to section 4975 of the Code through their ownership of
Shares will not cause the assets of the Operating Partnership to be treated as
"plan assets" of such shareholders.

70

PARTNERSHIP AGREEMENT

The following summary of the Partnership Agreement, and the descriptions of
certain provisions thereof set forth elsewhere in this Prospectus, is qualified
in its entirety by reference to the Partnership Agreement, which is filed as an
exhibit to the Registration Statement of which this Prospectus is a part.

MANAGEMENT

The Operating Partnership has been organized as a Delaware limited
partnership pursuant to the terms of the Partnership Agreement.  Pursuant to the
Partnership Agreement, the Company, as the sole general partner of the Operating
Partnership (in such capacity, the "General Partner"), will have full, exclusive
and complete responsibility and discretion in the management and control of the
Operating Partnership, and the limited partners of the Operating Partnership
(the "Limited Partners"), in their capacity as such, will have no authority to
transact business for, or participate in the management activities or decisions
of, the Operating Partnership.  However, any amendment to the Partnership
Agreement that would (i) affect the Redemption Rights (as defined below), (ii)
adversely affect the Limited Partners' rights to receive cash distributions,
(iii) alter the Operating Partnership's allocations of income and loss or (iv)
impose on the Limited Partners any obligations to make additional contributions
to the capital of the Operating Partnership, would require the consent of
Limited Partners holding more than two-thirds of the OP Units.

TRANSFERABILITY OF INTERESTS IN THE OPERATING PARTNERSHIP

The Company may not voluntarily withdraw from the Operating Partnership or
transfer or assign its interest in the Operating Partnership unless the
transaction in which such withdrawal or transfer occurs results in the Limited
Partners' receiving property in an amount equal to the amount they would have
received had they exercised their Redemption Rights immediately prior to such
transaction, or unless the successor to the General Partner contributes
substantially all of its assets to the Operating Partnership in return for an
interest in the Operating Partnership.  A person may not be admitted as a
substitute or successor General Partner unless a majority-in-interest of the
Limited Partners (other than the Advisor) consent in writing to the admission of
such substitute or successor General Partner, which consent may be withheld in
the sole discretion of such Limited Partners.  With certain limited exceptions,
the Limited Partners may not transfer their interests in the Operating
Partnership, in whole or in part, without the written consent of the Company,
which consent may be withheld in the sole discretion of the Company.

CAPITAL CONTRIBUTION

As the Company accepts subscriptions, it will contribute to the Operating
Partnership substantially all of the net proceeds thereof, in consideration of
which the Company will receive a general partnership interest in the Operating
Partnership.  The Advisor has contributed $200,000 to the Operating Partnership
and is the sole initial Limited Partner.  Although the Operating Partnership
will receive substantially all of the net proceeds of the Offering, the Company
will be deemed to have made capital contributions to the Operating Partnership
in the amount of the gross proceeds of the Offering and the Operating
Partnership will be deemed simultaneously to have paid the selling commissions
and other Organization and Offering Expenses.  The Partnership Agreement
provides that if the Operating Partnership requires additional funds at any time
or from time to time in excess of funds available to the Operating Partnership
from borrowing or capital contributions, the Company may borrow such funds from
a financial institution or other lender and lend such funds to the Operating
Partnership on the same terms and conditions as are applicable to the Company's
borrowing of such funds.  Moreover, the Company is authorized to cause the
Operating Partnership to issue partnership interests for less than fair market
value if the Company has concluded in good faith that such issuance is in the
best interests of the Company and the Operating Partnership.

REDEMPTION RIGHTS

Pursuant to the Partnership Agreement, the Limited Partners, other than the
Advisor, will receive rights (the "Redemption Rights"), which will enable them
to cause the Operating Partnership to redeem each OP Unit for cash equal to the
value of one Share (or, at the Company's election, the Company may purchase each
OP Unit offered for redemption for one Share).  The Redemption Rights may not be
exercised, however, if and to the extent that the delivery 

71

of Shares upon exercise of such rights (regardless of whether the Company would
exercise its rights to deliver Shares) would (i) result in any person owning,
directly or indirectly, Shares in excess of the Ownership Limitation, (ii)
result in shares of capital stock of the Company being owned by fewer than 100
persons (determined without reference to any rules of attribution), (iii) result
in the Company being "closely held" within the meaning of section 856(h) of the
Code, (iv) cause the Company to own, actually or constructively, 10% or more of
the ownership interests in a tenant of the Company's or the Operating
Partnership's real property, within the meaning of section 856(d)(2)(B) of the
Code, or (v) cause the acquisition of Shares by such redeeming Limited Partner
to be "integrated" with any other distribution of Shares for purposes of
complying with the Securities Act. The Redemption Rights may be exercised, at
any time after one year following the date of issuance of the related OP Units,
provided that not more than two redemptions may occur during each calendar year
and each Limited Partner may not exercise the Redemption Right for less than
1,000 OP Units or, if such Limited Partner holds less than 1,000 OP Units, all
of the OP Units held by such Limited Partner. The number of Shares issuable upon
exercise of the Redemption Rights will be adjusted upon the occurrence of share
splits, mergers, consolidations or similar pro rata share transactions, which
otherwise would have the effect of diluting the ownership interests of the
Limited Partners or the shareholders of the Company. As of the date hereof, the
Company has not issued any OP Units other than to the Advisor and has no current
intentions to issue OP Units.

OPERATIONS

The Partnership Agreement requires that the Operating Partnership be
operated in a manner that will enable the Company to satisfy the requirements
for being classified as a REIT, to avoid any federal income or excise tax
liability imposed under the Code and to ensure that the Operating Partnership
will not be classified as a "publicly traded partnership" for purposes of
section 7704 of the Code.

In addition to the administrative and operating costs and expenses incurred
by the Operating Partnership, the Operating Partnership will pay all
administrative costs and expenses of the Company (the "Company Expenses") and
the Company Expenses will be treated as expenses of the Operating Partnership.
The Company Expenses generally will include (i) all expenses relating to the
formation and continuity of existence of the Company, (ii) all expenses relating
to the public offering and registration of securities by the Company, (iii) all
expenses associated with the preparation and filing of any periodic reports by
the Company under federal, state or local laws or regulations, (iv) all expenses
associated with compliance by the Company with laws, rules and regulations
promulgated by any regulatory body and (v) all other operating or administrative
costs of the Company incurred in the ordinary course of its business on behalf
of the Operating Partnership.  The Company Expenses, however, will not include
any administrative and operating costs and expenses incurred by the Company that
are attributable to properties or partnership interests that are owned by the
Company directly.  The Company currently does not anticipate owning any
properties directly.

DISTRIBUTIONS AND ALLOCATIONS

The Partnership Agreement will provide that the Operating Partnership will
distribute cash from operations (including net sale or refinancing proceeds, but
excluding net proceeds from the sale of the Operating Partnership's property in
connection with the liquidation of the Operating Partnership) on a quarterly
(or, at the election of the Company, more frequent) basis, in amounts determined
by the Company in its sole discretion, to the partners in accordance with their
respective percentage interests in the Operating Partnership.  Upon liquidation
of the Operating Partnership, after payment of, or adequate provision for, debts
and obligations of the Operating Partnership, including any partner loans, any
remaining assets of the Operating Partnership will be distributed to all
partners with positive capital accounts in accordance with their respective
positive capital account balances.  If the Company has a negative balance in its
capital account following a liquidation of the Operating Partnership, it will be
obligated to contribute cash to the Operating Partnership equal to the negative
balance in its capital account.

Profit and loss of the Operating Partnership for each fiscal year of the
Operating Partnership generally will be allocated among the partners in
accordance with their respective interests in the Operating Partnership.
Taxable income and loss will be allocated in the same manner, subject to
compliance with the provisions of Code sections 704(b) and 704(c) and Treasury
Regulations promulgated thereunder.

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TERM

The Operating Partnership will continue until December 31, 2050, or until
sooner dissolved upon the sale or other disposition of all or substantially all
the assets of the Operating Partnership, the redemption of all limited
partnership interests in the Operating Partnership (other than those held by the
Advisor), or by the election by the Company.

TAX MATTERS

Pursuant to the Partnership Agreement, the Company will be the tax matters
partner of the Operating Partnership and, as such, will have authority to handle
tax audits and to make tax elections under the Code on behalf of the Operating
Partnership.

PLAN OF DISTRIBUTION

Of the total 16,5000,000 shares registered in the Offering, 1,500,000 are
reserved for issuance pursuant to the Reinvestment Plan and 600,000 are reserved
for issuance upon exercise of the Soliciting Dealer Warrants.  Consequently, a
maximum of 14,400,000 Shares are being offered to the public through the Dealer
Manager, a registered broker-dealer affiliated with the Advisor, and certain
unaffiliated broker-dealers.  See "Conflicts of Interest" and "Management
Compensation."  The Shares are being offered at a price of $10.00 per share on a
"best efforts" basis (which means generally that the Dealer Manager will be
required to use only its best efforts to sell the Shares and has no firm
commitment or obligation to purchase any of the Shares).  The Company and the
Dealer Manager have determined the Offering price of the Shares based on their
analysis of other similar offerings and what they believe the investing market
is willing to pay for the Shares.

Except as provided below, the Dealer Manager will receive commissions of 7%
of the Gross Offering Proceeds.  In addition, the Company may reimburse the
expenses incurred by the Dealer Manager and nonaffiliated dealers for actual
marketing support and due diligence purposes in the maximum amount of 2.5% of
the Gross Offering Proceeds.  The Company will not pay referral or similar fees
to any accountants, attorneys or other persons in connection with the
distribution of the Shares.  Shareholders who elect to participate in the
Reinvestment Plan will be charged Selling Commissions on Shares purchased
pursuant to the Reinvestment Plan on the same basis as shareholders purchasing
Shares other than pursuant to the Reinvestment Plan.   Soliciting Dealers will
also receive one Soliciting Dealer Warrant for each 25 Shares sold by such
Soliciting Dealer during the Offering, subject to federal and state securities
laws.  The holder of a Soliciting Dealer Warrant will be entitled to purchase
one Share from the Company at a price of $12 during the period commencing on the
first anniversary of the effective date of this Offering and ending five years
after the effective date of this Offering.  Subject to certain limitations, the
Soliciting Dealer Warrants may not be transferred, assigned, pledged or
hypothecated for a period of one year following the effective date of this
Offering.  The Shares issuable upon exercise of the Soliciting Dealer Warrants
are being registered as part of this Offering.  For the life of the Soliciting
Dealer Warrants, the holders are given, at nominal cost, the opportunity to
profit from a rise in the market price for the Common Stock without assuming the
risk of ownership, with a resulting dilution in the interest of other security
holders.  Moreover, the holders of the Soliciting Dealer Warrants might be
expected to exercise them at a time when the Company would, in all likelihood,
be able to obtain needed capital by a new offering of its securities on terms
more favorable than those provided by the Soliciting Dealer Warrants.  See
"Description of Capital Stock -- Soliciting Dealer Warrants."

The Dealer Manager may authorize certain other broker-dealers who are
members of the NASD to sell Shares.  In the event of the sale of Shares by such
other broker-dealers, the Dealer Manager may reallow its commissions in the
amount of up to 7% of the Gross Offering Proceeds to such participating broker-
dealers.

In no event shall the total underwriting compensation, including Selling
Commissions and expense reimbursements, exceed 7% of Gross Offering Proceeds,
except for the additional Marketing and Due Diligence Fee (2.5% of Gross
Offering Proceeds), which may be paid by the Company in connection with
marketing support and due diligence activities, which is comprised of .5% for
due diligence activities and 2% for marketing support activities.

73

The Company has agreed to indemnify the participating broker-dealers,
including the Dealer Manager, against certain liabilities arising under the
Securities Act of 1933, as amended.  Causes of action resulting from violations
of federal or state securities laws shall be governed by such law.

The broker-dealers are not obligated to obtain any subscriptions, and there
is no assurance that any Shares will be sold.

The Advisor and its Affiliates may at their option purchase Shares offered
hereby at the public offering price, in which case it would expect to hold such
Shares as shareholders for investment and not for distribution.  Shares
purchased by the Advisor or its Affiliates shall not be entitled to vote on any
matter presented to the shareholders for a vote.  No selling commissions will be
payable by the Company in connection with any Shares purchased by the Advisor.

Payment for Shares should be made by check payable to "NationsBank, N.A.,
as Escrow Agent"  Subscriptions will be effective only upon acceptance by the
Company, and the Company reserves the right to reject any subscription in whole
or in part.  In no event may a subscription for Shares be accepted until at
least five business days after the date the subscriber receives this Prospectus.
Each subscriber will receive a confirmation of his purchase.  Except for
purchase pursuant to the Reinvestment Plan, all accepted subscriptions will be
for whole Shares and for not less than 100 Shares ($1,000).  See "Investor
Suitability Standards."  Except in Maine, Minnesota and Washington, investors
who have satisfied the minimum purchase requirement and have purchased units in
Prior Wells Public Programs may purchase less than the minimum number of Shares
discussed above, provided that such investors purchase a minimum of 2.5 Shares
($25).  After investors have satisfied the minimum purchase requirement, minimum
additional purchases must be in increments of at least 2.5 Shares ($25), except
for purchases pursuant to the Reinvestment Plan.

Subscription proceeds will be placed in interest-bearing accounts with the
Escrow Agent by noon of the business day after the proceeds are received by the
Company until such subscriptions aggregating at least $1,250,000 (exclusive of
any subscriptions for Shares by the Advisor or its Affiliates) have been
received and accepted by the Advisor (the "Minimum Offering").  Any Shares
purchased by the Advisor or its Affiliates will not be counted in calculating
the Minimum Offering.  Subscription proceeds held in the escrow accounts will be
invested in obligations of, or obligations guaranteed by, the United States
government or bank money-market accounts or certificates of deposit of national
or state banks that have deposits insured by the Federal Deposit Insurance
Corporation (including certificates of deposit of any bank acting as depository
or custodian for any such funds), as directed by the Advisor.  Subscribers may
not withdraw funds from the escrow account.

Investors who desire to establish an IRA for purposes of investing in
Shares may do so by having Wells Advisors, Inc., a qualified non-bank IRA
custodian affiliated with the Advisor, act as their IRA custodian.  In the event
that an IRA is established having Wells Advisors, Inc. as the IRA custodian, the
authority of Wells Advisors, Inc. will be limited to holding the Shares on
behalf of the beneficiary of the IRA and making distributions or reinvestments
in Shares solely at the discretion of the beneficiary of the IRA.  Wells
Advisors, Inc. will not have the authority to vote any of the Shares held in an
IRA except strictly in accordance with the written instructions of the
beneficiary of the IRA.  See "Management."

If the Minimum Offering has not been received and accepted by January 30,
1999 (one year after the date of this Prospectus), the Escrow Agent will
promptly so notify the Company and this Offering will be terminated.  In such
event, the Escrow Agent is obligated to use its best efforts to obtain an
executed IRS Form W-9 from each subscriber whose subscription is rejected.  No
later than ten business days after rejection of a subscription, the Escrow Agent
will refund and return all monies to rejected subscribers and any interest
earned thereon without deducting escrow expenses.  In the event that a
subscriber fails to remit an executed IRS Form W-9 to the Escrow Agent prior to
the date the Escrow Agent returns the subscriber's funds, the Escrow Agent will
be required to withhold from such funds 31% of the earnings attributable to such
subscriber in accordance with IRS Regulations.  During any period in which
subscription proceeds are held in escrow, interest earned thereon will be
allocated among subscribers on the basis of the respective amounts of their
subscriptions and the number of days that such amounts were on deposit.  Such
interest net of escrow expenses will be paid to subscribers upon the termination
of the escrow period.

74

Initial subscribers may be admitted as shareholders of the Company and the
payments transferred from escrow to the Company at any time after the Company
has received and accepted the Minimum Offering, except that subscribers residing
in New York and Pennsylvania may not be admitted to the Company until
subscriptions have been received and accepted for 250,000 Shares ($2,500,000)
from all sources.  The funds representing subscriptions for Shares from New York
and Pennsylvania residents will not be released from the escrow account until
subscriptions for at least $2,500,000 have been received from all sources.
Subscriptions from New York residents may not be included in determining whether
subscriptions for the Minimum Offering have been obtained.  In addition, certain
other states may impose different requirements than those set forth herein.  Any
such additional requirements will be set forth in a supplement to this
Prospectus.

The proceeds of this Offering will be received and held in trust for the
benefit of purchasers of Shares and will be retained in trust after closing to
be used only for the purposes set forth in the "Estimated Use of Proceeds"
section.  After the close of the Minimum Offering, subscriptions will be
accepted or rejected within 30 days of receipt by the Company, and if rejected,
all funds shall be returned to subscribers within 10 business days.  Investors
whose subscriptions are accepted will be admitted as shareholders of the Company
periodically (but not less often than quarterly).  Escrowed proceeds will be
released to the Company on the date that the applicable Shareholder is admitted
to the Company.  A Shareholder will not receive a Share certificate or other
evidence of his interest in the Company unless the Listing occurs, and then only
if requested by the Shareholder.

The Advisor may sell Shares to Retirement Plans of broker-dealers
participating in the Offering, to broker-dealers in their individual capacities,
to IRAs and Qualified Plans of their registered representatives or to any one of
their registered representatives in their individual capacities for 93% of the
Share's public offering price in consideration of the services rendered by such
broker-dealers and registered representatives in the distribution.  The net
proceeds to the Company from such sales will be identical to the Company's net
proceeds from other sales of Shares.

In connection with sales of 25,000 or more Shares ($250,000) to a
"purchaser" (as defined below), investors may agree with their registered
representatives to reduce the amount of selling commissions payable to
participating broker-dealers.  Such reduction will be credited to the purchaser
by reducing the total purchase price payable by such purchaser.  The following
table illustrates the various discount levels:

SELLING COMMISSIONS                                          
-----------------------                            NET PROCEEDS 
DOLLAR VOLUME                                            PURCHASE PRICE        TO COMPANY  
OF SHARES PURCHASED            PERCENT       PER SHARE        PER SHARE            PER SHARE     
-------------------            -------       ---------      --------------       ------------ 

Under $250,000                  7.0%        $  0.70          $ 10.00              $9.30
$250,000-$649,999               6.0%        $0.5936          $9.8936              $9.30
$650,000-$999,999               3.0%        $0.2876          $9.5876              $9.30
$1,000,000-$1,999,999           1.0%        $0.0939          $9.3939              $9.30
Over $2,000,000                 0.5%        $0.0467          $9.3467              $9.30

For example, if an investor purchases 100,000 Shares in the Company, he
could pay as little as $939,390 rather than $1,000,000 for the Shares, in which
event the commission on the sale of such Shares would be $9,390 ($0.0939 per
Share), and the Company would receive net proceeds of $930,000 ($9.30 per
Share).  The net proceeds to the Company will not be affected by volume
discounts.

Because all investors will be deemed to have contributed the same amount
per Share to the Company for purposes of distributions of Cash Available for
Distribution, an investor qualifying for a volume discount will receive a higher
return on his investment in the Company than investors who do not qualify for
such discount.

Subscriptions may be combined for the purpose of determining the volume
discounts in the case of subscriptions made by any "purchaser," as that term is
defined below, 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 "purchaser."  Any request to combine more than one
subscription must be made in writing, and must set forth the basis 

75

for such request. Any such request will be subject to verification by the
Advisor that all of such subscriptions were made by a single "purchaser."

For the purposes of such volume discounts, the term "purchaser" includes
(i) 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; (ii) a corporation,
partnership, association, joint-stock company, trust fund or any organized group
of persons, whether incorporated or not; (iii) an employees' trust, pension,
profit sharing or other employee benefit plan qualified under Section 401(a) of
the Code; and (iv) all commingled trust funds maintained by a given bank.

Notwithstanding the above, in connection with volume sales made to
investors in the Company, the Company may, in its sole discretion, waive the
"purchaser" requirements and aggregate subscriptions (including subscriptions to
Prior Wells Public Programs) 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 broker-dealer, including the Dealer
Manager.  Any such reduction in selling commission will be prorated among the
separate subscribers except that, in the case of purchases through the Dealer
Manager, the Dealer Manager may allocate such reduction among separate
subscribers considered to be a single "purchaser" as it deems appropriate.  An
investor may reduce the amount of his purchase price to the net amount shown in
the foregoing table, if applicable.  If such investor does not reduce the
purchase price, the excess amount submitted over the discounted purchase price
shall be returned to the actual separate subscribers for Shares.  Except as
provided in this paragraph, separate subscriptions will not be cumulated,
combined or aggregated.

In addition, in order to encourage purchases in amounts of 500,000 or more
Shares, a potential purchaser who proposes to purchase at least 500,000 Shares
in the Company may agree with the Advisor and the Dealer Manager to have the
Acquisition and Advisory Fees payable to the Advisor with respect to the sale of
such Shares reduced to 0.5%, and to have the Selling Commissions payable with
respect to the sale of such Shares reduced to 0.5%, in which event the aggregate
fees payable with respect to the sale of such Shares would be reduced by $0.90
per Share, and the purchaser of such Shares would be required to pay a total of
$9.10 per Share purchased, rather than $10.00 per Share.  The net proceeds to
the Company would not be affected by such fee reductions.  Of the $9.10 paid per
Share, it is anticipated that approximately $8.40 per Share (or approximately
92%) will be used to acquire properties and pay required acquisition expenses
relating to the acquisition of properties.  All such sales must be made through
registered broker-dealers.

California residents should be aware that volume discounts will not be
available in connection with the sale of Shares made to California residents to
the extent such discounts do not comply with the provisions of Rule 260.140.51
adopted pursuant to the California Corporate Securities Law of 1968.  Pursuant
to this Rule, volume discounts can be made available to California residents
only in accordance with the following conditions: (i) there can be no variance
in the net proceeds to the Company from the sale of the Shares to different
purchasers of the same offering, (ii) all purchasers of the Shares must be
informed of the availability of quantity discounts, (iii) the same volume
discounts must be allowed to all purchasers of Shares which are part of the
offering, (iv) the minimum amount of Shares as to which volume discounts are
allowed cannot be less than $10,000, (v) the variance in the price of the Shares
must result solely from a different range of commissions, and all discounts
allowed must be based on a uniform scale of commissions, and (vi) no discounts
are allowed to any group of purchasers.  Accordingly, volume discounts for
California residents will be available in accordance with the foregoing table of
uniform discount levels based on dollar volume of Shares purchased, but no
discounts are allowed to any group of purchasers, and no subscriptions may be
aggregated as part of a combined order for purposes of determining the number of
Shares purchased.

Investors who, in connection with their purchase of Shares, have engaged
the services of a registered investment advisor with whom the investor has
agreed to pay a fee for investment advisory services in lieu of normal
commissions based on the volume of securities sold may agree with the
participating broker-dealer selling such Shares and the Dealer Manager to reduce
the amount of selling commissions payable with respect to such sale to zero.
The net proceeds to the Company will not be affected by eliminating the
commissions payable in connection with sales to investors purchasing through
such investment advisors.  All such sales must be made through registered
broker-dealers.

76

Neither the Dealer Manager nor its Affiliates will directly or indirectly
compensate any person engaged as an investment advisor by a potential investor
as an inducement for such investment advisor to advise favorably for investment
in the Company.

In addition, subscribers for Shares may agree with their participating
broker-dealers and the Dealer Manager to have selling commissions due with
respect to the purchase of their Shares paid over a seven year period pursuant
to a deferred commission arrangement (the "Deferred Commission Option").
Shareholders electing the Deferred Commission Option will be required to pay a
total of $9.40 per Share purchased upon subscription, rather than $10.00 per
Share, with respect to which $0.10 per Share will be payable as commissions due
upon subscription.  For each of the six years following termination of the
Offering, $0.10 per Share will be paid by the Company as deferred commissions
with respect to Shares sold pursuant to the Deferred Commission Option, which
amounts will be deducted from and paid out of distributions of Cash Available
for Distribution otherwise payable to shareholders holding such Shares.  The net
proceeds to the Company will not be affected by the election of the Deferred
Commission Option.  Under this arrangement, a Shareholder electing the Deferred
Commission Option will pay a 1% commission upon subscription, rather than an 7%
commission, and an amount equal to a 1% commission per year thereafter for the
next six years will be deducted from and paid by the Company out of Cash
Available for Distribution otherwise distributable to such Shareholder.

Taxable participants electing the Deferred Commission Option will incur tax
liability for Company income allocated to them with respect to their Shares even
though distributions of Cash Available for Distribution otherwise distributable
to such shareholders will instead be paid to third parties to satisfy the
deferred commission obligations with respect to such Shares for a period of six
years after the termination of the Offering.  See "Risk Factors - Federal Tax
Risks - Risk of Taxable Income Without Cash Distributions."

As set forth above, in no event shall the total underwriting compensation,
including sales commissions, the dealer manager fee and expense reimbursements,
exceed 7% of Gross Offering Proceeds, except for the additional .5% of Gross
Offering Proceeds which may be paid by the Company in connection with due
diligence activities and 2% of Gross Offering Proceeds which may be paid by the
Company in connection with marketing support activities.

SUPPLEMENTAL SALES MATERIAL

In addition to this Prospectus, the Company may utilize certain sales
material in connection with the Offering of the Shares, 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 the Advisor 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 in the Company is made only by means of this
Prospectus.  Although the information contained in such sales material does 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.

LEGAL MATTERS

The legality of the Shares being offered hereby has been passed upon for
the Company by Hunton & Williams, Atlanta, Georgia ("Counsel").  The statements
under the caption "Federal Income Tax Consequences" as they relate to federal
income tax matters have been reviewed by Counsel, and Counsel has opined as to
certain income tax matters relating to an investment in the Company.  Counsel
has represented the Advisor, as well as Affiliates of the Advisor, in other
matters and may continue to do so in the future.  See "Conflicts of Interest."

77

EXPERTS

The balance sheet of the Company as of December 31, 1997, included in this
Prospectus and elsewhere in the Registration Statement, has been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and is included herein in reliance upon the
authority of said firm as experts in giving said report.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement on Form S-11 under the
Securities Act of 1933, as amended, with respect to the Shares offered pursuant
to this Prospectus.  This Prospectus does not contain all the information set
forth in the Registration Statement and the exhibits related thereto filed with
the Commission, reference to which is hereby made.  Copies of the Registration
Statement and exhibits related thereto, as well as periodic reports and
information filed by the Company, may be obtained upon payment of the fees
prescribed by the Commission, or may be examined at the offices of the
Commission without charge, at (i) the public reference facilities in Washington,
D.C. at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, (ii) the Northeast Regional Office in New York at 7 World Trade Center,
Suite 1300, New York, New York 10048, and (iii) the Midwest Regional Office in
Chicago, Illinois at 500 West Madison Street, Suite 1400, Chicago, Illinois
66661-2511.  The Commission maintains a Web site that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission (the address of such site is
http://www.sec.gov).

GLOSSARY

The following are definitions of certain terms used in this Prospectus and
not otherwise defined herein:

"ACQUISITION EXPENSES" means expenses incurred in connection with the
selection and acquisition of properties, whether or not acquired, including, but
not limited to, legal fees and expenses, travel and communications expenses,
costs of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses and title insurance and other miscellaneous costs
and expenses relating to the selection and acquisition of properties.

"ACQUISITION FEES" means the total of all fees and commissions paid by any
party to any person in connection with the purchase, development or construction
of property by the Company, including Acquisition and Advisory Fees payable to
the Advisor or their Affiliates, real estate brokerage commissions, investment
advisory fees, finder's fees, selection fees, Development Fees, Construction
Fees, nonrecurring management fees, or any other fees of a similar nature,
however designated, except Development Fees and Construction Fees paid to a
person not affiliated with the Sponsor in connection with the actual development
or construction of a Company property.

"AFFILIATE" means (i) any person directly or indirectly controlling,
controlled by or under common control with a person, (ii) any person owning or
controlling 10% or more of the outstanding voting securities of a person, (iii)
any officer, director or partner of a person, and (iv) if such other person is
an officer, director or partner, any company for which such person acts in any
such capacity.

"AVERAGE INVESTED ASSETS" means, for any period, the average of the
aggregate book value of the assets of the Company invested, directly or
indirectly, in equity interests and in loans secured by real estate, before
reserves for depreciation or bad debts or other similar non-cash reserves,
computed by taking the average of such values at the end of each month during
such period.

"CASH AVAILABLE FOR DISTRIBUTION"  means Funds from Operations adjusted for
certain non-cash items, less reserves for capital expenditures.

"CODE" means the Internal Revenue Code of 1986, as amended.

78

"COMMON RETURN" means an 8% per annum cumulative, noncompounded return on
investor's Invested Capital.

"COMPANY" means Wells Real Estate Investment Trust, Inc., a Maryland
corporation.

"COMPETITIVE REAL ESTATE BROKERAGE COMMISSION" means the real estate or
brokerage commission paid for the purchase or sale of a property which is
reasonable, customary and competitive in light of the size, type and location of
such property.

"CONSTRUCTION FEE" means a fee or other remuneration for acting as general
contractor and/or construction manager to construct improvements, supervise and
coordinate projects or to provide major repairs or rehabilitation on properties.

"DEFERRED COMMISSION OPTION" means an agreement among a subscriber for
Shares, such subscriber's participating broker-dealer and the Dealer Manager to
have sales commissions due with respect to the purchase of the subscriber's
Shares paid over a  seven year period, in the manner described in the "Plan of
Distribution" section of the Prospectus.

"DEVELOPMENT FEE" means a fee for the packaging of a property of the
Company, including negotiating and approving plans, and undertaking to assist in
obtaining zoning and necessary variances and necessary financing for the
specific property, either initially or at a later date.

"FRONT-END FEES" means fees and expenses paid by any party for any services
rendered during the Company's organizational or acquisition phase including
Organization and Offering Expenses, Acquisition Fees, Acquisition Expenses,
interest on deferred fees and expenses, if applicable, and any other similar
fees, however designated.

"FUNDS FROM OPERATIONS" means income (loss) before minority interest
(computed in accordance with generally accepted accounting principles),
excluding gains (losses) from debt restructuring and sales of property, plus
real estate related depreciation an amortization (excluding amortization of
financing costs), and after adjustments for consolidated partnerships and joint
ventures.

"GAIN ON SALE" means the taxable income or gain for federal income tax
purposes in the aggregate for each fiscal year from the sale or exchange of all
or any portion of a Company asset after netting losses from such sales or
exchanges against the gains from such transactions.

"GROSS OFFERING PROCEEDS" means the total gross proceeds from the sale of
the Shares.

"INDEPENDENT EXPERT" means a person with no material current or prior
business or personal relationship with the Advisor or Board of Directors of the
Company who is engaged to a substantial extent in the business of rendering
opinions regarding the value of assets of the type held by the Company.

"INDEPENDENT DIRECTOR" shall mean a member of the Board of Directors of the
Company who is not associated and has not been associated within the last two
years, directly or indirectly, with the Advisor.

"INVESTED CAPITAL" means the original issue price of the Shares reduced by
prior distributions from the sale or financing of Company fixed assets.

"INVESTMENT IN PROPERTIES" means the amount of Gross Offering Proceeds
actually paid or allocated to the purchase, development, construction or
improvement of properties acquired by the Company, including the purchase of
properties, working capital reserves allocable thereto (except that working
capital reserves in excess of 5% shall not be included) and other cash payments
such as interest and taxes, but excluding Front-End Fees.

"IRA" means an Individual Retirement Account established pursuant to
Section 408 of the Code.

79

"LIQUIDATING DISTRIBUTIONS" means the net cash proceeds received by the
Company from (a) the sale, exchange, condemnation, eminent domain taking,
casualty or other disposition of substantially all of the assets of the Company
or the last remaining assets of the Company or (b) a liquidation of the
Company's assets in connection with a dissolution of the Company, after (i)
payment of all expenses of such sale, exchange, condemnation, eminent domain
taking, casualty, other disposition or liquidation, including real estate
commissions and fees, if applicable, (ii) the payment of any outstanding
indebtedness and other liabilities of the Company, (iii) any amounts used to
restore any such assets of the Company, and (iv) any amounts set aside as
reserves which the Company may deem necessary or desirable.

"NASAA GUIDELINES" means the Statement of Policy Regarding Real Estate
Investment Trusts of the North American Securities Administrators Association,
Inc. as revised and adopted on September 29, 1993.

"NET ASSETS" means the total assets (other than intangibles) at cost before
deducting depreciation or other non-cash reserves less total liabilities,
calculated at least quarterly on a basis consistently applied.

"NET INCOME" or "NET LOSS" means the net income or loss realized or
recognized by the Company for a fiscal year, as determined for federal income
tax purposes, including any income exempt from tax, but excluding all deductions
for depreciation, amortization and cost recovery and Gain on Sale.

"NET SALE PROCEEDS" means, collectively, Nonliquidating Net Sale Proceeds
and Liquidating Distributions.

"NONLIQUIDATING NET SALE PROCEEDS" means the net cash proceeds received by
the Company from a sale, exchange, condemnation, eminent domain taking, casualty
or other disposition of assets of the Company, which does not constitute
substantially all of the remaining assets of the Company, after (i) the payment
of all expenses of such sale, exchange, condemnation, eminent domain taking,
casualty, sale or other disposition, including real estate commissions and fees,
if applicable, (ii) the payment of any outstanding indebtedness and other
Company liabilities relating to such assets, (iii) any amounts used to restore
any such assets of the Company, and (iv) any amounts set aside as reserves which
the Company may deem necessary or desirable.

"OFFERING" means the offering and sale of the Shares pursuant to the terms
and conditions of this Prospectus.

"OPERATING PARTNERSHIP" means Wells Operating Partnership, L.P., a Delaware
limited partnership.

"OP UNITS" means units of limited partnership interest in the Operating
Partnership.

"ORGANIZATION AND OFFERING EXPENSES" means those expenses incurred in
connection with organizing the Company, preparing the Company for registration
and subsequently offering and distributing the Shares to the public, including
without limitation, legal and accounting fees, sales commissions paid to broker-
dealers in connection with the distribution of the Shares and all advertising
expenses.

"OWNERSHIP LIMITATION" means the ownership of more than 9.8% of any class
of the Company's outstanding capital stock.

"PARTNERS" means, collectively, the Company and any person who contributes
property to the Company in exchange for OP Units.

"PARTNERSHIP AGREEMENT" means the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership.

"PRIOR WELLS PUBLIC PROGRAMS" means the prior public real estate limited
partnership programs sponsored by the Advisor or its Affiliates having
substantially identical investment objectives as the Company, specifically,
Wells Real Estate Fund I, Wells Real Estate Fund II, Wells Real Estate Fund II-
OW, Wells Real Estate Fund III, L.P., Wells Real Estate Fund IV, L.P., Wells
Real Estate Fund V, L.P., Wells Real Estate Fund VI, L.P., Wells Real Estate
Fund VII, L.P., Wells Real Estate Fund VIII, L.P., Wells Real Estate Fund IX,
L.P., Wells Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.

80

"QUALIFIED PLAN" means a qualified sole proprietorship, partnership or
corporate pension or profit sharing plan established under Section 401(a) of the
Code.

"REGISTRATION STATEMENT" means the Registration Statement on Form S-11
filed by the Company with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, in order to register the Shares for sale to
the public.

"REINVESTMENT PLAN" means the Company's Dividend Reinvestment Plan.

"RESIDUAL PROCEEDS" means any Sale Proceeds available for distribution to
the shareholders after the shareholders have first received distributions of
Sale Proceeds in an amount equal to 100% of their Invested Capital plus their
Common Return (reduced by all prior distributions of Cash Available for
Distribution) and after the Advisor has received distributions of Sale Proceeds
in an amount equal to 100% of its capital contribution to the Operating
Partnership.

"RETIREMENT PLANS" means Individual Retirement Accounts ("IRAs")
established under Section 408 of the Code and Qualified Plans.

"SERVICE" means the U.S. Internal Revenue Service.

"SHARES-IN-TRUST" means the excess shares exchanged for Shares transferred
or proposed to be transferred in excess of the Ownership Limitation or which
would otherwise jeopardize the Company's status as a REIT under the Code.

"SPONSOR" means any person directly or indirectly instrumental in
organizing, wholly or in part, a REIT or any person who will control, manage or
participate in the management of a REIT, and any affiliate of such person

"UNIMPROVED REAL PROPERTY" means the properties of the Company which: (a)
represent an equity interest in real property which was not acquired for the
purpose of producing rental or other operating income, (b) has no development or
construction in process on such land, and (c) no development or construction on
such land is planned in good faith to commence on such land within one year.

"WELLS CAPITAL" means Wells Capital, Inc., a Georgia corporation which
serves as the Company's Advisor.

81

APPENDIX I

WELLS REAL ESTATE INVESTMENT TRUST, INC.

CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 1997
TOGETHER WITH
AUDITORS' REPORT

F-1

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors and Shareholder of
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying consolidated balance sheet of WELLS REAL ESTATE
INVESTMENT TRUST, INC. as of December 31, 1997.  This consolidated balance sheet
is the responsibility of the Company's management.  Our responsibility is to
express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards required that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated balance sheet is free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the consolidated balance sheet.  An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation.  We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the consolidated balance sheet referred to above presents
fairly, in all material respects, the financial position of Wells Real Estate
Investment Trust, Inc. as of December 31, 1997 in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP
Atlanta, Georgia
January 13, 1998

F-2

WELLS REAL ESTATE INVESTMENT TRUST, INC.

CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1997

ASSETS

CASH                                                                                             $201,000

DEFERRED OFFERING COSTS                                                                           289,073
--------
Total assets                                                                         $490,073
========

LIABILITIES AND SHAREHOLDER'S EQUITY

LIABILITIES:
Due to affiliate                                                                               $289,073
--------
MINORITY INTEREST OF UNIT HOLDER IN
OPERATING PARTNERSHIP                                                                             200,000
--------
SHAREHOLDER'S EQUITY:

Common shares, $.01 par value; 5,000 shares authorized, 100 shares issued and                         1
outstanding

Additional paid-in capital                                                                          999
--------
Total shareholder's equity                                                                   1,000
--------
Total liabilities and shareholder's equity                                                $490,073
========

The accompanying notes are an integral part of this consolidated balance sheet.

F-3

WELLS REAL ESTATE INVESTMENT TRUST, INC.

NOTES TO CONSOLIDATED BALANCE SHEET

DECEMBER 31, 1997

(1)  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Wells Real Estate Investment Trust, Inc. (the "Company"), is a newly formed
Maryland corporation that intends to qualify as a real estate investment
trust ("REIT").  The Company intends to offer for sale a maximum of
15,000,000 (exclusive of 1,500,000 shares available pursuant to the
Company's dividend reinvestment plan) shares of common stock, $.01 par
value per share, at a price of $10 per share.  As of December 31, 1997, the
Company had sold 100 shares to Wells Capital, Inc. (the "Advisor"), at the
proposed initial public offering price of $10 per share.  The Company will
seek to acquire and operate commercial properties, including, but not
limited to, office buildings, shopping centers, business and industrial
parks, and other commercial and industrial properties, including properties
which are under construction or development, are newly constructed, or have
been constructed and have operating histories.  All such properties may be
acquired, developed and operated by the Company alone or jointly with
another party.  The Company is likely to enter into one or more joint
ventures with affiliated entities for the acquisition of properties.  In
connection with this, the Company may enter into joint ventures for the
acquisition of properties with prior or future real estate limited
partnership programs sponsored by the Advisor or its affiliates.

Substantially all of the Company's business will be conducted through Wells
Operating Partnership, L.P. (the "Operating Partnership"), a Delaware
limited partnership.  At December 31, 1997, the Operating Partnership had
issued 20,000 limited partner units to the Advisor in exchange for
$200,000.  The Company is the sole general partner in the Operating
Partnership and possesses full legal control and authority over the
operations of the Operating Partnership; consequently, the accompanying
consolidated balance sheet of the Company includes the amounts of the
Company and the Operating Partnership.

As of December 31, 1997, the Company has neither purchased nor contracted
to purchase any properties, nor has the Advisor identified any properties
in which there is a reasonable probability that the Company will invest.

USE OF ESTIMATES

The preparation of the consolidated balance sheet in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the consolidated balance sheet.  Actual results could differ from those
estimates.

(2)  INCOME TAXES

The Company expects to qualify as a REIT under the Internal Revenue Code of
1986, as amended.  As a REIT, the Company generally will not be subject to
federal income tax on net income that it distributes to its shareholders.
The Company intends to make timely distributions sufficient to satisfy the
annual distribution requirements.

F-4

EXHIBIT A

PRIOR PERFORMANCE TABLES

The following Prior Performance Tables (the "Tables") provide information
relating to real estate investment programs sponsored by the Advisor and its
Affiliates ("Prior Programs") which have investment objectives similar to the
Company.

Prospective investors should read these Tables carefully together with the
summary information concerning the Prior Programs as set forth in "PRIOR
PERFORMANCE SUMMARY" elsewhere in this Prospectus.

INVESTORS IN THE COMPANY WILL NOT OWN ANY INTEREST IN THE PRIOR PROGRAMS
AND SHOULD NOT ASSUME THAT THEY WILL EXPERIENCE RETURNS, IF ANY, COMPARABLE TO
THOSE EXPERIENCED BY INVESTORS IN THE PRIOR PROGRAMS.

These Tables present actual results of Wells Prior Public Programs that
have investment objectives similar to those of the Company.  The Company's
investment objectives are to maximize Net Cash From Operations; to preserve
original Capital Contributions; and to realize capital appreciation over a
period of time.  All of the Wells Prior Public Programs have used a substantial
amount of capital and not acquisition indebtedness to acquire their properties.

The Advisor is responsible for the acquisition, operation, maintenance and
resale of the Partnership Properties.  The financial results of the Prior
Programs thus provide an indication of the Advisor's performance of its
obligations during the periods covered.  However, general economic conditions
affecting the real estate industry and other factors contribute significantly to
financial results.

The following tables are included herein:

TABLE I - Experience in Raising and Investing Funds (As a Percentage of
Investment)

TABLE II - Compensation to Sponsor (in Dollars)

TABLE III - Annual Operating Results of Prior Programs

TABLE IV (Results of completed programs) and TABLE V (sales or disposals of
property) have been omitted since none of the Prior Programs have sold any of
their properties to date.

Additional information relating to the acquisition of properties by the
Prior Programs is contained in TABLE VI, which is included in the Registration
Statement which the Company has filed with the Securities and Exchange
Commission.  As described above, no Wells Prior Public Program has sold or
disposed of any property held by it.  Copies of any or all information will be
provided to prospective investors at no charge upon request, including copies of
the Form 10-K Annual Report for any or all of the Prior Programs for any
available year.

The following are definitions of certain terms used in the Tables:

"ACQUISITION FEES" shall mean fees and commissions paid by a partnership in
connection with its purchase or development of a property, except Development
fees paid to a person not affiliated with the partnership or with a general
partner of the partnership in connection with the actual development of a
project after acquisition of the land by the partnership.

"ORGANIZATION EXPENSES" shall include legal fees, accounting fees,
securities filing fees, printing and reproduction expenses and fees paid to the
general partners or their affiliates in connection with the planning and
formation of the partnership.

"UNDERWRITING FEES" shall include selling commissions and wholesaling fees
paid to broker-dealers for services provided by the broker-dealers during the
offering.

A-1

TABLE I

(UNAUDITED)

EXPERIENCE IN RAISING AND INVESTING FUNDS

This Table provides a summary of the experience of the General Partners and
their Affiliates in Prior Programs for which offerings have been completed since
December 31, 1993.  Information is provided with regard to the manner in which
the proceeds of the offerings have been applied.  Also set forth is information
pertaining to the timing and length of these offerings, the time period over
which the proceeds have been invested in the properties, as well as the
percentage of offerings sold and the expenses related to the offerings.

Wells Real         Wells Real         Wells Real         Wells Real
Estate Fund        Estate Fund        Estate Fund        Estate Fund
VI, L.P.           VII, L.P.         VIII, L.P.          IX, L.P.
-----------------  -----------------  -----------------  -----------------

Dollar Amount Offered                        $  25,000,000(3)   $  25,000,000(4)   $  35,000,000(5)   $  35,000,000(6)
Dollar Amount Raised                         $  25,000,000(3)     $24,180,174(4)     $32,042,689(5)     $35,000,000(6)
=============      =============      =============      =============
Percentage Amount Raised                             100.0%(3)           96.7%(4)           91.6%(5)          100.0%(6)
Less Offering Expenses
Underwriting Fees                                   10.0%              10.0%              10.0%              10.0%
Organizational Expenses                              5.0%               5.0%               5.0%               5.0%
Reserves(1)                                            1.0%               1.0%               0.0%               0.0%
-------------      -------------      -------------      -------------
Percent Available for Investment                    84.0%              84.0%              85.0%              85.0%
Acquisition and Development Costs
Prepaid Items and Fees related
to Purchase of Property                            0.3%               0.0%               0.0%               0.0%
Cash Down Payment                                   40.4%              16.3%               6.3%               7.0%
Acquisition Fees(2)                                  3.7%               3.5%               4.0%               4.0%
Development and Construction Costs                  39.6%              64.2%              50.3%              30.0%
Reserve for Payment of Indebtedness                    0.0%               0.0%               0.0%               0.0%
-------------      -------------      -------------      -------------
Total Acquisition and Development Cost                84.0%              84.0%              60.6%(7)           41.0%(8)
-------------      -------------      -------------      -------------
Percent Leveraged                                      0.0%               0.0%               0.0%               0.0%
=============      =============      =============      =============
Date Offering Began                               04/05/93           04/24/94           01/06/95             1/5/96
Length of Offering                                  12 mo.             12 mo.             12 mo.             12 mo.
Months to Invest 90% of Amount
Available for Investment                          15 mo.             12 mo.                    (7)                (8)
(Measured from Beginning of Offering)
Number of Investors                                  1,791              1,865              2,086              2,098

- ---------------------
(1)  Does not include General Partner contributions held as part of reserves.
(2)  Includes development fees, real estate commissions, general contractor fees
and/or architectural fees paid to Affiliates of the General Partners.
(3)  Total dollar amount registered and available to be offered was $25,000,000.
Wells Real Estate Fund VI, L.P. closed its offering on April 4, 1994 and
the total dollar amount raised was $25,000,000.
(4)  Total dollar amount registered and available to be offered was $25,000,000.
Wells Real Estate Fund VII, L.P. closed its offering on January 5, 1995 and
the total dollar amount raised was $24,180,174.
(5)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund VIII, L.P. closed its offering on January 4, 1996
and the total dollar amount raised was $32,042,689.
(6)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund IX, L.P. closed its offering on December 30, 1996
and the total dollar amount raised was $35,000,000.
(7)  As of December 31, 1996, Wells Real Estate Fund VIII, L.P. had not yet
invested 90% of the amount available for investment.  The amount invested
in properties (including Acquisition Fees paid but not yet associated with
a specific property) at December 31, 1996 was 44% of the total dollar
amount raised.  The amount invested and/or committed to be invested in
properties (including Acquisition Fees paid but not yet associated with a
specific property) at December 31, 1996 was 60.6% of the total dollar
amount raised.
(8)  As of December 31, 1996, Wells Real Estate Fund IX, L.P. had not yet
invested 90% of the amount available for investment.  The amount invested
in properties (including Acquisition Fees paid but not yet associated with
a specific property) at December 31, 1996 was 17% of the total dollar
amount raised.  The amount invested and/or committed to be invested in
properties (including Acquisition Fees paid but not yet associated with a
specific property) at December 31, 1996 was 41.0% of the total dollar
amount raised.

A-2

TABLE II
(UNAUDITED)

COMPENSATION TO SPONSOR

The following sets forth the compensation received by General Partners or
Affiliates of the General Partners, including compensation paid out of offering
proceeds and compensation paid in connection with the ongoing operations of
Prior Programs having similar or identical investment objectives the offerings
of which have been completed since December 31, 1993.  These partnerships have
not sold or refinanced any of their properties to date.  All figures are as of
December 31, 1996.

Wells Real    Wells Real    Wells Real    Wells Real       Other
Estate Fund   Estate Fund   Estate Fund   Estate Fund       Public
VI, L.P.     VII, L.P.     VIII, L.P.     IX, L.P.     Programs(1)
------------  ------------  ------------  ------------  --------------

Date Offering Commenced                                      04/05/93      04/06/94      01/06/95      01/05/96             --
Dollar Amount Raised                                      $25,000,000   $24,180,174   $32,042,689   $35,000,000   $125,018,232
to Sponsor from Proceeds of Offering:
Underwriting Fees(2)                                     $   119,936   $   178,122   $   174,295   $   309,556   $    451,803
Acquisition Fees
Real Estate Commissions(5)                                       --            --            --            --             --
Acquisition and Advisory Fees(3)                        $   932,216   $   846,306   $ 1,281,708   $ 1,400,000   $  7,099,169
Dollar Amount of Cash Generated from Operations
Before Deducting Payments to Sponsor(4)                  $ 2,780,262   $ 1,943,504   $ 1,228,747   $   161,427   $ 21,533,226
Amount Paid to Sponsor from Operations:
Property Management Fee(1)                               $    78,975   $    58,433   $    26,780   $       486   $    791,998
Partnership Management Fee                                        --            --            --            --             --
Reimbursements(6)                                        $    92,825   $    90,160   $    48,429   $     8,332   $  1,138,583
Leasing Commissions(1)                                   $    41,428   $    39,494   $    25,209   $     1,459   $    817,520
General Partner Distributions                                      --            --            --            --         15,205
Other                                                              --            --            --            --             --
Dollar Amount of Property Sales and Refinancing
Payments to Sponsors:
Cash                                                               --            --            --            --             --
Notes                                                              --            --            --            --             --
Amount Paid to Sponsor from Property Sales
and Refinancing:
Real Estate Commissions                                          --            --            --            --             --
Incentive Fees                                                   --            --            --            --             --
Other                                                            --            --            --            --             --

- -----------------
(1) Includes compensation paid to General Partners from Wells Real Estate Fund
II, Wells Real Estate Fund II-OW, Wells Real Estate Fund III, L.P., Wells
Real Estate Fund IV, L.P. and Wells Real Estate Fund V, L.P. during the past
three years.  General Partners of Wells Real Estate Fund I are entitled to
certain property management and leasing fees but have elected to defer the
payment of such fees until a later year on properties owned by Fund I and
properties owned jointly by Fund I and Fund II.  At December 31, 1996, the
amount of such fees due the General Partners totaled $1,897,184 and are not
included in Table II.
(2) Includes net underwriting compensation and commissions paid to Wells
Investment Securities, Inc. in connection with the offerings of Wells Real
Estate Funds VI, VII, VIII and IX, which were not reallowed to participating
broker-dealers.
(3) Fees paid to the General Partners or their Affiliates for acquisition
advisory services in connection with the review and evaluation of potential
real property acquisitions.
(4) Includes $125,314 in net cash used by operating activities, $2,692,348 in
distributions paid to limited partners and $213,228 in payments to sponsors
for Wells Real Estate Fund VI, L.P.; $32,869 in net cash used by operating
activities, $1,732,250 in distributions paid to limited partners and
$188,087 in payments to sponsor for Wells Real Estate Fund VII, L.P.; $2,443
in net cash used by operating activities, $1,130,772 in distributions paid
to limited partners and $100,418 in payments to sponsor for Wells Real
Estate Fund VIII, L.P.; $1,725 in net cash provided by operating activities,
$149,425 in distributions paid to limited partners and $10,277 in payments
to sponsor for Wells Real Estate Fund IX, L.P.; and $855,331 in net cash
provided by operating activities, $19,618,669 in distributions paid to
limited partners and $2,763,306 in payments to sponsor for other public
programs.
(5) The sponsor does not receive any real estate commission for the acquisition
of any property.
(6) Certain salaries and other employee-related expenses, travel and other out-
of-pocket expenses of personnel (other than controlling persons of the
General Partner or their Affiliates) may be reimbursed to the extent such
expenses are directly related to a specific Partnership Property.

A-3

TABLE III
(UNAUDITED)

The tables on the following five (5) pages set forth operating results of
prior programs sponsored by the General Partners the offerings of which have
been completed since December 31, 1991.  The information relates only to public
programs with investment objectives similar to those of the Partnership.  All
figures are as of December 31 of the year indicated.

A-4

TABLE III
(UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND V, L.P.

1996         1995          1994           1993           1992
------------  -----------  -------------  -------------  -------------

Gross Revenues(1)                                    $  590,839      764,624    $   656,958    $   458,213    $    58,640
Profit on Sale of Properties                                 --           --             --             --             --
Less: Operating Expenses(2)                              78,939       68,735         88,987         96,964         71,521
Depreciation and Amortization(3)                          6,250        6,250          6,250          6,250          5,208
----------   ----------    -----------    -----------    -----------
Net Income (Loss) GAAP Basis(4)                      $  505,650   $  689,639    $   561,721    $   354,999    $   (18,089)
==========   ==========    ===========    ===========    ===========
Taxable Income (Loss): Operations                    $  666,780   $  676,367    $   528,025    $   280,000    $   (18,089)
==========   ==========    ===========    ===========    ===========
Cash Generated (Used By):                               (65,728)     (46,235)       (10,395)       112,594        (33,006)
Operations
Joint Ventures                                       1,072,835    1,020,905        653,729         54,154             --
----------   ----------    -----------    -----------    -----------
$1,007,107   $  974,670    $   643,334    $   166,748    $   (33,006)
Less Cash Distributions to Investors:                 1,007,107   $  969,011        643,334        151,336             --
Operating Cash Flow
Return of Capital                                           --           --         44,257             --             --
Undistributed Cash Flow from Prior
Year Operations                                        3,672           --          5,412             --             --
----------   ----------    -----------
Cash Generated (Deficiency) after
Cash Distributions                                 $   (3,672)  $    5,659    $   (59,669)   $    15,412    $   (33,006)
Special Items (not including sales
and financing):
Source of Funds:
General Partner Contributions                                --           --             --             --             --
Limited Partner Contributions                                --           --             --      5,589,786     11,416,234
----------   ----------    -----------    -----------    -----------
--   $    5,659    $   (59,699)   $ 5,605,198    $11,383,228
Use of Funds:
Sales Commissions and Offering
Expenses                                                   --           --             --        764,599      1,377,645
Return of Original Limited Partner's
Investment                                                 --           --             --             --            100
Property Acquisitions and Deferred
Project Costs                                           (225)    (233,501)     2,366,507      7,755,116      4,181,338
----------   ----------    -----------    -----------    -----------
Cash Generated (Deficiency) after Cash
Distributions and                                  $   (3,897)  $ (227,842)   $(2,426,206)   $(2,914,517)   $ 5,824,145
Special Items                                       ==========   ==========    ===========    ===========    ===========

Net Income and Distributions Data per
$1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                  71           73             58             29              0
- Operations Class B Units                                (378)        (272)          (180)           (54)           (65)
Capital Gain (Loss)                                          0            0              0              0              0
Tax and Distributions Data per $1,000
Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                  69           69             55             36             --
- Operations Class B Units                                (260)        (246)          (181)           (58)           (21)
Capital Gain (Loss)                                         --           --             --             --             --
Cash Distributions to Investors:
Source (on GAAP Basis)
- - Investment Income Class A Units                            65           63             46             10             --
- - Return of Capital Class A Units                            --           --             --             --             --
- - Return of Capital Class B Units                            --           --             --             --             --
Source (on Cash Basis)                                                                                                 --
- - Operations Class A Units                                   65           63             43             10             --
- - Return of Capital Class A Units                            --           --              3             --             --
- - Operations Class B Units                                   --           --             --             --             --
Amount (in Percentage Terms) Remaining
Invested in Program         100%
Properties at the end of the Last Year
Reported in the Table

- -------------------------
(See notes on following page)

A-5

(1) Includes $19,125 in equity in loss of joint ventures and $77,765 from
investment of reserve funds in 1992; $207,234 in equity in earnings of joint
ventures and $250,979 from investment of reserve funds in 1993; $592,902 in
equity in earnings of joint ventures and $64,056 from investment of reserve
funds in 1994; $745,173 in equity in earnings of joint ventures and $19,451
from investment of reserve funds in 1995; and $577,128 in equity in earnings
of joint ventures and $13,711 from investment of reserve funds in 1996.  At
December 31, 1996, the leasing status of all developed property was 92%.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenue is
depreciation and amortization of $100,796 for 1993, $324,578 for 1994,
$440,333 for 1995 and $591,390 for 1996.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated as follows:  $(17,908) to Class
B Limited Partners and $(181) to General Partners for 1992; $442,135 to
Class A Limited Partners, $(87,868) to Class B Limited Partners and $732 to
General Partners for 1993; $879,232 to Class A Limited Partners, $(316,460)
to Class B Limited Partners and $(1,051) to General Partners for 1994;
$1,124,203 to Class A Limited Partners and $(434,564) to Class B Limited
Partners and $0 for 1995; and $1,095,296 to Class A Limited Partners and
$(589,646) to Class B Limited Partners for 1996.

A-6

TABLE III
(UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VI, L.P.

1996           1995           1994           1993       1992
------------  --------------  -------------  -------------  ----

Gross Revenues(1)                                                   $  675,782    $  1,002,567    $   819,535    $    82,723   N/A
Profit on Sale of Properties                                                --              --             --             --
Less: Operating Expenses(2)                                             80,479          94,489        112,389         46,608
Depreciation and Amortization(3)                                         6,250           6,250          6,250          4,687
----------    ------------    -----------    -----------
Net Income (Loss) GAAP Basis(4)                                     $  589,053    $    901,828    $   700,896    $    31,428
==========    ============    ===========    ===========
Taxable Income (Loss): Operations                                   $  809,389    $    916,531    $   667,682    $    31,428
==========    ============    ===========    ===========
Cash Generated (Used By):                                               (2,716)       (278,728)      (276,376)        (2,478)
Operations
Joint Ventures                                                      1,044,891         766,212        203,543             --
----------    ------------    -----------    -----------
$1,042,175    $  1,044,940    $   479,919    $    (2,478)
Less Cash Distributions to Investors:
Operating Cash Flow                                                 1,042,175    $  1,044,940        245,800             --
Return of Capital                                                     125,314              --             --             --
Undistributed Cash Flow from Prior Year Operations                     18,027         216,092             --             --
----------    ------------    -----------    -----------
Cash Generated (Deficiency) after Cash Distributions                $ (143,341)   $   (216,092)   $   234,119    $    (2,478)
Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                               --              --             --             --
Limited Partner Contributions                                               --              --     12,163,461     12,836,539
----------    ------------    -----------    -----------
$  --         $  --            $12,397,580    $12,834,061
Use of Funds:
Sales Commissions and Offering Expenses                                    --              --      1,776,909      1,781,724
Return of Original Limited Partner's Investment                            --              --             --            100
Property Acquisitions and Deferred Project Costs                      234,924      10,721,376      5,912,454      3,856,239
----------    ------------    -----------    -----------
Cash Generated (Deficiency) after Cash Distributions and            $ (378,265)   $(10,937,468)   $(4,708,217)   $(7,195,998)
Special Items                                                      ==========    ============    ===========    ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                                 59              57             43              9
- Operations Class B Units                                               (160)            (60)           (12)            (5)
Capital Gain (Loss)                                                        --              --             --              0
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                 56              56             41              1
- Operations Class B Units                                                (99)            (51)           (22)            --
Capital Gain (Loss)                                                        --              --             --             --
Cash Distributions to Investors:
Source (on GAAP Basis)
- - Investment Income Class A Units                                           56              57             14             --
- - Return of Capital Class A Units                                           --               4             --             --
- - Return of Capital Class B Units                                           --              --             --             --
Source (on Cash Basis)
- - Operations Class A Units                                                  50              61             14             --
- - Return of Capital Class A Units                                            6              --             --             --
- - Operations Class B Units                                                  --
Amount (in Percentage Terms) Remaining Invested in Program                 100%
Properties at the end of the Last Year Reported in the Table

- ---------------------------
(See notes on following page)

A-7

(1) Includes $3,436 in equity in loss of joint ventures and $86,159 from
investment of reserve funds in 1993, $285,711 in equity in earnings of joint
ventures and $533,824 from investment of reserve funds in 1994, $681,033 in
equity in earnings of joint ventures and $321,534 from investment of reserve
funds in 1995 and $607,214 in equity in earnings of joint ventures and
$68,568 from investment of reserve funds in 1996.  At December 31, 1996, the
leasing status was 93%.
(2) Includes partnership administrative expenses.
(3) Included in equity in loss of joint ventures in gross revenues is
depreciation of $3,436 for 1993, $107,807 for 1994, and $264,866 for 1995
and $648,478 for 1996.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $39,551 to Class A Limited
Partners, $(8,042) to Class B Limited Partners and $(81) to the General
Partner for 1993; $762,218 to Class A Limited Partners, $(62,731) to Class B
Limited Partners and $1,409 to the General Partners for 1994; $1,172,944 to
Class A Limited Partners, $(269,288) to Class B Limited Partners and
$(1,828) to the General Partners for 1995; and $1,234,717 to Class A Limited
Partners, $(645,664) to Class B Limited Partners and $0 to the General
Partners for 1996.

A-8

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VII, L.P.

1996           1995            1994       1993  1992
-----------  --------------  --------------  ----  ----

Gross Revenues(1)                                                   $ 543,291         925,246    $    286,371    N/A   N/A
Profit on Sale of Properties                                               --                              --
Less: Operating Expenses(2)                                            84,265         114,953          78,420
Depreciation and Amortization(3)                                        6,250           6,250           4,688
---------    ------------    ------------
Net Income (Loss) GAAP Basis(4)                                     $ 452,776    $    804,043    $    203,263
=========    ============    ============
Taxable Income (Loss): Operations                                   $ 657,443    $    812,402    $    195,067
=========    ============    ============
Cash Generated (Used By):                                              20,883         431,728          47,595
Operations
Joint Ventures                                                       760,628         424,304          14,243
---------    ------------    ------------
$ 781,511    $    856,032    $     61,838
Less Cash Distributions to Investors:                                 781,511    $    856,032          52,195
Operating Cash Flow
Return of Capital                                                     10,805          22,064              --
Undistributed Cash Flow from Prior Year Operations                        --           9,643              --
---------    ------------    ------------
Cash Generated (Deficiency) after Cash Distributions                $ (10,805)   $    (31,707)   $     (9,643)
Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                                              --              --
Limited Partner Contributions                                      $                  805,212      23,374,961
--            ------------    ------------
$  --         $    773,505    $ 23,384,604
Use of Funds:
Sales Commissions and Offering Expenses                                   --         244,207       3,351,569
Return of Original Limited Partner's Investment                           --             100              --
Property Acquisitions and Deferred Project Costs                     736,960      14,971,002       4,477,765
---------    ------------    ------------
Cash Generated (Deficiency) after Cash Distributions and            $(747,765)   $(14,441,804)   $(15,555,270)
Special Items                                                      =========    ============    ============

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                                62              57              29
- Operations Class B Units                                               (98)            (20)             (9)
Capital Gain (Loss)                                                       --              --              --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                55              55              28
- Operations Class B Units                                               (58)            (16)            (17)
Capital Gain (Loss)                                                       --              --              --
Cash Distributions to Investors:
Source (on GAAP Basis)
- - Investment Income Class A Units                                          43              52               7
- - Return of Capital Class A Units                                          --              --              --
- - Return of Capital Class B Units                                          --              --              --
Source (on Cash Basis)
- - Operations Class A Units                                                 42              51               7
- - Return of Capital Class A Units                                           1               1              --
- - Operations Class B Units                                                 --              --              --
Source (on a Priority Distribution Basis)(5)
- - Investment income Class A Units                                          29              30               4
- - Return of Capital Class A Units                                          14              22               3
- - Return of Capital Class B Units                                          --              --              --
Amount (in Percentage Terms) Remaining Invested in Program                100%
Properties at the end of the Last Year Reported in the Table

- --------------------------------------------------------------------------------
(See notes on following page)

A-9

(1) Includes $78,799 in equity in earnings of joint ventures and $207,572 from
investment of reserve funds in 1994, and $403,325 in equity in earnings of
joint ventures and $521,921 from investment of reserve funds in 1995 and
$457,144 in equity in earnings of joint ventures and $86,147 from investment
of reserve funds in 1996.  At December 31, 1996, the leasing status was 90%
including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $25,468 for 1994, $140,533 for 1995 and $605,247 for 1996.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $233,337 to Class A Limited
Partners, $(29,854) to Class B Limited Partners and $(220) to the General
Partner for 1994; $950,826 to Class A Limited Partners, $(146,503) to Class
B Limited Partners and $(280) to the General Partners for 1995; and
$1,062,605 to Class A Limited Partners, $(609,829) to Class B Limited
Partners and $0 to the General Partners for 1996.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per Unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1996, the aggregate amount of such
priority distributions payable to Class B Limited Partners totaled $659,487.

A-10

TABLE III
(UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VIII, L.P.

1996            1995       1994  1993  1992
-------------  --------------  ----  ----  ----

Gross Revenues(1)                                                   $ 1,057,694    $    402,428    N/A   N/A   N/A
Profit on Sale of Properties                                                 --
Less: Operating Expenses(2)                                             114,854         122,264
Depreciation and Amortization(3)                                          6,250           6,250
-----------    ------------
Net Income (Loss) GAAP Basis(4)                                     $   936,590    $    273,914
===========    ============
Taxable Income (Loss): Operations                                   $ 1,001,974    $    404,348
===========    ============
Cash Generated (Used By):                                               623,268         204,790
Operations
Joint Ventures                                                         279,984          20,287
-----------    ------------
$   903,252    $    225,077
Less Cash Distributions to Investors:                                   903,252              --
Operating Cash Flow
Return of Capital                                                        2,443              --
Undistributed Cash Flow from Prior Year Operations                 $   222,077   $
-----------   --
Cash Generated (Deficiency) after Cash Distributions                $  (227,520)   $    225,077
Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                                --              --
Limited Partner Contributions                                         1,898,147      30,144,542
-----------    ------------
$ 1,670,627    $ 30,369,619
Use of Funds:
Sales Commissions and Offering Expenses                                464,760       4,310,028
Return of Original Limited Partner's Investment                             --              --
Property Acquisitions and Deferred Project Costs                     7,931,566       6,618,273
-----------    ------------
Cash Generated (Deficiency) after Cash Distributions and            $(6,725,699)   $(19,441,318)
Special Items                                                      ===========    ============

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                                  46              28
- Operations Class B Units                                                 (47)             (3)
Capital Gain (Loss)
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                  46              17
- Operations Class B Units                                                 (33)             (3)
Capital Gain (Loss)                                                         --              --
Cash Distributions to Investors:
Source (on GAAP Basis)
- - Investment Income Class A Units                                            43              --
- - Return of Capital Class A Units                                            --              --
- - Return of Capital Class B Units                                            --              --
Source (on Cash Basis)
- - Operations Class A Units                                                   32              --
- - Return of Capital Class A Units                                            11              --
- - Operations Class B Units                                                   --              --
Source (on a Priority Distribution Basis)(5)
- Investment Income Class A Units                                           33              --
- Return of Capital Class A Units                                           10              --
- Return of Capital Class B Units                                           --              --
Amount (in Percentage Terms) Remaining Invested in Program                  100%
Properties at the end of the Last Year Reported in the Table

- ----------------------------------
(See notes on following page)

A-11

(1) Includes $28,377 in equity in earnings of joint ventures and $374,051 from
investment of reserve funds in 1995 and $241,819 in equity in earnings of
joint ventures and $815,875 from investment of reserve funds in 1996.  At
December 31, 1996, the leasing status was 93% including developed property
in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $14,058 for 1995 and $265,259 for 1996.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $294,221 to Class A Limited
Partners, $(20,104) to Class B Limited Partners and $(203) to the General
Partners for 1995; and $1,207,540  to Class A Limited Partners, $(270,653)
to Class B Limited Partners and $(297) to the General Partners for 1996.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per Unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1996, the aggregate amount of such
priority distributions payable to Class B Limited Partners totaled $250,776.

A-12

TABLE III
(UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND IX, L.P.

1996       1995  1994  1993  1992
-------------  ----  ----  ----  ----

Gross Revenues(1)                                                   $   406,891    N/A   N/A   N/A   N/A
Profit on Sale of Properties                                                 --
Less: Operating Expenses(2)                                             101,885
Depreciation and Amortization(3)                                          6,250
-----------
Net Income (Loss) GAAP Basis(4)                                     $   298,756
===========
Taxable Income (Loss): Operations                                   $   304,552
===========
Cash Generated (Used By):
Operations                                                             151,150
Joint Ventures                                                              --
-----------
$   151,150
Less Cash Distributions to Investors:
Operating Cash Flow                                                    149,425
-----------
Cash Generated (Deficiency) after Cash Distributions                $     1,725
Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                                --
Limited Partner Contributions                                        35,000,000
-----------
$35,001,725
Use of Funds:
Sales Commissions and Offering Expenses                              4,900,321
Return of Original Limited Partner's Investment                             --
Property Acquisitions and Deferred Project Costs                     6,544,019
-----------
Cash Generated (Deficiency) after Cash Distributions and            $23,557,385
Special Items                                                      ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                                  28
- Operations Class B Units                                                 (11)
Capital Gain (Loss)                                                         --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                                  26
- Operations Class B Units                                                 (48)
Capital Gain (Loss)                                                         --
Cash Distributions to Investors:
Source (on GAAP Basis)
- - Investment Income Class A Units                                            13
- - Return of Capital Class A Units                                            --
- - Return of Capital Class B Units                                            --
Source (on Cash Basis)
- - Operations Class A Units                                                   13
- - Return of Capital Class A Units                                            --
- - Operations Class B Units                                                   --
Source (on a Priority Distribution Basis)(5)
- Investment Income Class A Units                                           10
- Return of Capital Class A Units                                            3
- Return of Capital Class B Units                                           --
Amount (in Percentage Terms) Remaining Invested in Program                  100%
Properties at the end of the Last Year Reported in the Table

- -----------------
(1) Includes $23,077 in equity in earnings of joint ventures and $383,884 from
investment of reserve funds in 1996.  At December 31, 1996, the leasing
status was 100% including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $25,286 for 1996.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $330,270 to Class A Limited
Partners, $(31,220) to Class B Limited Partners and $(294) to the General
Partners for 1996.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per Unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1996, the aggregate amount of such
priority distributions payable to Class B Limited Partners totaled $36,355.

A-13

EXHIBIT B

SUBSCRIPTION AGREEMENT

To:  Wells Real Estate Investment Trust, Inc.
3885 Holcomb Bridge Road
Norcross, Georgia  30092

Ladies and Gentlemen:

The undersigned, by signing and delivering a copy of the attached
Subscription Agreement Signature Page, hereby tenders this subscription and
applies for the purchase of the number of shares of common stock of ("Shares")
in Wells Real Estate Investment Trust, Inc., a Maryland corporation (the
"Company"), set forth on such Subscription Agreement Signature Page.  Payment
for the Shares is hereby made by check payable to "NationsBank, N.A., as Escrow
Agent."

Payments for Shares will be held in escrow until the Company has received
and accepted subscriptions for 125,000 Shares ($1,250,000), except with respect
to residents of the States of New York and Pennsylvania, whose payments for
Shares will be held in escrow until the Company has received and accepted
subscriptions for 250,000 Shares ($2,500,000) from all investors.

I hereby acknowledge receipt of the Prospectus for the Company dated
January 30, 1998 (the "Prospectus").

I agree that if this subscription is accepted, it will be held, together
with the accompanying payment, on the terms described in the Prospectus.
Subscriptions may be rejected in whole or in part by the Company in its sole and
absolute discretion.

Prospective investors are hereby advised of the following:

(a) The assignability and transferability of the Shares is restricted and
will be governed by the Company's Articles of Incorporation and Bylaws and all
applicable laws as described in the Prospectus.

(b) Prospective investors should not invest in Shares unless they have an
adequate means of providing for their current needs and personal contingencies
and have no need for liquidity in this investment.

(c) There will be no public market for the Shares, and accordingly, it may
not be possible to readily liquidate an investment in the Company.

B-1

SPECIAL NOTICE FOR CALIFORNIA RESIDENTS ONLY
CONDITIONS RESTRICTING TRANSFER OF SHARES

260.141.11  Restrictions on Transfer.
------------------------ 

(a) The issuer of any security upon which a restriction on transfer has
been imposed pursuant to Sections 260.102.6, 260.141.10 or 260.534 of the Rules
(the "Rules") adopted under the California Corporate Securities Law (the "Code")
shall cause a copy of this section to be delivered to each issuee or transferee
of such security at the time the certificate evidencing the security is
delivered to the issuee or transferee.

(b) It is unlawful for the holder of any such security to consummate a sale
or transfer of such security, or any interest therein, without the prior written
consent of the Commissioner (until this condition is removed pursuant to Section
260,141.12 of the Rules), except:

(1)  to the issuer;

(2) pursuant to the order or process of any court;

(3) to any person described in subdivision (i) of Section 25102 of the
Code or Section 260.105.14 of the Rules;

(4) to the transferor's ancestors, descendants or spouse, or any
custodian or trustee for the account of the transferor or the transferor's
ancestors, descendants or spouse; or to a transferee by a trustee or custodian
for the account of the transferee or the transferee's ancestors, descendants or
spouse;

(5) to holders of securities of the same class of the same issuer;

(6) by way of gift or donation inter vivos or on death;

(7) by or through a broker-dealer licensed under the Code (either
acting as such or as a finder) to a resident of a foreign state, territory or
country who is neither domiciled in this state to the knowledge of the broker-
dealer, nor actually present in this state if the sale of such securities is not
in violation of any securities laws of the foreign state, territory or country
concerned;

(8) to a broker-dealer licensed under the Code in a principal
transaction, or as an underwriter syndicate or selling group;

(9) if the interest sold or transferred is a pledge or other lien
given by the purchaser to the seller upon a sale of the security for which the
Commissioner's written consent is obtained or under this rule not required;

(10) by way of a sale qualified under Sections 25111, 25112, 25113 or
25121 of the Code, of the securities to be transferred, provided that no order
under Section 25140 or subdivision (a) of Section 25143 is in effect with
respect to such qualification;

(11) by a corporation to a wholly owned subsidiary of such corporation
, or by a wholly owned subsidiary of a corporation to such corporation;

(12) by way of an exchange qualified under Section 25111, 25112 or
25113 of the Code provided that no order under Section 25140 or subdivision (a)
of Section 25143 is in effect with respect to such qualification;

(13) between residents of foreign states, territories or countries who
are neither domiciled or actually present in this state;

(14) to the State Controller pursuant to the Unclaimed Property Law or
to the administrator of the unclaimed property law of another state;

B-2

(15) by the State Controller pursuant to the Unclaimed Property Law or
by the administrator of the unclaimed property law of another state if, in
either such case, such person (i) discloses to potential purchasers at the sale
that transfer of the securities is restricted under this rule, (ii) delivers to
each purchaser a copy of this rule, and (iii) advises the Commissioner of the
name of each purchaser;

(16) by a trustee to a successor trustee when such transfer does not
involve a change in the beneficial ownership of the securities;

(17) by way of an offer and sale of outstanding securities in an
issuer transaction that is subject to the qualification requirement of Section
25110 of the Code but exempt from that qualification requirement by subdivision
(f) of Section 25102; provided that any such transfer is on the condition that
any certificate evidencing the security issued to such transferee shall contain
the legend required by this section.

(c) The certificates representing all such securities subject to such a
restriction on transfer, whether upon initial issuance or upon any transfer
thereof, shall bear on their face a legend, prominently stamped or printed
thereon in capital letters of not less than 10-point size, reading as follows:

"IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER OF THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT THE
PRIOR WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES."

[Last amended effective January 21, 1988.]

SPECIAL NOTICE FOR MASSACHUSETTS AND MINNESOTA RESIDENTS ONLY

In no event may a subscription for Shares be accepted until at least five
business days after the date the subscriber received the Prospectus.  Residents
of the State of Massachusetts who first received the Prospectus only at the time
of subscription may receive a refund of the subscription amount upon request to
the Company within five days of the date of subscription.

SPECIAL NOTICE FOR NEBRASKA RESIDENTS ONLY

No person or entity selling Shares on behalf of the Company may complete a
sale of the share until at least five business days after the date the
prospective investor receives a Prospectus.

B-3

STANDARD REGISTRATION REQUIREMENTS

The following requirements have been established for the various forms of
registration.  Accordingly, complete Subscription Agreements and such supporting
material as may be necessary must be provided.

TYPE OF OWNERSHIP AND SIGNATURE(S) REQUIRED

(1)  INDIVIDUAL:  One signature required.

(2)  JOINT TENANTS WITH RIGHT OF SURVIVORSHIP:  All parties must sign.

(3)  TENANTS IN COMMON:  All parties must sign.

(4)  COMMUNITY PROPERTY:  Only one investor signature required.

(5)  PENSION OR PROFIT SHARING PLANS:  The trustee signs the Signature Page.

(6)  TRUST:  The trustee signs the Signature Page.  Provide the name of the
trust, the name of the trustee and the name of the beneficiary.

(7)  COMPANY:  Identify whether the entity is a general or limited partnership.
The general partners must be identified and their signatures obtained on
the Signature Page.  In the case of an investment by a general partnership,
all partners must sign (unless a "managing partner") has been designated
for the partnership, in which case he may sign on behalf of the partnership
if a certified copy of the document granting him authority to invest on
behalf of the partnership is submitted).

(8)  CORPORATION:  The Subscription Agreement must be accompanied by (1) a
certified copy of the resolution of the Board of Directors designation the
officer(s) of the corporation authorized to sign on behalf of the
corporation and (2) a certified copy of the Board's resolution authorizing
the investment.

(9)  IRA AND IRA ROLLOVERS:  Requires signature of authorized signer (e.g., an
officer) of the bank, trust company, or other fiduciary.  The address of
the trustee must be provided in order for the trustee to receive checks and
other pertinent information regarding the investment.

(10) KEOGH (HR 10):  Same rules as those applicable to IRAs.

(11) UNIFORM GIFT TO MINORS ACT (UGMA) or UNIFORM TRANSFERS TO MINORS ACT
(UTMA):  The required signature is that of the custodian, not of the parent
(unless the parent has been designated as the custodian).  Only one child
is permitted in each investment under UGMA or UTMA.  In addition, designate
the state under which the gift is being made.

B-4

INSTRUCTIONS TO SUBSCRIPTION AGREEMENT SIGNATURE PAGE
TO WELLS REAL ESTATE INVESTMENT TRUST, INC. SUBSCRIPTION AGREEMENT

- -------------------------------------------------------------------------------------------------------------------------------- 
INVESTMENT INSTRUCTIONS        Please follow these instructions carefully.  Failure to do so may result in the rejection of
your subscription.  All information on the Subscription Agreement Signature Page should be
completed as follows:
- -------------------------------------------------------------------------------------------------------------------------------- 
1.  INVESTMENT                 A minimum investment of $1,000 (100 Shares) is required, except for certain states which
require a higher minimum investment.  A CHECK FOR THE FULL PURCHASE PRICE OF THE SHARES
SUBSCRIBED FOR SHOULD BE MADE PAYABLE TO THE ORDER OF "NATIONSBANK, N.A., AS ESCROW AGENT"
Shares may be purchased only by persons meeting the standards set forth under the Section of
the Prospectus entitled "INVESTOR SUITABILITY STANDARDS."  Please indicate the state in which
the sale was made.
- --------------------------------------------------------------------------------------------------------------------------------  
2.  TYPE OF                    Please check the appropriate box to indicate the type of entity or type of individuals
OWNERSHIP                  subscribing.
- --------------------------------------------------------------------------------------------------------------------------------  
3.  REGISTRATION               Please enter the exact name in which the Shares are to be held.  For joint tenants with right
NAME AND                   of survivorship or tenants in common, include the names of both investors.  In the case of
ADDRESS                    partnerships or corporations, include the name of an individual to whom correspondence will
be addressed.  Trusts should include the name of the trustee.  All investors must complete
the space provided for taxpayer identification number or social security number.  By signing
in Section 6, the investor is certifying that this number is correct.  Enter the mailing
address and telephone numbers of the registered owner of this investment.  In the case of a
Qualified Plan or trust, this will be the address of the trustee.  Indicate the birthday and
occupation of the registered owner unless the registered owner is a partnership, corporation
or trust.
- --------------------------------------------------------------------------------------------------------------------------------  
4.  INVESTOR NAME              Complete this Section only if the investor's name and address is different from the
AND ADDRESS                registration name and address provided in Section 4.  If the Shares are registered in the
name of a trust, enter the name, address, telephone number, social security number, birthdate
and occupation of the beneficial owner of the trust.
- --------------------------------------------------------------------------------------------------------------------------------  
5.  SUBSCRIBER                 Please separately initial each representation made by the investor where indicated.  Except
SIGNATURE                  in the case of fiduciary accounts, the investor may not grant any person a power of attorney
to make such representations on his or her behalf.  Each investor must sign and date this
Section.  If title is to be held jointly, all parties must sign.  If the registered owner is
a partnership, corporation or trust, a general partner, officer or trustee of the entity must
sign.  PLEASE NOTE THAT THESE SIGNATURES DO NOT HAVE TO  BE NOTARIZED.
- --------------------------------------------------------------------------------------------------------------------------------  
6.  ADDITIONAL                 Please check if you plan to make one or more additional investments in the Company.  All
INVESTMENTS                additional investments must be increments of at least $25.  Additional investments by
residents of Maine must be for the minimum amounts stated under "INVESTOR SUITABILITY
STANDARDS" in the Prospectus, and residents of Maine must execute a new Subscription
Agreement Signature Page to make additional investments in the Company.  If additional
investments in the Company are made, the investor agrees to notify the Company and the
Broker-Dealer named on the Subscription Agreement Signature Page in writing if at any time he
fails to meet the applicable suitability standards or he is unable to make any other
representations or warranties set forth in the Prospectus or the Subscription Agreement.  The
investor acknowledges that the Broker-Dealer named in the Subscription Agreement Signature
Page may receive a commission not to exceed 7% of any such additional investments in the
Company.
- --------------------------------------------------------------------------------------------------------------------------------  
7.  DISTRIBUTIONS              a.  DISTRIBUTION REINVESTMENT PLAN:  By electing the Distribution Reinvestment Plan, the
investor elects to reinvest all distributions of Cash Available for Distribution in the
Company.  The investor agrees to notify the Company and the Broker-Dealer named on the
Subscription Agreement Signature Page in writing if at any time he fails to meet the
applicable suitability standards or he is unable to make any other representations and
warranties as set forth in the Prospectus or Subscription 

B-5

- -------------------------------------------------------------------------------------------------------------------------------- 
Agreement. The investor acknowledges that the Broker-Dealer named in the Subscription 
Agreement Signature Page may receive a commission not to exceed 8% of any reinvested 
distributions.

b.  DISTRIBUTION ADDRESS:  If cash distributions are to be sent to an address other than that
provided in Section 5 (i.e., a bank, brokerage firm or savings and loan, etc.), please
provide the name, account number and address.
- -------------------------------------------------------------------------------------------------------------------------------- 
8.  BROKER-DEALER              This Section is to be completed by the Registered Representative.  Please complete all
BROKER-DEALER information contained in Section 9 including suitability certification.
SIGNATURE PAGE MUST BE SIGNED BY AN AUTHORIZED REPRESENTATIVE.
- --------------------------------------------------------------------------------------------------------------------------------

The Subscription Agreement Signature Page, which has been delivered with this
Prospectus, together with a check for the full purchase price, should be
delivered or mailed to your Broker-Dealer.  Only original, completed copies of
Subscription Agreements can be accepted.  Photocopied or otherwise duplicated
Subscription Agreements cannot be accepted by the Company.

IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS
SUBSCRIPTION AGREEMENT SIGNATURE PAGE,
PLEASE CALL 1-800-448-1010

B-6

WELLS REAL ESTATE INVESTMENT TRUST, INC.

SUBSCRIPTION AGREEMENT SIGNATURE PAGE

1.__________________INVESTMENT__________________________________________________

- -------------------------------------    Make Investment Check Payable to:
____________________________            NationsBank, N.A. as Escrow Agent
_________________
# of Shares   Total $ Invested       [_] Initial Investment (Minimum $1,000)
(#Shares x $10.00=$ Invested)        [_] Additional Investment (Minimum     
Minimum purchase  $1,000 or 100 Shares       $25.00)                            
- --------------------------------------       State in which sale was made______ 

2.__________________ADDITIONAL INVESTMENTS__________________________________

Please check if you plan to make additional investments in the Company:    [_]

(If additional investments are made, please include social security number or
other taxpayer identification number on your check).

(All additional investments must be made in increments of at least $10.)

3.__________________TYPE OF                             -------------------
OWNERSHIP__________________________________________________________________

[_]    IRA (06)                                  [_]    Individual (01)
[_]    Keogh (10)                                [_]    Joint Tenants With Right of Survivorship (02)
[_]    Qualified Pension Plan (11)               [_]    Community Property (03)
[_]    Qualified Profit Sharing Plan (12)        [_]    Tenants in Common (04)
[_]    Other Trust__________________________     [_]    Custodian:  A Custodian for______________________ under
For the Benefit of_____________________         the Uniform Gift to Minors Act of the State of ________ (08)
[_]    Partnership (15)                          [_]    Other____________________________________________

4.__________________REGISTRATION NAME AND
ADDRESS____________________________________________________
Please print name(s) in which Shares are to be registered.  Include trust name,
if applicable.
[_] Mr.  [_] Mrs.  [_] Ms.  [_] MD  [_] Ph.D.  [_] DDS  [_] Other_________               Taxpayer Identification Number
[ ][ ]-[ ][ ][ ][ ][ ][ ][ ] 
_____________________________________________________                                           Social Security Number
[ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
_____________________________________________________
Street Address
or P.O. Box    ______________________________________________________________________________________________________

City  ______________________________________________  State __________________  Zip Code  ___________________________

Home                                                  Business
Telephone No. (_____)____________________             Telephone No. (_____)_____________________

Birthdate ________________________________            Occupation ____________________________________________________

5.__________________INVESTOR NAME AND ADDRESS_________________________________________________________
Please print name(s) in which Shares are to be registered.  Include trust name, if applicable.

(Complete only if different from registration name and address).

[_] Mr.  [_] Mrs.  [_] Ms.  [_] MD  [_] Ph.D.  [_] DDS  [_] Other___________________________________________________________

Name___________________________________________________________                               Social Security Number
[ ][ ][ ]-[ ][ ]-[ ][ ][ ][ ]
Street Address
or P.O. Box    ______________________________________________________________________________________________________

City  ______________________________________________  State __________________  Zip Code  ___________________________

Home                                                  Business
Telephone No. (_____)____________________             Telephone No. (_____)_____________________

Birthdate ________________________________            Occupation ____________________________________________________

6.__________________SUBSCRIBER SIGNATURE_______________________________________

Please separately initial each of the representations below.  Except in the
case of fiduciary accounts, you may not grant any person a power of attorney to
make such representations on your behalf.  In order to indicate the Company to
accept this subscription, I hereby represent and warrant to you as follows:

(a) I have received the Prospectus                       _______    _______ 
Initials    Initials 

(b) I accept and agree to be bound by the terms and conditions of the Articles 
of Incorporation.                                    _______    _______ 
Initials    Initials 

(c) I have (i) a net worth (exclusive of home, home furnishings and
automobiles) of $150,000 or more, or (ii) a net worth (as described above)
of at least $45,000 and had during the last tax year or estimate that I
will have during the current tax year a minimum of $45,000 annual gross
income, or that I meet the higher suitability requirements imposed by my
state of primary resident as set forth in the Prospectus under "INVESTOR-
SUITABILITY STANDARDS".                              _______    _______
Initials    Initials

(d) If I am a California resident or if the Person to whom I subsequently
propose to assign or transfer any Shares is a California resident, I may
not consummate a sale or transfer to my Shares, or any interest therein, or
receive any consideration therefor, without the prior written consent of
the Commissioner of the Department of Corporations of the State of
California, except as permitted in the Commissioner's Rules, and I
understand that my Shares, or any document evidencing my Shares, will bear
a legend reflecting the substance of the foregoing understanding.
_______    _______
Initials    Initials

(e) ARKANSAS AND TEXAS RESIDENTS ONLY:  I am purchasing the Shares for my own
account and acknowledge that the investment is not liquid.
_______    _______
Initials    Initials

I declare that the information supplied above is true and correct and may be
relied upon the Company in connection with my investment in the Company.  Under
penalties, perjury, by signing this Signature Page, I hereby certify that (a) I
have provided herein my correct Taxpayer Identification Number, and (b) I am not
subject to back-up withholding as a result of a failure to report all interest
or dividends, or the Internal Revenue Service has notified me that I am no
longer subject to back-up withholding.

_________________________________  _______________________________________
Signature of Investor or Trustee  Signature of Joint Owner, if applicable

Date________________________________

(MUST BE SIGNED BY TRUSTEE(S) IF IRA, KEOGH OR QUALIFIED PLAN).

7.__________________DISTRIBUTIONS_______________________________________________

7(a).  Check the following box to participate in the Distribution Reinvestment
Plan.  [_]
7(b). Complete following section only to direct distributions to a party
other than registered owner:

Name ______________________________________________________________

Account Number ____________________________________________________

Street Address
or P.O. Box _______________________________________________________

City ___________________________ State ________ Zip Code __________

8. _________________BROKER-DEALER____________________________________

(TO BE COMPLETED BY REGISTERED REPRESENTATIVE)

The Broker-Dealer or authorized representative must sign below to complete
order. Broker-Dealer warrants that it is a duly licensed Broker-Dealer and may
lawfully offer Shares in the state designated as the investor's address or the
state in which the sale was made, if different. The Broker-Dealer or authorized
representative warrants that he has reasonable grounds to believe this
investment is suitable for the subscriber as defined in Section 3(b) of
Appendix F and that he has informed subscriber of all aspects of liquidity and
marketability of this investment as required by Section 4 of Appendix F
(Attachment No. 1 to Dealer Agreement).

Broker-Dealer Name___________________________  Telephone No. (____)____________

Broker-Dealer Street
Address or P.O. Box____________________________________________________________

City ___________________________ State ________________________ Zip Code ______

Registered
Representative Name ___________________________ Telephone No. (____)___________

Reg. Rep. Street
Address or P.O. Box____________________________________________________________

City ___________________________ State ________________________ Zip Code ______

______________________________________      ____________________________________
Broker-Dealer Signature, if required       Registered Representative Signature

Please mail completed Subscription Agreement (with all signatures) and check(s)
made payable to

NationsBank, N.A., as Escrow Agent
WELLS INVESTMENT SECURITIES, INC.
800-448-1010 or 770-449-7800

Overnight address:                                              Mailing address:
3885 Holcomb Bridge Road                                         P.O. Box 926040
Norcross, Georgia  30092-9209                      Norcross, Georgia  30092-9209

ACCEPTANCE BY CORPORATION               Amount            Date
----------      ---------- 

Received and Subscription Accepted:  Check No.          Certificate No.
--------                 -------- 

By:                          Wells Real Estate Investment Trust, Inc.
------------------------            

- ------------------------     --------------------------   ----------------------
Broker-Dealer #               Registered Rep #              Account #

EXHIBIT C

DIVIDEND REINVESTMENT PLAN

Wells Real Estate Investment Trust, Inc., a Maryland corporation (the
"Company"), pursuant to its Articles of Incorporation, as amended and restated
to date (the "Articles"), has adopted a Dividend Reinvestment Plan (the "DRP"),
the terms and conditions of which are set forth below.  Capitalized terms shall
have the same meaning as set forth in the Articles unless otherwise defined
herein.

1.  As agent for stockholders ("Stockholders") of the Company who purchase
shares of the Company's common stock (the "Shares") pursuant to the Company's
public offering which commenced January 30, 1998, which offering is expected to
be completed within one year from the date of such effectiveness (the
"Offering") and who elect to participate in the DRP (the "Participants), the
Company will apply all dividends and other 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 DRP, to the purchase of the Shares for such Participants directly, if
permitted under state securities laws and, if not, through the Dealer-Manager
for Participating Dealers registered in the Participant's state of residence.
Neither the Company nor its Affiliates will receive a fee for selling Shares
under the DRP.

2.  Procedure for Participation.  Any Stockholder who purchased Shares
---------------------------                                       
pursuant to the Company's Offering may elect to become a Participant by
completing and executing the Subscription Agreement, enrollment form or other
appropriate authorization form as may be available from the Company, the Dealer-
Manager or Soliciting Dealer.  Participation in the DRP will begin with the next
Distribution payable after receipt of a Participant's subscription or
authorization.  Shares will be purchased under the DRP on the record date for
the Distribution used to purchase the Shares.  Distributions for Shares acquired
under the DRP are currently paid monthly and are calculated with a daily record
and Distribution declaration date.  Each Participant agrees that if, at any time
prior to listing of the Shares on a national stock exchange or inclusion of the
Shares for quotation on the National Association of Securities Dealers, Inc.
Automated Quotation System ("Nasdaq"), he or she fails to meet the suitability
requirements for making an investment in the Company or cannot make the other
representations or warranties set forth in the Subscription Agreement, he will
promptly so notify the Company in writing.

3.  Purchase of Shares.  Participants will acquire Shares from the Company
------------------                                                    
at a fixed price of $10 per Share until all 1,500,000 Initial DRP Shares (as
defined) are issued.  Participants in the DRP 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 Shares under the DRP to the
extent such purchase would cause it to exceed the Ownership Limit.

Shares to be distributed by the Company in connection with the DRP may (but
are not required to) be supplied from:  (a) 1,500,000 Shares which were
registered for the DRP in the Offering (the "Initial DRP Shares"), (b) shares of
the Company's stock purchased by the Company for the DRP in a secondary market
(if available) or on a stock exchange or Nasdaq (if listed) (collectively, the
"Secondary Market"), or (c) shares registered by the Company with the SEC for
use in the DRP (a "Secondary Registration").

Shares purchased on the Secondary Market as set forth in (b) above will be
purchased at the then-prevailing market price, which price will be utilized for
purposes of purchases of Shares in the DRP.  Shares acquired by the Company on
the Secondary Market or registered in a Secondary Registration for use in the
DRP may be at prices lower or higher than the $10 per Share price which will be
paid for the Initial DRP Shares.

If the Company acquires shares in the Secondary Market for use in the DRP,
the Company shall use reasonable efforts to acquire Shares for use in the DRP 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 DRP will be at the lowest possible price.  Further,
irrespective of the Company's ability to acquire Shares in the Secondary Market
or to complete a Secondary Registration for shares to be used in the DRP, the
Company is in no way obligated to do either, in its sole discretion.

It is understood that reinvestment of Distributions does not relieve a
Participant of any income tax liability which may be payable on the
Distributions.

4.  Share Certificates.  The ownership of the Shares purchased through the
------------------                                                    
DRP will be in book-entry form only until the Company begins to issue
certificates for all its outstanding Common Stock.

C-1

5.  Reports.  Within 90 days after the end of the Company's fiscal year,
-------                                                             
the Company will provide each Participant with an individualized report on his
or her investment, including the purchase date(s), purchase price and number of
Shares owned, as well as the dates of distribution and amounts of Distributions
received during the prior fiscal year.  The individualized statement to
Stockholders will include receipts and purchases relating to each Participant's
participation in the DRP including the tax consequences relative thereto.

6.  Termination by Participant.  A Participant may terminate participation
--------------------------                                            
in the DRP at any time, without penalty, by delivering to the Company a written
notice.  Prior to listing of the Shares on a stock exchange or Nasdaq, any
transfer of Shares by a Participant to a non-Participant will terminate
participation in the DRP with respect to the transferred Shares.  If a
Participant terminates DRP participation, the Company will provide the
terminating Participant with a certificate evidencing the whole shares in his or
her account and a check for the cash value of any fractional share in such
account.  Upon termination of DRP participation, Distributions will be
distributed to the Stockholder in cash.

7.  Amendment or Termination of DRP by the Company.  The Directors of the
----------------------------------------------                       
Company may by majority vote (including a majority of the Independent Directors)
amend or terminate the DRP for any reason upon 30 days' written notice to the
Participants.

8.  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:  (a) 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; and (b) 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 act of a state, the Company has been
advised that, in the opinion of the Securities and Exchange Commission and
certain state securities commissioners, such indemnification is contrary to
public policy and, therefore, unenforceable.

9.  Governing Law.  This DRP shall be governed by the laws of the State of
-------------                                                         
Maryland.

C-2

WELLS REAL ESTATE INVESTMENT TRUST, INC.
----------------------------------------

P  R  O  S  P  E  C  T  U  S

for

DIVIDEND REINVESTMENT PLAN

Pursuant to its revised Dividend Reinvestment Plan (the "Plan"), Wells Real
Estate Investment Trust, Inc., a Delaware corporation (the "Company"), hereby
offers to holders of its Common Stock, $.01 par value per share (the "Common
Stock") the opportunity to purchase, through reinvestment of dividends or by
additional cash payments, additional shares of Common Stock, on the terms,
subject to the conditions and at the prices herein stated.

The Plan was implemented initially in connection with the Company's
registered public offering of 16,500,000 shares of its Common Stock (the
"Initial Offering"), of which amount 1,500,000 shares were registered and
reserved for distribution pursuant to the Plan.

Dividends reinvested pursuant to the Plan will be applied to the purchase
of shares of Common Stock at a price of $10.00 per share until all 1,500,000
shares reserved initially for the Plan (the "Initial Plan Shares") have been
purchased.  Thereafter, the Company may in its sole discretion acquire
additional shares for purchase under the Plan may either through purchases on
the open market, through the Company's share repurchase program and/or
additional registrations of common stock for use in the Plan.  In any case, the
per share purchase price under the Plan for such additionally acquired shares
will equal the then-prevailing market price of the stock as determined by the
Company's Board of Directors, which if the Company's stock is listed shall equal
the price on the applicable stock exchange, Nasdaq or over-the-counter market.

This Prospectus relates to 1,500,000 shares of Common Stock that have been
registered for sale under the Plan.  Please retain this Prospectus for future
reference.

The executive offices of the Company are located at 3885 Holcomb Bridge
Rd., Norcross, Georgia  30092, and its telephone number is (770) 449-7800.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAVE SUCH
REGULATORS PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.  ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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 date of this Prospectus is _______________________

C-3

AUTHORIZATION

No person has been authorized to give any information or to make
representations not contained in this Prospectus regarding the Company or the
offering made hereby and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company.  This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any securities other than the securities to which it relates, nor does it
constitute an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation would be unlawful.  Neither delivery of this
Prospectus nor any sale made hereunder shall create an implication that
information contained herein is correct as of any time subsequent to the date
hereof.

AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act") and files reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission").  Reports, proxy statements, and other information concerning the
Company can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at its Regional Offices in New York (Suite 1300, 7 World Trade
Center, New York, New York 10048) and Chicago (Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661).  Copies of such material can be obtained by
mail from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates.

INCORPORATION OF DOCUMENTS BY REFERENCE

The following documents (or applicable portions thereof), filed with the
Commission pursuant to the 1934 Act or the Securities Act of 1933, as amended
(the "1933 Act"), are incorporated by reference in this Prospectus:

1.   The description of the Common Stock contained in the Company's Registration
Statement on Form S-11, as amended.

2.   The Company's Annual Report on Form l0-K for the year ended ______________.

3.   The Company's Quarterly Reports on Form l0-Q for the quarters ended
___________________________.

All documents filed pursuant to Sections l3(a), l3(c), l4 or l5(d) of the
l934 Act after the date of this Prospectus and before termination of this
offering are incorporated by reference into this Prospectus from the date of
filing of those documents.  Any statement contained in a document incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which is deemed to
be incorporated by reference herein modifies or supersedes such statement.  Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Prospectus.  Anyone
receiving a copy of this Prospectus may obtain, without charge, a copy of any of
the documents incorporated by reference, except for the exhibits, if any, to
those documents.  Telephone or mail your request to:

WELLS REAL ESTATE INVESTMENT TRUST, INC.
3885 HOLCOMB BRIDGE RD.
NORCROSS, GEORGIA  30092
ATTENTION:  SECRETARY
(770) 449-7800

C-4

THE COMPANY

The Company, founded in 1997, is a Maryland corporation that owns and
operates income producing real estate, primarily commercial office buildings.
The Company is structured and operated in a manner intended to enable it to
qualify as a real estate investment trust under the Internal Revenue Code of
1986, as amended (the "Code").

THE PLAN

The Plan provides you with a simple and convenient way to invest your cash
dividends in additional shares of Common Stock.  As a participant in the Plan,
you may purchase shares at a price of $10.00 per share until all 1,500,000
Initial Plan Shares have been purchased.  Thereafter, additional shares for
purchase within the Plan may (but do not have to), be acquired by the Company in
its sole discretion either through purchases on the open market, purchases
pursuant to the Company's share repurchase program and/or additional
registrations of common stock relating to the Plan.  In any case other than
purchase of the Initial Plan Shares, the per share purchase price under the Plan
will equal the then-prevailing market price of the stock, which if the Company's
stock is listed shall equal the price on the applicable stock exchange, Nasdaq
or over-the-counter market.

You receive free custodial service for the shares you hold through the
Plan.

Shares for the Plan will be purchased directly from the Company.  Such
shares will be authorized and may be either previously issued or unissued
shares.  Proceeds from the sale of the Plan Shares provide the Company with
funds for general corporate purposes.

ELIGIBILITY

Holders of record of Common are eligible to participate in the Plan with
respect to any whole number of their shares.  If your shares are held of record
by a broker or nominee and you want to participate in the Plan, you must make
appropriate arrangements with your broker or nominee.

The Company may refuse participation in the Plan to shareholders residing
in states where shares offered pursuant to the Plan are neither registered under
applicable securities laws nor exempt from registration.

ADMINISTRATION

As of the date of this Prospectus, the Plan is administered by the Company
or an affiliate of the Company (the "Plan Administrator"), but a different
entity may act as Plan Administrator in the future.  The Plan Administrator will
keep all records of your Plan account and sends statements of your account to
you.  Shares of Common Stock purchased under the Plan are registered in the name
of each participating shareholder.

ENROLLMENT

You may join the Plan by signing the enrollment form enclosed with this
Prospectus and returning it to the Company.

Your participation in the Plan will begin with the first dividend payment
after your signed card is received, provided your card is received on or before
ten days prior to the record date established for that dividend.  Record dates
for dividends are ordinarily on or about the 15th day of March, June, September
and December, but may be changed from time to time in the discretion of the
Company's management.  If your enrollment form is received after the record date
for any dividend and before payment of that dividend, that dividend will be paid
to you in cash and reinvestment of your dividends will not begin until the next
dividend payment date.

COSTS

Participants in the Plan pay no service charges or other fees for purchases
made under the Plan.  All costs of administration of the Plan are paid by the
Company.  However, any interest earned on dividends on shares within the Plan
will be paid to the Company to defray certain costs relating to the Plan.  If
you terminate participation in the Plan or ask that your Plan shares be sold,
you will pay certain charges as explained in "Termination of Participation"
below.  Except as described below, the Company will pay the following
commissions and fees to certain affiliates of the Company in connection with
shares of Common Stock sold to participants under the Plan (expressed as a
percentage of the purchase price proceeds):  (a) a selling commission of 7% (the
"Selling Commission"), all of which may be reallowed to the brokers and dealers
of such shares; (b) a marketing and due diligence fee (the "Due Diligence Fee")
of 2.5%; and (c) an acquisition and advisory fee ("Acquisition and Advisory
Fee") of 3%, which after sale of the Initial Plan Shares will be paid only in
the 

C-5

event that proceeds of the sale of such shares are used to acquire properties.
In Ohio, only the Acquisition and Advisory Fee may be paid in connection with
sales of stock under the Plan.

PURCHASES AND PRICE OF SHARES

Common Stock dividends will be invested within 30 days after the date on
which Common Stock dividends are paid each quarter (the "Investment Date").
Payment dates for Common Stock dividends are ordinarily on or about the last
calendar day of March, June, September and December, but may be changed from
time to time in the discretion of the Company.

You become an owner of shares purchased under the Plan as of the Investment
Date.  No shares will be purchased under the Plan at less than their par value
($.01 per share).  Dividends paid on shares held in the Plan (less any required
withholding tax) will be credited to your Plan account.  Dividends are paid on
both full and fractional shares held in your account and are automatically
reinvested.

Reinvested Distributions.  You may elect dividend reinvestment with respect
------------------------                                                   
to any whole number of shares registered in your name on the records of the
Company.  Specify on the enrollment form the number of shares for which you want
dividends reinvested.  Dividends on all shares purchased pursuant to the Plan
will be automatically reinvested.  The number of shares purchased for you as a
participant in the Plan depends on the amount of your dividends on these shares
(less any required withholding tax) and the purchase price of the Common Stock.
Your account will be credited with the number of shares, including fractions
computed to four decimal places, equal to the total amount invested divided by
the purchase price per share.

Shares of Common Stock for participants will be purchased from the Company
at a price per share of $10 for all of the Initial Plan Shares, and thereafter
(if available) at prices equal to the then-prevailing market price of the stock
as determined by the Company's Board of Directors, which if the Company's stock
is listed shall equal the closing price on the applicable stock exchange, Nasdaq
or over-the-counter market on the trading day immediately prior to the
Investment Date.

Optional Cash Purchases.  Until determined otherwise by the Company, Plan
-----------------------                                                  
participants may not make additional cash payments for the purchase of Common
Stock under the Plan.

DIVIDENDS ON SHARES HELD IN PLAN

Dividends paid on shares held in the Plan (less any required withholding
tax) will be credited to your Plan account.  Dividends are paid on both full and
fractional shares held in your account and are automatically reinvested.

ACCOUNT STATEMENTS

You will receive a statement of your account within 60 days after each
Investment Date.  The statements will contain a report of all transactions since
the last statement, including information with respect to the number of shares
allocated to your account, the amount of dividends received which are allocable
to you, the amount of Common Stock purchased therewith and the price paid.
These statements are your continuing record of the cost of your purchase and
should be retained for income tax purposes.

CERTIFICATES FOR SHARES

As of the date of this Prospectus, the Company is not issuing certificates
for shares purchased under the Plan, and your ownership of such shares will be
evidenced on the books of the Company in your account.  The number of shares
purchased will be shown on your statement of account.  This feature permits
ownership of fractional shares, protects against loss, theft or destruction of
stock certificates, and reduces the costs of the Plan.

After the date the Company begins issuing certificates for the outstanding
shares of its Common Stock, certificates for any number of whole shares credited
to your account will be issued in your name upon your written request to the
Plan Administrator.  Certificates for fractional shares will not be issued.
Should you want your certificates issued in a different name, you must notify
the Plan Administrator in writing and comply with applicable transfer
requirements.  If you wish to sell any whole shares credited to your account
under the Plan, you will have the option of either (i) receiving a certificate
for such whole number of shares, or (ii) requesting that such shares held in
your account be sold, in which case the shares will be sold on the open market
as soon as practicable.  Brokerage commissions on such sales will not be paid by
the Company, and will be deducted from the sales proceeds.  See "Termination of
Participation."  If you wish to pledge shares credited to your account, you must
first have the certificate for those shares issued in your name.

C-6

TERMINATION OF PARTICIPATION

You may discontinue reinvestment of dividends under the Plan with respect
to all, but not less than all, of your shares (including shares held for your
account in the Plan) at any time by notifying the Plan Administrator in writing
no less than ten days prior to the next record date.  A notice of termination
received by the Plan Administrator after such cutoff date will not be effective
until the next following Investment Date.  Participants who terminate their
participation in the Plan may thereafter rejoin the Plan by notifying the
Company and completing all necessary forms and otherwise as required by the
Company.

If you notify the Plan Administrator of your termination of participation
in the Plan or if your participation in the Plan is terminated by the Company,
the Company's stock ownership records will be updated to include the number of
whole shares in your Plan account.  For any fractional shares of stock in your
Plan account, the Plan Administrator may either (i) send you a check in payment
for any fractional shares in your account, or (ii) credit your stock ownership
account with any such fractional shares.

A participant who changes his or her address must promptly notify the Plan
Administrator.  If a participant moves his residence to a state where shares
offered pursuant to the Plan are neither registered nor exempt from registration
under applicable securities laws, the Company may deem the participant to have
terminated participation in the Plan.

AMENDMENT AND TERMINATION OF PLAN

The Company may, in its sole discretion, amend any aspect of the Plan
without the consent of participants or other stockholders, provided that notice
of any material amendment is sent to participants at least 30 days prior to the
effective date thereof.  The Company may also, in its sole discretion, terminate
the Plan for any reason at any time with ten days prior written notice of such
termination to all participants.  You will be notified if the Plan is terminated
or materially amended.  The Company may also terminate any participant's
participation in the Plan at any time by notice to such participant if continued
participation will, in the opinion of the Board of Directors, jeopardize the
status of the Company as a real estate investment trust under the Code.

VOTING OF SHARES HELD UNDER THE PLAN

You will be able to vote all shares of Common Stock (including fractional
shares) credited to your account under the Plan at the same time that you vote
the shares registered in your name on the records of the Company.

STOCK DIVIDENDS, STOCK SPLITS AND RIGHTS OFFERINGS

Your Plan account will be amended to reflect the effect of any stock
dividends, splits, reverse splits or other combinations or recapitalizations by
the Company on shares held in the Plan for you.  If the Company issues to its
shareholders rights to subscribe to additional shares, such rights will be
issued to you based on your total share holdings, including shares held in your
Plan account.

RESPONSIBILITY OF THE PLAN ADMINISTRATOR AND THE COMPANY UNDER THE PLAN

The Plan Administrator will not be liable for any claim based on an act
done in good faith or a good faith omission to act.  This includes, without
limitation, any claim of liability arising out of failure to terminate a
participant's account upon a participant's death, the prices at which shares are
purchased, the times when purchases are made, or fluctuations in the market
price of Common Stock.

All notices from the Plan Administrator to a participant will be mailed to
the participant at his last address of record with the Plan Administrator, which
will satisfy the Plan Administrator's duty to give notice.  Participants must
promptly notify the Plan Administrator of any change in address.

YOU SHOULD RECOGNIZE THAT NEITHER THE COMPANY NOR THE PLAN ADMINISTRATOR
CAN PROVIDE ANY ASSURANCE OF A PROFIT OR PROTECTION AGAINST LOSS ON ANY SHARES
PURCHASED UNDER THE PLAN.

INTERPRETATION AND REGULATION OF THE PLAN

The Company reserves the right, without notice to participants, to
interpret and regulate the Plan as it deems necessary or desirable in connection
with its operation.  Any such interpretation and regulation shall be conclusive.

C-7

FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN

The following discussion summarizes the principal federal income tax
consequences, under current law, of participation in the Plan.  It does not
address all potentially relevant federal income tax matters, including
consequences peculiar to persons subject to special provisions of federal income
tax law (such as tax-exempt organizations, insurance companies, financial
institutions, broker-dealers and foreign persons).  The discussion is based on
various rulings of the Internal Revenue Service regarding several types of
dividend reinvestment plans.  No ruling, however, has been issued or requested
regarding the Plan.  THE FOLLOWING DISCUSSION IS FOR YOUR GENERAL INFORMATION
ONLY, AND YOU MUST CONSULT YOUR OWN TAX ADVISOR TO DETERMINE THE PARTICULAR TAX
CONSEQUENCES (INCLUDING THE EFFECTS OF ANY CHANGES IN LAW) THAT MAY RESULT FROM
YOUR PARTICIPATION IN THE PLAN AND THE DISPOSITION OF ANY SHARES PURCHASED
PURSUANT TO THE PLAN.

REINVESTED DIVIDENDS.   Stockholders subject to federal income taxation who
elect to participate in the Plan will incur a tax liability for distributions
allocated to them even though they have elected not to receive their dividends
in cash but rather to have their dividends held pursuant to the Plan.
Specifically, participants will be treated as if they received the distribution
from the Company and then applied such distribution to purchase the shares in
the Plan.  A Stockholder designating a distribution for reinvestment will be
taxed on the amount of such distribution as ordinary income to the extent such
distribution is from current or accumulated earnings and profits, unless the
Company has designated all or a portion of the distribution as capital gain
dividend.  In such case, such designated portion of the distribution will be
taxed as a capital gain.  The amount treated as a distribution to you will
constitute a dividend for federal income tax purposes to the same extent as a
cash distribution.

RECEIPT OF SHARE CERTIFICATES AND CASH.  You will not realize any income if
you receive certificates for whole shares credited to your account under the
Plan.  Any cash received for a fractional share held in your account will be
treated as an amount realized on the sale of the fractional share.  You
therefore will recognize gain or loss equal to any difference between the amount
of cash received for a fractional share and your tax basis in the fractional
share.

INDEMNIFICATION OF DIRECTORS AND OFFICERS OF THE COMPANY

Directors and officers of the Company shall be indemnified against
liabilities, fines, penalties, and claims imposed upon or asserted against them
for actions in their capacities as directors and/or officers of the Corporation
to the fullest extent permitted under the Delaware General Corporation Law
("DGCL").  This indemnification covers all costs and expenses reasonably
incurred by a director or officer.  In addition, the DGCL and the Company's
Amended and Restated Articles of Incorporation may, under certain circumstances,
eliminate the liability of directors and officers in a shareholder or derivative
proceeding.

Insofar as indemnification for liabilities arising under the l933 Act may
be permitted to directors, officers, or controlling persons of the Company
pursuant to the foregoing provisions, the Company has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the l933 Act and is therefore
unenforceable.  In the event that a claim for indemnification against such
liabilities is asserted by such director or officer, the Company 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 l933 Act and
will be governed by the final adjudication of such issue.

EXPERTS

The financial statements of the Company incorporated by reference from its
Registration Statement on Form S-11 have been audited by Arthur Andersen LLP,
independent auditors, as set forth in their report thereon included therein and
incorporated herein by reference.  Such financial statements are incorporated
herein by reference in reliance upon such report given upon the authority of
such firm as experts in accounting and auditing.

PLAN ADMINISTRATOR; INQUIRIES REGARDING THE PLAN

Changes in name or address, notices of termination, requests to participate
in the Plan, questions about the Plan and your participation therein, and all
other matters regarding the Plan should be directed to:

Wells Real Estate Investment Trust, Inc.
Dividend Reinvestment Plan
3885 Holcomb Bridge Rd.
Norcross, GA  30092

C-8

E N R O L L M E N T  F O R M
----------------------------

WELLS REAL ESTATE INVESTMENT TRUST, INC.

DIVIDEND REINVESTMENT PLAN

TO JOIN THE PLAN:

(l)  Complete this card.  Be sure to include your social security or tax
identification number and signature.

(2)  Staple or tape the card closed so that your signature is enclosed.

I hereby appoint Wells Real Estate Investment Trust, Inc. (the "Company")
(or any successor), acting as plan administrator, as my agent to receive cash
dividends that may hereafter become payable to me on shares of Common Stock of
the Company registered in my name as set forth below, and authorize the Company
to apply such dividends to the purchase of full shares and fractional interests
in shares of the Company's Common Stock.

I understand that the purchases will be made under the terms and conditions
of the Dividend Reinvestment Plan as described in the Prospectus and that I may
revoke this authorization at any time by notifying the Plan Administrator, in
writing, of my desire to terminate my participation.

Please indicate your participation below.  Return this card only if
you wish to participate in the Plan

_____________   Yes, I would like to participate in the Dividend Reinvestment
Plan for all my shares of Common Stock.

Please Print Full Legal Name(s):

_______________________________________________________

Social Security or Tax Identification Number:

_______________________________________________________

Date: __________________________________

IF YOUR SHARES ARE HELD OF RECORD BY A BROKER OR NOMINEE, YOU MUST MAKE
APPROPRIATE ARRANGEMENTS WITH THE BROKER OR NOMINEE TO PARTICIPATE IN THE PLAN.

C-9

- --------------------------------------------------------------------------------

No dealer, salesperson or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus and,
if given or made, such information or representations must not be relied upon as
having been authorized by the Company or the Dealer Manager.  This Prospectus
does not constitute an offer of any securities other than those to which it
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.
Neither the delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create an implication that the information contained herein
is correct as of any time subsequent to the date hereof.  In the event of
material changes, this Prospectus will be amended to reflect such changes.

SUMMARY TABLE OF CONTENTS

Page
----

Summary of the Offering..........................     1
Risk Factors.....................................     9
Investor Suitability Standards...................    15
Estimated Use of Proceeds........................    17
Management Compensation..........................    19
Conflicts of Interest............................    21
Summary of Reinvestment Plan.....................    25
Share Repurchase Program.........................    27
Prior Performance Summary........................    28
Management.......................................    32
The Advisor and the Advisory Agreement...........    36
Wells Management.................................    39
Investment Objectives and Criteria...............    40
Real Property Investments........................    45
Distribution Policy..............................    45
Management's Discussion and Analysis of
Financial Condition and Results of Operations..    46
Description of Capital Stock.....................    46
Federal Income Tax Considerations................    55
ERISA Considerations.............................    68
Partnership Agreement............................    71
Plan of Distribution.............................    73
Supplemental Sales Material......................    77
Legal Matters....................................    77
Experts..........................................    78
Additional Information...........................    78
Glossary.........................................    78
Financial Statements.............................   F-1

Until April 30, 1998 (90 days after the date of this Prospectus), all dealers
effecting transactions in the registered securities, whether or not
participating in this distribution, may be required to deliver a Prospectus.
This is in addition to the obligation of dealers to deliver a prospectus when
acting as Soliciting Dealers.

- --------------------------------------------------------------------------------

15,000,000 Shares of Common Stock

WELLS REAL ESTATE
INVESTMENT TRUST, INC.

___________________

PROSPECTUS

___________________

WELLS INVESTMENT SECURITIES, INC.

January 30, 1998

WELLS REAL ESTATE INVESTMENT TRUST, INC.

SUPPLEMENT NO. 1 DATED APRIL 20, 1998 TO THE PROSPECTUS
DATED JANUARY 30, 1998

This document supplements, and should be read in conjunction with, the
Prospectus of Wells Real Estate Investment Trust, Inc. dated January 30, 1998
(the "Prospectus").  Unless otherwise defined herein, capitalized terms used in
this Supplement shall have the same meanings as set forth in the Prospectus.

The purpose of this Supplement is to describe the following:

(i)   The status of the offering of shares of common stock (the
"Shares") in Wells Real Estate Investment Trust, Inc. (the "Company");

(ii)  Updated Prior Performance Tables included as Exhibit A to the
Prospectus; and

(iii) Revisions to the "INVESTOR SUITABILITY STANDARDS" and "PLAN OF
DISTRIBUTION" sections of the Prospectus.

STATUS OF THE OFFERING

Pursuant to the Prospectus, the offering of Shares in the Company commenced
on January 30, 1998.  As of April 17, 1998, the Company had raised a total of
$451,700 in offering proceeds (45,170 Shares), which offering proceeds are being
held in escrow until the Company closes the Minimum Offering in accordance with
the terms of the Prospectus.

PRIOR PERFORMANCE TABLES

Prior Performance Tables dated as of December 31, 1997 are included as
Exhibit A to this Supplement.

INVESTOR SUITABILITY STANDARDS

The information contained on page 15 in the "INVESTOR SUITABILITY
STANDARDS" section of the Prospectus is revised as of the date of this
Supplement by the deletion of the fourth full paragraph of that section and the
insertion of the following paragraph in lieu thereof:

The minimum purchase is 100 Shares ($1,000) (except in certain states
and as otherwise described below).  No transfers will be permitted of less
than the minimum required purchase, nor (except in very limited
circumstances) may an investor transfer, fractionalize or subdivide such
Shares so as to retain less than such minimum number thereof.  For purposes
of satisfying the minimum investment requirement for Retirement Plans,
unless otherwise prohibited by state law, a husband and wife may jointly
contribute funds from their separate Individual Retirement Accounts
("IRAs"), provided that each such contribution is made in increments of at
least $100.  It should be noted, however, that an investment in the Company
will not, in itself, create a Retirement Plan for any investor and that in
order to create a Retirement Plan, an investor must comply with all
applicable provisions of the Code.  Except in Maine, Minnesota and
Washington, investors who have satisfied the minimum purchase requirements
and have purchased units in Prior Wells Public Programs may purchase less
than the minimum number of Shares set forth above, but in no event less
than 2.5 Shares ($25).  The minimum purchase for New York investors is 250
Shares ($2,500); however, the minimum investment for New York IRAs is 100
Shares ($1,000).  After an investor has purchased the minimum investment,
any additional investments must be made in increments of at least 2.5
Shares ($25), except for (i) those made by investors in Maine, who must
still meet the minimum investment requirement for Maine residents of $1,000
for IRAs and $2,500 for non-IRAs, (ii) purchases of Shares pursuant to the
Reinvestment Plan, which may be in lesser amounts, and (iii) the minimum
purchase requirement for Minnesota investors other than IRAs and Qualified
Plans of 250 Shares ($2,500), and the minimum purchase for Minnesota IRAs
and Qualified Plans of 200 Shares ($2,000).

PLAN OF DISTRIBUTION

The information contained on page 77 in the "PLAN OF DISTRIBUTION" section
of the Prospectus is revised as of the date of this Supplement by the deletion
of the second full paragraph on that page and the insertion of the following
paragraph in lieu thereof:

In addition, subscribers for Shares may agree with their participating
broker-dealers and the Dealer Manager to have selling commissions due with
respect to the purchase of their Shares paid over a seven year period
pursuant to a deferred commission arrangement (the "Deferred Commission
Option").  Shareholders electing the Deferred Commission Option will be
required to pay a total of $9.40 per Share purchased upon subscription,
rather than $10.00 per Share, with respect to which $0.10 per Share will be
payable as commissions due upon subscription.  For each of the six years
following the year of subscription, $0.10 per Share will be paid by the
Company as deferred commissions with respect to Shares sold pursuant to the
Deferred Commission Option, which amounts will be deducted from and paid
out of distributions of Cash Available for Distribution otherwise payable
to Shareholders holding such Shares. The net proceeds to the Company will
not be affected by the election of the Deferred Commission Option.  Under
this arrangement, a Shareholder electing the Deferred Commission Option
will pay a 1% commission upon subscription, rather than a 7% commission,
and an amount equal to a 1% commission per year thereafter for the next six
years will be deducted from and paid by the Company out of Cash Available
for Distribution otherwise distributable to such Shareholder.  In the event
that Listing of the Shares occurs at any time prior to the end of the sixth
year following termination of the Offering, however, the obligation of the
Company and its Shareholders to make any further payments of commissions
under the Deferred Commission Option shall terminate, and participating
broker-dealers will not be entitled to receive any further portion of their
commissions following Listing of the Company's Shares.

2

EXHIBIT A

PRIOR PERFORMANCE TABLES

The following Prior Performance Tables (the "Tables") provide information
relating to real estate investment programs sponsored by the Advisor and its
Affiliates ("Wells Prior Public Programs") which have investment objectives
similar to the Company.

Prospective investors should read these Tables carefully together with the
summary information concerning the Prior Programs as set forth in "PRIOR
PERFORMANCE SUMMARY" elsewhere in this Prospectus.

INVESTORS IN THE COMPANY WILL NOT OWN ANY INTEREST IN THE PRIOR PROGRAMS
AND SHOULD NOT ASSUME THAT THEY WILL EXPERIENCE RETURNS, IF ANY, COMPARABLE TO
THOSE EXPERIENCED BY INVESTORS IN THE PRIOR PROGRAMS.

These Tables present actual results of Wells Prior Public Programs that
have investment objectives similar to those of the Company. The Company's
investment objectives are to maximize Net Cash From Operations; to preserve
original Capital Contributions; and to realize capital appreciation over a
period of time. All of the Wells Prior Public Programs have used a substantial
amount of capital and not acquisition indebtedness to acquire their properties.

The Advisor is responsible for the acquisition, operation, maintenance and
resale of the Wells Prior Public Programs' Properties.  The financial results of
the Wells Prior Public Programs thus provide an indication of the Advisor's
performance of its obligations during the periods covered.  However, general
economic conditions affecting the real estate industry and other factors
contribute significantly to financial results.

The following tables are included herein:

TABLE I - Experience in Raising and Investing Funds (As a Percentage of
Investment)

TABLE II - Compensation to Sponsor (in Dollars)

TABLE III - Annual Operating Results of Prior Programs

TABLE IV (Results of completed programs) and TABLE V (sales or disposals of
property) have been omitted since none of the Prior Programs have sold any of
their properties to date.

Additional information relating to the acquisition of properties by the
Wells Prior Public Programs is contained in TABLE VI, which is included in the
Registration Statement which the Company has filed with the Securities and
Exchange Commission.  As described above, no Wells Prior Public Program has sold
or disposed of any property held by it.  Copies of any or all information will
be provided to prospective investors at no charge upon request.

The following are definitions of certain terms used in the Tables:

"ACQUISITION FEES" shall mean fees and commissions paid by a partnership in
connection with its purchase or development of a property, except development
fees paid to a person not affiliated with the partnership or with a general
partner of the partnership in connection with the actual development of a
project after acquisition of the land by the partnership.

"ORGANIZATION EXPENSES" shall include legal fees, accounting fees,
securities filing fees, printing and reproduction expenses and fees paid to the
general partners or their affiliates in connection with the planning and
formation of the partnership.

"UNDERWRITING FEES" shall include selling commissions and wholesaling fees
paid to broker-dealers for services provided by the broker-dealers during the
offering.

A-1

TABLE I
(UNAUDITED)

EXPERIENCE IN RAISING AND INVESTING FUNDS

This Table provides a summary of the experience of the General Partners and
their Affiliates in Prior Programs for which offerings have been completed since
December 31, 1994.  Information is provided with regard to the manner in which
the proceeds of the offerings have been applied.  Also set forth is information
pertaining to the timing and length of these offerings and the time period over
which the proceeds have been invested in the properties.

Wells Real         Wells Real         Wells Real         Wells Real
Estate Fund        Estate Fund        Estate Fund        Estate Fund
VII, L.P.         VIII, L.P.          IX, L.P.            X, L.P.
-----------------  -----------------  -----------------  ----------------

Dollar Amount Raised                                       $24,180,174/(3)/   $32,042,689/(4)/   $35,000,000/(5)/   $27,128,912/(6)/
===========        ===========        ===========        ===========
Percentage Amount Raised                                        100.0%/(3)/        100.0%/(4)/        100.0%/(5)/        100.0%/(6)/

Less Offering Expenses
Underwriting Fees                                              10.0%              10.0%              10.0%              10.0%
Organizational Expenses                                         5.0%               5.0%               5.0%               5.0%
Reserves/(1)/                                                     1.0%               0.0%               0.0%               0.0%
----               ----               ----               ----
Percent Available for Investment                              84.0%              85.0%              85.0%              85.0%

Acquisition and Development Costs
Prepaid Items and Fees related to Purchase of Property          0.0%               0.2%               0.0%               0.0%
Cash Down Payment                                              16.3%              29.2%               0.0%               0.0%
Acquisition Fees/(2)/                                           3.5%               4.5%               4.5%               4.5%
Development and Construction Costs                             64.2%              48.0%              50.4%              14.4%

Reserve for Payment of Indebtedness                               0.0%               0.0%               0.0%               0.0%
----               ----               ----               ----
Total Acquisition and Development Cost                           84.0%              81.9%              54.9%              18.9%
----               ----               ----               ----
Percent Leveraged                                                 0.0%               0.0%               0.0%              0.00%
====               ====               ====               ====
Date Offering Began                                             04/05/94           01/06/95           01/05/96           12/31/96

Length of Offering                                                12 mo.             12 mo.             12 mo.             12 mo.

Months to Invest 90% of Amount Available for
Investment (Measured from Beginning of Offering)                  12 mo.             17 mo.              /(7)/              /(8)/

Number of Investors                                               1,917              2,242              2,115              1,806

_______________________

(1)  Does not include General Partner contributions held as part of reserves.
(2)  Includes acquisition fees, real estate commissions, general contractor fees
and/or architectural fees paid to Affiliates of the General Partners.
(3)  Total dollar amount registered and available to be offered was $25,000,000.
Wells Real Estate Fund VII, L.P. closed its offering on January 5, 1995,
and the total dollar amount raised was $24,180,174.
(4)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund VIII, L.P. closed its offering on January 4, 1996,
and the total dollar amount raised was $32,042,689.
(5)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund IX, L.P. closed its offering on December 30, 1996,
and the total dollar amount raised was $35,000,000.
(6)  Total dollar amount registered and available to be offered was $35,000,000.
Wells Real Estate Fund X, L.P. closed its offering on December 30, 1997,
and the total dollar amount raised was $27,128,912.
(7)  As of December 31, 1997, Wells Real Estate Fund IX, L.P. had not yet
invested 90% of the amount available for investment.  The amount invested
in properties (including Acquisition Fees paid but not yet associated with
a specific property) at December 31, 1997 was 70.3% of the total dollar
amount raised.  The amount invested and/or committed to be invested in
properties (including Acquisition Fees paid but not yet associated with a
specific property) at December 31, 1997 was 83.5% of the total dollar
amount raised.
(8)  As of December 31, 1997, Wells Real Estate Fund X, L.P. had not yet
invested 90% of the amount available for investment.  The amount invested
in properties (including Acquisition Fees paid but not yet associated with
a specific property) at December 31, 1997 was 17.7% of the total dollar
amount raised.  The amount invested and/or committed to be invested in
properties (including Acquisition Fees paid but not yet associated with a
specific property) at December 31, 1997 was 32.8% of the total dollar
amount raised.

A-2

TABLE II
(UNAUDITED)

COMPENSATION TO SPONSOR

The following sets forth the compensation received by General Partners or
Affiliates of the General Partners, including compensation paid out of offering
proceeds and compensation paid in connection with the ongoing operations of
Prior Programs having similar or identical investment objectives the offerings
of which have been completed since December 31, 1994.  These partnerships have
not sold or refinanced any of their properties to date.  All figures are as of
December 31, 1997.

Wells Real    Wells Real    Wells Real    Wells Real       Other
Estate Fund   Estate Fund   Estate Fund   Estate Fund      Public
VII, L.P.     VIII, L.P.     IX, L.P.      X, L.P.     Programs/(1)/
------------  ------------  ------------  ------------  -------------

Date Offering Commenced                                04/05/94      01/06/95      01/05/96      12/31/96             --

Dollar Amount Raised                                $24,180,174   $32,042,689   $35,000,000   $27,128,912   $150,018,232
to Sponsor from Proceeds of Offering:
Underwriting Fees/(2)/                            $   178,122   $   174,295   $   309,556   $   260,748   $    571,739
Acquisition Fees
Real Estate Commissions                                   --            --            --            --             --
Acquisition and Advisory Fees/(3)/               $   846,306   $ 1,281,708   $ 1,400,000   $ 1,085,157   $  8,031,385

Dollar Amount of Cash Generated from Operations
Before Deducting Payments to Sponsor/(4)/          $ 3,850,827   $ 1,630,740   $ 1,305,840   $   438,195   $ 29,081,439

Amount Paid to Sponsor from Operations:
Property Management Fee/(1)/                       $   124,934   $    85,523   $    19,539   $         0   $    857,695
Partnership Management Fee                                  --            --            --            --             --
Reimbursements                                     $   159,036   $   112,773   $    32,349   $    11,137   $  1,187,273
Leasing Commissions                                $    97,856   $    91,566   $    29,162   $         0   $    800,710
General Partner Distributions                               --            --            --            --         15,205
Other                                                       --            --            --            --             --

Dollar Amount of Property Sales and Refinancing
Payments to Sponsors:
Cash                                                       --            --            --            --             --
Notes                                                      --            --            --            --             --

Amount Paid to Sponsor from Property Sales
and Refinancing:
Real Estate Commissions                                    --            --            --            --             --
Incentive Fees                                             --            --            --            --             --
Other                                                      --            --            --            --             --

____________________

(1) Includes compensation paid to General Partners from Wells Real Estate Fund
I, Wells Real Estate Fund II, Wells Real Estate Fund II-OW, Wells Real
Estate Fund III, L.P., Wells Real Estate Fund IV, L.P., Wells Real Estate
Fund V, L.P. and Wells Real Estate Fund VI, L.P. during the past three
years.  In addition to the amounts shown, Affiliates of the General Partners
of Wells Real Estate Fund I are entitled to certain property management and
leasing fees but have elected to defer the payment of such fees until a
later year on properties owned by Wells Real Estate Fund I.  At December 31,
1997, the amount of such fees due the General Partners totaled $2,088,727.
(2) Includes net underwriting compensation and commissions paid to Wells
Investment Securities, Inc. in connection with the offerings of Wells Real
Estate Funds VII, VIII, IX and X, which were not reallowed to participating
broker-dealers.
(3) Fees paid to the General Partners or their Affiliates for acquisition and
advisory services in connection with the review and evaluation of potential
real property acquisitions.
(4) Includes $409,361 in net cash provided by operating activities, $3,059,640
in distributions to limited partners and $381,826 in payments to sponsor for
Wells Real Estate Fund VII, L.P.; $464,964 in net cash provided by operating
activities, $875,914 in distributions to limited partners and $289,862 in
payments to sponsor for Wells Real Estate Fund VIII, L.P.; $2,540 in net
cash provided by operating activities, $1,221,764 in distributions to
limited partners and $81,536 in payments to sponsor for Wells Real Estate
Fund IX, L.P.; $449,332 in net cash used by operating activities, $0 in
distributions to limited partners and $11,137 in payments to sponsor for
Wells Real Estate Fund X, L.P.; and $855,331 in net cash provided by
operating activities, $19,618,669 in distributions to limited partners and
$2,748,101 in payments to sponsor for other public programs.

A-3

TABLE III
(UNAUDITED)

The following six (6) tables set forth operating results of prior programs
sponsored by the General Partners the offerings of which have been completed
since December 31, 1992. The information relates only to public programs with
investment objectives similar to those of the Partnership. All figures are as of
December 31 of the year indicated.

A-4

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND V, L.P.

1997          1996         1995          1994           1993
------------  ------------  -----------  ------------- -----------

Gross Revenues/(1)/                                              $  633,247    $  590,839   $  764,624    $   656,958   $   458,213
Profit on Sale of Properties                                             --            --           --             --            --
Less: Operating Expenses/(2)/                                        72,404        78,939       68,735         88,987        96,964
Depreciation and Amortization/(3)/                                  1,042         6,250        6,250          6,250         6,250
----------    ----------   ----------    -----------   -----------
Net Income (Loss) GAAP Basis/(4)/                                $  559,801    $  505,650   $  689,639    $   561,721   $   354,999
Taxable Income (Loss): Operations                                ==========    ==========   ==========    ===========   ===========
Cash Generated (Used By):                                        $  763,486    $  666,780   $  676,367    $   528,025   $   280,000
Operations                                                     ==========    ==========   ==========    ===========   ===========
Joint Ventures
(66,556)      (65,728)     (46,235)       (10,395)      112,594
1,121,000     1,072,835    1,020,905        653,729        54,154
----------    ----------   ----------    -----------   -----------
$1,054,444    $1,007,107   $  974,670    $   643,334   $   166,748
Less Cash Distributions to Investors:                                                                     
Operating Cash Flow                                             1,054,444     1,007,107      969,011        643,334       151,336
Return of Capital                                                   4,487            --           --         44,257            --
Undistributed Cash Flow from Prior Year Operations                  1,987         3,672           --         15,412            --
----------    ----------   ----------    -----------   -----------
Cash Generated (Deficiency) after Cash Distributions             $   (6,474)   $   (3,672)  $    5,659    $   (59,669)  $    15,412

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                         __            --           --             --            --
Increase in Limited Partner Contributions                             --            --           --             --     5,589,786
----------    ----------   ----------    -----------   -----------
$        __    $   (3,672)  $    5,659    $   (59,669)  $ 5,605,198
Use of Funds:
Sales Commissions and Offering Expenses                                              --           --             --       764,599
Return of Original Limited Partner's Investment                                      --           --             --            --
Property Acquisitions and Deferred Project Costs                 (154,131)         (225)    (233,501)     2,366,507     7,755,116
Cash Generated (Deficiency) after Cash Distributions and         ----------    ----------   ----------    -----------   -----------
Special Items
$  (160,605)   $   (3,897)  $ (227,842)   $(2,426,176)  $(2,914,517)

==========   ==========   ==========    ===========   ===========
Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                           36            71           73             58            29
- Operations Class B Units                                            0          (378)        (272)          (180)          (54)

Capital Gain (Loss)                                                   --            --           --             --            --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                           74            69           69             55            36
- Operations Class B Units                                         (256)         (260)        (246)          (181)          (58)

Capital Gain (Loss)                                                   --            --           --             --            --
Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                      36            65           63             46            10
- Return of Capital Class A Units                                      32            --           --             --            --
- Return of Capital Class B Units                                      --            --           --             --            --
Source (on Cash Basis)
- Operations Class A Units                                             68            65           63             43            10
- Return of Capital Class A Units                                      --            --           --              3            --
- Operations Class B Units                                             --            --           --             --            --
Amount (in Percentage Terms) Remaining Invested in Program
Properties at the end of the Last Year Reported in the Table           100%

_________________
(1) Includes $207,234 in equity in earnings of joint ventures and $250,979 from
investment of reserve funds in 1993; $592,902 in equity in earnings of joint
ventures and $64,056 from investment of reserve funds in 1994; $745,173 in
equity in earnings of joint ventures and $19,451 from investment of reserve
funds in 1995; $577,128 in equity in earnings of joint ventures and $13,711
from investment of reserve funds in 1996; and $623,249 in equity in earnings
of joint ventures and $9,998 from investment of reserve funds in 1997.  At
December 31, 1997, the leasing status of all developed property was 95%.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenue is
depreciation and amortization of $100,796 for 1993, $324,578 for 1994,
$440,333 for 1995, $592,281 for 1996, and $735,315 for 1997.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated as follows:  $442,135 to Class A
Limited Partners, $(87,868) to Class B Limited Partners and $732 to General
Partners for 1993; $879,232 to Class A Limited Partners, $(316,460) to Class
B Limited Partners and $(1,051) to General Partners for 1994; $1,124,203 to
Class A Limited Partners, $(434,564) to Class B Limited Partners and $0 to
General Partners for 1995; $1,095,296 to Class A Limited Partners,
$(589,646) to Class B Limited Partners and $0 to General Partners for 1996;
and $559,801 to Class A Limited Partners, $0 to Class B Limited Partners and
$0 to General Partners in 1997.

A-5

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VI, L.P.

1997          1996           1995           1994           1993
------------  ------------  --------------  -------------  ---------

Gross Revenues/(1)/                                           $  884,802    $  675,782    $  1,002,567    $   819,535    $   82,723
Profit on Sale of Properties                                          --            --              --             --            --
Less: Operating Expenses/(2)/                                     82,898        80,479          94,489        112,389        46,608
Depreciation and Amortization/(3)/                               6,250         6,250           6,250          6,250         4,687
----------    ----------    ------------    -----------    -----------

Net Income GAAP Basis/(4)/                                    $  795,654    $  589,053    $    901,828    $   700,896    $   31,428
Taxable Loss: Operations                                      ==========    ==========    ============    ===========    ===========

Cash Generated (Used By):                                     $1,091,770    $  809,389    $   916, 531    $   667,682    $   31,428
Operations                                                  ==========    ==========    ============    ===========    ===========

Joint Ventures                                                                                                         
(57,206)       (2,716)        278,728        276,376        (2,478)

1,500,023     1,044,891         766,212        203,543            --
----------    ----------    ------------    -----------    -----------
Less Cash Distributions to Investors:  
Operating Cash Flow                                         $1,442,817    $1,042,175    $  1,044,940     $  479,919    $   (2,478)

Return of Capital                                                                                                      
1,442,817     1,042,175       1,044,940        245,800            --
Undistributed Cash Flow from Prior Year Operations               9,986       125,314              --             --            --
--        18,027    $    216,092             --            --
----------    ------------     ----------   ------------

Cash Generated (Deficiency) after Cash Distributions          $   (9,986)   $ (143,341)       (216,092    $   234,119    $   (2,478)

Special Items (not including sales and financing):                                                                       
Source of Funds:                                                                                     
General Partner Contributions                                      --            --              --             --            --
Increase in Limited Partner Contributions                          --            --              --     12,836,461    12,836,539
----------    ----------    ------------    -----------   ------------

$   (9,986)   $ (143,341)   $   (216,092)   $12,397,580   $12,834,061
Use of Funds:                                                                                                 
Sales Commissions and Offering Expenses                                           --              --      1,776,909     1,781,724
Return of Original Limited Partner's Investment                                   --              --             --           100
Property Acquisitions and Deferred Project Costs               310,759       234,924      10,721,376      5,912,454     3,856,239
Cash Generated (Deficiency) after Cash Distributions and      ----------    ----------    ------------    -----------   ------------

Special Items                                                                                                 
$ (320,745)   $ (378,265)   $(10,937,468    $ 4,708,217   $ 7,195,998
==========    ==========    ============    ===========   ============

Net Income and Distributions Data per $1,000 Invested:                                                   
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                        78            59              57             43             9
- Operations Class B Units                                      (247)         (160)            (60)           (12)           (5)

Capital Gain (Loss)                                                --            --              --             --             0 

Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                        75            56              56             41             1
- Operations Class B Units                                      (150)          (99)            (51)           (22)           --
Capital Gain (Loss)                                                --            --              --             --            --
Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                   67            56              57             14            --
- Return of Capital Class A Units                                   --            --               4             --            --
- Return of Capital Class B Units                                   --            --              --             --            --
Source (on Cash Basis)
- Operations Class A Units                                          67            50              61             14            --
- Return of Capital Class A Units                                    0             6              --             --            --
- Operations Class B Units                                          --            --              --             --            --
Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in
the Table                                                           100%

(1) Includes $3,436 in equity in loss of joint ventures and $86,159 from
investment of reserve funds in 1993, $285,711 in equity in earnings of joint
ventures and $533,824 from investment of reserve funds in 1994, $681,033 in
equity in earnings of joint ventures and $321,534 from investment of reserve
funds in 1995, $607,214 in equity in earnings of joint ventures and $68,568
from investment of reserve funds in 1996, and $856,710 in equity in earnings
of joint ventures and $28,092 from investment of reserve funds in 1997.  At
December 31, 1997, the leasing status was 94%.
(2) Includes partnership administrative expenses.
(3) Included in equity in loss of joint ventures in gross revenues is
depreciation of $3,436 for 1993, $107,807 for 1994, $264,866 for 1995,
$648,478 for 1996, and $896,753 for 1997.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $39,551 to Class A Limited
Partners, $(8,042) to Class B Limited Partners and $(81) to the General
Partner for 1993; $762,218 to Class A Limited Partners, $(62,731) to Class B
Limited Partners and $1,409 to the General Partners for 1994; $1,172,944 to
Class A Limited Partners, $(269,288) to Class B Limited Partners and
$(1,828) to the General Partners for 1995; $1,234,717 to Class A Limited
Partners, $(645,664) to Class B Limited Partners and $0 to the General
Partners for 1996; and $1,677,826 to Class A Limited Partners, $(882,172) to
Class B Limited Partners and $0 to the General Partners for 1997.

A-6

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VII, L.P.

1997         1996           1995           1994       1993
------------  -----------  --------------  -------------  ----

Gross Revenues/(1)/                                             $  816,237    $ 543,291    $    925,246    $   286,371   N/A
Profit on Sale of Properties                                            --                                          --
Less: Operating Expenses/(2)/                                       76,838       84,265         114,953         78,420
Depreciation and Amortization/(3)/                                 6,250        6,250           6,250          4,688
----------    ---------    ------------    -----------
Net Income GAAP Basis/(4)/                                      $  733,149    $ 452,776    $    804,043    $   203,263
==========    =========    ============    =========== 
Taxable Income: Operations                                      $1,008,368    $ 657,443    $    812,402    $   195,067 
==========    =========    ============    =========== 
Cash Generated (Used By):                                       
Operations                                                       (43,250)      20,883         431,728         47,595   
Joint Ventures                                                 1,420,126      760,628         424,304         14,243
----------    ---------    ------------    ----------- 
$1,376,876    $ 781,511    $    856,032    $    61,838 

Less Cash Distributions to Investors:                          
Operating Cash Flow                                            1,376,876      781,511         856,032         52,195
Return of Capital                                                  2,709       10,805          22,064             --
Undistributed Cash Flow from Prior Year Operations                    --           --           9,643             -- 
----------    ---------    ------------    ----------- 
Cash Generated (Deficiency) after Cash Distributions            $   (2,709)   $ (10,805)   $    (31,707)   $     9,643  

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                        --           --              --             --
Increase in Limited Partner Contributions                    $       --    $      --    $    805,212    $23,374,961
----------    ---------    ------------    -----------
$   (2,709)   $ (10,805)   $    773,505    $23,384,604 

Use of Funds:                                                   
Sales Commissions and Offering Expenses                               --           --         244,207    $ 3,351,569  
Return of Original Limited Partner's Investment                       --           --             100             --  
Property Acquisitions and Deferred Project Costs                 169,172      736,960      14,971,002      4,477,765  
----------    ---------    ------------    -----------
Cash Generated (Deficiency) after Cash Distributions and          
Special Items                                                 $ (171,881)   $(747,765)   $(14,441,804)   $15,555,270 
==========    =========    ============    ===========   

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                           86           62              57             29
- Operations Class B Units                                         (168)         (98)            (20)            (9)
Capital Gain (Loss)                                                  --           --              --             --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                           78           55              55             28
- Operations Class B Units                                         (111)         (58)            (16)            17
Capital Gain (Loss)                                                  --           --              --             --
Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                     70           43              52              7
- Return of Capital Class A Units                                     --           --              --             --
- Return of Capital Class B Units                                     --           --              --             --
Source (on Cash Basis)
- Operations Class A Units                                            70           42              51              7
- Return of Capital Class A Units                                     --            1               1             --
- Operations Class B Units                                            --           --              --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment income Class A Units                                      54           29              30              4
- Return of Capital Class A Units                                      16           14              22              3
- Return of Capital Class B Units                                      --           --              --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in
the Table                                                             100%

____________________
(1) Includes $78,799 in equity in earnings of joint ventures and $207,572 from
investment of reserve funds in 1994, $403,325 in equity in earnings of joint
ventures and $521,921 from investment of reserve funds in 1995, $457,144 in
equity in earnings of joint ventures and $86,147 from investment of reserve
funds in 1996, and $785,398 in equity in earnings of joint ventures and
$30,839 from investment of reserve funds in 1997.  At December 31, 1997, the
leasing status was 92% including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $25,468 for 1994, $140,533 for 1995, $605,247 for 1996, and
$877,869 for 1997.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $233,337 to Class A Limited
Partners, $(29,854) to Class B Limited Partners and $(220) to the General
Partner for 1994; $950,826 to Class A Limited Partners, $(146,503) to Class
B Limited Partners and $(280) to the General Partners for 1995; $1,062,605
to Class A Limited Partners, $(609,829) to Class B Limited Partners and $0
to the General Partners for 1996; and $1,615,965 to class A Limited
Partners, $(882,816) to Class B Limited Partners and $0 to the General
Partners for 1997.

(footnotes continued on following page)

A-7

(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per Unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1997, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled
$972,030.

A-8

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND VIII, L.P.

1997           1996           1995      1994  1993
--------------  -------------  ------------  ----  ----

Gross Revenues/(1)/                                               $  1,204,018    $ 1,057,694   $   402,428   N/A   N/A
Profit on Sale of Properties                                                --
Less: Operating Expenses/(2)/                                           95,201        114,854       122,264
Depreciation and Amortization/(3)/                                     6,250          6,250         6,250
------------    -----------   -----------
Net Income GAAP Basis/(4)/                                        $  1,102,567    $   936,590       273,914
============    ===========   ===========
Taxable Income: Operations                                        $  1,213,524    $ 1,001,974       404,348
============    ===========   ===========
Cash Generated (Used By):
Operations                                                             7,909        623,268       204,790
Joint Ventures                                                     1,229,282        279,984        20,287
------------    -----------   -----------
$  1,237,191    $   903,252       225,077  
Less Cash Distributions to Investors:                             
Operating Cash Flow                                                1,237,191        903,252            -- 
Return of Capital                                                    183,315          2,443            -- 
Undistributed Cash Flow from Prior Year Operations                        --        225,077            -- 
------------    -----------   ----------- 
Cash Generated (Deficiency) after Cash Distributions              $   (183,315)   $  (227,520)      225,077                     

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                            --             --            --
Increase in Limited Partner Contributions/(5)/                           --      1,898,147    30,144,542
------------    -----------   -----------
$   (183,315)   $ 1,670,627    30,369,619
Use of Funds:
Sales Commissions and Offering Expenses                                   --        464,760     4,310,028
Return of Limited Partner's Investment                                 8,600             --            --
Property Acquisitions and Deferred Project Costs                  10,675,811      7,931,566     6,618,273
------------    -----------   -----------  
Cash Generated (Deficiency) after Cash Distributions and          
Special Items                                                   $(10,867,726)   $(6,725,699)   19,441,318
============    ===========   =========== 

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                               73             46            28
- Operations Class B Units                                             (150)           (47)           (3)
Capital Gain (Loss)                                                      --             --            --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                               65             46            17
- Operations Class B Units                                              (95)           (33)           (3)
Capital Gain (Loss)                                                      --             --            --
Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                         54             43            --
- Return of Capital Class A Units                                         --             --            --
- Return of Capital Class B Units                                         --             --            --
Source (on Cash Basis)
- Operations Class A Units                                                47             43            --
- Return of Capital Class A Units                                          7              0            --
- Operations Class B Units                                                --             --            --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                          42             33            --
- Return of Capital Class A Units                                          12             10            --
- Return of Capital Class B Units                                          --             --            --
Amount (in Percentage Terms) Remaining Invested in Program
Properties at the end of the Last Year Reported in the Table               100%

_______________________
(1) Includes $28,377 in equity in earnings of joint ventures and $374,051 from
investment of reserve funds in 1995, $241,819 in equity in earnings of joint
ventures and $815,875 from investment of reserve funds in 1996, and
$1,034,907 in equity in earnings of joint ventures and $169,111 from
investment of reserve funds in 1997.  At December 31, 1997, the leasing
status was 96% including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $14,058 for 1995, $265,259 for 1996, and $841,666  for 1997.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $294,221 to Class A Limited
Partners, $(20,104) to Class B Limited Partners and $(203) to the General
Partners for 1995; $1,207,540  to Class A Limited Partners, $(270,653) to
Class B Limited Partners and $(297) to the General Partners for 1996; and
$1,947,536  to Class A Limited Partners, $(844,969) to Class B Limited
Partners and $0 to the General Partners for 1997.

(footnotes continued on following page)

A-9

(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per Unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1997, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled
$551,455.

A-10

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND IX, L.P.

1997           1996       1995  1994  1993
--------------  -------------  ----  ----  ----

Gross Revenues/(1)/                                             $  1,199,300    $   406,891   N/A   N/A   N/A
Profit on Sale of Properties                                              --             --
Less: Operating Expenses/(2)/                                        101,284        101,885
Depreciation and Amortization/(3)/                                   6,250          6,250
------------    -----------
Net Income GAAP Basis/(4)/                                      $  1,091,766    $   298,756
============    =========== 
Taxable Income: Operations                                      $  1,083,824    $   304,552    
============    ===========    
Cash Generated (Used By):                                      

Operations                                                    $    501,390    $   151,150  
Joint Ventures                                                     527,390             -- 
------------    -----------
$  1,028,780    $   151,150     
Less Cash Distributions to Investors:                           
Operating Cash Flow                                              1,028,780        149,425 
Return of Capital                                             $     41,834    $        --  
Undistributed Cash Flow From Prior Year Operations                   1,725             -- 
------------    -----------
Cash Generated (Deficiency) after Cash Distributions            $    (43,559)   $     1,725       

Special Items (not including sales and financing):
Source of Funds:
General Partner Contributions                                          --             --
Increase in Limited Partner Contributions                              --     35,000,000
------------    -----------
$    (43,559)   $35,001,725 
Use of Funds:
Sales Commissions and Offering Expenses                            323,039      4,900,321
Return of Original Limited Partner's Investment                        100             --
Property Acquisitions and Deferred Project Costs                13,427,158      6,544,019
------------    ----------- 
Cash Generated (Deficiency) after Cash Distributions and        
Special Items                                                 $(13,793,856)   $23,557,385 
============    ===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                             53             28
- Operations Class B Units                                            (77)           (11)
Capital Gain (Loss)                                                    --             --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                             46             26
- Operations Class B Units                                            (47)           (48)
Capital Gain (Loss)                                                    --             --
Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                       36             13
- Return of Capital Class A Units                                       --             --
- Return of Capital Class B Units                                       --             --
Source (on Cash Basis)
- Operations Class A Units                                              35             13
- Return of Capital Class A Units                                        1             --
- Operations Class B Units                                              --             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                        29             10
- Return of Capital Class A Units                                         7              3
- Return of Capital Class B Units                                        --             --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in
the Table                                                               100%

___________________________
(1) Includes $23,077 in equity in earnings of joint ventures and $383,884 from
investment of reserve funds in 1996, and $593,914 in equity in earnings of
joint ventures and $605,386 from investment of reserve funds in 1997.  At
December 31, 1997, the leasing status was 93% including developed property
in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $25,286 for 1996, and $469,126 for 1997.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $330,270 to Class A Limited
Partners, $(31,220) to Class B Limited Partners and $(294) to the General
Partners for 1996; and $1,564,778 to Class A Limited Partners, $(472,806) to
Class B Limited Partners and $(206) to the General Partners for 1997.

(footnotes continued on following page)

A-11

(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per Unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1997, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled
$236,379.

A-12

TABLE III (UNAUDITED)
OPERATING RESULTS OF PRIOR PROGRAMS
WELLS REAL ESTATE FUND X, L.P.

1997       1996  1995  1994  1993
-------------  ----  ----  ----  ----

Gross Revenues/(1)/                                             $   372,507   N/A   N/A   N/A   N/A
Profit on Sale of Properties                                             --
Less: Operating Expenses/(2)/                                        88,232
Depreciation and Amortization/(3)/                                  6,250
-----------
Net Income GAAP Basis/(4)/                                      $   278,025
===========
Taxable Income: Operations                                      $   382,543 
===========
Cash Generated (Used By):
Operations                                                    $   200,668                

===========
Joint Ventures                                                $   200,668

Less Cash Distributions to Investors:                           
Operating Cash Flow                                                    --
Return of Capital                                                      --           
Undistributed Cash Flow From Prior Year Operations                     --
-----------
Cash Generated (Deficiency) after Cash Distributions            $   200,668    

Special Items (not including sales and financing):             
Source of Funds:                                              
General Partner Contributions                                         --
Increase in Limited Partner Contributions                    $27,128,912
-----------          
$27,329,580   
Use of Funds:                                                  
Sales Commissions and Offering Expenses                         3,737,363 
Return of Original Limited Partner's Investment                       100
Property Acquisitions and Deferred Project Costs                5,188,485           
-----------
Cash Generated (Deficiency) after Cash Distributions and          
Special Items                                                 $18,403,632 
===========

Net Income and Distributions Data per $1,000 Invested:
Net Income on GAAP Basis:
Ordinary Income (Loss)
- Operations Class A Units                                            28
- Operations Class B Units                                            (9)
Capital Gain (Loss)                                                   --
Tax and Distributions Data per $1,000 Invested:
Federal Income Tax Results:
Ordinary Income (Loss)
- Operations Class A Units                                            35
- Operations Class B Units                                             0
Capital Gain (Loss)                                                   --
Cash Distributions to Investors:
Source (on GAAP Basis)
- Investment Income Class A Units                                      --
- Return of Capital Class A Units                                      --
- Return of Capital Class B Units                                      --
Source (on Cash Basis)
- Operations Class A Units                                             --
- Return of Capital Class A Units                                      --
- Operations Class B Units                                             --
Source (on a Priority Distribution Basis)/(5)/
- Investment Income Class A Units                                       --
- Return of Capital Class A Units                                       --
- Return of Capital Class B Units                                       --

Amount (in Percentage Terms) Remaining Invested in
Program Properties at the end of the Last Year Reported in
the Table                                                              100%

(1) Includes $(10,035) in equity in earnings of joint ventures and $382,542 from
investment of reserve funds in 1997.  At December 31, 1997, the leasing
status was 67% including developed property in initial lease up.
(2) Includes partnership administrative expenses.
(3) Included in equity in earnings of joint ventures in gross revenues is
depreciation of $18,675 for 1997.
(4) In accordance with the partnership agreement, net income or loss,
depreciation and amortization are allocated $302,862 to Class A Limited
Partners, $(24,675) to Class B Limited Partners and $(162) to the General
Partners for 1997.
(5) Pursuant to the terms of the partnership agreement, an amount equal to the
cash distributions paid to Class A Limited Partners is payable as priority
distributions out of the first available net proceeds from the sale of
partnership properties to Class B Limited Partners.  The amount of cash
distributions paid per Unit to Class A Limited Partners is shown as a return
of capital to the extent of such priority distributions payable to Class B
Limited Partners.  As of December 31, 1997, the aggregate amount of such
priority distributions payable to Class B Limited Partners totalled $0.

A-13

WELLS REAL ESTATE INVESTMENT TRUST, INC.

SUPPLEMENT NO. 2 DATED JUNE 30, 1998 TO THE PROSPECTUS
DATED JANUARY 30, 1998

This document supplements, and should be read in conjunction with, the
Prospectus of Wells Real Estate Investment Trust, Inc. dated January 30, 1998,
as supplemented and amended by Supplement No. 1 dated April 20, 1998
(collectively, the "Prospectus").  Unless otherwise defined herein, capitalized
terms used in this Supplement shall have the same meanings as set forth in the
Prospectus.

The purpose of this Supplement is to describe the following:

(i)  The status of the offering of shares of common stock (the "Shares")
in Wells Real Estate Investment Trust, Inc. (the "Company");

(ii)  Revisions to the "MANAGEMENT" section of the Prospectus;

(iii)  Revisions to the "REAL PROPERTY INVESTMENTS" section of the Prospectus;

(iv)  Revisions to the "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" section of the Prospectus; and

(v)  Inclusion of Audited and Pro Forma Financial Statements as described in
the "Financial Statements" section of this Supplement.

STATUS OF THE OFFERING

Pursuant to the Prospectus, the offering of Shares in the Company commenced on
January 30, 1998.  The Company commenced operations on June 5, 1998, upon the
acceptance of subscriptions for the minimum offering of $1,250,000 (125,000
Shares).  As of June 30, 1998, the Company had raised a total of $2,683,595 in
offering proceeds (268,359 Shares).

MANAGEMENT

The information contained on page 32 in the "General" subsection of the
"MANAGEMENT" section of the Prospectus is revised as of the date of this
Supplement by the deletion of the second full paragraph in that subsection and
the insertion of the following paragraph in lieu thereof:

The Company currently has nine Directors; it may have no fewer than
three Directors and no more than fifteen. Directors will be elected
annually, and each Director will hold office until the next annual meeting
of stockholders or until his successor has been duly elected and qualified.
There is no limit on the number of times that a Director may be elected to
office. Although the number of Directors may be increased or decreased as
discussed above, a decrease shall not have the effect of shortening the
term of any incumbent Director.

The information beginning on page 33 in the "MANAGEMENT" section of the
Prospectus is revised as of the date of this Supplement by the deletion of the
entire text of the "Directors and Executive Officers" subsection and the
insertion of the following in lieu thereof:

DIRECTORS AND EXECUTIVE OFFICERS

The Directors and executive officers of the Company are listed below:

Name                       Age       Positions
----                       ---       ---------
Leo F. Wells, III           53       President and Director
Brian M. Conlon             40       Executive Vice President, Treasurer,
Secretary and Director

John L. Bell                58       Independent Director 
Richard W. Carpenter        61       Independent Director 
Walter W. Sessoms           64       Independent Director 
Bud Carter                  60       Independent Director  
William H. Keogler, Jr.     52       Independent Director 
Donald S. Moss              62       Independent Director 
Neil H. Strickland          62       Independent Director 

LEO F. WELLS, III is the President and a Director of the Company and the
President and sole Director of the Advisor. He is also the sole shareholder and
Director of Wells Real Estate Funds, Inc., the parent corporation of the
Advisor. Mr. Wells is President of Wells & Associates, Inc., a real estate
brokerage and investment company formed in 1976 and incorporated in 1978, for
which he serves as principal broker. He is also the sole Director and President
of: Wells Management Company, Inc. ("Wells Management"), a property management
company he founded in 1983; Wells Investment Securities, Inc. (the Dealer
Manager), a registered securities broker-dealer he formed in 1984; Wells
Advisors, Inc., a company he organized in 1991 to act as a non-bank custodian
for IRAs; and Wells Development Corporation ("Wells Development"), a company he
organized in 1997 to temporarily own, operate, manage, and/or develop real
properties.

Mr. Wells was a real estate salesman and property manager from 1970 to 1973
for Roy D. Warren & Company, an Atlanta real estate company, and he was
associated from 1973 to 1976 with Sax Gaskin Real Estate Company, during which
time he became a Life Member of the Atlanta Board of Realtors Million Dollar
Club. From 1980 to February 1985 he served as Vice President of Hill-Johnson,
Inc., a Georgia corporation engaged in the construction business. Mr. Wells
holds a Bachelor of Business Administration degree in economics from the
University of Georgia. Mr. Wells is a member of the International Association
for Financial Planning and a registered NASD principal.

Mr. Wells has over 25 years of experience in real estate sales, management
and brokerage services. He is currently a co-general partner in a total of 25
real estate limited partnerships formed for the purpose of acquiring, developing
and operating office buildings and other commercial properties. As of June 16,
1998, these 25 real estate limited partnerships represented investments
totalling $282,525,732 from 25,800 investors. See "Prior Performance Tables"
contained in Supplement No. 1 to the Prospectus.

BRIAN M. CONLON is the Executive Vice President, Secretary, Treasurer and a
Director of the Company.  He also serves as Executive Vice President of
both the Advisor and Wells Development.  Mr. Conlon joined the Advisor in
1985 as a Regional Vice President, and served as Vice President and
National Marketing Director from 1991 until April 1996 when he assumed his
current position.  Previously, Mr. Conlon was Director of Business
Development for Tishman Midwest Management & Leasing Services Corp. where
he was responsible for marketing the firm's property management and leasing
services to institutions.  Mr. Conlon also spent two years as an Investment
Property Specialist with Carter & Associates where he specialized in
acquisitions and dispositions of office and retail properties for
institutional clients.  Mr. Conlon received a Bachelor of Business
Administration degree from Georgia State University and a Master of
Business Administration degree from the University of Dallas.  Mr. Conlon
is a member of the International Association for Financial Planning (IAFP).
He is also a general securities principal and holds a Georgia real estate
brokerage license.  Mr. Conlon also holds the certified commercial
investment member (CCIM) designation of the Commercial Investment Real
Estate Institute and the certified financial planner (CFP) designation of
the Certified Financial Planner Board of Standards, Inc.

JOHN L. BELL was the owner and Chairman of Bell-Mann, Inc., the largest
commercial flooring contractor in the Southeast ("Bell-Mann") from February
1971 to February 1996.

Mr. Bell also served on the Board of Directors of Realty South Investors, a REIT
traded on the American Stock Exchange, and was the founder and served as a
Director of both the Chattahoochee Bank and the Buckhead Bank. In 1997, Mr. Bell
initiated and implemented a "Dealer Acquisition Plan" for Shaw Industries, Inc.,
a floor covering manufacturer and distributor, which plan included the
acquisition of Bell-Mann.

Mr. Bell currently serves on the advisory boards of Windsor Capital,
Mountain Top Boys Home and the Eagle Ranch Boys Home. Mr. Bell is also
extensively involved in buying and selling real estate both individually and in
partnership with others. Mr. Bell graduated from Florida State University
majoring in accounting and marketing.

RICHARD W. CARPENTER served as General Vice President of Real Estate
Finance of the Citizens and Southern National Bank from 1975 to 1979, during
which time his duties included the supervision and establishment of the co-
mingled United Kingdom Pension Fund, U.K.-American Properties, Inc. established
primarily for investment in commercial real estate within the United States.

Mr. Carpenter is currently President and Director of Realmark Holdings
Corp., a residential and commercial real estate developer, and has served in
that position since October 1983. He is also President and Director of Leisure
Technology, Inc., a retirement community developer, a position which he has held
since March 1993, Managing Partner of Carpenter Properties, L.P., a real estate
limited partnership, and President and Director of the oil refining companies of
Wyatt Energy, Inc. and Commonwealth Oil Refining Company, Inc., positions which
he has held since 1995 and 1984, respectively.

Mr. Carpenter is a Director of both Tara Corp., a steel manufacturing
company, and Environmental Compliance Corp., an environmental consulting firm.
Mr. Carpenter also serves as Vice Chairman and Director of both First Liberty
Financial Corp. and Liberty Savings Bank, F.S.B. He has been a member of The
National Association of Real Estate Investment Trusts and served as President
and Chairman of the Board of Southmark Properties, an Atlanta based REIT
investing in commercial properties. Mr. Carpenter is a past Chairman of the
American Bankers Association Housing and Real Estate Finance Division Executive
Committee. Mr. Carpenter holds a Bachelor of Science degree from Florida State
University, where he was named the outstanding alumni of the School of Business
in 1973.

WALTER W. SESSOMS was employed by BellSouth Telecommunications, Inc.
("BellSouth") from 1971 until his retirement in June 1997. While at BellSouth,
Mr. Sessoms served in a number of key positions, including Vice President-
Residence for the State of Georgia from June 1979 to July 1981, Vice President-
Transitional Planning Officer from July 1981 to February 1982, Vice President-
Georgia from February 1982 to June 1989, Senior Vice President-Regulatory and
External Affairs from June 1989 to November 1991, and Group President-Services
from December 1991 until his retirement on June 30, 1997.

Mr. Sessoms currently serves as a Director of the Georgia Chamber of
Commerce for which he is a past Chairman of the Board, the Atlanta Civic
Enterprises and the Salvation Army's Board of Visitors of the Southeast Region.
Mr. Sessoms is also a past executive advisory council member for the University
of Georgia College of Business Administration and past member of the executive
committee of the Atlanta Chamber of Commerce. Mr. Sessoms is a graduate of
Wofford College where he earned a degree in economics and business
administration and is currently a practitioner/lecturer at the University of
Georgia.

BUD CARTER was an award-winning broadcast news director and anchorman for
several radio and television stations in the Midwest for over 20 years. From
1975 to 1980, Mr. Carter served as General Manager of WTAZ-FM, a radio station
in Peoria, Illinois and served as editor 

3

and publisher of The Peoria Press, a weekly business and political journal in
Peoria, Illinois. From 1981 until 1989, Mr. Carter was also an owner and General
Manager of Transitions, Inc., a corporate outplacement company in Atlanta,
Georgia.

Mr. Carter currently serves as Senior Vice President for The Executive
Committee, a 42-year old international organization established to aid
presidents and CEOs share ideas on ways to improve the management and
profitability of their respective companies. The Executive Committee operates in
numerous large cities throughout the United States, Canada, Australia, France,
Italy, Malaysia, Brazil, the United Kingdom and Japan. The Executive Committee
has more than 6,000 presidents and CEOs who are members. In addition, Mr. Carter
was the first Chairman of the organization recruited in Atlanta and still serves
as Chairman of the first two groups formed in Atlanta, each comprised of 14
noncompeting CEOs and presidents. Mr. Carter is a graduate of the University of
Missouri where he earned degrees in journalism and social psychology.

WILLIAM H. KEOGLER, JR. was employed by Brooke Bond Foods, Inc. as a Sales
Manager from June 1965 to September 1968. From July 1968 to December 1974, Mr.
Keogler was employed by Kidder Peabody & Company, Inc. and Dupont, Glore, Forgan
as a corporate bond salesman responsible for managing the industrial corporate
bond desk and the utility bond area. From December 1974 to July 1982, Mr.
Keogler was employed by Robinson-Humphrey, Inc. as the Director of Fixed Income
Trading Departments responsible for all municipal bond trading and municipal
research, corporate and government bond trading, unit trusts and SBA/FHA loans,
as well as the oversight of the publishing of the Robinson-Humphrey Southeast
Unit Trust, a quarterly newsletter. Mr. Keogler was elected to the Board of
Directors of Robinson-Humphrey, Inc. in 1982. From July 1982 to October 1984,
Mr. Keogler was Executive Vice President, Chief Operating Officer, Chairman of
the Executive Investment Committee and member of the Board of Directors and
Chairman of the MFA Advisory Board for the Financial Service Corporation. He was
responsible for the creation of a full service trading department specializing
in general securities with emphasis on municipal bonds and municipal trusts.
Under his leadership, Financial Service Corporation grew to over 1,000
registered representatives and over 650 branch offices. In March 1985, Mr.
Keogler founded Keogler, Morgan & Company, Inc., a full service brokerage
firm, and Keogler Investment Advisory, Inc., in which he served as Chairman of
the Board of Directors, President and Chief Executive Officer. In January 1997,
both companies were sold to Sun America, Inc., a publicly traded New York Stock
Exchange Company. Mr. Keogler continued to serve as President and Chief
Executive Officer of those companies until his retirement in January 1998.

Mr. Keogler serves on the Board of Trustees of Senior Citizens Services of
Atlanta.  He graduated from Adelphi University in New York where he earned
a degree in psychology.

DONALD S. MOSS was employed by Avon Products, Inc. ("Avon") from 1957 until
his retirement in 1986. While at Avon, Mr. Moss served in a number of key
positions, including Vice President and Controller from 1973 to 1976, Group Vice
President of Operations-Worldwide from 1976 to 1979, Group Vice President of
Sales-Worldwide from 1979 to 1980, Senior Vice President-International from 1980
to 1983 and Group Vice President-Human Resources and Administration from 1983
until his retirement in 1986. Mr. Moss was also a member of the board of
directors of Avon Canada, Avon Japan, Avon Thailand, and Avon Malaysia from
1980-1983.

Mr. Moss is currently a Director of the Atlanta Athletic Club. He formerly
was the National Treasurer and a Director of the Girls Clubs of America from
1973 to 1976. Mr. Moss graduated from the University of Illinois where he
received a degree in business.

NEIL H. STRICKLAND was employed by Loyalty Group Insurance (which
subsequently merged with America Fore Loyalty Group and is now known as The
Continental Group) as an automobile insurance underwriter. From 1957 to 1961,
Mr. Strickland served as Assistant Supervisor of the Casualty Large Lines
Retrospective Rating Department. From 1961 to 1964,

4

Mr. Strickland served as Branch Manager of Wolverine Insurance Company, a full
service property and casualty service company, where he had full responsibility
for underwriting of insurance and office administration in the State of Georgia.
In 1964, Mr. Strickland and a non-active partner started Superior Insurance
Service, Inc., a property and casualty wholesale general insurance agency. Mr.
Strickland served as President and was responsible for the underwriting and all
other operations of the agency. In 1967, Mr. Strickland sold his interest in
Superior Insurance Service, Inc. and started Strickland General Agency, Inc., a
property and casualty general insurance agency concentrating on commercial
customers. Mr. Strickland is currently the Senior Operation Executive of
Strickland General Agency, Inc. and devotes most of his time to long-term
planning, policy development and senior administration.

Mr. Strickland is a past President of the Norcross Kiwanis Club and served
as both Vice President and President of the Georgia Surplus Lines Association.
He also served as President and a Director of the National Association of
Professional Surplus Lines Offices. Mr. Strickland currently serves as a
Director of First Capital Bank, a community bank located in the State of
Georgia. Mr. Strickland graduated from Georgia State University where he
received a degree in business administration. He also received an L.L.B. degree
from Atlanta Law School.

REAL PROPERTY INVESTMENTS

The information contained on page 45 in the "REAL PROPERTY INVESTMENTS"
section of the Prospectus is revised as of the date of this Supplement by the
deletion of the first paragraph of that section and the insertion of the
following paragraphs in lieu thereof:

JOINT VENTURE AGREEMENT

The Company, as sole general partner of Wells Operating Partnership,
L.P. ("Wells OP"), a Georgia limited partnership organized to own and
operate properties on behalf of the Company, entered into an Amended and
Restated Joint Venture Agreement (the "Joint Venture Agreement") with Wells
Real Estate Fund IX, L.P. ("Wells Fund IX"), Wells Real Estate Fund X, L.P.
("Wells Fund X") and Wells Real Estate Fund XI, L.P. ("Wells Fund XI")
known as The Fund IX, Fund X, Fund XI and REIT Joint Venture (the "Joint
Venture") for the purpose of the acquisition, ownership, development,
leasing, operation, sale and management of real properties. Wells Fund IX,
Wells Fund X and Wells Fund XI are all Affiliates of the Company and the
Advisor. The Joint Venture (formerly known as "Fund IX and X Associates")
was originally formed on March 20, 1997 between Wells Fund IX and Wells
Fund X, and on June 11, 1998, Wells Fund XI and Wells OP were admitted as
joint venturers to the Joint Venture. The investment objectives of Wells
Fund IX, Wells Fund X and Wells Fund XI are substantially identical to
those of the Company.

The Joint Venture Agreement provides that all income, profit, loss,
cash flow, resale gain, resale loss and sale proceeds of the Joint Venture
will be allocated and distributed between Wells Fund IX, Wells Fund X,
Wells Fund XI and Wells OP based on their respective capital contributions
to the Joint Venture. As of June 30, 1998, Wells OP had made total capital
contributions to the Joint Venture of $1,421,466 and held an equity
percentage interest in the Joint Venture of 4.4%; Wells Fund IX had made
total capital contributions to the Joint Venture of $14,571,686 and held an
equity percentage interest in the Joint Venture of 45.8%; Wells Fund X had
made total capital contributions to the Joint Venture of $13,360,540 and
held an equity percentage interest in the Joint Venture of 42.0%; and Wells
Fund XI had made total capital contributions to the Joint Venture of
$2,482,810 and held an equity percentage interest in the Joint Venture of
7.8%.

The Joint Venture Agreement allows each joint venturer to make a
buy/sell election upon receipt by any joint venturer of a bonafide third-
party offer to purchase all or substantially all of the properties or the
last remaining property of the Joint Venture. Upon receipt of notice of
such

5

third-party offer, each joint venturer must elect within thirty (30) days
after receipt of the notice to either (i) purchase the entire interest of
each venturer that wishes to accept the offer on the same terms and
conditions as the third-party offer to purchase, or (ii) consent to the
sale of the properties or last remaining property pursuant to such third-
party offer.

On June 24, 1998, Wells OP contributed $1,421,466 in cash to the
Joint Venture. Said $1,421,466 capital contribution by Wells OP was
aggregated with cash contributions made by Wells Fund IX in the amount of
$650,000, Wells Fund X in the amount of $950,000 and Wells Fund XI in the
amount of $2,482,810 to purchase a one-story office building located in
Oklahoma City, Oklahoma (the "Lucent Building") from Wells Development, an
Affiliate of the Company and the Advisor.

THE LUCENT BUILDING

Purchase of the Oklahoma City Property. On June 24, 1998, the Joint
-------------------------------------- 
Venture acquired a one-story office building containing approximately
57,186 rentable square feet which was developed and constructed on certain
real property located in Oklahoma City, Oklahoma (the "Oklahoma City
Property") by Wells Development pursuant to that certain Agreement for the
Purchase and Sale of Real Property (the "Contract") dated May 30, 1997
between Wells Development and the Joint Venture, as amended.

Wells Development had acquired the Oklahoma City Property on May 30,
1997, for a purchase price of $695,636, plus $20,869 in real estate
brokerage commissions and $58,000 in legal fees, title insurance premiums
and other closing costs. Simultaneously with the acquisition of the
Oklahoma City Property, Wells Development entered into the Contract with
the Joint Venture for the sale of the Oklahoma City Property following the
construction and development thereon of the Lucent Building, as described
below.

Pursuant to the terms of the Contract, the Joint Venture made an
earnest money deposit to Wells Development in the amount of $1,600,000
consisting of a $650,000 contribution funded by Wells Fund IX and a
$950,000 contribution funded by Wells Fund X. The earnest money deposit
paid by the Joint Venture under the Contract was used by Wells Development
to fund the purchase of the Oklahoma City Property, as described below, and
to fund the initial costs of the construction and development of the Lucent
Building. Wells Development also used part of the earnest money deposit to
acquire an additional strip of land along the northern boundary of the
Oklahoma City Property to expanded the parking area for the property.

In addition to the earnest money deposit, Wells Development obtained
a loan in the amount of $3,900,000 from NationsBank, N.A. to fund the
construction and development of the Lucent Building (the "Construction
Loan"). As set forth below, the Construction Loan was paid off upon the
sale of the Lucent Building to the Joint Venture, and Wells Development
delivered title to the Joint Venture debt-free at closing.

The purchase price of the Lucent Building was $5,504,276, which was
equal to the aggregate cost to Wells Development of the acquisition,
construction and development of the Lucent Building, including interest and
other carrying costs, and accordingly, Wells Development made no profit
from the sale of the Lucent Building to the Joint Venture.

Description of the Building and the Site. The Oklahoma City Property
----------------------------------------  
contains a one-story office building with 57,186 net rentable square feet
and 55,017 net useable square feet with a high tilt-up concrete panel
exterior and steel framing. Construction of the Lucent Building was
completed in January 1998. The parking area contains approximately 385
paved parking spaces.

The Lucent Building is located at 14400 Hertz Quail Springs Parkway,
Oklahoma City, Oklahoma. The site consists of approximately 5.3 acres
located in the Quail Springs Office Park 

6

in the northwest sector of Oklahoma City. Oklahoma City is located near the
center of the state and is the State Capitol of Oklahoma. Oklahoma City is
currently the 42nd largest metropolitan area in the United States. The
population of the Oklahoma City metropolitan area, which has been
increasing steadily over the past two decades, is currently in excess of
1,000,000.

The site is located approximately ten miles northwest of the central
business district of Oklahoma City. Access is available from Memorial Road
on the south and May Avenue on the east with all access streets being four
lane concrete boulevards with curbs and gutters.

The Lucent Lease. On May 30, 1997, Wells Development entered into a
----------------
Lease Agreement (the "Lucent Lease") with Lucent Technologies Inc. ("Lucent
Technologies"), pursuant to which Lucent Technologies agreed to lease all
of the Lucent Building upon completion of the improvement thereof. At the
closing of the sale of the Lucent Building to the Joint Venture, Wells
Development transferred and assigned its interest in the Lucent Lease to
the Joint Venture.

Lucent Technologies is a telecommunications company which was spun
off by AT&T in April of 1996. The company is in the business of designing,
developing and marketing communications systems and technologies ranging
from microchips to whole networks and is one of the world's leading
designers, developers and manufacturers of telecommunications system
software and products. For the fiscal year ended September 30, 1997, Lucent
Technologies, a public company traded on the New York Stock Exchange,
reported net income of approximately $541 million dollars on revenues in
excess of $26 billion dollars. As of March 31, 1998, Lucent Technologies
had total assets of in excess of $24 billion dollars and a net worth of in
excess of $5 billion dollars.

The initial term of the Lucent Lease is ten years which commenced on
January 5, 1998 (the "Rental Commencement Date"). Lucent Technologies has
the option to extend the initial term of the Lucent Lease for two
additional five year periods. Each extension option must be exercised by
giving written notice to the landlord at least twelve months prior to the
expiration date of the then current lease term.

The annual base rent payable under the Lucent Lease will be $508,383
payable in equal monthly installments of $42,365 during the first five
years of the initial lease term, and $594,152 payable in equal monthly
installments of $49,513 during the second five years of the initial lease
term. The annual base rent for each extended term under the lease will be
based upon the fair market rent then being charged by landlords under new
leases of office space in the metropolitan Oklahoma City market for similar
space in a building of comparable quality with comparable amenities. The
Lucent Lease provides that if the parties cannot agree upon the appropriate
fair market value rate, the rate will be established by real estate
appraisers.

Under the Lucent Lease, the Joint Venture, as landlord, is
responsible for (a) all maintenance, repairs and replacements to the
structural components of the Lucent Building, including without limitation,
the roof, exterior walls, bearing walls, support beams, foundations,
columns, exterior doors, windows, skylights and lateral support, and (b)
for the portion of the Lucent Lease term ending on the first anniversary of
the Rental Commencement Date, all maintenance, repairs and replacements to
the parking area surrounding the Lucent Building including lighting systems
for the parking area. Under the Lucent Lease, Lucent Technologies is
responsible for the payment of all property taxes, operating expenses and
other repair and maintenance work relating to the Lucent Building. Lucent
Technologies is also required to reimburse the landlord the cost of
casualty insurance for the property.

The landlord is responsible for a construction allowance of $857,790
(calculated at the rate of $15 per rentable square foot), which was funded
by Wells Development prior to the sale of the Lucent Building to the Joint
Venture and is included as a portion of the purchase price paid for the
Lucent Building.

7

Under the Lucent Lease, Lucent Technologies also has a one-time
option to terminate the Lucent Lease on the seventh (7th) anniversary of
the Rental Commencement Date, which is exercisable by written notice to the
landlord at least twelve (12) months in advance of such 7th anniversary. If
Lucent Technologies elects to exercise its option to terminate the Lucent
Lease, Lucent Technologies would be required to pay a termination payment
intended to compensate the landlord for the present value of funds expended
as construction allowance and leasing commissions relating to the Lucent
Lease, amortized over and attributable to the remaining lease term, and a
rental payment equal to approximately eighteen (18) months of monthly
rental payments. It is currently anticipated that the termination payment
required to be paid by Lucent Technologies, in the event it exercises its
option to terminate the Lucent Lease on the 7th anniversary would be
approximately $1,338,903 based upon certain assumptions.

In addition, Lucent Technologies has a one-time option under the
Lucent Lease to reduce the size of its leased premises by 15,000 square
feet of useable area effective the last day of the month which is the
second (2nd) anniversary of the Rental Commencement Date. Such option to
reduce the leased premises is exercisable by providing at least 180 days
prior written notice to the landlord and paying the landlord a reduction
payment equal to $750,000 on the effective date of such reduction.

There are no assurances that the Joint Venture will be able to
attract or obtain suitable replacement tenants for the Lucent Building upon
the expiration of the Lucent Lease or upon the 7th anniversary of the
Lucent Lease if Lucent Technologies elects to exercise its option to
terminate the Lucent Lease or for the unleased portion of the Lucent
Building in the event that Lucent Technologies exercises its option to
reduce the size of its leased premises.

In connection with the execution of the Lucent Lease, Wells
Development entered into agreements with each of two real estate brokers,
one of which is a firm affiliated with ADEVCO Corporation, the developer of
the Oklahoma City Property, for the payment of commissions in connection
with services rendered in procuring the Lucent Lease. The commission
agreements require Wells Development to pay a total of $330,764 in leasing
commissions, $110,255 of which is payable to said affiliate of the
developer. One-half of the leasing commissions were paid by Wells
Development simultaneously with the closing of its acquisition of the
Oklahoma City Property, with the remainder of the leasing commissions
funded by Wells Development prior to the sale of the Lucent Building to the
Joint Venture. The leasing commissions relating to the Lucent Lease were
included as a portion of the purchase price paid for the Lucent Building by
the Joint Venture. Neither broker is affiliated with Wells Development,
Wells Fund IX, Wells Fund X, Wells Fund XI, the Company or any affiliates
thereof.

As of June 30, 1998, the Company held a 4.4% ownership interest in
each of the properties described below as a result of its ownership
interest in the Joint Venture:

THE ABB BUILDING

Description of the Building and the Site. The Joint Venture owns
----------------------------------------  
certain real property located in Knoxville, Tennessee (the "Knoxville
Property"). The Knoxville Property contains a three-story steel framed
office building with a reflective insulated glass and brick exterior
containing approximately 87,000 gross square feet and 83,885 rentable
square feet (the "ABB Building"). The Knoxville Property was originally
purchased by Wells Fund IX on December 13, 1996, and was later contributed
by Wells Fund IX to the Joint Venture on March 26, 1997. Construction of
the ABB Building was completed in December 1997. The project site is
approximately 5.622 acres and contains approximately 297 paved parking
spaces.

The ABB Building is located in an office park known as Center Point
Business Park on Pellissippi Parkway just north of the intersection of
Interstates 40 and 75, in Knox County, Tennessee approximately 10 miles
west of the Knoxville central business district. The Pellissippi 

Parkway and the commercial area along the Interstate 40 and 75 corridor
have evolved recently from a residential suburb into one of the area's
fastest growing commercial and retail districts.

The western portion of Knox County in which the Knoxville Property
is located has experienced the most growth and development in the Knoxville
metropolitan area during the past 10 years due primarily to available land
and services. It is anticipated that the Knoxville metropolitan area will
continue to grow into a major regional center of trade and tourism due to
its location at the intersection of Interstates 40 and 75 and the recent
extension of the Pellissippi Parkway to the Knoxville airport.

The ABB Lease. On December 10, 1996, Wells Fund IX entered into a
-------------   
Lease Agreement (the "ABB Lease") with ABB Flakt, Inc. ("ABB") pursuant to
which ABB agreed to lease 55,000 rentable square feet of the ABB Building,
comprising approximately 66% of the rentable square feet of the ABB
Building. Wells Fund IX assigned its interest in the ABB Lease to the Joint
Venture on March 26, 1997, simultaneously with the contribution of the
Knoxville Property to the Joint Venture. The Joint Venture is currently
negotiating lease terms with a major tenant for lease of the remainder of
the ABB Building.

ABB is a Delaware corporation which is principally engaged in the
business of pollution control engineering and consulting. ABB will use the
leased area as office space for approximately 220 employees. ABB Asea Brown
Boveri, Ltd., a Swiss corporation based in Zurich, is the holding company
of the ABB Asea Brown Boveri Group (the "ABB Group") which is comprised of
approximately 1,000 companies around the world, including ABB. The ABB
Group revenue is predominately provided by contracts with utilities and
independent power producers for the design and engineering, construction,
manufacture and marketing of products, services and systems in connection
with the generation, transmission and distribution of electricity. In
addition, the ABB Group generates a significant portion of its revenues
from the sale of industrial automation products, systems and services to
pulp and paper, automotive and other manufacturers. For the fiscal year
ended December 31, 1997, the ABB Group reported net income of approximately
$572 million dollars and net worth of approximately $5.2 billion dollars.
ABB, Inc., the United States parent company of ABB, reported gross revenues
in 1997 in excess of $4 billion dollars. The ABB Group's total number of
employees for 1997 was approximately 213,000 worldwide and approximately
21,000 in the United States.

As security for ABB's obligations under the Lease, ABB has provided
to Wells Fund IX (and Wells Fund IX has in turn assigned to the Joint
Venture), and agreed to maintain in full force and effect at all times
during the 10 year period from the Rental Commencement Date, an irrevocable
standby letter of credit in accordance with the terms and conditions set
forth in the ABB Lease. Each letter of credit issued pursuant to the
provisions of the ABB Lease is required to be in a form of an irrevocable
credit, to be issued by an "approved issuer," to name the Joint Venture as
the beneficiary and to specify that the Joint Venture, as beneficiary, may
draw against the letter of credit upon the occurrence of a "drawing event."
"Approved issuer" is defined to require that the letter of credit issuer
shall have and maintain a Moody's Bank Credit Report Service rating of P-1
or its equivalent. "Drawing event" is defined to include any failure of ABB
to pay any installment of rent or other charge or assessment pursuant to
the terms of the ABB Lease within five days of notice thereof, or any other
event of default with respect to which the Joint Venture has exercised or
is exercising its remedies. The letter of credit maintained by ABB is
required to be in the amount of $4,000,000 until the seventh anniversary of
the Rental Commencement Date; $3,000,000 from the seventh anniversary of
the Rental Commencement Date to the eighth anniversary of the Rental
Commencement Date; $2,000,000 from the eighth anniversary of the Rental
Commencement Date to the ninth anniversary of the Rental Commencement Date;
and $1,000,000 from the ninth anniversary of the Rental Commencement Date
to the tenth anniversary of the Rental Commencement Date. The original
letter of credit which was delivered by ABB to Wells Fund IX simultaneously
with the execution of the ABB Lease was issued by Svenska Handelsbanken, a
Parkway Swedish bank which is the largest bank in the    

9

Nordic region with over $90 billion of assets and a credit rating issued by
Moody's Bank Credit Report Service of P-1/Aa3, and was issued in the amount
of $4,000,000 for a one year term. If the Joint Venture draws on the letter
of credit, the Joint Venture shall apply the proceeds first toward the
performance of the obligations which ABB has failed to perform under the
ABB Lease, and the remainder, if any, shall be held by the Joint Venture in
certain permitted investments as additional security for the performance by
ABB of the ABB Lease.

The initial term of the lease is nine years and eleven months which
commenced on January 1, 1998 (the "Rental Commencement Date").

The annual base rent payable under the ABB Lease is $646,250 payable
in equal monthly installments of $53,854 during the first five years of the
initial lease term, and $728,750 payable in equal monthly installments of
$60,729 during the last four years and eleven months of the initial lease
term.

Under the ABB Lease, ABB is responsible for all expenses, costs and
disbursements (excluding specific costs billed to specific tenants of the
building) of every kind and nature relating to or incurred or paid in
connection with the ownership, management, operation, repair and
maintenance of the ABB Building, including compensation of employees
engaged in the operation and management or maintenance of the ABB Building,
supplies, equipment and materials, utilities, repairs and general
maintenance, insurance, a management fee in the amount of 4% of the gross
rental income from the ABB Building, and all taxes and governmental charges
attributable to the ABB Building or its operations (excluding taxes imposed
or measured on or by the income of the Joint Venture from operation of the
ABB Building).

Under the terms of the ABB Lease, the Joint Venture is responsible
for a construction allowance of $976,600 (calculated at the rate of $19 per
useable square foot of the premises). In addition, the Joint Venture has
agreed to provide ABB on the fifth (5th) anniversary of the Rental
Commencement Date a redecoration allowance of an amount equal to (i) $5.00
per square foot of useable area of the premises leased as of the 5th
anniversary of the Rental Commencement Date which has been leased and
occupied by ABB for at least three consecutive years ending with such 5th
anniversary reduced by (ii) $177,000.

The terms of the ABB Lease provide that ABB has the right of first
refusal for the lease of any space in the ABB Building not initially leased
by ABB. In the event that the Joint Venture has secured a potential tenant
for any of such space, the Joint Venture has agreed to give ABB ten (10)
business days to exercise its right to add such space to the leased
premises. The base rent payable and other charges and any allowances shall
be solely as set forth in the notice to ABB of the proposed terms of the
lease for the potential tenant of such space. If ABB does not so exercise
its right of first refusal within such 10 business day period, the Joint
Venture will have the right to lease the space to the potential tenant,
except that, after the expiration of any such lease to another party, such
space will again become subject to ABB's right of first refusal. The ABB
Lease further provides that the Joint Venture agrees that during the term
of the ABB Lease, no leases of space with other tenants for any space not
initially leased by ABB pursuant to the ABB Lease shall have a term in
excess of three years from the last day of the month in which such third-
party tenant takes possession of such space.

ABB has a one-time option to terminate the ABB Lease as of the
seventh (7th) anniversary of the Rental Commencement Date which is
exercisable by written notice to the Joint Venture at least twelve (12)
months in advance of such 7th anniversary. If ABB elects to exercise this
termination option, ABB is required to pay to the Joint Venture, on or
before ninety (90) days prior to the 7th anniversary of the Rental
Commencement Date, a termination payment intended to compensate the Joint
Venture for the present value of certain sums which the Joint Venture has
expended in connection with the ABB Lease amortized over and attributable
to the remaining lease term and a rent payment equal to approximately
fifteen (15) months of monthly base rental

10

payments. It is currently anticipated that the termination payment required
to be paid by ABB in the event it exercises its option to terminate the ABB
Lease on the 7th anniversary would be approximately $1,818,000 based upon
certain assumptions.

THE OHMEDA BUILDING

Description of the Building and the Site. The Joint Venture owns
----------------------------------------- 
certain real property located in Louisville, Boulder County, Colorado (the
"Louisville Property"). The Louisville Property contains a two-story office
building with approximately 106,750 rentable square feet (the "Ohmeda
Building"). Construction of the Ohmeda Building was completed in January
1988.

The Joint Venture purchased the Ohmeda Building on February 13,
1998, for a purchase price of $10,325,000, plus closing costs of
approximately $6,644.

The Ohmeda Building was designed to accommodate the needs of a high-
technology tenant, and to provide the tenant substantial interior
flexibility in order to accommodate new product developments, changes in
electronics manufacturing techniques and the introduction of automated
material handling systems. The Ohmeda Building is modular re-tan brick with
flush mortar joints and energy efficient insulated solarban glass set in a
clear aluminum mullion system. The office area represents approximately 47%
of the building area, and the non-office area represents approximately 53%.
The lower level has 17 foot high ceilings and is divided into three areas:
the production area, the materials and finished goods handling area, and
the support administration, exercise room and cafeteria area. The cafeteria
and the exercise room contain a glass curtain wall offering panoramic views
of the mountains to the west. The upper level on the west side contains
managerial and financial offices, as well as research and employee amenity
space.

The site is approximately five miles southeast of Boulder and
approximately 17 miles northwest of Denver, situated near Highway 36
(Centennial Parkway), which is the main thoroughfare between Boulder and
Denver. The site is a 15 acre tract of land in the Centennial Valley
Business Park in Louisville, Colorado with scenic views both to and from
the site. The Louisville Property is situated approximately 100 feet above
Centennial Parkway with access by a "Z" curve roadway east of the site. All
of the Ohmeda Building access points, including a glass vestibule entry
court, are turned away from the strong winds from the west. The parking
area, which contains approximately 500 parking spaces, is concealed from
the view of Centennial Parkway and is open to the scenic views of the
mountains.

The Ohmeda Lease. The entire 106,750 rentable square feet of the
---------------- 
Ohmeda Building is currently under a net Lease Agreement dated February 26,
1987, as amended by First Amendment to Lease dated December 3, 1987, and as
amended by Second Amendment to Lease dated October 20, 1997 (the "Ohmeda
Lease") with Ohmeda, Inc., a Delaware corporation ("Ohmeda"). The Ohmeda
Lease currently expires in January 2005, subject to (i) Ohmeda's right to
effectuate an early termination of the Ohmeda Lease under the terms and
conditions described below, and (ii) Ohmeda's right to extend the Ohmeda
Lease for two additional five year periods of time.

Ohmeda is a medical supply firm based in Boulder, Colorado and is a
worldwide leader in vascular access and hemodynamic monitoring for hospital
patients. Ohmeda also has a special products division, which produces
neonatal and other oxygen care products. Ohmeda recently extended an
agreement with Hewlett-Packard to include co-marketing and promotion of
combined Ohmeda/H-P neonatal products.

Ohmeda was a wholly owned subsidiary of the BOC Group, Inc., a
Nevada corporation ("BOC"), which is a wholly-owned subsidiary of BOC
Holdings, whose ultimate parent is The BOC Group PLC, an English
corporation. On April 3, 1998, BOC sold the division of Ohmeda that
occupies the Ohmeda Building to Instrumentarium Corporation, a Finnish
company

("Instrumentarium"). The obligations of Ohmeda under the Ohmeda Lease are
currently guaranteed by both BOC and Instrumentarium. BOC, which is in the
businesses of gases and related products, vacuum technology and health
care, reported total consolidated sales of in excess of $2 billion for its
fiscal year ended September 30, 1997, and a net worth of in excess of $462
million. Instrumentarium is an international healthcare company
concentrating on selected fields of medical technology manufacturing,
marketing and distribution.

The monthly base rental payable under the Ohmeda Lease is $83,710
through January 31, 2003; $87,891 from February 1, 2003 through January 31,
2004; and $92,250 from February 1, 2004 through January 31, 2005. Under the
Ohmeda Lease, Ohmeda is responsible for all utilities, taxes, insurance and
other operating costs with respect to the Ohmeda Building during the term
of the Ohmeda Lease. In addition, Ohmeda shall pay a $21,000 per year
management fee for maintenance and administrative services of the Ohmeda
Building. The Joint Venture, as landlord, is responsible for maintenance of
the roof, exterior and structural walls, foundations, other structural
members and floor slab, provided that the landlord's obligation to make
repairs specifically excludes items of cosmetic and routine maintenance
such as the painting of walls.

The Ohmeda Lease contains an early termination clause that allows
Ohmeda the right to terminate the Ohmeda Lease, subject to certain
conditions, on either January 31, 2001 or January 31, 2002. In order to
exercise this early termination clause, Ohmeda must give the Joint Venture
notice on or before 5:00 p.m. MST, January 31, 2000, and said notice must
identify which early termination date Ohmeda is exercising. If Ohmeda
exercises its right to terminate on January 31, 2001, then Ohmeda must
tender $753,388 plus an amount equal to the amount of real property taxes
estimated to be payable to the landlord in 2002 for the tax year 2001 based
on the most recent assessment information available on the early
termination date. If Ohmeda exercises its right to terminate on January 31,
2002, then Ohmeda must tender $502,259 plus an amount equal to the amount
of real property taxes estimated to be payable to the landlord in 2003 for
the tax year 2002 based on the most recent assessment information available
on the early termination date. At the present time, real property taxes
relating to this property are approximately $135,500 per year. The payment
of these amounts by Ohmeda for early termination must be made on or before
the 180th day prior to the appropriate early termination date. If the
amount of the real property taxes actually assessed is greater or lesser
than the amount paid by Ohmeda on the early termination date, then the
difference shall be adjusted accordingly within thirty (30) days of notice
of such difference.

The Ohmeda Lease contains a provision whereby the tenant has the
option to extend the primary lease term for up to two consecutive five year
terms at the then current market rental rates.

In addition, the Ohmeda Lease contains an option to expand the
premises by an amount of square feet up to a total of 200,000 square feet
which, if exercised by Ohmeda, will require the Joint Venture to expend
funds necessary to acquire additional land, if such land is necessary to
such expansion and available for purchase for said expansion purposes, and
to construct the expansion space. Ohmeda's option to expand the premises is
subject to deliverance of at least four (4) months' prior written notice to
the Joint Venture. During the 4 months subsequent to the notice of Ohmeda's
intention to expand the premises, Ohmeda and the Joint Venture shall
negotiate in good faith and enter into an amendment to the Ohmeda Lease for
the construction and rental of the expansion space. If Ohmeda exercises its
option to expand the premises, the right to terminate clause described
above will automatically be canceled, and the primary lease term shall be
extended for a period of ten (10) years from the date on which a
certificate of occupancy is issued by the City of Louisville with respect
to the expansion space. The base rental for the expansion space payable
under the Ohmeda Lease shall be calculated to generate a rate of return to
the Joint Venture on its project costs and any retrofit expenses with
respect to the existing premises incurred by landlord over the new, 10 year
extended primary lease term, equal to the prime lending rate published by
Norwest Bank, N.A. on the first day of such extended primary 

lease term, plus 3.0%, plus full amortization of the tenant finish costs
with respect to the expansion space and the existing premises. This base
rental shall be payable through January 31, 2005. The base rental payable
under the Ohmeda Lease from February 1, 2005 through the remaining balance
of the new, extended 10 year primary lease term, shall be based on a
combined rental rate equal to the sum of (i) the base rental payable by
Ohmeda during lease year number seven for the existing premises, plus (ii)
the base rent payable by Ohmeda during lease year number seven for the
expansion space, plus an amount equal to 2% of the combined rental rate.
Thereafter, the base rent payable for the entire premises shall be the base
rent payable during the previous lease year plus an amount equal to 2% of
the base rent payable during such previous lease year.

THE INTERLOCKEN BUILDING

Description of the Building and the Site. The Joint Venture owns
----------------------------------------  
certain real property located in Broomfield, Boulder County, Colorado (the
"Broomfield Property"). The Broomfield Property contains a three-story
multi-tenant office building with 51,974 rentable square feet (the
"Interlocken Building"). Construction of the Interlocken Building was
completed in December 1996.

The Joint Venture purchased the Interlocken Building on March 20,
1998, for a purchase price of $8,275,000, plus closing costs of
approximately $18,000.

The first floor of the Interlocken Building has multiple tenants and
contains 15,599 rentable square feet; the second floor is leased to ODS
Technologies, L.P. ("ODS") and contains 17,146 rentable square feet; and
the third floor is leased to Transecon, Inc. ("Transecon") and contains
19,229 rentable square feet.

The Broomfield Property fronts on Highway 36 (the Boulder-Denver
Turnpike), which is the main thoroughfare between Boulder and Denver, and
is located approximately eight miles southeast of Boulder and approximately
15 miles northwest of Denver. The site is a 5.1 acre tract of land in the
Interlocken Business Park in Broomfield, Colorado. The Broomfield Property
contains a parking lot surrounding the entire building with ample parking
spaces available for tenants and visitors. The Interlocken Business Park is
a 963-acre business park containing primarily advanced technology and
research/development oriented companies. The Interlocken Conference Resort,
which will contain a 430-room hotel, 57,000 square feet of conference space
and a 27-hole championship golf course, is nearly complete and will border
the Park's western boundary.

Description of Leases. As stated above, the entire third floor of
---------------------
the Interlocken Building containing 19,229 rentable square feet (37% of the
total rentable square feet) is currently under lease to Transecon dated
June 27, 1996 (the "Transecon Lease"). The Transecon Lease currently
expires in October 2001, subject to Transecon's right to extend for one
additional term of five years upon 180 days' notice.

Transecon is a consumer distributor of environmental friendly
products, including on-site video and audio production of environmental and
alternative health videos using state-of-the-art electronics and sound
stage. Transecon was founded in 1989 and currently employs approximately 60
people.

The monthly base rental payable under the Transecon Lease is
approximately $24,000 for the initial term of the lease, and is calculated
under the Transecon Lease based upon 18,011 rentable square feet. Under the
Transecon Lease, Transecon is responsible for its share of utilities,
taxes, insurance and other operating costs with respect to the Interlocken
Building during the term of the Transecon Lease. In addition, Transecon has
a right of first refusal under the lease for any second floor space
proposed to be leased by the landlord. If Transecon elects to 

13

extend the lease, the monthly base rental shall be a market rate, but no
less than $24,000 and no more than $27,700. In accordance with the
Transecon Lease, Golden Rule, Inc., an affiliate of Transecon, occupies
6,621 rentable square feet of the third floor. Transecon guarantees the
entire payment due under the Transecon Lease.

Transecon also leases 1,510 rentable square feet on the first floor.
The monthly base rent payable for this space is approximately $2,000
through January 1999; approximately $2,100 through January 2000;
approximately $2,150 through January 2001; and approximately $2,200 through
October 2001.

The entire second floor of the Interlocken Building containing
17,146 rentable square feet (33% of total rentable square feet) is
currently under lease to ODS dated January 14, 1997 (the "ODS Lease"). The
ODS Lease currently expires in September 2003, subject to ODS's right to
extend for one additional term of three years upon 180 days' notice.

ODS provides in-home financial transaction services via telephone
and television, and it has developed interactive computer-based
applications for such in-home purchasing. Originally based in Tulsa,
Oklahoma, ODS has relocated its business to the Interlocken Building.

The monthly base rental payable under the ODS Lease is approximately
$22,150 through January 1999; approximately $22,600 through January 2000;
approximately $23,100 through January 2001; approximately $23,550 through
January 2002; approximately $24,050 through January 2003; and approximately
$24,550 through September 2003. The rental payments to be made by the
tenant under the ODS Lease are also secured by the assignment of a $275,000
letter of credit which may be drawn upon by the landlord in the event of a
tenant default under the lease. Under the ODS Lease, ODS is responsible for
its share of utilities, taxes, insurance and other operating costs with
respect to the Interlocken Building during the term of the ODS Lease. If
ODS elects to extend the lease, the monthly base rental shall be a market
rate as described in the ODS Lease.

The first floor of the Interlocken Building containing 15,599
rentable square feet is occupied by several tenants whose leases expire in
late 2001 or 2002. The aggregate monthly base rental payable under these
leases for 1998 is approximately $21,250. Each lessee is responsible for
its share of utilities, taxes, insurance and other operating costs with
respect to the Interlocken Building during the term of its lease. Most of
these leases contain a right to extend for one additional five year period
upon 180 days' notice.

In the event that Transecon, ODS or any of the first floor tenants
fail to extend their respective leases, the Joint Venture will be required
to find one or more new suitable tenants for the Interlocken Building at
the then prevailing market rental rates.

PROPERTY MANAGEMENT FEES

Wells Management Company, Inc. ("Wells Management"), an Affiliate of
the Company and the Advisor, has been retained to manage and lease all of
the properties currently owned by the Joint Venture. While the Company and
Wells Fund XI are authorized to pay aggregate management and leasing fees
to Wells Management in the amount of 4.5% of gross revenues, Wells Fund IX
and Wells Fund X are authorized to pay aggregate management and leasing
fees to Wells Management in the amount of 6% of gross revenues. Since, as
of June 30, 1998, Wells Fund IX and Wells Fund X held an aggregate 87.8%
ownership percentage interest in the Joint Venture, while the Company and
Wells Fund XI held an aggregate 12.2% ownership percentage interest in the
Joint Venture, 87.8% of the gross revenues of the Joint Venture are subject
to a 6% property management and leasing fee, while 12.2% of the gross
revenues of the Joint Venture are subject to a 4.5% property management and
leasing fee. Wells Management has also received an initial lease fee equal
to the first month's rent for the ABB Lease and the Lucent Lease. In

14

addition, Wells Management is entitled to one-time initial lease-up fees
equal to five percent (5%) of the gross revenues over the initial terms of
the ABB Lease and the Lucent Lease (not to exceed five years).

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATION

The information contained on page 46 in the "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" section of the
Prospectus is revised as of the date of this Supplement by the deletion of the
first paragraph of that section and the insertion of the following paragraph in
lieu thereof:

The Company commenced operations on June 5, 1998, upon the
acceptance of subscriptions for the minimum offering of $1,250,000 (125,000
Shares). As of June 30, 1998, the Company had raised a total of $2,683,595
in offering proceeds (268,359 Shares). After the payment of $93,926 in
acquisition and advisory fees and expenses, the payment of $335,449 in
selling commissions and organizational and offering expenses and the
payment of $1,421,466 in capital contributions to the Joint Venture, as of
June 30, 1998, the Company was holding net offering proceeds of $832,754
available for investment in additional properties.

FINANCIAL STATEMENTS

The financial statements of Fund IX and X Associates (the Joint Venture)
as of December 31, 1997 and for the period from March 20, 1997 to December 31,
1997 and of the Lucent Building for the three months ended March 31, 1998,
included herein as Appendix I to this Supplement No. 2, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
reports thereto, and are included herein upon the authority of said firm as
experts in giving said reports. The interim financial information of Fund IX and
X Associates (the Joint Venture) as of March 31, 1998 and for the three month
period ended March 31, 1998, and the pro forma financial information for Wells
Real Estate Investment Trust, Inc. as of December 31, 1997 and for the three
month period ended March 31, 1998, which are included in Appendix I to this
Supplement No. 2, have not been audited.

15

APPENDIX I

INDEX TO FINANCIAL STATEMENTS

Page
----

FUND IX AND X ASSOCIATES
Financial Statements
Report of Independent Public Accountants                                 I-1
Balance Sheets as of March 31, 1998 (Unaudited) and
December 31, 1997 (Audited)                                              I-2
Statements of Income (Loss) for the three months ended March 31,
1998 (Unaudited) and the Period from Inception (March 20, 1997)
to December 31, 1997 (Audited)                                           I-3
Statements of Partners' Capital for the three months ended March 31,
1998 (Unaudited) and the Period from Inception (March 20, 1997)
to December 31, 1997 (Audited)                                           I-4
Statements of Cash Flows for the three months ended March 31, 1998
(Unaudited) and the Period from Inception (March 20, 1997) to
December 31, 1997 (Audited)                                              I-5
Notes to Financial Statements                                            I-6

LUCENT BUILDING
Audited Financial Statements
Report of Independent Public Accountants                                I-10
Statement of Revenues Over Operating Expenses for the three months
ended March 31, 1998                                                    I-11
Notes to Statement of Revenues Over Operating Expenses for the three

months ended March 31, 1998                                             I-12

WELLS REAL ESTATE INVESTMENT TRUST, INC.
Unaudited Pro Forma Financial Statements
Summary of Unaudited Pro Forma Financial Statements                     I-13
Pro Forma Balance Sheet as of March 31, 1998                            I-14
Pro Forma Statement of Loss for the year ended December
31, 1997                                                                I-15
Pro Forma Statement of Income for the three months ended
March 31, 1998                                                          I-16

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Fund IX and X Associates:

We have audited the accompanying balance sheet of FUND IX AND X ASSOCIATES (a
Georgia Joint Venture) as of December 31, 1997 and the related statements of
loss, partners' capital, and cash flows for the period from inception (March 20,
1997) to December 31, 1997.  These financial statements are the responsibility
of the Joint Venture's management.  Our responsibility is to express an opinion
on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fund IX and X Associates as of
December 31, 1997 and the results of its operations and its cash flows for the
period from inception (March 20, 1997) to December 31, 1997 in conformity with
generally accepted accounting principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
January 9, 1998

I-1

FUND IX AND X ASSOCIATES

(A GEORGIA JOINT VENTURE)

BALANCE SHEETS

MARCH 31, 1998 AND DECEMBER 31, 1997

ASSETS

1998             1997       
-------------    -------------   
(UNAUDITED)                      

REAL ESTATE ASSETS, AT COST:                                                                            
Land                                                                 $  5,004,893     $     607,930   
Building and improvements, less accumulated                                                           
depreciation of $205,915 in 1998 and $36,863 in 1997                  22,005,710         6,445,300   
Construction in progress                                                    6,498            35,622   
-------------    --------------  
Total real estate assets                                        27,017,101         7,088,852   

CASH AND CASH EQUIVALENTS                                                   390,276           289,171   

ACCOUNTS RECEIVABLE                                                         150,402            40,512   

PREPAID EXPENSES AND OTHER ASSETS                                           383,399           329,310   
-------------    --------------  
Total assets                                                   $ 27,941,178     $   7,747,845   
=============    ==============  

LIABILITIES AND PARTNERS' CAPITAL                           

LIABILITIES:                                                                                            
Accounts payable                                                     $    385,072     $     379,770   
Due to affiliates                                                           2,281             2,479   
-------------    --------------  
Total liabilities                                                  387,353           382,249   
-------------    --------------  

PARTNERS' CAPITAL:                                                                                      
Wells Real Estate Fund IX                                              14,569,085         3,702,793   
Wells Real Estate Fund X                                               12,984,740         3,662,803   
-------------    --------------  
Total partners' capital                                           27,553,825         7,365,596   
-------------    --------------  
Total liabilities and partners' capital                         $ 27,941,178     $   7,747,845   
=============    ==============   

The accompanying notes are an integral part of these balance sheets.

I-2

FUND IX AND X ASSOCIATES

(A GEORGIA JOINT VENTURE)

STATEMENTS OF INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 1998

AND THE PERIOD FROM INCEPTION (MARCH 20, 1997)

TO DECEMBER 31, 1997

1998            1997
------------    ----------- 
(UNAUDITED)

REVENUES:
Rental income                                                          $   351,203     $   28,512
------------    ----------- 
EXPENSES:
Depreciation and amortization                                              178,881         36,863  
Management and leasing fees                                                 22,838          1,711  
Operating costs, net of reimbursements                                      24,052         10,118  
Property administration                                                      5,632              0  
------------    ----------- 
231,403         48,692
------------    -----------
NET INCOME (LOSS)                                                        $   119,800     $  (20,180)
============    ===========

NET INCOME (LOSS) ALLOCATED TO WELLS REAL ESTATE FUND IX                 $    57,858     $  (10,145)
============    ===========              

NET INCOME (LOSS) ALLOCATED TO WELLS REAL ESTATE FUND X                  $    61,942     $  (10,035)
============    ===========

The accompanying notes are an integral part of these statements.

I-3

FUND IX AND X ASSOCIATES

(A GEORGIA JOINT VENTURE)

STATEMENTS OF PARTNERS' CAPITAL

FOR THE THREE MONTHS ENDED MARCH 31, 1998

AND THE PERIOD FROM INCEPTION (MARCH 20, 1997)

TO DECEMBER 31, 1997

WELLS REAL            WELLS REAL             TOTAL    
ESTATE                ESTATE             PARTNERS'  
FUND IX               FUND X              CAPITAL    
-----------------    ------------------  ------------------- 

BALANCE, DECEMBER 31, 1996                          $             0      $              0     $              0

Net loss                                                  (10,145)              (10,035)             (20,180)
Partnership contributions                               3,712,938             3,672,838            7,385,776  
-----------------    ------------------  ------------------- 
BALANCE, DECEMBER 31, 1997                                3,702,793             3,662,803            7,365,596  

Partnership distributions                                (100,863)             (101,419)            (202,282) 
Net income                                                 57,858                61,942              119,800  
Partnership contributions                              10,909,297             9,361,414           20,270,711   
-----------------    ------------------  -------------------  
BALANCE, MARCH 31, 1998 (UNAUDITED)                 $    14,569,085      $     12,984,740     $     27,553,825
=================    ==================  ===================

The accompanying notes are an integral part of these statements.

I-4

FUND IX AND X ASSOCIATES

(A GEORGIA JOINT VENTURE)

STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 1998

AND THE PERIOD FROM INCEPTION (MARCH 20, 1997)

TO DECEMBER 31, 1997

1998                 1997      
-------------       -------------  
(UNAUDITED)                         

CASH FLOWS FROM OPERATING ACTIVITIES:                                                                                    
Net income (loss)                                                                  $    119,800        $     (20,180)  
-------------       -------------   
Adjustments to reconcile net income (loss) to net cash provided by operating                                           
activities:                                                                                                          
Depreciation                                                                         178,881               36,863   
Changes in assets and liabilities:                                                                                  
Accounts receivable                                                               (109,890)             (40,512)  
Prepaid expenses and other assets                                                  (54,089)            (329,310)  
Accounts payable                                                                     5,302              379,770   
Due to affiliates                                                                     (198)               2,479   
------------        -------------   
Total adjustments                                                                  20,006               49,290   
------------        -------------   
Net cash provided by operating activities                                         139,806               29,110  
============        =============  
CASH FLOWS FROM INVESTING ACTIVITIES:                                                                                   
Investment in real estate from partners                                              (19,123,419)          (5,715,847) 
------------        -------------  
CASH FLOWS FROM FINANCING ACTIVITIES:                                                                                   
Distributions to joint venture partners                                                 (202,282)                   0  
Contributions received from partners                                                  19,287,000            5,975,908  
------------        -------------  
Net cash provided by financing activities                                       19,084,718                       
------------        -------------  
NET INCREASE IN CASH AND CASH EQUIVALENTS                                                 101,105              289,171  
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                            289,171                    0  
------------        -------------  
CASH AND CASH EQUIVALENTS, END OF PERIOD                                             $    390,276        $     289,171  
============        =============  
SUPPLEMENTAL DISCLOSURE OF NONCASH ACTIVITIES:                                                                          
Deferred project costs applied by partners, net of deferred project costs                                             
transferred                                                                      $    983,711        $     318,981  
============        =============  

Contribution of real estate assets                                                 $          0        $   1,090,887  
============        =============   

The accompanying notes are an integral part of these statements.

I-5

FUND IX AND X ASSOCIATES

(A GEORGIA JOINT VENTURE)

NOTES TO FINANCIAL STATEMENTS

MARCH 31, 1998 AND DECEMBER 31, 1997

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION AND BUSINESS

On March 20, 1997, Fund IX and X Associates (a joint venture between Wells
Real Estate Fund IX, L.P. ("Fund IX") and Wells Real Estate Fund X, L.P.
("Fund X") was formed to acquire, develop, operate, and sell real properties.
On March 20, 1997, Fund IX contributed a 5.62-acre tract of real property in
Knoxville, Tennessee, and improvements thereon, known as the ABB Property, to
Fund IX and X Associates (the "Joint Venture").  A 83,885-square-foot, three-
story office building was constructed and commenced operations at the end of
1997.

CASH AND CASH EQUIVALENTS

For the purposes of the statements of cash flows, the Joint Venture considers
all highly liquid investments purchased with an original maturity of three
months or less to be cash equivalents.  Cash equivalents include cash and
short-term investments.  Short-term investments are stated at cost, which
approximates fair value, and consist of investments in money market accounts.

USE OF ESTIMATES AND FACTORS AFFECTING THE PARTNERSHIP

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

The carrying values of the real estate assets are based on management's
current intent to hold the real estate assets as long-term investments.  The
success of the Joint Venture's future operations and the ability to realize
the investment in its assets will be dependent on the Joint Venture's ability
to maintain an appropriate level of rental rates, occupancy, and operating
expenses in future years.  Management believes that the steps it is taking
will enable the Joint Venture to realize its investment in its assets.

I-6

INCOME TAXES

The Joint Venture is not subject to federal or state income taxes, and
therefore, none have been provided for in the accompanying financial
statements.  The partners of Fund IX and Fund X are required to include their
respective shares of profits and losses in their individual income tax
returns.

REAL ESTATE ASSETS

Real estate assets held by the Joint Venture are stated at cost less
accumulated depreciation.  Major improvements and betterments are capitalized
when they extend the useful life of the related asset.  All ordinary repairs
and maintenance are expensed as incurred.

Management continually monitors events and changes in circumstances which
could indicate that the carrying amounts of real estate assets may not be
recoverable. When events or changes in circumstances are present that
indicate the carrying amounts of real estate assets may not be recoverable,
management assesses the recoverability of real estate assets under Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed of," by
determining whether the carrying value of such real estate assets will be
recovered through the future cash flows expected from the use of the asset
and its eventual disposition. Management believes that there has been no
impairment in the carrying value of real estate assets held by the Joint
Venture.

Depreciation of buildings and land improvements is calculated using the
straight-line method over 25 years.  Tenant improvements are amortized over
the life of the related lease or the life of the asset, whichever is shorter.

REVENUE RECOGNITION

All leases on real estate assets held by the Joint Venture are classified as
operating leases, and the related rental income is recognized on a straight-
line basis over the terms of the respective leases.

PARTNERS' DISTRIBUTIONS AND ALLOCATIONS OF PROFIT AND LOSS

Cash available for distribution and allocations of profit and loss to Fund IX
and Fund X by the Joint Venture are made in accordance with the terms of the
joint venture agreement.  Generally, these items are allocated in proportion
to the partners' respective ownership interests.  Cash distributions are
generally paid by the Joint Venture to Fund IX and Fund X quarterly.

DEFERRED LEASE ACQUISITION COSTS

Costs incurred to procure operating leases are capitalized and amortized on a
straight-line basis over the terms of the related leases.

I-7

2. DEFERRED PROJECT COSTS

The Wells Real Estate Funds pay a percentage of limited partner contributions
to Wells Capital, Inc., an affiliate of the Joint Venture, for acquisition
and advisory services. These payments, as stipulated by the partnership
agreement, can be up to 5% of the limited partner contributions, subject to
certain overall limitations contained in the partnership agreement. These
fees are allocated to specific properties as they are purchased or developed
and are included in capitalized assets of the Joint Venture.

3. FUTURE MINIMUM RENTAL INCOME

The future minimum rental income due Fund IX and X Associates under
noncancelable operating leases at December 31, 1997 is as follows:

Year ending December 31:

1998                               $  646,250
1999                                  646,250
2000                                  646,250
2001                                  646,250
2002                                  646,250
Thereafter                            3,583,021
-----------                      
$6,814,271
===========

4. COMMITMENTS AND CONTINGENCIES

Management, after consultation with legal counsel, is not aware of any
significant litigation or claims against the Joint Venture or its partners.
In the normal course of business, the Joint Venture or its partners may
become subject to such litigation or claims.

5. SUBSEQUENT EVENTS (UNAUDITED)

On February 13, 1998, the Joint Venture acquired a two-story office building,
the Ohmeda Building, a 106,750-square-foot office building located in
Louisville, Colorado, for a cash purchase price of $10,325,000 plus
acquisition expenses of $6,644.  The building is 100% occupied by one tenant
with an original lease term of ten years that commenced February 1, 1988.
The lease term was extended for an additional seven years commencing February
1, 1998.

On March 20, 1998, the Joint Venture acquired the Interlocken Building, a
51,974-square-foot three-story multitenant office building located in
Broomfield, Colorado, for a cash purchase price of $8,275,000 plus
acquisition expenses of $18,000.

On June 11, 1998, Wells Operating Partnership, L.P. (of which Wells Real
Estate Investment Trust, Inc. is the sole general partner) and Wells Real
Estate Fund XI, L.P. were admitted to the Joint Venture.  The Joint Venture
agreement was restated and amended as such and was renamed the Fund IX, Fund
X, Fund XI, and REIT Joint Venture.

I-8

On June 24, 1998, Fund IX, Fund X, Fund XI, and REIT Joint Venture acquired
the Lucent Building, a one-story office building, from Wells Development
Corporation, an affiliate of the Joint Venture, for a cash purchase price of
$5,504,276 which equaled the book value of the building.  The building is
100% occupied by one tenant with an original lease term of ten years that
commenced January 1, 1998.

I-9

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund IX, L.P.,
Wells Real Estate Fund X, L.P.,
Wells Real Estate Fund XI, L.P., and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over operating expenses
for the LUCENT BUILDING for the three months ended March 31, 1998.  This
financial statement is the responsibility of management.  Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over operating expenses is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the statement of revenues
over operating expenses. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Lucent
Building after acquisition by Wells Real Estate Fund IX, L.P., Wells Real Estate
Fund X, L.P., Wells Real Estate Fund XI, L.P., and Wells Real Estate Investment
Trust, Inc.  The accompanying statement of revenues over operating expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission and is not intended to be a complete
presentation of the Lucent Building's revenues and expenses.

In our opinion, the statement of revenues over operating expenses presents
fairly, in all material respects, the revenues over operating expenses
(exclusive of expenses described in Note 2) of the Lucent Building for the three
months ended March 31, 1998 in conformity with generally accepted accounting
principles.

/s/ Arthur Andersen LLP

Atlanta, Georgia
June 30, 1998

I-10

LUCENT BUILDING

STATEMENT OF REVENUES OVER

OPERATING EXPENSES

FOR THE THREE MONTHS ENDED MARCH 31, 1998

REVENUES:                                                  
Rental revenue                                       $137,817

OPERATING EXPENSES                                          675
--------
REVENUES OVER OPERATING EXPENSES                       $137,142
--------  

The accompanying notes are an integral part of this statement.

I-11

LUCENT BUILDING

NOTES TO STATEMENT OF REVENUES OVER

OPERATING EXPENSES

FOR THE THREE MONTHS ENDED MARCH 31, 1998

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF REAL ESTATE PROPERTY ACQUIRED

On June 24, 1998, Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X,
L.P., Wells Real Estate Fund XI, L.P., and Wells Real Estate Investment
Trust, Inc., through Fund IX, Fund X, Fund XI, and REIT Joint Venture (a
Georgia joint venture), acquired the Lucent Building, a 57,186-square-foot
one-story office building located in Oklahoma City, Oklahoma, for a cash
purchase price of $5,504,276.  The building is 100% occupied by one tenant
with an original lease term of 10 years that commenced January 1, 1998.  The
lease is a triple net lease, whereby the terms require the tenant to pay all
operating expenses relating to the building.

RENTAL REVENUES

Rental income from the lease is recognized on a straight-line basis over the
life of the lease.

2. BASIS OF ACCOUNTING

The accompanying statement of revenues over operating expenses are presented
on the accrual basis.  This statement has been prepared in accordance with
the applicable rules and regulations of the Securities and Exchange
Commission for real estate properties acquired.  Accordingly, the statement
excludes certain historical expenses, such as depreciation, interest, and
management fees, not comparable to the operations of the Lucent Building
after acquisition by Wells Real Estate Fund IX, L.P., Wells Real Estate Fund
X, L.P, Wells Real Estate Fund XI, L.P., and Wells Real Estate Investment
Trust, Inc.

I-12

WELLS REAL ESTATE INVESTMENT TRUST, INC.

(UNAUDITED PRO FORMA FINANCIAL STATEMENTS)

The following unaudited pro forma balance sheet as of March 31, 1998 and the pro
forma statements of (loss) income for the year ended December 31, 1997 and three
months ended March 31, 1998 have been prepared to give effect to the following
transactions as if each occurred as of March 31, 1998 with respect to the
balance sheet and on January 1, 1997 with respect to the statements of
(loss)income :  (i) Wells Real Estate Investment Trust, Inc.'s acquisition of an
interest in Fund IX, Fund X, Fund XI, and REIT Joint Venture (formerly Fund IX-
Fund X Associates) and (ii) the Fund IX, Fund X, Fund XI, and REIT Joint
Venture's acquisition of the Lucent Building which commenced operations in
January 1998.

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisition been consummated at
the beginning of the period presented.

The pro forma financial statements are based on available information and
certain assumptions that management believes are reasonable.  Final adjustments
may differ from the pro forma adjustments herein.

I-13

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

MARCH 31, 1998

(UNAUDITED)

WELLS
REAL ESTATE
INVESTMENT       PRO FORMA         PRO FORMA
TRUST, INC.     ADJUSTMENTS          TOTAL
-----------     -----------        ---------

ASSETS:
Investment in joint venture                                              $         0     $1,480,741 (a)     $1,480,741
Cash                                                                         317,378       (317,378)(b)              0
Deferred project costs                                                         4,072         (4,072)(c)              0
Deferred offering costs                                                      461,108              0            461,108
Accounts receivable                                                               18              0                 18
-----------     -----------------  ----------
Total assets                                                       $   782,576     $1,159,291         $1,941,867
===========     =================  ==========
LIABILITIES:
Sales commission payable                                                 $    11,053     $        0         $   11,053
Due to affiliate                                                             468,718      1,159,291 (b)(c)   1,628,009
-----------     -----------------  ----------
Total liabilities                                                      479,771      1,159,291          1,639,062
===========     =================  ========== 
MINORITY INTEREST OF UNIT HOLDER IN OPERATING PARTNERSHIP                      200,000              0            200,000
-----------     -----------------  ----------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 40,000,000 shares authorized, 11,735
shares issued and outstanding                                                   117              0                117
Additional paid-in capital                                                   102,688              0            102,688
-----------     -----------------  ----------
Total shareholder's equity                                             102,805              0            102,805
-----------     -----------------  ----------
Total liabilities and shareholder's equity                         $   782,576     $1,159,291         $1,941,867
===========     =================  ==========  

(a)   Reflects Wells Real Estate Investment Trust, Inc.'s contribution
to Fund IX, Fund X, Fund XI, and REIT Joint Venture.

(b)   Reflects Wells Real Estate Investment Trust, Inc.'s portion of
the $5,504,276 purchase price related to the Lucent Building.

(c)   Reflects the deferred project costs allocated to the Fund IX,
Fund X, Fund XI, and REIT Joint Venture.

I-14

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF LOSS

FOR THE YEAR ENDED DECEMBER 31, 1997

(UNAUDITED)

WELLS
REAL ESTATE
INVESTMENT            PRO FORMA             PRO FORMA
TRUST, INC.           ADJUSTMENT              TOTAL
----------------      -----------------     ---------------

REVENUES:
Equity in loss of joint venture                              $   0              $  (888)(a)           $   (888)
----------------      -----------------     ---------------
NET LOSS                                                       $   0              $  (888)              $   (888)
================      =================     ===============
EARNINGS PER SHARE (BASIC AND DILUTED)                         $0.00              $  (8.88)             $   (8.88)
================      =================     ===============

(a)    Reflects Wells Real Estate Investment Trust, Inc.'s 4.4% equity in
earnings of the Fund IX, Fund X, Fund XI, and REIT Joint Venture.

I-15

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 1998

(UNAUDITED)

WELLS
REAL ESTATE
INVESTMENT            PRO FORMA           PRO FORMA
TRUST, INC.          ADJUSTMENT             TOTAL
----------------   -----------------     ----------------   

REVENUES:
Equity in income of joint ventures                            $   0              $9,282(a)               $9,282
----------------   -----------------     ----------------   
NET INCOME                                                      $   0              $9,282                  $9,282
================   =================     ================ 
EARNINGS PER SHARE (BASIC AND DILUTED)                          $0.00              $ 0.79                  $ 0.79
================   =================     ================ 

(a)  Reflects Wells Real Estate Investment Trust, Inc.'s 4.4% equity in
earnings of the Fund IX, Fund X, Fund XI, and REIT Joint Venture,
including the Lucent Building on a pro forma basis.

I-16

WELLS REAL ESTATE INVESTMENT TRUST, INC.

SUPPLEMENT NO. 3 DATED AUGUST 12, 1998 TO THE PROSPECTUS
DATED JANUARY 30, 1998

This document supplements, and should be read in conjunction with, the
Prospectus of Wells Real Estate Investment Trust, Inc. dated January 30, 1998,
as supplemented and amended by Supplement No. 1 dated April 20, 1998 and
Supplement No. 2 dated June 30, 1998 (collectively, the "Prospectus"). Unless
otherwise defined herein, capitalized terms used in this Supplement shall have
the same meanings as set forth in the Prospectus.

The purpose of this Supplement is to describe the following:

(i) The status of the offering of shares of common stock (the "Shares") in
Wells Real Estate Investment Trust, Inc. (the "Company");

(ii) The contribution of the Iomega Building located in Ogden, Weber
County, Utah by Wells Real Estate Fund X, L.P. ("Wells Fund X") to the Fund IX,
Fund X, Fund XI and REIT Joint Venture (the "IX-X-XI-REIT Joint Venture");

(iii) The Joint Venture Agreements entered into between Wells Operating
Partnership, L.P. ("Wells OP") and Wells Development Corporation ("Wells
Development");

(iv) The Joint Venture between Wells Real Estate Fund XI, L.P. ("Wells
Fund XI") and Wells Fund X (the "Fund X-XI Joint Venture") and the contracts
between the Fund X-XI Joint Venture and Wells Development;

(v) The acquisition of the Fairchild Building located in Fremont, Alameda
County, California;

(vi) The acquisition of the Cort Furniture Building located in Fountain
Valley, Orange County, California;

(vii) Revisions to the "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS" section of the Prospectus; and

(viii) Inclusion of Audited and Pro Forma Financial Statements as
described in the "Financial Statements" section of this Supplement.

Status of the Offering

Pursuant to the Prospectus, the offering of Shares in the Company
commenced on January 30, 1998. The Company commenced operations on June 5, 1998,
upon the acceptance of subscriptions for the minimum offering of $1,250,000
(125,000 Shares). As of August 10, 1998, the Company had raised a total of
$5,739,061 in offering proceeds (573,906 Shares).

The Iomega Building

Contribution of the Iomega Building. On July 1, 1998, Wells Fund X
contributed a single-story warehouse and office building with 108,000 rentable
square feet (the "Iomega Building") to the IX-X-XI-REIT Joint Venture as a
capital contribution. Wells Fund X was credited with making a capital
contribution to the IX-X-XI-REIT Joint Venture in the amount of $5,050,425,
which represents the purchase price of $5,025,000 plus $25,425 in closing costs
originally paid by Wells Fund X for the Iomega Building on April 1, 1998.

As of August 1, 1998, Wells Fund X had made total capital contributions to
the IX-X-XI-REIT Joint Venture of $18,410,965 and held an equity percentage
interest in the IX-X-XI-REIT Joint Venture of 49.9%; Wells Real Estate Fund IX,
L.P. had made total capital contributions to the IX-X-XI-REIT Joint Venture of
$14,571,686 and held an equity percentage interest in the IX-X-XI-REIT Joint
Venture of 39.5%; Wells Fund XI had made total capital contributions to the
IX-X-XI-REIT Joint Venture of $2,482,810 and held an equity percentage interest
in the IX-X-XI-REIT Joint Venture of 6.7%; and Wells OP had made total capital
contributions to the IX-X-XI-REIT Joint Venture of $1,421,466 and held an equity
percentage interest in the IX-X-XI-REIT Joint Venture of 3.9%.

Description of the Building and Site. The exterior of the Iomega Building
is constructed of concrete tilt-up wall panels approximately 23 feet in height
in the warehouse area with windows along the west and north sides of the
building. The office portion of the Iomega Building on the north side is
constructed of masonry block. Construction of the Iomega Building was completed
in 1989. In 1997, the current tenant, Iomega Corporation, completed construction
of a 16,000 square foot two-level office space addition inside the warehouse
area on the west side of the Iomega Building. The Iomega Building contains an
asphaltic concrete paved parking lot with 286 parking spaces. A railroad spur
provides access to two rail docks on the east side of the Iomega Building.
Access to the Iomega Building is controlled by on-site security guards. The
IX-X-XI-REIT Joint Venture has no current plans to further develop, improve or
renovate the Iomega Building.

The Iomega Building is located at 2976 South Commerce Way in the Ogden
Commercial and Industrial Park (the "Ogden Commercial Park") in Ogden City,
Utah. The site is an 8.03 acre tract of land located in an area containing
primarily light manufacturing and warehousing buildings. The Iomega Building is
one of the largest and most modern warehouse and office buildings in the Ogden
Commercial Park. Although the Ogden Commercial Park is a well established
industrial park, there are vacant land parcels immediately adjacent to the
Iomega Building on the north, west and south sides.

The Ogden Commercial Park is located one mile north of Roy City, one mile
northwest of Riverdale City and three miles southwest of the Ogden central
business district. Interstate 15, a major north-south freeway through the state,
and Interstate 84, a major east-west freeway through Weber County, are within
one mile of the site.

Description of Iomega Lease. The entire Iomega Building is currently under
a net Lease Agreement dated April 9, 1996 (the "Iomega Lease") with Iomega
Corporation ("Iomega"). Wells Fund X assigned its rights under the Iomega Lease
to the IX-X-XI REIT Joint Venture in connection with the contribution of the
Iomega Building on July 1, 1998. The Iomega Lease has a ten year lease term
which commenced on August 1, 1996 and expires on July 31, 2006. The Iomega Lease
contains no extension provisions. Iomega's world headquarters are located within
one mile of the Iomega Building. In the event that Iomega vacates the Iomega
Building at the expiration of its current lease term, the IX-X-XI-REIT Joint
Venture would be required to find one or more new suitable tenants for the
Iomega Building at the then prevailing market rental rates.

Iomega, a New York Stock Exchange company, is a manufacturer of computer
storage devices used by individuals, businesses, government and educational
institutions, including "Zip" drives and disks, "Jaz" one gigabyte drives and
disks, and tape backup drives and cartridges. Iomega reported total sales of in
excess of $1.7 billion, net income of in excess of $115 million and a net worth
of in excess of $400 million for its fiscal year ended December 31, 1997.

The monthly base rent payable under the Iomega Lease is $40,000 through
November 12, 1999. Beginning on the 40th and 80th months of the lease term, the
monthly base rent payable under the Iomega Lease will be increased to reflect an
amount equal to 100% of the increase in the Consumer Price Index (as defined in
the Iomega Lease) during the preceding 40 months; provided however, that in no
event shall the base rent be increased with respect to any one year by more than
6% or by less than 3% per annum, compounded annually, on a cumulative basis from
the beginning of the lease term. Under the Iomega Lease, Iomega is responsible
for all utilities, taxes, insurance and other operating costs with respect to
the Iomega Building during the term of the lease. The estimated annual real
estate taxes on the Iomega Building are $63,390. The Joint Venture, as landlord,
is responsible for

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maintenance of the structural soundness of the roof, foundation and exterior
walls of the Iomega Building, reasonable wear and tear and uninsured losses and
damages caused by Iomega excluded.

Iomega has used all of its $500,000 tenant improvement allowance provided
under the Iomega Lease for the construction of the 16,000 square foot two-level
office space addition described above and the addition of an additional parking
lot outside the south entrance of the Iomega Building.

Under the terms of the Iomega Lease, the IX-X-XI-REIT Joint Venture is
responsible for carrying and maintaining all risk liability insurance covering
the full replacement cost of the Iomega Building. Iomega is responsible for
carrying and maintaining all risk property insurance covering the full
replacement cost of all property and improvements installed or placed on the
premises by Iomega; worker's compensation insurance with no less than the
minimum limits required by law; employer's liability insurance with such limits
as required by law; and commercial liability insurance, with a minimum limit of
$1,000,000 per occurrence and a minimum umbrella limit of $1,000,000, for a
total minimum combined general liability and umbrella limit of $2,000,000 for
property damage, personal injuries or deaths occurring in or about the premises.
The cost of the insurance paid by the landlord is billed on a monthly basis to
the tenant at a rate of $334. Management believes that the Iomega Building is
adequately insured against loss for property damage, personal injury and deaths
of persons in or about the premises.

The Joint Ventures

The Fremont Joint Venture. In July 1998, Wells OP entered into a Joint
Venture Agreement known as Wells/Fremont Associates (the "Fremont Joint
Venture") with Wells Development. The purpose of the Fremont Joint Venture is
the acquisition, ownership, leasing, operation, sale and management of real
properties, including, but not limited to, that certain office building
containing 58,424 rentable square feet located in Fremont, Alameda County,
California (the "Fairchild Building").

Wells Development had previously entered into that certain Agreement for
the Purchase and Sale of Property dated June 8, 1998 with Rose Ventures V, Inc.,
a California corporation, and Thomas G. Haury and Carleen S. Haury to acquire
the Fairchild Building (the "Fairchild Contract"). Prior to the closing of the
Fairchild Building, Wells Development assigned its rights to the Fairchild
Contract to the Fremont Joint Venture, and on July 21, 1998, the Fremont Joint
Venture acquired the Fairchild Building pursuant to the Fairchild Contract.

The Cort Joint Venture. In July 1998, Wells OP entered into another Joint
Venture Agreement with Wells Development known as Wells/Orange County Associates
(the "Cort Joint Venture") for the purpose of the acquisition, ownership,
leasing, operation, sale and management of real properties, including, but not
limited to, that certain office building containing 52,000 rentable square feet
located in Fountain Valley, Orange County, California (the "Cort Furniture
Building").

Wells Development had previously entered into that certain Purchase and
Sale Agreement and Joint Escrow Instructions dated June 12, 1998 with Spencer
Fountain Valley Holdings, Inc., a California corporation ("Spencer"), to acquire
the Cort Furniture Building (the "Cort Contract"). Prior to the closing of the
Cort Furniture Building, Wells Development assigned its rights to the Cort
Contract to the Cort Joint Venture, and on July 31, 1998, the Cort Joint Venture
acquired the Cort Furniture Building pursuant to the Cort Contract.

The Fund X-XI Joint Venture. In July 1998, Wells Fund XI entered into a
Joint Venture Agreement with Wells Fund X known as Fund X and Fund XI Associates
(the "Fund X-XI Joint Venture") for the purpose of the acquisition, ownership,
leasing, operation, sale and management of real properties, and interests in
real properties, including, but not limited to, the acquisition of equity
interests in the Fremont Joint Venture and the Cort Joint Venture (as described
below).

-3-

Wells OP is acting as the initial Administrative Venturer of both the
Fremont Joint Venture and the Cort Joint Venture and, as such, is responsible
for establishing policies and operating procedures with respect to the business
and affairs of each of these joint ventures. However, approval of each of Wells
OP and ultimately the Fund X-XI Joint Venture will be required for any major
decision or any action which materially affects the Fremont Joint Venture or the
Cort Joint Venture or its real property investments.

Contracts to Acquire Joint Venture Interests

Acquisition of the Fremont Joint Venture Interest. On July 17, 1998, the
Fund X-XI Joint Venture entered into an Agreement for the Purchase and Sale of
Joint Venture Interest (the "Fremont JV Contract") with Wells Development.
Pursuant to the Fremont JV Contract, the Fund X-XI Joint Venture contracted to
acquire Wells Development's interest in the Fremont Joint Venture (the "Fremont
JV Interest") which, at closing, will result in the Fund X-XI Joint Venture
becoming a joint venture partner with Wells OP in the ownership of the Fairchild
Building. Wells Fund X, Wells XI and Wells Development are all Affiliates of
Wells Capital, Inc. (the "Advisor") and the Company.

At the time of entering into the Fremont JV Contract, the Fund X-XI Joint
Venture delivered $2,000,000 to Wells Development as an earnest money deposit.
Wells Development contributed the earnest money it received from the Fund X-XI
Joint Venture to the Fremont Joint Venture as its initial capital contribution
of $2,000,000, and Wells OP simultaneously contributed $995,480 to the Fremont
Joint Venture as its initial capital contribution.

Acquisition of the Cort JV Interest. On July 30, 1998, the Fund X-XI Joint
Venture entered into another Agreement for the Purchase and Sale of Joint
Venture Interest (the "Cort JV Contract") with Wells Development. Pursuant to
the Cort JV Contract, the Fund X-XI Joint Venture contracted to acquire Wells
Development's interest in the Cort Joint Venture (the "Cort JV Interest") which,
at closing, will result in the Fund X-XI Joint Venture becoming a joint venture
partner with Wells OP in the ownership of the Cort Furniture Building.

At the time of entering into the Cort JV Contract, the Fund X-XI Joint
Venture delivered $1,500,000 to Wells Development as an earnest money deposit.
Wells Development contributed the earnest money it received from the Fund X-XI
Joint Venture to the Cort Joint Venture as its initial capital contribution of
$1,500,000, and Wells OP simultaneously contributed $168,000 to the Cort Joint
Venture as its initial capital contribution.

The Fairchild Building

Purchase of the Fairchild Building. On July 21, 1998, the Fremont Joint
Venture acquired the Fairchild Building pursuant to the Fairchild Contract for a
purchase price of $8,900,000. The Fremont Joint Venture incurred acquisition
expenses including legal fees, title insurance fees, loan origination fees,
appraisal fees and other closing costs of approximately $60,000. The Fremont
Joint Venture used the $2,995,480 aggregate capital contributions described
above to partially fund the purchase of the Fairchild Building. The Fremont
Joint Venture also obtained a loan in the amount of $5,960,000 from NationsBank,
N.A., the proceeds of which were used to fund the remainder of the cost of the
Fairchild Building (the "Fairchild Loan").

The Fairchild Loan. The Fairchild Loan matures on July 21, 1999 (the
"Fairchild Maturity Date"), unless the Fremont Joint Venture exercises its
option to extend the Fairchild Maturity Date to January 21, 2000. The interest
rate on the Fairchild Loan is a variable rate per annum equal to the rate
appearing on Telerate Page 3750 as the London InterBank Offered Rate (the "LIBOR
Rate") for a thirty day period plus 220 basis points. Commencing on September 1,
1998, and on the first day of each calendar month thereafter continuing through
and including the first day of the calendar month in which the Fairchild
Maturity Date occurs, the Fremont Joint Venture is required to pay to
NationsBank monthly installments of principal in the amount of $10,498 plus
accrued interest. The Fairchild Loan is secured by a first mortgage against the
Fairchild Building. In addition Leo F. Wells, III and Wells Development,
Affiliates of the Advisor and the Company, are co-guarantors of the Fairchild
Loan.

-4-

Closing of the Fremont JV Interest. Under the Joint Venture Agreement of
the Fremont Joint Venture, cash flow distributions will be paid to Wells OP and
Wells Development in accordance with each such entity's equity interest in the
Fremont Joint Venture based upon each entity's relative capital contribution to
the Fremont Joint Venture. As of July 31, 1998, Wells OP held an approximately
33% equity interest and Wells Development held an approximately 67% equity
interest in the Fremont Joint Venture. As additional offering proceeds are
raised by the Wells REIT, it is anticipated that Wells OP will make additional
capital contributions to the Fremont Joint Venture, which will be utilized to
pay down the Fairchild Loan and will increase Wells OP's relative equity
interest (and decrease Wells Development's relative equity interest) in the
Fremont Joint Venture. Cash flow distributions payable by the Fremont Joint
Venture to Wells Development shall be credited as a purchase price adjustment or
paid to the Fund X-XI Joint Venture at the closing of the acquisition of the
Fremont JV Interest from Wells Development, since Wells Development is
prohibited from making any profit on the transaction during the holding period.

At such time as sufficient funds have been raised, either in the Fund X-XI
Joint Venture or the Wells REIT, or a combination thereof, to pay off the
Fairchild Loan, the Fund X-XI Joint Venture shall close the acquisition of the
Fremont JV Interest. This closing shall take place on or before July 21, 1999;
however, the Fund X-XI Joint Venture has the right to extend the closing date
for two successive periods of six months if sufficient cash has not been raised
to pay off the Fairchild Loan. At the conclusion of such transaction, the Fund
X-XI Joint Venture will be admitted to the Fremont Joint Venture as a joint
venturer partner in the place of Wells Development. The ultimate equity
percentage interests in the Fremont Joint Venture to be owned by Wells OP and
the Fund X-XI Joint Venture are dependent upon the amount of offering proceeds
which are raised in the future by the Company and by Wells Fund XI and,
accordingly, are indeterminable at this time.

Description of the Fairchild Building. The Fairchild Building is a
two-story office and manufacturing building with 58,424 rentable square feet.
The Fairchild Building is composed of painted concrete tilt-up wall panels,
plaster walls with a clay tile covered mansard roof on the building's west and
north sides and aluminum framed windows. Construction of the Fairchild Building
was completed in 1985.

The Fairchild Building is located at 47320 Kato Road on the corner of Kato
Road and Auburn Road in the City of Fremont, California. The site is
approximately 3.05 acres and is located in a commercial area composed of similar
use buildings. The parking area surrounds the Fairchild Building and contains
approximately 184 paved parking spaces.

An independent appraisal of the Fairchild Building was prepared by CB
Richard Ellis Appraisal Services, a division of CB Commercial, as of June 29,
1998, pursuant to which the market value of the land and the leased fee interest
in the Fairchild Building subject to the Fairchild Lease (described below) was
estimated to be $8,900,000. The value estimate contained in this appraisal was
based upon a number of assumptions, including that the Fairchild Building will
continue operating at a stabilized level with Fairchild occupying 100% of the
rentable areas, and is not necessarily an accurate reflection of the fair market
value of the property. The Fremont Joint Venture also obtained an environmental
report prior to closing evidencing that the environmental condition of the land
encompassing the Fairchild Building was satisfactory.

Fremont is considered Alameda County's extension of Silicon Valley as it
is home to a large number of high-technology manufacturing and new product
development companies. Fremont, which is the second largest city in Alameda
County and the fourth largest city in the Bay Area with a population of
approximately 190,000, is 25 miles south of Oakland and 15 miles north of San
Jose along Interstate 880. Fremont encompasses approximately 94 square miles and
is the largest source of current and future growth and development in Alameda
County due to its abundance of land relative to other areas and its location on
the fringe of Silicon Valley.

The Fremont Joint Venture will experience competition for its current
tenant from owners and managers of various other office and manufacturing
buildings located in the immediate area of the Fairchild Building, which

-5-

could adversely affect the Fremont Joint Venture's ability to retain Fairchild
as a tenant, and if necessary in the future, to attract and retain other
tenants.

The Fairchild Lease. The entire 58,424 rentable square feet of the
Fairchild Building is currently under a net lease agreement dated September 19,
1997 (the "Fairchild Lease") with Fairchild Technologies U.S.A., Inc.
("Fairchild"). Fairchild took early possession of the second floor of the
Fairchild Building on October 1, 1997 at a monthly base rental of $22,456. The
Fairchild Lease commenced on December 1, 1997 (the "Rental Commencement Date")
and expires on November 30, 2004, subject to Fairchild's right to extend the
Fairchild Lease for an additional five-year period. Fairchild must give written
notice of its intention to exercise said option not more than 180 days and not
less than 90 days before the last day of the initial term of the Fairchild
Lease. In the event that Fairchild vacates the Fairchild Building at the
expiration of its current lease term, the Fremont Joint Venture would be
required to find one or more new suitable tenants for the Fairchild Building at
the then prevailing market rental rates.

Fairchild is a global leader in the design and manufacture of production
equipment for semiconductor and compact disk manufacturing. The semiconductor
equipment group recently unveiled a new line of semiconductor wafer processing
equipment which will provide alternatives to the traditional semiconductor chip
production methods.

Fairchild is a wholly-owned subsidiary of the Fairchild Corporation, a
Delaware corporation ("Fairchild Corp"). Fairchild Corp is the largest aerospace
fastener and fastening system manufacturer and is one of the largest independent
aerospace parts distributors in the world. Fairchild Corp is a leading supplier
to aircraft manufacturers such as Boeing, Airbus, Lockheed Martin, British
Aerospace and Bombardier and to airlines such as Delta Airlines and U.S.
Airways. The aerospace fastener segment accounted for approximately 51.4% of the
company's net sales and the aerospace parts distribution segment accounted for
approximately 35.9% of the company's net sales in fiscal year 1997. The
obligations of Fairchild under the Fairchild Lease are guaranteed by Fairchild
Corp, which reported total consolidated sales of in excess of $680 Million and a
net worth of in excess of $232 Million for its fiscal year ended June 30, 1997.

The monthly base rent payable under the Fairchild Lease is $68,128 through
November 30, 1998. On each one-year anniversary of the Rental Commencement Date,
the monthly base rent in effect for the preceding year shall be adjusted upward
by a 3% increase. The monthly base rent during the first year of the extended
term of the Fairchild Lease, if exercised by Fairchild, shall be 95% of the then
fair market rental value of the Fairchild Building subject to the annual 3%
increase adjustments. If Fairchild and the Fremont Joint Venture are unable to
agree upon the fair rental value for the extended lease term, each party shall
select an appraiser and the two appraisers shall establish the rent by
agreement. Under the Fairchild Lease, Fairchild is responsible for all
utilities, taxes, insurance and other operating costs with respect to the
Fairchild Building during the term of the Fairchild Lease. Currently, the annual
real estate taxes for the Fairchild Building are approximately $37,000. The
Fremont Joint Venture, as landlord, is responsible for the maintenance and
repair of the structural elements of the roof, bearing walls and foundation of
the Fairchild Building.

Under the terms of the Fairchild Lease, Fairchild is required to carry and
maintain, at its own cost and expense, certain types of insurance in form
acceptable to the Fremont Joint Venture, naming the Fremont Joint Venture as an
additional insured. With respect to insurance against loss or damage to the
Fairchild Building, Fairchild is required to name the Fremont Joint Venture as
loss payee under its policy. Among other types of insurance, the Fairchild Lease
requires that Fairchild maintain liability insurance coverage covering the
leased premises and Fairchild's use thereof against claims for personal injury,
death, property damage and product liability, in single limit amounts of not
less than $2,000,000 per occurrence, and an equivalent form of insurance against
loss or damage of the Fairchild Building, including earthquake insurance, in an
amount not less than 100% of the actual replacement value of the building and
improvements thereto. Management believes that the Fairchild Building is
adequately insured against loss for property damage, personal injury and deaths
of persons in or about the premises.

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The Cort Furniture Building

Purchase of the Cort Furniture Building. On July 31, 1998, the Cort Joint
Venture acquired the Cort Furniture Building pursuant to the Cort Contract for a
purchase price of $6,400,000. The Cort Joint Venture incurred acquisition
expenses including legal fees, title insurance fees, loan origination fees,
appraisal fees and other closing costs of approximately $63,000. In addition, at
closing, the Cort Joint Venture paid $85,000 in real estate brokerage
commissions to Collins Commercial and Daum Commercial Real Estate, neither of
which are affiliated in any way with the Company or the Advisor. The Cort Joint
Venture used the $1,668,000 aggregate capital contributions to partially fund
the purchase of the Cort Furniture Building. The Cort Joint Venture also
obtained a loan in the amount of $4,875,000 from NationsBank, N.A., the proceeds
of which were used to fund the remainder of the cost of the Cort Furniture
Building (the "Cort Loan").

The Cort Loan. The Cort Loan matures on July 31, 1999 (the "Cort Maturity
Date"), unless the Cort Joint Venture exercises its option to extend the Cort
Maturity Date to January 31, 2000. The interest rate on the Cort Loan is a
variable rate per annum equal to the rate appearing on Telerate Page 3750 as the
LIBOR Rate for a thirty day period plus 220 basis points. Commencing on
September 1, 1998, and on the first day of each calendar month thereafter
continuing through and including the first day of the calendar month in which
the Cort Maturity Date occurs, the Cort Joint Venture is required to pay to
Nationsbank monthly installments of principal in the amount of $8,587 plus
accrued interest. The Cort Loan is secured by a first mortgage against the Cort
Furniture Building. Leo F. Wells, III and Wells Development are also
co-guarantors of the Cort Loan.

Closing of the Cort JV Interest. Under the Joint Venture Agreement of the
Cort Joint Venture, cash flow distributions will be paid to Wells OP and Wells
Development in accordance with each such entity's equity interest in the Cort
Joint Venture based upon each entity's relative capital contribution to the Cort
Joint Venture. As of July 31, 1998, Wells Development held an approximately 90%
equity interest and Wells OP held an approximately 10% equity interest in the
Cort Joint Venture. As additional offering proceeds are raised by the Wells
REIT, it is anticipated that Wells OP will make additional capital contributions
to the Cort Joint Venture, which will be utilized to pay down the Cort Loan and
will increase Wells OP's relative equity interest (and decrease Wells
Development's relative equity interest) in the Cort Joint Venture. Cash flow
distributions payable by the Cort Joint Venture to Wells Development shall be
credited as a purchase price adjustment or paid to the Fund X-XI Joint Venture
at the closing of the acquisition of the Cort JV Interest from Wells
Development, since Wells Development is prohibited from making any profit on the
transaction during the holding period.

At such time as sufficient funds have been raised, either in the Fund X-XI
Joint Venture or the Company, or a combination thereof, to pay off the Cort Loan
on the Cort Furniture Building, the Fund X-XI Joint Venture shall close the
acquisition of the Cort JV Interest. This closing shall take place on or before
July 31, 1999; however, the Fund X-XI Joint Venture has the right to extend the
closing date for two successive periods of six months if sufficient cash has not
been raised to pay off the Cort Loan. At the conclusion of such transaction, the
Fund X-XI Joint Venture will be admitted to the Cort Joint Venture as a joint
venture partner in the place of Wells Development. The ultimate equity
percentage interests in the Cort Joint Venture to be owned by Wells OP and the
Fund X-XI Joint Venture are dependent upon the amount of offering proceeds which
are raised in the future by the Company and by Wells Fund XI and, accordingly,
are indeterminable at this time.

Description of the Cort Furniture Building. The Cort Furniture Building is
a single-story office and warehouse building with 52,000 rentable squire feet
comprised of an 18,000 square foot office and open showroom area and a 34,000
square foot warehouse area. The Cort Furniture Building's foundation is shallow
reinforced concrete spread footings under load bearing columns with floor slabs
consisting of four inch thick reinforced concrete slab. The exterior walls of
the Cort Furniture Building are load bearing concrete tilt-wall panels. The roof
framing is composed of one-half inch thick plywood decking supported by glu-lam
beams and wood joyces. The main entrance of the Cort Furniture Building consists
of covered walkways. The site contains approximately 150 paved parking spaces.
Construction of the Cort Furniture Building was completed in 1975.

-7-

An independent appraisal of the Cort Furniture Building was prepared by
Cushman Wakefield, real estate appraisers and consultants, as of July 1, 1998,
pursuant to which the market value of the land and the leased fee interest in
the Cort Furniture Building subject to the Cort Furniture Lease (described
below) was estimated to be $6,400,000. The value estimate contained in this
appraisal was based upon a number of assumptions, including that the Cort
Furniture Building will continue operating at a stabilized level with Cort
occupying 100% of the rentable areas, and is not necessarily an accurate
reflection of the fair market value of the property. The Cort Joint Venture also
obtained an environmental report prior to closing evidencing that the
environmental condition of the land encompassing the Cort Furniture Building was
satisfactory.

The Cort Furniture Building is located at 10700 Spencer Street on the
southeast corner of Spencer Avenue and Mt. Langley Street adjacent on the south
side to Interstate 405 (with good freeway exposure) located in the City of
Fountain Valley, Orange County, California. The site consists of two parcels of
land totalling approximately 3.65 acres and is located in an established,
built-out industrial pocket within the southeastern region of the city. The site
is located approximately four miles West of the John Wayne Airport.

Fountain Valley is considered an established bedroom community which is
characterized by a family-oriented, affluent resident population. The city is
located on the fringe of one of the county's major regional employment centers.
Most development within the immediate area consists of mid-sized warehouse
distribution facilities, garden office buildings, corporate headquarter
facilities, small incubator industrial parks and various retail showroom
buildings. Fountain Valley encompasses approximately 9.75 square miles and is
considered to be in the stable stage of its life cycle with relatively little
vacant land parcels available for development. While the population of Fountain
Valley as of 1997 was approximately 55,000 residents, Orange County had a
population in excess of 2.6 million. Orange County employs about 10% of the
state's workers despite having only about 8% of the state's population.

The Cort Joint Venture will experience competition for its current tenant
from owners and managers from various other office and warehouse buildings
located in the immediate area of the Cort Furniture Building which could
adversely affect the Cort Joint Venture's ability to retain Cort as a tenant,
and if necessary in the future, to attract and retain other tenants.

The Cort Furniture Lease. The entire 52,000 rentable square feet of the
Cort Furniture Building is currently under a net lease agreement dated October
25, 1988 (The "Cort Furniture Lease") with Cort Furniture Rental Corporation, a
New York corporation ("Cort"). Cort uses the Cort Furniture Building as its
regional corporate headquarters with an attached clearance showroom and
warehouse storage areas. The Cort Furniture Building was originally developed
for and occupied by Mary Kay Cosmetics as their regional corporate headquarters.
In March 1988, the Cort Furniture Building was leased to Cort. Subsequently,
Cort exercised an option to purchase the property in mid-1988. In October 1988,
Cort sold the property to Spencer and leased back the property for a 15 year
term at an initial lease rate of $0.914 per square foot per month (on a triple
net basis).

The Cort Furniture Lease commenced on November 1, 1988 (the "Rental
Commencement Date") and contains a lease term of 15 years expiring on October
31, 2003. Cort has an option to extend the Cort Furniture Lease for an
additional five-year period of time. Such option must be exercised by Cort in a
written notice delivered to the Cort Joint Venture at least one year prior to
the expiration of the then current lease term. In the event that Cort vacates
the Cort Furniture Building at the expiration of its current lease term, the
Cort Joint Venture would be required to find one or more suitable tenants for
the Cort Furniture Building at the then prevailing market rental rates.

Cort is a wholly owned subsidiary of Cort Business Services Corporation, a
New York Stock Exchange Company trading under the symbol CBZ ("Cort Business
Services"). Cort Business Services is the largest and only national provider of
high-quality office and residential rental furniture and related accessories.
Cort Business Services has operations that cover 32 states and the District of
Columbia, including 109 rental showrooms, 72 clearance centers and 72
distribution centers. The obligations of Cort under the Cort Furniture Lease are
guaranteed

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by Cort Business Services, which reported net income of in excess of $22 million
on total consolidated revenue of in excess of $287 million, and reported a net
worth of in excess of $149 million for its fiscal year ended December 31, 1997.

The monthly base rent payable under the Cort Furniture Lease is $63,247
through April 30, 2001 at which time the monthly base rent will be increased 10%
to $69,574 for the remainder of the lease term. The monthly base rent during the
first year of the extended term shall be 90% of the then fair market rental
value of the Cort Furniture Building, but will be no less than the rent in the
15th year of the Cort Furniture Lease. If Cort and the Cort Joint Venture are
unable to agree upon a fair rental value for the extended lease term, each party
shall select an appraiser and the two appraisers shall provide appraisals on the
Cort Furniture Building. If the appraisal values established are within 10% of
each other, the average of such appraised value shall be the fair market rental
value. If said appraisals are varied by more than 10%, the two appraisers shall
appoint a third appraiser and the middle appraisal of the three shall be the
fair rental value. Under the Cort Furniture lease, Cort is responsible for all
utilities, taxes, insurance and other operating costs with respect to the Cort
Furniture Building during the term of the Cort Furniture Lease. The estimated
annual real estate taxes on the Cort Furniture Building are $38,040. The Cort
Joint Venture, as landlord, is responsible for the maintenance and repair of the
structural portions of the exterior walls and the foundation of the Cort
Furniture Building, but shall not include painting or installing, maintaining or
repairing wall or floor coverings.

Under the terms of the Cort Furniture Lease, the Cort Joint Venture is
responsible for carrying and maintaining liability insurance covering the leased
premises including claims for personal injury, death, property damage and
product liability, in single limit amounts of not less than $1,000,000. The
insurance against property damage to the Cort Furniture Building shall be in an
amount not less than 100% of the actual replacement value of the building and
improvements thereto. The cost of said insurance is billed on a monthly basis to
the tenant. Cort is required to maintain property insurance for its personal
property on the premises, including all inventory, equipment, fixtures and
tenant improvements that have not become a part of the premises, in an amount
equal to the full replacement value of such personal property. Pursuant to the
terms of the Cort Loan, the Cort Joint Venture is required to carry and maintain
earthquake insurance on the Cort Furniture Building for the full replacement
value of the building. Management believes that the Cort Furniture Building is
adequately insured against loss for property damage, personal injury and deaths
of persons in or about the premises.

Property Management Fees

Iomega Building. Wells Management Company, Inc. ("Wells Management"), an
Affiliate of the Advisor and the Company, has been retained to manage and lease
all of the properties currently owned by the IX-X-XI-REIT Joint Venture,
including the Iomega Building. While Wells Fund XI and the Company are
authorized to pay aggregate management and leasing fees to Wells Management in
the amount of 4.5% of gross revenues, Wells Fund IX and Wells Fund X are
authorized to pay aggregate management and leasing fees to Wells Management in
the amount of 6% of gross revenues. Since, as of August 1, 1998, Wells Fund IX
and Wells Fund X held an aggregate 89.4% ownership percentage interest in the
IX-X-XI-REIT Joint Venture, while Wells Fund XI and the Company held an
aggregate 10.6% ownership percentage interest in the IX-X-XI-REIT Joint Venture,
89.4% of the gross revenues of the IX-X-XI-REIT Joint Venture are subject to a
6% property management and leasing fee, while 10.6% of the gross revenues of the
IX-X-XI-REIT Joint Venture are subject to a 4.5% property management and leasing
fee.

Fairchild and Cort Furniture Buildings. Wells Management has also been
retained to manage and lease the Fairchild Building and the Cort Furniture
Building. The Fremont Joint Venture and the Cort Joint Venture shall each pay
4.5% of gross revenues of these buildings to Wells Management for property
management and leasing services.

-9-

Management's Discussion and Analysis of Financial Condition and Results of
Operation

The information contained on page 46 in the "MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS" section of the
Prospectus is revised as of the date of this Supplement by the deletion of the
first paragraph of that section and the insertion of the following paragraph in
lieu thereof:

The Company commenced operations on June 5, 1998, upon the
acceptance of subscriptions for the minimum offering of $1,250,000
(125,000 Shares). As of August 10, 1998, the Company had raised a total of
$5,739,061 in offering proceeds (573,906 Shares). After the payment of
$200,867 in acquisition and advisory fees and acquisition expenses, the
payment of $717,382 in selling commissions and organizational and offering
expenses, capital contributions of $1,421,466 to the IX-X-XI-REIT Joint
Venture, capital contributions of $995,480 to the Fremont Joint Venture
and capital contributions of $168,000 to the Cort Joint Venture, as of
August 10, 1998, the Company was holding net offering proceeds of
$2,235,866 available for investment in additional properties.

Financial Statements

The financial statements of the Iomega Building, the Fairchild Building
and the Cort Furniture Building for the year ended December 31, 1997, included
herein as Appendix I to this Supplement No. 3, have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their reports with
respect thereto, and are included herein upon the authority of said firm as
experts in giving said reports. The pro forma financial information for Wells
Real Estate Investment Trust, Inc. for the year ended December 31, 1997 and for
the six month period ended June 30, 1998, and the financial statements of the
Iomega Building, the Fairchild Building and the Cort Furniture Building for the
six month period ended June 30, 1998, which are included in Appendix I to this
Supplement No. 3, have not been audited.

-10-

APPENDIX F

INDEX TO FINANCIAL STATEMENTS

Page
----

Iomega Building
Audited Financial Statements
Report of Independent Public Accountants                               F-1
Statement of Revenues Over Certain Operating Expenses for
the year ended December 31, 1997 (Audited) and for the six
months ended June 30, 1998 (Unaudited)                                 F-2
Notes to Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1997 (Audited) and for the
six months ended June 30, 1998 (Unaudited)                             F-3

Cort Furniture Building
Audited Financial Statements
Report of Independent Public Accountants                               F-5
Statement of Revenues Over Certain Operating Expenses for
the year ended December 31, 1997 (Audited) and for the six
months ended June 30, 1998 (Unaudited)                                 F-6
Notes to Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1997 (Audited) and for the six
months ended June 30, 1998 (Unaudited)                                 F-7

Fairchild Building
Audited Financial Statements
Report of Independent Public Accountants                               F-9
Statement of Revenues Over Certain Operating Expenses for
the year ended December 31, 1997 (Audited) and for the six
months ended June 30, 1998 (Unaudited)                                F-10
Notes to Statement of Revenues Over Certain Operating Expenses
for the year ended December 31, 1997 (Audited) and for the six
months ended June 30, 1998 (Unaudited)                                F-11

Wells Real Estate Investment Trust, Inc.
Unaudited Pro Forma Financial Statements
Summary of Unaudited Pro Forma Financial Statements                   F-13
Pro Forma Balance Sheet as of June 30, 1998                           F-14
Pro Forma Statement of Income (Loss) for the year ended
December 31, 1997                                                     F-15
Pro Forma Statement of Income for the six months ended 
June 30, 1998                                                         F-16

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XI, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the IOMEGA BUILDING for the year ended December 31, 1997. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Iomega
Building after acquisition by Fund IX, X, XI, and REIT Joint Venture (a joint
venture between Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P.,
Wells Real Estate Fund XI, L.P. and Wells Operating Partnership, L.P.). The
accompanying statement of revenues over certain operating expenses was prepared
for the purpose of complying with the rules and regulations of the Securities
and Exchange Commission and is not intended to be a complete presentation of the
Iomega Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Iomega Building for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
August 6, 1998

F-1

IOMEGA BUILDING

STATEMENTS OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1997         1998
========     ========
(Unaudited)

RENTAL REVENUES                                         $552,828     $276,414

OPERATING EXPENSES, net of reimbursements                 (1,426)       9,750
--------     --------
REVENUES OVER CERTAIN OPERATING EXPENSES                $554,254     $266,664
========     ========

The accompanying notes are an integral part of these statements.

F-2

IOMEGA BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1.    ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

On July 1, 1998, Wells Real Estate Fund X, L.P. ("Fund X") contributed a
single-story warehouse and office building with 108,000 rentable square
feet (the "Iomega Building") to the Fund IX, Fund X, Fund XI, and REIT
Joint Venture ("IX-X-XI-REIT Joint Venture") (a Georgia joint venture) as
a capital contribution. Fund X was credited with making a capital
contribution to the IX-X-XI-REIT Joint Venture in the amount of
$5,050,425, which represents the purchase price of $5,025,000 plus
acquisition expenses of $25,425 originally paid by Fund X for the Iomega
Building on April 1, 1998. As of August 1, 1998, Fund X had made total
capital contributions to the IX-X-XI-REIT Joint Venture of $18,410,965 and
held an equity percentage interest in the IX-X-XI-REIT Joint Venture of
49.9%; Wells Real Estate Fund IX, L.P. had made total capital
contributions to the IX-X-XI-REIT Joint Venture of $14,571,686 and held an
equity percentage interest in the IX-X-XI-REIT Joint Venture of 39.5%;
Wells Operating Partnership, L.P. had made total capital contributions to
the IX-X-XI-REIT Joint Venture of $1,421,466 and held an equity percentage
interest in the IX-X-XI-REIT Joint Venture of 3.9%; and Wells Real Estate
Fund XI, L.P. had made total capital contributions to the IX-X-XI-REIT
Joint Venture of $2,482,810 and held an equity percentage interest in the
IX-X-XI-REIT Joint Venture of 6.7%.

The building is 100% occupied by one tenant with a ten year lease term
that expires on July 31, 2006. The monthly base rent payable under the
lease is $40,000 through November 12, 1999. Beginning on the 40th and 80th
months of the lease term, the monthly base rent payable under the lease
will be increased to reflect an amount equal to 100% of the increase in
the Consumer Price Index (as defined in the lease) during the preceding 40
months; provided however, that in no event shall the base rent be
increased with respect to any one year by more than 6% or by less than 3%
per annum, compounded annually, on a cumulative basis from the beginning
of the lease term. The lease is a triple net lease, whereby the terms
require the tenant to reimburse the IX-X-XI-REIT Joint Venture for certain
operating expenses, as defined in the lease, related to the building.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over
the life of the lease.

F-3

2.    BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statement excludes certain historical expenses, such as depreciation and
management fees, not comparable to the operations of the Iomega Building
after acquisition by the IX-X-XI REIT Joint Venture.

F-4

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XI, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the CORT FURNITURE BUILDING for the year ended December 31, 1997.
This financial statement is the responsibility of management. Our responsibility
is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the Cort
Furniture Building after acquisition by the Cort Joint Venture (a joint venture
between Wells Operating Partnership, L.P. and Wells Development Corporation).
The accompanying statement of revenues over certain operating expenses was
prepared for the purpose of complying with the rules and regulations of the
Securities and Exchange Commission and is not intended to be a complete
presentation of the Cort Furniture Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Cort Furniture Building for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
August 6, 1998

F-5

CORT FURNITURE BUILDING

STATEMENTS OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1997         1998
========     ========
(Unaudited)

RENTAL REVENUES                                         $771,618     $385,809

OPERATING EXPENSES                                        16,408        4,104
--------     --------
REVENUES OVER CERTAIN OPERATING EXPENSES                $755,210     $381,705
========     ========

The accompanying notes are an integral part of these statements.

F-6

CORT FURNITURE BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1.    ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

The Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized to own and operate properties on behalf of the Wells
Real Estate Investment Trust, Inc, entered into a Joint Venture Agreement
known as Wells/Orange County Associates ("Cort Joint Venture") with Wells
Development Corporation. On July 31, 1998, the Cort Joint Venture acquired
the Cort Furniture Building, a 52,000-square-foot warehouse and office
building located in Fountain Valley, California, for a purchase price of
$6,400,000 plus acquisition expenses of approximately $150,000. The Cort
Joint Venture used the $1,668,000 aggregate capital contributions
described below to partially fund the purchase of the Cort Furniture
Building. The Cort Joint Venture obtained a loan in the amount of
$4,875,000 from NationsBank, N.A., the proceeds of which were used to fund
the remainder of the cost of the Cort Furniture Building (the "Cort
Loan"). The Cort Loan matures on July 31, 1999 (the "Cort Maturity Date"),
unless the Cort Joint Venture exercises its option to extend the Cort
Maturity Date to January 31, 2000. The interest rate on the Cort Loan is a
variable rate per annum equal to the rate appearing on Telerate Page 3750
as the LIBOR Rate for 30-day period plus 220 basis points.

The building is 100% occupied by one tenant with a 15-year lease term that
commenced on November 1, 1988 and expires on October 31, 2003. The monthly
base rent payable under the lease is $63,247 through April 30, 2001 at
which time the monthly base rent will be increased 10% to $69,574 for the
remainder of the lease term. The lease is a triple net lease, whereby the
terms require the tenant to reimburse the Cort Joint Venture for certain
operating expenses, as defined in the lease, related to the building.

Acquisition of the Cort Joint Venture Interest

Wells Real Estate Fund XI, L.P. ("Wells Fund XI") entered into a Joint
Venture Agreement with Wells Real Estate Fund X, L.P. ("Wells Fund X")
known as Fund X and Fund XI Associates ("Fund X-XI Joint Venture") for the
purpose of the acquisition, ownership, leasing, operation, sale and
management of real properties, and interests in real properties, including
but not limited to, the acquisition of equity interests in the Cort Joint
Venture.

F-7

On July 30, 1998, the Fund X-XI Joint Venture entered into an Agreement
for the Purchase and Sale of Joint Venture Interest (the "Cort JV
Contract") with Wells Development. Pursuant to the Cort JV Contract, the
Fund X-XI Joint Venture contracted to acquire Wells Development's interest
in the Cort Joint Venture (the "Cort JV Interest") which, at closing, will
result in the Fund X-XI Joint Venture becoming a joint venture partner
with Wells OP in the ownership of the Cort Furniture Building. Wells Fund
X, Wells OP and Wells Development are all affiliates of Wells Fund XI.

At the time of entering into the Cort JV Contract, the Fund X-XI Joint
Venture delivered $1,500,000 to Wells Development as an earnest money
deposit (the "Cort Earnest Money"). Wells Fund XI contributed $750,000 of
the Cort Earnest Money as a capital contribution to the Fund X-XI Joint
Venture and, as of July 31, 1998, held an equity percentage interest in
the Fund X-XI Joint Venture of 50%; and Wells Fund X contributed $750,000
of the Cort Earnest Money as a capital contribution to the Fund X-XI Joint
Venture and, as of July 31, 1998, held an equity percentage interest in
the Fund X-XI Joint Venture of 50%. Wells Development contributed the Cort
Earnest Money it received from the Fund X-XI Joint Venture to the Cort
Joint Venture as its initial capital contribution, and Wells OP
simultaneously contributed $168,000 to the Cort Joint Venture as its
initial capital contribution.

Cash flow distributions allocable by the Cort Joint Venture to Wells
Development will be credited as a purchase price adjustment or paid to the
Fund X-XI Joint Venture at the closing of the acquisition of the Cort JV
Interest from Wells Development since Wells Development is prohibited from
making any profit on the transaction during the holding period. The Fund
X-XI Joint Venture will have no property rights in the Cort Building prior
to closing nor any potential liability on the Cort Loan, which will be
paid off prior to closing.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over
the life of the lease.

2.    BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statement excludes certain historical expenses, such as interest,
depreciation, and management fees, not comparable to the operations of the
Cort Furniture Building after acquisition by the Cort Joint Venture.

F-8

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wells Real Estate Fund XI, L.P. and
Wells Real Estate Investment Trust, Inc.:

We have audited the accompanying statement of revenues over certain operating
expenses for the FAIRCHILD BUILDING for the year ended December 31, 1997. This
financial statement is the responsibility of management. Our responsibility is
to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of revenues over certain operating
expenses is free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the statement of
revenues over certain operating expenses. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.

As described in Note 2, this financial statement excludes certain expenses that
would not be comparable with those resulting from the operations of the
Fairchild Building after acquisition by the Fremont Joint Venture (a joint
venture between Wells Operating Partnership, L.P. and Wells Development
Corporation). The accompanying statement of revenues over certain operating
expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission and is not intended to be
a complete presentation of the Fairchild Building's revenues and expenses.

In our opinion, the statement of revenues over certain operating expenses
presents fairly, in all material respects, the revenues over certain operating
expenses of the Fairchild Building for the year ended December 31, 1997 in
conformity with generally accepted accounting principles.

/s/ ARTHUR ANDERSEN LLP

Atlanta, Georgia
August 6, 1998

F-9

FAIRCHILD BUILDING

STATEMENTS OF REVENUES OVER CERTAIN

OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1997         1998
========     ========
(Unaudited)

RENTAL REVENUES                                         $220,090     $440,178

OPERATING EXPENSES                                        67,573       10,420
--------     --------
REVENUES OVER CERTAIN OPERATING EXPENSES                $152,517     $429,758
========     ========

The accompanying notes are an integral part of these statements.

F-10

FAIRCHILD BUILDING

NOTES TO STATEMENTS OF REVENUES

OVER CERTAIN OPERATING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 1997

AND FOR THE SIX MONTHS ENDED JUNE 30, 1998

1.    ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Description of Real Estate Property Acquired

The Wells Operating Partnership, L.P. ("Wells OP"), a Delaware limited
partnership organized to own and operate properties on behalf of the Wells
Real Estate Investment Trust, Inc., entered into a Joint Venture Agreement
known as Wells/Fremont Associates ("Fremont Joint Venture") with Wells
Development Corporation. On July 21, 1998, the Fremont Joint Venture
acquired the Fairchild Building, a 58,424-square-foot warehouse and office
building located in Fremont, California, for a purchase price of
$8,900,000 plus acquisition expenses of approximately $60,000. The Fremont
Joint Venture used the $2,995,480 aggregate capital contributions
described below to partially fund the purchase of the Fairchild Building.
The Fremont Joint Venture obtained a loan in the amount of $5,960,000 from
NationsBank, N.A., the proceeds of which were used to fund the remainder
of the cost of the Fairchild Building (the "Fairchild Loan"). The
Fairchild Loan matures on July 21, 1999 (the "Fairchild Maturity Date"),
unless the Fremont Joint Venture exercises its option to extend the
Fairchild Maturity Date to January 21, 2000. The interest rate on the
Fairchild Loan is a variable rate per annum equal to the rate appearing on
Telerate Page 3750 as the LIBOR Rate for a 30-day period plus 220 basis
points.

The building is 100% occupied by one tenant with a seven-year lease term
that commenced on December 1, 1997 (with an early possession date of
October 1, 1997) and expires on November 30, 2004. The monthly base rent
payable under the lease is $68,128 with a 3% increase on each anniversary
of the commencement date. The lease is a triple net lease, whereby the
terms require the tenant to reimburse Wells/Fremont for certain operating
expenses, as defined in the lease, related to the building. Prior to
October 1, 1997, the building was unoccupied and all operating expenses
were paid by the former owner of the Fairchild Building.

Acquisition of the Fremont Joint Venture Interest

Wells Real Estate Fund XI, L.P. ("Wells Fund XI") entered into a Joint
Venture Agreement with Wells Real Estate Fund X, L.P. ("Wells Fund X")
known as Fund X and Fund XI Associates ("Fund X-XI Joint Venture") for the
purpose of the acquisition, ownership, leasing, operation, sale and
management of real properties, and interests in real properties, 

F-11

including but not limited to, the acquisition of equity interests in the
Fremont Joint Venture.

On July 17, 1998, the Fund X-XI Joint Venture entered into an Agreement
for the Purchase and Sale of Joint Venture Interest (the "Fremont JV
Contract") with Wells Development. Pursuant to the Fremont JV Contract,
the Fund X-XI Joint Venture contracted to acquire Wells Development's
interest in the Fremont Joint Venture (the "Freemont JV Interest") which,
at closing, will result in the Fund X-XI Joint Venture becoming a joint
venture partner with Wells OP in the ownership of the Fairchild Building.
Wells Fund X, Wells OP and Wells Development are all affiliates of Wells
Fund XI.

At the time of the entering into the Fremont JV Contract, the Fund X-XI
Joint Venture delivered $2,000,000 to Wells Development as an earnest
money deposit (the "Fremont Earnest Money"). Wells Fund XI contributed
$1,000,000 of the Fremont Earnest Money as a capital contribution to the
Fund X-XI Joint Venture and, as of July 21, 1998, held an equity
percentage interest in the Fund X-XI Joint Venture of 50%; and Wells Fund
X contributed $1,000,000 of the Fremont Earnest Money as a capital
contribution to the Fund X-XI Joint Venture and, as of July 21, 1998, held
an equity percentage interest in the Fund X-XI Joint Venture of 50%. Wells
Development contributed the Fremont Earnest Money it received from the
Fund X-XI Joint Venture to the Fremont Joint Venture as its initial
capital contribution, and Wells OP simultaneously contributed $995,480 to
the Fremont Joint Venture as its initial capital contribution.

Cash flow distributions allocable by the Fremont Joint Venture to Wells
Development will be credited as a purchase price adjustment or paid to the
Fund X-XI Joint Venture at the closing of the acquisition of the Fremont
JV Interest from Wells Development since Wells Development is prohibited
from making any profit on the transaction during the holding period. The
Fund X-XI Joint Venture will have no property rights in the Fairchild
Building prior to closing nor any potential liability on the Fairchild
Loan, which will be paid off prior to closing.

Rental Revenues

Rental income from the lease is recognized on a straight-line basis over
the life of the lease.

2.    BASIS OF ACCOUNTING

The accompanying statement of revenues over certain operating expenses is
presented on the accrual basis. This statement has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for real estate properties acquired. Accordingly, the
statement excludes certain historical expenses, such as interest,
depreciation, and management fees, not comparable to the operations of the
Fairchild Building after acquisition by Wells/Fremont.

F-12

WELLS REAL ESTATE INVESTMENT TRUST, INC.

(Unaudited Pro Forma Financial Statements)

The following unaudited pro forma balance sheet as of June 30, 1998 and the pro
forma statements of (loss) income for the year ended December 31, 1997 and six
months ended June 30, 1998 have been prepared to give effect to the following
transaction as if each occurred as of June 30, 1998 with respect to the balance
sheet and on January 1, 1997 with respect to the statements of (loss) income :
(i) Wells Real Estate Investment Trust, Inc.'s adjusted equity interest in the
Fund IX, Fund X, Fund XI, and REIT Joint Venture ("Joint Venture") (a joint
venture between Wells Real Estate Fund IX, L.P., Wells Real Estate Fund X, L.P.,
Wells Real Estate Fund XI, L.P., and Wells Operating Partnership, L.P. and
formerly Fund IX--Fund X Associates) after giving effect to the Joint Venture's
acquisition of the Lucent Building and the contribution by Wells Real Estate
Fund X, L.P. of the Iomega Building to the Joint Venture; (ii) the acquisition
of the Cort Furniture Building by Wells/Orange County Associates (a joint
venture between Wells Operating Partnership, L.P. and Wells Development
Corporation), and (iii) the acquisition of the Fairchild Building by
Wells/Fremont Associates (a joint venture between Wells Operating Partnership,
L.P. and Wells Development Corporation).

These unaudited pro forma financial statements are prepared for informational
purposes only and are not necessarily indicative of future results or of actual
results that would have been achieved had the acquisition been consummated at
the beginning of the period presented.

The pro forma financial statements are based on available information and
certain assumptions that management believes are reasonable. Final adjustments
may differ from the pro forma adjustments herein.

F-13

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA BALANCE SHEET

JUNE 30, 1998

(Unaudited)

Pro Forma Adjustments
Wells      ----------------------------------
Real Estate                        Cort
Investment     Fairchild         Furniture           Pro Forma
Trust, Inc.    Building          Building              Total
===========   ===============   ================    ===========

ASSETS:
Investment in joint venture                           $ 1,472,065   $ 1,039,082(a)    $   175,001(d)      $ 2,686,148
Cash and cash equivalents                               1,112,656      (995,480)(b)      (117,176)(e)               0
Deferred project costs                                     34,651       (34,651)(c)             0                   0
Deferred offering costs                                   604,201             0                 0             604,201
Due from affiliates                                        15,307             0                 0              15,307
Prepared expenses and other assets                         10,000             0                 0              10,000
-----------   ---------------   ----------------    -----------
Total assets                                        3,248,880         8,951            57,825           3,315,656
===========   ===============   ================    ===========
LIABILITIES:
Sales commission payable                                   33,675             0                 0              33,675
Due to affiliate                                          655,160         8,951(c)         57,825(e,f)        721,936
-----------   ---------------   ----------------    -----------
Total liabilities                                     688,835         8,951            57,825             755,611
-----------   ---------------   ----------------    -----------
MINORITY INTEREST OF UNIT HOLDER IN
OPERATING PARTNERSHIP                                     200,000             0                 0             200,000
-----------   ---------------   ----------------    -----------
SHAREHOLDERS' EQUITY:
Common shares, $.01 par value; 40,000,000 shares
authorized, 268,459 shares issued and outstanding         2,685             0                 0               2,685
Additional paid-in capital                              2,346,461             0                 0           2,346,461
Retained earnings                                          10,899             0                 0              10,899
-----------   ---------------   ----------------    -----------
Total shareholder's equity                          2,360,045             0                 0           2,360,045
-----------   ---------------   ----------------    -----------
Total liabilities and shareholder's equity        $ 3,248,880   $     8,951       $    57,825         $ 3,315,656
===========   ===============   ================    ===========

(a)   Reflects Wells Operating Partnership, L.P.'s contribution to
Wells/Fremont Associates.

(b)   Reflects Wells Operating Partnership, L.P.'s portion of the
$8,900,000 purchase price related to the Fairchild Building.

(c)   Reflects deferred project costs allocated to Wells Operating
Partnership, L.P.'s investment in Wells/Fremont Associates

(d)   Reflects Wells Operating Partnership, L.P.'s contribution to
Wells/Orange County Associates.

(e)   Reflects Wells Operating Partnership, L.P.'s portion of the
$6,400,000 purchase price related to the Cort Furniture
Building.

(f)   Reflects deferred project costs allocated to Wells Operating
Partnership, L.P.'s investment in Wells/Orange County
Associates.

F-14

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 1997

(Unaudited)

Pro Forma Adjustments
Wells     -----------------------------------------------
Real Estate  Fund IX, Fund X,                      Cort           Pro
Investment   Fund XI and REIT   Fairchild       Furniture        Forma
Trust, Inc.    Joint Venture    Building         Building        Total
===========  ================   =============   ============   ========= 

REVENUES:                                                                    
Equity in income (loss) of joint venture      $0          $  12,341(a)     $(203,458)(b)   $  18,252(c)   $(172,865)

EXPENSES                                         0                  0                0               0              0
===========  ================   =============   ============   ========= 
NET INCOME (LOSS)                               $0          $  12,341        $(203,458)      $  18,252      $(172,865)
===========  ================   =============   ============   ========= 

INCOME (LOSS) PER SHARE (basic and diluted)     $0          $  123.41        $(2,034.58)     $  182.52      $(1,728.65)
===========  ================   =============   ============   ========= 

(a)   Reflects Wells Operating Partnership, L.P.'s 3.9% equity in
earnings of Fund IX, Fund X, Fund XI, and REIT Joint Venture
which totaled $316,445 after giving effect to the contribution
by Wells Real Estate Fund X of the Iomega Building to the
Joint Venture. The pro forma adjustments result from rental
revenues less operating expenses, management fees, and
depreciation expense.

(b)   Reflects Wells Operating Partnership, L.P.'s 33.3% equity in
net loss of Wells/Fremont Associates which totaled $610,374.
The pro forma adjustments result from rental revenues less
operating expenses, management fees, depreciation, and
interest expense.

(c)   Reflects Wells Operating Partnership, L.P.'s 10% equity in
earnings of Wells/Orange County Associates which totaled
$182,520. The pro forma adjustments result from rental
revenues less operating expenses, management fees,
depreciation, and interest expense.

F-15

WELLS REAL ESTATE INVESTMENT TRUST, INC.

PRO FORMA STATEMENT OF INCOME

FOR THE SIX MONTHS ENDED JUNE 30, 1998

(Unaudited)

Pro Forma Adjustments
--------------------------------------------
Wells          Fund IX,
Real Estate   Fund X, Fund XI,                     Cort        Pro
Investment     and REIT Joint     Fairchild     Furniture     Forma
Trust, Inc.       Venture          Building      Building     Total
===========   ================   ===========   ===========   =======

REVENUES:
Equity in income of joint ventures     $  6,631        $33,348(a)      $12,201(b)     $9,848(c)   $62,028
Interest income                           4,286              0               0             0        4,286
-----------   ----------------   -----------   -----------   -------
10,917         33,348          12,201         9,848       66,314

EXPENSES:
Office expense                               18              0               0             0           18
-----------   ----------------   -----------   -----------   -------
NET INCOME                                  $10,899        $33,348         $12,201        $9,848      $66,296
===========   ================   ===========   ===========   =======

EARNINGS PER SHARE (basic and diluted)        $0.04          $0.12           $0.05         $0.04        $0.25
===========   ================   ===========   ===========   =======

(a)   Reflects Wells Operating Partnership, L.P.'s 3.9% equity in
earnings of Fund IX, Fund X, Fund XI, and REIT Joint Venture
which totaled $855,066 after giving effect to the Joint
Venture's acquisition of the Lucent Building and the
contribution by Wells Real Estate Fund X of the Iomega
Building to the Joint Venture.. The pro forma adjustments
result from rental revenues less operating expenses,
management fees, depreciation, and amortization.

(b)   Reflects Wells Operating Partnership, L.P.'s 33.3% equity in
earnings of Wells/Fremont Associates which totaled $36,606.
The pro forma adjustments result from rental revenues less
operating expenses, management fees, depreciation, and
interest expense.

(c)   Reflects Wells Operating Partnership, L.P.'s 10% equity in
earnings of Wells/Orange County Associates which totaled
$98,480. The pro forma adjustments result from rental revenues
less operating expenses, management fees, depreciation, and
interest expense.

F-16

PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

Items 31 through 35 and Item 37 of Part II are incorporated by reference to the
Registrant's Registration Statement, as amended to date, Commission File No.
333-32099.

Item 36     Financial Statements and Exhibits.

(a)   Financial Statements:

The following financial statements of Wells Real Estate
Investment Trust, Inc. are filed as part of this Registration
Statement and are included in the Prospectus:

Audited Balance Sheet

(1)   Report of Independent Public Accountants,
(2)   Consolidated Balance Sheet as of December 31,
1997, and
(3)   Notes to Consolidated Balance Sheet.

The following financial statements of Fund IX and X Associates
are filed as part of this Registration Statement and are
included in Supplement No. 2 to the Prospectus:

Financial Statements

(1)   Report of Independent Public Accountants,
(2)   Balance Sheets as of March 31, 1998 (Unaudited)
and December 31, 1997 (Audited),
(3)   Statements of Income (Loss) for the three months
ended March 31, 1998 (Unaudited) and the Period
from Inception (March 20, 1997) to December 31,
1997 (Audited),
(4)   Statements of Partners' Capital for the three
months ended March 31, 1998 (Unaudited) and the
Period from Inception (March 20, 1997) to December
31, 1997 (Audited),
(5)   Statements of Cash Flows for the three months
ended March 31, 1998 (Unaudited) and the Period
from Inception (March 20, 1997) to December 31,
1997 (Audited), and
(6)   Notes to Financial Statements.

The following financial statements relating to the acquisition
of the Lucent Building by the Joint Venture are filed as part
of this Registration Statement and included in Supplement No.
2 to the Prospectus:

Audited Statement of Revenues Over Operating Expenses

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Operating Expenses for
the three months ended March 31, 1998, and
(3)   Notes to Statement of Revenues Over Operating
Expenses for the three months ended March 31,
1998.

The following unaudited pro forma financial statements of
Wells Real Estate Investment Trust, Inc. are filed as part of
this Registration Statement and are included in Supplement No.
2 to the Prospectus:

Unaudited Pro Forma Financial Statements

(1)   Summary of Unaudited Pro Forma Financial
Statements,
(2)   Pro Forma Balance Sheet as of March 31, 1998,

II-1

(3)   Pro Forma Statement of Loss for the year ended
December 31, 1997, and
(4)   Pro Forma Statement of Income for the three months
ended March 31, 1998.

The following financial statements relating to the acquisition
of the Iomega Building by the IX-X-XI-REIT Joint Venture are
filed as part of this Registration Statement and included in
Supplement No. 3 to the Prospectus:

Statement of Revenues Over Operating Expenses

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1997
(Audited) and for the six months ended June 30,
1998 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain
Operating Expenses for the year ended December 31,
1997 (Audited) and for the six months ended June
30, 1998 (Unaudited).

The following financial statements relating to the acquisition
of the Cort Furniture Building by the Cort Joint Venture are
filed as part of this Registration Statement and included in
Supplement No. 3 to the Prospectus:

Statement of Revenues Over Operating Expenses

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1997
(Audited) and for the six months ended June 30,
1998 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain
Operating Expenses for the year ended December 31,
1997 (Audited) and for the six months ended June
30, 1998 (Unaudited).

The following financial statements relating to the acquisition
of the Fairchild Building by the Fremont Joint Venture are
filed as part of this Registration Statement and included in
Supplement No. 3 to the Prospectus:

Statement of Revenues Over Operating Expenses

(1)   Report of Independent Public Accountants,
(2)   Statement of Revenues Over Certain Operating
Expenses for the year ended December 31, 1997
(Audited) and for the six months ended June 30,
1998 (Unaudited), and
(3)   Notes to Statement of Revenues Over Certain
Operating Expenses for the year ended December 31,
1997 (Audited) and for the six months ended June
30, 1998 (Unaudited).

The following unaudited pro forma financial statements of
Wells Real Estate Investment Trust, Inc. are filed as part of
this Registration Statement and are included in Supplement No.
3 to the Prospectus:

Unaudited Pro Forma Financial Statements

(1)   Summary of Unaudited Pro Forma Financial
Statements,
(2)   Pro Forma Balance Sheet as of June 30, 1998,
(3)   Pro Forma Statement of Income (Loss) for the 
year ended December 31, 1997, and
(4)   Pro Forma Statement of Income for the 
six months ended June 30, 1998.

II-2

(b)   Exhibits (See Exhibit Index):

Exhibit No.       Description
- -----------       -----------

1.1               Form of Dealer Manager Agreement between the Registrant and
Wells Investment Securities, Inc. (previously filed and
incorporated by reference to the Registrant's Registration
Statement on Form S-11, as amended to date, Commission File
No. 333-32099)

3.1               Form of Amended and Restated Articles of Incorporation of the
Registrant (previously filed and incorporated by reference to
the Registrant's Registration Statement on Form S-11, as
amended to date, Commission File No. 333-32099)

3.2               Bylaws of the Registrant (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

4.1               Form of Subscription Agreement and Subscription Agreement
Signature Page (included as Exhibit B to Prospectus)

4.2               Form of Dividend Reinvestment Plan (included as Exhibit C to
Prospectus)

5.1               Form of Opinion of Hunton & Williams (previously filed and
incorporated by reference to the Registrant's Registration
Statement on Form S-11, as amended to date, Commission File
No. 333-32099)

8.1               Form of Opinion of Hunton & Williams as to Tax Matters
(previously filed and incorporated by reference to the
Registrant's Registration Statement on Form S-11, as amended
to date, Commission File No. 333-32099)

10.1              Form of Agreement of Limited Partnership of Wells Operating
Partnership, L.P. (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.2              Form of Escrow Agreement (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.3              Form of Advisory Agreement (previously filed and incorporated
by reference to the Registrant's Registration Statement on
Form S-11, as amended to date, Commission File No. 333-32099)

10.3(a)           First Amendment to Advisory Agreement dated June 1, 1998
(previously filed and incorporated by reference to the
Registrant's Registration Statement on Form S-11, as amended
to date, Commission File No. 333-32099)

10.4              Amended and Restated Joint Venture Agreement of The Fund IX,
Fund X, Fund XI and REIT Joint Venture (the "IX-X-XI-REIT
Joint Venture") dated June 11, 1998 (previously filed and
incorporated by reference to the Registrant's Registration
Statement on Form S-11, as amended to date, Commission File
No. 333-32099)

10.5              Lease Agreement for the ABB Building dated December 10, 1996
between the IX-X-XI-REIT Joint Venture (as successor in
interest by assignment) and ABB Flakt, Inc. (previously filed
as Exhibit 10(kk) and incorporated by reference to the
Registration Statement on Form S-11 of Wells Real Estate Fund
VIII, L.P. and Wells Real Estate Fund IX, L.P., as amended,
Commission File No. 33-83852)

II-3

10.6              Agreement for the Purchase and Sale of Real Property relating
to the Ohmeda Building dated November 14, 1997 between Lincor
Centennial, Ltd. and Wells Real Estate Fund X, L.P.
(previously filed and incorporated by reference to the
Registrant's Registration Statement on Form S-11, as amended
to date, Commission File No. 333-32099)

10.7              Agreement for the Purchase and Sale of Property relating to
the Interlocken Building dated February 11, 1998 between Orix
Prime West Broomfield Venture and Wells Development
Corporation (previously filed and incorporated by reference to
the Registrant's Registration Statement on Form S-11, as
amended to date, Commission File No. 333-32099)

10.8              Agreement for the Purchase and Sale of Real Property relating
to the Lucent Building dated May 30, 1997 between Wells
Development Corporation and the IX-X-XI-REIT Joint Venture
(previously filed as Exhibit 10(k) and incorporated by
reference to the Registration Statement on Form S-11 of Wells
Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.,
as amended to date, Commission File No. 333-7979)

10.8(a)           First Amendment to the Agreement for the Purchase and Sale of
Real Property relating to the Lucent Building dated April 21,
1998 between Wells Development Corporation and the IX-X-XI-
REIT Joint Venture (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.9              Development Agreement relating to the Lucent Building dated
May 30, 1997 between Wells Development Corporation and ADEVCO
Corporation (previously filed as Exhibit 10(m) and
incorporated by reference to the Registration Statement on
Form S-11 of Wells Real Estate Fund X, L.P. and Wells Real
Estate Fund XI, L.P., as amended to date, Commission File No.
333- 7979)

10.10             Net Lease Agreement for the Lucent Building dated May 30, 1997
between the IX-X-XI-REIT Joint Venture (as successor in
interest by assignment) and Lucent Technologies, Inc.
(previously filed as Exhibit 10(l) and incorporated by
reference to the Registration Statement on Form S-11 of Wells
Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.,
as amended to date, Commission File No. 333-7979)

10.10(a)          First Amendment to Net Lease Agreement for the Lucent Building
dated March 30, 1998 between the IX-X-XI-REIT Joint Venture
(as successor in interest by assignment) and Lucent
Technologies, Inc. (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.11             Purchase and Sale Agreement relating to the Iomega Building
dated February 4, 1998 between the IX-X-XI-REIT Joint Venture
and SCI Development Services Incorporated, filed herewith

10.12             Lease Agreement for the Iomega Building dated April 9, 1996
between the IX-X-XI-REIT Joint Venture (as successor in
interest by assignment) and Iomega Corporation, filed herewith

10.13             Agreement for the Purchase and Sale of Property relating to
the Fairchild Building dated June 8, 1998 between the Fremont
Joint Venture (as successor in interest by assignment) and
Rose Ventures V, Inc., Thomas G. Haury and Carleen S. Haury,
filed herewith

10.14             Restatement of and First Amendment to Agreement for the
Purchase and Sale of Property relating to the Fairchild
Building dated July 1, 1998 between the Fremont Joint
Venture (as successor in interest by assignment) and Rose
Ventures V, Inc., Thomas G. Haury and Carleen S. Haury, filed
herewith

10.15             Promissory Note for $5,960,000 from the Fremont Joint Venture
to NationsBank, N.A. relating to the Fairchild Building dated
July 16, 1998, filed herewith

II-4

10.16             Deed of Trust securing the Fairchild Building dated July 16,
1998 between the Fremont Joint Venture and NationsBank, N.A.,
filed herewith

10.17             Joint Venture Agreement of Wells/Fremont Associates (the
"Fremont Joint Venture") dated July 15, 1998 between Wells
Development Corporation and Wells Operating Partnership, L.P.,
filed herewith

10.18             Joint Venture Agreement of Fund X and Fund XI Associates (the
"Fund X-XI Joint Venture") dated July 15, 1998 between the
Registrant and Wells Real Estate Fund X, L.P., filed herewith

10.19             Agreement for the Purchase and Sale of Joint Venture Interest
relating to the Fremont Joint Venture dated July 17, 1998
between Wells Development Corporation and the Fund X-XI Joint
Venture, filed herewith

10.20             Lease Agreement for the Fairchild Building dated September 19,
1997 between the Fremont Joint Venture (as successor in
interest by assignment) and Fairchild Technologies USA, Inc.,
filed herewith

10.21             Purchase and Sale Agreement and Joint Escrow Instructions
relating to the Cort Furniture Building dated June 12, 1998
between the Cort Joint Venture (as successor in interest by
assignment) and Spencer Fountain Valley Holdings, Inc., filed
herewith

10.22             First Amendment to Purchase and Sale Agreement and Joint
Escrow Instructions relating to the Cort Furniture Building
dated July 16, 1998 between the Cort Joint Venture (as
successor in interest by assignment) and Spencer Fountain
Valley Holdings, Inc., filed herewith

10.23             Promissory Note for $4,875,000 from the Cort Joint Venture to
NationsBank, N.A. relating to the Cort Furniture Building
dated July 30, 1998, filed herewith

10.24             Deed of Trust securing the Cort Furniture Building dated July
30, 1998 between the Fremont Joint Venture and NationsBank,
N.A., filed herewith

10.25             Joint Venture Agreement of Wells/Orange County Associates (the
"Cort Joint Venture") dated July 27, 1998 between Wells
Development Corporation and Wells Operating Partnership, L.P.,
filed herewith

10.26             Agreement for the Purchase and Sale of Joint Venture Interest
relating to the Cort Joint Venture dated July 30, 1998
between Wells Development Corporation and the Fund X-XI Joint
Venture, filed herewith

23.1              Consent of Hunton & Williams (included in Exhibits 5.1 and
8.1)

23.2              Consent of Arthur Andersen LLP, filed herewith

24.1              Power of Attorney , filed herewith

II-5

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 the
requirements for filing on Form S-11 and has duly caused this Post-Effective
Amendment No. 3 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Norcross, and State of
Georgia, on the 29th day of July, 1998.

WELLS REAL ESTATE INVESTMENT TRUST, INC.
A Maryland corporation
(Registrant)

By: /s/ Leo F. Wells, III
------------------------------------
Leo F. Wells, III
President

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment No. 3 to Registration Statement has been signed below
on July 29, 1998 by the following persons in the capacities indicated.

/s/ Leo F. Wells, III               President and Director
- --------------------------------    (Principal Executive Officer)
Leo F. Wells, III

/s/ Brian M. Conlon                 Executive Vice President and Director
- --------------------------------    (Principal Financial and Accounting Officer)
Brian M. Conlon                     

/s/ Walter W. Sessoms          *    Director
- --------------------------------
Walter W. Sessoms

/s/ John L. Bell               *    Director
- --------------------------------
John L. Bell

/s/ Richard W. Carpenter       *    Director
- --------------------------------
Richard W. Carpenter

/s/ Bud S. Carter              *    Director
- --------------------------------
Bud Carter

/s/ Donald S. Moss             *    Director
- --------------------------------
Donald S. Moss

/s/ Neil H. Strickland         *    Director
- --------------------------------
Neil H. Strickland

/s/ William H. Keogler, Jr.    *    Director
- --------------------------------
William H. Keogler, Jr.

* By Brian M. Conlon, Attorney-in-fact, pursuant to Power of Attorney dated
May 7, 1998 and included as Exhibit 24.1 herein.

EXHIBIT INDEX

Sequential
Exhibit No.       Description
- -----------       -----------

1.1               Form of Dealer Manager Agreement between the Registrant and
Wells Investment Securities, Inc. (previously filed and
incorporated by reference to the Registrant's Registration
Statement on Form S-11, as amended to date, Commission File
No. 333-32099)

3.1               Form of Amended and Restated Articles of Incorporation of the
Registrant (previously filed and incorporated by reference to
the Registrant's Registration Statement on Form S-11, as
amended to date, Commission File No. 333-32099)

3.2               Bylaws of the Registrant (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

4.1               Form of Subscription Agreement and Subscription Agreement
Signature Page (included as Exhibit B to Prospectus)

4.2               Form of Dividend Reinvestment Plan (included as Exhibit C to
Prospectus)

5.1               Form of Opinion of Hunton & Williams (previously filed and
incorporated by reference to the Registrant's Registration
Statement on Form S-11, as amended to date, Commission File
No. 333- 32099)

8.1               Form of Opinion of Hunton & Williams as to Tax Matters
(previously filed and incorporated by reference to the
Registrant's Registration Statement on Form S-11, as amended
to date, Commission File No. 333-32099)

10.1              Form of Agreement of Limited Partnership of Wells Operating
Partnership, L.P. (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.2              Form of Escrow Agreement (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.3              Form of Advisory Agreement (previously filed and incorporated
by reference to the Registrant's Registration Statement on
Form S-11, as amended to date, Commission File No. 333-32099)

10.3(a)           First Amendment to Advisory Agreement dated June 1, 1998
(previously filed and incorporated by reference to the
Registrant's Registration Statement on Form S-11, as amended
to date, Commission File No. 333-32099)

10.4              Amended and Restated Joint Venture Agreement of The Fund IX,
Fund X, Fund XI and REIT Joint Venture (the "IX-X-XI-REIT
Joint Venture") dated June 11, 1998 (previously filed and
incorporated by reference to the Registrant's Registration
Statement on Form S-11, as amended to date, Commission File
No. 333-32099)

10.5              Lease Agreement for the ABB Building dated December 10, 1996
between the IX-X-XI-REIT Joint Venture (as successor in
interest by assignment) and ABB Flakt, Inc. (previously filed
as Exhibit 10(kk) and incorporated by reference to the
Registration Statement on Form S-11 of Wells Real Estate Fund
VIII, L.P. and Wells Real Estate Fund IX, L.P., as amended,
Commission File No. 33-83852)

10.6              Agreement for the Purchase and Sale of Real Property relating
to the Ohmeda Building dated November 14, 1997 between Lincor
Centennial, Ltd. and Wells Real Estate Fund X, L.P.
(previously filed and incorporated by reference to the
Registrant's Registration Statement on Form S-11, as amended
to date, Commission File No. 333-32099)

10.7              Agreement for the Purchase and Sale of Property relating to
the Interlocken Building dated February 11, 1998 between Orix
Prime West Broomfield Venture and Wells Development
Corporation (previously filed and incorporated by reference to
the Registrant's Registration Statement on Form S-11, as
amended to date, Commission File No. 333-32099)

10.8              Agreement for the Purchase and Sale of Real Property relating
to the Lucent Building dated May 30, 1997 between Wells
Development Corporation and the IX-X-XI-REIT Joint Venture
(previously filed as Exhibit 10(k) and incorporated by
reference to the Registration Statement on Form S-11 of Wells
Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.,
as amended to date, Commission File No. 333-7979)

10.8(a)           First Amendment to the Agreement for the Purchase and Sale of
Real Property relating to the Lucent Building dated April 21,
1998 between Wells Development Corporation and the IX-X-XI-
REIT Joint Venture (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.9              Development Agreement relating to the Lucent Building dated
May 30, 1997 between Wells Development Corporation and ADEVCO
Corporation (previously filed as Exhibit 10(m) and
incorporated by reference to the Registration Statement on
Form S-11 of Wells Real Estate Fund X, L.P. and Wells Real
Estate Fund XI, L.P., as amended to date, Commission File No.
333- 7979)

10.10             Net Lease Agreement for the Lucent Building dated May 30, 1997
between the IX-X-XI-REIT Joint Venture (as successor in
interest by assignment) and Lucent Technologies, Inc.
(previously filed as Exhibit 10(l) and incorporated by
reference to the Registration Statement on Form S-11 of Wells
Real Estate Fund X, L.P. and Wells Real Estate Fund XI, L.P.,
as amended to date, Commission File No. 333-7979)

10.10(a)          First Amendment to Net Lease Agreement for the Lucent Building
dated March 30, 1998 between the IX-X-XI-REIT Joint Venture
(as successor in interest by assignment) and Lucent
Technologies, Inc. (previously filed and incorporated by
reference to the Registrant's Registration Statement on Form
S-11, as amended to date, Commission File No. 333-32099)

10.11             Purchase and Sale Agreement relating to the Iomega Building
dated February 4, 1998 between the IX-X-XI-REIT Joint Venture
and SCI Development Services Incorporated, filed herewith

10.12             Lease Agreement for the Iomega Building dated April 9, 1996
between the IX-X-XI-REIT Joint Venture (as successor in
interest by assignment) and Iomega Corporation, filed herewith

10.13             Agreement for the Purchase and Sale of Property relating to
the Fairchild Building dated June 8, 1998 between the Fremont
Joint Venture (as successor in interest by assignment) and
Rose Ventures V, Inc., Thomas G. Haury and Carleen S. Haury,
filed herewith

10.14             Restatement of and First Amendment to Agreement for the
Purchase and Sale of Property relating to the Fairchild
Building dated July 1, 1998 between the Fremont Joint
Venture (as successor in interest by assignment) and Rose
Ventures V, Inc., Thomas G. Haury and Carleen S. Haury, filed
herewith

10.15             Promissory Note for $5,960,000 from the Fremont Joint Venture
to NationsBank, N.A. relating to the Fairchild Building dated
July 16, 1998, filed herewith

10.16             Deed of Trust securing the Fairchild Building dated July 16,
1998 between the Fremont Joint Venture and NationsBank, N.A.,
filed herewith

10.17             Joint Venture Agreement of Wells/Fremont Associates (the
"Fremont Joint Venture") dated July 15, 1998 between Wells
Development Corporation and Wells Operating Partnership, L.P.,
filed herewith

10.18             Joint Venture Agreement of Fund X and Fund XI Associates (the
"Fund X-XI Joint Venture") dated July 15, 1998 between the
Registrant and Wells Real Estate Fund X, L.P., filed herewith

10.19             Agreement for the Purchase and Sale of Joint Venture Interest
relating to the Fremont Joint Venture dated July 17, 1998
between Wells Development Corporation and the Fund X-XI Joint
Venture, filed herewith

10.20             Lease Agreement for the Fairchild Building dated September 19,
1997 between the Fremont Joint Venture (as successor in
interest by assignment) and Fairchild Technologies USA, Inc.,
filed herewith

10.21             Purchase and Sale Agreement and Joint Escrow Instructions
relating to the Cort Furniture Building dated June 12, 1998
between the Cort Joint Venture (as successor in interest by
assignment) and Spencer Fountain Valley Holdings, Inc., filed
herewith

10.22             First Amendment to Purchase and Sale Agreement and Joint
Escrow Instructions relating to the Cort Furniture Building
dated July 16, 1998 between the Cort Joint Venture (as
successor in interest by assignment) and Spencer Fountain
Valley Holdings, Inc., filed herewith

10.23             Promissory Note for $4,875,000 from the Cort Joint Venture to
NationsBank, N.A. relating to the Cort Furniture Building
dated July 30, 1998, filed herewith

10.24             Deed of Trust securing the Cort Furniture Building dated July
30, 1998 between the Fremont Joint Venture and NationsBank,
N.A., filed herewith

10.25             Joint Venture Agreement of Wells/Orange County Associates (the
"Cort Joint Venture") dated July 27, 1998 between Wells
Development Corporation and Wells Operating Partnership, L.P.,
filed herewith

10.26             Agreement for the Purchase and Sale of Joint Venture Interest
relating to the Cort Joint Venture dated July 30, 1998
between Wells Development Corporation and the Fund X-XI Joint
Venture, filed herewith

23.1              Consent of Hunton & Williams (included in Exhibits 5.1 and
8.1)

23.2              Consent of Arthur Andersen LLP, filed herewith

24.1              Power of Attorney, filed herewith

EXHIBIT 10.11

PURCHASE AND SALE AGREEMENT

BETWEEN THE IX-X-XI-REIT JOINT VENTURE

AND

SCI DEVELOPMENT SERVICES INCORPORATED

PURCHASE AND SALE AGREEMENT
Ogden Distribution Center (Iomega Building)

ARTICLE 1: PROPERTY/PURCHASE PRICE

1.1   Certain Basic Terms.

(a)   Purchaser and Notice Address:

WELLS DEVELOPMENT CORPORATION, a Georgia 
corporation
Attn: Michael C. Berndt
3885 Holcomb Bridge Road
Norcross, Georgia 30092
Telephone: 800-448-1010
Facsimile: 770-840-7224

With a copy to:   O'Callaghan & Stumm, LLP
Attn: William L. O'Callaghan, Jr.
127 Peachtree Street, N.E., Suite 1330
Atlanta, Georgia 30303
Telephone: 404/522-2002
Facsimile: 404/522-3080

(b)   Seller and Notice Address:

SCI Development Services Incorporated, a
Delaware corporation
Attn: Mark Degner
14100 East 35th Place
Aurora, Colorado 80011
Telephone: 303/576-2621
Facsimile: 303/576-2602

With a copy to:   Mayer, Brown & Platt
Attn: George Ruhlen
141 East Palace Avenue
Santa Fe, New Mexico 87501
Telephone: 505/820-8185
Facsimile: 505/820-7334

(c)   Date of this      The date of execution by Seller or Purchaser, as 
Agreement:        indicated on the signature page.                 

(d)   Purchase Price:   $5,025,000

(e)   Earnest Money:    $50,000, including interest thereon.

(f)   Due Diligence     The period ending 45 days after the date of this
Period:           Agreement.                                       

(g)   Closing Date:     The later of April 1, 1998 and the date which is 3
days after the end of the Due Diligence Period.

(h)   Title Company:    Chicago Title Insurance Company Attn: Frank Jansen
700 South Flower Street, Suite 920 Los Angeles,
California 90017 Telephone: 213/488-4346
Facsimile: 213/891-0834

(i)   Escrow Agent:     Founders Title
1133 North Main Street
Layton, Utah 84041
Attn: Jim Morris
Telephone: 801/546-0606
Facsimile: 801/546-0635

(j)   Broker:           The Royston Group

1.2 Property. Subject to the terms of this Purchase and Sale Agreement
(the "Agreement"), Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase from Seller, the following property (the "Property"):

(a) The real property described in Exhibit A, together with the buildings
and improvements thereon (the "Improvements"), and all appurtenances of the
above-described real property, including easements or rights-of-way relating
thereto, and, without warranty, all right, title, and interest, if any, of
Seller in and to the land lying within any street or roadway adjoining the real
property described above or any vacated or hereafter vacated street or alley
adjoining said real property.

(b) All of Seller's right, title and interest, in and to all fixtures,
furniture, equipment, and other tangible personal property, if any, owned by
Seller (the "Personal Property") presently located on such property, but
specifically excluding any items of personal property owned by tenants.

(c) All of Seller's interest, as landlord, in the "Lease," being all
leases of the Improvements, and all leases which may be made by Seller after the
date hereof and before Closing as permitted by this Agreement, including all
amendments thereto.

(d) All of Seller's right, title and interest, if any, in and to all of
the following items, to the extent assignable and without warranty (the
"Intangible Personal Property"): (A) licenses, and permits relating to the
operation of the Property, (B) the right to use the name of the property (if
any) in connection with the Property, but specifically excluding any trademarks,
service marks and trade names of Seller and with reservation by Seller to use
such name in connection with other property owned by Seller in the vicinity of
the Property, and (C) if still in effect, guaranties and warranties received by
Seller from any contractor, manufacturer or other person in connection with the
construction or operation of the Property.

1.3 Earnest Money. The Earnest Money, in immediately available federal
funds, evidencing Purchaser's good faith to perform Purchaser's obligations
under this Agreement, shall be deposited by Purchaser with the Escrow Agent not
later than the second business day after the execution of this Agreement. In the
event that Purchaser fails to timely deposit the Earnest Money with the Escrow
Agent, this Agreement shall be of no force and effect. The Escrow Agent shall
pay the Earnest Money to Seller at and upon the Closing, or otherwise, to the
party entitled to receive the Earnest Money in accordance Article 9.

ARTICLE 2: INSPECTIONS

2.1 Property Information. Seller shall provide copies to Purchaser, within
5 days after the date of this Agreement, to the extent in Seller's possession,
the following ("Property Information"):

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(a) the Lease including all amendments;

(b) 1996, 1997 and year to date operating statements (the "Operating
Statements");

(c) a list and copies of any management, service or maintenance
agreements, if any, relating to the Property ("Service Contracts");

(d) any existing title reports, tax bills and land title survey of the
Property; and

(e) any environmental, architectural and engineering reports prepared for
Seller and, to Seller's knowledge, in its possession in connection with Seller's
purchase, ownership or management of the Property.

Except as otherwise expressly provided herein, Seller makes no
representations or warranties as to the accuracy or completeness of the Property
Information.

2.2 Tenant Estoppel. Seller shall endeavor to secure and deliver to
Purchaser by the Closing Date an estoppel certificate for the Lease
substantially in the form attached hereto as Exhibit B. Purchaser may terminate
this Agreement if by the Closing Date Seller has not delivered such estoppel;
provided, however, Purchaser may not terminate this Agreement on the basis that
paragraphs (j), (k) and/or (l) as set foth in Exhibit B are deleted from the
estoppel certificate delivered to Seller.

2.3 Confidentiality. The Property Information and all other information,
other than matters of public record, furnished to, or obtained through
inspection of the Property by, Purchaser, its affiliates, lenders, employees or
agents relating to the Property, will be treated by Purchaser, its affiliates,
lenders, employees and agents as confidential, and will not be disclosed other
than on a need-to-know basis to Purchaser's consultants who agree to maintain
the confidentiality of such information, and will be returned to Seller by
Purchaser if the Closing does not occur.

2.4 Inspections in General. During the Due Diligence Period, Purchaser,
its agents, and employees shall have the right to enter upon the Property for
the purpose of making non-invasive inspections at Purchaser's sole risk, cost
and expense. Before any such entry, Purchaser shall provide Seller with a
certificate of insurance reasonably satisfactory to Seller. All of such entries
upon the Property shall be at reasonable times during normal business hours and
after at least 24 hours prior notice to Seller or Seller's agent, and Seller or
Seller's agent shall have the right to accompany Purchaser during any activities
performed by Purchaser on the Property. Purchaser shall not disturb the tenants
on the Property, and Purchaser's inspection shall be subject to the rights of
tenants under their Lease. At Seller's request, Purchaser shall provide Seller
with a copy of the results of any tests and inspections made by Purchaser,
excluding only market and economic feasibility studies. If any inspection or
test disturbs the Property, Purchaser will restore the Property to the same
condition as existed before the inspection or test. Purchaser shall defend,
indemnify Seller and hold Seller, Seller's trustees, officers, tenants, agents,
contractors and employees and the Property harmless from and against any and all
losses, costs, damages, claims, or liabilities, including but not limited to,
mechanic's and materialmen's liens and Seller's attorneys' fees, arising out of
or in connection with Purchaser's inspection of the Property as allowed herein.

2.5 Environmental Inspections. The inspections under Paragraph 2.4 may
include a non-invasive Phase I environmental inspection of the Property, but no
Phase II environmental inspection or other invasive inspection or sampling of
soil or materials, including without limitation construction materials, either
as part of the Phase I inspection or any other inspection, shall be performed
without the prior written consent of Seller, which may be withheld in its sole
and absolute discretion, and if consented to by Seller, the proposed scope of
work and the party who will perform the work shall be subject to Seller's review
and approval. Purchaser shall deliver to Seller copies of any Phase II or other
environmental report to which Seller consents as provided above.

2.6 Termination During Due Diligence Period. If Purchaser determines, in
its sole discretion, before the expiration of the Due Diligence Period that the
Property is unacceptable for Purchaser's purposes, Purchaser

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shall have the right to terminate this Agreement by giving to Seller notice of
termination before the expiration of the Due Diligence Period, returning the
Property Information to Seller, and delivering to Seller a certified statement
that all work which could give rise to a claim against the Property has been
paid in full. Upon such deliveries, and provided Purchaser is not in default
hereunder, Seller shall authorize the Escrow Agent to refund the Earnest Money
to Purchaser, and neither party shall have any further rights or liabilities
hereunder except for those provisions which survive the termination of this
Agreement. Return of the Property Information and repair of any damage to the
Property caused by Seller, its agents, contractors or employees shall be a
condition precedent to the return of the Earnest Money pursuant to any provision
of this Agreement providing for a return of the Earnest Money.

2.7 Purchaser's Reliance on its Investigations. To the maximum extent
permitted by applicable law and except for Seller's representations and
warranties in Paragraph 6.5 and 7.1 and the warranties of title in the Deed and
Assignment of Lease and Contracts and Bill of Sale delivered at the Closing
("Seller's Warranties"), this sale is made and will be made without
representation, covenant, or warranty of any kind (whether express, implied, or,
to the maximum extent permitted by applicable law, statutory) by Seller. As a
material part of the consideration for this Agreement, PURCHASER AGREES TO
ACCEPT THE PROPERTY ON AN "AS IS" AND "WHERE IS" BASIS, WITH ALL FAULTS, AND
WITHOUT ANY REPRESENTATION OR WARRANTY, ALL OF WHICH SELLER HEREBY DISCLAIMS,
EXCEPT FOR THE SELLER'S WARRANTIES. EXCEPT FOR SELLER'S WARRANTIES, NO WARRANTY
OR REPRESENTATION IS MADE BY SELLER AS TO (A) FITNESS FOR ANY PARTICULAR
PURPOSE, (B) MERCHANTABILITY, (C) DESIGN, (D) QUALITY, (E) CONDITION, (F)
OPERATION OR INCOME, (G) COMPLIANCE WITH DRAWINGS OR SPECIFICATIONS, (H) ABSENCE
OF DEFECTS, (I) ABSENCE OF HAZARDOUS OR TOXIC SUBSTANCES, (J) ABSENCE OF FAULTS,
(K) FLOODING, OR (L) COMPLIANCE WITH LAWS AND REGULATIONS INCLUDING, WITHOUT
LIMITATION, THOSE RELATING TO HEALTH, SAFETY, AND THE ENVIRONMENT. Purchaser
acknowledges that Purchaser has entered into this Agreement with the intention
of making and relying upon its own investigation of the physical, environmental,
economic use, compliance, and legal condition of the Property and that except
for Seller's warranties Purchaser is not now relying, and will not later rely,
upon any representations and warranties made by Seller or anyone acting or
claiming to act, by, through or under or on Seller's behalf concerning the
Property. The provisions of this Paragraph 2.7 shall survive indefinitely any
Closing or termination of this Agreement and shall not be merged into the
Closing documents.

ARTICLE 3: TITLE AND SURVEY REVIEW

3.1 Delivery of Title Report. Within 15 days of the date hereof, Seller
shall cause to be delivered to Purchaser a preliminary report or title
commitment issued by the Title Company (the "Title Report"), covering the
Property, together with copies of all documents referenced in the Title Report.
Purchaser, at its option and expense, may obtain a survey (the "Survey") of the
Property.

3.2 Title Review and Cure. Purchaser shall notify Seller in writing of any
title objections no later than 30 days after the date of this Agreement. Failure
timely to provide such a notice of objections shall constitute an approval by
Purchaser of all matters disclosed in the Title Report and any matters that
would have been disclosed by an accurate survey of the Property. Seller shall
have no obligation to cure any title objections except financings created by
Seller and/or mechanics' liens created under contracts with Seller, which liens
Seller shall cause to be released at the Closing. Seller may, but shall not be
obligated to, attempt to cure by the Closing Date any title objections noted by
Purchaser. If Seller elects not to cure any title objection, or fails to cure
any title objection by the Closing Date, then Purchaser shall either (i)
terminate this Agreement by written notice to Seller given on or before 10 days
after receipt of any notice by Seller that it elects not to cure or cannot cure
any title objections, or, if earlier, the Closing Date, and the Earnest Money
shall be refunded to Purchaser, or (ii) waive such title objections, in which
event the Closing shall occur and Purchaser shall accept title to the Property
subject to such title condition, subject to Seller's foregoing obligation to
cause its financing and mechanics' liens to be released. Failure to so terminate
shall constitute waiver of title objections other than the aforesaid financing
and mechanics liens.

4

3.3 Title Policy. At Closing, as a condition to Purchaser's obligation to
close, the Title Company shall deliver to Purchaser an Owner's Policy of Title
Insurance (the "Title Policy"), issued by the Title Company, dated the date and
time of recording of the Deed in the amount of the Purchase Price, insuring
Purchaser as owner of fee simple title to the Property, in such form as
permitted by, and subject to such exceptions as set forth in, the most current
Title Report as of the expiration of the Due Diligence Period and without
exception for any Seller financings or mechanics' liens. The Title Policy may be
delivered after Closing if that is customary in the locality and the Title
Company has provided a pro-forma policy or marked its commitment in accordance
with the above requirements.

ARTICLE 4: OPERATIONS AND RISK OF LOSS

4.1 Ongoing Operations. During the pendency of this Agreement, Seller
shall carry on its business and activities relating to the Property
substantially in the same manner as it did before the date of this Agreement.

4.2 Performance under Lease and Service Contracts. During the pendency of
this Agreement, Seller will perform its material obligations under the Lease and
Service Contracts and other agreements that may affect the Property.

4.3 New Contracts. During the pendency of this Agreement, Seller will not
enter into any contract that will be an obligation affecting the Property
subsequent to the Closing, except contracts entered into in the ordinary course
of business that are terminable without cause on 30-days' notice, without the
prior consent of the Purchaser, which shall not be unreasonably withheld or
delayed.

4.4 Damage or Condemnation. Risk of loss resulting from any condemnation
or eminent domain proceeding which is commenced or has been threatened before
the Closing, and risk of loss to the Property due to fire, flood or any other
cause before the Closing, shall remain with Seller. If before the Closing the
Property or any portion thereof shall be materially damaged, or if the Property
or any portion thereof shall be subjected to a bona fide threat of condemnation
or shall become the subject of any proceedings, judicial, administrative or
otherwise, with respect to the taking by eminent domain or condemnation, then
Purchaser may terminate this Agreement by written notice to Seller given within
5 days after Purchaser learns of the damage or taking, in which event the
Earnest Money shall be returned to Purchaser. If the Closing Date is within the
aforesaid 5-day period, then Closing shall be extended to the next business day
following the end of said 5-day period. If no such election is made, and in any
event if the damage is not material, this Agreement shall remain in full force
and effect and the purchase contemplated herein, less any interest taken by
eminent domain or condemnation, shall be effected with no further adjustment,
and upon the Closing of this purchase, Seller shall assign, transfer and set
over to Purchaser all of the right, title and interest of Seller in and to any
awards that have been or that may thereafter be made for such taking, and Seller
shall assign, transfer and set over to Purchaser any insurance proceeds that may
thereafter be made for such damage or destruction giving Purchaser a credit at
Closing for any deductible under such policies. For the purposes of this
paragraph, the phrases "Material damage" and "Materially damaged" means damage
reasonably exceeding 10 percent of the Purchase Price to repair.

ARTICLE 5: CLOSING

5.1 Closing. The consummation of the transaction contemplated herein
("Closing") shall occur on the Closing Date at the offices of the Escrow Agent.

5.2 Conditions to the Parties' Obligations to Close. The obligation of
Seller, on the one hand, and Purchaser, on the other hand, to consummate the
transaction contemplated hereunder is contingent upon the following:

5

(a) The other party's representations and warranties contained herein
shall be true and correct in all material respects as of the date of this
Agreement and the Closing Date, subject to any Seller modifications hereafter
made to a Property Representation (as defined and provided for in Paragraph
7.1);

(b) As of the Closing Date, the other party shall have performed its
obligations hereunder and all deliveries to be made at Closing have been
tendered;

(c) There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened against
the other party that would materially and adversely affect the other party's
ability to perform its obligations under this Agreement; and

(d) There shall exist no pending or threatened action, suit or proceeding
with respect to the other party before or by any court or administrative agency
which seeks to restrain or prohibit, or to obtain damages or a discovery order
with respect to, this Agreement or the consummation of the transaction
contemplated hereby.

So long as a party is not in default hereunder, if any condition to such
party's obligation to proceed with the Closing hereunder has not been satisfied
as of the Closing Date, such party may, in its sole discretion, terminate this
Agreement by delivering written notice to the other party on or before the
Closing Date, or elect to close, notwithstanding the non-satisfaction of such
condition, in which event such party shall be deemed to have waived any such
condition. If such party elects to close, notwithstanding the nonsatisfaction of
such condition, there shall be no liability on the part of the other party for
breaches of representations and warranties of which the party electing to close
had knowledge as of the Closing.

5.3 Seller's Deliveries in Escrow. On or before the Closing Date, Seller
shall deliver in escrow to the Escrow Agent the following:

(a) Deed. A special or limited warranty deed (warranting title for acts
by, through or under Seller) (the "Deed") in the form provided for under the law
of the state where the Property is located, or otherwise in conformity with the
custom in such jurisdiction and satisfactory to Seller, executed and
acknowledged by Seller, conveying, to Purchaser Seller's title to the Property,
subject only to: all zoning and building laws, ordinances, maps, resolutions,
and regulations of all governmental authorities having jurisdiction which affect
the Property and the use and improvement thereof; the Lease(s); all matters of
record; and, any state of facts which an accurate survey made of the Property at
the time of Closing would show. Any discrepancy between the description of the
Property in the deed from Seller's immediate grantor and in the Deed shall be
quitclaimed by Seller;

(b) Assignment of Lease and Contracts and Bill of Sale. An Assignment of
Lease and Service Contracts and Bill of Sale in the form of Exhibit C attached
hereto, executed by Seller;

(c) State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of real
property;

(d) FIRPTA. A Foreign Investment in Real Property Tax Act affidavit
executed by Seller;

(e) Additional Documents. Any additional documents that Escrow Agent or
the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.

5.4 Purchaser's Deliveries in Escrow. On or before the Closing Date,
Purchaser shall deliver in escrow to the Escrow Agent the following:

(a) Purchase Price. The Purchase Price, less the Earnest Money that is
applied to the Purchase Price, plus or minus applicable prorations, deposited by
Purchaser with the Escrow Agent in immediate, same-day federal funds wired for
credit into the Escrow Agent's escrow account.

6

(b) Assignment of Lease and Contracts and Bill of Sale. An Assignment of
Lease and Contracts and Bill of Sale in form of Exhibit C attached hereto,
executed by Purchaser;

(c) State Law Disclosures. Such disclosures and reports as are required by
applicable state and local law in connection with the conveyance of real
property; and

(d) Additional Documents. Any additional documents that Escrow Agent or
the Title Company may reasonably require for the proper consummation of the
transaction contemplated by this Agreement.

5.5 Closing Statements/Escrow Fees. At the Closing, Seller and Purchaser
shall deposit with the Escrow Agent executed closing statements consistent with
this Agreement in the form required by the Escrow Agent.

5.6 Title Policy. The Title Policy shall be delivered at Closing as
provided in Paragraph 3.3.

5.7 Possession. Seller shall deliver possession of the Property to
Purchaser at the Closing.

5.8 Post-Closing Deliveries. Immediately after the Closing, Seller shall
deliver to the offices of Purchaser's property manager: the original Lease(s);
copies or originals of all contracts, receipts for deposits, and unpaid bills;
all keys, if any, used in the operation of the Property; and, if in Seller's
possession or control, any certificates of occupancy or "as-built" plans and
specifications of the Improvements.

5.9 Notice to Tenants. Seller and Purchaser shall execute at Closing, and
deliver to each tenant immediately after the Closing, notices regarding the sale
in substantially in the form of Exhibit D attached hereto, or such other form as
may be required by applicable state law.

5.10 Closing Costs. Each party shall pay the following closing costs:

(a)   Title Policy:
(i)   Basic premium - Seller
(ii)  Extended coverage - Purchaser
(iii) Endorsements - Purchaser
(b)   Survey - Purchaser
(c)   Recording charges:
(i)   Instruments to remove encumbrances that Seller is
obligated or agrees to remove - Seller
(ii)  All other instruments, including the Deed - Purchaser
(e)   Other - Each party shall pay one-half of the Escrow Agent's
escrow fee and its own attorneys' fees. Purchaser shall pay
any escrow cancellation fee in the event Purchaser disapproves
the Property and elects to cancel the Escrow. If the Escrow is
cancelled in connection with a default by any party, the
defaulting party shall pay the Escrow cancellation fee. All
other costs shall be borne according to local custom.

5.11 Close of Escrow. Upon satisfaction or completion of the foregoing
conditions and deliveries, the parties shall direct the Escrow Agent to
immediately record and deliver the documents described above to the appropriate
parties and make disbursements according to the closing statements executed by
Seller and Purchaser.

ARTICLE 6: PRORATIONS

6.1 Prorations. If the Purchase Price is received by Escrow Agent by noon
on the Closing Date, the day of Closing shall belong to Purchaser and all
prorations hereinafter provided to be made as of the Closing shall each be made
as of the end of the day before the Closing Date. If the cash portion of the
Purchase Price is not so received by Escrow Agent on the Closing Date, then the
day of Closing shall belong to Seller and such proration

7

shall be made as of the end of the day that is the Closing Date. In each such
proration set forth below, the portion thereof applicable to periods beginning
as of Closing shall be credited to Purchaser or charged to Purchaser as
applicable and the portion thereof applicable to periods ending as of Closing
shall be credited to Seller or charged to Seller as applicable.

(a) Collected Rent. All collected rent (excluding tenant reimbursements
for Operating Costs, which are prorated pursuant to (b) below) and other
collected income (and any applicable state or local tax on rent) under the
Lease(s) in effect on the Closing Date shall be prorated as of the Closing.
Seller shall be charged with any rent and other income collected by Seller
before Closing but applicable to any period of time after Closing. Uncollected
rent and other income shall not be prorated. Purchaser shall apply rent and
other income from tenants that are collected after the Closing first to the
obligations then owing to Purchaser for its period of ownership and to costs of
collection, remitting the balance, if any, to Seller. Any prepaid rents for the
period following the Closing Date shall be paid over by Seller to Purchaser.
Purchaser will make reasonable efforts, without suit, to collect any rents
applicable to the period before Closing. Seller may pursue collection as to any
rent not collected by Purchaser within 6 months following the Closing Date,
provided that Seller shall have no right to terminate any Lease or any tenant's
occupancy under any Lease in connection therewith.

(b) Operating Costs. Seller, as landlord under the Lease, is currently
collecting from the tenant under the Lease additional rent to cover taxes,
insurance, utilities (to the extent not paid directly by tenants), common area
maintenance and other operating costs and expenses (collectively, "Operating
Costs") in connection with the ownership, operation, maintenance and management
of the Property. Seller and Purchaser shall each receive a debit or credit, as
the case may be, for the difference between the tenant's current account
balances for Operating Costs and amount of Operating Costs reimbursable to
Seller. Operating Costs for Seller's period of ownership shall be reasonably
estimated by the parties if final bills are not available. Operating Costs that
are not payable by the tenant either directly or reimbursable under the Lease
shall be prorated between Seller and Purchaser.

(c) Taxes and Assessments. Real estate taxes and assessments imposed by
governmental authority that are not yet due and payable and that are not
reimbursable by tenants under the Lease as Operating Costs shall be prorated as
of the Closing based upon the most recent ascertainable assessed values and tax
rates. Seller shall receive a credit for any taxes and assessments paid by
Seller and applicable to any period after the Closing.

(d) Final Adjustment After Closing. If final prorations cannot be made at
Closing for any item being prorated under this Paragraph 6.1, then Purchaser and
Seller agree to allocate such items on a fair and equitable basis as soon as
invoices or bills are available and applicable reconciliation with tenants have
been completed, with final adjustment to be made as soon as reasonably possible
after the Closing, to the effect that income and expenses are received and paid
by the parties on an accrual basis with respect to their period of ownership.
Payments in connection with the final adjustment shall be due within 30 days of
written notice. Seller shall have reasonable access to, and the right to inspect
and audit, Purchaser's books to confirm the final prorations. Seller shall not,
however, be charged for any increase in Operating Costs due to increased costs
incurred by Purchaser in respect of such subsequent to the Closing.

6.2 Service Contracts. Purchaser will assume the obligations arising from
and after the Closing Date under those Service Contracts that are not terminable
as of the Closing Date without notice, expense, or liability to Seller.

6.3 Tenant Deposit. The tenant security deposits actually received by
Seller (and interest thereon if required by law or contract to be earned
thereon) and not theretofore applied to tenant obligations under the Lease(s)
shall be transferred or credited to Purchaser at Closing or placed in escrow if
required by law. As of the Closing, Purchaser shall assume Seller's obligations
related to tenant security deposits. Purchaser will indemnify, defend, and hold
Seller harmless from and against all demands and claims made by tenants arising
out of the transfer or disposition of any security deposits and will reimburse
Seller for all attorneys' fees incurred or that may be incurred as a result of
any such claims or demands as well as for all loss, expenses, verdicts,
judgments, settlements,

8

interest, costs and other expenses incurred or that may be incurred by Seller as
a result of any such claims or demands by tenants.

6.4 Utility Deposits. Purchaser shall be responsible for making any
deposits required with utility companies.

6.5 Sale Commissions. Seller and Purchaser represent and warrant each to
the other that they have not dealt with any real estate broker, sales person or
finder in connection with this transaction other than Broker. If this
transaction is closed, Seller shall pay Broker in accordance with their separate
agreement. Broker is an independent contractor and is not authorized to make any
agreement or representation on behalf of either party. Except as expressly set
forth above, if any claim is made for broker's or finder's fees or commissions
in connection with the negotiation, execution or consummation of this Agreement
or the transactions contemplated hereby, each party shall defend, indemnify and
hold harmless the other party from and against any such claim based upon any
statement, representation or agreement of such party.

ARTICLE 7: REPRESENTATIONS AND WARRANTIES

7.1 Seller's Representations and Warranties. As a material inducement to
Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:

(a) Organization and Authority. Seller has been duly organized and is
validly existing as a Delaware corporation, in good standing in the State of
Delaware and is qualified to do business in the state in which the Property is
located. Seller has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Seller at the Closing will be,
authorized and properly executed and constitutes, or will constitute, as
appropriate, the valid and binding obligation of Seller, enforceable in
accordance with their terms.

(b) Conflicts and Pending Action. There is no agreement to which Seller is
a party or to Seller's knowledge binding on Seller which is in conflict with
this Agreement. There is no action or proceeding pending or, to Seller's
knowledge, threatened against Seller of the Property, including condemnation
proceedings, which challenges or impairs Seller's ability to execute or perform
its obligations under this Agreement.

(c) Lease. With respect to the Lease, the copy of such Lease provided to
Purchaser pursuant to Paragraph 2.1 is true, correct and complete. Seller's
representation in this Paragraph 7.1(c) shall be void and no claim shall be
actionable or enforceable with respect to any Lease for which a tenant estoppel
complying with the requirements of Paragraph 2.2 is obtained in connection with
this transaction.

(d) Service Contracts. The list of Service Contracts delivered to
Purchaser pursuant to this Agreement is true, correct, and complete as of the
date of its delivery. Neither Seller nor, to Seller's knowledge, any other party
is in material default under any Service Contract.

(e) Leasing Commissions. To Seller's knowledge, no leasing commissions are
due with respect to the Lease or any expansion or renewal of the Lease.

(f) Compliance with Law. To Seller's knowledge, Seller is not in actual
receipt of and has not received any written notice, addressed specifically to
Seller and sent by any governmental authority or agency having jurisdiction over
the Property, that the Property or its use is in material violation of any law,
ordinance, or regulation.

(g) Violation of Environmental Laws. To Seller's knowledge, Seller has not
received any notice that the Property is in violation of any Environmental Laws.
The term "Environmental Laws" means the Resource

9

Conservation and Recovery Act, the Comprehensive Environmental Response
Compensation and Liability Act and equivalent state laws.

"Seller's knowledge," as used in this Agreement means the current actual
knowledge of Mark H. Degner and any Asset Manager for the Property of Seller,
without any duty of inquiry or investigation.

Seller's representations and warranties in subparagraphs (c), (d), (e),
(f) and (g) ("Property Representations") are qualified by any knowledge obtained
by Purchaser by the expiration of the Due Diligence Period. Seller may further
qualify the Property Representations by notice, specifying with reasonable
particularity the facts and circumstances known to Seller that make the
applicable Property Representation false, misleading or inaccurate, delivered to
Purchaser before the Closing Date. If Seller delivers a Property Representation
notice within less than 3 business days before the Closing, then the Purchaser
may by notice to Seller extend the Closing Date to that day which is 3 business
days after the date of receipt of the Property Representation notice. If any
Property Representation notice delivered after the Due Diligence Period effects
a material adverse change in the matter covered by the applicable Property
Representation, then Purchaser, as its sole remedy, may terminate this Agreement
within 3 business days after receipt of such notice and receive a refund of the
Earnest Money.

7.2 Purchaser's Representations and Warranties. As a material inducement
to Seller to execute this Agreement and consummate this transaction, Purchaser
represents and warrants to Seller that:

(a) Organization and Authority. Purchaser has been duly organized and is
validly existing as a corporation, in good standing in the State of Georgia and
is qualified to do business in the state in which the Property is located.
Purchaser has the full right and authority and has obtained any and all consents
required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby. This Agreement has been, and
all of the documents to be delivered by Purchaser at the Closing will be,
authorized and properly executed and constitutes, or will constitute, as
appropriate, the valid and binding obligation of Purchaser, enforceable in
accordance with their terms.

(b) Conflicts and Pending Action. There is no agreement to which Purchaser
is a party or to Purchaser's knowledge binding on Purchaser which is in conflict
with this Agreement. There is no action or proceeding pending or, to Purchaser's
knowledge, threatened against Purchaser which challenges or impairs Purchaser's
ability to execute or perform its obligations under this Agreement.

ARTICLE 8: DEFAULT AND DAMAGES

8.1 Default by Purchaser. If Purchaser shall default in its obligation to
purchase the Property pursuant to this Agreement, Purchaser agrees that Seller
shall have the right to have the Escrow Agent deliver the Earnest Money to
Seller as liquidated damages to recompense Seller for time spent, labor and
services performed, and the loss of its bargain. Purchaser and Seller agree that
it would be impracticable or extremely difficult to affix damages if Purchaser
so defaults and that the Earnest Money, together with the interest thereon,
represents a reasonable estimate of Seller's damages. Seller agrees to accept
the Earnest Money as Seller's total damages and relief hereunder if Purchaser
defaults in its obligation to close hereunder. If Purchaser does so default,
this Agreement shall be terminated and Purchaser shall have no further right,
title, or interest in or to the Property.

8.2 Default by Seller. If Seller defaults in its obligation to sell and
convey the Property to Purchaser pursuant to this Agreement, Purchaser's sole
remedy shall be to elect one of the following: (a) to terminate this Agreement,
in which event Purchaser shall be entitled to the return by the Title Company to
Purchaser of the Earnest Money, or (b) to bring a suit for specific performance
provided that any suit for specific performance must be brought within 90 days
of Seller's default, to the extent permitted by law, Purchaser waiving the right
to bring suit at any later date. This Agreement confers no present right, title
or interest in the Property to Purchaser and Purchaser agrees not to file a lis
pendens or other similar notice against the Property except in connection with,
and after, the proper filing of a suit for specific performance.

10

ARTICLE 9: EARNEST MONEY PROVISIONS

9.1 Investment and Use of Funds. The Escrow Agent shall invest the Earnest
Money in government insured interest-bearing accounts satisfactory to both
Purchaser and Seller, shall not commingle the Earnest Money with any funds of
the Escrow Agent or others, and shall promptly provide Purchaser and Seller with
confirmation of the investments made. If the Closing under this Agreement
occurs, the Escrow Agent shall deliver the Earnest Money to, or upon the
instructions of, Purchaser on the Closing Date.

9.2 Termination by Seller or Purchaser.

(a) Upon not less than 7 business days prior written notice executed by
Seller and delivered to both Purchaser and Escrow Agent in accordance with
Section 7, asserting that (i) Purchaser has breached or otherwise defaulted and
failed to perform its obligations under the Purchase Agreement, and (ii) Seller
is entitled to retain the Earnest Money on account thereof, as provided in the
Purchase Agreement, Escrow Agent shall deliver the Earnest Money to Seller;
provided, however, that if Purchaser shall, within said 7 day period, deliver to
Seller and Escrow Agent a written notice that it disputes Seller's claim to the
Earnest Money, Escrow Agent shall retain the Earnest Money until it receives
written instructions executed by both Seller and Purchaser as to the disposition
and disbursement of the Earnest Money, or until ordered by final court order,
decree or judgment, which has not been appealed, to deliver the Earnest Money to
a particular party, in which event the Earnest Money shall be delivered in
accordance with such notice, instruction, order, decree or judgment.

(b) Upon not less than 7 business days' prior written notice executed by
Purchaser and delivered to Seller and Escrow Agent in accordance with Section 7,
asserting that Purchaser is entitled to the return of the Earnest Money under
the Purchase Agreement, Escrow Agent shall deliver the Earnest Money to
Purchaser; provided, however, that if Seller shall, within said 7 day period,
deliver to Purchaser and Escrow Agent a written notice that it disputes
Purchaser's claim or right to receive back the Earnest Money, Escrow Agent shall
retain the Earnest Money until it receives written instructions executed by both
Seller and Purchaser as to the disposition and disbursement of the Earnest
Money, or until ordered by final court order, decree or judgment, which has not
been appealed, to deliver the Earnest Money to a particular party, in which
event the Earnest Money shall be delivered in accordance with such notice
instruction, order, decree, or judgment.

In the event either (a) or (b) of this Section shall occur, Purchaser's or
Seller's notice to Escrow Agent shall include a statement on which Escrow Agent
may rely, that Purchaser or Seller has notified the other party that the
requesting party is entitled to the Earnest Money. However, upon receipt by
Escrow Agent of a notice from Seller or Purchaser, as the case may be, claiming
the Earnest Money, Escrow Agent shall immediately forward a copy of such notice
to the other party.

9.3 Interpleader. Seller and Purchaser mutually agree that in the event of
any controversy regarding the Earnest Money, unless mutual written instructions
are received by the Escrow Agent directing the Earnest Money's disposition, the
Escrow Agent shall not take any action, but instead shall await the disposition
of any proceeding relating to the Earnest Money or, at the Escrow Agent's
option, the Escrow Agent may interplead all parties and deposit the Earnest
Money with a court of competent jurisdiction in which event the Escrow Agent may
recover all of its court costs and reasonable attorneys' fees. Seller or
Purchaser, whichever loses in any such interpleader action, shall be solely
obligated to pay such costs and fees of the Escrow Agent, as well as the
reasonable attorneys' fees of the prevailing party in accordance with the other
provisions of this Agreement.

9.4 Liability of Escrow Agent. The parties acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request and for their
convenience, that the Escrow Agent shall not be deemed to be the agent of either
of the parties, and that the Escrow Agent shall not be liable to either of the
parties for any action or omission on its part taken or made in good faith, and
not in disregard of this Agreement, but shall be liable for its negligent acts
and for any loss, cost or expense incurred by Seller or Purchaser resulting from
the Escrow Agent's

11

mistake of law respecting the Escrow Agent's scope or nature of its duties.
Seller and Purchaser shall jointly and severally indemnify and hold the Escrow
Agent harmless from and against all costs, claims and expenses, including
reasonable attorneys' fees, incurred in connection with the performance of the
Escrow Agent's duties hereunder, except with respect to actions or omissions
taken or made by the Escrow Agent in bad faith, in disregard of this Agreement
or involving negligence on the part of the Escrow Agent.

ARTICLE 10: MISCELLANEOUS

10.1 Parties Bound. Neither party may assign this Agreement without the
prior written consent of the other, and any such prohibited assignment shall be
void; provided that Purchaser may assign this Agreement without Seller's consent
to an Affiliate. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the respective legal representatives, successors,
assigns, heirs, and devisees of the parties. For the purposes of this paragraph,
the term "Affiliate" means (a) an entity that directly or indirectly controls,
is controlled by or is under common control with the Purchaser or (b) an entity
at least a majority of whose economic interest is owned by Purchaser; and the
term "control" means the power to direct the management of such entity through
voting rights, ownership or contractual obligations. No such assignment will,
however, relieve Purchaser from any liabilities or obligations under this
Agreement.

10.2 Confidentiality. Purchaser shall make no public announcement or
disclosure of this Agreement or any information related to this Agreement,
before or for a period of one year after the Closing, without the prior written
consent of Seller. Purchaser shall not record this Agreement or any memorandum
of this Agreement. The confidentiality provisions of this Paragraph 10.2 shall
not apply to (i) public disclosure made by Purchaser as required by law or (ii)
disclosures made to persons involved in the sale or purchase of an interest in
Purchaser or its Affiliates as long as Seller's identity remains confidential.

10.3 Headings. The article and paragraph headings of this Agreement are
for convenience only and in no way limit or enlarge the scope or meaning of the
language hereof.

10.4 Invalidity and Waiver. If any portion of this Agreement is held
invalid or inoperative, then so far as is reasonable and possible the remainder
of this Agreement shall be deemed valid and operative, and effect shall be given
to the intent manifested by the portion held invalid or inoperative. The failure
by either party to enforce against the other any term or provision of this
Agreement shall not be deemed to be a waiver of such party's right to enforce
against the other party the same or any other such term or provision in the
future.

10.5 Governing Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the law of the state in
which the Property is located.

10.6 Survival. Unless otherwise expressly stated in this Agreement, each
of the covenants, obligations, representations, and agreements contained in this
Agreement, including Paragraphs 7.1 (c) through (g),shall survive the Closing
and the execution and delivery of the Deed required hereunder only for a period
of 12 months immediately following the Closing Date; provided, however the
indemnification provisions of Paragraph 2.4, 6.3 and 6.5, and the provisions of
Paragraph 6.1(d) shall survive the termination of this Agreement or the Closing,
whichever occurs, and shall not be merged, until the applicable statute of
limitations with respect to any claim, cause of action, suit or other action
relating thereto shall have fully and finally expired. Any claim based upon a
misrepresentation or a breach of a warranty contained in Article 7 of this
Agreement shall be actionable or enforceable if and only if: (i) notice of such
claim is given to the party which allegedly made such misrepresentation or
breached such covenant, obligation, warranty or agreement within 12 months after
the Closing Date; and (ii) the amount of damages or losses as a result of such
claim suffered or sustained by the party making such claim exceeds $25,000.

10.7 No Third Party Beneficiary. This Agreement is not intended to give or
confer any benefits, rights, privileges, claims, actions, or remedies to any
person or entity as a third party beneficiary, decree, or otherwise.

12

10.8 Entirety and Amendments. This Agreement embodies the entire agreement
between the parties and supersedes all prior agreements and understandings
relating to the Property except for any confidentiality agreement binding on
Purchaser, which shall not be superseded by this Agreement. This Agreement may
be amended or supplemented only by an instrument in writing executed by the
party against whom enforcement is sought.

10.9 Time. Time is of the essence in the performance of this Agreement.

10.10 Attorneys' Fees. Should either party employ attorneys to enforce any
of the provisions hereof, the party against whom any final judgment is entered
agrees to pay the prevailing party all reasonable costs, charges, and expenses,
including attorneys' fees, expended or incurred in connection therewith.

10.11 Notices. All notices required or permitted hereunder shall be in
writing and shall be served on the parties at the addresses set forth in
Paragraph 1.1. Any such notices shall be either (a) sent by overnight delivery
using a nationally recognized overnight courier, in which case notice shall be
deemed delivered one business day after deposit with such courier, (b) sent by
facsimile, with written confirmation by overnight or first class mail, in which
case notice shall be deemed delivered upon receipt of confirmation of
transmission of such facsimile notice, or (c) sent by personal delivery, in
which case notice shall be deemed delivered upon receipt. Any notice sent by
facsimile or personal delivery and delivered after 5:00 Denver, Colorado time
shall be deemed received on the next business day. A party's address may be
changed by written notice to the other party; provided, however, that no notice
of a change of address shall be effective until actual receipt of such notice.
Copies of notices are for informational purposes only, and a failure to give or
receive copies of any notice shall not be deemed a failure to give notice.

10.12 Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement, and agree that the normal rule
of construction - to the effect that any ambiguities are to be resolved against
the drafting party - shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.

10.13 Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described herein, the day of the act or event after
which the designated period of time begins to run is not to be included and the
last day of the period so computed is to be included at, unless such last day is
a Saturday, Sunday or legal holiday for national banks in Colorado, Georgia or
Utah, in which event the period shall run until the end of the next day which is
neither a Saturday, Sunday, or legal holiday. The last day of any period of time
described herein shall be deemed to end at 5:00 p.m. Denver, Colorado time.

10.14 Procedure for Indemnity. The following provisions govern actions for
indemnity under this Agreement. Promptly after receipt by an indemnitee of
notice of any claim, such indemnitee will, if a claim in respect thereof is to
be made against the indemnitor, deliver to the indemnitor written notice thereof
and the indemnitor shall have the right to participate in and, if the indemnitor
agrees in writing that it will be responsible for any costs, expenses,
judgments, damages, and losses incurred by the indemnitee with respect to such
claim, to assume the defense thereof, with counsel mutually satisfactory to the
parties; provided, however, that an indemnitee shall have the right to retain
its own counsel, with the fees and expenses to be paid by the indemnitor, if the
indemnitee reasonably believes that representation of such indemnitee by the
counsel retained by the indemnitor would be inappropriate due to actual or
potential differing interests between such indemnitee and any other party
represented by such counsel in such proceeding. The failure of indemnitee to
deliver written notice to the indemnitor within a reasonable time after
indemnitee receives notice of any such claim shall relieve such indemnitor of
any liability to the indemnitee under this indemnity only if and to the extent
that such failure is prejudicial to its ability to defend such action, and the
omission so to deliver written notice to the indemnitor will not relieve it of
any liability that it may have to any indemnitee other than under this
indemnity. If an indemnitee settles a claim without the prior written consent of
the indemnitor, then the indemnitor shall be released from liability with
respect to such claim unless the indemnitor has unreasonably withheld such
consent.

13

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

10.16 Waiver of Jury Trial. To the extent permitted by applicable law, the
parties hereby waive any right to trial by jury in any legal proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.

14

SIGNATURE PAGE TO
PURCHASE AND SALE AGREEMENT
BY AND BETWEEN
SCI DEVELOPMENT SERVICES INCORPORATED
AND
WELLS DEVELOPMENT CORPORATION

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year written below.

SCI DEVELOPMENT SERVICES INCORPORATED

By: /s/ Mark H. Degner
-----------------------------------------
Name:   Mark H. Degner
Date: 2/4/98                        Title:  Vice President
"Seller"

WELLS DEVELOPMENT CORPORATION

By: /s/ Leo F. Wells
-----------------------------------------
Name:   Leo F. Wells, III
Date: 2/3/98                        Title:  President
"Purchaser"

Escrow Agent has executed this Agreement in order to confirm that the Escrow
Agent has received and shall hold the Earnest Money in escrow, and shall
disburse the Earnest Money pursuant to the provisions of Article 9.

FOUNDER'S TITLE

By: /s/ Jim C. Morris
-----------------------------------------
Name:   Jim C. Morris
Date: 2/6/98                        Title:  V.P.

15

EXHIBIT 10.12

LEASE AGREEMENT

BETWEEN THE IX-X-XI-REIT JOINT VENTURE

AND

IOMEGA CORPORATION

[Net Lease]

LEASE AGREEMENT

THIS LEASE AGREEMENT is made this 9th day of April, 1996, between Security
Capital Industrial Trust ("Landlord"), and the Tenant named below.

Tenant:                               IOMEGA Corporation

Tenant's representative,
address, and phone no.:               Attn: Mr. Dave Correll
821 W. Iomega Way
Roy, Utah 84067
Telephone: 801/778-1000
Facsimile: 801/778-4100

Premises:                             That portion of the Building, containing
approximately 100,000 rentable square
feet, as determined by Landlord, as shown
on Exhibit A.

Project:                              NCR Facility

Building:                             2976 S. Commerce Street, Ogden, Utah

Tenant's Proportionate Share
of Project:                           100%

Lease Term:                           Beginning on the Commencement Date and
ending on the last day of the 120th full
calendar month thereafter.

Commencement Date:                    The later of (a) June 1, 1996, (b) one day
after Landlord purchases the Building, or
(c) the date Landlord delivers to Tenant
occupancy of the Premises. Tenant shall
not be charged Base Rent for the first 14
days following the Commencement Date,
provided that Tenant shall fulfill on the
Commencement Date all requirements under
this Lease relating to Tenant's occupancy
(including without limitation all
insurance requirements).

Initial Monthly Base Rent:                                               $40,000

Initial Estimated Monthly
Operating Expense Payments:
(estimates only and subject
to adjustment to actual costs
and expenses according to the
provisions of this Lease)

1. Utilities:            To be paid directly by Tenant.           

2. Common Area Charges:  To be paid directly by Tenant.           

3. Taxes:                $4,690 (To be paid by Tenant to Landlord)

4. Insurance:            $334 (To be paid by Tenant to Landlord)  

5. Others:               To be paid directly by Tenant.           

Initial Estimated Monthly Operating
Expense Payments Payable by Tenant Directly to Landlord:                $5,024

Initial Monthly Base Rent and
Operating Expense Payments (Payable by Tenant Directly to Landlord):   $45,024

Security Deposit:                     $43,134

Broker:                               Lee & Associates

Addenda:                              Exhibit A (Premises); Addendum A (CPI
Adjustment); Addendum B (Storage and Use
of Permitted Hazardous Materials);
Addendum C (Construction Allowance)

1. Granting Clause. In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord,
the Premises, to have and to hold for the Lease Term, subject to the terms,
covenants and conditions of this Lease. Tenant acknowledges that, as of the date
of this Lease Agreement, Landlord does not own the Building. Landlord and Tenant
agree that if Landlord is unable to consummate its purchase of the Building by
July 15, 1996, then this Lease shall become null and void and of no further
effect.

Tenant: [Illegible] Landlord: [Illegible]

2. Acceptance of Premises. Tenant shall accept the Premises in its
condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions. Landlord has made no
representation or warranty as to the suitability of the Premises for the conduct
of Tenant's business, and Tenant waives any implied warranty that the Premises
are suitable for Tenant's intended purposes. Except as provided in Paragraph 10,
in no event shall Landlord have any obligation for any defects in the Premises
(other than material defects for which Tenant provides Landlord with written
notice within the first 30 days of the Commencement Date) or any limitation on
its use. The taking of possession of the Premises shall be conclusive evidence
that Tenant accepts the Premises and that the Premises were in good condition at
the time possession was taken except for items that are Landlord's
responsibility under Paragraph 10, any punchlist items agreed to in writing by
Landlord and Tenant, and any material defects for which Tenant has notified
Landlord within the first 30 days of the Commencement Date.

3. Use. The Premises shall be used only for the purpose of receiving,
manufacturing, storing, shipping and selling products, materials and merchandise
made and/or distributed by Tenant and for such other lawful purposes as may be
incidental thereto. In connection with Tenant's manufacturing operations, Tenant
shall construct a clean room in the Premises to local, state and federal
requirements, as applicable. Tenant shall not conduct or give notice of any
auction, liquidation, or going out of business sale on the Premises. Tenant will
use the Premises in a careful, safe and proper manner and will not commit waste,
overload the floor or structure of the Premises or subject the Premises to use
that would damage the Premises. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the
Premises, or take any other action that would constitute a nuisance or would
disturb, unreasonably interfere with, or endanger Landlord. Tenant, at its sole
expense, shall use and occupy the Premises in compliance with all laws,
including, without limitation, the Americans With Disabilities Act, orders,
judgments, ordinances, regulations, codes, directives, permits, licenses,
covenants and restrictions now or hereafter applicable to the Premises
(collectively, "Legal Requirements"). The Premises shall not be used as a place
of public accommodation under the Americans With Disabilities Act or similar
state statutes or local ordinances or any regulations promulgated thereunder,
all as may be amended from time to time. Tenant shall, at its expense, make any
alterations or modifications, within or without the Premises, that are required
by Legal Requirements related to Tenant's use or occupation of the Premises.
Tenant will not use or permit the Premises to be used for any purpose or in any
manner that would void Tenant's or Landlord's insurance, increase the insurance
risk, or cause the disallowance of any sprinkler credits. If any increase in the
cost of any insurance on the Premises or the Project is caused by Tenant's use
or occupation of the Premises, or because Tenant vacates the Premises, then
Tenant shall pay the amount of such increase to Landlord. Any occupation of the
Premises by Tenant prior to the Commencement Date shall be subject to all
obligations of Tenant under this Lease.

4. Base Rent. Tenant shall pay Base Rent in the amount set forth above.
The first month's Base Rent, the Security Deposit, and the first monthly
installment of estimated Operating Expenses (as hereafter defined) shall be due
and payable on the date hereof, and Tenant promises to pay to Landlord in
advance, without demand, deduction or set-off, monthly installments of Base Rent
on or before the first day of each calendar month succeeding the Commencement
Date. Payments of Base Rent for any fractional calendar month shall be prorated.
All payments required to be made by Tenant to Landlord hereunder shall be
payable at such address as Landlord may specify from time to time by written
notice delivered in accordance herewith. The obligation of Tenant to pay Base
Rent and other sums to Landlord and the obligations of Landlord under this Lease
are independent obligations. Tenant shall have no right at any time to abate,
reduce, or set-off any rent due hereunder except as may be expressly provided in
this Lease. If Tenant is delinquent in any monthly installment of Base Rent or
of estimated Operating Expenses for more than 5 days, Tenant shall pay to
Landlord on demand a late charge equal to 5 percent of such delinquent sum. The
provision for such late charge shall be in addition to all of Landlord's other
rights and remedies hereunder or at law and shall not be construed as a penalty.

5. Security Deposit. The Security Deposit shall be held by Landlord as
security for the performance of Tenant's obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Upon each occurrence of an Event of Default
(hereinafter defined), Landlord may use all or part of the Security Deposit to
pay delinquent payments due under this Lease, and the cost of any damage,
injury, expense or liability caused by such Event of Default, without prejudice
to any other remedy provided herein or provided by law. Tenant shall pay
Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant when
Tenant's obligations under this Lease have been completely fulfilled. Landlord
shall be released from any obligation with respect to the Security Deposit upon
transfer of this Lease and the Premises to a person or entity assuming
Landlord's obligations under this Paragraph 5.

6. Operating Expense Payments. During each month of the Lease Term, on the
same date that Base Rent is due, Tenant shall pay Landlord an amount equal to
1/12 of the annual cost, as estimated by Landlord from time to time, of Taxes
(as set forth in Paragraph 8) and Insurance (as set forth in Paragraph 9) for
the Project. Payments thereof for any fractional calendar month shall be
prorated. Tenant shall replace, repair and maintain all aspects of the Project
contemplated in the Operating Expenses (as defined below) and timely pay for all
such aspects of Operating Expenses directly to the applicable entity, and send
evidence of all such payments made to Landlord when such payments are made. If
Tenant fails to timely perform any such replacements, repairs or maintenance, or
to timely make payments for such replacements, repairs or maintenance, or to
provide timely evidence of such payments, Landlord shall have

-2-

the right to perform such replacements, repairs or maintenance and/or make such
payments, as the case may be, and charge such costs to Tenant as additional
rent, to be paid by Tenant with the next due installment of Base Rent. The term
"Operating Expenses" means all costs and expenses incurred by Landlord with
respect to the ownership, maintenance, and operation of the Project including,
but not limited to costs of: Taxes (hereinafter defined) and reasonable fees
payable to tax consultants and attorneys for consultation and contesting taxes;
insurance; utilities; maintenance, repair and replacement of all portions of the
Project, including without limitation, paving and parking areas, roads, roofs,
alleys, and driveways, mowing, landscaping, exterior painting, utility lines,
heating, ventilation and air conditioning systems, lighting, electrical systems
and other mechanical and building systems; amounts paid to contractors and
subcontractors for work or services performed in connection with any of the
foregoing; charges or assessments of any association to which the Project is
subject; security services, if any; trash collection, sweeping and removal; and
additions or alterations made by Landlord to the Project or the Building in
order to comply with Legal Requirements (other than those expressly required
herein to be made by Tenant). Operating Expenses do not include costs, expenses,
depreciation or amortization for capital repairs and capital replacements
required to be made by Landlord under Paragraph 10 of this Lease, debt service
under mortgages or ground rent under ground leases, costs of restoration to the
extent of net insurance proceeds received by Landlord with respect thereto,
leasing commissions, or the costs of renovating space for tenants.

If Tenant's total payments of Operating Expenses for any year are
less than Tenant's Proportionate Share of actual Operating Expenses for such
year, then Tenant shall pay the difference to Landlord within 30 days after
demand, and if more, then Landlord shall retain such excess and credit it
against Tenant's next payments. For purposes of calculating Tenant's
Proportionate Share of Operating Expenses, a year shall mean a calendar year
except the first year, which shall begin on the Commencement Date, and the last
year, which shall end on the expiration of this Lease. With respect to Operating
Expenses which Landlord allocates to the entire Project, Tenant's "Proportionate
Share" shall be the percentage set forth on the first page of this Lease. The
estimated Operating Expenses for the Premises set forth on the first page of
this Lease are only estimates, and Landlord makes no guaranty or warranty that
such estimates will be accurate.

7. Utilities. Tenant shall pay for all water, gas, electricity, heat,
light, power, telephone, sewer, sprinkler services, refuse and trash collection,
and other utilities and services used on the Premises, all maintenance charges
for utilities, and any storm sewer charges or other similar charges for
utilities imposed by any governmental entity or utility provider, together with
any taxes, penalties, surcharges or the like pertaining to Tenant's use of the
Premises. Landlord may cause at Tenant's expense any utilities to be separately
metered or charged directly to Tenant by the provider. No interruption or
failure of utilities shall result in the termination of this Lease or the
abatement of rent. Tenant agrees to limit use of water and sewer for normal
restroom use, production processes and outside landscape watering.

8. Taxes. Landlord shall pay all taxes, assessments and governmental
charges (collectively referred to as "Taxes") that accrue against the Project
during the Lease Term, which shall be included as part of the Operating Expenses
charged to Tenant. Landlord may contest by appropriate legal proceedings the
amount, validity, or application of any Taxes or liens thereof. All capital
levies or other taxes assessed or imposed on Landlord upon the rents payable to
Landlord under this Lease and any franchise tax, any excise, transaction, sales
or privilege tax, assessment, levy or charge measured by or based, in whole or
in part, upon such rents from the Premises and/or the Project or any portion
thereof shall be paid by Tenant to Landlord monthly in estimated installments or
upon demand, at the option of Landlord, as additional rent; provided, however,
in no event shall Tenant be liable for any net income taxes imposed on Landlord
unless such net income taxes are in substitution for any Taxes payable
hereunder. If any such tax or excise is levied or assessed directly against
Tenant, then Tenant shall be responsible for and shall pay the same at such
times and in such manner as the taxing authority shall require. Tenant shall be
liable for all taxes levied or assessed against any personal property or
fixtures placed in the Premises, whether levied or assessed against Landlord or
Tenant.

9. Insurance. Landlord shall maintain all risk property insurance covering
the full replacement cost of the Building. Landlord may, but is not obligated
to, maintain such other insurance and additional coverages as it may deem
necessary, including, but not limited to, commercial liability insurance and
rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant. The Project or Building may be included in
a blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance which Landlord reasonably deems necessary as a result of
Tenant's use of the Premises.

Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance with no less than the minimum limits required by
law; employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless 30 days prior written notice shall have been given to
Landlord, contain a hostile fire endorsement and a contractual liability
endorsement 

-3-

and provide primary coverage to Landlord (any policy issued to Landlord
providing duplicate or similar coverage shall be deemed excess over Tenant's
policies). Such policies or certificates thereof shall be delivered to Landlord
by Tenant upon commencement of the Lease Term and upon each renewal of said
insurance.

The all risk property insurance obtained by Landlord and Tenant
shall include a waiver of subrogation by the insurers and all rights based upon
an assignment from its insured, against Landlord or Tenant, their officers,
directors, employees, managers, agents, invitees and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its officers,
directors, employees, managers, agents, invitees or contractors shall be liable
to the other for loss or damage caused by any risk coverable by all risk
property insurance, and each party waives any claims against the other party,
and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained
by Tenant or any person claiming through Tenant resulting from any accident or
occurrence in or upon the Premises or the Project from any cause whatsoever,
including without limitation, damage caused in whole or in part, directly or
indirectly, by the negligence of Landlord or its agents, employees or
contractors.

10. Landlord's Repairs. Landlord shall maintain, at its expense, the
structural soundness of the roof, foundation, and exterior walls of the Building
in good repair, reasonable wear and tear and uninsured losses and damages caused
by Tenant, its agents and contractors excluded. The term "walls" as used in this
Paragraph 10 shall not include windows, glass or plate glass, doors or overhead
doors, special store fronts, dock bumpers, dock plates or levelers, or office
entries. Tenant shall promptly give Landlord written notice of any repair
required by Landlord pursuant to this Paragraph 10, after which Landlord shall
have a reasonable opportunity to repair provided, however, that if Landlord fail
to make such repairs within a reasonable amount of time, Tenant may make such
repairs and be reimbursed within 10 days of providing Landlord with written
documentation of expenses incurred and demand therefor.

11. Tenant's Repairs. Landlord, at Tenant's expense as provided in
Paragraph 6, shall maintain in good repair and condition the parking areas and
other common areas of the Building, including, but not limited to driveways,
alleys, landscape and grounds surrounding the Premises. Subject to Landlord's
obligation in Paragraph 10 and subject to Paragraphs 9 and 15, Tenant, at its
expense, shall repair, replace and maintain in good condition all portions of
the Premises and all areas, improvements and systems exclusively serving the
Premises including, without limitation, dock and loading areas, truck doors,
plumbing, water and sewer lines up to points of common connection, fire
sprinklers and fire protection systems, entries, doors, ceilings and roof
membrane, windows, interior walls, and the interior side of demising walls, and
heating, ventilation and air conditioning systems. Such repair and replacements
include capital expenditures and repairs whose benefit may extend beyond the
Term. Heating, ventilation and air conditioning systems and other mechanical and
building systems serving the Premises shall be maintained at Tenant's expense
pursuant to maintenance service contracts entered into by Tenant or, at
Landlord's election, by Landlord. The scope of services and contractors under
such maintenance contracts shall be reasonably approved by Landlord. At
Landlord's request, Tenant shall enter into a joint maintenance agreement with
any railroad that services the Premises. If Tenant fails to perform any repair
or replacement for which it is responsible, Landlord may perform such work and
be reimbursed by Tenant within 10 days after demand therefor. Subject to
Paragraphs 9 and 15, Tenant shall bear the full cost of any repair or
replacement to any part of the Building or Project that results from damage
caused by Tenant, its agents, contractors, or invitees and any repair that
benefits only the Premises.

12. Tenant-Made Alterations and Trade Fixtures. Any alterations,
additions, or improvements made by or on behalf of Tenant to the Premises
("Tenant-Made Alterations") shall be subject to Landlord's prior written
consent. Tenant shall cause, at its expense, all Tenant-Made Alterations to
comply with insurance requirements and with Legal Requirements and shall
construct at its expense any alteration or modification required by Legal
Requirements as a result of any Tenant-Made Alterations. All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by contractors
reasonably acceptable to Landlord and only good grades of materials shall be
used. All plans and specifications for any Tenant-Made Alterations shall be
submitted to Landlord for its approval. Landlord may monitor construction of the
Tenant-Made Alterations. Landlord's right to review plans and specifications and
to monitor construction shall be solely for its own benefit, and Landlord shall
have no duty to see that such plans and specifications or construction comply
with applicable laws, codes, rules and regulations. Landlord may post on and
about the Premises notices of non-responsibility pursuant to applicable law.
Tenant shall provide certificates of insurance for worker's compensation and
other coverage in amounts and from an insurance company satisfactory to Landlord
protecting Landlord against liability for personal injury or property damage
during construction. Upon completion of any Tenant-Made Alterations, Tenant
shall deliver to Landlord, if in Tenant's possession, final lien waivers from
all such contractors and subcontractors. Upon surrender of the Premises, all
Tenant-Made Alterations and any leasehold improvements constructed by Landlord
or Tenant shall remain on the Premises as Landlord's property, except to the
extent Landlord requires removal at Tenant's expense of any such items or
Landlord and Tenant have otherwise agreed in writing in connection with
Landlord's consent to any Tenant-Made Alterations. Tenant shall repair any
damage caused by such removal.

Tenant: [Illegible] Landlord: [Illegible]

-4-

Tenant, at its own cost and expense and without Landlord's prior
approval, may erect such shelves, bins, machinery and trade fixtures
(collectively "Trade Fixtures") in the ordinary course of its business provided
that such items do not alter the basic character of the Premises, do not
overload or damage the Premises, and may be removed without injury to the
Premises, and the construction, erection, and installation thereof complies with
all Legal Requirements and with Landlord's requirements set forth above. Tenant
shall remove its Trade Fixtures and shall repair any damage caused by such
removal.

13. Signs. Tenant shall not make any changes to the exterior of the
Premises without Landlord's prior written consent. Upon surrender or vacation of
the Premises, Tenant shall have removed all signs and repair, paint, and/or
replace the building facia surface to which its signs are attached. Tenant shall
obtain all applicable governmental permits and approvals for sign and exterior
treatments. All signs, decorations, advertising media, blinds, draperies and
other window treatment or bars or other security installations visible from
outside the Premises shall be subject to Landlord's approval and conform in all
respects to Landlord's requirements.

14. Parking. Tenant shall be entitled to park in areas designated for
nonreserved parking. Landlord shall not be responsible for enforcing Tenant's
parking rights against any third parties.

15. Restoration. If at any time during the Lease Term the Premises are
damaged by a fire or other casualty, Landlord shall notify Tenant within 60 days
after such damage as to the amount of time Landlord reasonably estimates it will
take to restore the Premises. If the restoration time is estimated to exceed 6
months, either Landlord or Tenant may elect to terminate this Lease upon notice
to the other party given no later than 30 days after Landlord's notice. If
neither party elects to terminate this Lease or if Landlord estimates that
restoration will take 6 months or less, then, subject to receipt of sufficient
insurance proceeds, Landlord shall promptly restore the Premises excluding the
improvements installed by Tenant or by Landlord and paid by Tenant, subject to
delays arising from the collection of insurance proceeds or from Force Majeure
events. Tenant at Tenant's expense shall promptly perform, subject to delays
arising from the collection of insurance proceeds, or from Force Majeure events,
all repairs or restoration not required to be done by Landlord and shall
promptly re-enter the Premises and commence doing business in accordance with
this Lease. Notwithstanding the foregoing, either party may terminate this Lease
if the Premises are damaged during the last year of the Lease Term and Landlord
reasonably estimates that it will take more than one month to repair such
damage. Tenant shall pay to Landlord with respect to any damage to the Premises
the amount of the commercially reasonably deductible under Landlord's insurance
policy (currently $10,000) within 10 days after presentment of Landlord's
invoice. If the damage involves the premises of other tenants, Tenant shall pay
the portion of the deductible that the cost of the restoration of the Premises
bears to the total cost of restoration, as determined by Landlord. Base Rent and
Operating Expenses shall be abated for the period of repair and restoration in
the proportion which the area of the Premises, if any, which is not usable by
Tenant bears to the total area of the Premises. Such abatement shall be the sole
remedy of Tenant, and except as provided herein, Tenant waives any right to
terminate the Lease by reason of damage or casualty loss.

16. Condemnation. If any part of the Premises or the Project should be
taken for any public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a "Taking" or "Taken"), and the Taking would prevent or materially
interfere with Tenant's use of the Premises or in Landlord's judgment would
materially interfere with or impair its ownership or operation of the Project,
then upon written notice by Landlord this Lease shall terminate and Base Rent
shall be apportioned as of said date. If part of the Premises shall be Taken,
and this Lease is not terminated as provided above, the Base Rent payable
hereunder during the unexpired Lease Term shall be reduced to such extent as may
be fair and reasonable under the circumstances. In the event of any such Taking,
Landlord shall be entitled to receive the entire price or award from any such
Taking without any payment to Tenant, and Tenant hereby assigns to Landlord
Tenant's interest, if any, in such award. Tenant shall have the right, to the
extent that same shall not diminish Landlord's award, to make a separate claim
against the condemning authority (but not Landlord) for such compensation as may
be separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant's Trade Fixtures, if a separate award for such items is made to Tenant.

17. Assignment and Subletting. Without Landlord's prior written consent,
Tenant shall not assign this Lease or sublease the Premises or any part thereof
or mortgage, pledge, or hypothecate its leasehold interest or grant any
concession or license within the Premises and any attempt to do any of the
foregoing shall be void and of no effect. For purposes of this paragraph, a
transfer of the ownership interests controlling Tenant shall be deemed an
assignment of this Lease unless such ownership interests are publicly traded.
Notwithstanding the above, Tenant may assign or sublet the Premises, or any part
thereof, to (a) any entity controlling Tenant, controlled by Tenant or under
common control with Tenant (a "Tenant Affiliate"), or (b) to any person or
entity which shall acquire not less than 51% of the stock or assets of Tenant as
a result of a consolidation, merger or sale, provided that in the case of this
Subparagraph 17(b), (x) such consolidation, merger or sale is for a good
business purpose and not principally for the purpose of transferring Tenant's
leasehold estate, and (y) the assignee or successor entity has a net worth at
least equal to the net worth of Tenant immediately prior to such consolidating
merger or sale without the prior written consent of Landlord. Tenant shall
reimburse Landlord for all of Landlord's reasonable out-of-pocket expenses in
connection with any assignment or sublease. Upon Landlord's receipt of Tenant's
written notice of a desire to assign or sublet the Premises, or any part thereof
(other than to a Tenant Affiliate), Landlord may, by giving written notice to
Tenant within 30 days after receipt of Tenant's notice, terminate this Lease
with respect to the space described in Tenant's notice, as of the date specified
in Tenant's notice for the commencement of the proposed assignment or sublease.

Tenant: [Illegible] Landlord: [Illegible]

-5-

Notwithstanding any assignment or subletting, Tenant and any
guarantor or surety of Tenant's obligations under this Lease shall at all times
remain fully responsible and liable for the payment of the rent and for
compliance with all of Tenant's other obligations under this Lease (regardless
of whether Landlord's approval has been obtained for any such assignments or
sublettings). In the event that the rent due and payable by a sublessee or
assignee (or a combination of the rental payable under such sublease or
assignment plus any bonus or other consideration therefor or incident thereto)
exceeds the rental payable under this Lease, then Tenant shall be bound and
obligated to pay Landlord as additional rent hereunder all such excess rental
and other excess consideration within 10 days following receipt thereof by
Tenant.

If this Lease be assigned or if the Premises be subleased (whether
in whole or in part) or in the event of the mortgage, pledge, or hypothecation
of Tenant's leasehold interest or grant of any concession or license within the
Premises or if the Premises be occupied in whole or in part by anyone other than
Tenant, then upon a default by Tenant hereunder Landlord may collect rent from
the assignee, sublessee, mortgagee, pledgee, party to whom the leasehold
interest was hypothecated, concessionee or licensee or other occupant and,
except to the extent set forth in the preceding paragraph, apply the amount
collected to the next rent payable hereunder; and all such rentals collected by
Tenant shall be held in trust for Landlord and immediately forwarded to
Landlord. No such transaction or collection of rent or application thereof by
Landlord, however, shall be deemed a waiver of these provisions or a release of
Tenant from the further performance by Tenant of its covenants, duties, or
obligations hereunder.

18. Indemnification. Except for the negligence of Landlord, its agents,
employees or contractors, and to the extent permitted by law, Tenant agrees to
indemnify, defend and hold harmless Landlord, and Landlord's agents, employees
and contractors, from and against any and all losses, liabilities, damages,
costs and expenses (including reasonable attorneys' fees) resulting from claims
by third parties for injuries to any person and damage to or theft or
misappropriation or loss of property occurring in or about the Project and
arising from the use and occupancy of the Premises or from any activity, work,
or thing done, permitted or suffered by Tenant in or about the Premises or due
to any other act or omission of Tenant, its subtenants, assignees, invitees,
employees, contractors and agents. The furnishing of insurance required
hereunder shall not be deemed to limit Tenant's obligations under this Paragraph
18.

Landlord covenants and agrees to indemnify and save Tenant, its
employees and agents harmless of and from any and all claims, costs, expenses
and liabilities, including, without limitation, attorneys' fees, arising on
account of or by reason of claims by third parties for injuries or death to
persons or damages to property resulting from the negligence or willful
misconduct of Landlord or its agents, employees, or contractors, to the extent
not attributable to any negligence of Tenant, any assignee or subtenant of
Tenant, or their respective employees, agents, or contractors. If a claim under
the foregoing indemnity is made against the indemnitee which the indemnitee
believes to be covered by an indemnitor's indemnification obligations hereunder,
the indemnitee shall promptly notify the indemnitor of the claim and, in such
notice shall offer to the indemnitor the opportunity to assume the defense of
the claim within 10 business days after receipt of the notice (with counsel
reasonably acceptable to the indemnitee). If the indemnitor timely elects to
assume the defense of the claim, the indemnitor shall have the right to settle
the claim on any terms it considers reasonable and without the indemnitee's
prior written consent, as long as the settlement shall not require the
indemnitee to render any performance or pay any consideration, and the
indemnitee shall not have the right to settle any such claim. If the indemnitor
fails timely to elect to assume the defense of the claim or fails to defend the
claim with diligence, then the indemnitee shall have the right to take over the
defense of the claim and to settle the claim on any terms the indemnitee
considers reasonable. Any such settlement shall be valid as against the
indemnitor. If the indemnitor assumes the defense of a claim, the indemnitee may
employ its own counsel but such employment shall be at the sole expense of the
indemnitee. If any such claim arises out of the negligence of both Landlord and
Tenant, responsibility for such claim shall be allocated between Landlord and
Tenant based on their respective degrees of negligence. This indemnity does not
cover claims arising from the presence or release of Hazardous Materials.

19. Inspection and Access. Landlord and its agents, representatives, and
contractors may enter the Premises at any reasonable time upon reasonable notice
to inspect the Premises and to make such repairs as may be required or permitted
pursuant to this Lease and for any other business purpose. Landlord and
Landlord's representatives may enter the Premises during business hours for the
purpose of showing the Premises to prospective purchasers and, during the last
year of the Lease Term, to prospective tenants. Landlord may erect a suitable
sign on the Premises stating the Premises are available to let or that the
Project is available for sale. Landlord may grant easements, make public
dedications, designate common areas and create restrictions on or about the
Premises, provided that no such easement, dedication, designation or restriction
materially interferes with Tenant's use or occupancy of the Premises. At
Landlord's request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.

20. Quiet Enjoyment. If Tenant shall substantially perform all of the
covenants and agreements herein required to be performed by Tenant, Tenant
shall, subject to the terms of this Lease, at all times during the Lease Term,
have peaceful and quiet enjoyment of the Premises against any person claiming
by, through or under Landlord; provided, that substantial performance of
Tenant's rent-payment obligations shall be nothing less than full payment of all
amounts owed when due.

21. Surrender. Upon termination of the Lease Term or earlier termination
of Tenant's right of possession, Tenant shall surrender the Premises to Landlord
in the same condition as received, broom clean, ordinary wear and tear and
casualty loss and condemnation covered by Paragraphs 15 and 16 excepted. Any
Trade Fixtures, Tenant-Made Alterations and property not so removed by Tenant as
permitted or required herein shall be deemed abandoned and may be stored,
removed, and disposed of by Landlord at Tenant's expense, and Tenant waives all
claims against Landlord for any damages resulting from Landlord's retention and
disposition of such property. All obligations of Tenant hereunder not fully
performed as of the termination of the Lease Term shall survive the termination
of the Lease Term, including without limitation, indemnity obligations, payment
obligations with respect to Operating Expenses and obligations concerning the
condition and repair of the Premises.

22. Holding Over. If Tenant retains possession of the Premises after the
termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be subject to immediate termination by Landlord at any time,
and all of the other terms and provisions of this Lease (excluding any expansion
or renewal option or other similar right or option) shall be applicable during
such holdover period, except that Tenant shall pay Landlord from time to time,
upon demand, as Base Rent for the holdover period, an amount equal to double the
Base Rent in effect on the termination date, computed on a monthly basis for
each month or part thereof during such holding over. All other payments shall
continue under the terms of this Lease. In addition, Tenant shall be liable for
all damages incurred by Landlord as a result of such holding over. No holding
over by Tenant, whether with or without consent of Landlord, shall operate to
extend this Lease except as otherwise expressly provided, and this Paragraph 22
shall not be construed as consent for Tenant to retain possession of the
Premises.

23. Events of Default. Each of the following events shall be an event of
default ("Event of Default") by Tenant under this Lease: 

Tenant: [Illegible] Landlord: [Illegible]

-6-

(i) Tenant shall fail to pay any installment of Base Rent or any
other payment required herein when due, and such failure shall continue
for a period of 5 days from receipt of notice therefor from Landlord
(provided, however, that if Landlord shall have provided notice of
Tenant's failure to pay rent once during any calendar year or three times
during the Lease Term, thereafter, as the case may be, Tenant's failure to
pay rent within 5 days after the due date thereof shall constitute an
Event of Default without any requirement of notice from Landlord).

(ii) Tenant or any guarantor or surety of Tenant's obligations
hereunder shall (A) make a general assignment for the benefit of
creditors; (B) commence any case, proceeding or other action seeking to
have an order for relief entered on its behalf as a debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or
its debts or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or of any substantial part of its
property (collectively a "proceeding for relief"); (C) become the subject
of any proceeding for relief which is not dismissed within 60 days of its
filing or entry; or (D) die or suffer a legal disability (if Tenant,
guarantor, or surety is an individual) or be dissolved or otherwise fail
to maintain its legal existence (if Tenant, guarantor or surety is a
corporation, partnership or other entity).

(iii) Any insurance required to be maintained by Tenant pursuant to
this Lease shall be cancelled or terminated or shall expire or shall be
reduced or materially changed, except, in each case, as permitted in this
Lease.

(iv) Tenant shall not occupy or shall vacate the Premises or shall
fail to continuously operate its business at the Premises for the
permitted use set forth herein, whether or not Tenant is in monetary or
other default under this Lease.

(v) Tenant shall attempt or there shall occur any assignment,
subleasing or other transfer of Tenant's interest in or with respect to
this Lease except as otherwise permitted in this Lease.

(vi) Tenant shall fail to discharge any lien placed upon the
Premises in violation of this Lease within 30 days after any such lien or
encumbrance is filed against the Premises.

(vii) Tenant shall fail to comply with any provision of this Lease
other than those specifically referred to in this Paragraph 23, and except
as otherwise expressly provided herein, such default shall continue for
more than 30 days after Landlord shall have given Tenant written notice of
such default.

24. Landlord's Remedies. Upon each occurrence of an Event of Default and
so long as such Event of Default shall be continuing, Landlord may at any time
thereafter at its election: terminate this Lease or Tenant's right of
possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without formal demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
If Landlord re-enters the Premises, Landlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and equipment
at the Premises.

If Landlord terminates this Lease, Landlord may recover from Tenant
the sum of: all Base Rent and all other amounts accrued hereunder to the date of
such termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and costs of removing and storing Tenant's or any other occupant's
property, repairing, altering, remodeling, or otherwise putting the Premises
into condition acceptable to a new tenant or tenants, and all reasonable
expenses incurred by Landlord in pursuing its remedies, including reasonable
attorneys' fees and court costs; and the excess of the then present value of the
Base Rent and other amounts payable by Tenant under this Lease as would
otherwise have been required to be paid by Tenant to Landlord during the period
following the termination of this Lease measured from the date of such
termination to the expiration date stated in this Lease, over the present value
of any net amounts which Tenant establishes Landlord can reasonably expect to
recover by reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to the
90-day U.S. Treasury bill rate at the date of such termination.

If Landlord terminates Tenant's right of possession (but not this
Lease), Landlord may, but shall be under no obligation to, relet the Premises
for the account of Tenant for such rent and upon such terms as shall be
satisfactory to Landlord without thereby releasing Tenant from any liability
hereunder and without demand or notice of any kind to Tenant. For the purpose of
such reletting Landlord is authorized to make any repairs, changes, alterations,
or additions in or to the Premises as Landlord deems reasonably necessary or
desirable. If the Premises are not relet, then Tenant shall pay to Landlord as
damages a sum equal to the amount of the rental reserved in this Lease for such
period or periods, plus the cost of recovering possession of the Premises
(including attorneys' fees and costs of suit), the unpaid Base Rent and other
amounts accrued hereunder at the time of repossession, and the costs incurred in
any attempt by Landlord to relet the Premises. If the Premises are relet and a
sufficient sum shall not be realized from such reletting [after first deducting
therefrom, for retention by Landlord, the unpaid Base Rent and other amounts
accrued hereunder at the time of reletting, the cost of recovering possession
(including attorneys' fees and costs of suit), all of the costs and expense of
repairs, changes, alterations, and 

-7-

additions, the expense of such reletting (including without limitation brokerage
fees and leasing commissions) and the cost of collection of the rent accruing
therefrom] to satisfy the rent provided for in this Lease to be paid, then
Tenant shall immediately satisfy and pay any such deficiency. Any such payments
due Landlord shall be made upon demand therefor from time to time and Tenant
agrees that Landlord may file suit to recover any sums falling due from time to
time. Notwithstanding any such reletting without termination, Landlord may at
any time thereafter elect in writing to terminate this Lease for such previous
breach.

Exercise by Landlord of any one or more remedies hereunder granted
or otherwise available shall not be deemed to be an acceptance of surrender of
the Premises and/or a termination of this Lease by Landlord, whether by
agreement or by operation of law, it being understood that such surrender and/or
termination can be effected only by the written agreement of Landlord and
Tenant. Any law, usage, or custom to the contrary notwithstanding, Landlord
shall have the right at all times to enforce the provisions of this Lease in
strict accordance with the terms hereof; and the failure of Landlord at any time
to enforce its rights under this Lease strictly in accordance with same shall
not be construed as having created a custom in any way or manner contrary to the
specific terms, provisions, and covenants of this Lease or as having modified
the same. Tenant and Landlord further agree that forbearance or waiver by
Landlord to enforce its rights pursuant to this Lease or at law or in equity,
shall not be a waiver of Landlord's right to enforce one or more of its rights
in connection with any subsequent default. A receipt by Landlord of rent or
other payment with knowledge of the breach of any covenant hereof shall not be
deemed a waiver of such breach, and no waiver by Landlord of any provision of
this Lease shall be deemed to have been made unless expressed in writing and
signed by Landlord. To the greatest extent permitted by law, Tenant waives the
service of notice of Landlord's intention to re-enter as provided for in any
statute, or to institute legal proceedings to that end, and also waives all
right of redemption in case Tenant shall be dispossessed by a judgment or by
warrant of any court or judge. The terms "enter," "re-enter," "entry" or
"re-entry," as used in this Lease, are not restricted to their technical legal
meanings. Any reletting of the Premises shall be on such terms and conditions as
Landlord in its sole discretion may determine (including without limitation a
term different than the remaining Lease Term, rental concessions, alterations
and repair of the Premises, lease of less than the entire Premises to any tenant
and leasing any or all other portions of the Project before reletting the
Premises). Landlord shall not be liable, nor shall Tenant's obligations
hereunder be diminished because of, Landlord's failure to relet the Premises or
collect rent due in respect of such reletting.

25. Tenant's Remedies/Limitation of Liability. Landlord shall not be in
default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then after such period of time as
is reasonably necessary). All obligations of Landlord hereunder shall be
construed as covenants, not conditions; and, except as may be otherwise
expressly provided in this Lease, Tenant may not terminate this Lease for breach
of Landlord's obligations hereunder. All obligations of Landlord under this
Lease will be binding upon Landlord only during the period of its ownership of
the Premises and not thereafter. The term "Landlord" in this Lease shall mean
only the owner, for the time being of the Premises, and in the event of the
transfer by such owner of its interest in the Premises, such owner shall
thereupon be released and discharged from all obligations of Landlord thereafter
accruing, but such obligations shall be binding during the Lease Term upon each
new owner for the duration of such owner's ownership. Any liability of Landlord
under this Lease shall be limited solely to its interest in the Project, and in
no event shall any personal liability be asserted against Landlord in connection
with this Lease nor shall any recourse be had to any other property or assets of
Landlord.

26. Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY
JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS
LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

27. Subordination. This Lease and Tenant's interest and rights hereunder
are and shall be subject and subordinate at all times to the lien of any first
mortgage, now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant agrees,
at the election of the holder of any such mortgage, to attorn to any such
holder. Tenant agrees upon demand to execute, acknowledge and deliver such
instruments, confirming such subordination and such instruments of attornment as
shall be requested by any such holder. Tenant hereby appoints Landlord attorney
in fact for Tenant irrevocably (such power of attorney being coupled with an
interest) to execute, acknowledge and deliver any such instrument and
instruments for and in the name of the Tenant and to cause any such instrument
to be recorded. Notwithstanding the foregoing, any such holder may at any time
subordinate its mortgage to this Lease, without Tenant's consent, by notice in
writing to Tenant, and thereupon this Lease shall be deemed prior to such
mortgage without regard to their respective dates of execution, delivery or
recording and in that event such holder shall have the same rights with respect
to this Lease as though this Lease had been executed prior to the execution,
delivery and recording of such mortgage and had been assigned to such holder.
The term "mortgage" whenever used in this Lease shall be deemed to include deeds
of trust, security assignments and any other encumbrances, and any reference to
the "holder" of a mortgage shall be deemed to include the beneficiary under a
deed of trust.

28. Mechanic's Liens. Tenant has no express or implied authority to create
or place any lien or encumbrance of any kind upon, or in any manner to bind the
interest of Landlord or Tenant in, the Premises or to charge the rentals payable
hereunder for any claim in favor of any person dealing with Tenant, including
those who 

-8-

may furnish materials or perform labor for any construction or repairs. Tenant
covenants and agrees that it will pay or cause to be paid all sums legally due
and payable by it on account of any labor performed or materials furnished in
connection with any work performed on the Premises and that it will save and
hold Landlord harmless from all loss, cost or expense based on or arising out of
asserted claims or liens against the leasehold estate or against the interest of
Landlord in the Premises or under this Lease. Tenant shall give Landlord
immediate written notice of the placing of any lien or encumbrance against the
Premises and cause such lien or encumbrance to be discharged within 30 days of
the filing or recording thereof; provided, however, Tenant may contest such
liens or encumbrances as long as such contest prevents foreclosure of the lien
or encumbrance and Tenant causes such lien or encumbrance to be bonded or
insured over in a manner satisfactory to Landlord within such 30 day period.

29. Estoppel Certificates. Tenant agrees, from time to time, within 10
days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating
that this Lease is in full force and effect, the date to which rent has been
paid, that Landlord is not in default hereunder (or specifying in detail the
nature of Landlord's default), the termination date of this Lease and such other
matters pertaining to this Lease as may be requested by Landlord. Tenant's
obligation to furnish each estoppel certificate in a timely fashion is a
material inducement for Landlord's execution of this Lease. No cure or grace
period provided in this Lease shall apply to Tenant's obligations to timely
deliver an estoppel certificate. Tenant hereby irrevocably appoints Landlord as
its attorney in fact to execute on its behalf and in its name any such estoppel
certificate if Tenant fails to execute and deliver the estoppel certificate
within 10 days after Landlord's written request thereof.

30. Environmental Requirements. Except for Hazardous Material contained in
products used by Tenant in de minimis quantities for ordinary cleaning and
office purposes, Tenant shall not permit or cause any party to bring any
Hazardous Material upon the Premises or transport, store, use, generate,
manufacture or release any Hazardous Material in or about the Premises without
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
operate its business in the Premises in strict compliance with all Environmental
Requirements and shall remediate in a manner satisfactory to Landlord any
Hazardous Materials released on or from the Project by Tenant, its agents,
employees, contractors, subtenants or invitees. Tenant shall complete and
certify to disclosure statements as requested by Landlord from time to time
relating to Tenant's transportation, storage, use, generation, manufacture or
release of Hazardous Materials on the Premises. The term "Environmental
Requirements" means all applicable present and future statutes, regulations,
ordinances, rules, codes, judgments, orders or other similar enactments of any
governmental authority or agency regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the environment,
including without limitation, the following: the Comprehensive Environmental
Response, Compensation and Liability Act; the Resource Conservation and Recovery
Act; and all state and local counterparts thereto, and any regulations or
policies promulgated or issued thereunder. The term "Hazardous Materials" means
and includes any substance, material, waste, pollutant, or contaminant listed or
defined as hazardous or toxic, under any Environmental Requirements, asbestos
and petroleum, including crude oil or any fraction thereof, natural gas liquids,
liquified natural gas, or synthetic gas usable for fuel (or mixtures of natural
gas and such synthetic gas). As defined in Environmental Requirements, Tenant is
and shall be deemed to be the "operator" of Tenant's "facility" and the "owner"
of all Hazardous Materials brought on the Premises by Tenant, its agents,
employees, contractors or invitees, and the wastes, by-products, or residues
generated, resulting, or produced therefrom.

Tenant shall indemnify, defend, and hold Landlord harmless from and
against any and all losses (including, without limitation, diminution in value
of the Premises or the Project and loss of rental income from the Project),
claims, demands, actions, suits, damages (including, without limitation,
punitive damages), expenses (including, without limitation, remediation,
removal, repair, corrective action, or cleanup expenses), and costs (including,
without limitation, actual reasonable attorneys' fees, consultant fees or expert
fees and including, without limitation, removal or management of any asbestos
brought into the property or disturbed in breach of the requirements of this
Paragraph 30, regardless of whether such removal or management is required by
law) which are brought or recoverable against, or suffered or incurred by
Landlord as a result of any release of Hazardous Materials for which Tenant is
obligated to remediate as provided above or any other breach of the requirements
under this Paragraph 30 by Tenant, its agents, employees, contractors,
subtenants, assignees or invitees, regardless of whether Tenant had knowledge of
such noncompliance. The obligations of Tenant under this Paragraph 30 shall
survive any termination of this Lease. Tenant shall not be liable, under this
Paragraph 30, for any Hazardous Materials existing on the Premises prior to the
Commencement Date.

Landlord shall have access to, and a right to perform inspections
and tests of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 30, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations. Such
inspections and tests shall be conducted at Landlord's expense, unless such
inspections or tests reveal that Tenant has not complied with any Environmental
Requirement, in which case Tenant shall reimburse Landlord for the reasonable
cost of such inspection and tests. Landlord's receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord holds
against Tenant.

31. Rules and Regulations. Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and regulations
at any time or from time to time established by Landlord covering use of the
Premises and the Project. The current rules and regulations are attached hereto.
In the event of any conflict between said rules and regulations and other
provisions of this Lease, the other terms and provisions 

-9-

of this Lease shall control. Landlord shall not have any liability or obligation
for the breach of any rules or regulations by other tenants in the Project.

32. Security Service. Tenant acknowledges and agrees that, while Landlord
may patrol the Project, Landlord is not providing any security services with
respect to the Premises and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or
any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.

33. Force Majeure. Each of Landlord and Tenant shall not be held
responsible for delays in the performance of its obligations hereunder when
caused by strikes, lockouts, labor disputes, acts of God, inability to obtain
labor or materials or reasonable substitutes therefor, governmental
restrictions, governmental regulations, governmental controls, delay in issuance
of permits, enemy or hostile governmental action, civil commotion, fire or other
casualty, and other causes beyond their respective reasonable control ("Force
Majeure"), provided, however, that Tenant's obligation to pay rent shall survive
any such Force Majeure occurrence.

34. Entire Agreement. This Lease constitutes the complete agreement of
Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have been
made by Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant,
which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties hereto.

35. Severability. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this Lease shall
not be affected thereby. It is also the intention of the parties to this Lease
that in lieu of each clause or provision of this Lease that is illegal, invalid
or unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.

36. Brokers. Landlord and Tenant each represents and warrants that it has
dealt with no broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this transaction, other
than the broker, if any, set forth on the first page of this Lease, and each
party agrees to indemnify and hold the other party harmless from and against any
claims by any other broker, agent or other person claiming a commission or other
form of compensation by virtue of having dealt with Landlord or Tenant, as the
case may be, with regard to this leasing transaction.

37. Miscellaneous. (a) Any payments or charges due from Tenant to Landlord
hereunder shall be considered rent for all purposes of this Lease.

(b) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.

(c) All notices required or permitted to be given under this Lease shall
be in writing and shall be sent by registered or certified mail, return receipt
requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses below,
and with a copy sent to Landlord at 14100 East 35th Place, Aurora, Colorado
80011. Either party may by notice given aforesaid change its address for all
subsequent notices. Except where otherwise expressly provided to the contrary,
notice shall be deemed given upon delivery.

(d) Except as otherwise expressly provided in this Lease or as otherwise
required by law, Landlord retains the absolute right to withhold any consent or
approval.

(e) At Landlord's request from time to time Tenant shall furnish Landlord
with true and complete copies of its most recent annual and quarterly financial
statements prepared by Tenant or Tenant's accountants and any other financial
information or summaries that Tenant typically provides to its shareholders.

(f) Neither this Lease nor a memorandum of lease shall be filed by or on
behalf of Tenant in any public record. Landlord may prepare and file, and upon
request by Landlord Tenant will execute, a memorandum of lease.

(g) The normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Lease or any exhibits or amendments hereto.

(h) The submission by Landlord to Tenant of this Lease shall have no
binding force or effect, shall not constitute an option for the leasing of the
Premises, nor confer any right or impose any obligations upon either party until
execution of this Lease by both parties.

(i) Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The

-10-

captions inserted in this Lease are for convenience only and in no way define,
limit or otherwise describe the scope or intent of this Lease, or any provision
hereof, or in any way affect the interpretation of this Lease.

(j) Any amount not paid by Tenant within 5 days after Tenant's receipt of
written notice thereof from Landlord (subject to Paragraph 23(i)) in accordance
with the terms of this Lease shall bear interest from such due date until paid
in full at the lesser of the highest rate permitted by applicable law or 15
percent per year. It is expressly the intent of Landlord and Tenant at all times
to comply with applicable law governing the maximum rate or amount of any
interest payable on or in connection with this Lease. If applicable law is ever
judicially interpreted so as to render usurious any interest called for under
this Lease, or contracted for, charged, taken, reserved, or received with
respect to this Lease, then it is Landlord's and Tenant's express intent that
all excess amounts theretofore collected by Landlord be credited on the
applicable obligation (or, if the obligation has been or would thereby be paid
in full, refunded to Tenant), and the provisions of this Lease immediately shall
be deemed reformed and the amounts thereafter collectible hereunder reduced,
without the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder.

(k) Construction and interpretation of this Lease shall be governed by the
laws of the state in which the Project is located, excluding any principles of
conflicts of laws.

(l) Time is of the essence as to the performance of Tenant's and
Landlord's obligations under this Lease.

(m) All exhibits and addenda attached hereto are hereby incorporated into
this Lease and made a part hereof. In the event of any conflict between such
exhibits or addenda and the terms of this Lease, such exhibits or addenda shall
control.

38. Limitation of Liability of Trustees, Shareholders, and Officers of
Security Capital Industrial Trust. Any obligation or liability whatsoever of
Security Capital Industrial Trust, a Maryland real estate investment trust,
which may arise at any time under this Lease or any obligation or liability
which may be incurred by it pursuant to any other instrument, transaction, or
undertaking contemplated hereby shall not be personally binding upon, nor shall
resort for the enforcement thereof be had to the property of, its trustees,
directors, shareholders, officers, employees or agents, regardless of whether
such obligation or liability is in the nature of contract, tort, or otherwise.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.

TENANT:                                    LANDLORD:

IOMEGA CORPORATION                         SECURITY CAPITAL INDUSTRIAL TRUST

By: /s/ [Illegible]                        By: /s/ [Illegible]
---------------------------------           ---------------------------------
Title: Director Corporate Facilities       Title: Managing Director

Address:                                   Address:

821 W. Iomega Way                          14100 E. 35th Place
Attn:  Dave Correll                        Attn:  Managing Director
Roy, Utah  84067                           Aurora, Colorado  80011

-11-

Rules and Regulations

1.    The sidewalk, entries, and driveways of the Project shall not be
obstructed by Tenant, or its agents, or used by them for any purpose other
than ingress and egress to and from the Premises.

2.    Except for seeing-eye dogs, no animals shall be allowed in the offices,
halls, or corridors in the Project.

3.    Tenant shall not install or operate any steam or gas engine or boiler, or
other mechanical apparatus in the Premises, except as specifically
approved in the Lease. The use of oil, gas or inflammable liquids for
heating, lighting or any other purpose is expressly prohibited. Explosives
or other articles deemed extra hazardous shall not be brought into the
Project.

4.    In the event that a vehicle is disabled, it shall be removed within 48
hours. All vehicles shall be parked in the designated parking areas in
conformity with all signs and other markings. All parking will be open
parking, and no reserved parking, numbering or lettering of individual
spaces will be permitted except as specified by Landlord.

5.    Tenant shall maintain the Premises free from rodents, insects and other
pests.

6.    Landlord reserves the right to exclude or expel from the Project any
person who shall in any manner do any act in violation of the Rules and
Regulations of the Project.

7.    Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Unless caused by Landlord's negligence, Landlord shall not be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to the effects of Tenant by the janitors
or any other employee or person.

8.    Tenant shall give Landlord prompt notice of any defects in the water, lawn
sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
apparatus, or any other service equipment affecting the Premises.

9.    Tenant shall not permit dumping of waste or refuse or permit any harmful
materials to be placed in any drainage system or sanitary system in or
about the Premises.

10.   All moveable trash receptacles provided by the trash disposal firm for the
Premises must be kept in the trash enclosure areas, if any, provided for
that purpose.

11.   No auction, public or private, will be permitted on the Premises or the
Project.

12.   No awnings shall be placed over the windows in the Premises except with
the prior written consent of Landlord.

13.   The Premises shall not be used for lodging, sleeping or cooking or for any
immoral or illegal purposes or for any purpose other than that specified
in the Lease.

14.   Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account the
capacity of the electrical wiring in the Project and the Premises, and
shall not use more than such safe capacity. Landlord's consent to the
installation of electric equipment shall not relieve Tenant from the
obligation not to use more electricity than such safe capacity.

15.   Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage.

16.   Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's ordinary
use of the Premises and shall keep all such machinery free of vibration,
noise and air waves which may be transmitted beyond the Premises.

-12-

EXHIBIT A

Premises

2976 S. Commerce Street, Ogden, Utah

[Depiction to be attached.]

-13-

ADDENDUM A

CPI ADJUSTMENT

ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 9, 1996 BETWEEN
SECURITY CAPITAL INDUSTRIAL TRUST
and
IOMEGA CORPORATION

Base Rent shall increase on the first day of each of the 40th and
80th months of the Lease Term by an amount equal to 100 percent (100%) of the
increase in the Consumer Price Index during the preceding 40 months; provided,
however, in no event shall the Base Rent each year be increased by more than 6%
or by less than 3% per annum, compounded annually, on a cumulative basis from
the beginning of the Lease term. "Consumer Price Index" means the Utah Wasatch
Front Consumer Price Index for All Urban Consumers (Revised Series) of the
United States Department of Labor, Bureau of Labor Statistics. If the manner in
which the Consumer Price Index is calculated shall be revised, Landlord shall
make an adjustment in such revised index so as to produce results equivalent, as
nearly as possible, to those which would have been obtained if the Consumer
Price Index had not been so revised. If the Consumer Price Index shall become
unavailable to the public because publication is discontinued or otherwise,
Landlord will substitute therefor a comparable index based upon changes in the
cost of living or purchasing power of the consumer dollar published by any other
governmental agency or, if no such index shall be available, then a comparable
index published by a major bank or other financial institution or by a
university or a recognized financial publication.

-14-

ADDENDUM B

STORAGE AND USE OF PERMITTED HAZARDOUS MATERIALS

ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 9, 1996, BETWEEN
IOMEGA CORPORATION
and
SECURITY CAPITAL INDUSTRIAL TRUST

1. Permitted Hazardous Materials and Use.

Tenant has requested Landlord's consent to use the Hazardous Materials
listed below in its business at the Premises (the "Permitted Hazardous
Materials"). Subject to the conditions set forth herein, Landlord hereby
consents to the Use (hereinafter defined) of the Permitted Hazardous Materials.
Any Permitted Hazardous Materials on the Premises will be generated, used,
received, maintained, treated, stored, or disposed in a manner consistent with
good engineering practice and in compliance with all Environmental Requirements.

Permitted Hazardous Materials (including maximum quantities):

To be completed within 30 days of lease [ILLEGIBLE] commencement
--------------------------------------------------------------------
date
--------------------------------------------------------------------

--------------------------------------------------------------------

The storage, uses or processes involving the Permitted Hazardous
Materials (the "Use") are described below.

Use [If limited to receiving and storage, so specify]:

--------------------------------------------------------------------

--------------------------------------------------------------------

--------------------------------------------------------------------

2. No Current Investigation. Tenant represents and warrants that it is not
currently subject to an inquiry, regulatory investigation, enforcement order, or
any other proceeding regarding the generation, use, treatment, storage, or
disposal of a Hazardous Material.

3. Notice and Reporting. Tenant immediately shall notify Landlord in
writing of any spill, release, discharge, or disposal of any Hazardous Material
in, on or under the Premises or the Project. All reporting obligations imposed
by Environmental Requirements are strictly the responsibility of Tenant. Tenant
shall supply to Landlord within 5 business days after Tenant first receives or
sends the same, copies of all claims, reports, complaints, notices, warnings or
asserted violations relating in any way to Tenant's use of the Premises.

4. Indemnification. Tenant's indemnity obligation under the Lease with
respect to Hazardous Materials shall include indemnification for the
liabilities, expenses and other losses described therein as a result of the Use
of the Hazardous Materials or the breach of Tenant's obligations or
representations set forth above. It is the intent of this provision that Tenant
be strictly liable to Landlord as a result of the Use of Hazardous Materials
without regard to the fault or negligence of Tenant, Landlord or any third
party.

5. Disposal Upon Lease Termination. At the expiration or earlier
termination of the Lease, Tenant, at its sole cost and expense, shall: (i)
remove and dispose off-site any drums, containers, receptacles, structures, or
tanks storing or containing Hazardous Materials (or which have stored or
contained Hazardous Materials) and the contents thereof; (ii) remove, empty, and
purge all underground and above ground storage tank systems, including connected
piping, of all vapors, liquids, sludges and residues; and (iii) restore the
Premises to its original condition. Such activities shall be performed in
compliance with all Environmental Requirements and to the satisfaction of
Landlord. Landlord's satisfaction with such activities or the condition of the
Premises does not waive, or release Tenant from, any obligations hereunder.

-15-

ADDENDUM C

CONSTRUCTION
(ALLOWANCE)

ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED APRIL 9, 1996, BETWEEN

SECURITY CAPITAL INDUSTRIAL TRUST

and

IOMEGA CORPORATION

(a) Landlord agrees to furnish or perform those items of
construction and those improvements (the "Tenant Improvements") specified below:

Landlord shall diligently pursue to completion the construction of a parking lot
to service the Building. All costs associated with designing, obtaining
approvals for and constructing the parking lot will be deducted from the
$500,000 Tenant Improvement allowance set forth below. Any remaining amounts of
the $500,000 may be used by Tenant to build additional office space in the
Building, which improvements will be made by Tenant.

Landlord shall pay for the Tenant Improvements (as described above) up to a
maximum amount of $500,000, and Tenant shall pay for the cost of the Tenant
Improvements in excess of such amount. If the cost of the Tenant Improvements is
estimated to exceed such amount, such estimated overage shall be paid by Tenant
before Landlord begins construction and a final adjusting payment based upon the
actual costs of the Tenant Improvements shall be made when the Tenant
Improvements are complete.

(b) If Tenant shall desire any changes to the parking lot
improvements, Tenant shall so advise Landlord in writing and Landlord shall
determine whether such changes can be made in a reasonable and feasible manner.
Any and all costs of reviewing any requested changes, and any and all costs of
making any changes to the Tenant Improvements which Tenant may request and which
Landlord may agree to shall be deducted from the Tenant Improvement allowance.

-1-

EXHIBIT 10.13

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY

BETWEEN THE FREMONT JOINT VENTURE

AND

ROSE VENTURES V. INC., THOMAS G. HAURY AND CARLEEN S. HAURY

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY

THIS AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY (the "Agreement"), is
made and entered into as of the 8th day of June, 1998, by and between ROSE
VENTURES V, INC., a California Corporation as to an undivided 50% interest, and
THOMAS G. HAURY and CARLEEN S. HAURY, husband and wife, as joint tenants as to
undivided 50% interest (hereinafter referred to as "Seller"), and WELLS
DEVELOPMENT CORPORATION, a Georgia Corporation (hereinafter referred to as
"Purchaser").

W I T N E S S E T H:

WHEREAS, Seller desires to sell and Purchaser desires to purchase the
Property (as hereinafter defined) subject to the terms and conditions
hereinafter set forth.

NOW, THEREFORE, for and in consideration of the premises, the mutual
agreements contained herein, the sum of Ten Dollars ($10.00) in hand paid by
Purchaser to Seller at and before the sealing and delivery of these presents and
for other good and valuable consideration, the receipt, adequacy, and
sufficiency which are hereby expressly acknowledged by the parties hereto, the
parties hereto do hereby covenant and agree as follows:

1. Purchase and Sale of Property. Subject to and in accordance with the
terms and provisions of this Agreement, Seller hereby agrees to sell to
Purchaser and Purchaser hereby agrees to purchase from Seller, the Property,
which term "Property" shall mean and include the following:

(a) all that tract or parcel of land located in Fremont, Alameda
County, California, and being more particularly described on Exhibit "A"
attached hereto and by this reference made a part hereof (herein referred
to as the "Land"); and

(b) all of Seller's rights, privileges, and easements appurtenant to
the Land, and all of Seller's water rights, mineral rights, reversions, or
other appurtenances to said Land, and all right, title, and interest of
Seller, if any, in and to any land lying in the bed of any street, road,
alley, or right-of-way, open or proposed, adjacent to or abutting the
Land; and

(c) all buildings, structures, and improvements situated on the
Land, including, without limitation, that certain two story office
building containing approximately 58,424 rentable square feet of space,
the parking areas containing approximately 190 parking spaces and other
amenities constructed on the Land, and all apparatus, built-in appliances,
equipment, pumps, machinery, plumbing, heating, air conditioning,
elevators, electrical and other fixtures located on or to be located on
the Land (all of which are herein collectively referred to as the
"Improvements"); and

(d) all personal property located on or to be located on or in, or
used in connection with, the Land and Improvements, (all of which are
herein collectively referred to as the "Personal Property"); and

(e) all of Seller's right, title, and interest, as landlord or
lessor, in and to the Lease (as hereinafter defined); and

(f) all of Seller's right, title, and interest, if any, in and to
the plans and specifications with respect to the Improvements and any
guarantees, trademarks, rights of copyright, warranties, or other rights
related to the ownership of or use and operation of the Land, Personal
Property, or Improvements, all governmental licenses and permits, and all
intangibles associated with the Land, Personal Property, and Improvements,
including the name of the Improvements and the logo therefor, if any.

2. Earnest Money. Within two (2) business days after the Effective Date,
Purchaser shall deliver to First American Title Guaranty Company ("Escrow
Agent"), whose offices are at 1734 North First Street, San Jose, California
95112, Purchaser's check, payable to Escrow Agent, in the amount of $100,000
(the "Earnest 

Money"), which Earnest Money shall be held and disbursed by Escrow Agent
pursuant to this Agreement. The Earnest Money shall be paid by Escrow Agent to
Seller at Closing (as hereinafter defined) and shall be applied as a credit to
the Purchase Price (as hereinafter defined), or shall otherwise be paid to
Seller or refunded to Purchaser in accordance with the terms of this Agreement.
All interest and other income from time to time earned on the Earnest Money
shall belong to Purchaser and shall be disbursed to Purchaser at any time and
from time to time as Purchaser shall direct Escrow Agent, all as provided in the
Escrow Agreement. In no event shall any such interest or other income be deemed
a part of the Earnest Money.

3. Purchase Price. Subject to adjustment and credits as otherwise
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Property shall be EIGHT MILLION NINE HUNDRED
THOUSAND Dollars ($8,900,000). The Purchase Price shall be paid by wire transfer
of immediately available federal funds, less the amount of Earnest Money and
subject to prorations, adjustments and credits as otherwise specified in this
Agreement.

4. Purchaser's Inspection and Review Rights. Commencing on the Effective
Date and ending on the Closing Date, and subject to the rights of the Tenant (as
hereinafter defined), Purchaser and its agents, engineers, or representatives,
with Seller's reasonable, good faith cooperation, shall have the privilege of
going upon the Property as needed to inspect, examine, test, and survey the
Property at all reasonable times and from time to time. Such privilege shall
include the right to make tests, borings, and other tests to obtain information
necessary to determine surface and subsurface conditions, provided, however,
that no borings shall be made without the advance written consent of Seller.
Seller in its sole and absolute discretion, shall have the right to approve all
consultants conducting any tests as well as the scope of any invasive testing on
the Property prior to the Purchaser conducting such testing. Such privilege
shall also include the right to make any other tests deemed reasonably necessary
by Purchaser. Purchaser hereby agrees to indemnify and hold Seller harmless from
any liens, claims, liabilities, expenses and damages, including, without
limitation, reasonable attorney's fees, incurred through the exercise of such
privilege, and Purchaser further agrees to repair any damage to the Property
caused by the exercise of such privilege. At all reasonable times prior to the
Closing (as hereinafter defined), Seller shall make available to Purchaser, or
Purchaser's agents and representatives, and for copying at Purchaser's expense,
all books, records, and files in Seller's possession relating to the ownership
and operation of the Property, including, without limitation, title matters,
surveys, tenant files, service and maintenance agreements, and other contracts,
books, records, operating statements, and other information relating to the
Property. Seller further agrees to in good faith assist and cooperate with
Purchaser, at no cost to Seller, in coming to a thorough understanding of the
books, records, and files relating to the Property. Seller further agrees to
provide copies of any of such books, records, and files as may be reasonably
requested by Purchaser, with the copying costs to be borne by Purchaser. Seller
further agrees to provide to Purchaser prior to the date which is five (5)
business days after the Effective Date the most current surveys, appraisals,
environmental and engineering reports of the Land and Improvements which are in
the possession of Seller or which Seller can obtain with a reasonable effort and
which have not been previously delivered to Purchaser. Seller further agrees to
provide to Purchaser prior to the date which is five (5) days after the
Effective Date, a statement setting forth all revenues from the Property and
setting forth all costs and expenses of operating, maintaining, and repairing
the Property (and the costs of replacing component parts thereof) incurred by
Seller, in each case during the period of its ownership. The provisions of this
paragraph 4 shall survive the Closing or any termination of this Agreement.

5. Special Condition to Closing. Subject to the limitations set forth in
paragraph 4 above, Purchaser shall have until June 24, 1998 to make
investigations, examinations, inspections, market studies, feasibility studies,
lease reviews, and tests relating to the Property and the operation thereof in
order to determine, in Purchaser's sole opinion and discretion, the suitability
of the Property for acquisition by Purchaser. Purchaser shall have the right to
terminate this Agreement at any time prior to the expiration of the Inspection
Period by giving written notice to Seller of such election to terminate. In the
event this Agreement is so terminated, Seller shall be entitled to receive the
sum of One Hundred Dollars ($100) of the Earnest Money, and the balance of the
Earnest Money shall be promptly refunded by Escrow Agent to Purchaser,
whereupon, except as expressly provided to the contrary in this Agreement,
Purchaser shall have no further right to purchase the Property and no party
hereto shall have any other or further rights or obligations under this
Agreement. Seller acknowledges that the sum of $100 is good and adequate
consideration for the termination rights granted to Purchaser hereunder. In 

the event Purchaser fails to notify Seller on or before June 24, 1998 that
Purchaser has elected to terminate this Agreement, then Purchaser's right to
terminate this Agreement pursuant to the provisions of paragraphs 5, 6(g) and
6(h) shall be deemed to have been waived. Thereafter, if Seller has complied
with all the terms and conditions of this Agreement, and Purchaser fails or
refuses to close on or before June 26, 1998 (or July 7, 1998, if the closing
date is extended as provided herein), then the Earnest Money shall be released
to Seller, and Purchaser shall have no further liability hereunder.

6. General Conditions Precedent to Purchaser's Obligations Regarding the
Closing. In addition to any other conditions to Purchaser's obligations
hereunder, the obligations and liabilities of Purchaser hereunder shall in all
respects be conditioned upon the satisfaction of each of the following
conditions prior to or simultaneously with the Closing (as hereinafter defined),
any of which may be waived by written notice from Purchaser to Seller:

(a) Seller shall have complied in all material respects with and
otherwise performed in all material respects each of the covenants and
obligations of Seller set forth in this Agreement.

(b) All representations and warranties of Seller as set forth in
this Agreement shall be true and correct in all material respects as of
the date of Closing.

(c) There shall have been no material adverse change to the title to
the Property which has not been cured and the Title Company (as
hereinafter defined) shall have issued the Title Report (as hereinafter
defined) on the Land and Improvements without exceptions other than as
have been approved by Purchaser as Permitted Exceptions (as hereinafter
defined) and the Title Company shall be prepared to issue to Purchaser
upon the Closing an ALTA Owner's Title Insurance Policy on the Land and
Improvements pursuant to such Title Report.

(d) Purchaser shall have received the Tenant Estoppel Certificate
referred to in Paragraph 9(c) hereof, duly executed by the Tenant (as
hereinafter defined).

(e) Purchaser shall have received a date-down on the Title Report
through the date and time of recording the Grant Deed from Seller to
Purchaser, to reflect that Purchaser is vested with the fee simple title
to the Land and the Improvements, and to reflect that all requirements for
the issuance of the final title policy pursuant to such Title Commitment
have been satisfied.

(f) Seller shall use reasonable efforts to cause the entities which
issued to Seller the environmental site assessment report, the appraisal
and the building inspection report to address their respective reports to
Purchaser in such a way that Purchaser shall be entitled to rely on same.

(g) Purchaser's obligations and liabilities hereunder shall be
conditioned upon Purchaser receiving, at Purchaser's sole cost and
expense, prior to the Closing, an appraisal of the Land and Improvements
(as encumbered by the Lease) from a competent independent appraiser
selected by Purchaser which shall state that the Land and Improvements
have a value equal to or exceeding the Purchase Price. If the appraisal
received by the Purchaser shall reflect a value of the Land and
Improvements which is less than the Purchase Price, Purchaser shall have
the right to terminate this Agreement prior to June 24, 1998 by giving
written notice to Seller of such election to terminate. In the event
Purchaser so elects to terminate this Agreement, Seller shall be entitled
to receive $100 of the Earnest Money from Escrow Agent, and Purchaser
shall be entitled to a return of the balance of the Earnest Money, if any,
from Escrow Agent, Purchaser shall have no further right to acquire the
Property, and no party hereto shall have any other or future rights or
obligations under this Agreement, except as expressly provided to the
contrary herein.

(h) Purchaser shall have received a commitment from a licensed
commercial lending institution to make a loan to Purchaser in the amount
of not less than $6,800,000, bearing an interest rate not in excess of
9.25% per annum, being amortized over a period of 30 years, a maturity
date of 3 years,

3

closing costs not to exceed $10,000; an origination fee and other costs
not to exceed 1% of the loan amount and permitting prepayment in six
months. Purchaser shall pay any costs incurred in connection with the
closing of such a loan. This contingency to be removed on or before June
24, 1998.

7. Title and Survey. Seller covenants and agrees that Seller, at its sole
cost and expense, shall, on or before seven (7) days after the Effective Date of
this Agreement cause First American Title Guaranty Company, or such other such
title insurance company acceptable to Purchaser (herein referred to as the
"Title Company"), to deliver to Purchaser its Preliminary Title Report (herein
referred to as the "Title Report") to issue to Purchaser, upon the recording of
the Grant Deed conveying title to the Property from Seller to Purchaser, the
payment of the Purchase Price, and the payment to the Title Company of the
policy premium therefor, an ALTA Owner's Policy of Title Insurance with
endorsements covering survey and zoning, in the amount of the Purchase Price,
insuring good and marketable fee simple record title to the Property to be in
Purchaser without exception (including any general exception) except for matters
approved by Purchaser (herein referred to as the ("Permitted Exceptions"). The
Title Policy to be issued shall not contain any exception for mechanic's or
materialman's liens or any exception for unpaid taxes other than an exception
for taxes not yet due and payable. Such Title Policy shall not contain any
exception for rights of parties in possession other than an exception for the
rights of the Tenant (as hereinafter defined) under the Lease. If the Title
Report shall contain an exception for the state of facts which would be
disclosed by a survey of the Property or an "area and boundaries" exception, the
Title Report shall provide that such exception will be deleted upon the
presentation of an "as-built" survey, in which case the Title Report shall be
amended to contain an exception only for the matters shown on the as-built
survey. Seller shall also cause to be delivered to Purchaser together with such
Title Report, legible copies of all documents and instruments referred to
therein. Purchaser shall have until June 15, 1998 or five days after receipt of
the Title Report and accompanying documents, whichever is later to notify
Seller, in writing, of Purchaser's objection to any exceptions contained in the
Title Report and/or any other rights, interests or matters not shown of record
but which are discovered by Purchaser as a result of a survey, inspection or
inquiry (hereinafter referred to as "Title Defects"). Upon receipt of such
notification, Seller shall have five (5) days within which to notify Purchaser,
in writing, whether Seller intends to remove or delete from the title to be
conveyed to Purchaser any Title Defects objected to by Purchaser provided that
Seller shall cure any mortgage, deed of trust or other lien voluntarily created
by Seller. If Seller so elects to cure such Title Defects, then Seller shall
exercise diligent efforts, at no cost to Purchaser, to remove the same prior to
the Closing. If Seller does not elect or is unable to cure such Title Defects,
Seller shall notify Purchaser thereof in writing within said five (5) day
period, and Purchaser may elect within five (5) calendar days of receipt of
Seller's notice (but in no event later than June 24, 1998) to either (i) waive
its objections and proceed with the purchase of the Property (without any
reduction in the Purchase Price) pursuant to the terms of this Agreement (in
which event such Title Defect shall be deemed a "Permitted Exception" as stated
above), or (ii) terminate this Agreement, in which event Purchaser and Seller
shall have no further right, obligations or liabilities hereunder (other than
those that expressly survive termination of this Agreement) and Purchaser shall
be entitled to the prompt return of the Earnest Money and all interest accrued
thereon while in escrow. If Purchaser fails to make such election within five
(5) calendar day period, then Purchaser shall be deemed to have elected to
terminate this Agreement as provided above. For purposes of this Agreement, the
term "Permitted Exceptions" shall mean those title exceptions applicable to the
Property, which are accepted by Purchaser in accordance with the terms of this
Section 7). If Seller fails to remove such Title Defect as of the Closing, then,
to the extent such Title Defect is a mortgage, deed of trust or other lien
voluntarily created by Seller, Purchaser may use the applicable portion of the
Purchase Price at Closing to pay off and discharge such mortgage, deed of trust
or other lien voluntarily created by Seller; or (i) Purchaser shall have the
right to terminate this Agreement by giving written notice of such termination
to Seller, whereupon Escrow Agent shall promptly refund all Earnest Money to
Purchaser, Purchaser shall have no further right to purchase the Property and
Purchaser and Seller shall have no further rights, obligations, or liabilities
hereunder, except as may be expressly provided to the contrary herein; or (ii)
Purchaser shall have the right to accept title to the Property subject to such
defects and objections with no reduction in the Purchase Price, in which event
such defects and objections shall be deemed "Permitted Exceptions" above. Except
as expressly provided to the contrary herein, Seller makes no warranty of any
kind with respect to the title of the Property and Purchaser agrees to look
solely to the remedies afforded by Purchaser's title insurance policy with
regard to the condition of title.

8. Representations and Warranties of Seller. Seller hereby makes the
following representations and warranties to Purchaser:

(a) Lease. Attached hereto as Exhibit "B" and by this reference made
a part hereof as a true and correct copy of the lease with Fairchild
Technologies USA, Inc. ("Tenant") dated September 19, 1997, including the
guarantee of The Fairchild Corporation together with all modifications and
amendments to such lease, the cover page of which is attached as Exhibit
"A" (such lease, as modified and amended, being herein referred to as the
"Lease"). Seller is the "landlord" under the Lease and the rents and other
income thereunder, subject only to the collateral assignment of the Lease
and the rents thereunder in favor of the holder of any existing mortgage
or deed of trust encumbering the Property, which mortgage or deed of trust
shall be canceled and satisfied by Seller at the Closing.

(b) Lease - Assignment. To Seller's knowledge, the Tenant has not
assigned its interest in the Lease or sublet any portion of its premises
under the Lease.

4

(c) Lease - Default. (i) Seller has not received any notice of
termination or default under the Lease, (ii) to the Seller's knowledge
there are no existing or uncured defaults by Seller or by the Tenant under
the Lease, (iii) to the Seller's knowledge there are no events which with
the passage of time or notice, or both, would constitute a default by
Seller or by the Tenant, and Seller has complied with each and every
undertaking, covenant, and obligation of landlord under the Lease, except
that as of the date hereof approximately $197,000 remains to be disbursed
to Tenant in order to satisfy Seller's contribution for tenant
improvements, and to the extent Seller's contribution has not been fully
funded at Closing, the unfunded portion shall be withheld from Seller's
proceeds at Closing and applied by Purchaser to satisfy Seller's
obligations under the Lease, and (iv) Seller has not received notice that
Tenant has asserted any defense, set-off, or counterclaim with respect to
its tenancy or its obligation to pay rent, additional rent, or other
charges under the Lease.

(d) Lease - Rents and Special Consideration. Tenant: (i) has not
prepaid rent for more than one month in advance under the Lease, (ii) is
not entitled to receive any rent concession in connection with its tenancy
under the Lease which has not already been received except as expressly
provided therein, (iii) is not entitled to any special work (not yet
performed), or consideration (not yet given) in connection with its
tenancy under the Lease; and (iv) does not have any deed, option, or other
evidence of any right or interest in or to the Property, except as
evidenced by the express terms of the Lease.

(e) Lease - Commissions. No rental, lease, or other commissions with
respect to the Lease is payable to Seller, any partner of Seller, any
party affiliated with or related to Seller or third party. All commissions
payable under, relating to, or as a result of the Lease has been
cashed-out and paid and satisfied in full by Seller or by Seller's
predecessor in title to the Property.

(f) Service Contracts. There are no service contracts with Seller
(as opposed to Tenant) which are in effect and which relate to the
operation, management, or maintenance the Property which will continue in
effect after Closing. Seller has canceled or will cancel, effective as of
the Closing, any agreement in the nature of a management agreement or
service contract between Seller and any partner or shareholder of Seller
or any party affiliated with or related to Seller or any partner or
shareholder of Seller.

(g) No Other Agreements. Other than the Lease and the Permitted
Exceptions, Seller has not entered into any leases, service contracts,
management agreements, or other agreements or instruments, to which Seller
is a party and that grant to any person whomsoever or any entity
whatsoever any right, title, interest or benefit in or to all or any part
of the Property or any rights relating to the use, operation, management,
maintenance, or repair of all or any part of the Property and which will
extend beyond the Closing.

(h) No Litigation. To Seller's knowledge, there are no actions,
suits, or proceedings pending, or, threatened by any organization, person,
individual, or governmental agency against Seller with respect to the
Property or against the Property, nor does Seller have any knowledge of
any basis for such action. Seller has no knowledge of any pending or
threatened application for changes in the zoning applicable to the
Property or any portion thereof.

(I) Condemnation. To Seller's knowledge no condemnation or other
taking by eminent domain of the Property or any portion thereof has been
instituted and, there are no pending or threatened condemnation or eminent
domain proceedings (or proceedings in the nature or in lieu thereof)
affecting the Property or any portion thereof or its use.

(j) Proceedings Affecting Access. The Property is served by a curb
cut for direct vehicular access to and from Auburn Street and Kato Road,
adjoining the Property, which is a public road. To Seller's knowledge,
there are no pending or threatened proceedings that could have the effect
of impairing or restricting access between the Property and such adjacent
public roads.

5

(k) No Assessments. To Seller's knowledge, no assessments have been
made against the Property that are unpaid, whether or not they have become
liens, and there are no pending assessments, except as shown on the Title
Report.

(l) Violations. Seller has not received written notice of any
violations of law, municipal or county ordinances, or other legal
requirements with respect to the Property that remain uncured, nor any
notice that Improvements thereon do not comply with any legal requirements
with respect to the use, occupancy and construction thereof. To Seller's
knowledge, the Property is currently zoned in a classification such as
will permit the operation of the Property for the uses specified in the
Lease and the conditions, if any, to the granting of the zoning of the
Property have been satisfied. To Seller's knowledge, the Improvements
located on the Property are not located in a flood plain.

(m) Improvements. To Seller's knowledge, there are no structural or
other defects, latent or otherwise, in the Improvements, the heating,
ventilating, air conditioning, electrical, plumbing, water, roofing,
elevators (if any), storm drainage and sanitary sewer systems at or
servicing the Land and Improvements are in good condition and working
order and there are no defects or deficiencies, latent or otherwise,
therein.

(n) Employees. There are no employment, collective bargaining, or
similar agreements or arrangements between Seller and any of its employees
or others which will be binding on Purchaser or any of Purchaser's
successors in title.

(o) Bankruptcy. Seller is solvent and has not made a general
assignment for the benefit of creditors nor been adjudicated a bankrupt or
insolvent, nor has a receiver, liquidator, or trustee for any of Seller's
properties (including the Property) been appointed or a petition filed by
or to Seller's knowledge against Seller for bankruptcy, reorganization, or
arrangement pursuant to the Federal Bankruptcy Act or any similar Federal
or state statute, or any proceeding instituted for the dissolution or
liquidation of Seller.

(p) Pre-existing Right to Acquire. No person or entity has any right
or option to acquire the Property or any portion thereof which will have
any force or effect after the execution of this Agreement, other than
Purchaser, except as set forth in the Lease.

(q) Effect of Certification. Neither this Agreement nor the
transactions contemplated herein will constitute a breach or violation of,
or default under, or will be modified, restricted, or precluded by the
Leases, the Service Contracts, or the Permitted Exceptions.

(r) Authorization. ROSE VENTURES V, INC. is a duly organized and
validly existing corporation under the laws of the State of California and
has duly registered in any jurisdiction where it is required to do so.
This Agreement has been duly authorized and executed on behalf of Seller
and constitutes the valid and binding agreement of Seller, enforceable in
accordance with its terms, and all necessary action on the part of Seller
to authorize the transactions herein contemplated has been taken, and no
further action is necessary for such purpose.

(s) Seller Not a Foreign Person. Neither Seller nor the owner of
beneficial title to the Property is a "foreign person" which would subject
Purchaser to the withholding tax provisions of Section 1445 of the
Internal Revenue Code of 1986, as amended.

(t) Utilities. To Sellers knowledge all utilities necessary for the
use of the Property as an office building of the size and nature situated
thereon, including water, sanitary sewer, storm sewer, electricity, and
telephone, are installed and operational, and such utilities either enter
the Property through adjoining public streets, or, if they pass through
adjoining private land, do so in accordance with valid public easements or
private easements which inure to the benefit of the Property. All
installation and connection charges for utilities serving the Property
have been paid in full.

6

(u) Tax Returns. All property tax returns required to be filed by
Seller relating to the Property under any law, ordinance rule, regulation,
order, or requirement of any governmental authority have been, or will be,
as the case may be, truthfully, correctly, and timely filed.

At Closing, Seller shall represent and warrant to Purchaser that all
representations and warranties of Seller in this Agreement remain true and
correct as of the date of the Closing, except for any changes in any such
representations or warranties that occur and are disclosed by Seller to
Purchaser expressly and in writing at any time and from time to time prior to
Closing, which disclosures shall thereafter be updated by Seller to the date of
Closing. If there is any change in any representations or warranties and Seller
does not cure or correct such changes prior to Closing, then Purchaser may, at
Purchaser's option, (i) close and consummate the transaction contemplated by
this Agreement, (ii) terminate this Agreement by written notice to Seller,
whereupon the Earnest Money shall be immediately returned by Escrow Agent to
Purchaser, Purchaser shall have no further right to purchase the Property and
thereafter the parties hereto shall have no further rights or obligations
hereunder, except only for such rights or obligations that, by the express terms
hereof, survive any termination of this Agreement, or (iii) exercise any other
remedy available to Purchaser at law or in equity.

9. Seller's Additional Covenants. Seller does hereby further covenant and
agree as follows:

(a) Operation of Property. Seller hereby covenants that, from the
date of this Agreement up to and including the date of Closing, Seller
shall: (i) not enter into a contract with any third party respecting the
sale of the Property or any interest therein unless such contract is by
its terms subordinate to this Agreement, (ii) not modify, amend, or
terminate the Lease or enter into any new lease, contract, or other
agreement respecting the Property, without the consent of Purchaser, which
consent shall not be withheld or delayed and (iii) not grant or otherwise
create or consent to the creation of any easement, restriction, lien,
assessment, or encumbrance respecting the Property.

(b) Preservation of Lease. Seller shall, from and after the date of
this Agreement to the date of Closing, use its best efforts to perform and
discharge all of the duties and obligations and shall otherwise comply
with every covenant and agreement of the landlord under the Lease, at
Seller's expense, in the manner and within the time limits required
thereunder. Furthermore, Seller shall, for the same period of time, use
diligent and good faith efforts to cause the Tenant under the Lease to
perform all of its duties and obligations and otherwise comply with each
and every one of its covenants and agreements under such Lease and shall
take such actions as are reasonably necessary to enforce the terms and
provisions of the Lease.

(c) Tenant Estoppel Certificate. Prior to June 24, 1998, Seller
shall obtain and deliver to Purchaser a fully completed estoppel
certificate with respect to the Lease (herein referred to as the "Tenant
Estoppel Certificate") duly executed by the Tenant thereunder in the form
attached hereto as Exhibit "C".

(d) Insurance. From and after the date of this Agreement to the date
and time of Closing, Seller shall, at its expense, continue to maintain
the insurance policies covering the Property which are currently in force
and effect.

(e) Securities Act Compliance. Seller acknowledges that Purchaser
may be required by the Securities and Exchange Commission to file audited
financial statements for one to three years with regard to the Property.
At no cost or liability to Seller, Seller shall (i) cooperate with
Purchaser, its counsel, accountants, agents, and representatives, provide
them with access to Seller's books and records with respect to the
ownership, management, maintenance, and operation of the Property for the
applicable period, and permit them to copy the same,(ii) execute a form of
"rep" letter in form and substance reasonably satisfactory to Seller, and
(iii) furnish Purchaser with such additional information concerning the
same as Purchaser shall reasonably request. Purchaser will pay the costs
associated with any such audit. The terms of this paragraph shall survive
Closing.

7

10. Closing. Provided that all of the conditions set forth in this
Agreement are theretofore satisfied or performed in all material respects, it
being fully understood and agreed, however, that Purchaser may expressly waive
in writing, at or prior to Closing, any conditions that are unsatisfied or
unperformed at such time, the consummation of the sale by Seller and purchase by
Purchaser of the Property (herein referred to as the "Closing") shall be held on
or before June 26, 1998, and at such specific time, and date as shall be
designated by Purchaser in a written notice to Seller not less than two (2)
business days prior to Closing at the office of the Title Company, and absent
such notice at 2:00pm local time on June 26, 1998. For an additional $100,000.00
non-refundable deposit, close of escrow can be extended to July 7, 1998.

11. Seller's Closing Documents. For and in consideration of, and as a
condition precedent to, Purchaser's delivery to Seller of the Purchase Price
described in Paragraph 3 hereof, Seller shall obtain or execute, at Seller's
expense, and deliver to Purchaser at Closing the following documents (all of
which shall be duly executed, acknowledged, and notarized where required):

(a) Grant Deed. A Grant Deed ("Grant Deed") in the form attached
hereto as Exhibit "D" conveying to Purchaser fee simple title to the Land
and Improvements, together with all rights, members, easements, and
appurtenances thereto, subject only to the Permitted Exceptions. The legal
description set forth in the Grant Deed shall be as set forth on Exhibit
"A" attached hereto. In the event Purchaser shall obtain a new or updated
survey of the Land and Improvements and the legal description set forth in
Purchaser's survey shall differ from the legal description set forth on
Exhibit "A" hereto, Seller shall execute and deliver to Purchaser a
quitclaim deed containing a legal description based upon such survey
obtained by Purchaser;

(b) Bill of Sale. A Bill of Sale conveying to Purchaser marketable
title to the Personal Property in the form attached hereto as Exhibit "E";

(c) Blanket Transfer. A Blanket Transfer and Assignment in the form
attached hereto as Exhibit "F";

(d) Assignment and Assumption of Lease. An Assignment and Assumption
of Lease in the form attached hereto as Exhibit "G" assigning to Purchaser
all of Seller's right, title, and interest in and to the Lease and the
rents thereunder;

(e) ALTA Affidavit. A customary ALTA affidavit in the form required
by the Title Company;

(f) FIRPTA Certificate. A FIRPTA Certificate;

(g) Surveys and Plans. Such surveys, site plans, plans and
specifications, and other matters relating to the Property as are
described in subparagraph (a) of the Blanket Transfer and Assignment and
are in the possession of Seller or Seller's agents;

(h) Certificates of Occupancy. To the extent in Seller's possession,
the original certificates of occupancy for all space within the
Improvements;

(I) Lease. An original executed counterpart or certified copy of the
Lease and all amendments to and modifications thereof;

(j) Estoppel Certificate. The estoppel certificate referred to in
Paragraph 9(c) hereof;

(k) Keys and Records. All of the keys to any doors or locks on the
Property and the original tenant files and other books and records
relating to the Property in Seller's possession;

8

(l) Tenant Notice. Notice from Seller to the Tenant of the sale of
the Property to Purchaser in such form as Purchaser shall reasonably
approve; and,

(m) Settlement Statement. A settlement statement setting forth the
amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement.

12. Purchaser's Closing Documents. Purchaser shall deliver the balance of
the Purchase Price and shall obtain or execute and deliver to Seller at Closing
the following documents, all of which shall be duly executed and acknowledged
where required and shall survive the Closing:

(a) Blanket Transfer. The Blanket Transfer and Assignment;

(b) Assignment and Assumption of Lease. The Assignment and
Assumption of Lease; and

(c) Settlement Statement. A settlement statement setting forth the
amounts paid by or on behalf of and/or credited to each of Purchaser and
Seller pursuant to this Agreement.

13. Closing Costs. Seller shall pay the cost of the Title Report, the
premium for a CLTA Owner's Policy of Title Insurance issued pursuant thereto,
the cost of any recording fees, grantor, documentary or transfer tax imposed by
the State of California, Alameda County and local transfer taxes, if any, upon
the conveyance of the Property pursuant hereto, the attorneys' fees of Seller
and closing costs of the loan referred to in paragraph 6(h) and all other costs
and expenses incurred by Seller in closing and consummating the purchase and
sale of the Property pursuant hereto. Purchaser shall pay for the difference in
premium between a CLTA and an ALTA title policy, any loan closing costs, for its
attorneys' fees and all other costs and expenses incurred by Purchaser in
closing and consummating the purchase and sale of the Property pursuant hereto.
The parties shall each pay one-half of any escrow fees.

14. Prorations. The following items shall be prorated and/or credited
between Seller and Purchaser as of Midnight preceding the date of Closing:

(a) Rent. Rent, additional rents, operating costs, and other income
of the Property (other than security deposits) collected by Seller from
Tenant for the month of Closing. Seller shall pay to Purchaser at Closing
any rents or other sums prepaid by Tenant for any period following the
month of Closing. The parties shall adjust after Closing for any
uncollected rent or other income under the Lease that shall become due and
payable upon final reconciliation of any pass-through items under the
Lease. Seller further reserves the right to collect (without any right to
pursue the right of possession against the Tenant under the Lease) any
delinquent rents or other sums payable under the Lease as of the Closing.

(b) Property Taxes. Except for such taxes which are the
responsibility of Tenant and for which Seller has not received payment,
City, state, county, and school district ad valorem taxes based on the ad
valorem tax bills for the Property, if then available, or if not, then on
the basis of the latest available tax figures and information. Should such
proration be based on such latest available tax figures and information
and prove to be inaccurate upon receipt of the ad valorem tax bills for
the Property for the year of Closing, either Seller or Purchaser, as the
case may be, may demand at any time after Closing a payment from the other
correcting such malapportionment. In addition, if after Closing there is
an adjustment or reassessment by any governmental authority with respect
to, or affecting, any ad valorem taxes for the Property for the year of
Closing or any prior year, any additional tax payment or refund for the
Property required to be paid or refunded with respect to the year of
Closing shall be prorated between Purchaser and Seller and any such
additional tax payment or refund for the Property for any year prior to
the year of Closing shall be paid by or to Seller, as the case may be.
This agreement shall expressly survive the Closing.

(c) Utility Charges. Except for utilities which are the
responsibility of Tenant and for which Seller has not received payment,
Seller shall pay all utility bills received prior to Closing and shall 

9

be responsible for utilities furnished to the Property prior to Closing.
Purchaser shall be responsible for the payment of all bills for utilities
furnished to the Property subsequent to the Closing. Seller and Purchaser
hereby agree to prorate and pay their respective shares of all utility
bills received subsequent to Closing, which agreement shall survive
Closing.

15. PURCHASER'S DEFAULT. IN THE EVENT OF DEFAULT BY PURCHASER UNDER THE
TERMS OF THIS AGREEMENT, SELLER'S SOLE AND EXCLUSIVE REMEDY SHALL BE TO RECEIVE
THE EARNEST MONEY AS LIQUIDATED DAMAGES AND THEREAFTER THE PARTIES HERETO SHALL
HAVE NO FURTHER RIGHTS OR OBLIGATIONS HEREUNDER WHATSOEVER. IT IS HEREBY AGREED
THAT SELLER'S DAMAGES WILL BE DIFFICULT TO ASCERTAIN AND THAT THE EARNEST MONEY
CONSTITUTES A REASONABLE LIQUIDATION THEREOF AND IS INTENDED NOT AS A PENALTY,
BUT AS FULLY LIQUIDATED DAMAGES. SELLER AGREES THAT IN THE EVENT OF DEFAULT BY
PURCHASER, IT SHALL NOT INITIATE ANY PROCEEDING TO RECOVER DAMAGES FROM
PURCHASER, BUT SHALL LIMIT ITS RECOVERY TO THE RETENTION OF THE EARNEST MONEY.

-------------------------
Seller's Initials

-------------------------
Purchaser's Initials

16. Seller's Default. In the event of default by Seller under the terms of
this Agreement, except as otherwise specifically set forth herein, at
Purchaser's option: (i) Purchaser may terminate this Agreement by written notice
to Seller, whereupon the Earnest Money shall be immediately returned by Escrow
Agent to Purchaser, and the parties hereto shall have no further rights or
obligations hereunder whatsoever, or (ii) Purchaser shall be entitled to an
immediate refund of the Earnest Money and to pursue the remedy of specific
performance as its sole and exclusive remedies.

17. Condemnation. If, prior to the Closing, all or any part of the
Property valued at more than $100,000 is subjected to a bona fide threat of
condemnation by a body having the power of eminent domain or is taken by eminent
domain or condemnation (or sale in lieu thereof), or if Seller has received
notice that any condemnation action or proceeding with respect to the Property
is contemplated by a body having the power of eminent domain, Seller shall give
Purchaser immediate written notice of such threatened or contemplated
condemnation or of such taking or sale, and Purchaser may by written notice to
Seller given within thirty (30) days of the receipt of such notice from Seller,
elect to cancel this Agreement. If Purchaser chooses to cancel this Agreement in
accordance with this Paragraph 17, then the Earnest Money shall be returned
immediately to Purchaser by Escrow Agent and except as otherwise provided
herein, the rights, duties, obligations, and liabilities of the parties
hereunder shall immediately terminate and be of no further force and effect. If
Purchaser does not elect to cancel this Agreement in accordance herewith or the
portion of the Property in question is valued at less than $100,000, this
Agreement shall remain in full force and effect and the sale of the Property
contemplated by this Agreement, less any interest taken by eminent domain or
condemnation, or sale in lieu thereof, shall be effected with no further
adjustment and without reduction of the Purchase Price, and at the Closing,
Seller shall assign, transfer, and set over to Purchaser all of the right,
title, and interest of Seller in and to any awards that have been or that may
thereafter be made for such taking.

18. Damage or Destruction. If any of the Improvements shall be destroyed
or damaged prior to the Closing, and the estimated cost of repair or replacement
exceeds One Hundred Thousand Dollars ($100,000) or if the Lease shall terminate
as a result of such damage, Purchaser may, by written notice given to Seller
within ten (10) days after receipt of written notice from Seller of such damage
or destruction, elect to terminate this Agreement, in which event the Earnest
Money shall immediately be returned by Escrow Agent to Purchaser and except as
expressly provided herein to the contrary, the rights, duties, obligations, and
liabilities of all parties hereunder shall immediately terminate and be of no
further force or effect. If Purchaser does not elect to terminate this Agreement
pursuant to this Paragraph 18, or has no right to terminate this Agreement
(because the 

10

damage or destruction does not exceed $100,000 and the Lease remains in full
force and effect), and the sale of the Property is consummated, Purchaser shall
be entitled to receive all insurance proceeds paid or payable to Seller by
reason of such destruction or damage under the insurance required to be
maintained by Seller pursuant to Paragraph 9(d) hereof (less amounts of
insurance theretofore received and applied by Seller to restoration) and Seller
shall pay to Purchaser the amount of any deductible thereunder. If the amount of
said casualty or rent loss insurance proceeds is not settled by the date of
Closing, Seller shall execute at Closing all proofs of loss, assignments of
claim, and other similar instruments to ensure that Purchaser shall receive all
of Seller's right, title, and interest in and under said insurance proceeds.

19. Hazardous Substances. To Seller's actual knowledge (Thomas B. Haurey
and/or Stephen Diamond) (a) there are no "hazardous substances" (as defined in
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Sections 9601 et seq. as amended) at the Property; (b) there has been no
release or threat of release of any such hazardous substance; (c) the Property
is not subject to regulation by any governmental entity as result of the
presence of (A) stored, leaked or spilled petroleum products,(B) underground
storage tanks, (C) an accumulation of rubbish, debris or other solid waste, or
because of the presence, release, threat of release, discharge, storage,
treatment, generation or disposal of any "hazardous waste" (as defined in the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., as
amended), or "toxic substance" (as defined in the Toxic Substance Control Act,
15 U.S.C. Section 2601 et seq., as amended), including without limitation
asbestos and items or equipment containing polychlorinated biphenyls (PCBs) in
excess of 50 parts per million; and (d) no environmental condition exists on the
Property that either (X) requires the owner of the Property to report such
condition to any authority or agency of the State of California or (Y) requires
the owner of the Property to make a notation of such condition in any public
records or conveyancing instrument upon the conveyance of the Property. Seller
covenants during the period of this Agreement not to discharge or store any such
materials on the Property.

20. Assignment. Purchaser's rights and duties under this Agreement shall
be freely transferable and assignable by Purchaser to an affiliate of Purchaser,
Purchaser shall remain liable for the performance of all obligations, covenants,
conditions, and agreements imposed upon Purchaser pursuant to the terms of this
Agreement.

21. Broker's Commission. Seller has agreed to pay a real estate commission
of 3% to The Royston Group and Spectrum Interests (the "Broker"). Purchaser and
Seller hereby represent each to the other that they have not discussed this
Agreement or the subject matter hereof with any real estate broker or agent
other than Broker so as to create any legal right in any such broker or agent to
claim a real estate commission with respect to the conveyance of the Property
contemplated by this Agreement. Seller shall and does hereby indemnify and hold
harmless Purchaser from and against any claim, whether or not meritorious, for
any real estate sales commission, finder's fees, or like compensation in
connection with the sale contemplated hereby and arising out of any act or
agreement of Seller. Likewise, Purchaser shall and does hereby indemnify and
hold harmless Seller from and against any claim, whether or not meritorious, for
any real estate sales commission, finder's fees, or like compensation in
connection with the sale contemplated hereby and arising out of any act or
agreement of Purchaser, except any such claim asserted by Broker, or any broker
or agent claiming under Broker. This Paragraph 21 shall survive the Closing or
any termination of this Agreement.

22. Notices. Wherever any notice or other communication is required or
permitted hereunder, such notice or other communication shall be in writing and
shall be delivered by overnight courier, by hand, or sent by U.S. registered or
certified mail, return receipt requested, postage prepaid, to the addresses set
out below or at such other addresses as are specified by written notice
delivered in accordance herewith:

PURCHASER:                       c/o Wells Capital, Inc.
3885 Holcomb Bridge Road
Norcross, Georgia 30092
Attn: Mr. Leo F. Wells, III

11

with a copy to:                  O'Callaghan & Stumm LLP
127 Peachtree Street N.E., Suite 1330
Atlanta, Georgia 30303
Attn: William L. O'Callaghan, Jr., Esq.

SELLER:                          3600 Pruneridge Avenue
Suite 200
Santa Clara, CA 95051

with a copy to:                  Kent Mitchell, Esq.
550 Hamilton Ave., Ste. 230
Palo Alto, CA 94301

Any notice or other communication given as hereinabove provided shall be deemed
effectively given or received on the date of delivery.

23. Possession. Possession of the Property shall be granted by Seller to
Purchaser on the date of Closing, subject only to the Leases and the Permitted
Exceptions.

24. Time Periods. If the time period by which any right, option, or
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday, or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day in San Jose, California.

25. Survival of Provisions. All covenants, warranties, and agreements set
forth in this Agreement shall survive the execution or delivery of any and all
deeds and other documents at any time executed or delivered under, pursuant to,
or by reason of this Agreement, and shall survive the payment of all monies made
under, pursuant to, or by reason of this Agreement, for a period of 24 months
following Closing.

26. Severability. This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable laws, ordinances,
rules, and regulations. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall, for any reason and to any extent
be invalid or unenforceable, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby but rather shall be enforced to the greatest extent permitted by law.

27. Authorization. Purchaser represents to Seller that this Agreement has
been duly authorized and executed on behalf of Purchaser and constitutes the
valid and binding agreement of Purchaser, enforceable in accordance with its
terms, and all necessary action on the part of Purchaser to authorize the
transactions herein contemplated has been taken, and no further action is
necessary for such purpose.

28. General Provisions. No failure of either party to exercise any power
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no representations, inducements, promises, or agreements,
oral or otherwise, between the parties not embodied herein shall be of any force
or effect. Any amendment to this Agreement shall not be binding upon the parties
hereto unless such amendment is in writing and executed by all parties hereto.
Subject to the provisions of paragraph 20, the provisions of this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective heirs, legal representatives, successors, and assigns. Time is of the
essence of this Agreement. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, but all of which taken
together shall constitute one and the same agreement. The headings inserted at
the beginning of each paragraph are for convenience only, and do not add to or
subtract from the meaning of the contents of each paragraph. This Agreement
shall be construed and interpreted under the laws of the State of California.
Except as otherwise provided herein, all rights, powers, and privileges
conferred hereunder upon the parties shall be cumulative but not restrictive to
those given by law. All personal pronouns used in this Agreement, whether used
in the

12

masculine, feminine, or neuter gender shall include all genders, and all
references herein to the singular shall include the plural and vice versa.

29. Effective Date. The "Effective Date" of this Agreement shall be deemed
to be the date this Agreement is fully executed by both Purchaser and Seller and
a fully executed original counterpart of this Agreement has been received by
both Purchaser and Seller. If the Effective Date does not occur on or before
June 8, 1998, this Agreement shall be void and of no further force and effect.

30. Tax Free Exchanges. Seller shall have the full and unrestricted right
to assign the rights and obligations of Seller under the final Purchase
Agreement, to one or more substitute buyer or buyers; but such assignment shall
not relieve Seller of Seller's obligations hereunder. The purpose of any such
assignment is to enable the substitute buyer or buyers to exchange the Property
for property owned by Seller, pursuant to a separate exchange agreement between
Seller and such substitute buyer or buyers in order to effect a real property
exchange under Internal Revenue Code Section 1031. Buyer agrees to cooperate in
such exchange, including the execution of all documents reasonably required by
Seller's attorney, at no cost or liability to Buyer, and provided that Buyer
shall not be required to take title to any other real estate. Seller agrees to
hold Buyer harmless from any liability, damage or costs including reasonable
attorney's fees that may arise from Buyer's participation in such exchange.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective seals to be affixed hereunto as of the day,
month and year first above written.

"SELLER":

ROSE VENTURES V, INC.

By:  /s/ Stephen P. Diamond
-----------------------------
Stephen P. Diamond
Its: President

/s/ Thomas G. Haury
----------------------------------
THOMAS G. HAURY

/s/ Carleen S. Haury
----------------------------------
CARLEEN S. HAURY

"PURCHASER":

WELLS DEVELOPMENT CORPORATION

By: /s/ Brian M. Conlon
------------------------------
Its: EXECUTIVE VICE PRESIDENT
-------------------------

13

EXHIBIT 10.14

RESTATEMENT AND FIRST AMENDMENT TO

AGREEMENT FOR THE PURCHASE AND SALE OF PROPERTY

BETWEEN THE FREMONT JOINT VENTURE

AND

ROSE VENTURES V, INC., THOMAS G. HAURY AND CARLEEN S. HAURY

REINSTATEMENT OF AND FIRST AMENDMENT TO
AGREEMENT FOR THE PURCHASE
AND SALE OF PROPERTY

THIS REINSTATEMENT OF AND FIRST AMENDMENT TO AGREEMENT FOR THE PURCHASE
AND SALE OF PROPERTY is made and entered into as of the 1st day of July, 1998,
by and between WELLS DEVELOPMENT CORPORATION, a Georgia corporation
("Purchaser") and ROSE VENTURES V, Inc., a California corporation as to any
undivided 50% interest, and THOMAS G. HAURY and CARLEEN S. HAURY, husband and
wife, as joint tenants, as to an undivided 50% interest (collectively, "Seller")

W I T N E S S E T H:

WHEREAS, the parties hereto entered into that certain Agreement for the
Purchase and Sale of Property (the "Purchase Agreement") dated as of June 8,
1998, relating to that certain property located at 47320 Kato Road and being
more particularly described on Exhibit A hereto (the "Property"); and

WHEREAS, the Agreement was timely terminated by Purchaser; and

WHEREAS, the parties desire to reinstate the Agreement and amend certain
provisions of the Agreement;

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein set forth, and other good and valuable
consideration the receipt, adequacy and sufficiency of which are hereby
expressly acknowledged by the parties hereto, Seller and Purchaser do hereby
covenant and agree as follows:

1. The Agreement, as amended hereby, is reinstated.

2. Purchaser hereby waives the Special Condition to Closing set forth in
paragraph 5 of the Agreement, and said paragraph 5 shall be deleted from the
Agreement.

3. Purchaser hereby waives the conditions set forth in subparagraphs 6(g)
and 6(h) of the Agreement, and said subparagraphs 6(g) and 6(h) shall be deleted
from the Agreement. A new subparagraph 6(g) shall be added to the Agreement, as
follows:

"(g) Purchaser shall have, simultaneously with Closing hereunder,
closed a loan from a commercial lending institution in the amount of not less
than $5,960,000; bearing an interest rate not in excess of (i) the prime rate of
NationsBank, N.A., or (ii) the Variable Eurdollar Rate (as defined by
NationsBank, N.A.) plus 220 basis points; being amortized over 30 years; and
having a maturity date of 18 months. Purchaser agrees to apply for and accept a
commitment having the foregoing terms or more favorable terms and to use
commercially reasonable efforts to satisfy any conditions of said commitment and
close said loan."

4. The provisions of paragraph 7 of the Agreement shall be amended to
provide that Purchaser shall have until July 10, 1998, to notify Seller in
writing of Purchaser's objection to any exceptions contained in the Title
Report, etc. The date "June 24, 1998" appearing in said paragraph 7 shall be
deemed to mean the date of Closing.

5. The date of Closing specified in paragraph 10 shall be deemed to mean
July 15, 1998.

6. Except as expressly modified by the terms and conditions hereof, the
terms and conditions of the Agreement shall remain unchanged and in full 

force and effect.

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

"PURCHASER":

WELLS DEVELOPMENT CORPORATION, A GEORGIA CORPORATION

By:      /s/ Leo F. Wells, III
------------------------------------------------

Title:   President
---------------------------------------------

"SELLER"

ROSE VENTURES V, INC.

By: /s/ Stephen P. Diamond
------------------------------------------------
Stephen P. Diamond
Its: President

/s/ Thomas G. Haury
------------------------------------------------
THOMAS G. HAURY

/s/ Carleen S. Haury
------------------------------------------------
CARLEEN S. HAURY

EXHIBIT 10.15

PROMISSORY NOTE

FROM THE FREMONT JOINT VENTURE

TO

NATIONSBANK, N.A.

PROMISSORY NOTE
$5,960,000.00                                                       July 16,1998

1. Payment Schedule and Maturity Date. FOR VALUE RECEIVED, the undersigned
(herein called "Maker") hereby promises to pay to the order of NationsBank,
N.A., a national banking association ("Lender"), without offset, in immediately
available funds in lawful money of the United States of America, at NationsBank
Plaza, 600 Peachtree Street, N.E. in the City of Atlanta, Fulton County,
Georgia, the principal sum of FIVE MILLION NINE HUNDRED SIXTY THOUSAND AND
NO/l00 DOLLARS ($5,960,000.00) (or the unpaid balance of all principal advanced
against this Note, if that amount is less) together with interest on the unpaid
principal balance of this Note from day to day outstanding as hereinafter
provided, as follows:

a. Primary Maturity Date. Unless duly extended as hereinafter provided,
the final maturity of the indebtedness evidenced by this Note shall be July 16,
1999 (the "Primary Maturity Date").

b. Extended Maturity Date. Maker shall have the right and option (the
"Extension Option") to extend the final maturity of the indebtedness evidenced
by this Note from the Primary Maturity Date to January 16, 2000 (the "Extended
Maturity Date"), upon the conditions that (a) Maker shall give to Lender, no
earlier than May 16, 1999, and no later than June 16, 1999, written notice of
the exercise by Maker of the Extension Option; (b) there shall not exist, either
on the date of such notice (the "Notice Date") or on the Primary Maturity Date,
any default under the Mortgage (hereinafter defined) or any other Loan Document
(hereinafter defined); (c) there shall not have occurred, from and after the
date of this Note, any material adverse change in the business or financial
condition of Maker, Wells Development Corporation, a Georgia corporation, Wells
Operating Partnership, L.P., a Delaware limited partnership, or Leo F. Wells,
III, or any material adverse change in the condition or value of the Property
(hereinafter defined); (d) Maker shall make a prepayment of principal in an
amount (if any) sufficient to cause the outstanding principal balance of the
indebtedness evidenced by this Note to be reduced, prior to the Primary Maturity
Date, to an amount no greater than Five Million Four Hundred Sixty Thousand and
No/l00 Dollars ($5,460,000.00); and (e) Maker shall pay to Lender,
simultaneously with the giving of written notice of Maker's exercise of the
Extension Option, an additional origination fee in the amount of Seven Thousand
Four Hundred Fifty and No/100 Dollars ($7,450.00).

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 1

c. Maturity Date. The terms "Maturity Date" and "the final maturity of the
indebtedness evidenced by this Note" as used in this Note mean either the
Primary Maturity Date, if the Extension Option is not duly exercised by Maker,
or the Extended Maturity Date, if the Extension Option is duly exercised by
Maker.

d. Interest Installments. All interest accruing hereunder from the date
hereof through the Maturity Date shall be due and payable in arrears commencing
on August 1, 1998, and continuing on the first (1st) day of each succeeding
calendar month thereafter through and including the first (1st) day of the
calendar month in which the Maturity Date occurs.

e. Principal Installments. Commencing on September 1, 1998, and continuing
on the first (1st) day of each succeeding calendar month thereafter through and
including the first (1st) day of the calendar month in which the Maturity Date
occurs, Maker shall pay to Lender equal consecutive monthly installments of
principal in the amount of Ten Thousand Four Hundred Ninety-Eight and No/100
Dollars ($10,498.00) each.

f. Final Payment of Principal and Interest. The entire outstanding
principal balance of this Note together with all accrued and unpaid interest
thereon shall be finally due and payable on the Maturity Date.

2. Security; Loan Documents. The security for this Note includes a Deed of
Trust, Assignment, Security Agreement and Fixture Filing (which, as it may have
been or may be amended, restated, modified or supplemented from time to time, is
herein called the "Mortgage") of even date herewith from Maker to Lender,
conveying and encumbering certain property in Alameda County, California
described therein (the "Property"). This Note, the Mortgage and any other
documents now or hereafter securing, guaranteeing or executed in connection with
the loan evidenced by this Note, are, as the same have been or may be amended,
restated, modified or supplemented from time to time, herein sometimes called
individually a "Loan Document" and together the "Loan Documents."

3. Interest Rate.

(a) Stated Rate. Subject to the further provisions of this Section
3, the unpaid principal balance of this Note from day to day outstanding which
is not past due shall bear interest at a rate per annum equal to the lesser of
(i) the Maximum Rate (hereinafter defined) or (ii) the Stated Rate (hereinafter
defined) computed on the Annual Basis (hereinafter defined). The term "Stated
Rate" as used in this Note means a variable rate per annum equal to either (i)
the Prime Rate (hereinafter defined); or (ii) at the election of Maker, but
subject to the terms and conditions set forth herein, the Variable Eurodollar
Basis

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 2

(hereinafter defined). The Stated Rate shall, unless otherwise specified herein,
change with each change in the Prime Rate or Variable Eurodollar Rate, as the
case may be, as of the date of any such change, without notice, subject always
to the limitations set out in this Section 3; provided, however, that if on any
day the Variable Rate shall exceed the maximum permitted by application of the
Maximum Rate in effect on that day, the Variable Rate shall be limited to, but
shall remain at and vary with, the maximum permitted by application of the
Maximum Rate on that day and on each day thereafter until the total amount of
interest accrued at the Variable Rate on the unpaid balance of this Note equals
the total amount of interest which would have accrued if there were no
limitation by the Maximum Rate, or until the earlier payment in full of this
Note.

The term "Annual Basis" as used in this Note means computation of interest for
the actual number of days elapsed and as if each year were composed of 360 days;
however, use of the Annual Basis is subject always to limitation by the Maximum
Rate and in no event shall any such computation result in an amount of interest
in excess of the Maximum Amount (hereinafter defined). In any event, all
interest at the Maximum Rate shall be computed on the Annual Basis of 365 days
(366 in a leap year).

The term "Business Day" as used in this Note means any day on which the offices
of Lender are open for the conduct of its banking business in Atlanta, Georgia
and also on which commercial banks are open for international business
(including dealings in United States dollar deposits) in London, England.

The term "Eurodollar Borrowing" means any portion of the indebtedness evidenced
by this Note which bears interest at the Variable Eurodollar Basis.

The term "Eurodollar Reserve Percentage" as used in this Note means the reserve
percentage applicable from day to day under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or if more than one
such percentage is so applicable, the daily average for such percentage for
those days during which any such percentage shall be applicable) for determining
the maximum reserve requirement (including, without limitation, any basic,
marginal, supplemental or emergency reserve requirement) for Lender in respect
of liabilities or assets consisting of or including "Eurocurrency Liabilities"
as defined in Regulation D of the Board of Governors of the Federal Reserve
Board as from time to time in effect, whether or not Lender has any Eurocurrency
liabilities subject to such reserve requirement at that time. Eurodollar
Borrowings shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of credits for
proration, exceptions or offsets that may be available from time to time to
Lender. The Variable Eurodollar Basis shall be adjusted

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 3

automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.

The term "Maximum Rate" as used in this Note means the maximum nonusurious rate
of interest per annum permitted by whichever of applicable United States federal
law or the law of the State of Georgia permits the higher interest rate,
including to the extent permitted by applicable law, any amendments thereof
hereafter or any new law hereafter coming into effect to the extent a higher
Maximum Rate is permitted thereby. The Maximum Rate shall be applied by taking
into account all amounts characterized by applicable law as interest on the debt
evidenced by this Note, so that the aggregate of all interest does not exceed
the maximum nonusurious amount permitted by applicable law (the "Maximum
Amount").

The term "Prime Rate" as used in this Note means, on any day, the rate of
interest per annum then most recently established by Lender as its "prime rate."
Any such rate is a general reference rate of interest, may not be related to any
other rate, and may not be the lowest or best rate actually charged by Lender to
any customer or a favored rate and may not correspond with future increases or
decreases in interest rates charged by other lenders or market rates in general.

The term "Variable Eurodollar Basis" as used in this Note means a per annum rate
of interest (rounded upwards, if necessary, to the nearest whole one-sixteenth
of 1%) determined pursuant to the following formula:

Variable Eurodollar Basis =             [Variable Eurodollar Rate]
--------------------------------------
[100% - Eurodollar Reserve Percentage]

PLUS two hundred twenty (220) basis points, after adjustment for
insurance costs and other appropriate regulatory costs and
adjustments.

The term "Variable Eurodollar Rate" as used in this Note means, as such rate
changes each day, without notice, the rate per annum appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in United States dollars at approximately 11:00 a.m. (London time) for a
thirty-day period, with the applicable Variable Eurodollar Rate for each day
being the Variable Eurodollar Rate that appeared, as aforesaid, two Business
Days prior to such day. If for any reason such rate is not available, the term
"Variable Eurodollar Rate" shall mean, as such rate changes each day, without
notice, the rate per annum appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in United States dollars at approximately
11:00 a.m. (London time) for a thirty-day period, with the applicable Variable
Eurodollar Rate for each day being

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 4

the Variable Eurodollar Rate that appeared, as aforesaid, two Business Days
prior to such day; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.

(b) Election of Stated Rate. The Stated Rate as of the date hereof
is the Variable Eurodollar Basis. Maker may elect to change the Stated Rate from
the Prime Rate to the Variable Eurodollar Basis, or from the Variable Eurodollar
Basis to the Prime Rate, once per calendar month, which election shall be
effective on the first (1st) Business Day following receipt by Lender of written
notice from Maker setting forth the rate elected. Any portion of the outstanding
principal balance hereof which, prior to the Maturity Date, does not bear
interest at the Variable Eurodollar Basis shall bear interest at the Prime Rate.

(c) Application of Maximum Rate. Notwithstanding anything herein to
the contrary, if on any day the Stated Rate shall exceed the maximum permitted
by application of the Maximum Rate in effect on that day, the Stated Rate shall
be limited to, but shall remain at and vary with, the maximum permitted by
application of the Maximum Rate on that day and on each day thereafter until the
total amount of interest accrued at the Stated Rate on the unpaid balance of
this Note equals the total amount of interest which would have accrued if there
were no limitation by the Maximum Rate, or until the earlier payment in full of
this Note.

(d) Suspension of Eurodollar Borrowings. If, at any time,

(i) Lender shall have reasonably determined (which determination
shall be conclusive and binding) that by reason of circumstances affecting
the London interbank market or other Eurodollar market, as applicable,
adequate and reasonable means do not exist for ascertaining the Variable
Eurodollar Basis, or

(ii) Lender shall have reasonably determined (which determination
shall be conclusive and binding) that the Variable Eurodollar Basis will
not adequately and fairly reflect the cost to Lender of any Eurodollar
Borrowing,

then Lender shall forthwith give notice thereof to Maker, whereupon until Lender
notifies Maker that the circumstances giving rise to such suspension no longer
exist, the obligation of Lender to allow new Eurodollar Borrowings shall be
suspended.

(e) Conversion to Prime Rate. If, after the date of this Note, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 5

or comparable agency charged with the interpretation or administration thereof,
or compliance by Lender (or any of its non-United States offices) with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful or
impossible for Lender to make, maintain or fund Eurodollar Borrowings, Lender
shall forthwith give notice thereof to Maker, whereupon until Lender notifies
Maker that the circumstances giving rise to such suspension no longer exist, the
obligation of Lender to allow Eurodollar Borrowings shall be suspended. If
Lender shall determine that it may not lawfully continue to maintain any
outstanding Eurodollar Borrowing to maturity and shall so specify in such
notice, such Eurodollar Borrowing shall be immediately converted to a borrowing
at the Prime Rate.

(f) Additional Compensation To Lender. If, after the date of this
Note, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:

(i) shall subject Lender to any tax, duty or other direct charge
with respect to Eurodollar Borrowings or this Note or shall change the
basis of taxation of payments to Lender of the principal of or interest on
Eurodollar Borrowings or any other amounts due under this Note in respect
of Eurodollar Borrowings or its obligations to allow Eurodollar Borrowings
(except for changes in the rate of tax on the overall net income of Lender
imposed by the jurisdiction in which Lender's principal executive office
is located); or

(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Eurodollar Borrowing any such
requirement included in an applicable Eurodollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, Lender or shall impose on Lender or the interbank market for
Eurodollar deposits any other condition affecting Eurodollar Borrowings,
this Note or the obligation of Lender to allow Eurodollar Borrowings;

and the result of any of the foregoing is to increase the cost to Lender of
allowing or maintaining Eurodollar Borrowings or to reduce the amount of any sum
received or receivable by Lender under this Note with respect thereto, by an
amount deemed by Lender, in its good faith judgment, to be material, then,
within

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 6

fifteen (15) days after demand by Lender, Maker shall pay to Lender such
additional amount or amounts as will compensate Lender for such increased cost
or reduction. Lender will promptly notify Maker of any event of which it has
knowledge, occurring after the date hereof, which will entitle Lender to
compensation pursuant to this paragraph. A certificate of Lender claiming
compensation under this paragraph, setting forth the additional amount or
amounts to be paid to it hereunder and explaining in reasonable detail the
estimates, data and calculations of such amount, shall be conclusive and binding
in the absence of manifest error. In determining such amount, Lender may use any
reasonable averaging and attribution methods. In lieu of paying the compensation
to Lender described in this paragraph, Maker may elect, promptly upon receiving
notice from Lender of the event entitling Lender to such compensation, to have
any Eurodollar Borrowing converted to a borrowing at the Prime Rate.

(g) Past Due Rate. From and after maturity (whether by acceleration
or otherwise), any principal of, and to the extent permitted by applicable law,
any interest on this Note, and any other sum payable hereunder, shall bear
interest, payable on demand, at a rate per annum (the "Past Due Rate") equal to
the lesser of (i) the Stated Rate plus four percent (4%) or (ii) the Maximum
Rate.

(h) Late Charge. If any principal or interest is not paid when due,
Maker shall pay, on demand, a late charge of four cents ($.04) for each dollar
of each installment which becomes past due for a period exceeding ten (10) days
to help defray the added expense incurred in handling said delinquent
installment, provided that in no event shall interest be due or payable in
excess of the Maximum Rate.

4. Prepayment. Maker may prepay the principal balance of this Note, in
full at any time or in part from time to time, provided that (i) Lender shall
have actually received from Maker at least five (5) business days' prior written
notice of Maker's intent to prepay, of the amount of principal which will be
prepaid (the "Prepaid Principal") and of the date on which the prepayment will
be made; (ii) the prepayment must not, in Lender's judgment, result in a breach
or loss of rights under any commitment or agreement by any third party for
payment or purchase of the loan evidenced by this Note or of the Property; (iii)
each prepayment shall be in the amount of $1,000.00 or a larger integral
multiple of $1,000.00 (unless the prepayment retires the outstanding balance of
this Note in full); and (iv) each prepayment shall be in the amount of 100% of
the Prepaid Principal, plus accrued unpaid interest thereon to the date of
prepayment, plus any other sums which have become due to Lender under the Loan
Documents on or before the date of prepayment but have not been paid. If this
Note is prepaid in full, any commitment of Lender for further advances shall
automatically terminate.

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 7

5. Certain Provisions Regarding Payments. All payments made as scheduled
on this Note shall be applied, to the extent thereof, to accrued but unpaid
interest, unpaid principal, and any other sums due and unpaid to Lender under
the Loan Documents, in such manner and order as Lender may elect in its
discretion. All prepayments on this Note shall be applied, to the extent
thereof, to accrued but unpaid interest on the amount prepaid, to the remaining
principal installments, and any other sums due and unpaid to Lender under the
Loan Documents, in such manner and order as Lender may elect in its discretion,
including but not limited to application to principal installments in inverse
order of maturity. Except to the extent that specific provisions are set forth
in this Note or another Loan Document with respect to application of payments,
all payments received by the holder hereof shall be applied, to the extent
thereof, to the indebtedness secured by the Mortgage in such manner and order as
Lender may elect in its discretion, any instructions from Maker or anyone else
to the contrary notwithstanding. Remittances in payment of any part of the
indebtedness other than in the required amount in immediately available U.S.
funds shall not, regardless of any receipt or credit issued therefor, constitute
payment until the required amount is actually received by the holder hereof in
immediately available U.S. funds and shall be made and accepted subject to the
condition that any check or draft may be handled for collection in accordance
with the practice of the collecting bank or banks. Acceptance by the holder
hereof of any payment in an amount less than the amount then due on any
indebtedness shall be deemed an acceptance on account only and shall not in any
way excuse the existence of a Default (hereinafter defined). Payments received
after 2:00 o'clock p.m. Atlanta, Georgia time shall be deemed to be received on,
and shall be posted as of, the following business day.

6. Defaults. It shall be a default ("Default") under this Note and each of
the other Loan Documents if (a) any principal, interest or other amount of money
due under this Note is not paid in full when due, regardless of how such amount
may have become due; or (b) there shall occur any default or event of default
under the Mortgage or any other Loan Document. Upon the occurrence of a Default,
subject to the terms of Section 4.2 of the Mortgage, the holder hereof shall
have the rights to declare the unpaid principal balance and accrued but unpaid
interest on this Note at once due and payable (and upon such declaration, the
same shall be at once due and payable), to foreclose any liens and security
interests securing payment hereof and to exercise any of its other rights,
powers and remedies under this Note, under any other Loan Document, or at law or
in equity.

7. Rights Cumulative. All of the rights, remedies, powers and privileges
(together, "Rights") of the holder hereof provided for in this Note and in any
other Loan Document are 

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 8

cumulative of each other and of any and all other Rights at law or in equity.
The resort to any Right shall not prevent the concurrent or subsequent
employment of any other appropriate Right. No single or partial exercise of any
Right shall exhaust it, or preclude any other or further exercise thereof, and
every Right may be exercised at any time and from time to time. No failure by
the holder hereof to exercise, nor delay in exercising any Right, including but
not limited to the right to accelerate the maturity of this Note, shall be
construed as a waiver of any Default or as a waiver of any Right. Without
limiting the generality of the foregoing provisions, the acceptance by the
holder hereof from time to time of any payment under this Note which is past due
or which is less than the payment in full of all amounts due and payable at the
time of such payment, shall not (i) constitute a waiver of or impair or
extinguish the right of the holder hereof to accelerate the maturity of this
Note or to exercise any other Right at the time or at any subsequent time, or
nullify any prior exercise of any such Right, or (ii) constitute a waiver of the
requirement of punctual payment and performance or a novation in any respect.

8. Costs of Collection. If any holder of this Note retains an attorney in
connection with any Default or at maturity or to collect, enforce or defend this
Note or any other Loan Document in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any holder in
connection with this Note or any other Loan Document and does not prevail, then
Maker agrees to pay to each such holder, in addition to principal, interest and
any other sums owing to Lender under the Loan Documents, all reasonable costs
and expenses incurred by such holder in trying to collect this Note or in any
such suit or proceeding, including reasonable attorneys' fees.

9. Controlling Agreement. All parties to the Loan Documents intend to
comply with applicable usury law. All existing and future agreements regarding
the debt evidenced by this Note are hereby limited and controlled by the
provisions of this Section. In no event (including but not limited to
prepayment, default, demand for payment, or acceleration of maturity) shall the
interest taken, reserved, contracted for, charged or received under this Note or
under any of the other Loan Documents or otherwise, exceed the Maximum Amount.
If, from any possible construction of any document, interest would otherwise be
payable in excess of the Maximum Amount, then, ipso facto, such document shall
be reformed and the interest payable reduced to the Maximum Amount, without
necessity of execution of any amendment or new document. If the holder hereof
ever receives interest in an amount which apart from this provision would exceed
the Maximum Amount, the excess shall, without penalty, be applied to the unpaid
principal of this Note in inverse order of maturity of installments and not to
the payment of interest, or be refunded to the payor, at the election of the
holder hereof in its sole 

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 9

discretion or as required by applicable law. The holder hereof does not intend
to charge or receive unearned interest on acceleration. All interest paid or
agreed to be paid to the holder hereof shall be spread throughout the full term
(including any renewal or extension) of the debt so that the amount of interest
does not exceed the Maximum Amount.

10. General Provisions. Time is of the essence with respect to Maker's
obligations under this Note. Maker and all sureties, endorsers, guarantors and
any other party now or hereafter liable for the payment of this Note in whole or
in part, hereby severally (i) waive demand, presentment for payment, notice of
dishonor and of nonpayment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices (except any notices
which are specifically required by this Note or any other Loan Document), filing
of suit and diligence in collecting this Note or enforcing any of the security
herefor; (ii) agree to any substitution, subordination, exchange or release of
any such security or the release of any party primarily or secondarily liable
hereon; (iii) agree that the holder hereof shall not be required first to
institute suit or exhaust its remedies hereon against Maker or others liable or
to become liable hereon or to perfect or enforce its rights against them or any
security herefor; (iv) consent to any extensions or postponements of time of
payment of this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences with respect
hereto, without notice thereof to any of them; and (v) submit (and waive all
rights to object) to non~exclusive personal jurisdiction in the State of
Georgia, and venue in the county in which payment is to be made as specified in
Section 1 of this Note, for the enforcement of any and all obligations under the
Loan Documents.

Maker and all other parties to this Note severally waive any and all homestead
and exemption rights which any of them or the family of any of them may have
under or by virtue of the Constitution or laws of the United States of America
or of any state as against this Note, any renewal hereof, or any indebtedness
evidenced hereby. Maker and all other parties to this Note jointly and severally
transfer, convey and assign to Lender or any other holder a sufficient amount of
property or money set apart as exempt to pay the indebtedness evidenced hereby,
or any renewal hereof and do hereby, jointly and severally, appoint Lender and
any other holder the attorney-in-fact for each of them to claim any and all
homestead exemptions allowed by law.

A determination that any provision of this Note is unenforceable or invalid
shall not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or circumstances.

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 10

This Note may not be amended except in a writing specifically intended for the
purpose and executed by the party against whom enforcement of the amendment is
sought. The holder of this Note may, from time to time, sell or offer to sell
the loan evidenced by this Note, or interests therein, to one or more assignees
or participants and is hereby authorized to disseminate any information it now
has or hereafter obtains pertaining to the loan evidenced by this Note,
including, without limitation, any security for this Note and credit or other
information on Maker, any of its principals and any guarantor of this Note, to
any assignee or participant or prospective assignee or prospective participant,
holder's affiliates, including NationsBanc Montgomery Securities LLC, any
regulatory body having jurisdiction over the holder of this Note and to any
other parties as necessary or appropriate in the holder of this Note's
reasonable judgment. Maker shall execute, acknowledge and deliver any and all
instruments reasonably requested by the holder of this Note in connection
therewith and to the extent, if any, specified in any such assignment or
participation, such companies, assignees or participants shall have the rights
and benefits with respect to this Note and the other Loan Documents as such
persons would have if such persons were Lender hereunder. Maker warrants and
represents to Lender and all other holders of this Note that the loan evidenced
by this Note is and will be for business or commercial purposes and not
primarily for personal, family, or household use. The terms, provisions,
covenants and conditions hereof shall be binding upon Maker and the
representatives, successors and assigns of Maker. Captions and headings in this
Note are for convenience only and shall be disregarded in construing it. THIS
NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY
GEORGIA LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE
UNITED STATES FEDERAL LAW.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signatures Begin on Following Page]

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 11

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

MAKER:

Wells/Fremont Associates,
a Georgia joint venture

By:   Wells Operating Partnership, L.P.,
a Delaware limited partnership,
Joint Venture Partner

By:   Wells Real Estate Investment
Trust, Inc.,
a Maryland corporation,
General Partner

By:  /s/ Leo F. Wells, III,
-------------------------------
Leo F. Wells, III,
President

[CORPORATE SEAL]

By:   Wells Development Corporation,
a Georgia corporation,
Joint Venture Partner

By:  /s/ Leo F. Wells, III,
-------------------------------
Leo F. Wells, III,
President

[CORPORATE SEAL]

Maker's Federal Tax
Identification Number:  58-2402574

WELLS/FREMONT ASSOCIATES
PROMISSORY NOTE
PAGE 12

EXHIBIT 10.16

DEED OF TRUST

BETWEEN THE FREMONT JOINT VENTURE

AND

NATIONSBANK, N.A.

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

James H. Keaten, Esq.
Troutman Sanders LLP
NationsBank Plaza - Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia  30308-2216

INSTRUCTIONS TO RECORDER:
Index this document as
(i)   a deed of trust; 
(ii)  an assignment of rents; 
(iii) a security agreement; and 
(iv)  a fixture filing

================================================================================
DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING
STATE OF GEORGIA

COUNTY OF FULTON

THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (the "Security Instrument") is made and entered into as of the
16th day of July, 1998, by WELLS/FREMONT ASSOCIATES, a Georgia joint venture
comprised of Wells Development Corporation, a Georgia corporation, and Wells
Operating Partnership, L.P., a Delaware limited partnership ("Borrower"), in
favor of FIRST AMERICAN TITLE INSURANCE COMPANY, with an address of 1737 North
First Street, San Jose, California 95112 ("Trustee"), and NATIONSBANK, N.A., a
national banking corporation, together with its successors and assigns
("Lender").

ARTICLE 1 - CERTAIN DEFINITIONS; GRANTING CLAUSES; SECURED
INDEBTEDNESS

Section 1.1. Certain Definitions and Reference Terms. In addition to
other terms defined herein, each of the following terms shall have the meaning
assigned to it:

"Promissory Note": Promissory Note dated of even date herewith made
by Borrower payable to the order of Lender in the principal face amount of FIVE
MILLION NINE HUNDRED SIXTY THOUSAND AND NO/100 DOLLARS ($5,960,000.00), bearing
interest at a variable rate as therein provided, and finally maturing on July
16, 1999, unless extended to January 16, 2000, pursuant to the terms of said
Note, which, by this reference, is made a part hereof.

Section 1.2. Property. The Borrower, in consideration of the
indebtedness herein recited, irrevocably grants, conveys and assigns to the
Trustee and the Trustee's successors and

WELLS/FREMONT ASSOCIATES
DEED OF TRUST
PAGE 1

assigns, in trust, with power of sale, all of the following described land, real
property interests, buildings, improvements, fixtures, furniture and appliances
and other personal property: (a) the real estate (herein called the "Land")
described in Exhibit A which is attached hereto and incorporated herein by
reference, and (i) all improvements now or hereafter situated or to be situated
on the Land (herein together called the "Improvements"); and (ii) all right,
title and interest of Borrower, now owned or hereafter acquired, in and to (1)
all streets, roads, alleys, easements, rights-of-way, licenses, rights of
ingress and egress, vehicle parking rights and public places, existing or
proposed, abutting, adjacent, used in connection with or pertaining to the Land
or the Improvements; (2) any strips or gores between the Land and abutting or
adjacent properties; (3) all options to purchase or lease the Land or the
Improvements or any portion thereof or interest therein, and any greater estate
in the Land or the Improvements; (4) all claims, actions and causes of action,
both in law and in equity, with respect to the Property or the Improvements; and
(5) all water and water rights, timber, crops and mineral interests on or
pertaining to the Land (the Land, Improvements and other rights, titles and
interests referred to in this clause (a) being herein sometimes collectively
called the "Premises"); (b) all fixtures, equipment, systems, machinery,
furniture, furnishings, appliances, inventory, goods, building and construction
materials, supplies, and articles of personal property, of every kind and
character, now owned or hereafter acquired by Borrower, which are now or
hereafter attached to or situated in, on or about the Land or the Improvements,
or used in or necessary to the complete and proper planning, development, use,
occupancy or operation thereof, or acquired (whether delivered to the Land or
stored elsewhere) for use or installation in or on the Land or the Improvements,
and all renewals and replacements of, substitutions for and additions to the
foregoing (the properties referred to in this clause (b) being herein sometimes
collectively called the "Accessories," all of which are hereby declared to be
permanent accessions to the Land); (c) all (i) plans and specifications for the
Improvements; (ii) Borrower's rights, but not liability for any breach by
Borrower, under all commitments (including any commitment for financing to pay
any of the secured indebtedness, as defined below), insurance policies,
contracts and agreements for the design, construction, operation or inspection
of the Improvements and other contracts and general intangibles (including but
not limited to trademarks, trade names, goodwill and symbols) related to the
Premises or the Accessories or the operation thereof; (iii) deposits (including
but not limited to Borrower's rights in tenants' security deposits, deposits
with respect to utility services to the Premises, and any deposits or reserves
hereunder or under any other Loan Document for taxes, insurance or

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otherwise), rebates or refunds of impact fees or other taxes, assessments or
charges, money, accounts, instruments, documents, notes and chattel paper
arising from or by virtue of any transactions related to the Premises or the
Accessories; (iv) permits, licenses, franchises, certificates, development
rights, commitments and rights for utilities, and other rights and privileges
obtained in connection with the Premises or the Accessories; (v) leases, rents,
royalties, bonuses, issues, profits, revenues and other benefits of the Premises
and the Accessories (without derogation of Article 3 hereof); (vi) oil, gas and
other hydrocarbons and other minerals produced from or allocated to the Land and
all products processed or obtained therefrom, and the proceeds thereof; and
(vii) engineering, accounting, title, legal, and other technical or business
data concerning the Property which are in the possession of Borrower or in which
Borrower can otherwise grant a security interest; and (d) all (i) proceeds of or
arising from the properties, rights, titles and interests referred to above in
this Section 1.2, including but not limited to proceeds of any sale, lease or
other disposition thereof, proceeds of each policy of insurance relating thereto
(including premium refunds), proceeds of the taking thereof or of any rights
appurtenant thereto, including change of grade of streets, curb cuts or other
rights of access, by eminent domain or transfer in lieu thereof for public or
quasi-public use under any law, and proceeds arising out of any damage thereto;
(ii) all claims, actions and causes of action, both in law and in equity, with
respect to the Property or the Improvements; and (iii) other interests of every
kind and character which Borrower now has or hereafter acquires in, to or for
the benefit of the properties, rights, titles and interests referred to above in
this Section 1.2 and all property used or useful in connection therewith,
including but not limited to rights of ingress and egress and remainders,
reversions and reversionary rights or interests; and if the estate of Borrower
in any of the property referred to above in this Section 1.2 is a leasehold
estate, this conveyance shall include, and the lien and interest created hereby
shall encumber and extend to, all other or additional title, estates, interests
or rights which are now owned or may hereafter be acquired by Borrower in or to
the property demised under the lease creating the leasehold estate; TO HAVE AND
TO HOLD the foregoing rights, interests and properties, and all rights, estates,
powers and privileges appurtenant thereto (herein collectively called the
"Property"), to the use, benefit and behoof of Lender, forever, in fee simple
subject to the Permitted Encumbrances (as hereafter defined).

Section 1.3. Security Interest. As additional collateral and further
security for the indebtedness secured hereby, to the fullest extent permitted by
applicable law, Borrower hereby assigns and grants to Lender a security interest

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in all of the Property which constitutes personal property or fixtures (herein
sometimes collectively called the "Collateral"). In addition to its rights
hereunder or otherwise, Lender shall have all of the rights of a secured party
under the Uniform Commercial Code as adopted in the State of California, or
under the Uniform Commercial Code in force in any other state to the extent the
same is applicable law.

Section 1.4. Note, Loan Documents, Other Obligations. This Security
Instrument is made to secure and enforce the payment and performance of the
following promissory notes, obligations, indebtedness and liabilities and all
renewals, extensions, supplements, increases, and modifications thereof in whole
or in part from time to time: (a) the Promissory Note and all other notes given
in substitution therefor or in modification, supplement, increase, renewal or
extension thereof, in whole or in part (such note or notes, whether one or more,
as from time to time renewed, extended, supplemented, increased or modified and
all other notes given in substitution therefor, or in modification, renewal or
extension thereof, in whole or in part, being hereinafter called the "Note");
(b) all indebtedness and other obligations owed by Borrower to Lender, or any
affiliate of Lender, now or hereafter incurred or arising pursuant to or
permitted by the provisions of the Note, this Security Instrument, the
Environmental Indemnity Agreement (the "Environmental Agreement") of even date
herewith between Borrower and Lender, or any other document now or hereafter
evidencing, governing, guaranteeing, securing or otherwise executed in
connection with the loan evidenced by the Note, including but not limited to any
loan or credit agreement, tri-party financing agreement, purchase and sale
agreement with respect to the Property or other agreement between Borrower and
Lender, or among Borrower, Lender and any other party or parties, pertaining to
the repayment or use of the proceeds of the loan evidenced by the Note (the
Note, this Security Instrument, the Environmental Agreement and such other
documents, as they or any of them may have been or may be from time to time
renewed, extended, supplemented, increased or modified, being herein sometimes
collectively called the "Loan Documents"); and (c) all other loans and future
advances made by Lender to Borrower and all other debts, obligations and
liabilities of Borrower of every kind and character now or hereafter existing in
favor of Lender, however and whenever incurred, whether direct or indirect,
primary or secondary, joint or several, fixed or contingent, secured or
unsecured, and whether originally payable to Lender or to a third party and
subsequently acquired by Lender; provided, however, and notwithstanding the
foregoing provisions of this clause (c), this Security Instrument shall not
secure any such other loan, advance, debt, obligation or liability with respect
to which Lender is by applicable law prohibited from obtaining a

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lien or security title on real estate nor shall this clause (c) operate or be
effective to constitute or require any assumption or payment by any person, in
any way, of any debt of any other person to the extent that the same would
violate or exceed the limit provided in any applicable usury or other law. The
indebtedness referred to in this Section 1.4 is hereinafter sometimes referred
to as the "secured indebtedness" or the "indebtedness secured hereby."

ARTICLE 2 - Representations, Warranties and Covenants

Section 2.1. Borrower represents, warrants, and covenants as
follows:

(a) Payment and Performance. Borrower will make due and punctual
payment of the secured indebtedness. Borrower will timely and properly perform
and comply with all of the covenants, agreements, and conditions imposed upon it
by this Security Instrument and the other Loan Documents and will not permit a
default to occur hereunder or thereunder. Time shall be of the essence in this
Security Instrument.

(b) Title and Permitted Encumbrances. Borrower has, in Borrower's
own right, and Borrower covenants to maintain, lawful, good and marketable fee
simple title to the Property, is lawfully seized and possessed of the Property
and every part thereof, and has the right to convey the same, free and clear of
all liens, charges, claims, interests, and encumbrances except for (i) the
matters, if any, set forth under the heading "Permitted Exceptions" in Exhibit B
hereto, which are Permitted Exceptions only to the extent the same are valid and
subsisting and affect the Property, (ii) the liens and security interests
evidenced by this Security Instrument, (iii) other liens and security interests
(if any) in favor of Lender (the matters described in the foregoing clauses (i),
(ii) and (iii) being herein called the "Permitted Encumbrances"). Borrower, and
Borrower's successors and assigns, will warrant and forever defend title to the
Property, subject as aforesaid, to Lender and its successors and assigns,
against the claims and demands of all persons claiming or to claim the same or
any part thereof. Borrower will punctually pay, perform, observe and keep all
covenants, obligations and conditions in or pursuant to any Permitted
Encumbrance and will not modify or permit modification of any Permitted
Encumbrance without the prior written consent of Lender. Inclusion of any matter
as a Permitted Encumbrance does not constitute approval or waiver by Lender of
any existing or future violation or other breach thereof by Borrower, by the
Property or otherwise. If any right or interest of Lender in the Property or any
part thereof shall be endangered or questioned or shall be attacked directly or
indirectly, Lender (whether or not

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named as the party to legal proceedings with respect thereto) is hereby
authorized and empowered to take such steps as in its discretion may be proper
for the defense of any such legal proceedings or the protection of such right or
interest of Lender, including but not limited to the employment of independent
counsel, the prosecution or defense of litigation, and the compromise or
discharge of adverse claims. All expenditures so made of every kind and
character shall be a demand obligation (which obligation Borrower hereby
promises to pay) owing by Borrower to Lender, and Lender shall be subrogated to
all rights of the person receiving such payment.

(c) Taxes and Other Impositions. Borrower will pay, or cause to be
paid, all taxes, assessments and other charges or levies imposed upon or against
or with respect to the Property or the ownership, use, occupancy or enjoyment of
any portion thereof, or any utility service thereto, as the same become due and
payable, including but not limited to all ad valorem taxes assessed against the
Property or any part thereof, and shall deliver promptly to Lender such evidence
of the payment thereof as Lender may require.

(d) Insurance.

I. Required Insurance. Borrower shall obtain and maintain at
Borrower's sole expense: (1) Lender title insurance issued to Lender covering
the Premises as required by Lender; (2) all-risk insurance with respect to all
insurable Property, against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such hazards as are presently included in so-called
"all-risk" coverage and against such other insurable hazards as Lender may
require, in an amount not less than 100% of the full replacement cost, including
the cost of debris removal, without deduction for depreciation and sufficient to
prevent Borrower and Lender from becoming a coinsurer, such insurance to be in
builder's risk (non-reporting) form during and with respect to any construction
on the Premises; (3) if and to the extent any portion of the Improvements is in
a special flood hazard area, a flood insurance policy in an amount equal to the
lesser of the principal face amount of the Note or the maximum amount available;
(4) comprehensive general public liability insurance, on an "occurrence" basis,
for the benefit of Borrower and Lender as named insureds; (5) statutory workers'
compensation insurance with respect to any work on or about the Premises; and
(6) such other insurance on the Property as may from time to time be required by
Lender (including but not limited to rental loss or business interruption
insurance, boiler and machinery insurance, earthquake insurance, and war risk
insurance) and against other insurable hazards or casualties which at the time
are commonly insured against in the case of premises similarly situated, due

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regard being given to the height, type, construction, location, use and
occupancy of buildings and improvements. All insurance policies shall be issued
and maintained by insurers, in amounts, with deductibles, and in form
satisfactory to Lender, and shall require not less than thirty (30) days' prior
written notice to Lender of any cancellation or change of coverage. All
insurance policies maintained, or caused to be maintained, by Borrower with
respect to the Property, except for public liability insurance, shall provide
that each such policy shall be primary without right of contribution from any
other insurance that may be carried by Borrower or Lender and that all of the
provisions thereof, except the limits of liability, shall operate in the same
manner as if there were a separate policy covering each insured. If any insurer
which has issued a policy of title, hazard, liability or other insurance
required pursuant to this Security Instrument or any other Loan Document becomes
insolvent or the subject of any bankruptcy, receivership or similar proceeding
or if in Lender's reasonable opinion the financial responsibility of such
insurer is or becomes inadequate, Borrower shall, in each instance promptly upon
the request of Lender and at Borrower's expense, obtain and deliver to Lender a
like policy (or, if and to the extent permitted by Lender, a certificate of
insurance) issued by another insurer, which insurer and policy meet the
requirements of this Security Instrument or such other Loan Document, as the
case may be. Without limiting the discretion of Lender with respect to required
endorsements to insurance policies, all such policies for loss of or damage to
the Property shall contain a standard Lender clause (without contribution)
naming Lender as Lender with loss proceeds payable to Lender notwithstanding (i)
any act, failure to act or negligence of or violation of any warranty,
declaration or condition contained in any such policy by any named insured; (ii)
the occupation or use of the Property for purposes more hazardous than permitted
by the terms of any such policy; (iii) any foreclosure or other action by Lender
under the Loan Documents; or (iv) any change in title to or ownership of the
Property or any portion thereof, such proceeds to be held for application as
provided in the Loan Documents. The originals of each initial insurance policy
(or to the extent permitted by Lender, a copy of the original policy and a
satisfactory certificate of insurance) shall be delivered to Lender at the time
of execution of this Security Instrument, with premiums fully paid, and each
renewal or substitute policy (or certificate) shall be delivered to Lender, with
premiums fully paid, at least ten (10) days before the termination of the policy
it renews or replaces. Borrower shall pay all premiums on policies required
hereunder as they become due and payable and promptly deliver to Lender evidence
satisfactory to Lender of the timely payment thereof. If any loss occurs at any
time when Borrower has failed to perform Borrower's covenants and

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agreements in this paragraph, Lender shall nevertheless be entitled to the
benefit of all insurance covering the loss and held by or for Borrower, to the
same extent as if it had been made payable to Lender. Upon any foreclosure
hereof or transfer of title to the Property in extinguishment of the whole or
any part of the secured indebtedness, all of Borrower'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. Lender 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, and the
expenses incurred by Lender in the adjustment and collection of insurance
proceeds shall be a part of the secured indebtedness and shall be due and
payable to Lender on demand. Lender 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 Borrower. Subject to the terms of Subsection II, below, any
proceeds received by Lender shall, after deduction therefrom of all reasonable
expenses actually incurred by Lender, including attorneys' fees, at Lender's
option be (1) released to Borrower, or (2) applied (upon compliance with such
terms and conditions as may be required by Lender) to repair or restoration,
either partly or entirely, of the Property so damaged, or (3) applied to the
payment of the secured indebtedness in such order and manner as Lender, in its
sole but reasonable discretion, may elect, whether or not due. In any event, the
unpaid portion of the secured indebtedness shall remain in full force and effect
and the payment thereof shall not be excused. Borrower 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.

II. Restoration Advances.

(i) Lender agrees that in the event that all or a portion of the
Improvements shall be destroyed or damaged by fire, explosion, windstorm, hail
or any other casualty against which insurance is required under this Security
Instrument, Lender will elect to apply the insurance proceeds which remain after
payment of the expenses of collection thereof as provided in Subsection I, above
(called the "Proceeds" below in this Subsection), or so much thereof as is
required, to restoration of the portion of the Premises damaged, as nearly as
practicable to its value, character and condition immediately prior to such

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casualty (the "Restoration"), provided that all of the following conditions
precedent are satisfied in full not later than ninety (90) days after the date
on which the casualty loss occurs:

A) no default shall have occurred and shall remain uncured following
the expiration of any grace or cure period;

B) all tenants having present or future possessory rights under
Leases (hereinafter defined), including without limitation the tenant
under the that certain Standard Industrial/Commercial Single-Tenant
Lease-Net (the "Fairchild Lease") dated September 19, 1997, by and between
Rose Ventures V, Inc., a California corporation, Thomas G. Haury and
Carleen S. Haury, as Lessor, and Fairchild Technologies USA, Inc., as
Lessee, the Lessor's interest thereunder having been assigned to Borrower,
have agreed in a manner satisfactory to Lender that their Leases will
continue in full force and effect and, if necessary, the time for taking
or regaining possession of the demised premises under such Leases will be
extended by the time necessary to complete the Restoration;

C) all parties having operating, management or franchise interests
in, and arrangements concerning, the Property have agreed that they will
continue their interests and arrangements for the contract terms then in
effect following the Restoration;

D) all parties having commitments to provide financing with respect
to the Property, to purchase Borrower's interest in full or in part in the
Property or to purchase or pay the loan evidenced by the Note
(collectively, "Commitment Providers") have agreed in a manner
satisfactory to Lender that their commitments will continue in full force
and effect and, if necessary, the expiration of such commitments will be
extended by the time necessary to complete the Restoration;

E) Borrower has presented evidence satisfactory to Lender, and
Lender has reasonably determined, that the Restoration can be accomplished
within a reasonable period of time and in any event prior to the Maturity
Date (as defined in the Note);

F) Borrower has delivered or caused to be delivered to Lender, and
Lender has approved, complete final plans and specifications (the
"Restoration Plans") for the work to be performed in connection with the
Restoration (hereinafter called the "Restoration Work") prepared and
sealed by an

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architect (the "Architect") acceptable to Lender, with evidence
satisfactory to Lender of the approval of the Restoration Plans by all
Commitment Providers and by all governmental authorities and all tenants
under Leases whose approval is required;

G) Borrower has delivered or caused to be delivered to Lender a
signed estimate approved in writing by the Architect, stating the entire
cost of completing the Restoration Work;

H) Borrower has entered into, and has furnished to Lender a copy of,
a fixed price construction contract satisfactory to Lender, with a
contractor reasonably acceptable to Lender, bonded to the extent required
by Lender, for the Restoration Work;

I) if Lender has determined that (i) the projected cost of the
Restoration Work substantially in accordance with the Restoration Plans
exceeds (ii) the available Proceeds held by Lender, then Borrower has
deposited with Lender funds sufficient to cover the excess cost;

J) Borrower has furnished all insurance coverage required by Lender
pursuant to Subsection 2.1(d)(I), above; and

K) Lender has determined that it will not incur any liability to any
person as a result of such use of the Proceeds.

If all of the foregoing conditions have not been satisfied within
the time limit specified above, then Lender may, at its option, apply such
Proceeds to the indebtedness secured hereby, whether or not due, in such order
and manner as Lender elects.

(ii) To the extent that Lender elects to apply the Proceeds to the
restoration or reconstruction of the Improvements, then disbursement of the
Proceeds for Restoration or Restoration Work shall be subject to and shall be
made in accordance with the customary practices of Lender governing the
disbursement of construction loans. If Lender determines from time to time that
(i) the estimated cost of the Restoration substantially in accordance with the
Restoration Plans exceeds (ii) the available Proceeds held by Lender plus all
other available funds deposited by Borrower with Lender for the purpose of the
Restoration, then Borrower shall deposit additional funds with Lender to cover
the excess cost before Lender shall be required to disburse any such Proceeds or
other available funds

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for Restoration costs. Any such funds provided by Borrower to cover excess costs
shall be used for the costs of Restoration prior to disbursement of any of the
Proceeds for such costs.

(iii) Any such Proceeds and additional funds provided by Borrower
which are held by Lender under this Subsection II shall be held by Lender in an
account of Lender's selection until disbursed for Restoration or otherwise
applied as herein provided. Lender's receipt and custody of such Proceeds or
additional funds shall not constitute a repayment of any of the indebtedness
secured hereby, unless and until such Proceeds or additional funds are actually
applied against the indebtedness secured hereby in accordance with this Security
Instrument. No disbursement of such Proceeds for Restoration costs shall
constitute an advance of the loan evidenced by the Note or increase the
principal amount of such loan. If surplus Proceeds remain after completion of
the Restoration and payment of all costs therefor, then such surplus Proceeds
shall be applied against the indebtedness secured hereby in such manner and
order as Lender elects. If surplus funds then remain from additional funds
provided by Borrower to cover excess costs of Restoration, then such surplus
funds shall be returned to Borrower, provided that no uncured default shall
exist hereunder.

(iv) In any event, upon the occurrence of a default at any time, and
the expiration of any applicable grace or cure period without the curing
thereof, Lender may (but has no obligation to) apply all or any portion of such
Proceeds or additional funds provided by Borrower in Lender's possession to the
payment of the indebtedness secured hereby, whether or not due, in such order
and manner as Lender elects, and/or to the cure of any default without waiving
the same.

(e) Reserve for Insurance, Taxes and Assessments. Upon request of
Lender, to secure certain of Borrower's obligations in paragraphs (c) and (d)
above, but not in lieu of such obligations, Borrower will deposit with Lender a
sum equal to ad valorem taxes, assessments and charges (which charges for the
purpose of this paragraph shall include without limitation any recurring charge
which could result in a lien against the Property) against the Property for the
current year and the premiums for such policies of insurance for the current
year, all as estimated by Lender and prorated to the end of the calendar month
following the month during which Lender's request is made, and thereafter will
deposit with Lender, on each date when an installment of principal and/or
interest is due on the Note, sufficient funds (as estimated from time to time by
Lender) to permit Lender to pay at least fifteen (15) days prior to the
delinquency date thereof, the next maturing ad valorem taxes, assessments and
charges and premiums for such policies of

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insurance. Lender shall have the right to rely upon tax information furnished by
applicable taxing authorities in the payment of such taxes or assessments and
shall have no obligation to make any protest of any such taxes or assessments.
Any excess over the amounts required for such purposes shall be held by Lender
for future use, applied to any secured indebtedness or refunded to Borrower, at
Lender's option, and any deficiency in such funds so deposited shall be made up
by Borrower upon demand of Lender. All such funds so deposited shall bear
interest at the rate applicable to the account selected by Lender for such
funds, may be mingled with the general funds of Lender and shall be applied by
Lender toward the payment of such taxes, assessments, charges and premiums when
statements therefor are presented to Lender by Borrower (which statements shall
be presented by Borrower to Lender a reasonable time before the applicable
amount is delinquent); provided, however, that, if a default shall have occurred
hereunder, such funds may at Lender's option be applied to the payment of the
secured indebtedness in the order determined by Lender in its sole discretion,
and that Lender may (but shall have no obligation) at any time, in its
discretion, apply all or any part of such funds toward the payment of any such
taxes, assessments, charges or premiums which are past due, together with any
penalties or late charges with respect thereto. The conveyance or transfer of
Borrower's interest in the Property for any reason (including without limitation
the foreclosure of a subordinate lien or security interest or a transfer by
operation of law) shall constitute an assignment or transfer of Borrower's
interest in and rights to such funds held by Lender under this paragraph but
subject to the rights of Lender hereunder.

(f) Condemnation. Borrower shall notify Lender immediately of any
threatened or pending proceeding for condemnation affecting the Property or
arising out of damage to the Property, and Borrower shall, at Borrower's
expense, diligently prosecute any such proceedings. Lender shall have the right
(but not the obligation) to participate in any such proceeding and to be
represented by counsel of its own choice. Lender shall be entitled to receive
all sums which may be awarded or become payable to Borrower 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 Borrower for injury or damage to the Property. Borrower shall,
promptly upon request of Lender, execute such additional assignments and other
documents as may be necessary from time to time to permit such participation and
to enable Lender to collect and receipt for any such sums. All such sums are
hereby assigned to Lender, and shall, after deduction therefrom of all
reasonable expenses actually incurred by Lender, including attorneys' fees, at
Lender's option be (1) released to

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Borrower, or (2) applied (upon compliance with such terms and conditions as may
be required by Lender) to repair or restoration of the Property so affected, or
(3) applied to the payment of the secured indebtedness in such order and manner
as Lender, in its sole but reasonable discretion, may elect, whether or not due.
In any event the unpaid portion of the secured indebtedness shall remain in full
force and effect and the payment thereof shall not be excused. Lender 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 Borrower. Lender is hereby
authorized, in the name of Borrower, to execute and deliver valid acquittances
for, and to appeal from, any such award, judgment or decree. All costs and
expenses (including but not limited to attorneys' fees) incurred by Lender in
connection with any condemnation shall be a demand obligation owing by Borrower
(which Borrower hereby promises to pay) to Lender pursuant to this Security
Instrument.

(g) Compliance with Legal Requirements. The Property and the use,
operation and maintenance thereof and all activities thereon do and shall at all
times comply with all applicable Legal Requirements (defined below). The
Property is not, and shall not be, dependent on any other property or premises
or any interest therein other than the Property to fulfill any requirement of
any Legal Requirement. Borrower shall not, by act or omission, permit any
building or other improvement not subject to the lien and interest of this
Security Instrument to rely on the Property or any interest therein to fulfill
any requirement of any Legal Requirement. No part of the Property constitutes a
nonconforming use under any zoning law or similar law or ordinance. Borrower has
obtained and shall preserve in force all requisite zoning, utility, building,
health, environmental and operating permits from the governmental authorities
having jurisdiction over the Property. If Borrower 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,
Borrower will promptly furnish a copy of such notice or claim to Lender.
Borrower has received no notice and has no knowledge of any such noncompliance.
As used in this Security Instrument: (i) the term "Legal Requirement" means any
Law (defined below), 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; and (ii) the term
"Law" means any federal, state or local law, statute, ordinance, code, rule,
regulation, license, permit, authorization, decision, order, injunction or
decree, domestic or foreign.

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(h) Maintenance, Repair and Restoration. Borrower will keep the
Property 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,
Borrower will not, without the prior written consent of Lender, which consent
shall not be unreasonably withheld (i) remove from the Property any fixtures or
personal property conveyed or encumbered by this Security Instrument except such
as is replaced by Borrower by an article of equal suitability and value, owned
by Borrower, free and clear of any lien or security interest (except that
created by this Security Instrument), or (ii) make any structural alteration to
the Property or any other alteration thereto which impairs the value thereof. If
any act or occurrence of any kind or 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, Borrower shall give prompt
notice thereof to Lender and Borrower shall promptly, at Borrower's sole cost
and expense and regardless of whether insurance or condemnation proceeds (if
any) shall be available or sufficient for the purpose, 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.

(i) No Other Liens. Borrower will not, without the prior written
consent of Lender, create, place or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or allow to remain, any
deed to secure debt, Security Instrument, voluntary or involuntary lien, whether
statutory, constitutional or contractual, security title, interest, encumbrance
or charge, or conditional sale or other title retention document, against or
covering the Property, or any part thereof, other than the Permitted
Encumbrances, regardless of whether the same are expressly or otherwise
subordinate to the lien or security interest created in this Security
Instrument, and should any of the foregoing become attached hereafter in any
manner to any part of the Property without the prior written consent of Lender,
Borrower will cause the same to be promptly discharged and released. Borrower
will own all parts of the Property and will not acquire any fixtures, equipment
or other property forming a part of the Property pursuant to a lease, license,
security agreement or similar agreement, whereby any party has or may obtain the
right to repossess or remove same, without the prior written consent of Lender,
which consent shall not be unreasonably withheld. If Lender consents to the
voluntary grant by Borrower of any deed to

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secure debt, lien, security interest, or other encumbrance (hereinafter called
"Subordinate Lien") conveying or encumbering any of the Property or if the
foregoing prohibition is determined by a court of competent jurisdiction to be
unenforceable as to a Subordinate Lien, any such Subordinate Lien shall contain
express covenants to the effect that: (1) the Subordinate Lien is
unconditionally subordinate to this Security Instrument and all Leases
(hereinafter defined); (2) if any action (whether judicial or pursuant to a
power of sale) shall be instituted to foreclose or otherwise enforce the
Subordinate Lien, no tenant of any of the Leases (hereinafter defined) shall be
named as a party defendant, and no action shall be taken that would terminate
any occupancy or tenancy without the prior written consent of Lender; (3) Rents
(hereinafter defined), if collected by or for the holder of the Subordinate
Lien, shall be applied first to the payment of the secured indebtedness then due
and expenses incurred in the ownership, operation and maintenance of the
Property in such order as Lender may determine, prior to being applied to any
indebtedness secured by the Subordinate Lien; (4) written notice of default
under the Subordinate Lien and written notice of the commencement of any action
(whether judicial or pursuant to a power of sale) to foreclose or otherwise
enforce the Subordinate Lien or to seek the appointment of a receiver for all or
any part of the Property shall be given to Lender with or immediately after the
occurrence of any such default or commencement; and (5) neither the holder of
the Subordinate Lien, nor any purchaser at foreclosure thereunder, nor anyone
claiming by, through or under any of them shall succeed to any of Borrower's
rights hereunder without the prior written consent of Lender.

(j) Operation of Property. Borrower will operate the Property 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. Borrower will
keep the Property occupied so as not to impair the insurance carried thereon.
Borrower 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 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. Borrower 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.
Borrower will not impose any easement, restrictive covenant or encumbrance upon
the Property, execute or file any subdivision plat or condominium declaration
affecting the

WELLS/FREMONT ASSOCIATES
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Property or consent to the annexation of the Property to any municipality,
without the prior written consent of Lender, which consent shall not be
unreasonably withheld. Borrower will not do or suffer to be done any act whereby
the value of any part of the Property may be lessened. Borrower will preserve,
protect, renew, extend and retain all material rights and privileges granted for
or applicable to the Property. Without the prior written consent of Lender
pursuant to paragraph (u) of this Section 2.1, 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. Borrower will cause all
debts and liabilities of any character (including without limitation all debts
and liabilities for labor, material and equipment 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.

(k) Financial Matters. Borrower is solvent after giving effect to
all borrowings contemplated by the Loan Documents and no proceeding under any
Debtor Relief Law (hereinafter defined) is pending (or, to Borrower's knowledge,
threatened) by or against Borrower, or any affiliate of Borrower, 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 Borrower to Lender 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
Borrower or, to Borrower's knowledge, of any tenant under any lease described
therein. For the purposes of this paragraph, "Borrower" shall also include any
person liable directly or indirectly for the secured indebtedness or any part
thereof and any joint venturer or general partner of Borrower.

(l) Status of Borrower; Suits and Claims; Loan Documents. Borrower
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 and operate the Property.

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Each Loan Document executed by Borrower has been duly authorized, executed and
delivered by Borrower, and the obligations thereunder and the performance
thereof by Borrower in accordance with their terms are and will continue to be
within Borrower'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 Borrower or the
Property is subject, and do not and will not result in the creation of any
encumbrance against any assets or properties of Borrower, or any other person
liable, directly or indirectly, for any of the secured indebtedness, except as
expressly contemplated by the Loan Documents. There is no suit, action, claim,
investigation, inquiry, proceeding or demand pending (or, to Borrower's
knowledge, threatened) against Borrower or against any person liable directly or
indirectly for the secured indebtedness or which affects the Property
(including, without limitation, any which challenges or otherwise pertains to
Borrower'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 Borrower's knowledge, threatened) against Borrower
or against any other person liable directly or indirectly for the secured
indebtedness, except as has been disclosed in writing to Lender in connection
with the loan evidenced by the Note. The Loan Documents constitute legal, valid
and binding obligations of Borrower (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.
Borrower is not a "foreign person" within the meaning of the Internal Revenue
Code of 1986, as amended, Sections 1445 and 7701 (i.e. Borrower 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
purposes, and is not for personal, family, household or agricultural purposes.
Borrower will not cause or permit any change to be made in its name, identity,
or corporate or partnership structure, unless Borrower shall have notified
Lender of such change prior to the effective date of such change, and shall have
first taken all action required by Lender for the purpose of further perfecting
or protecting the lien and security interest of Lender in the Property.
Borrower's principal place of business and chief executive office, and the place
where Borrower keeps its books and records concerning the Property, has for the
preceding four months been and will continue to be (unless Borrower notifies
Lender of any change in writing prior to the date of such change) the address of
Borrower set forth at the end of this Security Instrument.

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(m) Certain Environmental Matters.

(i) Definitions. As used in this Security Instrument: (1)
"Environmental Claim" means any investigative, enforcement, cleanup, removal,
containment, remedial or other governmental or regulatory action at any time
threatened, instituted or completed pursuant to any applicable Environmental
Requirement against Borrower or against or with respect to the Property or any
use or activity on the Property, and any claim at any time threatened or made by
any person against Borrower or against or with respect to the Property or any
use or activity on the Property, relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous Substance;
(2) "Environmental Requirement" means any Legal Requirement which pertains to
ground or air or water or noise pollution or contamination, underground or
aboveground tanks, health or the environment, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), and all environmental laws, ordinances, regulations and rules
of the State of California and each agency, instrumentality and subdivision
thereof having jurisdiction over the Premises; and (3) "Hazardous Substance"
means any substance, whether solid, liquid or gaseous: (a) which is listed,
defined or regulated as a "hazardous substance", "hazardous waste" or "solid
waste", or otherwise classified as hazardous or toxic, in or pursuant to any
Environmental Requirement; or (b) which is or contains asbestos, radon, any
polychlorinated biphenyl, urea formaldehyde foam insulation, or explosive or
radioactive material; or (c) which causes or poses a threat to cause a
contamination or nuisance on the Property or on any adjacent property or a
hazard to the environment or to the health or safety of persons on the Property.
As used in this paragraph (m), the word "on" when used with respect to the
Property or adjacent property means "on, in, under, above or about".

(ii) Representations and Warranties. Borrower represents and
warrants to Lender, without regard to whether Lender has or hereafter obtains
any knowledge or report of the environmental condition of the Property, as
follows: (1) during the period of Borrower's ownership of the Property, the
Property has not been used for industrial or manufacturing purposes, for
landfill, dumping or other waste disposal activity or operation, for generation,
storage, use, sale, treatment, processing, recycling or disposal of any
Hazardous Substance, or for any other use that would give rise to the release of
any Hazardous Substance on the Property; (2) to the best of Borrower's knowledge
after inquiry in accordance with good commercial or customary practices, no use
of the Property described in clause

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(1) preceding occurred at any time prior to the period of Borrower's ownership
of the Property nor did any such use on any adjacent property occur during or at
any time prior to the period of Borrower's ownership of the Property, and there
is no Hazardous Substance, storage tank (or similar vessel), sump or well on the
Property; (3) Borrower has received no notice and has no knowledge of any
Environmental Claim or any completed, pending, proposed or threatened
investigation or inquiry concerning the presence or release of any Hazardous
Substance on the Property or on any adjacent property or concerning whether any
condition, use or activity on the Property or on any adjacent property is in
violation of any Environmental Requirement; (4) the present conditions, uses and
activities on the Property do not violate any Environmental Requirement and the
use of the Property which Borrower (and each tenant and subtenant, if any) makes
and intends to make of the Property complies and will comply with all applicable
Environmental Requirements; (5) the Property is not currently on, and to the
best of Borrower's knowledge after inquiry in accordance with good commercial or
customary practices, has never been on, any federal or state "superfund" or
"superlien" list; and (6) neither Borrower, nor to Borrower's knowledge any
tenant or subtenant, has obtained or is required to obtain any permit or other
authorization to construct, occupy, operate, use or conduct any activity on any
of the Property by reason of any Environmental Requirement.

(iii) Violations. Borrower will not cause, commit, permit or allow
to continue any violation of any Environmental Requirement by Borrower or by or
with respect to the Property or any use or activity on the Property, or the
attachment of any environmental lien to the Property. Borrower will not place,
install, dispose of or release, or cause, permit or allow the placing,
installation, disposal or release of, any Hazardous Substance or storage tank
(or similar vessel) on the Property and will keep the Property free of any
Hazardous Substance. Notwithstanding the foregoing provisions of this Subsection
(iii), Borrower shall not be in default under this Subsection (iii) should
Borrower store minimal quantities of substances on the Premises which
technically could be considered Hazardous Substance, provided that: such
substances are of a type and are held only in a quantity normally used in
connection with the construction, occupancy or operation of comparable buildings
(such as cleaning fluids, and supplies normally used in the day to day operation
of business offices), such substances are being held, stored and used in
complete and strict compliance with all applicable Environmental Requirements,
and the indemnity in Section 7 of the Environmental Agreement shall always apply
to such substances, and it shall be and continue to be the responsibility of
Borrower to take all remedial actions required

WELLS/FREMONT ASSOCIATES
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under and in accordance with Subsection (vi), below, in the event of any
unlawful release of any such substance.

(iv) Notice to Lender. Borrower will promptly advise Lender in
writing of any Environmental Claim or of the discovery of any Hazardous
Substance on the Property, as soon as Borrower first obtains knowledge thereof,
including a full description of the nature and extent of the Environmental Claim
and/or Hazardous Substance and all relevant circumstances.

(v) Site Assessments and Information. If Lender shall ever have
reason to believe that any Hazardous Substance affects the Property, or if any
Environmental Claim is made or threatened, or if a default shall have occurred,
Borrower will at its expense provide to Lender from time to time, in each case
within 30 days of Lender's request, a report (including all drafts thereof if
requested by Lender) of an environmental assessment of the Property made after
the date of Lender's request and of such scope (including but not limited to the
taking of soil borings, air and groundwater samples and other above and below
ground testing) as Lender may request and by a consulting firm acceptable to
Lender. Borrower will cooperate with each consulting firm making any such
assessment and will supply to the consulting firm, from time to time and
promptly on request, all information available to Borrower to facilitate the
completion of the assessment and report.

(vi) Remedial Actions. Without limitation of Lender's rights to
declare a default and to exercise all remedies available by reason thereof, if
any Hazardous Substance is discovered on the Property at any time and regardless
of the cause, Borrower shall: (1) promptly at Borrower's sole risk and expense
remove, treat and dispose of the Hazardous Substance in compliance with all
applicable Environmental Requirements and solely under Borrower's name (or if
removal is prohibited by any Environmental Requirement, take whatever action is
required by applicable Environmental Requirements), in addition to taking such
other action as is necessary to have the full use and benefit of the Property as
contemplated by the Loan Documents, and provide Lender with satisfactory
evidence thereof; and (2) if requested by Lender, provide to Lender within 30
days of Lender's request a bond, letter of credit or other financial assurance
evidencing to Lender's satisfaction that all necessary funds are readily
available to pay the costs and expenses of the actions required by clause (1)
preceding and to discharge any assessments or liens established against the
Property as a result of the presence of the Hazardous Substance on the Property.

(n) Further Assurances. Borrower will, promptly on request of
Lender, (i) correct any defect, error or omission

WELLS/FREMONT ASSOCIATES
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which may be discovered in the contents, execution or acknowledgment of this
Security Instrument or any other Loan Document; (ii) execute, acknowledge,
deliver, procure and record and/or file such further documents (including,
without limitation, further Security Instruments, security agreements, financing
statements, continuation statements, 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 Security Instrument and the other Loan
Documents, to more fully identify and subject to the liens and 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 Lender to protect the
lien or the 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 Lender to enable Lender to comply with
the requirements or requests of any agency having jurisdiction over Lender or
any examiners of such agencies with respect to the indebtedness secured hereby,
Borrower or the Property. Borrower shall pay all costs connected with any of the
foregoing, which shall be a demand obligation owing by Borrower (which Borrower
hereby promises to pay) to Lender pursuant to this Security Instrument.

(o) Fees and Expenses. Without limitation of any other provision of
this Security Instrument or of any other Loan Document and to the extent not
prohibited by applicable law, Borrower will pay, and will reimburse to Lender on
demand to the extent paid by Lender: (i) all appraisal fees, filing and
recording fees, taxes, brokerage fees and commissions, abstract fees, title
search or examination fees, title policy and endorsement premiums and fees,
uniform commercial code search fees, escrow fees, reasonable attorneys' fees,
architect fees, construction consultant fees, environmental inspection fees,
survey fees, and all other out-of-pocket costs and expenses of every character
incurred by Borrower or Lender 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 Security
Instrument, 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 Borrower as owner of the Property;
and (ii) all costs and expenses, including reasonable attorneys' fees and
expenses, incurred or expended in connection with the exercise of any right or
remedy, or the enforcement of any obligation of Borrower, hereunder or under any
other Loan Document.

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(p) Indemnification.

(i) Borrower will indemnify and hold harmless Lender from and
against, and reimburse Lender on demand for, any and all Indemnified Matters
(defined below). For purposes of this paragraph (p), the term "Lender" shall
include the directors, officers, partners, employees and agents of Lender, and
any persons owned or controlled by, owning or controlling, or under common
control or affiliated with Lender. 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 paragraph (p) by Borrower
to Lender shall be a demand obligation owing by Borrower (which Borrower hereby
promises to pay) to Lender pursuant to this Security Instrument. Nothing in this
paragraph, elsewhere in this Security Instrument or in any other Loan Document
shall limit or impair any rights or remedies of Lender (including without
limitation any rights of contribution or indemnification) against Borrower or
any other person under any other provision of this Security Instrument, any
other Loan Document, any other agreement or any applicable Legal Requirement.

(ii) As used herein, the term "Indemnified Matters" means any and
all claims, demands, liabilities (including strict liability), losses, damages
(including consequential damages), causes of action, judgments, penalties, 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 Lender 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 Security Instrument 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 at any time
on or before the Release Date, any act performed or omitted to be performed
hereunder or under any other Loan Document, any breach by Borrower of any
representation, warranty, covenant, agreement or condition contained in this
Security Instrument or in any other Loan

WELLS/FREMONT ASSOCIATES
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Document, any default as defined herein or any claim under or with respect to
any Lease (hereinafter defined) or arising under the Environmental Agreement.
The term "Release Date" as used herein means the earlier of the following two
dates: (i) the date on which the indebtedness and obligations secured hereby
have been paid and performed in full and this Security Instrument has been
cancelled and satisfied of record, or (ii) the date on which this Security
Instrument is fully and finally foreclosed or a conveyance by deed in lieu of
such foreclosure is fully and finally effective, and possession of the Property
has been given to the purchaser or grantee free of occupancy and claims to
occupancy by Borrower and Borrower's heirs, devisees, representatives,
successors and assigns; provided, that if such payment, performance, release,
foreclosure or conveyance is challenged, in bankruptcy proceedings or otherwise,
the Release Date shall be deemed not to have occurred until such challenge is
rejected, dismissed or withdrawn with prejudice. The indemnities in this
paragraph (p) shall not terminate upon the Release Date or upon the
cancellation, satisfaction, foreclosure or other termination of this Security
Instrument but will survive the Release Date, foreclosure of this Security
Instrument or conveyance in lieu of foreclosure, the repayment of the secured
indebtedness, the discharge, cancellation and satisfaction of this Security
Instrument and the other Loan Documents, any bankruptcy or other debtor relief
proceeding, and any other event whatsoever.

(q) Records and Financial Reports. Borrower will keep accurate books
and records in accordance with sound accounting principles in which full, true
and correct entries shall be promptly made with respect to the Property and the
operation thereof, and will permit all such books and records to be inspected
and copied, and the Property to be inspected and photographed, by Lender and its
representatives during normal business hours and at any other reasonable times.
Without limitation of other or additional requirements in any of the other Loan
Documents, Borrower will furnish to Lender (i) current operating statements
itemizing all income and expenses of the Property for each quarter (and for the
fiscal year through the end of such quarter) as soon as reasonably practicable
but in any event within fifteen (15) days after the end of such quarter and for
the fiscal year of Borrower within sixty (60) days after the end thereof
including also a projection of such operations for the next fiscal year; and
(ii) a balance sheet (including disclosure of all contingent liabilities) and an
income statement of Borrower, for each fiscal year of Borrower as soon as
reasonably practicable following the end of such fiscal year, but in any event
within ninety (90) days after the end thereof. Each financial statement
submitted pursuant to this paragraph shall be prepared in accordance with
generally accepted accounting

WELLS/FREMONT ASSOCIATES
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PAGE 23

principles, consistently applied, and be certified in writing as true and
correct by a representative of Borrower acceptable to Lender. Borrower will
furnish to Lender at Borrower's expense all evidence which Lender may from time
to time reasonably request as to compliance with all provisions of the Loan
Documents. Any inspection or audit of the Property or the books and records of
Borrower, or the procuring of documents and financial and other information, by
or on behalf of Lender shall be for Lender's protection only, and shall not
constitute any assumption of responsibility to Borrower or anyone else with
regard to the condition, construction, maintenance or operation of the Property
nor Lender's approval of any certification given to Lender nor relieve Borrower
of any of Borrower's obligations. Lender may from time to time assign or grant
participations in the secured indebtedness and Borrower consents to the delivery
by Lender to any acquirer or prospective acquirer of any interest or
participation in or with respect to all or part of the secured indebtedness such
information as Lender now or hereafter has relating to the Property, Borrower,
any party obligated for payment of any part of the secured indebtedness, any
tenant or guarantor under any lease affecting any part of the Property and any
agent or guarantor under any management agreement affecting any part of the
Property.

(r) Taxes on Note or Security Instrument. Borrower will promptly pay
all income, franchise and other taxes owing by Borrower and any stamp taxes or
other taxes (unless such payment by Borrower is prohibited by law) which may be
required to be paid with respect to the Note, this Security Instrument or any
other instrument evidencing or securing any of the secured indebtedness,
excepting any amounts to be paid under the present California Security
Instrument tax laws, which amounts shall be paid by Lender. In the event of the
enactment after this date of any law of any governmental entity applicable to
Lender, the Note, the Property or this Security Instrument deducting from the
value of property for the purpose of taxation any lien or interest thereon, or
imposing upon Lender the payment of the whole or any part of the taxes or
assessments or charges or liens herein required to be paid by Borrower, or
changing in any way the laws relating to the taxation of Security Instruments or
security agreements or debts secured by Security Instruments or security
agreements or the interest of the Lender or secured party in the property
covered thereby, or the manner of collection of such taxes, so as to affect this
Security Instrument or the indebtedness secured hereby or Lender, then, and in
any such event, Borrower, upon demand by Lender, shall pay such taxes,
assessments, charges or liens, or reimburse Lender therefor; provided, however,
that if in the opinion of counsel for Lender (i) it might be unlawful to require
Borrower to make such payment or (ii) the making of such payment might result in

WELLS/FREMONT ASSOCIATES
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the imposition of interest beyond the maximum amount permitted by law, then and
in such event, Lender may elect, by notice in writing given to Borrower, to
declare all of the indebtedness secured hereby to be and become due and payable
sixty (60) days from the giving of such notice.

(s) Statement Concerning Note or Security Instrument. Borrower shall
at any time and from time to time furnish within seven (7) days of request by
Lender a written statement in such form as may be required by Lender stating
that (i) the Note, this Security Instrument and the other Loan Documents are
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their terms; (ii) the unpaid principal balance of the Note;
(iii) the date to which interest on the Note is paid; (iv) the Note, this
Security Instrument and the other Loan Documents have not been released,
subordinated or modified; and (v) there are no offsets or defenses against the
enforcement of the Note, this Security Instrument or any other Loan Document. If
any of the foregoing statements are untrue, Borrower shall, alternatively,
specify the reasons therefor.

(t) Annual Appraisal. Lender may at its option obtain at Borrower's
expense, once in each year (or as otherwise reasonably requested by Lender) an
appraisal of the Property or any part thereof prepared in accordance with
written instructions from Lender by a third-party appraiser engaged directly by
Lender. Each such appraiser and appraisal shall be satisfactory to Lender. The
costs of each such appraisal shall be a part of the secured indebtedness and
shall be payable by Borrower to Lender on demand (which obligation Borrower
hereby promises to pay).

(u) Mineral Interests. Borrower agrees that the making of any oil,
gas or mineral lease or the sale or conveyance of any mineral interest or right
to explore for minerals under, through or upon the Property would impair the
value of the Property as security for payment of the indebtedness secured hereby
and that Borrower shall have no right, power or authority to lease the Property,
or any part thereof, for oil, gas or other mineral purposes, or to grant, assign
or convey any mineral interest of any nature, or the right to explore for oil,
gas and other minerals, without first obtaining from Lender express written
permission, which permission shall not be valid until recorded. Borrower further
agrees that if Borrower shall make any such lease or attempt to grant any such
mineral rights without such prior written permission, then Lender shall have the
option, without notice, to declare the same to be a default hereunder and to
declare the indebtedness secured hereby immediately due and payable. Whether or
not Lender shall consent to such lease or grant of mineral rights, Lender shall
receive

WELLS/FREMONT ASSOCIATES
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the entire consideration to be paid for such lease or grant of mineral rights,
with the same to be applied upon the indebtedness secured hereby; provided,
however, that the acceptance of such consideration shall in no way impair the
lien of this Security Instrument on the Property, including all mineral rights.

(v) Year 2000 Compliance. Borrower has (i) initiated a review and
assessment of all areas within its business and operations (including those
affected by suppliers and vendors) that could be adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications used by Borrower (or
its suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Borrower reasonably believes that all computer
applications (including those of its suppliers and vendors) that are material to
its business and operations will on a timely basis be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000 (that
is, will be "Year 2000 Compliant"), except to the extent that a failure to do so
could not reasonably be expected to cause a material adverse change in the
financial condition, results of operations, business or properties of Borrower
(a "Material Adverse Change"). Borrower will promptly notify Lender in the event
that Borrower discovers or determines that any computer application (including
those of its suppliers and vendors) that is material to its business and
operations will not be Year 2000 Compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to cause a Material
Adverse Change.

Section 2.2. Performance by Lender on Borrower's Behalf. Borrower
agrees that, if Borrower fails to perform any act or to take any action which
under any Loan Document Borrower is required to perform or take, or to pay any
money which under any Loan Document Borrower is required to pay, and whether or
not the failure then constitutes a default hereunder or thereunder, and whether
or not there has occurred any default or defaults hereunder or the secured
indebtedness has been accelerated, Lender, in Borrower's name or its own name,
may, but shall not be obligated to, perform or cause to be performed such act or
take such action or pay such money, and any expenses so incurred by Lender and
any money so paid by Lender shall be a demand obligation owing by Borrower to
Lender (which obligation Borrower hereby promises to pay), shall be a part of
the indebtedness secured hereby, and Lender, upon making such payment, shall be
subrogated to all of the rights of the person, entity or body politic receiving
such payment. Lender and its designees shall

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have the right to enter upon the Property at any time and from time to time for
any such purposes. No such payment or performance by Lender shall waive or cure
any default or waive any right, remedy or recourse of Lender. Any such payment
may be made by Lender in reliance on any statement, invoice or claim without
inquiry into the validity or accuracy thereof. Each amount due and owing by
Borrower to Lender pursuant to this Security Instrument shall bear interest,
from the date such amount becomes due until paid, at the rate per annum provided
in the Note for interest on past due principal owed on the Note but never in
excess of the maximum nonusurious amount permitted by applicable law, which
interest shall be payable to Lender on demand; and all such amounts, together
with such interest thereon, shall automatically and without notice be a part of
the indebtedness secured hereby. The amount and nature of any expense by Lender
hereunder and the time when paid shall be fully established by the certificate
of Lender or any of Lender's officers or agents.

Section 2.3. Absence of Obligations of Lender with Respect to
Property. Notwithstanding anything in this Security Instrument to the contrary,
including, without limitation, the definition of "Property" and/or the
provisions of Article 3 hereof, (i) to the extent permitted by applicable law,
the Property is composed of Borrower's rights, title and interests therein but
not Borrower's obligations, duties or liabilities pertaining thereto, (ii)
Lender neither assumes nor shall have any obligations, duties or liabilities in
connection with any portion of the items described in the definition of
"Property" herein, either prior to or after obtaining title to such Property,
whether by foreclosure sale, the granting of a deed in lieu of foreclosure or
otherwise, and (iii) Lender may, at any time prior to or after the acquisition
of title to any portion of the Property as above described, advise any party in
writing as to the extent of Lender's interest therein and/or expressly disaffirm
in writing any rights, interests, obligations, duties and/or liabilities with
respect to such Property or matters related thereto. Without limiting the
generality of the foregoing, it is understood and agreed that Lender shall have
no obligations, duties or liabilities prior to or after acquisition of title to
any portion of the Property, as lessee under any lease or purchaser or seller
under any contract or option unless Lender elects otherwise by written
notification.

ARTICLE 3 - Collateral Assignment of Leases and Rents

Section 3.1. Assignment. As additional security for the indebtedness
secured hereby, Borrower hereby assigns to Lender all Rents (hereinafter
defined) and all of Borrower's rights in and under all Leases (hereinafter
defined). Upon the

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occurrence of a default hereunder, Lender shall have the right, power and
privilege (but shall be under no duty) to demand possession of the Rents, which
demand shall to the fullest extent permitted by applicable law be sufficient
action by Lender to entitle Lender to immediate and direct payment of the Rents
(including delivery to Lender of Rents collected for the period in which the
demand occurs and for any subsequent period), for application as provided in
this Security Instrument, all without the necessity of any further action by
Lender, including, without limitation, any action to obtain possession of the
Land, Improvements or any other portion of the Property or any action for the
appointment of a receiver. Borrower hereby authorizes and directs the tenants
under the Leases to pay Rents to Lender upon written demand by Lender, without
further consent of Borrower, without any obligation to determine whether a
default has in fact occurred and regardless of whether Lender has taken
possession of any portion of the Property, and the tenants may rely upon any
written statement delivered by Lender to the tenants. Any such payment to Lender
shall constitute payment to Borrower under the Leases, and Borrower hereby
appoints Lender as Borrower's lawful attorney-in-fact for giving, and Lender is
hereby empowered to give, acquittances to any tenants for such payments to
Lender after a default. The assignment contained in this Section shall become
null and void upon the release of this Security Instrument. As used herein: (i)
"Lease" means each existing or future lease, sublease (to the extent of
Borrower's rights thereunder), usufruct or other agreement under the terms of
which any person has or acquires any right to occupy or use the Property, or any
part thereof, or interest therein, and each existing or future guaranty of
payment or performance thereunder, and all extensions, renewals, modifications
and replacements of each such lease, sublease, usufruct, agreement or guaranty;
and (ii) "Rents" means all of the rents, revenue, income, profits and proceeds
derived and to be derived from the Property or arising from the use or enjoyment
of any portion thereof or from any Lease, including but not limited to
liquidated damages following default under any such Lease, all proceeds payable
under any policy of insurance covering loss of rents resulting from
untenantability caused by damage to any part of the Property, all of Borrower's
rights to recover monetary amounts from any tenant in bankruptcy including,
without limitation, rights of recovery for use and occupancy and damage claims
arising out of Lease defaults, including rejections, under any applicable Debtor
Relief Law (as hereinafter defined), together with any sums of money that may
now or at any time hereafter be or become due and payable to Borrower by virtue
of any and all royalties, overriding royalties, bonuses, delay rentals and any
other amount of any kind or character arising under any and all present and all
future oil, gas, mineral and mining leases covering the Property or any part
thereof, and all proceeds and other amounts

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paid or owing to Borrower under or pursuant to any and all contracts and bonds
relating to the construction or renovation of the Property.

Section 3.2. Covenants, Representations and Warranties Concerning
Leases and Rents. Borrower covenants, represents and warrants that: (i) Borrower
has good title to, and is the owner of the entire landlord's interest in, the
Leases and Rents hereby assigned and authority to assign them; (ii) all Leases
are valid and enforceable, and in full force and effect, and are unmodified
except as stated therein; (iii) neither Borrower nor any tenant in the Property
is in default under its Lease (and no event has occurred which with the passage
of time or notice or both would result in a default under its Lease) or is the
subject of any bankruptcy, insolvency or similar proceeding; (iv) unless
otherwise stated in a Permitted Encumbrance, no Rents or Leases have been or
will be assigned, mortgaged, pledged or otherwise encumbered and no other person
has or will acquire any right, title or interest in such Rents or Leases; (v) no
Rents have been waived, released, discounted, set off or compromised; (vi)
except as stated in the Leases, Borrower has not received any funds or deposits
from any tenant for which credit has not already been made on account of accrued
Rents; (vii) Borrower shall perform all of its obligations under the Leases and
enforce the tenants' obligations under the Leases to the extent enforcement is
prudent under the circumstances; (viii) Borrower will not, without the prior
written consent of Lender, which consent shall not be unreasonably withheld,
enter into any Lease after the date hereof, or waive, release, discount, set
off, compromise, reduce or defer any Rent, receive or collect Rents more than
one (1) month in advance, grant any rent-free period to any tenant, reduce any
Lease term or waive, release or otherwise modify any other material obligation
under any Lease, renew or extend any Lease except in accordance with a right of
the tenant thereto in such Lease, approve or consent to an assignment of a Lease
or a subletting of any part of the premises covered by a Lease, or settle or
compromise any claim against a tenant under a Lease in bankruptcy or otherwise;
(ix) Borrower will not, except in good faith where the tenant is in material
default thereunder, terminate or consent to the cancellation or surrender of any
Lease having an unexpired term of one year or more unless promptly after the
cancellation or surrender a new Lease of such premises is made with a new tenant
having a credit standing, in Lender's judgment, at least equivalent to that of
the tenant whose Lease was cancelled, on substantially the same terms as the
terminated or cancelled Lease; (x) Borrower will not execute any Lease except in
accordance with the Loan Documents and for actual occupancy by the tenant
thereunder; (xi) Borrower shall give prompt notice to Lender, as soon as
Borrower first obtains notice, of any claim, or the commencement of any action,
by any

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tenant or subtenant under or with respect to a Lease regarding any claimed
damage, default, diminution of or offset against Rent, cancellation of the
Lease, or constructive eviction, excluding, however, notices of default under
residential Leases, and Borrower shall defend, at Borrower's expense, any
proceeding pertaining to any Lease, including, if Lender so requests, any such
proceeding to which Lender is a party; (xii) Borrower shall as often as
requested by Lender, within ten (10) days of each request, deliver to Lender a
complete rent roll of the Property in such detail as Lender may require and
financial statements of the tenants, subtenants and guarantors under the Leases
to the extent available to Borrower, and deliver to such of the tenants and
others obligated under the Leases specified by Lender written notice of the
assignment in Section 3.1 hereof in form and content satisfactory to Lender;
(xiii) promptly upon request by Lender, Borrower shall deliver to Lender
executed originals of all Leases and copies of all records relating thereto;
(xiv) there shall be no merger of the leasehold estates, created by the Leases,
with the fee estate of the Land without the prior written consent of Lender; and
(xv) Lender may at any time and from time to time by specific written instrument
intended for the purpose, unilaterally subordinate the lien of this Security
Instrument to any Lease, without joinder or consent of, or notice to, Borrower,
any tenant or any other person, and notice is hereby given to each tenant under
a Lease of such right to subordinate. No such subordination shall constitute a
subordination to any lien or other encumbrance, whenever arising, or improve the
right of any junior lienholder; and nothing herein shall be construed as
subordinating this Security Instrument to any Lease.

Section 3.3. No Liability of Lender. Lender's acceptance of this
assignment shall not be deemed to constitute Lender a "Lender in possession,"
nor obligate Lender to appear in or defend any proceeding relating to any Lease
or to the Property, or to take any action hereunder, expend any money, incur any
expenses, or perform any obligation or liability under any Lease, or assume any
obligation for any deposit delivered to Borrower by any tenant and not as such
delivered to and accepted by Lender. Lender shall not be liable for any injury
or damage to person or property in or about the Property, or for Lender's
failure to collect or to exercise diligence in collecting Rents, but shall be
accountable only for Rents that it shall actually receive. Neither the
assignment of Leases and Rents nor enforcement of Lender's rights regarding
Leases and Rents (including collection of Rents) nor possession of the Property
by Lender nor Lender's consent to or approval of any Lease (nor all of the
same), shall render Lender liable on any obligation under or with respect to any
Lease or constitute affirmation of, or any subordination to, any Lease,
occupancy, use or option. If Lender

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seeks or obtains any judicial relief regarding Rents or Leases, the same shall
in no way prevent the concurrent or subsequent employment of any other
appropriate rights or remedies nor shall same constitute an election of judicial
relief for any foreclosure or any other purpose. Lender neither has nor assumes
any obligations as lessor or landlord with respect to any Lease. The rights of
Lender under this Article 3 shall be cumulative of all other rights of Lender
under the Loan Documents or otherwise.

ARTICLE 4 - Default

Section 4.1. Events of Default. The occurrence of any one of the
following shall be a default under this Security Instrument ("Default" or
"default"):

(a) Failure to Pay Indebtedness. Any of the secured indebtedness is
not paid when due, regardless of how such amount may have become due, and such
failure is not cured within the applicable grace or cure period provided for in
Section 4.2 of this Security Instrument.

(b) Nonperformance of Covenants. Any covenant, agreement or
condition herein or in any other Loan Document (other than covenants otherwise
addressed in another paragraph of this Section, such as covenants to pay the
secured indebtedness) is not fully and timely performed, observed or kept, and
such failure is not cured within the applicable grace or cure period provided
for in Section 4.2 of this Security Instrument.

(c) Representations. Any statement, representation or warranty in
any of the Loan Documents, or in any financial statement or any other writing
heretofore or hereafter delivered to Lender in connection with the secured
indebtedness is false, misleading or erroneous in any material respect on the
date hereof or on the date as of which such statement, representation or
warranty is made.

(d) Bankruptcy or Insolvency. The owner of the Property or any
person liable, directly or indirectly, for any of the secured indebtedness (or
any general partner or joint venturer of such owner, if the owner is a general
partnership or joint venture):

(1) (i) Executes an assignment for the benefit of creditors, or
takes any action in furtherance thereof; or (ii) admits in writing its inability
to pay, or fails to pay, its debts generally as they become due; or (iii) as a
debtor, files a petition, case, proceeding or other action pursuant to, or
voluntarily seeks the benefit or benefits of, Title 11 of the United States Code
as now or hereafter in effect or any other

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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 (Title 11 of the United States Code and such other laws being herein
called "Debtor Relief Laws"), or takes any action in furtherance thereof; or
(iv) 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

(2) 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 (i) admits,
acquiesces in or fails to contest diligently the material allegations thereof,
or (ii) the petition, case, proceeding or other action results in entry of any
order for relief or order granting relief sought against it, or (iii) in a
proceeding under the Federal Bankruptcy Code, the case is converted from one
chapter to another, or (iv) 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

(3) 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 (4) 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

(4) Fails to have discharged within a period of ten (10) days any
attachment, sequestration, or similar writ levied upon any of its property; or

(5) Fails to pay immediately any final money judgment against it.

(e) Transfer of the Property. There occurs 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: (i) sales or transfers of items of the

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Accessories which have become obsolete or worn beyond practical use and which
have been replaced by adequate substitutes, owned by Borrower, having a value
equal to or greater than the replaced items when new; and (ii) the grant, in the
ordinary course of business, of a leasehold interest in a part of the
Improvements to a tenant for occupancy, not containing a right or option to
purchase and not in contravention of any provision of this Security Instrument
or of any other Loan Document. Lender may, in its sole discretion, waive a
default under this paragraph, but it shall have no obligation to do so, and any
waiver may be conditioned upon such one or more of the following (if any) which
Lender may require: the grantee's integrity, reputation, character,
creditworthiness and management ability being satisfactory to Lender in its sole
judgment and such grantee's executing, prior to such sale or transfer, a written
assumption agreement containing such terms as Lender may require, a principal
paydown on the Note, an increase in the rate of interest payable under the Note,
a transfer fee, a modification of the term of the Note, and any other
modification of the Loan Documents which Lender may require.

(f) Transfer of Ownership of Borrower. There occurs any sale,
pledge, encumbrance, assignment or transfer, voluntarily or involuntarily,
whether by operation of law or otherwise, of any interest in Borrower, without
the prior written consent of Lender.

(g) Grant of Easement, Etc. Without the prior written consent of
Lender, which will not be unreasonably withheld, Borrower 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 affect the Property.

(h) Abandonment. The owner of the Property abandons any of the
Property.

(i) Default Under Other Lien. A default or event of default occurs
and is continuing under any lien, security interest or assignment covering the
Property or any part thereof (whether or not Lender has consented, and without
hereby implying Lender'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.

(j) Destruction. The Property is so demolished, destroyed or damaged
that, in the reasonable opinion of Lender,

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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.

(k) 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 (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, 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.

(l) Liquidation, Etc. There occurs a liquidation, termination,
dissolution, merger, consolidation or failure to maintain good standing in the
State of Georgia (or in the case of an individual, the death or legal
incapacity) of the owner of the Property or any person obligated to pay any part
of the secured indebtedness.

(m) Material, Adverse Change. In Lender's reasonable opinion, the
prospect of payment of all or any part of the secured indebtedness has been
impaired because of a material, adverse change in the financial condition,
results of operations, business or properties of the owner of the Property or
any person liable, directly or indirectly, for any of the secured indebtedness,
or of any general partner or joint venturer thereof (if such owner or other
person is a partnership or joint venture).

(n) Enforceability; Priority. Any Loan Document shall for any reason
without Lender'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 Lender; or the liens, interests, Security
Instruments or security interests of Lender 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 Borrower or any person obligated to pay any part of
the secured indebtedness.

(o) Other Loan Documents; Fairchild Lease. A default or event of
default occurs under any Loan Document, other than this Security Instrument, or
a default or event of default occurs

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under the Fairchild Lease , and the same is not remedied within the applicable
period of grace (if any) provided in such document.

Section 4.2. Notice and Cure. Lender agrees, by its acceptance of
this Security Instrument, that notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, upon the occurrence of
any default of the type described in Subparagraphs (a) or (b) of Section 4.1 of
this Security Instrument, Lender will not accelerate the maturity of the Note or
the secured indebtedness and will not exercise any of its other rights and
remedies hereunder or under the other Loan Documents until and unless Lender has
first given notice of such default to Borrower, in the manner prescribed in
Section 6.12 of this Security Instrument, and Borrower has failed to cure such
default within the following periods of time:

(a) If such default is a default of the type described in
Subparagraph (a) of Section 4.1 of this Security Instrument, Borrower shall have
a period of ten (10) days from and after the effective date of such notice
within which to cure such default; or

(b) If such default is a default of the type described in
Subparagraph (b) of Section 4.1 of this Security Instrument, Borrower shall have
a period of thirty (30) days from and after the effective date of such notice
within which to cure such default.

After the occurrence of three (3) such defaults, and the giving of
notice thereof by Lender, Lender shall not be obligated to give to Borrower any
further notice of default or opportunity to cure the same. The agreements set
forth in this Section 4.2 do not and shall not be deemed to prevent or prohibit
Lender from withholding any advances of the secured indebtedness, following the
occurrence of a default, until and unless such default shall have been cured.

If Lender shall fail to give such notice and right to cure to
Borrower as provided herein, the sole and exclusive remedy of Borrower for such
failure shall be to seek appropriate equitable relief to enforce the agreement
to give such notice and right to cure and to have any acceleration of the
maturity of the Note and the secured indebtedness postponed or revoked and
foreclosure or other proceedings in connection therewith delayed or terminated
pending or upon the curing of such default in the manner and during the period
of time permitted by such agreement, and Borrower shall have no right to damages
or any other type of relief not herein specifically set out against Lender, all
of which damages or other relief are hereby waived by Borrower. Nothing herein
or in any of the other Loan Documents shall

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operate or be construed to add on or make cumulative any cure or grace periods
specified in any of the Loan Documents.

ARTICLE 5 - Remedies

Section 5.1. Certain Remedies. If a default shall occur, Lender may
(but shall have no obligation to) exercise any one or more of the following
remedies, without additional notice (unless notice is required by applicable
statute):

(a) Acceleration. Lender may at any time and from time to time
declare any or all of the secured indebtedness immediately due and payable and
such secured indebtedness shall thereupon be immediately due and payable,
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 Borrower. Without limitation of the
foregoing, upon the occurrence of a default described in clauses (i), (iii) or
(iv) of subparagraph (1) of paragraph (d) of Section 4.1, hereof, all of the
secured indebtedness 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 Borrower.

(b) Enforcement of Assignment of Rents. Prior or subsequent to
taking possession of any portion of the Property or taking any action with
respect to such possession, Lender may: (1) collect and/or sue for the Rents in
Lender'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 indebtedness in such manner and order as Lender
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 Borrower to transfer all security deposits and records thereof to Lender
together with original counterparts of the Leases.

(c) Foreclosure.

(i) Method of Foreclosure. Lender, at Lender's option, may either:
(1) accelerate the secured indebtedness, including all accrued interest,
pursuant to paragraph (a) of this Section 5.1 and foreclose the lien of this
Security Instrument by judicial proceeding, or (2) declare the secured
indebtedness immediately due and payable, without deduction, and foreclose this
Security Instrument by the power of sale hereby granted.

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(ii) Power of Sale. Should Lender elect to foreclose by exercise of
the power of sale contained herein, Lender shall notify Trustee and shall, if
required, deposit with Trustee the Note, the original or a certified copy of
this Security Instrument, and such other documents, receipts and evidences of
expenditures made and secured hereby as Trustee may require. Upon receipt of
such notice from Lender, Trustee shall cause to be recorded and delivered to
Borrower such notice as may then be required by law and by this Security
Instrument. Trustee shall, without demand on Borrower, after lapse of such time
as may then be required by law and after recordation of such notice of default
and after notice of sale has been given as required by law, sell the Property at
the time and place of sale fixed by it in said notice of sale, either as a whole
or in separate lots or parcels or items as Trustee 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. Trustee shall
deliver to the purchaser or purchasers at such sale its good and sufficient deed
or deeds conveying the property so sold, but 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, Borrower, Trustee or Lender, may purchase at such sale, and Borrower
hereby covenants to warrant and defend the title of such purchaser or
purchasers.

(iii) Foreclosure Sale; Proceeds. After deducting all costs, fees
and expenses of Trustee and of this Security Instrument, including, without
limitation, costs of evidence of title and actual and customary attorneys' fees
of Trustee or Lender in connection with a sale as provided in subparagraph (i)
above, Trustee shall apply the proceeds of such sale (a) first, to the payment
of all sums expended by Lender under the terms of any of the Loan Documents and
not yet repaid, together with interest on such sums at the Default Rate as set
forth in the Note, (b) second, to the payment of all sums expended under the
terms hereof not then repaid, with accrued interest at the rate of interest
equal to the rate then in effect under the Note, or if the Note has been repaid,
the rate that would have been in effect under the Note, (c) third, to the
payment of all other sums then secured hereby, and (d) fourth, the remainder, if
any, to the person or persons legally entitled thereto.

(iv) Additional Remedies. Trustee and Lender shall have all powers,
rights and remedies under applicable law whether or not specifically or
generally granted or described in this Security Instrument. Nothing contained
herein shall be construed to impair or to restrict such powers, rights and
remedies or to

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preclude any procedures or process otherwise available to trustees or
beneficiaries under deeds of trust in the State of California. Trustee and
Lender, and each of them, shall be entitled to enforce the payment and
performance of any indebtedness or obligations secured hereby and to exercise
all rights and powers under this Security Instrument or under any other Loan
Document or other agreement or any laws now or hereafter in force,
notwithstanding the fact that some or all of the indebtedness and obligations
secured hereby may now or hereafter be otherwise secured, whether by Security
Instrument, deed of trust, pledge, lien, assignment or otherwise. Neither the
acceptance of this Security Instrument nor its enforcement, whether by court
action or pursuant to the power of sale or other powers contained herein, shall
prejudice or in any manner affect Trustee's or Lender's right to realize upon or
enforce any other rights or security now or hereafter held by Trustee or Lender.
Trustee and Lender, and each of them, shall be entitled to enforce this Security
Instrument and any other rights or security now or hereafter held by Lender or
Trustee in such order and manner as they or either of them may in their absolute
discretion determine. No remedy herein conferred upon or reserved to Trustee or
Lender is intended to be exclusive of any other remedy contained herein or by
law provided or permitted, but each shall be cumulative and in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity.
Every power or remedy given by any of the Loan Documents to Trustee or Lender,
or to which either of them may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Trustee or Lender, and either of them may pursue inconsistent
remedies. By exercising or by failing to exercise any right, option or election
hereunder, Lender shall not be deemed to have waived any provision hereof or to
have released Borrower from any of the obligations secured hereby unless such
waiver or release is in writing and signed by Lender. The waiver by Lender of
Borrower's failure to perform or observe any term, covenant or condition
referred to or contained herein to be performed or observed by Borrower shall
not be deemed to be a waiver of such term, covenant or condition or of any
subsequent failure of Borrower to perform or observe the same or any other such
term, covenant or condition referred to or contained herein, and no custom or
practice which may develop between Borrower and Lender during the term hereof
shall be deemed a waiver of or in any way affect the right of Lender to insist
upon the performance by Borrower of the obligations secured hereby in strict
accordance with the terms hereof or of any other Loan Document.

(d) Uniform Commercial Code. Without limitation of Lender's rights
of enforcement with respect to the Collateral or any part thereof in accordance
with the procedures for

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foreclosure of real estate, Lender may exercise its rights of enforcement with
respect to the Collateral or any part thereof under the Uniform Commercial Code
as adopted in the State of California (or under the Uniform Commercial Code in
force in any other state to the extent the same is applicable law) and in
conjunction with, in addition to or in substitution for those rights and
remedies: (1) Lender may enter upon Borrower's premises to take possession of,
assemble and collect the Collateral or, to the extent and for those items of the
Collateral permitted under applicable law, to render it unusable; (2) Lender may
require Borrower to assemble the Collateral and make it available at a place
Lender designates which is mutually convenient to allow Lender to take
possession or dispose of the Collateral; (3) written notice mailed to Borrower
as provided herein at least five (5) days prior to the date of public sale of
the Collateral or prior to the date after which private sale of the Collateral
will be made shall constitute reasonable notice; (4) any sale made pursuant to
the provisions of this paragraph shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held contemporaneously with and
upon the same notice as required for the sale of the Property under power of
sale as provided in paragraph (c) above in this Section 5.1; (5) in the event of
a foreclosure sale, whether made by Lender under the terms hereof, or under
judgment of a court, the Collateral and the other Property may, at the option of
Lender, be sold as a whole; (6) it shall not be necessary that Lender take
possession of the Collateral or any part thereof prior to the time that any sale
pursuant to the provisions of this Section is conducted and it shall not be
necessary that the Collateral or any part thereof be present at the location of
such sale; (7) with respect to application of proceeds of disposition of the
Collateral under Section 5.2 hereof, the costs and expenses incident to
disposition shall include the reasonable expenses of retaking, holding,
preparing for sale or lease, selling, leasing and the like and the reasonable
attorneys' fees and legal expenses incurred by Lender; (8) any and all
statements of fact or other recitals made in any bill of sale or assignment or
other instrument evidencing any foreclosure sale hereunder as to nonpayment of
the secured indebtedness or as to the occurrence of any default, or as to Lender
having declared all of such indebtedness to be due and payable, or as to notice
of time, place and terms of sale and of the properties to be sold having been
duly given, or as to any other act or thing having been duly done by Lender,
shall be taken as prima facie evidence of the truth of the facts so stated and
recited; and (9) Lender 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 Lender,
including the sending of notices and the conduct of the sale, but in the name
and on behalf of Lender.

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(e) Right of Rescission. Lender may from time to time rescind any
notice of default or notice of sale before any Trustee's sale in accordance with
the laws of the State of California. The exercise by Lender of such right of
rescission shall not constitute a waiver of any breach or default then existing
or subsequently occurring, or impair the right of Lender to execute and deliver
to Trustee, as above provided, other declarations or notices of default to
satisfy the obligations of this Security Instrument or secured hereby, nor
otherwise affect any provision, covenant or condition of any Loan Document or
any of the rights, obligations or remedies of Trustee or Lender hereunder or
thereunder.

(f) Full Reconveyance. Upon written request of Lender stating that
all sums secured hereby have been paid, upon surrender to Trustee of the Note
and the original or a certified copy of this Security Instrument for
cancellation and retention, and upon payment of its fees, Trustee shall fully
reconvey, without warranty, the entire remaining Property then held hereunder.
The recitals in such reconveyance of any matters of facts shall be conclusive
proof of the truthfulness thereof. The grantee in such reconveyance may be
described as "the person or persons legally entitled thereto."

(g) Fixture Filing. This Security Instrument constitutes a fixture
filing under the fixture filing provisions of the UCC, Sections 9-313 and
9-402(6) as enacted and under the equivalent statutes in the State of
California, as amended or recodified from time to time.

(h) Border Zone Property. Borrower represents and warrants that the
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 Property that is
reasonably likely to cause the Property or any part thereof to be designated as
Border Zone Property.

(i) Entry on Property. Lender is authorized, prior or subsequent to
the institution of any foreclosure proceedings, to the fullest extent permitted
by applicable law, to enter upon the Property, or any part thereof, and to take
possession of the Property and all books and records relating thereto, and to
exercise without interference from Borrower any and all rights which Borrower
has with respect to the management, possession, operation, protection or
preservation of the Property. Lender shall not be deemed to have taken
possession of the Property or any part thereof except upon the exercise of its
right to do so, and then only to the extent evidenced by its demand and overt
act

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specifically for such purpose. All costs, expenses and liabilities of every
character incurred by Lender in managing, operating, maintaining, protecting or
preserving the Property shall constitute a demand obligation of Borrower (which
obligation Borrower hereby promises to pay) to Lender pursuant to this Security
Instrument. If necessary to obtain the possession provided for above, Lender may
invoke any and all legal remedies to dispossess Borrower. In connection with any
action taken by Lender pursuant to this Section, Lender shall not be liable for
any loss sustained by Borrower resulting from any failure to let the Property or
any part thereof, or from any act or omission of Lender in managing the Property
unless such loss is caused by the willful misconduct and bad faith of Lender,
nor shall Lender be obligated to perform or discharge any obligation, duty or
liability of Borrower arising under any lease or other agreement relating to the
Property or arising under any Permitted Encumbrance or otherwise arising.
Borrower hereby assents to, ratifies and confirms any and all actions of Lender
with respect to the Property taken under this Section.

(J) Termination of Commitment to Lend. Lender may terminate any
commitment or obligation to lend or disburse funds under any Loan Document.

Section 5.2. Intentionally Deleted.

Section 5.3. Lender as Purchaser. Lender shall have the right to
become the purchaser at any sale held by Lender or substitute or successor or by
any receiver or public officer or at any public sale, and Lender shall have the
right to credit upon the amount of Lender's successful bid, to the extent
necessary to satisfy such bid, all or any part of the secured indebtedness in
such manner and order as Lender may elect.

Section 5.4. Remedies Cumulative. All rights and remedies provided
for herein and in any other Loan Document are cumulative of each other and of
any and all other rights and remedies existing at law or in equity, and Lender
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights and remedies
as may now or hereafter exist at law or in equity for the collection of the
secured indebtedness and the enforcement of the covenants herein and the
foreclosure of the liens and interests evidenced hereby, and the resort to any
right or remedy provided for hereunder or under any such other Loan Document or
provided for by law or in equity shall not prevent the concurrent or subsequent
employment of any other appropriate right or rights or remedy or remedies.

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Section 5.5. Lender's Discretion as to Security. Lender may resort
to any security given by this Security Instrument or to any other security now
existing or hereafter given to secure the payment of the secured indebtedness,
in whole or in part, and in such portions and in such order as may seem best to
Lender in its sole and uncontrolled discretion, and any such action shall not in
any way be considered as a waiver of any of the rights, benefits, liens or
interests evidenced by this Security Instrument.

Section 5.6. Borrower's Waiver of Certain Rights. To the full extent
Borrower may do so, Borrower agrees that Borrower will not at any time insist
upon, plead, claim or take the benefit or advantage of any law now or hereafter
in force providing for any stay, extension or redemption, homestead, moratorium,
reinstatement, marshalling or forbearance, and Borrower, for Borrower,
Borrower's successors and assigns, and for any and all persons ever claiming any
interest in the Property, to the extent permitted by applicable law, hereby
waives and releases all rights of redemption, stay of execution, reinstatement,
notice of intention to mature or declare due the whole of the secured
indebtedness, notice of election to mature or declare due the whole of the
secured indebtedness and all rights to a marshaling of assets of Borrower,
including the Property, or to a sale in inverse order of alienation in the event
of foreclosure of the liens and/or security interests hereby created. Borrower
shall not have or assert any right under any statute or rule of law pertaining
to the marshaling of assets, sale in inverse order of alienation, the exemption
of homestead, the administration of estates of decedents, or other matters
whatever to defeat, reduce or affect the right of Lender under the terms of this
Security Instrument to a sale of the Property for the collection of the secured
indebtedness without any prior or different resort for collection, or the right
of Lender under the terms of this Security Instrument to the payment of the
secured indebtedness out of the proceeds of sale of the Property in preference
to every other claimant whatever. Borrower waives any right or remedy which
Borrower may have or be able to assert, pursuant to any provision of applicable
law, pertaining to the rights and remedies of sureties. If any law referred to
in this Section and now in force, of which Borrower or Borrower's successors or
assigns or any other persons claiming any interest in the Property might take
advantage despite this Section, shall hereafter be repealed or cease to be in
force, such law shall not thereafter be deemed to preclude the application of
this Section. Appraisement of the Property is hereby expressly waived, or not,
at the option of Lender, such option to be exercised at the time judgment is
rendered in any foreclosure hereof, or at any time prior thereto.

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Section 5.7. Delivery of Possession After Foreclosure. In the event
there is a foreclosure sale hereunder and at the time of such sale, Borrower or
Borrower's successors or assigns are occupying or using the Property, or any
part thereof, each and all shall immediately become the tenant of the purchaser
at such sale, which tenancy shall be a tenancy from day to day, terminable at
the will of either landlord or tenant, at a reasonable rental per day based upon
the value of the property occupied, such rental to be due daily to the
purchaser; and to the extent permitted by applicable law, the purchaser at such
sale shall, notwithstanding any language herein apparently to the contrary, have
the sole option to demand immediate possession following the sale or to permit
the occupants to remain as tenants at will. In the event the tenant fails to
surrender possession of said property upon demand, the purchaser shall be
entitled to institute and maintain a summary action for possession of the
property (such as an action for forcible detainer) in any court having
jurisdiction.

Section 5.8. Withdrawal, Discontinuance or Abandonment of
Proceedings. In the case Lender shall have proceeded to enforce any right, power
or remedy under this Security Instrument by foreclosure, entry or otherwise or
in the event that Lender shall have commenced advertising the intended exercise
of the right of foreclosure provided hereunder, and such proceeding or
advertisement shall be withdrawn, discontinued or abandoned for any reason, or
shall be determined adversely to Lender, then, in every such case (i) Borrower
and Lender shall be restored to their former positions and rights, (ii) all
rights, powers and remedies of Lender shall continue as if no such proceeding
had been taken, (iii) each and every default declared and remaining uncured
prior to such withdrawal, discontinuance or abandonment shall and shall be
deemed to be a continuing default, and (iv) neither this Security Instrument,
the Note, the secured indebtedness nor any other instrument concerned therewith
shall be or shall be deemed to have been reinstated or otherwise affected by
such withdrawal, discontinuance or abandonment, and Borrower hereby expressly
waives the benefit of any statute or rule of law which would produce a result
contrary to or in conflict with the foregoing.

ARTICLE 6 - Miscellaneous

Section 6.1. Scope of Security Instrument. This Security Instrument
is a Security Instrument, collateral assignment, security agreement and
financing statement, and also covers proceeds and fixtures.

Section 6.2. Notice to Account Debtors. In addition to the rights
granted elsewhere in this Security Instrument,

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Lender may at any time notify the account debtors or obligors of any accounts,
chattel paper, negotiable instruments or other evidences of indebtedness
included in the Collateral to pay Lender directly.

Section 6.3. Waiver by Lender. Lender may at any time and from time
to time by a specific writing intended for the purpose: (a) waive compliance by
Borrower with any covenant herein made by Borrower to the extent and in the
manner specified in such writing; (b) consent to Borrower's doing any act which
hereunder Borrower is prohibited from doing, or to Borrower's failing to do any
act which hereunder Borrower is required to do, to the extent and in the manner
specified in such writing; (c) release any part of the Property or any interest
therein from the lien and security interest of this Security Instrument; or (d)
release any party liable, either directly or indirectly, for the secured
indebtedness or for any covenant herein or in any other Loan Document, without
impairing or releasing the liability of any other party. No such act shall in
any way affect the rights or powers of Lender hereunder except to the extent
specifically agreed to by Lender in such writing.

Section 6.4. No Impairment of Security. The lien, interest and other
security rights of Lender hereunder or under any other Loan Document shall not
be impaired by any indulgence, moratorium or release granted by Lender
including, but not limited to, any renewal, extension or modification which
Lender may grant with respect to any secured indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which Lender
may grant in respect of the Property, or any part thereof or any interest
therein, or any release or indulgence granted to any endorser, guarantor or
surety of any secured indebtedness. The taking of additional security by Lender
shall not release or impair the lien, interest or other security rights of
Lender hereunder or affect the liability of Borrower or of any endorser,
guarantor or surety, or improve the right of any junior lienholder in the
Property (without implying hereby Lender's consent to any junior lien).

Section 6.5. Acts Not Constituting Waiver by Lender. Lender may
waive any default without waiving any other prior or subsequent default. Lender
may remedy any default without waiving the default remedied. Neither failure by
Lender to exercise, nor delay by Lender in exercising, nor discontinuance of the
exercise of any right, power or remedy (including but not limited to the right
to accelerate the maturity of the secured indebtedness or any part thereof) upon
or after any default shall be construed as a waiver of such default or as a
waiver of the right to exercise any such right, power or remedy at a later date.
No single or partial exercise by Lender of any right, power

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or remedy hereunder shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right, power or remedy hereunder may be
exercised at any time and from time to time. No modification or waiver of any
provision hereof nor consent to any departure by Borrower therefrom shall in any
event be effective unless the same shall be in writing and signed by Lender and
then such waiver or consent shall be effective only in the specific instance,
for the purpose for which given and to the extent therein specified. No notice
to nor demand on Borrower in any case shall of itself entitle Borrower to any
other or further notice or demand in similar or other circumstances. Remittances
in payment of any part of the secured indebtedness other than in the required
amount in immediately available U.S. funds shall not, regardless of any receipt
or credit issued therefor, constitute payment until the required amount is
actually received by Lender in immediately available U.S. funds and shall be
made and accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the collecting bank or
banks. Acceptance by Lender of any payment in an amount less than the amount
then due on any secured indebtedness shall be deemed an acceptance on account
only and shall not in any way excuse the existence of a default hereunder.

Section 6.6. Borrower's Successors. If the ownership of the Property
or any part thereof becomes vested in a person other than Borrower, Lender may,
without notice to Borrower, deal with such successor or successors in interest
with reference to this Security Instrument and to the indebtedness secured
hereby in the same manner as with Borrower, without in any way vitiating or
discharging Borrower's liability hereunder or for the payment of the
indebtedness or performance of the obligations secured hereby. No transfer of
the Property, no forbearance on the part of Lender, and no extension of the time
for the payment of the indebtedness secured hereby given by Lender shall operate
to release, discharge, modify, change or affect, in whole or in part, the
liability of Borrower hereunder for the payment of the indebtedness or
performance of the obligations secured hereby or the liability of any other
person hereunder for the payment of the indebtedness secured hereby. Borrower
agrees that it shall be bound by any modification of this Security Instrument or
any of the other Loan Documents made by Lender and any subsequent owner of the
Property, with or without notice to such Borrower, and no such modifications
shall impair the obligations of such Borrower under this Security Instrument or
any other Loan Document. Nothing in this Section or elsewhere in this Security
Instrument shall be construed to imply Lender's consent to any transfer of the
Property.

Section 6.7. Place of Payment; Forum. All secured indebtedness which
may be owing hereunder at any time by Borrower

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shall be payable at the place designated in the Note (or if no such designation
is made, at the address of Lender indicated at the end of this Security
Instrument). Borrower hereby irrevocably submits generally and unconditionally
for itself and in respect of its property to the non-exclusive jurisdiction of
any Georgia state court or any United States federal court sitting in the county
in which the secured indebtedness is payable, and to the non-exclusive
jurisdiction of any state or United States federal court sitting in the state in
which any of the Property is located, over any suit, action or proceeding
arising out of or relating to this Security Instrument or the secured
indebtedness. Borrower hereby agrees and consents that, in addition to any
methods of service of process provided for under applicable law, all service of
process in any such suit, action or proceeding in any Georgia state court or any
United States federal court sitting in the county in which the secured
indebtedness is payable may be made by certified or registered mail, return
receipt requested, directed to Borrower at its address stated in this Security
Instrument, or at a subsequent address of Borrower of which Lender received
actual notice from Borrower in accordance with this Security Instrument, and
service so made shall be complete five (5) days after the same shall have been
so mailed.

Section 6.8. Subrogation to Existing Liens; Vendor's Lien. To the
extent that proceeds of the Note are used to pay indebtedness secured by any
outstanding lien, interest, charge or prior encumbrance against the Property,
such proceeds have been advanced by Lender at Borrower's request, and Lender
shall be subrogated to any and all rights, interests and liens owned by any
owner or holder of such outstanding liens, security interests, charges or
encumbrances, however remote, irrespective of whether said liens, interests,
charges or encumbrances are released, and all of the same are recognized as
valid and subsisting and are renewed and continued and merged herein to secure
the secured indebtedness, but the terms and provisions of this Security
Instrument shall govern and control the manner and terms of enforcement of the
liens, security interests, charges and encumbrances to which Lender is
subrogated hereunder. It is expressly understood that, in consideration of the
payment of such indebtedness by Lender, Borrower hereby waives and releases all
demands and causes of action for offsets and payments in connection with the
said indebtedness. If all or any portion of the proceeds of the loan evidenced
by the Note or of any other secured indebtedness has been advanced for the
purpose of paying the purchase price for all or a part of the Property, no
vendor's lien is waived; and Lender shall have, and is hereby granted, a
vendor's lien on the Property as cumulative additional security for the secured
indebtedness. Lender may foreclose under this

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Security Instrument or under the vendor's lien without waiving the other or may
foreclose under both.

Section 6.9. Application of Payments to Certain Indebtedness. If any
part of the secured indebtedness cannot be lawfully secured by this Security
Instrument or if any part of the Property cannot be lawfully subject to the lien
and interest hereof to the full extent of such indebtedness, then all payments
made shall be applied on said indebtedness first in discharge of that portion
thereof which is not secured by this Security Instrument.

Section 6.10. Compliance with Usury Laws. It is the intent of
Borrower and Lender and all other parties to the Loan Documents to conform to
and contract in strict compliance with applicable usury law from time to time in
effect. All agreements between Lender and Borrower (or any other party liable
with respect to any indebtedness under the Loan Documents) are hereby limited by
the provisions of this Section which shall override and control all such
agreements, whether now existing or hereafter arising. In no way, nor in any
event or contingency (including but not limited to prepayment, default, demand
for payment, or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, chargeable, or received under
this Security Instrument, the Note or any other Loan Document or otherwise,
exceed the maximum nonusurious amount permitted by applicable law (the "Maximum
Amount"). If, from any possible construction of any document, interest would
otherwise be payable in excess of the Maximum Amount, any such construction
shall be subject to the provisions of this Section and such document shall ipso
facto be automatically reformed and the interest payable shall be automatically
reduced to the Maximum Amount, without the necessity of execution of any
amendment or new document. If Lender shall ever receive anything of value which
is characterized as interest under applicable law and which would apart from
this provision be in excess of the Maximum Amount, an amount equal to the amount
which would have been excessive interest shall, without penalty, be applied to
the reduction of the principal amount owing on the secured indebtedness in the
inverse order of its maturity and not to the payment of interest, or refunded to
Borrower or the other payor thereof if and to the extent such amount which would
have been excessive exceeds such unpaid principal. The right to accelerate
maturity of the Note or any other secured indebtedness does not include the
right to accelerate any interest which has not otherwise accrued on the date of
such acceleration, and Lender does not intend to charge or receive any unearned
interest in the event of acceleration. All interest paid or agreed to be paid to
Lender shall, to the extent permitted by applicable law, be amortized, prorated,

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allocated and spread throughout the full stated term (including any renewal or
extension) of such indebtedness so that the amount of interest on account of
such indebtedness does not exceed the Maximum Amount. As used in this Section,
the term "applicable law" shall mean applicable laws of the State of Georgia, or
the federal laws of the United States applicable to this transaction, whichever
laws allow the greater interest, as such laws now exist or may be changed or
amended or come into effect in the future.

Section 6.11. Cancellation of Security Instrument. If all of the
secured indebtedness be paid as the same becomes due and payable and all of the
covenants, warranties, undertakings and agreements made in this Security
Instrument are kept and performed, and all obligations, if any, of Lender for
further advances have been terminated, then, and in that event only, this
Security Instrument shall be cancelled by Lender in due form at Borrower's cost.
Without limitation, all provisions herein for indemnity of Lender shall survive
discharge of the secured indebtedness and any foreclosure, release or
termination of this Security Instrument.

Section 6.12. Notices. All notices, requests, consents, demands and
other communications required or which any party desires to give hereunder or
under any other Loan Document shall be in writing and, unless otherwise
specifically provided in such other Loan Document, shall be deemed sufficiently
given or furnished if delivered by personal delivery, by courier, or by
registered or certified United States mail, postage prepaid, addressed to the
party to whom directed at the addresses specified at the end of this Security
Instrument (unless changed by similar notice in writing given by the particular
party whose address is to be changed) or by telex, or facsimile. Any such notice
or communication shall be deemed to have been given and to be effective either
at the time of personal delivery or, in the case of courier or mail, as of the
date of first attempted delivery at the address and in the manner provided
herein, or, in the case of telex, when transmitted (answerback confirmed), or,
in the case of facsimile, upon receipt. Notwithstanding the foregoing, no notice
of change of address shall be effective except upon receipt. This Section shall
not be construed in any way to affect or impair any waiver of notice or demand
provided in any Loan Document or to require giving of notice or demand to or
upon any person in any situation or for any reason.

Section 6.13. Invalidity of Certain Provisions. A determination that
any provision of this Security Instrument is unenforceable or invalid shall not
affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Security Instrument
to any person or circumstance is illegal or unenforceable shall not

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affect the enforceability or validity of such provision as it may apply to other
persons or circumstances.

Section 6.14. Gender; Titles; Construction. Within this Security
Instrument, words of any gender shall be held and construed to include any other
gender, and words in the singular number shall be held and construed to include
the plural, unless the context otherwise requires. Titles appearing at the
beginning of any subdivisions hereof are for convenience only, do not constitute
any part of such subdivisions, and shall be disregarded in construing the
language contained in such subdivisions. The use of the words "herein,"
"hereof," "hereunder" and other similar compounds of the word "here" shall refer
to this entire Security Instrument and not to any particular Article, Section,
paragraph or provision. The term "person" and words importing persons as used in
this Security Instrument shall include firms, associations, partnerships
(including limited partnerships), joint ventures, trusts, corporations and other
legal entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.

Section 6.15. Reporting Compliance. Borrower agrees to comply with
any and all reporting requirements applicable to the transaction evidenced by
the Note and secured by this Security Instrument which are set forth in any law,
statute, ordinance, rule, regulation, order or determination of any governmental
authority, including but not limited to The International Investment Survey Act
of 1976, The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Lender to furnish Lender with evidence of such
compliance.

Section 6.16. Lender's Consent. Except where otherwise expressly
provided herein, in any instance hereunder where the approval, consent or the
exercise of judgment of Lender is required or requested, (i) the granting or
denial of such approval or consent and the exercise of such judgment shall be
within the sole discretion of Lender, and Lender shall not, for any reason or to
any extent, be required to grant such approval or consent or exercise such
judgment in any particular manner, regardless of the reasonableness of either
the request or Lender's judgment, and (ii) no approval or consent of Lender
shall be deemed to have been given except by a specific writing intended for the
purpose and executed by an authorized representative of Lender.

Section 6.17. Borrower. Unless the context clearly indicates
otherwise, as used in this Security Instrument,

WELLS/FREMONT ASSOCIATES
DEED OF TRUST
PAGE 49

"Borrower" means the Borrower named in Section 1.1 hereof. Each signatory who
signs on behalf of Borrower represents and warrants to Lender that this
instrument is executed, acknowledged and delivered by Borrower's duly authorized
representatives.

Section 6.18. Execution; Recording. This Security Instrument has
been executed in several counterparts, all of which are identical, and all of
which counterparts together shall constitute one and the same instrument. The
date or dates reflected in the acknowledgments hereto indicate the date or dates
of actual execution of this Security Instrument, but such execution is as of the
date shown on the first page hereof, and for purposes of identification and
reference the date of this Security Instrument shall be deemed to be the date
reflected on the first page hereof. Borrower will cause this Security Instrument
and all amendments and supplements thereto and substitutions therefor and all
financing statements and continuation statements relating thereto to be
recorded, filed, re-recorded and refiled in such manner and in such places as
Lender shall reasonably request and will pay all such recording, filing,
re-recording and refiling taxes, fees and other charges.

Section 6.19. Successors and Assigns. The terms, provisions,
covenants and conditions hereof shall be binding upon Borrower, and the
successors and assigns of Borrower, and shall inure to the benefit of Lender and
the successors and assigns of Lender and shall constitute covenants running with
the Land. All references in this Security Instrument to Borrower shall be deemed
to include all such successors and assigns of Borrower, and all references in
this Security Instrument to Lender shall be deemed to include all such
successors and assigns of Lender.

Section 6.20. Modification or Termination. The Loan Documents may
only be modified or terminated by a written instrument or instruments intended
for that purpose and executed by the party against which enforcement of the
modification or termination is asserted. Any alleged modification or termination
which is not so documented shall not be effective as to any party.

Section 6.21. No Partnership, Etc.. The relationship between Lender
and Borrower is solely that of lender and borrower. Lender has no fiduciary or
other special relationship with Borrower. Nothing contained in the Loan
Documents is intended to create any partnership, joint venture, association or
special relationship between Borrower and Lender or in any way make Lender a
co-principal with Borrower with reference to the Property. All agreed
contractual duties between Borrower and Lender are set forth herein and in the
other Loan Documents and any additional implied covenants or duties are hereby
disclaimed.

WELLS/FREMONT ASSOCIATES
DEED OF TRUST
PAGE 50

Any inferences to the contrary of any of the foregoing are hereby expressly
negated.

Section 6.22. Disclosure of Information. Lender may, from time to
time, sell or offer to sell the Loan, or interests therein, to one or more
assignees or participants and is hereby authorized to disseminate any
information it now has or hereafter obtains pertaining to the Loan, including,
without limitation, any security for the Loan and credit or other information on
the Project, Borrower, any of its principals and any guarantor, to any assignee
or participant or prospective assignee or prospective participant, to Security
Instrument's affiliates, including without limitation NationsBanc Capital
Markets, Inc., to any regulatory body having jurisdiction over Lender and to any
other parties as necessary or appropriate in Lender's reasonable judgment.
Borrower shall execute, acknowledge and deliver any and all instruments
reasonably requested by Lender in connection therewith and to the extent, if
any, specified in any such assignment or participation, such companies,
assignees or participants shall have the rights and benefits with respect to the
Loan Documents as such persons would have if such persons were Lender hereunder.

Section 6.23. Applicable Law. The enforceability of this Security
Instrument shall be governed by California law only for purposes of determining
the following: (i) the applicable conflict of law rules in this Security
Instrument and the other Loan Documents, (ii) whether this Security Instrument
transfers or creates an interest in real property for security purposes or
otherwise, (iii) the nature of an interest in real property that is transferred
or created by this Security Instrument, (iv) the method for foreclosure of a
lien on real property and the exercise of any other remedy with respect to the
real property or the Rents or profits therefrom, (v) the nature of an interest
in real property that results from foreclosure, and (vi) the manner and effect
of recording or failing to record evidence of a transaction that transfers or
creates an interest in real property. Except as expressly set out above, the
enforceability of this Security Instrument and the other Loan Documents shall be
governed by Georgia law.

Section 6.24. Effective as a Financing Statement. This Security
Instrument shall be effective as a financing statement filed as a fixture filing
with respect to all fixtures included within the Property and is to be filed for
record in the real estate records of each county where any part of the Property
(including said fixtures) is situated. This Security Instrument shall also be
effective as a financing statement covering minerals or the like (including oil
and gas) and accounts and is to be filed for record in the real estate records
of each county

WELLS/FREMONT ASSOCIATES
DEED OF TRUST
PAGE 51

where any part of the Property is situated. This Security Instrument shall also
be effective as a financing statement covering any other Property and may be
filed in any other appropriate filing or recording office. The mailing address
of Borrower is the address of Borrower set forth at the end of this Security
Instrument and the address of Lender from which information concerning the
security interests hereunder may be obtained is the address of Lender set forth
at the end of this Security Instrument. A carbon, photographic or other
reproduction of this Security Instrument or of any financing statement relating
to this Security Instrument shall be sufficient as a financing statement for any
of the purposes referred to in this Section.

Section 6.25. Entire Agreement. The Loan Documents constitute the
entire understanding and agreement between Borrower and Lender with respect to
the transactions arising in connection with the indebtedness secured hereby and
supersede all prior written or oral understandings and agreements between
Borrower and Lender with respect to the matters addressed in the Loan Documents.
Borrower hereby acknowledges that, except as incorporated in writing in the Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the matters addressed in the Loan
Documents.

THE WRITTEN LOAN DOCUMENTS  REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES

IN WITNESS WHEREOF, this Security Instrument has been executed and
sealed by Borrower as of the date first written on page 1 hereof.

Borrower:

Wells/Fremont Associates,
a Georgia joint venture

By:   Wells Operating Partnership, L.P.,
a Delaware limited partnership,
Joint Venture Partner

By:   Wells Real Estate Investment
Trust, Inc.,
a Maryland corporation,

WELLS/FREMONT ASSOCIATES
DEED OF TRUST
PAGE 52

General Partner

By: /s/ Leo F. Wells, III,
-----------------------------------
Leo F. Wells, III,
President

[CORPORATE SEAL]

By:  Wells Development Corporation,
a Georgia corporation,
Joint Venture Partner

By: /s/ Leo F. Wells, III,
-----------------------------------
Leo F. Wells, III,
President

[CORPORATE SEAL]

The address and federal tax identification 
number of Borrower are:

3885 Holcomb Bridge Road
Norcross, Georgia  30092

Federal Tax No. 58-2402574

The address of Lender is (including county):

NationsBank, N.A.
NationsBank Plaza - 6th Floor
600 Peachtree Street, N.E.
Atlanta, Fulton County,
Georgia  30308

WELLS/FREMONT ASSOCIATES
DEED OF TRUST
PAGE 53

ACKNOWLEDGMENT

STATE OF GEORGIA  :
:  ss
COUNTY OF FULTON  :

Before me, a notary public in and for said County and State, on this
16th day of July, 1998, personally appeared Leo F. Wells, III, to me known to be
the identical person who subscribed the name of Wells/Fremont Associates, a
Georgia joint venture ("Borrower"), to the foregoing instrument in his capacity
as President of Wells Real Estate Investment Trust, Inc., a Maryland
corporation, which is the General Partner of Wells Operating Partnership, L.P.,
a Delaware limited partnership, one of the Joint Venture Partners of Borrower,
and in his capacity as President of Wells Development Corporation, a Georgia
corporation, the other Joint Venture Partner of Borrower, and acknowledged to me
that he executed the same as his free and voluntary act and deed and as the free
act and voluntary deed of such Joint Venture Partners and of Borrower for the
uses and purposes therein set forth.

/s/ W. L. O'Callaghan
--------------------------------------
NOTARY PUBLIC

My Commission Expires:

[SEAL]
--------------------------------------
[NOTARIAL SEAL]

WELLS/FREMONT ASSOCIATES
DEED OF TRUST
PAGE 54

EXHIIBIT 10.17

JOINT VENTURE AGREEMENT

OF

THE FREMONT JOINT VENTURE

JOINT VENTURE AGREEMENT
OF
WELLS/FREMONT ASSOCIATES

THIS JOINT VENTURE AGREEMENT (the "Agreement") is made and entered into as
of the 15th day of July, 1998, by and between WELLS OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership having Wells Real Estate Investment Trust, Inc.,
a Maryland corporation, as general partner ("Wells OP"), and WELLS DEVELOPMENT
CORPORATION, a Georgia corporation ("Wells Development"). Each of the parties
may also be referred to herein as a "Venturer" and together as the "Venturers."

W I T N E S S E T H :

WHEREAS, the Venturers desire to joint venture the acquisition,
development, operation and sale of real properties according to the terms and
conditions set forth herein;

NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto covenant and agree as follows:

1. DEFINITIONS.

For the purposes of this Agreement, the following defined terms
shall have the meanings ascribed thereto.

1.1 "Administrative Venturer" means the Entity responsible for the
conduct of the ordinary and usual business of the Venture and the implementation
of the decisions of the Venturers, all as is more fully set forth in Subsection
4.2 hereof. The initial Administrative Venturer shall be Wells OP.

1.2 "Agreed Value" means with respect to Contributed Property the
fair market value of such property as of the date of contribution to the Venture
as determined by the general partners of the Venturers.

1.3 "Approve," "Approved" or "Approval" means, as to the subject
matter thereof and as the context may require, an express consent evidenced by
and contained in a written statement signed by the approving Entity. A copy of
each such written statement shall be kept at the office of the respective
Venturer and shall be available for inspection by the other Venturer upon
request.

1.4 "Bankrupt" or "Bankruptcy" means the occurrence of one or more
of the following events:

(i) The appointment of a permanent or temporary receiver of the
assets and properties of the Venture or a Venturer, and the failure to secure
the removal thereof within 60 days after such appointment;

(ii) The adjudication of the Venture or a Venturer as bankrupt or
the commission by the Venture or a Venturer of an act of bankruptcy;

(iii) The making by the Venture or a Venturer of an assignment for
the benefit of creditors;

(iv) The levying upon or attachment by process of the assets and
properties of the Venture or a Venturer; or

(v) The use by the Venture or a Venturer, whether voluntary or
involuntary, of any debt or relief proceedings under the present or future law
of any state or of the United States.

1.5 "Capital Account" means a separate account maintained for each
Venturer in a manner which complies with Treasury Regulation Section 1.704-1(b),
as may be amended or revised from time to time.

1.6 "Capital Contributions" means the aggregate contributions to the
capital of the Venture made by the Venturers as Capital Contributions pursuant
to Subsection 3.1 hereof.

1.7 "Contributed Property" means the interest of each Venturer
contributing property (excluding cash or cash equivalents) to the Venture in
such property.

1.8 "Defaulting Venturer" means any Venturer failing to perform any
of the obligations of such Venturer under this Agreement or violating the
provisions of this Agreement.

1.9 "Distribution Percentage Interests" means collectively the
interests in the income, gains, losses, deductions, credits, Net Cash Flow,
Extraordinary Receipts, as determined by Subsection 3.2 hereof, as such may be
adjusted from time to time as provided in this Agreement.

1.10 "Entity" means any person, corporation, partnership (general or
limited), joint venture, association, joint stock company, trust or other
business entity or organization.

1.11 "Extraordinary Receipts" means those funds of the Venture which
are derived from (i) the net proceeds of any casualty insurance insuring any of
the Properties or any portion thereof, to the extent not applied to the repair,
restoration or replacement of the Properties or any portion thereof as may be
Approved by the Venturers; (ii) the net proceeds of any condemnation, or any
taking by eminent domain, or any transfer in lieu thereof, of any of the
Properties, or any portion thereof, to the extent not applied to the repair,
restoration or reconstruction of any remaining portion of the Properties as may
be Approved by the Venturers; (iii) the net proceeds of any sale of any of the
Properties, or any portion thereof; and (iv) the

2

net proceeds of any indebtedness (or any refinancing of such indebtedness)
secured in whole or in part by any of the Properties or any portion thereof.

1.12 "Fiscal Year" means the fiscal year of the Venture established
under Subsection 3.4(c) hereof.

1.13 "I.R.C." means the Internal Revenue Code of 1986, as amended.

1.14 "Lease" means a lease or rental agreement now or hereafter
existing between the Venture, as lessor or landlord (whether initially or by
assignment) and an Entity.

1.15 "Leasing Agreements" means, collectively, those certain Leasing
and Tenant Coordinating Agreements between the Venturers as "Owner" and Wells
Management Company, Inc. as "Agent" therein, concerning the leasing of the
Properties.

1.16 "Major Decisions" means any decision or action to (i) convey by
the Venture substantially all the assets of the Venture; (ii) acquire any
Property or an interest in a Property, except for the acquisition of that
certain office building located at 47320 Kato Road, Fremont, California leased
to Fairchild Technologies USA, Inc. (the "Fairchild Building"), which is hereby
Approved by the Venturers; (iii) finance or borrow or execute any promissory
note or other obligation (other than a Lease) or mortgage or other encumbrance
in the name of or on behalf of the Venture, except for that certain loan from
NationsBank, N.A. in the amount of approximately $5,960,000 to finance the
acquisition of the Fairchild Building to constitute a mortgage and encumbrance
upon the Fairchild Building, which is hereby Approved by the Venturers; (iv)
retain the services of a manager other than Wells Management Company, Inc.; (v)
approve each construction and architectural contract and all architectural
plans, specifications and drawings and all revisions or changes thereof in
connection with the development and construction of any improvements for the
Properties; (vi) reduce any portion of the insurance program for the Properties
or the Venture; (vii) determine any fee or other amount to be paid to either
Venturer or any affiliate of a Venturer; (viii) make any expenditure or incur
any obligation by or on behalf of the Venture involving a sum in excess of
$15,000 for any transaction or group of similar transactions except for
expenditures made and obligations incurred pursuant to and specifically set
forth in a budget Approved by the Venturers; (ix) adjust, settle or compromise
any claim, obligation, debt, demand, suit or judgment against the Venture or any
Venturer in its capacity as a Venturer, or waive any breach of or default in any
monetary or non-monetary obligation owed to the Venture, involving singly or in
the aggregate an amount in excess of $15,000, or in the initiation of any such
claim or suit for the benefit of the Venture; (x) convey or sell any Properties
or authorize the conveyance or sale of all Properties; (xi) admit any new
Venturer to the Venture; (xii) cause the Venture to be admitted as a joint
venturer to any other joint venture; and (xiii) make any other decision or
action which by the provisions of this Agreement is required to be Approved by
the Venturers or which in a material respect affects the Venture or any of the
assets or operations thereof. All Major Decisions shall be made by the Venturers
in a timely manner with due regard for the necessity of obtaining and evaluating
the information necessary for making such Major Decisions.

3

1.17 "Management Agreements" means, collectively, those certain
Management Agreements between the Venturers as "Owner" and Wells Management
Company, Inc. as "Manager" therein, concerning the management of the Property.

1.18 "Manager" means Wells Management Company, Inc.

1.19 "Net Cash Flow" means for a given fiscal period, those funds of
the Venture constituting the gross cash receipts of the Venture from the
operation of the Properties (including interest and proceeds from business
interruption or rent insurance) for such period exclusive of Capital
Contributions by the Venturers and Extraordinary Receipts, which are available
for distribution to the Venturers following (i) the payment of all operating,
fixed cost and capital expenditures of the Venture, for which no reserves have
been established, applicable to such period; (ii) the payment of all principal
and interest with respect to any debt secured by any mortgage permitted by this
Agreement; and (iii) the establishment by the Venturers of appropriate reserves
for taxes, debt service, maintenance, repairs and other expenses and working
capital requirements of the Venture including, without limitation, accruals for
real estate taxes, insurance and other annual expense items (unless and to the
extent the same are escrowed with a mortgagee).

1.20 "Nondefaulting Venturer" in the context wherein one or more
Venturers become a Defaulting Venturer, means the remaining Venturers (provided
the remaining Venturers are not also Defaulting Venturers).

1.21 "Notice" means a written advice or notification required or
permitted by this Agreement, as more particularly provided in Subsection 8.1
hereof.

1.22 "Prime Rate" means the rate of interest announced from time to
time by NationsBank, N.A. as its prime rate. In the event the prime rate of
NationsBank, N.A. is hereafter discontinued or becomes unascertainable, the
Administrative Venturer shall designate a comparable reference rate to be the
Prime Rate.

1.23 "Property" means any particular tract of land (and all rights
and appurtenances incident thereto) owned or to be owned by the Venture or owned
or to be owned by any joint venture, partnership, limited liability company or
other entity in which the Venture owns an economic or beneficial interest and
all improvements located, constructed or developed thereon or to be constructed
or developed thereon.

1.24 "Properties" means, collectively, all Property of the Venture
at any given time.

1.25 "Purchasing Party" means the Venturer other than the Selling
Party in the event of a proposed transfer described in Subsection 6.4 hereof.

4

1.26 "Selling Party" means the Venturer desiring to transfer its
interest in a transaction described in Subsection 6.4 hereof.

1.27 "Venture" means the joint venture formed pursuant to the laws
of the State of Georgia by this Agreement.

1.28 "Venturer" or "Venturers" means the party or parties to this
Agreement and all permitted successors and assigns thereof.

1.29 Other terms defined in this Agreement:

Term                                Section
----                                -------

"Assignment"                        6.1
"Right of First Refusal"            6.2
"Certification"                     6.4(a)
"Accepting Venturer"                6.5(a)
"Dissenting Venturer"               6.5(a)

2. THE VENTURE.

2.1 Formation of Venture. The Venturers hereby enter into and form
the Venture as a joint venture for the limited purposes and scope set forth
herein. The rights and obligations of the Venturers and the status,
administration and termination of the Venture shall be governed by the laws of
the State of Georgia. The Venture is being formed for the sole purpose of
acquiring, owning, developing, operating and eventually selling the Properties.

2.2 Purposes and Scope of Venture. Subject to the provisions of this
Agreement, the activities of the Venture shall be limited strictly to the
acquisition, ownership, financing, development, leasing, operation, sale and
management of the Properties for the production of income and profit, either
directly or through the ownership of joint ventures, partnerships, limited
liability companies or other entities, including all activities reasonably
necessary or desirable to accomplish such purposes, and shall not be extended by
implication or otherwise unless Approved by all venturers. Nothing in this
Agreement shall be deemed to restrict in any way the freedom of any Venturer to
conduct any other business or activity whatsoever (including, without
limitation, the acquisition, development, leasing, sale, operation and
management of other real property) without any accountability to the Venture or
any other Venturer, even if such business or activity competes with the business
of the Venture, it being understood by each Venturer that the other Venturer may
be interested directly or indirectly in various other businesses and
undertakings not included in the Venture.

2.3 Name of Venture. The business and affairs of the Venture shall
be conducted under the name "Wells/Fremont Associates" (or such other names as
shall be approved by both Venturers), and such name shall be used at all times
in connection with the

5

business and affairs of the Venture. The Venturers shall execute any assumed or
fictitious name certificate or certificates required by law to be filed in
connection with the formation of the Venture and shall cause such certificate or
certificates to be filed in the appropriate records.

2.4 Scope of Authority. Except as otherwise expressly and
specifically provided in this Agreement, no Venturer shall have any authority to
act for, or assume any obligations or responsibility on behalf of, any other
Venturer or the Venture.

2.5 Principal Place of Business. The principal place of business and
initial office of the Venture shall be located at 3885 Holcomb Bridge Road,
Norcross, Georgia 30092, and may be relocated as may be from time to time
Approved by the Venturers.

2.6 Representations, Warranties and Indemnity. In order to induce
the other Venturer to enter into this Agreement, each Venturer does hereby make
to each other Venturer the representations and warranties hereinafter set forth,
and does hereby agree to indemnify and hold each other Venturer harmless from
any and all loss, expense or liability any other Venturer may suffer as a result
of any inaccuracy as of the date hereof in any representation and warranty set
forth below:

(a) Authorization. The execution and delivery of this
Agreement has been duly authorized by the agreements by which each Venturer was
either created or currently governed.

(b) Claims. There is no claim, litigation, proceeding or
governmental investigation pending, or, so far as is known to each Venturer,
threatened, against or relating to each Venturer, or the transactions
contemplated by this Agreement which does or would reasonably be expected
materially and adversely to affect the ability of each Venturer to enter into
this Agreement or to carry out its obligations hereunder, and there is not any
basis for any such claim, litigation, proceeding or governmental investigation.

(c) Conflicts. Neither the consummation of the transactions
contemplated by this Agreement to be performed, nor the fulfillment of the
terms, conditions and provisions of this Agreement, conflict with or will result
in the breach of any of the terms, conditions or provisions of, or constitute a
default under, the agreements by which each Venturer was created or is currently
governed or any material agreement, indenture, instrument or undertaking to
which each Venturer is a party.

(d) Investment Objectives. The investment objectives of each
Venturer with respect to the Properties and the objectives of the Venture are:
(i) to maximize Net Cash Flow; (ii) to preserve, protect and return the
Venturers' investment in the Venture; and (iii) to realize appreciation upon the
sale of the Properties.

(e) Charges to the Venturer. Neither Venturer will be charged,
directly or indirectly, more than once for the same services.

6

2.7 Term of Venture.

(a) Commencement. The Venture term shall begin on the date of
this Agreement as set forth above and end upon dissolution of the Venture.

(b) Dissolution and Termination. Dissolution shall occur upon
the occurrence of any of the events described in Section 7 of this Agreement.
Upon dissolution, the assets shall be liquidated in due course and distributed
as provided in Subsection 3.3(c)(i) hereof. The Venture shall continue until
termination in accordance with the relevant dissolution and termination
provisions of the Georgia Uniform Partnership Act.

3. FINANCIAL STRUCTURE.

3.1 Capital Contributions. The Venturers shall from time to time
make Capital Contributions to the Venture in such amounts as are agreed to by
the Venturers. In addition, Wells Development shall be obligated to transfer,
assign and contribute, and hereby agrees to transfer, assign and contribute, to
the Venture all of its right, title and interest in and to that certain
Agreement for the Purchase and Sale of Property between Wells Development and
Rose Ventures V, Inc., Thomas G. Haury and Carleen S. Haury dated as of June 8,
1998, as amended by that certain Reinstatement of and First Amendment to
Agreement for the Purchase and Sale of Property dated as of July 1, 1998
relating to the acquisition of the Fairchild Building.

3.2 Distribution Percentage Interest. The Distribution Percentage
Interest of each of the Venturers shall be equal to the percentage equivalent
(rounded to the nearest one-hundredth of a percent) of a fraction, the numerator
of which is the aggregate of all Capital Contributions (or the Agreed Value
thereof) made by the Venturer pursuant to Subsection 3.1 hereof, and the
denominator of which is the aggregate amount of all Capital Contributions (or
the Agreed Value thereof) made by all of the Venturers pursuant to Subsection
3.1 hereof. Each Venturer's interest in the Venture shall always be proportional
to its Capital Contributions.

Each Venturer (the "First Venturer") does hereby agree to indemnify
and hold the other Venturer (the "Second Venturer") harmless from and against
any claim, action, liability, loss, damage, cost or expense, including, without
limitation, attorney's fees and expenses incurred by the Second Venturer by
reason of (i) any act or omission of the First Venturer in connection with the
operation of the Venture and the Properties, or (ii) the claims made by third
parties to the extent that the Second Venturer's percentage share of the total
liability, loss, damage, cost or expense incurred by the Venture and the
Venturers in connection with such claims exceeds its Distribution Percentage
Interest at the time such liability, loss, damage, cost or expense is suffered
or incurred. Upon dissolution, each Venturer shall look solely to the assets of
the Venture for the return of its investment, and if the Venture Property
remaining after payment or discharge of the debts and liabilities of the
Venture, including debts and liabilities owed to one or more of the Venturers,
is insufficient to return the aggregate Capital

7

Contributions of each Venturer, such Venturers shall have no recourse against
the Venture or any other Venturer.

3.3 Allocations and Distributions. Allocations for accounting
purposes and for federal, state and local income tax purposes of each item of
income, loss, deduction and gain, and distributions of Net Cash Flow and
Extraordinary Receipts shall be allocated among the Venturers as follows:

(a) Allocation of Tax Items. For federal, state and local
income tax purposes and for purposes of maintaining the Venturers' Capital
Accounts, except as otherwise provided herein, each item of income, gain, loss
and deduction of the Venture for each tax year shall be allocated to the
Venturers in accordance with their Distribution Percentage Interests.

(b) Net Cash Flow. All distributions of Net Cash Flow shall be
made to the Venturers in accordance with each such Venturer's Distribution
Percentage Interest and shall be made at such intervals as may be approved by
the Venturers, but in no event less frequently than quarterly.

(c) Extraordinary Receipts. Distributions of Extraordinary
Receipts shall be made as follows:

(i) Distributions Not in Connection With Dissolution.
Distribution of Extraordinary Receipts not generated in connection with an event
of dissolution shall be made as follows: first, to the establishment of any
reserve approved by the Venturers; and second, to the Venturers based on their
respective Distribution Percentage Interests.

(ii) Distributions in Connection With Dissolution.
Distribution of Extraordinary Receipts generated in connection with an event of
dissolution (as well as the other assets of the Venture) shall be made as
follows: first, to the payment of debts and liabilities of the Venture to
creditors (including all mortgages, but excluding any other debts or liabilities
to Venturers or affiliates of Venturers), and to the expenses of liquidation;
second, to the establishment of such reserves as the Venturers may deem
reasonably necessary for contingent or unforeseen liabilities or obligations of
the Venture, which may be held in escrow for a reasonable period of time and
then distributed pursuant to the remainder of this Subsection; third, to the
repayment of any remaining debts and obligations of the Venture to the Venturers
or affiliates of the Venturers; and fourth, to the Venturers in accordance with
the positive balances in their respective Capital Accounts.

(d) Compliance with Section 704(c). To comply with Section
704(c) of the I.R.C., items of income, gain, loss, depreciation and cost
recovery deductions attributable to Contributed Property shall be allocated for
federal income tax purposes among the Venturers in the manner provided under
Section 704(c) of the I.R.C. taking into account the variation, if any, between
the Agreed Value of such Property and its adjusted tax basis at the time of
contribution.

8

(e) Qualified Income Offset. Notwithstanding any provision to
the contrary contained herein, in the event that any Venturer receives an
adjustment, allocation or distribution described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes a deficit balance in
such Venturer's Capital Account, such Venturer will be allocated items of income
or gain (consisting of a pro rata portion of each item of partnership income,
including gross income, and gain for such year) in an amount and manner
sufficient to eliminate such deficit balance as quickly as possible, all in
accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d). (It is the
intent of the Venturers that the foregoing provision constitute a "Qualified
Income Offset," as defined in Treasury Regulations Section 1.704-1(b)(2)(ii)(d),
and the foregoing provision shall in all events be interpreted so as to
constitute a valid "Qualified Income Offset.")

3.4 Income Taxes and Accounting.

(a) Income Tax Returns. All income tax returns of the Venture
shall be prepared on an accrual basis (except to the extent as may otherwise be
Approved by all Venturers or be required by law, statute or regulation governing
such tax and returns).

(b) Elections. Any provision of this Agreement to the contrary
notwithstanding, solely for federal income tax purposes, each of the Venturers
hereby recognizes that the Venture will be subject to all provisions of
Subchapter K of Chapter 1 of Subtitle A of the I.R.C.; provided, however, that
the filing of U.S. Partnership Returns of Income shall not be construed to
extend the purposes of the Venture or expand the obligations or liabilities of
the Venturers. The Venture shall file an election under Section 754 of the
I.R.C. only in the event of a transfer or proposed transfer by any one or more
Venturers of all or any part of their interest or interests in the Venture to
any Entity. Such election shall be filed by the Venture upon the request of any
Venturer made with respect to the income tax return for the period which
includes the date of transfer of such interest in the Venture; such request
shall be in writing and shall be made not less than 60 days prior to the initial
date established by law for filing such income tax return.

(c) Fiscal Year. The Venture shall operate on a calendar year
basis.

(d) Books of Account. The books of account of the Venture and
the Venturer's Properties shall be kept and maintained at all times by the
Administrative Venturer or the delegated representative thereof at the principal
place of business of the Administrative Venturer. The books of account shall be
maintained on an accrual basis, unless otherwise determined by the
Administrative Venturer, in accordance with generally accepted accounting
principles, consistently applied, and shall show all items of income and expense
relating to the Venture and the Properties.

(e) Reports. The Administrative Venturer shall cause to be
prepared at the expense of the Venture and furnished to each of the Venturers
the information and data with respect to the Venture during the Fiscal Year as
shall enable each Venturer on a timely

9

basis to prepare or cause to be prepared the reports required under their
respective partnership agreements to be made to their partners. In addition,
within 60 days after the end of each Fiscal Year, the Administrative Venturer
shall use its best efforts to cause to be prepared and to deliver to each
Venturer a report setting forth in sufficient detail all such information and
data with respect to business transactions effected by or involving the Venture
during such Fiscal Year as shall enable the Venture and each Venturer to prepare
its federal, state and local income tax returns on a timely basis in accordance
with the laws, rules and regulations then prevailing. The Administrative
Venturer shall cause to be prepared federal, state and local tax returns
required of the Venture and submit such returns to the Venturers no later than
30 days prior to the date required for the filing thereof and shall file the
same.

(f) Records. Any Venturer shall have the right at all
reasonable times during usual business hours to audit, examine and make copies
of the books of account of the Venture. Such right may be exercised through any
agent or employee of such Venturer designated by such Venturer or by an
independent certified public accountant designated by such Venturer. Any
Venturer shall bear all expenses incurred in any examination or audit made for
such Venturer's account.

(g) Audits. In the event that the Internal Revenue Service or
any other governmental agency with jurisdiction shall conduct, commence or give
notification of intent to conduct or commence any audit or other investigation
of the books, records, tax returns or other affairs of the Venture, the
Administrative Venturer shall immediately advise the Venturers thereof by
Notice. The Administrative Venturer shall be the "tax matters partner," as that
term is defined by I.R.C., if one is needed for the Venture.

3.5 Banking. Funds of the Venture shall be deposited in an account
or accounts of a type, in form and name and in a bank or banks selected by the
Administrative Venturer. No funds other than Venture funds shall be deposited in
any such account. Withdrawals from bank accounts shall be made by the
Administrative Venturer and by such other parties as may be designated by the
Venturers.

4. MANAGEMENT.

4.1 Authority of Administrative Venturer. The overall management and
control of the business and affairs of the Venture shall be vested in the
Venturers, collectively, acting by and through the Administrative Venturer. The
Administrative Venturer shall have responsibility for establishing the policies
and operating procedures with respect to the business and affairs of the Venture
and for making all decisions, except as otherwise provided herein and except
Major Decisions, as to all matters which the Venture has authority to perform,
as fully as if the Venturers were themselves making such decisions. All
decisions, other than Major Decisions, with respect to the management and
control of the Venture made by the Administrative Venturer shall be binding on
the Venture and all Venturers. The Administrative Venturer shall be responsible
for performing, or for causing to be performed, all acts necessary to accomplish
the purposes of the Venture. No act shall be taken, sum expended, decision made

10

or obligation incurred by the Venture, or any Venturer, with respect to a matter
within the scope of any of the Major Decisions, unless such matter has been
Approved by all of the Venturers. Except as otherwise expressly provided for in
this Agreement, documents executed by or behalf of the Venture shall be executed
only with the Approval of the Administrative Venturer.

4.2 Administrative Venturer. The initial Administrative Venturer
shall be Wells OP. The Administrative Venturer shall, at the expense of the
Venture, discharge or cause the discharge of the duties of the Administrative
Venturer unless and until (i) the Administrative Venturer resigns as the
Administrative Venturer, or (ii) the Administrative Venturer becomes a
Defaulting Venturer. In the event of an occurrence described in either clause
(i) or (ii) of the immediately preceding sentence, the then current
Administrative Venturer shall thereupon be relieved from any further performance
of the functions of the Administrative Venturer under this Agreement and a
replacement for the Administrative Venturer shall be appointed by a majority in
interest of the other Venturers. In the event an Entity not a Venturer shall be
appointed to be Administrative Venturer, such Entity shall discharge the
functions of the Administrative Venturer under this Agreement but shall not be
entitled to any of the rights, titles or interests of a Venturer. The breach or
violation by the Administrative Venturer of any provision of this Subsection, or
of any other duty or obligation imposed upon the Administrative Venturer by this
Agreement, shall subject to the Administrative Venturer to the provisions of
Subsection 4.4 hereof as a Defaulting Venturer (provided the Administrative
Venturer is then also a Venturer) only if such breach or violation by the
Administrative Venturer involves fraud, negligence or willful misconduct.
Furthermore, the Administrative Venturer shall be liable to the Venture and to
the Venturers for any breach or violation of the Administrative Venturer's
duties and obligations under this Subsection only if such breach or violation
involves fraud, negligence or willful misconduct.

(a) Records. The Administrative Venturer shall maintain or
cause to be maintained at the expense of the Venture, books of account as
described in Subsection 3.4(d) hereof.

(b) Property Taxes and Licenses. The Administrative Venturer
shall cause to be filed each year timely ad valorem tax returns for the
Properties.

(c) Leases. The Administrative Venturer is authorized to
negotiate and execute Leases on behalf of the Venture without further Approval
of the Venturers and is authorized to delegate this responsibility pursuant to a
management agreement. Initially, this responsibility will be delegated to the
Manager under the Management Agreements and Leasing Agreements by and between
the Venturers and the Manager.

(d) Indemnity. The Venture shall indemnify and hold the
Administrative Venturer harmless against all claims, actions, liability, loss,
damage, cost or expense, including attorney's fees and expenses, by reason of
any act or omission of the Administrative Venturer that is duly authorized and
performed in accordance with the terms and provisions of this Agreement.
However, any Entity which is both the Administrative Venturer

11

and a Venturer shall be responsible as a Venturer, to the extent of the
proportionate liability thereof, for such obligation for the Venture to so
indemnify and hold harmless the Administrative Venturer. The liability of the
Venturers under this Subsection shall be several, and not joint, and shall be
shared in proportion to the Distribution Percentage Interests of the Venturers.

4.3 Compensation of Venturers. No payment will be made by the
Venture to any Venturer for the services of such Venturer or any affiliate,
partner or employee of any Venturer, other than as provided in the Management
Agreements and the Leasing Agreements.

4.4 Defaulting Venturer. If any Venturer fails to perform any of its
obligations under this Agreement or violates the terms of this Agreement, such
Venturer shall be a Defaulting Venturer and the Nondefaulting Venturer shall
have the right to give such Defaulting Venturer a Notice specifically setting
forth the nature of the default and stating that such Defaulting Venturer shall
have a period of 15 days to pay any sums of money specified therein as due and
owing to the Venture or to any Venturer, or 30 days (or such longer period as is
specified in the next succeeding sentence) to cure any other default specified
in such Notice. If the monies specified are not paid within such 15 day period
or such Defaulting Venturer does not cure all other defaults within such 30 day
period, or, if the defaults are not capable of being cured within such 30 day
period, such Defaulting Venturer has not commenced in good faith the curing of
such defaults within such 30 days period and does not thereafter prosecute to
completion with diligence and continuity the curing thereof, the Nondefaulting
Venturer shall have all rights provided in Subsections 4.4(a) through 4.4(c)
below, in addition to any other rights it may have under the Georgia Uniform
Partnership Act. If a Defaulting Venturer completely cures all of such defaults
within the aforesaid cure periods, then such defaults shall be deemed no longer
to exist and such Venturer shall be deemed no longer to constitute a Defaulting
Venturer unless and until another default by such Venturer occurs. A Defaulting
Venturer shall have no power or authority to bind the Venture or the Venturers
but shall cooperate with and, to the extent requested, assist the Nondefaulting
Venturers in every way possible.

(a) Equitable Relief. The Nondefaulting Venturer may bring any
proceeding in the nature of injunction, specific performance or other equitable
remedy, it being acknowledged by each of the Venturers that damages at law may
be an inadequate remedy for a default or threatened breach of this Agreement.

(b) Damages. The Nondefaulting Venturer may bring any action
at law by or on behalf of itself or the Venture as may be permitted in order to
recover damages.

(c) Dissolution. The Nondefaulting Venturer may institute such
proceedings as may be appropriate to secure an accounting and to dissolve, wind
up and terminate the Venture.

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(d) Additional Remedies. The rights and remedies of the
Venturers under this Agreement shall not be mutually exclusive; that is, the
exercise of one or more of the provisions hereof shall not preclude the exercise
of any other provisions hereof, except as may be expressly provided in this
Agreement. Each of the Venturers confirms that damages at law may be an
inadequate remedy for a breach or threatened breach of this Agreement and agrees
that, in the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
performance, injunction or other equitable remedy, but nothing herein contained
is intended to, nor shall it, limit or affect any right or rights at law or by
statute or otherwise of any Venturer aggrieved as against any other Venturer for
breach or threatened breach of any provisions of this Agreement, it being the
intention of this Subsection to make clear the Agreement of the Venturers that
the respective rights and obligations of the Venturers under this Agreement
shall be enforceable in equity as well as at law or otherwise.

4.5 Limitation on Authority. Notwithstanding any provision of this
Agreement to the contrary, neither Venturer shall have the authority to take any
action which, if taken singularly by such Venturer separate from the Venture,
would be prohibited by such Venturer's

4.6 Holding Title as Nominee. With the consent of the other
Venturers, any Venturer shall be authorized to hold title to a Property or
Properties as agent or as nominee on behalf of the Venture.

5. INSURANCE.

5.1 Minimum Insurance Requirements. The Venture shall carry and
maintain in force the insurance hereinafter described, the premiums for which
shall be a cost and expense of the Venture.

(a) Liability Insurance. Comprehensive general liability
insurance for the benefit of the Venture and the Venturers as named insureds
against claims for "personal injury" liability.

(b) Other Insurance. Such other insurance as the Venturers may
reasonably deem to be necessary or as may be required by any mortgagee of any
Property of the Venture.

5.2 Insureds. All of the policies of insurance described in
Subsection 5.1 shall name the Venture and each of the Venturers as named
insureds, as their respective interests may appear. All such insurance shall be
effected under policies issued by insurers and be in forms and for amounts
Approved by both Venturers.

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6. TRANSFERS AND OTHER DISPOSITIONS.

6.1 Prohibited Transfers. No Venturer may sell, transfer, assign,
mortgage, pledge, hypothecate or otherwise dispose of, encumber or permit or
suffer any encumbrance on (all referred to as "Assignment"), all or any part of
the interest of such Venturer in the Venture or in the Properties (including,
but not limited to, the right to receive any distributions under this Agreement)
unless such an Assignment is Approved by all Venturers, provided that this
restriction on Assignment shall not apply to the Assignment of units of
partnership interests or beneficial interests in a Venturer. Any Assignment made
in violation of this Section 6 shall be void.

6.2 Exceptions. The prohibition in Subsection 6.1 hereof shall not
apply to: (a) an Assignment permitted under Subsection 6.4 hereof ("Right of
First Refusal"); or (b) an Assignment of all or a part of its interest in the
Venture by Wells Development to Wells Real Estate Fund X, L.P., Wells Real
Estate Fund XI, L.P. or a joint venture between said Wells Real Estate Fund X,
L.P. and Wells Real Estate Fund XI, L.P., which is hereby Approved by Wells OP.

6.3 Notice. Each Venturer shall promptly by Notice inform the other
Venturer of the occurrence of any disposition not required to have been Approved
by the other Venturer.

6.4 Right of First Refusal. If any Selling Party shall desire to
transfer (for the purposes of this Subsection the terms "transfer" and
"transferred" include any and all types of disposition) all or any portion of
its interest in the Venture to any Entity, such Selling Party may consummate
such transfer only if (i) such sale is a sale of Selling Party's interest in the
Venture separate and distinct from any other property, (ii) the consideration
payable is cash and/or note(s) and not an interest in other property, and (iii)
the provisions and conditions of Subsections (a) through (d) hereof have been
complied with.

(a) Certification. The Selling Party shall deliver to the
Purchasing Party a written certification ("Certification") reflecting (i) the
name of the prospective transferee of the entire interest of the Selling Party
in the Venture; (ii) the price for which, and the terms upon which, the Selling
Party is willing to transfer and such prospective transferee is willing to buy
the entire interest of the Selling Party in the Venture (which price and terms
shall be based either upon preliminary discussions and negotiations, evidenced
in a writing signed by the prospective transferee, between the Selling Party and
such prospective transferee or upon a fully negotiated and executed purchase
agreement, a copy of which shall be furnished to the Purchasing Party); and
(iii) whether the Selling Party has any interest, financial or otherwise, in the
prospective transferee and whether, to the best knowledge of the Selling Party,
there exists any other contract or offer for the purchase of all or any portion
of the Properties or of the Selling Party's interest in the Venture. Such
Certification shall be accompanied by a request (in the form of a Notice) by the
Selling Party to the Purchasing Party to either Approve such transfer and
prospective transferee or to purchase the Selling Party's interest in the
Venture for the price and upon the terms provided in such Certification. The
Selling Party may transfer the

14

interest of the Selling Party in the Venture only to such prospective transferee
or to the Purchasing Party. The Purchasing Party must either approve such
prospective transferee or purchase the interest of the Selling Party in the
Venture.

(b) Purchasing Party's Rights. The Purchasing Party shall have
the right either (i) to allow the Selling Party to transfer the interest of the
Selling Party in the Venture for a price and upon terms no more favorable to the
prospective transferee than those reflected, and to the prospective transferee
named in the Certification, or (ii) to purchase the Selling Party's entire
interest in the Venture at the price contained in the Certification and on the
other terms and conditions of the Certification. The price for which, and the
terms upon which, the Selling Party shall transfer its interest in the Venture
shall, by way of illustration and not limitation, be deemed "more favorable"
than those reflected in the Certification if (i) the total actual transfer price
is lower than that set forth in such Certification, (ii) a lesser portion of the
price is paid in cash at the time of the transfer than that set forth in such
Certification, or (iii) the portion of the price not paid in cash at the time of
the transfer is payable over a longer period of time, at a lower interest rate
or with lower or less frequent periodic payments than those set forth in such
Certification.

(c) Notice of Election. The Purchasing Party shall have a
period of 60 days after receipt of the Selling Party's Certification specified
in Subsection 6.4(a) hereof to serve upon the Selling Party a Notice which shall
specify whether such Purchasing Party will Approve a transfer to such
prospective transferee, or whether the Purchasing Party shall purchase the
entire interest of the Selling Party as provided in Subsection 6.4(b) hereof. If
the Purchasing Party fails to give such Notice within the allocated time, the
Purchasing Party shall be deemed to have approved the transfer of the interest
to such prospective transferee, and the Purchasing Party shall, if requested by
the Selling Party, execute, acknowledge and deliver such documents, or cause the
same to be executed, acknowledged and delivered, including without limitation,
the rights and restrictions contained in this Section 6 with respect to further
transfers. Any such new Venturer shall execute and deliver to the other
Venturers such documents as the other Venturers may reasonably request
confirming the assumption by such new Venturer of the obligations of the Selling
Party under this Agreement. At the time of closing of a transfer to a third
party transferee pursuant to this Subsection 6.4, the Purchasing Party shall
execute and deliver to the Selling Party and such transferee a written estoppel
certificate in recordable form pursuant to which the Purchasing Party shall
certify and agree that to the best of the Purchasing Party's knowledge and
belief the pending transfer is permitted pursuant to this Subsection (provided,
that to the best of the Purchasing Party's knowledge and belief such transfer
is, in fact, permitted by this Subsection). In such estoppel certificate, the
Purchasing Party shall waive any further right whatsoever to attempt to force a
rescission or setting aside of such transfer; provided, however, the Purchasing
Party shall expressly reserve any rights thereafter to pursue any action for
damages against both the Selling Party and the transferee should the Purchasing
Party thereafter determine that, contrary to the Purchasing Party's earlier best
knowledge and belief, the transfer was in fact not consummated in strict
accordance with the terms of this Section 6.

15

(d) Power of Attorney. In the event that either (i) the
Purchasing Party shall have failed to respond, in the manner and within the time
required by Subsection 6.4(c) hereof, to the Selling Party's Certification
specified in Subsection 6.4(a) hereof, or (ii) the Purchasing Party shall have
served upon the Selling Party a Notice specifying that the Purchasing Party has
approved a transfer to a prospective transferee of the Selling Party as
contemplated by Subsection 6.4(c) hereof, and the Purchasing Party shall have
thereafter failed or refused, within ten days after receipt of a Notice from the
other Venturer requesting same, to execute, acknowledge and deliver such
documents, or cause the same to be done, as shall be required to effectuate a
transfer of such interest in accordance with the Certification, then, and in
either of such events, the Selling Party may execute, acknowledge and deliver
such documents for, on behalf of and in the stead of the Purchasing Party, and
such execution, acknowledgment and delivery by the Selling Party shall be for
all purposes as effective against and binding upon the Purchasing Party as
though such execution, acknowledgment and delivery had been by the Purchasing
Party; provided, however, that no such documents executed by the Selling Party
shall contain any undertaking on behalf of the Purchasing Party beyond the scope
of the undertakings necessary for the Selling Party to effectuate such transfer.
Each Venturer does hereby irrevocably constitute and appoint each other Venturer
as the true and lawful attorney in fact of such Venture and the successors and
assigns thereof, in the name, place and stead of such Venturer or the successors
or assigns thereof, as the case may be, to execute, acknowledge and deliver such
documents in the event such Venturer shall be the Purchasing Party under the
circumstances contemplated by this Subsection 6.4(d). It is expressly
understood, intended and agreed by each Venturer, for such Venturer and the
successors and assigns thereof, that the grant of the power of attorney to each
other Venturer pursuant to this Subsection 6.4(d) is coupled with an interest,
is irrevocable and shall survive the death, termination or legal incompetency of
such granting Venturer, as the case may be, or the assignment of the interest of
such granting Venturer in the Venture, or the dissolution of the Venture.

6.5 Offer from Third Party to Purchase the Property.

(a) In the event that one of the Venturers receives a bona fide
offer from an unrelated third party for the sale of all or substantially all of
the Properties or last remaining Property owned by the Venture at the time of
such offer, which offer such Venturer wishes to accept (the "Accepting
Venturer"), but the other Venturer wishes to reject, the Venturer not desiring
to sell the Property or Properties pursuant to said offer (the "Dissenting
Venturer") must elect within thirty (30) days after receipt by the Dissenting
Venturer of notice of said offer from the Accepting Venturer to either (i)
purchase the Accepting Venturer's entire interest in the Venture on the same
terms and conditions as the third party offer to purchase; or (ii) consent to
the sale of the Properties or last remaining Property of the Venturer pursuant
to such third party offer. The Accepting Venturer shall deliver to the
Dissenting Venturer a written notice (the "Notice") reflecting (i) the name and
address of the person or entity desiring to purchase the Properties or last
remaining Property of the Venture; (ii) the sales price to be paid by such
person or entity; and (iii) shall include a copy of the third party offer. In
the event that the Dissenting Venturer elects to purchase the Accepting
Venturer's entire interest in the Venture, the purchase price payable for the
Accepting Partner's interest in the Venture shall be equal to

16

the amount such Accepting Venturer would have received if the Property or
Properties had been sold to such unrelated third party in accordance with the
terms of its offer, after payment of all sales commissions and other fees and
expenses which would have been due and payable upon the sale of said Property or
Properties and the repayment of all debts of the Venture, if any.

(b) As set forth above, the Dissenting Venturer shall have 30 days
after receipt of the Notice in which to make its election. The election of the
Dissenting Venturer shall be made by written notice to the Accepting Venturer.
In the event that the Dissenting Venturer elects to purchase the Accepting
Venturer's interest in the Venture pursuant to alternative (i) above, the
Dissenting Venturer shall have an additional 30 days following the receipt of
the Notice within which to close the purchase of the Accepting Venturer's
interest in the Venture. The failure of the Dissenting Venturer to either elect
to purchase the Accepting Venturer's interest in the Venture pursuant to
subparagraph (a)(i) above within 30 days after the receipt by the Dissenting
Venturer of the Notice, or the failure to close the purchase of the Accepting
Venturer's interest in the Venture within the foregoing time period shall be
conclusively deemed to constitute a consent to the sale of the Properties or
last remaining Property of the Venturer pursuant to such third party offer.

(c) The closing of any purchase and sale under this Section 6.5
shall be held at the principal office of the Venturer or at such other place as
shall be mutually agreed to by the Venturers within 30 days following the
receipt by the Accepting Venturer of written notice that the Dissenting Venturer
has exercised its option to purchase the Accepting Venturer's interest in the
Venture. At the closing, an appropriate assignment of the Accepting Venturer's
interest in the Venture, with covenants against Assignor's acts, together with
such other instruments and documents as may be necessary or appropriate to
effect the transfer of the Accepting Venturer's interest in the Venture, shall
be executed and delivered. The Venturers shall also execute and deliver an
amendment to this Agreement, if appropriate. The purchase price payable to the
Accepting Venturer shall be paid at closing by wire transfer of immediately
available federal funds. Effective the date of closing, the Accepting Venturer
shall cease to be a member of the Venture, and the Accepting Venturer shall have
no further rights, duties or obligations with respect to the Venture arising out
of this Agreement. Subsequent to the closing date, the Accepting Venturer shall
have no further interest in the Venture's capital, income, profits, losses,
gains, allocations or distributions.

(d) Upon any default or breach of any provision of this Section 6.5,
the nonbreaching party shall be entitled to sue such defaulting party and
recover damages or enforce the terms hereof by specific performance.

(e) In the event that either (i) the Dissenting Venturer shall have
failed to respond, in the manner and within the time required by Subsection
6.5(a) hereof, to the Accepting Venturer's Notice specified in Subsection 6.5(a)
hereof, or (ii) the Dissenting Venturer shall have served upon the Accepting
Venturer a notice specifying its intent to approve the transfer of the
Properties or Property, and the Dissenting Venturer shall have thereafter failed
or refused within ten (10) days after receipt of a notice from the Accepting
Venturer

17

requesting same to execute, acknowledge and deliver such documents, instruments
and writings, or to cause the same to be done, as required to effectuate the
contemplated sale of the Properties, or (iii) the Dissenting Venturer shall have
failed to close the purchase of the Accepting Venturer's interest in the Venture
within the time period set forth in Subsection 6.5(c) hereof, then, in such
event, the Accepting Venturer may execute, acknowledge and deliver such
documents, instruments and writings for, and on behalf of, and in the name,
place and stead of, the Dissenting Venturer, and such execution, acknowledgment
and delivery by such Accepting Venturer shall be for all purposes as effective
against and binding upon the Venture and the Dissenting Venturer as if such
execution, acknowledgment and delivery had been made by the Dissenting Venturer;
provided, however, that no such documents executed by the Accepting Venturer
pursuant to the terms hereof shall contain any undertaking on behalf of the
Dissenting Venturer beyond the scope of the undertaking as necessary for the
Accepting Venturer to effectuate the transfer and sale of the Properties of the
Venture. Each Venturer does hereby irrevocably constitute and appoint each other
Venturer as its true and lawful attorney-in-fact of such Venturer and its
successors and assigns, in the name, place and stead of such Venturer or its
successors or assigns, as the case may be, to execute, acknowledge and deliver
any and all such deeds, assignments, documents, instruments and writings in the
event such Venturer shall be the Dissenting Venturer under the circumstances
contemplated by this Subsection 6.5(e). It is expressly understood, intended and
agreed by each Venturer, for such Venturer and its successors and assigns, that
the grant of the power of attorney to each other Venturer pursuant to this
Subsection 6.5(e) is coupled with an interest, is irrevocable and shall survive
the death, termination or legal incompetence of such granting Venturer, as the
case may be, or the assignment of the interest of such granting Venturer in the
Venture, or the dissolution of the Venture.

7. DISSOLUTION AND TERMINATION.

The Venture shall dissolve on December 31, 2028, or upon the
occurrence of any of the following:

(i)   A decree of a court of competent jurisdiction declaring
dissolution;

(ii)  Sale of all or substantially all of the assets of the Venture;

(iii) The Venture or either Venturer is adjudicated insolvent or
bankrupt;

(iv)  Termination of either of the Venturers; or

(v)   Unanimous consent of the Venturers.

Upon the occurrence of any of the events set forth in this Section 7, Notice
thereof shall be given to all of the Venturers by the Administrative Venturer
and the Administrative Venturer shall, as required by Subsection 2.7(b) hereof,
proceed to terminate and wind up the Venture

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and shall distribute the Extraordinary Receipts (and the other assets of the
Venture) resulting therefrom in accordance with Subsection 3.3(c) hereof.

8. MISCELLANEOUS PROVISIONS.

8.1 Notices. Notices given under this Agreement shall be in writing
and shall be deemed to have been properly given or served by the deposit of such
with the United States Postal Service, or any official successor thereto,
designated as registered or certified mail, return receipt requested, bearing
adequate postage and addressed as hereinafter provided. The time period in which
a response to any such Notice must be given or any action taken with respect
thereto, however, shall commence to run from the date of receipt on the return
receipt of the Notice. Rejection or other refusal to accept or the inability to
deliver because of changed address or status of which no Notice was given to the
Administrative Venturer shall be deemed to be receipt of the Notice sent. In the
event that registered or certified mail is not being accepted for prompt
delivery, each Notice may then be served by personal service addressed as
hereinafter provided. By giving to the other Venturer at least 30 days' Notice
thereof, any Venturer shall have the right from time to time during the term of
this Agreement to change his Notice address(es) and to specify as his Notice
address(es) any other address(es) within the continental United States of
America. Each Notice to the Venturers shall be sent to the addresses set forth
below (unless such Notice address is properly changed):

Wells Operating Partnership, L.P.
3885 Holcomb Bridge Road
Norcross, Georgia 30092

Wells Development Corporation
3885 Holcomb Bridge Road
Norcross, Georgia 30092

8.2 Governing Law. This Agreement and the obligations of the
Venturers hereunder shall be interpreted, construed and enforced in accordance
with the laws of the State of Georgia, including the Georgia Uniform Partnership
Act.

8.3 Fees and Commissions. Except as may otherwise be provided
herein, each Venturer hereby represents to each other Venturer that there are no
claims for brokerage or other commissions or finder's or other similar fees in
connection with the transactions contemplated by this Agreement insofar as such
claims shall be based on arrangements or agreements made by or on behalf of the
Venturer so representing, and each Venturer so representing hereby indemnifies
and agrees to hold harmless each other Venturer from and against all
liabilities, cost, damages and expenses from any such claims.

8.4 Waiver. No consent or waiver, express or implied, by any
Venturer to or of any breach or default by any other Venturer in the performance
by such other Venturer of the obligations thereof under this Agreement shall be
deemed or construed to be a consent or

19

waiver to or of any other breach or default in the performance by such other
Venturer of the same or any other obligations of such other Venturer under this
Agreement. Failure on the part of any Venturer to complain or any act or failure
to act of any other Venturer or to declare any other Venturer in default,
irrespective of how long such failure continues, shall not constitute a waiver
of such Venturer of the rights thereof under this Agreement.

8.5 Severability. If any provision of this Agreement or the
application thereof to any Entity or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to any other Entity or circumstance shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.

8.6 Status Reports. Recognizing that each Venturer may find it
necessary from time to time to establish to third parties such as accountants,
banks, mortgagees or the like, the then current status of performance hereunder,
upon the written request of any other Venturer, made from time to time by
Notice, each Venturer shall furnish promptly a written statement (in recordable
form, if requested) on the status of any matter pertaining to this Agreement to
the best of the knowledge and belief of the Venturer making such statement.

8.7 Entire Agreement - Amendment. This Agreement constitutes the
entire agreement of the Venturers with respect to the subject matter hereof.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Venturer against whom enforcement of the change, waiver, discharge or
termination is sought. The execution of any amendment to this Agreement, or the
execution of any other agreement or amendment thereto, by all Venturers shall
establish that such execution was made in accordance with any applicable
requirements for Approval.

8.8 Terminology. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural; and the plural shall
include the singular. Titles of Sections, Subsections and Paragraphs in this
Agreement are for convenience only, and neither limit nor amplify the provisions
of this Agreement, and all references in this Agreement to Sections, Subsections
or Paragraphs shall refer to the Section, Subsection or Paragraph of this
Agreement unless specific reference is made to another document or instrument.

8.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall comprise but a single instrument.

8.10 Successors and Assigns. Subject to the restrictions on
transfers and encumbrances set forth herein, this Agreement shall inure to the
benefit of and be binding upon the Venturers and their respective heirs,
executors, legal representatives, successors and assigns. Whenever in this
Agreement a reference to any Entity or Venturer is made, such reference shall be
deemed to include a reference to the heirs, executors, legal representatives,
successors and assigns of such Entity or Venturer.

20

IN WITNESS WHEREOF, the undersigned Venturers have executed this Joint
Venture Agreement of Wells/Fremont Associates under seal as of the day and year
first above written.

WELLS OPERATING PARTNERSHIP, L.P.
A Delaware Limited Partnership

By: Wells Real Estate Investment Trust, Inc.
A Maryland Corporation
(As General Partner)

Signed, sealed and delivered       By: /s/ Leo F. Wells, III
in the presence of:                   ------------------------------------------
Leo F. Wells, III
President
/s/ Michael C. Berndt
- --------------------------------
Unofficial Witness

/s/ Martha Jean Cory
- --------------------------------
Notary Public

WELLS DEVELOPMENT CORPORATION
A Georgia Corporation

Signed, sealed and delivered       By: /s/ Leo F. Wells, III
in the presence of:                   ------------------------------------------
Leo F. Wells, III
President
/s/ Michael C. Berndt
- --------------------------------
Unofficial Witness

/s/ Martha Jean Cory
- --------------------------------
Notary Public

ATL1-290543

21

EXHIBIT 10.18

JOINT VENTURE AGREEMENT

OF

FUND X AND FUND XI ASSOCIATES

JOINT VENTURE AGREEMENT
OF
FUND X AND FUND XI ASSOCIATES

THIS JOINT VENTURE AGREEMENT (the "Agreement") is made and entered into as
of the 15th day of July, 1998, by and between WELLS REAL ESTATE FUND X, L.P., a
Georgia limited partnership having Leo F. Wells, III and Wells Partners, L.P., a
Georgia limited partnership, as general partners ("Fund X"), and WELLS REAL
ESTATE FUND XI, L.P., a Georgia limited partnership having Leo F. Wells, III and
Wells Partners, L.P., a Georgia limited partnership, as general partners ("Fund
XI"). Each of the parties may also be referred to herein as a "Venturer" and
together as the "Venturers."

W I T N E S S E T H :

WHEREAS, the Venturers desire to joint venture the acquisition,
development, operation and sale of real properties according to the terms and
conditions set forth herein;

NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto covenant and agree as follows:

1. DEFINITIONS.

For the purposes of this Agreement, the following defined terms
shall have the meanings ascribed thereto.

1.1 "Administrative Venturer" means the Entity responsible for the
conduct of the ordinary and usual business of the Venture and the implementation
of the decisions of the Venturers, all as is more fully set forth in Subsection
4.2 hereof. The initial Administrative Venturer shall be Fund X.

1.2 "Agreed Value" means with respect to Contributed Property the
fair market value of such property as of the date of contribution to the Venture
as determined by the general partners of the Venturers.

1.3 "Approve," "Approved" or "Approval" means, as to the subject
matter thereof and as the context may require, an express consent evidenced by
and contained in a written statement signed by the approving Entity. A copy of
each such written statement shall be kept at the office of the respective
Venturer and shall be available for inspection by the other Venturer upon
request.

1.4 "Bankrupt" or "Bankruptcy" means the occurrence of one or more
of the following events:

(i) The appointment of a permanent or temporary receiver of the
assets and properties of the Venture or a Venturer, and the failure to secure
the removal thereof within 60 days after such appointment;

(ii) The adjudication of the Venture or a Venturer as bankrupt or
the commission by the Venture or a Venturer of an act of bankruptcy;

(iii) The making by the Venture or a Venturer of an assignment for
the benefit of creditors;

(iv) The levying upon or attachment by process of the assets and
properties of the Venture or a Venturer; or

(v) The use by the Venture or a Venturer, whether voluntary or
involuntary, of any debt or relief proceedings under the present or future law
of any state or of the United States.

1.5 "Capital Account" means a separate account maintained for each
Venturer in a manner which complies with Treasury Regulation Section 1.704-1(b),
as may be amended or revised from time to time.

1.6 "Capital Contributions" means the aggregate contributions to the
capital of the Venture made by the Venturers as Capital Contributions pursuant
to Subsection 3.1 hereof.

1.7 "Contributed Property" means the interest of each Venturer
contributing property (excluding cash or cash equivalents) to the Venture in
such property.

1.8 "Defaulting Venturer" means any Venturer failing to perform any
of the obligations of such Venturer under this Agreement or violating the
provisions of this Agreement.

1.9 "Distribution Percentage Interests" means collectively the
interests in the income, gains, losses, deductions, credits, Net Cash Flow,
Extraordinary Receipts, as determined by Subsection 3.2 hereof, as such may be
adjusted from time to time as provided in this Agreement.

1.10 "Entity" means any person, corporation, partnership (general or
limited), joint venture, association, joint stock company, trust or other
business entity or organization.

1.11 "Extraordinary Receipts" means those funds of the Venture which
are derived from (i) the net proceeds of any casualty insurance insuring any of
the Properties or any

2

portion thereof, to the extent not applied to the repair, restoration or
replacement of the Properties or any portion thereof as may be Approved by the
Venturers; (ii) the net proceeds of any condemnation, or any taking by eminent
domain, or any transfer in lieu thereof, of any of the Properties, or any
portion thereof, to the extent not applied to the repair, restoration or
reconstruction of any remaining portion of the Properties as may be Approved by
the Venturers; (iii) the net proceeds of any sale of any of the Properties, or
any portion thereof; and (iv) the net proceeds of any indebtedness (or any
refinancing of such indebtedness) secured in whole or in part by any of the
Properties or any portion thereof.

1.12 "Fiscal Year" means the fiscal year of the Venture established
under Subsection 3.4(c) hereof.

1.13 "I.R.C." means the Internal Revenue Code of 1986, as amended.

1.14 "Lease" means a lease or rental agreement now or hereafter
existing between the Venture, as lessor or landlord (whether initially or by
assignment) and an Entity.

1.15 "Leasing Agreements" means, collectively, those certain Leasing
and Tenant Coordinating Agreements between the Venturers as "Owner" and Wells
Management Company, Inc. as "Agent" therein, concerning the leasing of the
Properties.

1.16 "Major Decisions" means any decision or action to (i) convey by
the Venture substantially all the assets of the Venture; (ii) acquire any
Property or an interest in any Property; (iii) finance or borrow or execute any
promissory note or other obligation (other than a Lease) or mortgage or other
encumbrance in the name of or on behalf of the Venture; (iv) retain the services
of a manager other than Wells Management Company, Inc.; (v) approve each
construction and architectural contract and all architectural plans,
specifications and drawings and all revisions or changes thereof in connection
with the development and construction of any improvements for the Properties;
(vi) reduce any portion of the insurance program for the Properties or the
Venture; (vii) determine any fee or other amount to be paid to either Venturer
or any affiliate of a Venturer; (viii) make any expenditure or incur any
obligation by or on behalf of the Venture involving a sum in excess of $15,000
for any transaction or group of similar transactions except for expenditures
made and obligations incurred pursuant to and specifically set forth in a budget
Approved by the Venturers; (ix) adjust, settle or compromise any claim,
obligation, debt, demand, suit or judgment against the Venture or any Venturer
in its capacity as a Venturer, or waive any breach of or default in any monetary
or non-monetary obligation owed to the Venture, involving singly or in the
aggregate an amount in excess of $15,000, or in the initiation of any such claim
or suit for the benefit of the Venture; (x) convey or sell any Properties or
authorize the conveyance or sale of all Properties; (xi) admit any new Venturer
to the Venture; (xii) cause the Venture to be admitted as a joint venturer to
any other joint venture; and (xiii) make any other decision or action which by
the provisions of this Agreement is required to be Approved by the Venturers or
which in a material respect affects the Venture or any of the assets or
operations thereof. All Major Decisions shall be made by

3

the Venturers in a timely manner with due regard for the necessity of obtaining
and evaluating the information necessary for making such Major Decisions.

1.17 "Management Agreements" means, collectively, those certain
Management Agreements between the Venturers as "Owner" and Wells Management
Company, Inc. as "Manager" therein, concerning the management of the Property.

1.18 "Manager" means Wells Management Company, Inc.

1.19 "Net Cash Flow" means for a given fiscal period, those funds of
the Venture constituting the gross cash receipts of the Venture from the
operation of the Properties (including interest and proceeds from business
interruption or rent insurance) for such period exclusive of Capital
Contributions by the Venturers and Extraordinary Receipts, which are available
for distribution to the Venturers following (i) the payment of all operating,
fixed cost and capital expenditures of the Venture, for which no reserves have
been established, applicable to such period; (ii) the payment of all principal
and interest with respect to any debt secured by any mortgage permitted by this
Agreement; and (iii) the establishment by the Venturers of appropriate reserves
for taxes, debt service, maintenance, repairs and other expenses and working
capital requirements of the Venture including, without limitation, accruals for
real estate taxes, insurance and other annual expense items (unless and to the
extent the same are escrowed with a mortgagee).

1.20 "Nondefaulting Venturer" in the context wherein one or more
Venturers become a Defaulting Venturer, means the remaining Venturers (provided
the remaining Venturers are not also Defaulting Venturers).

1.21 "Notice" means a written advice or notification required or
permitted by this Agreement, as more particularly provided in Subsection 8.1
hereof.

1.22 "Prime Rate" means the rate of interest announced from time to
time by NationsBank of Georgia, N.A. as its prime rate. In the event the prime
rate of NationsBank of Georgia, N.A. is hereafter discontinued or becomes
unascertainable, the Administrative Venturer shall designate a comparable
reference rate to be the Prime Rate.

1.23 "Property" means any particular tract of land (and all rights
and appurtenances incident thereto) owned or to be owned by the Venture or owned
or to be owned by any joint venture, partnership, limited liability company or
other entity in which the Venture owns an economic or beneficial interest and
all improvements located, constructed or developed thereon or to be constructed
or developed thereon.

1.24 "Properties" means, collectively, all Property of the Venture
at any given time.

4

1.25 "Purchasing Party" means the Venturer other than the Selling
Party in the event of a proposed transfer described in Subsection 6.4 hereof.

1.26 "Selling Party" means the Venturer desiring to transfer its
interest in a transaction described in Subsection 6.4 hereof.

1.27 "Venture" means the joint venture formed pursuant to the laws
of the State of Georgia by this Agreement.

1.28 "Venturer" or "Venturers" means the party or parties to this
Agreement and all permitted successors and assigns thereof.

1.29 Other terms defined in this Agreement:

Term                                Section
----                                -------

"Assignment"                        6.1
"Right of First Refusal"            6.2
"Certification"                     6.4(a)

2. THE VENTURE.

2.1 Formation of Venture. The Venturers hereby enter into and form
the Venture as a joint venture for the limited purposes and scope set forth
herein. The rights and obligations of the Venturers and the status,
administration and termination of the Venture shall be governed by the laws of
the State of Georgia. The Venture is being formed for the sole purpose of
acquiring, owning, developing, operating and eventually selling the Properties.

2.2 Purposes and Scope of Venture. Subject to the provisions of this
Agreement, the activities of the Venture shall be limited strictly to the
acquisition, ownership, financing, development, leasing, operation, sale and
management of the Properties for the production of income and profit, either
directly or through the ownership of joint ventures, partnerships, limited
liability companies or other entities, and to contract to purchase and acquire
ownership interests in such Properties or entities which own such Properties,
including all activities reasonably necessary or desirable to accomplish such
purposes, and shall not be extended by implication or otherwise unless Approved
by all venturers. Nothing in this Agreement shall be deemed to restrict in any
way the freedom of any Venturer to conduct any other business or activity
whatsoever (including, without limitation, the acquisition, development,
leasing, sale, operation and management of other real property) without any
accountability to the Venture or any other Venturer, even if such business or
activity competes with the business of the Venture, it being understood by each
Venturer that the other Venturer may be interested directly or indirectly in
various other businesses and undertakings not included in the Venture.

5

2.3 Name of Venture. The business and affairs of the Venture shall
be conducted under the name "Fund X and Fund XI Associates" (or such other names
as shall be approved by both Venturers), and such name shall be used at all
times in connection with the business and affairs of the Venture. The Venturers
shall execute any assumed or fictitious name certificate or certificates
required by law to be filed in connection with the formation of the Venture and
shall cause such certificate or certificates to be filed in the appropriate
records.

2.4 Scope of Authority. Except as otherwise expressly and
specifically provided in this Agreement, no Venturer shall have any authority to
act for, or assume any obligations or responsibility on behalf of, any other
Venturer or the Venture.

2.5 Principal Place of Business. The principal place of business and
initial office of the Venture shall be located at 3885 Holcomb Bridge Road,
Norcross, Georgia 30092, and may be relocated as may be from time to time
Approved by the Venturers.

2.6 Representations, Warranties and Indemnity. In order to induce
the other Venturer to enter into this Agreement, each Venturer does hereby make
to each other Venturer the representations and warranties hereinafter set forth,
and does hereby agree to indemnify and hold each other Venturer harmless from
any and all loss, expense or liability any other Venturer may suffer as a result
of any inaccuracy as of the date hereof in any representation and warranty set
forth below:

(a) Authorization. The execution and delivery of this
Agreement has been duly authorized by the agreements by which each Venturer was
either created or currently governed.

(b) Claims. There is no claim, litigation, proceeding or
governmental investigation pending, or, so far as is known to each Venturer,
threatened, against or relating to each Venturer, or the transactions
contemplated by this Agreement which does or would reasonably be expected
materially and adversely to affect the ability of each Venturer to enter into
this Agreement or to carry out its obligations hereunder, and there is not any
basis for any such claim, litigation, proceeding or governmental investigation.

(c) Conflicts. Neither the consummation of the transactions
contemplated by this Agreement to be performed, nor the fulfillment of the
terms, conditions and provisions of this Agreement, conflict with or will result
in the breach of any of the terms, conditions or provisions of, or constitute a
default under, the agreements by which each Venturer was created or is currently
governed or any material agreement, indenture, instrument or undertaking to
which each Venturer is a party.

(d) Investment Objectives. The investment objectives of each
Venturer with respect to the Properties and the objectives of the Venture are:
(i) to maximize Net Cash Flow; (ii) to preserve, protect and return the
Venturers' investment in the Venture; and (iii) to realize appreciation upon the
sale of the Properties.

6

(e) Charges to the Venturer. Neither Venturer will be charged,
directly or indirectly, more than once for the same services.

2.7 Term of Venture.

(a) Commencement. The Venture term shall begin on the date of
this Agreement as set forth above and end upon dissolution of the Venture.

(b) Dissolution and Termination. Dissolution shall occur upon
the occurrence of any of the events described in Section 7 of this Agreement.
Upon dissolution, the assets shall be liquidated in due course and distributed
as provided in Subsection 3.3(c)(i) hereof. The Venture shall continue until
termination in accordance with the relevant dissolution and termination
provisions of the Georgia Uniform Partnership Act.

3. FINANCIAL STRUCTURE.

3.1 Capital Contributions. The Venturers shall from time to time
make Capital Contributions to the Venture in such amounts as are agreed to by
the Venturers.

3.2 Distribution Percentage Interest. The Distribution Percentage
Interest of each of the Venturers shall be equal to the percentage equivalent
(rounded to the nearest one-hundredth of a percent) of a fraction, the numerator
of which is the aggregate of all Capital Contributions (or the Agreed Value
thereof) made by the Venturer pursuant to Subsection 3.1 hereof, and the
denominator of which is the aggregate amount of all Capital Contributions (or
the Agreed Value thereof) made by all of the Venturers pursuant to Subsection
3.1 hereof. Each Venturer's interest in the Venture shall always be proportional
to its Capital Contributions.

Each Venturer (the "First Venturer") does hereby agree to indemnify
and hold the other Venturer (the "Second Venturer") harmless from and against
any claim, action, liability, loss, damage, cost or expense, including, without
limitation, attorney's fees and expenses incurred by the Second Venturer by
reason of (i) any act or omission of the First Venturer in connection with the
operation of the Venture and the Properties, or (ii) the claims made by third
parties to the extent that the Second Venturer's percentage share of the total
liability, loss, damage, cost or expense incurred by the Venture and the
Venturers in connection with such claims exceeds its Distribution Percentage
Interest at the time such liability, loss, damage, cost or expense is suffered
or incurred. Upon dissolution, each Venturer shall look solely to the assets of
the Venture for the return of its investment, and if the Venture Property
remaining after payment or discharge of the debts and liabilities of the
Venture, including debts and liabilities owed to one or more of the Venturers,
is insufficient to return the aggregate Capital Contributions of each Venturer,
such Venturers shall have no recourse against the Venture or any other Venturer.

3.3 Allocations and Distributions. Allocations for accounting
purposes and for federal, state and local income tax purposes of each item of
income, loss, deduction and gain,

7

and distributions of Net Cash Flow and Extraordinary Receipts shall be allocated
among the Venturers as follows:

(a) Allocation of Tax Items. For federal, state and local
income tax purposes and for purposes of maintaining the Venturers' Capital
Accounts, except as otherwise provided herein, each item of income, gain, loss
and deduction of the Venture for each tax year shall be allocated to the
Venturers in accordance with their Distribution Percentage Interests.

(b) Net Cash Flow. All distributions of Net Cash Flow shall be
made to the Venturers in accordance with each such Venturer's Distribution
Percentage Interest and shall be made at such intervals as may be approved by
the Venturers, but in no event less frequently than quarterly.

(c) Extraordinary Receipts. Distributions of Extraordinary
Receipts shall be made as follows:

(i) Distributions Not in Connection With Dissolution.
Distribution of Extraordinary Receipts not generated in connection with an event
of dissolution shall be made as follows: first, to the establishment of any
reserve approved by the Venturers; and second, to the Venturers based on their
respective Distribution Percentage Interests.

(ii) Distributions in Connection With Dissolution.
Distribution of Extraordinary Receipts generated in connection with an event of
dissolution (as well as the other assets of the Venture) shall be made as
follows: first, to the payment of debts and liabilities of the Venture to
creditors (including all mortgages, but excluding any other debts or liabilities
to Venturers or affiliates of Venturers), and to the expenses of liquidation;
second, to the establishment of such reserves as the Venturers may deem
reasonably necessary for contingent or unforeseen liabilities or obligations of
the Venture, which may be held in escrow for a reasonable period of time and
then distributed pursuant to the remainder of this Subsection; third, to the
repayment of any remaining debts and obligations of the Venture to the Venturers
or affiliates of the Venturers; and fourth, to the Venturers in accordance with
the positive balances in their respective Capital Accounts.

(d) Compliance with Section 704(c). To comply with Section
704(c) of the I.R.C., items of income, gain, loss, depreciation and cost
recovery deductions attributable to Contributed Property shall be allocated for
federal income tax purposes among the Venturers in the manner provided under
Section 704(c) of the I.R.C. taking into account the variation, if any, between
the Agreed Value of such Property and its adjusted tax basis at the time of
contribution.

(e) Qualified Income Offset. Notwithstanding any provision to
the contrary contained herein, in the event that any Venturer receives an
adjustment, allocation or distribution described in Treasury Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) or (6) which causes a deficit balance in
such Venturer's Capital Account, such Venturer will be allocated

8

items of income or gain (consisting of a pro rata portion of each item of
partnership income, including gross income, and gain for such year) in an amount
and manner sufficient to eliminate such deficit balance as quickly as possible,
all in accordance with Treasury Regulations Section 1.704-1(b)(2)(ii)(d). (It is
the intent of the Venturers that the foregoing provision constitute a "Qualified
Income Offset," as defined in Treasury Regulations Section 1.704-1(b)(2)(ii)(d),
and the foregoing provision shall in all events be interpreted so as to
constitute a valid "Qualified Income Offset.")

3.4 Income Taxes and Accounting.

(a) Income Tax Returns. All income tax returns of the Venture
shall be prepared on an accrual basis (except to the extent as may otherwise be
Approved by all Venturers or be required by law, statute or regulation governing
such tax and returns).

(b) Elections. Any provision of this Agreement to the contrary
notwithstanding, solely for federal income tax purposes, each of the Venturers
hereby recognizes that the Venture will be subject to all provisions of
Subchapter K of Chapter 1 of Subtitle A of the I.R.C.; provided, however, that
the filing of U.S. Partnership Returns of Income shall not be construed to
extend the purposes of the Venture or expand the obligations or liabilities of
the Venturers. The Venture shall file an election under Section 754 of the
I.R.C. only in the event of a transfer or proposed transfer by any one or more
Venturers of all or any part of their interest or interests in the Venture to
any Entity. Such election shall be filed by the Venture upon the request of any
Venturer made with respect to the income tax return for the period which
includes the date of transfer of such interest in the Venture; such request
shall be in writing and shall be made not less than 60 days prior to the initial
date established by law for filing such income tax return.

(c) Fiscal Year. The Venture shall operate on a calendar year
basis.

(d) Books of Account. The books of account of the Venture and
the Venturer's Properties shall be kept and maintained at all times by the
Administrative Venturer or the delegated representative thereof at the principal
place of business of the Administrative Venturer. The books of account shall be
maintained on an accrual basis, unless otherwise determined by the
Administrative Venturer, in accordance with generally accepted accounting
principles, consistently applied, and shall show all items of income and expense
relating to the Venture and the Properties.

(e) Reports. The Administrative Venturer shall cause to be
prepared at the expense of the Venture and furnished to each of the Venturers
the information and data with respect to the Venture during the Fiscal Year as
shall enable each Venturer on a timely basis to prepare or cause to be prepared
the reports required under their respective partnership agreements to be made to
their partners. In addition, within 60 days after the end of each Fiscal Year,
the Administrative Venturer shall use its best efforts to cause to be prepared
and to deliver to each Venturer a report setting forth in sufficient detail all
such information and data with

9

respect to business transactions effected by or involving the Venture during
such Fiscal Year as shall enable the Venture and each Venturer to prepare its
federal, state and local income tax returns on a timely basis in accordance with
the laws, rules and regulations then prevailing. The Administrative Venturer
shall cause to be prepared federal, state and local tax returns required of the
Venture and submit such returns to the Venturers no later than 30 days prior to
the date required for the filing thereof and shall file the same.

(f) Records. Any Venturer shall have the right at all
reasonable times during usual business hours to audit, examine and make copies
of the books of account of the Venture. Such right may be exercised through any
agent or employee of such Venturer designated by such Venturer or by an
independent certified public accountant designated by such Venturer. Any
Venturer shall bear all expenses incurred in any examination or audit made for
such Venturer's account.

(g) Audits. In the event that the Internal Revenue Service or
any other governmental agency with jurisdiction shall conduct, commence or give
notification of intent to conduct or commence any audit or other investigation
of the books, records, tax returns or other affairs of the Venture, the
Administrative Venturer shall immediately advise the Venturers thereof by
Notice. The Administrative Venturer shall be the "tax matters partner," as that
term is defined by I.R.C., if one is needed for the Venture.

3.5 Banking. Funds of the Venture shall be deposited in an account
or accounts of a type, in form and name and in a bank or banks selected by the
Administrative Venturer. No funds other than Venture funds shall be deposited in
any such account. Withdrawals from bank accounts shall be made by the
Administrative Venturer and by such other parties as may be designated by the
Venturers.

4. MANAGEMENT.

4.1 Authority of Administrative Venturer. The overall management and
control of the business and affairs of the Venture shall be vested in the
Venturers, collectively, acting by and through the Administrative Venturer. The
Administrative Venturer shall have responsibility for establishing the policies
and operating procedures with respect to the business and affairs of the Venture
and for making all decisions, except as otherwise provided herein and except
Major Decisions, as to all matters which the Venture has authority to perform,
as fully as if the Venturers were themselves making such decisions. All
decisions, other than Major Decisions, with respect to the management and
control of the Venture made by the Administrative Venturer shall be binding on
the Venture and all Venturers. The Administrative Venturer shall be responsible
for performing, or for causing to be performed, all acts necessary to accomplish
the purposes of the Venture. No act shall be taken, sum expended, decision made
or obligation incurred by the Venture, or any Venturer, with respect to a matter
within the scope of any of the Major Decisions, unless such matter has been
Approved by all of the Venturers. Except as otherwise expressly provided for in
this Agreement, documents executed by or behalf of the Venture shall be executed
only with the Approval of the Administrative Venturer.

10

4.2 Administrative Venturer. The initial Administrative Venturer
shall be Fund X. The Administrative Venturer shall, at the expense of the
Venture, discharge or cause the discharge of the duties of the Administrative
Venturer unless and until (i) the Administrative Venturer resigns as the
Administrative Venturer, or (ii) the Administrative Venturer becomes a
Defaulting Venturer. In the event of an occurrence described in either clause
(i) or (ii) of the immediately preceding sentence, the then current
Administrative Venturer shall thereupon be relieved from any further performance
of the functions of the Administrative Venturer under this Agreement and a
replacement for the Administrative Venturer shall be Fund XI or shall be
appointed by Fund XI. In the event an Entity not a Venturer shall be appointed
to be Administrative Venturer, such Entity shall discharge the functions of the
Administrative Venturer under this Agreement but shall not be entitled to any of
the rights, titles or interests of a Venturer. The breach or violation by the
Administrative Venturer of any provision of this Subsection, or of any other
duty or obligation imposed upon the Administrative Venturer by this Agreement,
shall subject to the Administrative Venturer to the provisions of Subsection 4.4
hereof as a Defaulting Venturer (provided the Administrative Venturer is then
also a Venturer) only if such breach or violation by the Administrative Venturer
involves fraud, negligence or willful misconduct. Furthermore, the
Administrative Venturer shall be liable to the Venture and to the Venturers for
any breach or violation of the Administrative Venturer's duties and obligations
under this Subsection only if such breach or violation involves fraud,
negligence or willful misconduct.

(a) Records. The Administrative Venturer shall maintain or
cause to be maintained at the expense of the Venture, books of account as
described in Subsection 3.4(d) hereof.

(b) Property Taxes and Licenses. The Administrative Venturer
shall cause to be filed each year timely ad valorem tax returns for the
Properties.

(c) Leases. The Administrative Venturer is authorized to
negotiate and execute Leases on behalf of the Venture without further Approval
of the Venturers and is authorized to delegate this responsibility pursuant to a
management agreement. Initially, this responsibility will be delegated to the
Manager under the Management Agreements and Leasing Agreements by and between
the Venturers and the Manager.

(d) Indemnity. The Venture shall indemnify and hold the
Administrative Venturer harmless against all claims, actions, liability, loss,
damage, cost or expense, including attorney's fees and expenses, by reason of
any act or omission of the Administrative Venturer that is duly authorized and
performed in accordance with the terms and provisions of this Agreement.
However, any Entity which is both the Administrative Venturer and a Venturer
shall be responsible as a Venturer, to the extent of the proportionate liability
thereof, for such obligation for the Venture to so indemnify and hold harmless
the Administrative Venturer. The liability of the Venturers under this
Subsection shall be several, and not joint, and shall be shared in proportion to
the Distribution Percentage Interests of the Venturers.

11

4.3 Compensation of Venturers. No payment will be made by the
Venture to any Venturer for the services of such Venturer or any affiliate,
partner or employee of any Venturer, other than as provided in the Management
Agreements and the Leasing Agreements.

4.4 Defaulting Venturer. If any Venturer fails to perform any of its
obligations under this Agreement or violates the terms of this Agreement, such
Venturer shall be a Defaulting Venturer and the Nondefaulting Venturer shall
have the right to give such Defaulting Venturer a Notice specifically setting
forth the nature of the default and stating that such Defaulting Venturer shall
have a period of 15 days to pay any sums of money specified therein as due and
owing to the Venture or to any Venturer, or 30 days (or such longer period as is
specified in the next succeeding sentence) to cure any other default specified
in such Notice. If the monies specified are not paid within such 15 day period
or such Defaulting Venturer does not cure all other defaults within such 30 day
period, or, if the defaults are not capable of being cured within such 30 day
period, such Defaulting Venturer has not commenced in good faith the curing of
such defaults within such 30 days period and does not thereafter prosecute to
completion with diligence and continuity the curing thereof, the Nondefaulting
Venturer shall have all rights provided in Subsections 4.4(a) through 4.4(c)
below, in addition to any other rights it may have under the Georgia Uniform
Partnership Act. If a Defaulting Venturer completely cures all of such defaults
within the aforesaid cure periods, then such defaults shall be deemed no longer
to exist and such Venturer shall be deemed no longer to constitute a Defaulting
Venturer unless and until another default by such Venturer occurs. A Defaulting
Venturer shall have no power or authority to bind the Venture or the Venturers
but shall cooperate with and, to the extent requested, assist the Nondefaulting
Venturers in every way possible.

(a) Equitable Relief. The Nondefaulting Venturer may bring any
proceeding in the nature of injunction, specific performance or other equitable
remedy, it being acknowledged by each of the Venturers that damages at law may
be an inadequate remedy for a default or threatened breach of this Agreement.

(b) Damages. The Nondefaulting Venturer may bring any action
at law by or on behalf of itself or the Venture as may be permitted in order to
recover damages.

(c) Dissolution. The Nondefaulting Venturer may institute such
proceedings as may be appropriate to secure an accounting and to dissolve, wind
up and terminate the Venture.

(d) Additional Remedies. The rights and remedies of the
Venturers under this Agreement shall not be mutually exclusive; that is, the
exercise of one or more of the provisions hereof shall not preclude the exercise
of any other provisions hereof, except as may be expressly provided in this
Agreement. Each of the Venturers confirms that damages at law may be an
inadequate remedy for a breach or threatened breach of this Agreement and agrees
that, in the event of a breach or threatened breach of any provision hereof, the
respective rights and obligations hereunder shall be enforceable by specific
performance, injunction or other

12

equitable remedy, but nothing herein contained is intended to, nor shall it,
limit or affect any right or rights at law or by statute or otherwise of any
Venturer aggrieved as against any other Venturer for breach or threatened breach
of any provisions of this Agreement, it being the intention of this Subsection
to make clear the Agreement of the Venturers that the respective rights and
obligations of the Venturers under this Agreement shall be enforceable in equity
as well as at law or otherwise.

4.5 Limitation on Authority. Notwithstanding any provision of this
Agreement to the contrary, neither Venturer shall have the authority to take any
action which, if taken singularly by such Venturer separate from the Venture,
would be prohibited by such Venturer's

4.6 Holding Title as Nominee. With the consent of the other
Venturers, any Venturer shall be authorized to hold title to a Property or
Properties as agent or as nominee on behalf of the Venture.

5. INSURANCE.

5.1 Minimum Insurance Requirements. The Venture shall carry and
maintain in force the insurance hereinafter described, the premiums for which
shall be a cost and expense of the Venture.

(a) Liability Insurance. Comprehensive general liability
insurance for the benefit of the Venture and the Venturers as named insureds
against claims for "personal injury" liability.

(b) Other Insurance. Such other insurance as the Venturers may
reasonably deem to be necessary or as may be required by any mortgagee of any
Property of the Venture.

5.2 Insureds. All of the policies of insurance described in
Subsection 5.1 shall name the Venture and each of the Venturers as named
insureds, as their respective interests may appear. All such insurance shall be
effected under policies issued by insurers and be in forms and for amounts
Approved by both Venturers.

6. TRANSFERS AND OTHER DISPOSITIONS.

6.1 Prohibited Transfers. No Venturer may sell, transfer, assign,
mortgage, pledge, hypothecate or otherwise dispose of, encumber or permit or
suffer any encumbrance on (all referred to as "Assignment"), all or any part of
the interest of such Venturer in the Venture or in the Properties (including,
but not limited to, the right to receive any distributions under this Agreement)
unless such an Assignment is Approved by all Venturers, provided that this
restriction on Assignment shall not apply to the Assignment of units of
partnership interests or beneficial interests in a Venturer. Any Assignment made
in violation of this Section 6 shall be void.

13

6.2 Exceptions. The prohibition in Subsection 6.1 hereof shall not
apply to an Assignment permitted under Subsection 6.4 hereof ("Right of First
Refusal").

6.3 Notice. Each Venturer shall promptly by Notice inform the other
Venturer of the occurrence of any disposition not required to have been Approved
by the other Venturer.

6.4 Right of First Refusal. If any Selling Party shall desire to
transfer (for the purposes of this Subsection the terms "transfer" and
"transferred" include any and all types of disposition) all or any portion of
its interest in the Venture to any Entity, such Selling Party may consummate
such transfer only if (i) such sale is a sale of Selling Party's interest in the
Venture separate and distinct from any other property, (ii) the consideration
payable is cash and/or note(s) and not an interest in other property, and (iii)
the provisions and conditions of Subsections (a) through (d) hereof have been
complied with.

(a) Certification. The Selling Party shall deliver to the
Purchasing Party a written certification ("Certification") reflecting (i) the
name of the prospective transferee of the entire interest of the Selling Party
in the Venture; (ii) the price for which, and the terms upon which, the Selling
Party is willing to transfer and such prospective transferee is willing to buy
the entire interest of the Selling Party in the Venture (which price and terms
shall be based either upon preliminary discussions and negotiations, evidenced
in a writing signed by the prospective transferee, between the Selling Party and
such prospective transferee or upon a fully negotiated and executed purchase
agreement, a copy of which shall be furnished to the Purchasing Party); and
(iii) whether the Selling Party has any interest, financial or otherwise, in the
prospective transferee and whether, to the best knowledge of the Selling Party,
there exists any other contract or offer for the purchase of all or any portion
of the Properties or of the Selling Party's interest in the Venture. Such
Certification shall be accompanied by a request (in the form of a Notice) by the
Selling Party to the Purchasing Party to either Approve such transfer and
prospective transferee or to purchase the Selling Party's interest in the
Venture for the price and upon the terms provided in such Certification. The
Selling Party may transfer the interest of the Selling Party in the Venture only
to such prospective transferee or to the Purchasing Party. The Purchasing Party
must either approve such prospective transferee or purchase the interest of the
Selling Party in the Venture.

(b) Purchasing Party's Rights. The Purchasing Party shall have
the right either (i) to allow the Selling Party to transfer the interest of the
Selling Party in the Venture for a price and upon terms no more favorable to the
prospective transferee than those reflected, and to the prospective transferee
named in the Certification, or (ii) to purchase the Selling Party's entire
interest in the Venture at the price contained in the Certification and on the
other terms and conditions of the Certification. The price for which, and the
terms upon which, the Selling Party shall transfer its interest in the Venture
shall, by way of illustration and not limitation, be deemed "more favorable"
than those reflected in the Certification if (i) the total actual transfer price
is lower than that set forth in such Certification, (ii) a lesser portion of the
price is paid in cash at the time of the transfer than that set forth in such
Certification, or (iii) the portion of the price not paid in cash at the time of
the transfer is payable over a

14

longer period of time, at a lower interest rate or with lower or less frequent
periodic payments than those set forth in such Certification.

(c) Notice of Election. The Purchasing Party shall have a
period of 60 days after receipt of the Selling Party's Certification specified
in Subsection 6.4(a) hereof to serve upon the Selling Party a Notice which shall
specify whether such Purchasing Party will Approve a transfer to such
prospective transferee, or whether the Purchasing Party shall purchase the
entire interest of the Selling Party as provided in Subsection 6.4(b) hereof. If
the Purchasing Party fails to give such Notice within the allocated time, the
Purchasing Party shall be deemed to have approved the transfer of the interest
to such prospective transferee, and the Purchasing Party shall, if requested by
the Selling Party, execute, acknowledge and deliver such documents, or cause the
same to be executed, acknowledged and delivered, including without limitation,
the rights and restrictions contained in this Section 6 with respect to further
transfers. Any such new Venturer shall execute and deliver to the other
Venturers such documents as the other Venturers may reasonably request
confirming the assumption by such new Venturer of the obligations of the Selling
Party under this Agreement. At the time of closing of a transfer to a third
party transferee pursuant to this Subsection 6.4, the Purchasing Party shall
execute and deliver to the Selling Party and such transferee a written estoppel
certificate in recordable form pursuant to which the Purchasing Party shall
certify and agree that to the best of the Purchasing Party's knowledge and
belief the pending transfer is permitted pursuant to this Subsection (provided,
that to the best of the Purchasing Party's knowledge and belief such transfer
is, in fact, permitted by this Subsection). In such estoppel certificate, the
Purchasing Party shall waive any further right whatsoever to attempt to force a
rescission or setting aside of such transfer; provided, however, the Purchasing
Party shall expressly reserve any rights thereafter to pursue any action for
damages against both the Selling Party and the transferee should the Purchasing
Party thereafter determine that, contrary to the Purchasing Party's earlier best
knowledge and belief, the transfer was in fact not consummated in strict
accordance with the terms of this Section 6.

(d) Power of Attorney. In the event that either (i) the
Purchasing Party shall have failed to respond, in the manner and within the time
required by Subsection 6.4(c) hereof, to the Selling Party's Certification
specified in Subsection 6.4(a) hereof, or (ii) the Purchasing Party shall have
served upon the Selling Party a Notice specifying that the Purchasing Party has
approved a transfer to a prospective transferee of the Selling Party as
contemplated by Subsection 6.4(c) hereof, and the Purchasing Party shall have
thereafter failed or refused, within ten days after receipt of a Notice from the
other Venturer requesting same, to execute, acknowledge and deliver such
documents, or cause the same to be done, as shall be required to effectuate a
transfer of such interest in accordance with the Certification, then, and in
either of such events, the Selling Party may execute, acknowledge and deliver
such documents for, on behalf of and in the stead of the Purchasing Party, and
such execution, acknowledgment and delivery by the Selling Party shall be for
all purposes as effective against and binding upon the Purchasing Party as
though such execution, acknowledgment and delivery had been by the Purchasing
Party; provided, however, that no such documents executed by the Selling Party
shall contain any undertaking on behalf of the Purchasing Party beyond the scope
of the undertakings

15

necessary for the Selling Party to effectuate such transfer. Each Venturer does
hereby irrevocably constitute and appoint each other Venturer as the true and
lawful attorney in fact of such Venture and the successors and assigns thereof,
in the name, place and stead of such Venturer or the successors or assigns
thereof, as the case may be, to execute, acknowledge and deliver such documents
in the event such Venturer shall be the Purchasing Party under the circumstances
contemplated by this Subsection 6.4(d). It is expressly understood, intended and
agreed by each Venturer, for such Venturer and the successors and assigns
thereof, that the grant of the power of attorney to each other Venturer pursuant
to this Subsection 6.4(d) is coupled with an interest, is irrevocable and shall
survive the death, termination or legal incompetency of such granting Venturer,
as the case may be, or the assignment of the interest of such granting Venturer
in the Venture, or the dissolution of the Venture.

7. DISSOLUTION AND TERMINATION.

The Venture shall dissolve on December 31, 2028, or upon the
occurrence of any of the following:

(i) A decree of a court of competent jurisdiction declaring
dissolution;

(ii) Sale of all or substantially all of the assets of the Venture;

(iii) The Venture or either Venturer is adjudicated insolvent or
bankrupt;

(iv) Termination of either of the Venturers; or

(v) Unanimous consent of the Venturers.

Upon the occurrence of any of the events set forth in this Section 7, Notice
thereof shall be given to all of the Venturers by the Administrative Venturer
and the Administrative Venturer shall, as required by Subsection 2.7(b) hereof,
proceed to terminate and wind up the Venture and shall distribute the
Extraordinary Receipts (and the other assets of the Venture) resulting therefrom
in accordance with Subsection 3.3(c) hereof.

8. MISCELLANEOUS PROVISIONS.

8.1 Notices. Notices given under this Agreement shall be in writing
and shall be deemed to have been properly given or served by the deposit of such
with the United States Postal Service, or any official successor thereto,
designated as registered or certified mail, return receipt requested, bearing
adequate postage and addressed as hereinafter provided. The time period in which
a response to any such Notice must be given or any action taken with respect
thereto, however, shall commence to run from the date of receipt on the return
receipt of the Notice. Rejection or other refusal to accept or the inability to
deliver because of changed address or status of which no Notice was given to the
Administrative Venturer shall be deemed to be receipt of the Notice sent. In the
event that registered or certified mail is not being

16

accepted for prompt delivery, each Notice may then be served by personal service
addressed as hereinafter provided. By giving to the other Venturer at least 30
days' Notice thereof, any Venturer shall have the right from time to time during
the term of this Agreement to change his Notice address(es) and to specify as
his Notice address(es) any other address(es) within the continental United
States of America. Each Notice to the Venturers shall be sent to the addresses
set forth below (unless such Notice address is properly changed):

Wells Real Estate Fund X, L.P.
3885 Holcomb Bridge Road
Norcross, Georgia 30092

Wells Real Estate Fund XI, L.P.
3885 Holcomb Bridge Road
Norcross, Georgia 30092

8.2 Governing Law. This Agreement and the obligations of the
Venturers hereunder shall be interpreted, construed and enforced in accordance
with the laws of the State of Georgia, including the Georgia Uniform Partnership
Act.

8.3 Fees and Commissions. Except as may otherwise be provided
herein, each Venturer hereby represents to each other Venturer that there are no
claims for brokerage or other commissions or finder's or other similar fees in
connection with the transactions contemplated by this Agreement insofar as such
claims shall be based on arrangements or agreements made by or on behalf of the
Venturer so representing, and each Venturer so representing hereby indemnifies
and agrees to hold harmless each other Venturer from and against all
liabilities, cost, damages and expenses from any such claims.

8.4 Waiver. No consent or waiver, express or implied, by any
Venturer to or of any breach or default by any other Venturer in the performance
by such other Venturer of the obligations thereof under this Agreement shall be
deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such other Venturer of the same or any other
obligations of such other Venturer under this Agreement. Failure on the part of
any Venturer to complain or any act or failure to act of any other Venturer or
to declare any other Venturer in default, irrespective of how long such failure
continues, shall not constitute a waiver of such Venturer of the rights thereof
under this Agreement.

8.5 Severability. If any provision of this Agreement or the
application thereof to any Entity or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to any other Entity or circumstance shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.

8.6 Status Reports. Recognizing that each Venturer may find it
necessary from time to time to establish to third parties such as accountants,
banks, mortgagees or the like, the then current status of performance hereunder,
upon the written request of any other Venturer,

17

made from time to time by Notice, each Venturer shall furnish promptly a written
statement (in recordable form, if requested) on the status of any matter
pertaining to this Agreement to the best of the knowledge and belief of the
Venturer making such statement.

8.7 Entire Agreement - Amendment. This Agreement constitutes the
entire agreement of the Venturers with respect to the subject matter hereof.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Venturer against whom enforcement of the change, waiver, discharge or
termination is sought. The execution of any amendment to this Agreement, or the
execution of any other agreement or amendment thereto, by all Venturers shall
establish that such execution was made in accordance with any applicable
requirements for Approval.

8.8 Terminology. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural; and the plural shall
include the singular. Titles of Sections, Subsections and Paragraphs in this
Agreement are for convenience only, and neither limit nor amplify the provisions
of this Agreement, and all references in this Agreement to Sections, Subsections
or Paragraphs shall refer to the Section, Subsection or Paragraph of this
Agreement unless specific reference is made to another document or instrument.

8.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall comprise but a single instrument.

8.10 Successors and Assigns. Subject to the restrictions on
transfers and encumbrances set forth herein, this Agreement shall inure to the
benefit of and be binding upon the Venturers and their respective heirs,
executors, legal representatives, successors and assigns. Whenever in this
Agreement a reference to any Entity or Venturer is made, such reference shall be
deemed to include a reference to the heirs, executors, legal representatives,
successors and assigns of such Entity or Venturer.

18

IN WITNESS WHEREOF, the undersigned Venturers have executed this Joint
Venture Agreement of Fund X and Fund XI Associates under seal as of the day and
year first above written.

WELLS REAL ESTATE FUND X, L.P.
A Georgia Limited Partnership

By:   Wells Partners, L.P.
A Georgia Limited Partnership
(As General Partner)

By:   Wells Capital, Inc.
A Georgia Corporation
(As General Partner)

Signed, sealed and delivered                       By: /s/ Leo F. Wells, III
in the presence of:                                    -------------------------
Leo F. Wells, III 
President         
/s/ Michael C. Berndt                                    
- --------------------------------                         [Corporate Seal]
Unofficial Witness                                    

/s/ Martha Jean Cory                   
- --------------------------------       
Notary Public                          
Notary Public, Gwinnett County, Georgia
My Commission Expires June 24, 2000

Signed, sealed and delivered                       By: /s/ Leo F. Wells, III    
in the presence of:                                    -------------------------
Leo F. Wells, III      
General Partner
/s/ Michael C. Berndt 
- --------------------------------                         
Unofficial Witness                               

/s/ Martha Jean Cory
- --------------------------------                 
Notary Public                                    
Notary Public, Gwinnett County, Georgia         
My Commission Expires June 24, 2000

19

WELLS REAL ESTATE FUND XI, L.P.
A Georgia Limited Partnership

By:   Wells Partners, L.P.
A Georgia Limited Partnership
(As General Partner)

By:   Wells Capital, Inc.
A Georgia Corporation
(As General Partner)

Signed, sealed and delivered                       By: /s/ Leo F. Wells, III
in the presence of:                                    -------------------------
Leo F. Wells, III 
President         
/s/ Michael C. Berndt
- --------------------------------                         [Corporate Seal]
Unofficial Witness                                    

/s/ Martha Jean Cory                   
- --------------------------------       
Notary Public                          
Notary Public, Gwinnett County, Georgia
My Commission Expires June 24, 2000

Signed, sealed and delivered                       By: /s/ Leo F. Wells, III    
in the presence of:                                    -------------------------
Leo F. Wells, III      
General Partner
/s/ Michael C. Berndt
- --------------------------------                         
Unofficial Witness                               

/s/ Martha Jean Cory
- --------------------------------                 
Notary Public                                    
Notary Public, Gwinnett County, Georgia         
My Commission Expires June 24, 2000

20

EXHIBIT 10.19

AGREEMENT FOR THE PURCHASE AND SALE

OF JOINT VENTURE INTEREST

BETWEEN WELLS DEVELOPMENT CORPORATION

AND

THE FUND X-XI JOINT VENTURE

AGREEMENT FOR THE PURCHASE
AND SALE OF JOINT VENTURE INTEREST

THIS AGREEMENT, made and entered into as of the 17th day of July, 1998, by
and between WELLS DEVELOPMENT CORPORATION, a Georgia corporation whose address
is 3885 Holcomb Bridge Road, Norcross, Georgia 30092 ("Seller"), WELLS
MANAGEMENT COMPANY, INC., whose address is 3885 Holcomb Bridge Road, Norcross,
Georgia 30092 ("Guarantor") and FUND X AND FUND XI ASSOCIATES, a Georgia joint
venture comprised of Wells Real Estate Fund X, L.P., a Georgia limited
partnership, and Wells Real Estate Fund XI, L.P., a Georgia limited partnership,
whose address is 3885 Holcomb Bridge Road, Norcross, Georgia 30092
(collectively, the "Purchaser").

W I T N E S S E T H:

Whereas, Seller has entered into that certain Agreement for the Purchase
and Sale of Property (the "Purchase Agreement") with ROSE VENTURES V, INC.,
Thomas G. Haury and Carleen S. Haury dated as of June 8, 1998, as amended,
relating to certain improved property situated in the Mission Business Park in
Fremont, California and being more particularly described on Exhibit A hereto
(the "Property"); and

WHEREAS, Seller intends to assign its rights under the Purchase Agreement
to WELLS/FREMONT ASSOCIATES, a Georgia joint venture between Seller and Wells
Operating Partnership, L.P., a Delaware limited partnership (the "Joint
Venture") and contribute the Earnest Money received by it hereunder in exchange
for an interest in the Joint Venture (the "Joint Venture Interest"); and

Whereas, The Joint Venture will acquire the Property with the funds
contributed by Seller and funds obtained through a loan in the amount of
$5,960,000 (the "Loan") from NationsBank, N.A.; and

WHEREAS, the property is subject to that certain Standard
Industrial/Commercial Single Tenant Lease-Net with Fairchild Technologies USA,
Inc. (the "Lease") relating to the Property; and

WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
acquire from Seller the Joint Venture Interest upon the terms and conditions
hereinafter set forth; and

WHEREAS, Guarantor is an affiliate of Seller and will benefit from this
transaction;

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein set forth, the receipt, adequacy and sufficiency
of which are hereby expressly acknowledged by the parties hereto, Seller and
Purchaser do hereby covenant and agree as follows:

1. Agreement to Buy and Sell. Upon the terms and conditions set forth in
this Agreement, and subject to acquisition of the Property by the Joint Venture
pursuant to the Purchase Agreement, Purchaser agrees to buy from Seller and
Seller agrees to sell to Purchaser the Joint Venture Interest.

2. Earnest Money. Within three (3) business days after the effective date
of this Agreement, Purchaser shall deliver to Seller, Purchaser's check, in the
amount of $2,000,000 (said amount being herein referred to as the "Earnest
Money"), which Earnest Money shall be held and disbursed pursuant to this
Agreement. The Earnest Money, plus any other funds advanced by Purchaser to
Seller, shall be applied as a credit to the Purchase Price (as hereinafter
defined) or otherwise paid to Seller or refunded to Purchaser as provided
herein. The parties hereto acknowledge that some or all of the Earnest Money
shall be utilized by Seller to be contributed as a capital contribution to the
Joint Venture with respect to Seller's Joint Venture Interest. Purchaser may but
shall not be required to pay additional funds to Seller thereby increasing the
Earnest Money and Purchase Price by an equivalent amount, in which event Seller
shall contribute such funds to the Joint Venture in exchange for an increased
ownership interest. Guarantor joins in the execution of this Agreement for the
sole purpose of guaranteeing Seller's obligations to Purchaser hereunder
regarding the repayment of the Earnest Money, which guaranty shall be evidenced
by the execution and delivery of that certain Guarantee of Refund of Earnest
Money in the form attached as Exhibit B hereto.

3. Purchase Price. Subject to adjustment and credits as otherwise
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid by Purchaser to Seller for the Joint Venture Interest shall be
approximately $2,000,000, the precise amount to be the amount contributed by
Seller to the Joint Venture. It is the intent of the parties that Seller shall
not make any profit or incur any loss in connection with this transaction and to
that end, Seller agrees to cause the Joint Venture to hold in an interest
bearing account for the benefit of Purchaser any cash distributions payable to
Seller prior to Closing hereunder. The Purchase Price shall be paid by Purchaser
to Seller at the Closing by cashier's check or by wire transfer of immediately
available federal funds, less the amount of Earnest Money and subject to
prorations, adjustments, and credits as otherwise specified in this Agreement.

4. Purchaser's Right of Inspection and Seller's Cooperation. From and
after the date of this Agreement, Purchaser and its agents, engineers, or
representatives, with Seller's reasonable, good faith cooperation, shall have
the privilege of going upon the Property as needed to inspect, examine, test,
and survey the Property at all reasonable times and from time to time. Such
privilege shall include the right to make said tests, borings, and other tests
to obtain information necessary to 

-2-

determine surface and subsurface conditions. Such privilege shall also include
the right to make any other tests deemed reasonably necessary by Purchaser.
Purchaser hereby indemnifies and holds Seller harmless from any liens, claims,
liabilities, and damages incurred through the exercise of such privilege. The
obligations of Purchaser under the preceding sentence shall survive any
termination of this Agreement. Seller shall make available to Purchaser all work
product in the possession of Seller relating to the Property, including surveys,
site plans, environmental audits, soils tests, market studies, Seller's owner's
title policy and all other information provided to Seller or obtained by Seller
with respect to the Property.

5. Special Conditions to Closing. Notwithstanding any other provision to
the contrary contained in this Agreement, Purchaser's obligations hereunder are
expressly conditioned upon the following special conditions:

(a) The Joint Venture shall have paid-off the Loan in full prior to
Closing and the Joint Venture shall own title to the Property debt-free at
Closing;

(b) Purchaser shall have available to it at the date of Closing
sufficient net proceeds available for investment in properties to fully
fund the remainder of the Purchase Price;

(c) All of the representations and warranties set forth in paragraph
7 shall be true and correct in all material respects on the Date of
Closing;

(d) The receipt by Purchaser of an appraisal reflecting the value of
the Property owned by the Joint Venture as being not less than $8,900,000;

(e) The receipt by Purchaser of evidence reasonably satisfactory to
Purchaser that the Property is free of any Hazardous Materials;

(f) The receipt of evidence that Fairchild Technologies USA, Inc.
continues to be occupying the Property as a tenant pursuant to the Lease
paying rent on a current basis and that neither the Landlord nor the
tenant are in default with respect to the Lease; and

(g) The receipt of any necessary consents for the admission of
Purchaser as a Joint Venture partner in the Joint Venture.

In the event any of the conditions set forth above are not met on or prior to
the date of Closing, Purchaser shall be entitled to terminate this Agreement
upon written notice to Seller. If Purchaser elects to so terminate this
Agreement, Seller shall be entitled to receive the sum of Twenty-Five Dollars
($25.00) of 

-3-

the Earnest Money, and the balance of the Earnest Money shall be refunded to
Purchaser, whereupon, except as expressly provided to the contrary in this
Agreement, no party hereto shall have any other or further rights or obligations
under this Agreement. Seller acknowledges that the sum of Twenty-Five Dollars
($25.00) is good and adequate consideration for the termination rights granted
to Purchaser hereunder.

6. Closing and Closing Date. The consummation of the sale by Seller and
the purchase by Purchaser of the Property (herein referred to as the "Closing")
shall be held on or before the first anniversary of the date hereof, unless
extended as hereinafter provided, at the offices of O'Callaghan & Stumm LLP, 127
Peachtree Street N.E., Suite 1330, Atlanta, Georgia 30303 or such other office
as the parties may agree at such specific time and date as shall be designated
by Purchaser in a written notice to Seller not less than three (3) business days
prior to the date of Closing or absent such notice at 10:00 a.m. on the first
anniversary of the date hereof. At Closing, Seller shall execute and deliver to
Purchaser (a) an assignment of its Joint Venture Interest in form and substance
reasonably satisfactory to Purchaser and (b) the consent of Wells Operating
Partnership, L.P. to the transfer of the Joint Venture Interest, (c) an
amendment to the Joint Venture Agreement of the Joint Venture providing for
admission of Purchaser in the place of Seller, and (d) such other documents as
may be reasonably required by Purchaser or Purchaser's counsel in order to
effectuate the transaction contemplated hereunder. At Closing, Purchaser shall
deliver to Seller the Purchase Price and shall execute and deliver to Seller a
Closing Statement and such other documents as may be reasonably required by
Seller or Seller's counsel in order to effectuate the transaction contemplated
hereby. Purchaser shall have the right to extend the closing for two successive
six month periods in the event Purchaser does not have sufficient funds
available to close the transaction.

7. Representations and Warranties of Seller. Seller hereby makes the
following representations and warranties to Purchaser, each of which shall be
deemed material:

(a) Title and Authority. The Joint Venture shall at Closing be the
owner of good and marketable fee simple record title to the Property
subject only to those matters set forth on Exhibit C hereto (the
"Permitted Encumbrances") and, if applicable, to one or more mortgages
which shall be canceled and satisfied at no cost to Purchaser at or before
the Closing, it being the intent of the parties that the Property free and
clear of any liens, claims or encumbrances except the Permitted
Encumbrances, at the time Purchaser acquires the Joint Venture Interest.
Seller has the full right, power and authority to execute and deliver this
Agreement and to consummate the purchase and sale herein 

-4-

contemplated and to perform the covenants and agreement of Seller
hereunder.

(b) No Litigation. There are no actions, suits, or proceedings
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
which would impair Seller's ability to convey the Joint Venture Interest
pursuant to this Agreement or against the Property, nor does Seller know
of any basis for such action.

(c) Pre-existing Right to Acquire. No person or entity has any right
or option to acquire the Joint Venture Interest which will have any force
or effect after the execution hereof, other than Purchaser.

(d) Ownership of Joint Venture Interest. Seller owns or shall at the
time of Closing own beneficially and of record the Joint Venture Interest
free and clear of all liens, claims, pledges, options, adverse claims and
charges of any nature whatsoever.

8. Default. In the event Seller fails to comply with or perform any of the
covenants, agreements or obligations to be performed by Seller under the terms
and provisions of this Agreement, or in the event Seller's warranties and
representations set forth in this Agreement are untrue or misleading, at
Purchaser's option: (i) Purchaser shall be entitled to an immediate refund of
all Earnest Money and to thereafter exercise any and all rights and remedies
available to Purchaser at law or in equity; or (ii) Purchaser shall be entitled,
upon giving written notice to Seller as herein provided, to terminate this
Agreement. Upon any such termination, all Earnest Money shall be immediately
returned to Purchaser and this Agreement and all rights and obligations created
hereunder shall be of no further force or effect. In the event Purchaser fails
to comply with or perform any of the covenants, agreements or obligations to be
performed by Purchaser under the terms and provisions of this Agreement,
Seller's sole and exclusive remedy for any such default shall be to terminate
this Agreement and to receive $100 of the Earnest Money as full liquidated
damages for such default, the parties hereto acknowledging that it is impossible
to more precisely estimate the damages to be suffered by Seller upon Purchaser's
default, whereupon all rights and obligations created hereby shall terminate and
be of no further force or effect whatsoever.

9. Assignment. Purchaser's rights and duties under this Agreement shall be
freely transferable and assignable by Purchaser, either in full or in part, and
in the event of any such transfer or assignment, Seller shall look solely to
such transferee or assignee for the performance of all obligations, 

-5-

covenants, conditions, and agreements imposed upon Purchaser pursuant to the
terms of this Agreement.

10. Broker's Commission. Seller shall and does hereby indemnify and hold
harmless Purchaser from and against any claim for any real estate sales
commission, finder's fees, or like compensation in connection with the sale
contemplated hereby and arising out of any act or agreement of Seller. Likewise,
Purchaser shall and does hereby indemnify and hold harmless Seller from and
against any claim for any real estate sales commission, finder's fees or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Purchaser.

11. Notices. Any notices which may be permitted or required hereunder
shall be in writing and sent or hand delivered to the addresses set forth
herein, and shall be deemed to have been duly given as of the date and time the
same are either personally delivered (if delivered by hand or by overnight
courier) or, if mailed, on the third (3rd) business day following the date same
is deposited with the United States Postal Service, postage prepaid, to be
mailed by registered or certified United States mail, return receipt requested.

12. Time Periods. If the time period by which any right, option, or
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.

13. Survival of Provisions. All covenants, warranties, and agreements set
forth in this Agreement shall survive the execution or delivery of any and all
deeds and other documents at any time executed or delivered under, pursuant to
or by reason of this Agreement, and shall survive the payment of all monies made
under, pursuant to, or by reason of this Agreement.

14. Severability. This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable laws, ordinances,
rules and regulations. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall for any reason and to any extent be
invalid or unenforceable, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected thereby
but rather shall be enforced to the greatest extent permitted by law.

15. General Provisions. No failure of either party to exercise any power
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a 

-6-

waiver of either party's right to demand exact compliance with the terms hereof.
This Agreement contains the entire agreement of the parties hereto, and no prior
representations, inducements, promises, or agreements, oral or otherwise,
between the parties not embodied herein or in said Letter Agreement shall be of
any force or effect. Any amendment to this Agreement shall not be binding upon
Seller or Purchaser unless such amendment is in writing and executed by both.
The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, legal representatives,
successors, and assigns. Time is of the essence in this Agreement. This
Agreement may be executed in multiple counterparts, each of which shall
constitute an original, but all of which taken together shall constitute one and
the same agreement. The headings inserted at the beginning of each paragraph are
for convenience only, and do not add to or subtract from the meaning of the
contents of each paragraph. This Agreement shall be construed and interpreted
under the laws of the State of Georgia. Except as otherwise provided herein, all
rights, powers, and privileges conferred hereunder upon the parties shall be
cumulative but not restrictive to those given by law. All personal pronouns used
in this Agreement, whether used in the masculine, feminine, or neuter gender
shall include all genders, and all references herein to the singular shall
include the plural and vice versa. The parties do not intend and this Agreement
shall not be deemed to create a joint venture, partnership, or any other
relationship between Seller and Purchaser or the Joint Venture and Purchaser
except that of contracting parties.

16. Effective Date. For purposes of the calculations of any time periods
set forth in this Agreement, the effective date of this Agreement shall be
deemed to be the latest of the dates set forth below, or the date this Agreement
is last initialed, whichever is later.

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

"SELLER":

WELLS DEVELOPMENT CORPORATION, a Georgia corporation

By: /s/ Leo F. Wells III
-----------------------

Title: PRESIDENT
--------------------

Date: July 17, 1998

-7-

"GUARANTOR":

WELLS MANAGEMENT COMPANY, INC.

By: /s/ Leo F. Wells III
-----------------------

Title: PRESIDENT
--------------------

Date: July 17, 1998

"PURCHASER":

FUND X AND FUND XI ASSOCIATES, a Georgia joint venture

By:   WELLS REAL ESTATE FUND X, L.P.,
a Georgia limited partnership, as
administrative venturer

By:   Wells Partners, L.P., a Georgia
limited partnership, general partner

By:   Wells Capital, Inc., a
Georgia corporation
General Partner

By: /s/ Leo F. Wells III     
-----------------------   

Title: PRESIDENT             
--------------------   

Date: July 17, 1998          

-8-

EXHIBIT 10.20

LEASE AGREEMENT

BETWEEN THE FREMONT JOINT VENTURE

AND

FAIRCHILD TECHNOLOGIES USA, INC.

AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE - NET
(DO NOT USE THIS FORM FOR MULTI-TENANT BUILDINGS)

1. Basic Provisions ("Basic Provisions")

1.1 Parties: This Lease ("Lease"), dated for reference purposes only
September 19, 1997, is made by and between ROSE VENTURES V, INC., a California
corporation, THOMAS G. HAURY and CARLEEN S. HAURY ("Lessor") and FAIRCHILD
TECHNOLOGIES USA, INC., a _________________ corporation ("Lessee"),
(collectively the "Parties," or individually a "Party").

1.2 Premises: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known as 47320 Kato Road, Freemont, located in the County of Alameda, State of
California, and generally described as (describe briefly the nature of the
property and, if applicable, the "Project", if the property is located within a
Project) an industrial/office building and land located thereon, said building
consisting of approximately 58,424 square feet, of which approximately 22,456
square feet is second story office space, with approximately 35,968 square feet
of first floor space ("Premises"). (See also Paragraph 2)

1.3 Term: Seven (7) years and -0- months ("Original Term") commencing
December 1, 1997 ("Commencement Date") and ending November 30, 2004 ("Expiration
Date"). (See also Paragraph 3)

1.4 Early Possession: October 1, 1997 for 2nd floor office area for early
possession rent of $22,456.00 per month for two (2) months ("Early Possession
Date"). (See also Paragraphs 3.2 and 3.3)

1.5 Base Rent: $68,128.00 per month ("Base Rent"), payable on the first
(1st) day of each month commencing December 1, 1997 (See also Paragraph 4)

|_| If this box is checked, there are provisions in this Lease for the
Base Rent to be adjusted. (Addendum paragraphs 50, 52).

1.6 Base Rent Paid Upon Execution: $22,456.00 as Base Rent for the period
October 1, 1997 to October 31, 1997.

1.7 Security Deposit: None ("Security Deposit"). (See also Paragraph 5)

1.8 Agreed Use: general office, light manufacturing and industrial,
assembly and manufacturing semiconductor and optical cd machinery and equipment.
(See also Paragraph 6)

1.9 Insuring Party: Lessor is the "Insuring Party" unless otherwise stated
herein. (See also Paragraph 8)

1.10 Real Estate Brokers: (See also Paragraph 15)

(a) Representation: The following real estate brokers (collectively,
the "Brokers") and brokerage relationships exist in this transaction (check
applicable boxes):

|X| Cornish & Carey Commercial represents Lessor exclusively 
("Lessor's Broker");

|X| CB Commercial represents Lessee exclusively ("Lessee's Broker"); or

|_| ______________________________ represents both Lessor and Lessee ("Dual
Agency").

(b) Payment to Brokers: Upon execution and delivery of this Lease by
both Parties, Lessor shall pay to the Broker the fee agreed to in their separate
written agreement (or if there is no such agreement, the sum of _______% of the
total Base Rent for the brokerage services rendered by said Broker).

1.11 Guarantor. The obligations of the Lessee under this Lease are to be
guaranteed by The Fairchild Corporation ("Guarantor"). (See also Paragraph 37)

1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda
consisting of Paragraphs 50 through 68 and Exhibits _______, all of which
constitute a part of this Lease.

2. Premises.

2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. Unless otherwise provided
herein, any statement of size set forth in this Lease, or that may have been
used in calculating rental, is an approximation which the Parties agree is
reasonable and the rental based thereon is not subject to revision whether or
not the actual size is more or less.

2.2 Condition. Lessor shall deliver the Premises to Lessee broom clean and
free of debris on the Commencement Date or the Early Possession Date, whichever
first occurs ("Start Date"), and, Landlord warrants that the Premises are
connected for water, electricity and gas usage and that all of the connections
for water, electricity and gas usage are in working order and shall be in good
working order as of the Start Date, and, warrants that the structural elements
of the roof, bearing walls and foundation of any buildings on the Premises (the
"Building") shall be free of material defects. If a non-compliance with said
warranty exists as of the Start Date, Lessor shall, as Lessor's sole obligation
with respect to such matter, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Lessor's expense. If, after the Start Date, Lessee does not give Lessor written
notice of any non-compliance with this warranty within: (i) one year as to the
surface of the roof and the structural portions of the roof, foundations and
bearing walls, (ii) six (6) months as to the HVAC systems, (iii) thirty (30)
days as to the remaining systems and other elements of the Building, correction
of such non-compliance shall be the obligation of Lessee at Lessee's sole cost
and expense.

2.3 Compliance. If the Applicable Requirements are hereafter changed (as
opposed to being in existence at the Start Date, which is addressed in Paragraph
6.2(e) below) so as to require during the term of this Lease the construction of
an addition to or an alteration of the Building, the remediation of any
Hazardous

1

Substance, or the reinforcement or other physical modification of the Building
("Capital Expenditure"), Lessor and lessee shall allocate the cost of such work
as follows:

(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are
required as a result of the specific and unique use of the Premises by Lessee as
compared with uses by tenants in general, Lessee shall be fully responsible for
the cost thereof, provided, however that if such Capital Expenditure is required
during the last two (2) years of this Lease and the cost thereof exceeds six (6)
months' Base Rent, Lessee may instead terminate this Lease unless Lessor
notifies Lessee, in writing, within ten (10) days after receipt of Lessee's
termination notice that Lessor has elected to pay the difference between the
actual cost thereof and the amount equal to six (6) months' Base Rent. If Lessee
elects termination, Lessee shall immediately cease the use of the Premises which
requires such Capital Expenditure and deliver to Lessor written notice
specifying a termination date at least ninety (90) days thereafter. Such
termination date shall, however, in no event be earlier than the last day that
Lessee could legally utilize the Premises without commencing such Capital
Expenditure.

(b) If such Capital Expenditure is not the result of the specific and
unique use of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor and Lessee shall allocate the obligation to pay for
such costs pursuant to the provisions of Paragraph 7.1(c); provided, however,
that if such Capital Expenditure is required during the last two years of this
Lease or if Lessor reasonably determines that it is not economically feasible to
pay its share thereof, Lessor shall have the option to terminate this Lease upon
ninety (90) days prior written notice to Lessee unless Lessee notifies Lessor,
in writing, within ten (10) days after receipt of Lessor's termination notice
that Lessee will pay for such Capital Expenditure. If Lessor does not elect to
terminate, and fails to tender its share of any such Capital Expenditure, Lessee
may advance such funds and deduct same, with Interest, from Rent until Lessor's
share of such costs have been fully paid. If Lessee is unable to finance
Lessor's share, or if the balance of the Rent due and payable for the remainder
of this Lease is not sufficient to fully reimburse Lessee on an offset basis,
Lessee shall have the right to terminate this Lease upon thirty (30) days
written notice to Lessor.

(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Lessee as a result of an actual or proposed change in use, change in intensity
of use, or modification to the Premises then, and in that event, Lessee shall be
fully responsible for the cost thereof, and Lessee shall not have any right to
terminate this Lease.

2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by
Lessor and/or Brokers to satisfy itself with respect to the condition of the
Premises (including but not limited to the electrical, HVAC and fire sprinkler
systems, security, environmental aspects, and compliance with Applicable
Requirements), and their suitability for Lessee's intended use, (b) Lessee has
made such investigation as it deems necessary with reference to such matters and
assumes all responsibility therefor as the same relate to its occupancy of the
Premises, and (c) neither Lessor, Lessor's agents, nor any Broker has made any
oral or written representations or warranties with respect to said matters other
than as set forth in this Lease. In addition, Lessor acknowledges that: (a)
Broker has made no representations, promises or warranties concerning Lessee's
ability to honor the Lease or suitability to occupy the Premises, and (b) it is
Lessor's sole responsibility to investigate the financial capability and/or
suitability of all proposed tenants. 

3. Term.

3.1 Term. The Commencement Date, Expiration Date and Original Term of this
Lease are as specified in Paragraph 1.3.

3.2 Early Possession. Except as expressly provided in paragraphs 1.4 and
1.6, if Lessee totally or partially occupies the Premises prior to the
Commencement Date, the obligation to pay Base Rent shall be abated for the
period of such early possession. All other terms of this Lease (including but
not limited to the obligations to pay Real Property Taxes and insurance premiums
and to maintain the Premises) shall, however, be in effect during such period.
Any such early possession shall not affect the Expiration Date.

3.3 Delay In Possession. Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession as agreed, Lessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease. Lessee shall not, however,
be obligated to pay Rent or perform its other obligations until it receives
possession of the Premises. If possession is not delivered within sixty (60)
days after the Commencement Date, Lessee may, at its option, by notice in
writing within ten (10) days after the end of such sixty (60) day period, cancel
this Lease, in which event the Parties shall be discharged from all obligations
hereunder. If such written notice is not received by Lessor within said ten (10)
day period, Lessee's right to cancel shall terminate. Except as otherwise
provided, if possession is not tendered to Lessee by the Start Date and Lessee
does not terminate this Lease, as aforesaid, any period of rent abatement that
Lessee would otherwise have enjoyed shall run from the date of delivery of
possession and continue for a period equal to what Lessee would otherwise have
enjoyed under the terms hereof, but minus any days of delay caused by the acts
or omissions of Lessee. If possession of the Premises is not delivered within
four (4) months after the Commencement Date, this Lease shall terminate unless
other agreements are reached between Lessor and Lessee, in writing.

3.4 Lessee Compliance. Lessor shall not be required to tender possession
of the Premises to Lessee until Lessee complies with its obligation to provide
evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee
shall be required to perform all of its obligations under this Lease from and
after the Start Date, including the payment of Rent, notwithstanding Lessor's
election to withhold possession pending receipt of such evidence of insurance.
Further, if Lessee is required to perform any other conditions prior to or
concurrent with the Start Date, the Start Date shall occur but Lessor may elect
to withhold possession until such conditions are satisfied.

2

4. Rent.

4.1. Rent Defined. All monetary obligations of Lessee to Lessor under the
terms of this Lease (except for the Security Deposit) are deemed to be rent
("Rent").

4.2 Payment. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
Rent for any period during the term hereof which is for less than one (1) full
calendar month shall be prorated based upon the actual number of days of said
month. Payment of Rent shall be made to Lessor at its address stated herein or
to such other persons or place as Lessor may from time to time designate in
writing. Acceptance of a payment which is less than the amount then due shall
not be a waiver of Lessor's rights to the balance of such Rent, regardless of
Lessor's endorsement of any check so stating. 

5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee's faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount due Lessor or to reimburse or
compensate Lessor for any liability, expense, loss or damage which Lessor may
suffer or incur by reason thereof. If Lessor uses or applies all or any portion
of said Security Deposit, Lessee shall within ten (10) days after written
request therefor deposit monies with Lessor sufficient to restore said Security
Deposit to the full amount required by this Lease. If the Base Rent increases
during the term of this Lease, Lessee shall, upon written request from Lessor,
deposit additional moneys with Lessor so that the total amount of the Security
Deposit shall at all times bear the same proportion to the increased Base Rent
as the initial Security Deposit bore to the initial Base Rent. Should the Agreed
Use be amended to accommodate a material change in the business of Lessee or to
accommodate a sublessee or assignee, Lessor shall have the right to increase the
Security Deposit to the extent necessary, in Lessor's reasonable judgment, to
account for any increased wear and tear that the Premises may suffer as a result
thereof. If a change in control of Lessee occurs during this Lease and following
such change the financial condition of Lessee is, in Lessor's reasonable
judgment, significantly reduced, Lessee shall deposit such additional monies
with Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on said change in financial condition.
Lessor shall not be required to keep the Security Deposit separate from its
general accounts. Within fourteen (14) days after the expiration or termination
of this Lease, if Lessor elects to apply the Security Deposit only to unpaid
Rent, and otherwise within thirty (30) days after the Premises have been vacated
pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of the
Security Deposit not used or applied by Lessor. No part of the Security Deposit
shall be considered to be held in trust, to bear interest or to be prepayment
for any monies to be paid by Lessee under this Lease.

6. Use.

6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use,
or any other legal use which is reasonably comparable thereto, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to neighboring properties. Lessor shall not
unreasonably withhold or delay its consent to any written request for a
modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements on the Premises or the mechanical or
electrical systems therein, is not significantly more burdensome to the
Premises. If Lessor elects to withhold consent, Lessor shall within five (5)
business days after such request give written notification of same, which notice
shall include an explanation of Lessor's objections to the change in use. 

6.2 Hazardous Substances.

(a) Reportable Uses Require Consent. The term "Hazardous Substance" as
used in this Lease shall mean any product, substance, or waste whose presence,
use, manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, by-products or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee's expense) with all
Applicable Requirements. "Reportable Use" shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use, so long as such use
is in compliance with all Applicable Requirements, is not a Reportable Use, and
does not expose the Premises or neighboring property to any meaningful risk of
contamination or damage or expose Lessor to any liability therefor. In addition,
Lessor may condition its consent to any Reportable Use upon receiving such
additional assurances as Lessor reasonably deems necessary to protect itself,
the public, the Premises and/or the environment against damage, contamination,
injury and/or liability, including, but not limited to, the installation (and
removal on or before Lease expiration or termination) of protective
modifications (such as concrete encasements) and/or increasing the Security
Deposit.

(b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to
believe, that a Hazardous Substance has come to be located in, on, under or
about the Premises, other than as previously consented to by Lessor, Lessee
shall immediately give written notice of such fact to Lessor, and provide Lessor
with a copy of any report, notice, claim or other documentation which it has
concerning the presence of such Hazardous Substance.

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(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under, or about the Premises
(including through the plumbing or sanitary sewer system) and shall promptly, at
Lessee's expense, take all investigatory and/or remedial action reasonably
recommended, whether or not formally ordered or required, for the cleanup of any
contamination of, and for the maintenance, security and/or monitoring of the
Premises or neighboring properties, that was caused or materially contributed to
by Lessee, or pertaining to or involving any Hazardous Substance brought onto
the Premises during the term of this Lease, by or for Lessee, or any third
party.

(d) Lessee Indemnification. Lessee shall indemnify, defend and hold
Lessor, its agents, employees, lenders and ground lessor, if any, harmless from
and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys' and consultants' fees arising out of
or involving any Hazardous Substance brought onto the Premises by or for Lessee,
or any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from adjacent properties). Lessee's obligations shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Lessee, and the cost
of investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease. No termination,
cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous
Substances, unless specifically so agreed by Lessor in writing at the time of
such agreement.

(e) Lessor Indemnification. Lessor and its successors and assigns shall
indemnify, defend, reimburse and hold Lessee, its employees and lenders,
harmless from and against any and all environmental damages, including Lessee's
reasonable attorney's fees, costs of defense, the cost of remediation, which
existed as a result of Hazardous Substances on the Premises prior to the Start
Date or which are caused by the gross negligence or willful misconduct of
Lessor, its agents or employees. Lessor's obligations, as and when required by
the Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease.

(f) Investigations and Remediations. Lessor shall retain the
responsibility and pay for any investigations or remediation measures required
by governmental entities having jurisdiction with respect to the existence of
Hazardous Substances on the Premises prior to the Start Date, unless such
remediation measure is required as a result of Lessee's use (including
"Alterations, as defined in paragraph 7.3(a) below) of the Premises, in which
event Lessee shall be responsible for such payment. Lessee shall cooperate fully
in any such activities at the request of Lessor, including allowing Lessor and
Lessor's agents to have reasonable access to the Premises at reasonable times in
order to carry out Lessor's investigative and remedial responsibilities.

(g) Lessor Termination Option. If a Hazardous Substance Condition occurs
during the term of this Lease, unless Lessee is legally responsible therefor (in
which case Lessee shall make the investigation and remediation thereof required
by the Applicable Requirements and this Lease shall continue in full force and
effect, but subject to Lessor's rights under Paragraph 6.2(d) and Paragraph 13),
Lessor may, at Lessor's option, either (i) investigate and remediate such
Hazardous Substance Condition, if required, as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) if the estimated cost to remediate such condition exceeds twelve
(12) times the then monthly Base Rent or $100,000, whichever is greater, give
written notice to Lessee, within thirty (30) days after receipt by Lessor of
knowledge of the occurrence of such Hazardous Substance Condition, of Lessor's
desire to terminate this Lease as of the date sixty (60) days following the date
of such notice. In the event Lessor elects to give a termination notice, Lessee
may, within ten (10) days thereafter, give written notice to Lessor of Lessee's
commitment to pay the amount by which the cost of the remediation of such
Hazardous Substance Condition exceeds an amount equal to twelve (12) times the
then monthly Base Rent or $100,000, whichever is greater. Lessee shall provide
Lessor with said funds or satisfactory assurance thereof within thirty (30) days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Lessee does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Lessor's
notice of termination.

6.3 Lessee's Compliance with Applicable Requirements. Except as otherwise
provided in this Lease, Lessee shall, at Lessee's sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor's engineers and/or consultants
which relate in any manner to the Premises, without regard to whether said
requirements are now in effect or become effective after the Start Date. Lessee
shall, within ten (10) days after receipt of Lessor's written request, provide
Lessor with copies of all permits and other documents, and other information
evidencing Lessee's compliance with any Applicable Requirements specified by
Lessor, and shall immediately upon receipt, notify Lessor in writing (with
copies of any documents involved) of any threatened or actual claim, notice,
citation, warning, complaint or report pertaining to or involving the failure of
Lessee or the Premises to comply with any Applicable Requirements.

6.4 Inspection; Compliance. Lessor and Lessor's "Lender" (as defined in
Paragraph 30 below) and consultants shall have the right to enter into Premises
at any time, in the case of an emergency, and otherwise at reasonable times, for
the purpose of inspecting the condition of the Premises and for verifying
compliance by Lessee with this Lease. The cost of any such inspections shall be
paid by Lessor, unless a violation of Applicable Requirements, or a
contamination is found to exist or be imminent, or the inspection is requested
or ordered by a governmental authority. In such case, Lessee shall upon request
reimburse Lessor for the cost of such inspections, so long as such inspection is
reasonably related to the violation or contamination.

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7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.

7.1 Lessee's Obligations.

(a) In General. Subject to the provisions of Paragraph 2.2 (Condition),
2.3 (Compliance), 6.3 (Lessee's Compliance with Applicable Requirements), 7.2
(Lessor's Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee
shall, at Lessee's sole expense, keep the Premises, Utility Installations, and
Alterations in good order, condition and repair (whether or not the portion of
the Premises requiring repairs, or the means of repairing the same, are
reasonably or readily accessible to Lessee, and whether or not the need for such
repairs occurs as a result of Lessee's use, any prior use, the elements or the
age of such portion of the Premises), including, but not limited to, all
equipment or facilities, such as plumbing, heating, ventilating,
air-conditioning, electrical, lighting facilities, boilers, pressure vessels,
fire protection system, fixtures, walls (interior and exterior), foundations,
ceilings, roofs, floors, windows, doors, plate glass, skylights, landscaping,
driveways, parking lots, fences, retaining walls, signs, sidewalks and parkways
located in, on, or adjacent to the Premises. Lessee, in keeping the Premises in
good order, condition and repair, shall exercise and perform good maintenance
practices, specifically including the procurement and maintenance of the service
contracts required by Paragraph 7.1(b) below. Lessee's obligations shall include
restorations, replacements or renewals when necessary to keep the Premises and
all improvements thereon or a part thereof in good order, condition and state of
repair. Lessee shall, during the term of this Lease, keep the exterior
appearance of the Building in a first-class condition consistent with the
exterior appearance of other similar facilities of comparable age and size in
the vicinity, including, painting the Building exterior if and upon exercise of
the Option to extend by Lessee.

(b) Service Contracts. Not used.

(c) Replacement. Subject to Lessee's indemnification of Lessor as set
forth in Paragraph 8.7 below, and without relieving Lessee of liability
resulting from Lessee's failure to exercise and perform good maintenance
practices, if the Basic Elements described in Paragraph 7.1(b) cannot be
repaired other than at a cost which is in excess of 50% of the cost of replacing
such Basic Elements, then such Basic Elements shall be replaced by Lessor, and
the cost thereof shall be prorated between the Parties and Lessee shall only be
obligated to pay, each month during the remainder of the term of this Lease, on
the date on which Base Rent is due, an amount equal to the product of
multiplying the cost of such replacement by a fraction, the numerator of which
is one, and the denominator of which is the number of months of the useful life
of such replacement as such useful life is specified pursuant to Federal income
tax regulations or guidelines for depreciation thereof (including interest on
the unamortized balance as is then commercially reasonable in the judgment of
Lessor's accountants), with Lessee reserving the right to prepay its obligation
at any time.

7.2 Lessor's Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 9 (Damage or Destruction) and 14 (Condemnation),
it is intended by the Parties hereto that Lessor have no obligation, in any
manner whatsoever, to repair and maintain the Premises, or the equipment
therein, all of which obligations are intended to be that of the Lessee. It is
the intention of the Parties that the terms of this Lease govern the respective
obligations of the Parties as to maintenance and repair of the Premises, and
they expressly waive the benefit of any statute now or hereafter in effect to
the extent it is inconsistent with the terms of this Lease.

7.3 Utility Installations; Trade Fixtures; Alterations.

(a) Definitions; Consent Required. The term "Utility Installations" refers
to all floor and window coverings, air lines, power panels, electrical
distribution, security and fire protection systems, communication systems,
lighting fixtures, HVAC equipment, plumbing, and fencing in or on the Premises.
The term "Trade Fixtures" shall mean Lessee's machinery and equipment that can
be removed without doing material damage to the Premises. The term "Alterations"
shall mean any modification of the improvements, other than Utility
Installations or Trade Fixtures, whether by addition or deletion. "Lessee Owned
Alterations and/or Utility Installations" are defined as Alterations and/or
Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a). Lessee shall not make any Alterations or Utility
Installations to the Premises without Lessor's prior written consent. Lessee
may, however, make non-structural Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost
thereof during this Lease as extended does not exceed $100,000 in any one year.

(b) Consent. Any Alterations or Utility Installations that Lessee shall
desire to make and which require the consent of the Lessor shall be presented to
Lessor in written form with detailed plans. Consent shall be deemed conditioned
upon Lessee's: (i) acquiring all applicable governmental permits, (ii)
furnishing Lessor with copies of both the permits and the plans and
specifications prior to commencement of the work, and (iii) compliance with all
conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner. Any Alterations or Utility Installations shall be performed
in a workmanlike manner with good and sufficient materials. Lessee shall
promptly upon completion furnish Lessor with as-built plans and specifications.
For work which costs an amount equal to the greater of one month's Base Rent, or
$10,000, Lessor may condition its consent upon Lessee providing a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of such Alteration or Utility Installation and/or upon Lessee's posting an
additional Security Deposit with Lessor.

(c) Indemnification. Lessee shall pay, when due, ail claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use on the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days' notice prior to the commencement of any
work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility. If Lessee shall contest the validity of any such
lien, claim or demand, then Lessee shall, at its sole expense defend and protect
itself, Lessor and the Premises against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof. If Lessor shall require, Lessee shall furnish a surety bond in an
amount equal to one and one-half times the amount

5

of such contested lien, claim or demand, indemnifying Lessor against liability
for the same. If Lessor elects to participate in any such action, Lessee shall
pay Lessor's attorneys' fees and costs.

7.4 Ownership; Removal; Surrender; and Restoration.

(a) Ownership. Subject to Lessor's right to elect ownership as hereinafter
provided, all Alterations and Utility Installations made by Lessee shall be the
property of Lessee, but considered a part of the Premises. Lessor may, at any
time, elect in writing to be the owner of all or any specified part of the
Lessee Owned Alterations and Utility Installations. Unless otherwise instructed
per Paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall, at the expiration or termination of this Lease, become the
property of Lessor and be surrendered by Lessee with the Premises.

(b) Removal. By delivery to Lessee of written notice from Lessor not
earlier than ninety (90) and not later than thirty (30) days prior to the end of
the term of this Lease, Lessor may require that any or all Lessee Owned
Alterations or Utility Installations be removed by the expiration or termination
of this Lease. Lessor may require the removal at any time of all or any part of
any Lessee Owned Alterations or Utility Installations made without the required
consent.

(c) Surrender/Restoration. Lessee shall surrender the Premises by the
Expiration Date or any earlier termination date, with all of the improvements,
parts and surfaces thereof broom clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear excepted. "Ordinary
wear and tear" shall not include any damage or deterioration that would have
been prevented by good maintenance practice. Lessee shall repair any damage
occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee
Owned Alternations and/or Utility Installations, furnishings, and equipment as
well as the removal of any storage tank installed by or for Lessee, and the
removal, replacement, or remediation of any soil, material or groundwater
contaminated by Lessee. Trade Fixtures shall remain the property of Lessee and
shall be removed by Lessee. The failure by Lessee to timely vacate the Premises
pursuant to this Paragraph 7.4(c) without the express written consent of Lessor
shall constitute a holdover under the provisions of Paragraph 26 below.

8. Insurance; Indemnity.

8.1 Payment For Insurance. Lessee shall pay for all insurance required
under Paragraph 8 except to the extent of the cost attributable to liability
insurance carried by Lessor under Paragraph 8.2(b) in excess of $2,000,000 per
occurrence. Premiums for policy periods commencing prior to or extending beyond
the Lease term shall be prorated to correspond to the Lease term. Payment shall
be made by Lessee to Lessor within ten (10) days following receipt of an
invoice.

8.2 Liability Insurance.

(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial
General Liability Policy of Insurance protecting Lessee and Lessor against
claims for bodily injury, personal injury and property damage based upon or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $2,000,000 per
occurrence with an "Additional Insured-Managers or Lessors of Premises
Endorsement" and contain the "Amendment of the Pollution Exclusion Endorsement"
for damage caused by heat, smoke or fumes from a hostile fire. The Policy shall
not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an "insured contract" for the performance of Lessee's indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. All
insurance carried by Lessee shall be primary to and not contributory with any
similar insurance carried by Lessor, whose insurance shall be considered excess
insurance only.

(b) Carried by Lessor. Not used.

8.3 Property Insurance - Building, Improvements and Rental Value.

(a) Building and Improvements. The Insuring Party shall obtain and keep in
force a policy or policies in the name of Lessor, with loss payable to Lessor,
any groundlessor, and to any Lender(s) insuring loss or damage to the Premises.
The amount of such insurance shall be equal to the full replacement cost of the
Premises, as the same shall exist from time to time, or the amount required by
any Lenders, but in no event more than the commercially reasonable and available
insurable value thereof. If Lessor is the Insuring Party, however, Lessee Owned
Alterations and Utility Installations, Trade Fixtures, and Lessee's personal
property shall be insured by Lessee under Paragraph 8.4 rather than by Lessor.
If the coverage is available and commercially appropriate, such policy or
policies shall insure against all risks of direct physical loss or damage
(except the perils of flood and/or earthquake unless required by a Lender),
including coverage for debris removal and the enforcement of any Applicable
Requirements requiring the upgrading, demolition, reconstruction or replacement
of any portion of the Premises as the result of a covered loss. Said policy or
policies shall also contain an agreed valuation provision in lieu of any
coinsurance clause, waiver of subrogation, and inflation guard protection
causing an increase in the annual property insurance coverage amount by a factor
of not less than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located. If
such insurance coverage has a deductible clause, the deductible amount shall not
exceed $1,000 per occurrence, and Lessee shall be liable for such deductible
amount in the event of an Insured Loss.

(b) Rental Value. The Insuring Party shall obtain and keep in force a
policy or policies in the name of Lessor with loss payable to Lessor and any
Lender, insuring the loss of the full Rent for one (1 ) year. Said insurance
shall provide that in the event the Lease is terminated by reason of an insured
loss, the period of indemnity for such coverage shall be extended beyond the
date of the completion of repairs or replacement of the Premises, to provide for
one full year's loss of Rent from the date of any such loss. Said insurance
shall contain an agreed valuation provision in lieu of any coinsurance clause,
and the amount of coverage shall be adjusted annually to reflect the projected
Rent otherwise payable by Lessee, for the next twelve (12) month period. Lessee
shall be liable for any deductible amount in the event of such loss.

6

(c) Adjacent Premises. If the Premises are part of a larger building, or
of a group of buildings owned by Lessor which are adjacent to the Premises, the
Lessee shall pay for any increase in the premiums for the property insurance of
such building or buildings if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.

8.4 Lessee's Property/Business Interruption Insurance.

(a) Property Damage. Lessee shall obtain and maintain insurance coverage
on all of Lessee's personal property, Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such insurance shall be full replacement
cost coverage with a deductible of not to exceed $1,000 per occurrence. The
proceeds from any such insurance shall be used by Lessee for the replacement of
personal property, Trade Fixtures and Lessee Owned Alterations and Utility
Installations. Lessee shall provide Lessor with written evidence that such
insurance is in force.

(b) Business Interruption. Lessee shall obtain and maintain loss of income
and extra expense insurance in amounts as will reimburse Lessee for direct or
indirect loss of earnings attributable to all perils commonly insured against by
prudent lessees in the business of Lessee or attributable to prevention of
access to the Premises as a result of such perils.

(c) No Representation of Adequate Coverage. Lessor makes no representation
that the limits or forms of coverage of insurance specified herein are adequate
to cover Lessee's property, business operations or obligations under this Lease.

8.5 Insurance Policies. Insurance required herein shall be by companies
duly licensed or admitted to transact business in the state where the Premises
are located, and maintaining during the policy term a "General Policyholders
Rating" of at least B+, V, as set forth in the most current issue of "Best's
Insurance Guide", or such other rating as may be required by a Lender. Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates evidencing the
existence and amounts of the required insurance. No such policy shall be
cancelable or subject to modification except after thirty (30) days prior
written notice to Lessor. Lessee shall, at least thirty (30) days prior to the
expiration of such policies, furnish Lessor with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Lessor may order such
insurance and charge the cost thereof to Lessee, which amount shall be payable
by Lessee to Lessor upon demand. Such policies shall be for a term of at least
one year, or the length of the remaining term of this Lease, whichever is less.
If either Party shall fail to procure and maintain the insurance required to be
carried by it, the other Party may, but shall not be required to, procure and
maintain the same.

8.6 Waiver of Subrogation. Without affecting any other rights or remedies,
Lessee and Lessor each hereby release and relieve the other, and waive their
entire right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such releases and waivers is not limited by the amount of
insurance carried or required, or by any deductibles applicable hereto. The
Parties agree to have their respective property damage insurance carriers waive
any right to subrogation that such companies may have against Lessor or Lessee,
as the case may be, so long as the insurance is not invalidated thereby.

8.7 Indemnity. Except for Lessor's gross negligence or willful misconduct,
Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor
and its agents, Lessor's master or ground lessor, partners and Lenders, from and
against any and all claims, loss of rents and/or damages, liens, judgments,
penalties, attorneys' and consultants' fees, expenses and/or liabilities arising
out of, involving, or in connection with, the use and/or occupancy of the
Premises by Lessee. If any action or proceeding is brought against Lessor by
reason of any of the foregoing matters, Lessee shall upon notice defend the same
at Lessee's expense by counsel reasonably satisfactory to Lessor and Lessor
shall cooperate with Lessee in such defense. Lessor need not have first paid any
such claim in order to be defended or indemnified.

8.8 Exemption of Lessor from Liability. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, HVAC or lighting fixtures, or from any other cause,
whether the said injury or damage results from conditions arising upon the
Premises or upon other portions of the Building of which the Premises are a part
or from other sources or places. Lessor shall not be liable for any damages
arising from any act or neglect of any other tenant of Lessor. Notwithstanding
Lessor's negligence or breach of this Lease, Lessor shall under no circumstances
be liable for injury to Lessee's business or for any loss of income or profit
therefrom. 

9. Damage or Destruction.

9.1 Definitions

(a) "Premises Partial Damage" shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alternations and Utility
Installations, which Lessor certifies in writing to Lessee can reasonably be
repaired in the Applicable Period (defined below) or less. Lessor shall notify
Lessee in writing within thirty (30) days from the date of the damage or
destruction as to whether or not the damage is Partial or Total. If Lessor does
not so certify, or if the repairs are not substantially completed within the
Applicable Period, then Lessee may terminate this Lease.

(b) "Premises Total Destruction" shall mean damage or destruction to the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which cannot reasonably be repaired in the Applicable Period or
less. Lessor shall notify Lessee in writing within 30 days from the date of the
damage or destruction as to whether or not the damage is Partial or Total.

7

(c) "Insured Loss" shall mean damage or destruction to improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.

(d) "Replacement Cost" shall mean the cost to repair or rebuild the
improvements owned by Lessor at the time of the occurrence to their condition
existing immediately prior thereto, including demolition, debris removal and
upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation.

(e) "Hazardous Substance Condition" shall mean the occurrence or discovery
of a condition involving the presence of, or a contamination by, a Hazardous
Substance as defined in Paragraph 6.2(a), in, on, or under the Premises.

(f) See Addendum 66 for the definition of "Applicable Period".

9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall exert commercially reasonable efforts to,
at Lessor's expense, repair such damage (but not Lessee's Trade Fixtures or
Lessee Owned Alterations and Utility Installations) as soon as reasonably
possible and this Lease shall continue in full force and effect; provided,
however, that Lessee shall, at Lessor's election, make the repair of any damage
or destruction the total cost to repair of which is $10,000 or less, and, in
such event, Lessor shall make any applicable insurance proceeds available to
Lessee on a reasonable basis for that purpose. Notwithstanding the foregoing, if
the required insurance was not in force or the insurance proceeds are not
sufficient to effect such repair, the Insuring Party shall promptly contribute
the shortage in proceeds (except as to the deductible which is Lessee's
responsibility) as and when required to complete said repairs. In the event,
however, such shortage was due to the fact that, by reason of the unique nature
of the improvements, full replacement cost insurance coverage was not
commercially reasonable and available, Lessor shall have no obligation to pay
for the shortage in insurance proceeds or to fully restore the unique aspects of
the Premises unless Lessee provides Lessor with the funds to cover same, or
adequate assurance thereof, within ten (10) days following receipt of written
notice of such shortage and request therefor. If Lessor receives said funds or
adequate assurance thereof within said ten (10) day period, the party
responsible for making the repairs shall complete them as soon as reasonably
possible and this Lease shall remain in full force and effect (subject to
Lessee's right to terminate the Lease if repairs are not substantially completed
within the Applicable Period). If such funds or assurance are not received,
Lessor may nevertheless elect by written notice to Lessee within ten (10) days
thereafter to: (i) make such restoration and repair as is commercially
reasonable with Lessor paying any shortage in proceeds, in which case this Lease
shall remain in full force and effect, or have this Lease terminate thirty (30)
days thereafter. Lessee shall not be entitled to reimbursement of any funds
contributed by Lessee to repair any such damage or destruction. Premises Partial
Damage due to flood or earthquake shall be subject to Paragraph 9.3,
notwithstanding that there may be some insurance coverage, but the net proceeds
of any such insurance shall be made available for the repairs if made by either
Party.

9.3 Partial Damage - Uninsured Lose. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense),
Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect (subject to Lessee's right to terminate the Lease if repairs are not
substantially completed within the Applicable Period), or (ii) terminate this
Lease by giving written notice to Lessee within thirty (30) days after receipt
by Lessor of knowledge of the occurrence of such damage. Such termination shall
be effective sixty (60) days following the date of such notice. In the event
Lessor elects to terminate this Lease, Lessee shall have the right within ten
(10) days after receipt of the termination notice to give written notice to
Lessor of Lessee's commitment to pay for the repair of such damage without
reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within thirty (30) days after making such
commitment. In such event this Lease shall continue in full force and effect,
and Lessor shall proceed to make such repairs as soon as reasonably possible
after the required funds are available. If Lessee does not make the required
commitment, this Lease shall terminate as of the date specified in the
termination notice.

9.4 Total Destruction. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs, this Lease shall (at the election of either
party) terminate as of the date of such Destruction. If the damage or
destruction was caused by the gross negligence or willful misconduct of Lessee,
Lessor shall have the right to recover Lessor's damages from Lessee, except as
provided in Paragraph 8.6.

9.5 Damage Near End of Term. If at any time during the last six (6) months
of this Lease there is damage for which the cost to repair exceeds one (1)
month's Base Rent, whether or not an Insured Loss, Lessor may terminate this
Lease effective sixty (60) days following the date of occurrence of such damage
by giving a written termination notice to Lessee within thirty (30) days after
the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee
at that time has an exercisable option to extend this Lease or to purchase the
Premises, then Lessee may preserve this Lease by, (a) exercising such option and
(b) providing Lessor with any shortage in insurance proceeds (or adequate
assurance thereof) needed to make the repairs on or before the earlier of (i)
the date which is ten days after Lessee's receipt of Lessor's written notice
purporting to terminate this Lease, or (ii) the day prior to the date upon which
such option expires. If Lessee duly exercises such option during such period and
provides Lessor with funds (or adequate assurance thereof) to cover any shortage
in insurance proceeds, Lessor shall, at Lessor's commercially reasonable
expense, repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during such period, then this Lease shall
terminate on the date specified in the termination notice and Lessee's option
shall be extinguished.

8

9.6 Abatement of Rent; Lessee's Remedies.

(a) Abatement. In the event of Premises Partial Damage or Premises Total
Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.

(b) Remedies. If Lessor shall be obligated to repair or restore the
Premises and does not commence, in a substantial and meaningful way, such repair
or restoration within ninety (90) days after such obligation shall accrue,
Lessee may, at any time prior to the commencement of such repair or restoration,
give written notice to Lessor and to any Lenders of which Lessee has actual
notice, of Lessee's election to terminate this Lease on a date not less than
sixty (60) days following the giving of such notice. If Lessee gives such notice
and such repair or restoration is not commenced within thirty (30) days
thereafter, this Lease shall terminate as of the date specified in said notice.
If the repair or restoration is commenced within said thirty (30) days, this
Lease shall continue in full force and effect. "Commence" shall mean either the
unconditional authorization of the preparation of the required plans, or the
beginning of the actual work on the Premises, whichever first occurs.

9.7 Termination-Advance Payments. Upon termination of this Lease pursuant
to Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor. Lessor shall, in addition, return to Lessee so much of Lessee's Security
Deposit as has not been, or is not then required to be, used by Lessor.

9.8 Waive Statutes. Lessor and Lessee agree that the terms of this Lease
shall govern the effect of any damage to or destruction of the Premises with
respect to the termination of this Lease and hereby waive the provisions of any
present or future statute to the extent inconsistent herewith.

10. Real Property Taxes.

10.1 Definition of "Real Property Taxes." As used herein, the term "Real
Property Taxes" shall include any form of assessment; real estate, general,
special, ordinary or extraordinary, or rent levy or tax (other than inheritance,
personal income or estate taxes); improvement bond; and/or license fee imposed
upon or levied against any legal or equitable interest of Lessor in the
Premises, Lessor's right to other income therefrom, and/or Lessor's business of
leasing, by any authority having the direct or indirect power to tax and where
the funds are generated with reference to the Building address and where the
proceeds so generated are to be applied by the city, county or other local
taxing authority of a jurisdiction within which the Premises are located. The
term "Real Property Taxes" shall also include any tax, fee, levy, assessment or
charge, or any increase therein, imposed by reason of events occurring during
the term of this Lease, including but not limited to, a change in the ownership
of the Premises.

10.2

(a) Payment of Taxes. Lessee shall pay the Real Property Taxes applicable
to the Premises during the term of this Lease. Subject to Paragraph 10.2(b), all
such payments shall be made at least ten (10) days prior to any delinquency
date. Lessee shall promptly furnish Lessor with satisfactory evidence that such
taxes have been paid. If any such taxes shall cover any period of time prior to
or after the expiration or termination of this Lease, Lessee's share of such
taxes shall be prorated to cover only that portion of the tax bill applicable to
the period that this Lease is in effect, and Lessor shall reimburse Lessee for
any overpayment. If Lessee shall fail to pay any required Real Property Taxes,
Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor
therefor upon demand.

(b) Advance Payment. In the event Lessee incurs a late charge on any Rent
payment, Lessor may, at Lessor's option, estimate the current Real Property
Taxes, and require that such taxes be paid in advance to Lessor by Lessee,
either: (i) in a lump sum amount equal to the installment due, at least twenty
(20) days prior to the applicable delinquency date, or (ii) monthly in advance
with the payment of the Base Rent. If Lessor elects to require payment monthly
in advance, the monthly payment shall be an amount equal to the amount of the
estimated installment of taxes divided by the number of months remaining before
the month in which said installment becomes delinquent. When the actual amount
of the applicable tax bill is known, the amount of such equal monthly advance
payments shall be adjusted as required to provide the funds needed to pay the
applicable taxes. If the amount collected by Lessor is insufficient to pay such
Real Property Taxes when due, Lessee shall pay Lessor, upon demand, such
additional sums as are necessary to pay such obligations. All moneys paid to
Lessor under this Paragraph may be intermingled with other moneys of Lessor and
shall not bear interest. In the event of a Breach by Lessee in the performance
of its obligations under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may at the option of Lessor, be treated
as an additional Security Deposit.

10.3 Joint Assessment. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the Real Property Taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be conclusively determined by Lessor from the respective
valuations assigned in the assessor's work sheets or such other information as
may be reasonably available.

10.4 Personal Property Taxes. Lessee shall pay, prior to delinquency, all
taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee. When possible, Lessee shall cause such property to be assessed and
billed separately from the real property of Lessor. If any of Lessee's said
personal property shall be assessed with Lessor's real property, Lessee shall
pay Lessor the taxes attributable to Lessee's property within ten (10) days
after receipt of a written statement. 

11. Utilities. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately

9

metered to Lessee, Lessee shall pay a reasonable proportion, to be determined by
Lessor, of all charges jointly metered.

12. Assignment and Subletting.

12.1 Lessor's Consent Required.

(a) Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, "assign or assignment") or sublet all or any
part of Lessee's interest in this Lease or in the Premises without Lessor's
prior written consent.

(b) A change in the control of Lessee shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of twenty-five percent
(25%) or more of the voting control of Lessee shall constitute a change in
control for this purpose.

(c) The involvement of Lessee or its assets in any transaction, or series
of transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buy-out or otherwise), whether or not a formal assignment or
hypothecation of this Lease or Lessee's assets occurs, which results or will
result in a reduction of the Net Worth of Lessee by an amount greater than
twenty-five percent (25%) of such Net Worth as it was represented at the time of
the execution of this Lease or at the time of the most recent assignment to
which Lessor has consented, or as it exists immediately prior to said
transaction or transactions constituting such reduction, whichever was or is
greater, shall be considered an assignment of this Lease to which Lessor may
withhold its consent. "Net Worth of Lessee" shall mean the net worth of Lessee
(excluding any guarantors) established under generally accepted accounting
principles.

(d) An assignment or subletting without consent shall, at Lessor's option,
be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach, Lessor may
either: (i) terminate this Lease, or (ii) upon thirty (30) days written notice,
increase the monthly Base Rent to one hundred ten percent (110%) of the Base
Rent then in effect. Further, in the event of such Breach and rental adjustment,
(i) the purchase price of any option to purchase the Premises held by Lessee
shall be subject to similar adjustment to one hundred ten percent (110%) of the
price previously in effect, and (ii) all fixed and non-fixed rental adjustments
scheduled during the remainder of the Lease term shall be increased to One
Hundred Ten Percent (110%) of the scheduled adjusted rent.

(e) Lessee's remedy for any breach of Paragraph 12.1 by Lessor shall be
limited to compensatory damages and/or injunctive relief.

12.2 Terms and Conditions Applicable to Assignment and Subletting.

(a) Regardless of Lessor's consent, any assignment or subletting shall
not: (i) be effective without the express written assumption by such assignee or
subleases of the obligations of Lessee under this Lease, (ii) release Lessee of
any obligations hereunder, or (iii) alter the primary liability of Lessee for
the payment of Rent or for the performance of any other obligations to be
performed by Lessee.

(b) Lessor may accept Rent or performance of Lessee's obligations from any
person other than Lessee pending approval or disapproval of an assignment.
Neither a delay in the approval or disapproval of such assignment nor the
acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor's right to exercise its remedies for Lessee's Default or Breach.

(c) Lessor's consent to any assignment or subletting shall not constitute
a consent to any subsequent assignment or subletting.

(d) In the event of any Default or Breach by Lessee, Lessor may proceed
directly against Lessee, any Guarantors or anyone else responsible for the
performance of Lessee's obligations under this Lease, including any assignee or
sublessee, without first exhausting Lessor's remedies against any other person
or entity responsible therefore to Lessor, or any security held by Lessor.

(e) Each request for consent to an assignment or subletting shall be in
writing, accompanied by information relevant to Lessor's determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $1,000 or
ten percent (10%) of the current monthly Base Rent applicable to the portion of
the Premises which is the subject of the proposed assignment or sublease,
whichever is greater, as consideration for Lessor's considering and processing
said request. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested.

(f) Any assignee of, or sublessee under, this Lease shall, by reason of
accepting such assignment or entering into such sublease, be deemed to have
assumed and agreed to conform and comply with each and every term covenant,
condition and obligation herein to be observed or performed by Lessee during the
term of said assignment or sublease, other than such obligations as are contrary
to or inconsistent with provisions of an assignment or sublease to which Lessor
has specifically consented to in writing.

12.3 Additional Terms and Conditions Applicable to Subletting. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest
in all Rent payable on any sublease, and Lessor may collect such Rent and apply
same toward Lessee's obligations under this Lease; provided, however that until
a Breach shall occur in the performance of Lessee's obligations, Lessee may
collect said Rent. Lessor shall not, by reason of the foregoing or any
assignment of such sublease, nor by reason of the collection of Rent, be deemed
liable to the sublessee for any failure of Lessee to perform and comply with any
of Lessee's obligations to such sublessee. Lessee hereby irrevocably authorizes
and directs any such sublessee, upon receipt of a written notice from Lessor
stating that a Breach exists in the performance of Lessee's obligations under
this Lease, to pay to Lessor all Rent due and to become due under the sublease.
Sublessee shall rely upon any such

10

notice from Lessor and shall pay all Rents to Lessor without any obligation or
right to inquire as to whether such Breach exists, notwithstanding any claim
from Lessee to the contrary.

(b) In the event of a Breach by Lessee, Lessor may, at its option, require
sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor.

(c) Any matter requiring the consent of the sublessor under a sublease
shall also require the consent of Lessor.

(d) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.

(e) Lessor shall deliver a copy of any notice of Default or Breach by
Lessee to the sublessee, who shall have the right to cure the Default of Lessee
within the grace period, if any, specified in such notice. The sublessee shall
have a right of reimbursement and offset from and against Lessee for any such
Defaults cured by the sublessee. 

13. Default; Breach; Remedies.

13.1 Default; Breach. A "Default" is defined as a failure by the Lessee to
comply with or perform any of the terms, covenants, conditions or rules under
this Lease. A "Breach" is defined as the occurrence of one or more of the
following Defaults, and the failure of Lessee to cure such Default within any
applicable grace period:

(a) The abandonment of the Premises; or the vacating of the Premises
without providing a commercially reasonable level of security, or where the
coverage of the property insurance described in Paragraph 8.3 is jeopardized as
a result thereof, or without providing reasonable assurances to minimize
potential vandalism.

(b) The failure of Lessee to make any payment of Rent or any Security
Deposit required to be made by Lessee hereunder, whether to Lessor or to a third
party, when due, to provide reasonable evidence of insurance or surety bond, or
to fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of five (5) business days
following written notice to Lessee.

(c) The failure by Lessee to provide (i) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) a Tenancy
Statement, (v) a requested subordination, (vi) evidence concerning any guaranty
and/or Guarantor, (vii) any document requested under Paragraph 42 (easements),
or (viii) any other documentation or information which Lessor may reasonably
require of Lessee under the terms of this Lease, where any such failure
continues for a period of fifteen (15) days following written notice to Lessee.

(d) A Default by Lessee as to the terms, covenants, conditions or
provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
other than those described in subparagraphs 13.1 (a), (b) or (c), above, where
such Default continues for a period of thirty (30) days after written notice;
provided, however, that if the nature of Lessee's Default is such that more than
thirty (30) days are reasonably required for its cure, then it shall not be
deemed to be a Breach if Lessee commences such cure within said thirty (30) day
period and thereafter diligently prosecutes such cure to completion.

(e) The occurrence of any of the following events: (i) the making of any
general arrangement or assignment for the benefit of creditors; (ii) becoming a
"debtor" as defined in 11 U.S.C. ss. 101 or any successor statute thereto
(unless, in the case of a petition filed against Lessee, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where possession is not restored to Lessee
within thirty (30) days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Lessee's assets located at the Premises or of
Lessee's interest in this Lease, where such seizure is not discharged within
thirty (30) days; provided, however, in the event that any provision of this
subparagraph (e) is contrary to any applicable law, such provision shall be of
no force or effect, and not affect the validity of the remaining provisions.

(f) The discovery that any financial statement of Lessee or of any
Guarantor given to Lessor was materially false.

(g) If the performance of Lessee's obligations under this Lease is
guaranteed: (i) the death of a Guarantor, (ii) the termination of a Guarantor's
liability with respect to this Lease other than in accordance with the terms of
such guaranty, (iii) a Guarantor's becoming insolvent or the subject of a
bankruptcy filing, (iv) a Guarantor's refusal to honor the guaranty, or (v) a
Guarantor's breach of its guaranty obligation on an anticipatory basis, and
Lessee's failure, within sixty (60) days following written notice of any such
event, to provide written alternative assurance or security, which, when coupled
with the then existing resources of Lessee, equals or exceeds the combined
financial resources of Lessee and the Guarantors that existed at the time of
execution of this Lease.

13.2 Remedies. If Lessee fails to perform any of its affirmative duties or
obligations, within ten (10) days after written notice (or in case of an
emergency, without notice), Lessor may, at its option, perform such duty or
obligation on Lessee's behalf, including but not limited to the obtaining of
reasonably required bonds, insurance policies, or governmental licenses, permits
or approvals. The costs and expenses of any such performance by Lessor shall be
due and payable by Lessee upon receipt of invoice therefor. If any check given
to Lessor by Lessee shall not be honored by the bank upon which it is drawn,
Lessor, at its option, may require all future payments to be made by Lessee to
be by cashier's check. In the event of a Breach, Lessor may, with or without
further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:

(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession to Lessor. In such event Lessor shall be entitled to
recover from Lessee: (i) the unpaid Rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time

11

of award exceeds the amount of such rental loss that the Lessee proves could
have been reasonably avoided; (iii) the worth at the time of award of the amount
by which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys' fees, and that
portion of any leasing commission paid by Lessor in connection with this Lease
applicable to the unexpired term of this Lease. The worth at the time of award
of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank of the District within which the Premises are located
at the time of award plus one percent (1%). Efforts by Lessor to mitigate
damages caused by Lessee's Breach of this Lease shall not waive Lessor's right
to recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

(b) Continue the Lease and Lessee's right to possession and recover the
Rent as it becomes due, in which event Lessee may sublet or assign, subject only
to reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessor's interests, shall not
constitute a termination of the Lessee's right to possession.

(c) Pursue any other remedy now or hereafter available under the laws or
judicial decisions of the state wherein the Premises are located. The expiration
or termination of this Lease and/or termination of Lessee's right to possession
shall not relieve Lessee from liability under any indemnity provisions of this
Lease as to matters occurring or accruing during the term hereof or by reason of
Lessee's occupancy of the Premises.

13.3 Inducement Recapture. Any agreement for free or abated rent or other
charges, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee's entering into this Lease,
all of which concessions are hereinafter referred to as "Inducement Provisions"
shall be deemed conditioned upon Lessee's full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee.
The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by Lessor
at the time of such acceptance.

13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
of Rent will cause Lessor to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within ten (10) days after such amount shall be
due, then, without any requirement for notice to Lessee, Lessee shall pay to
Lessor a one-time late charge equal to five percent (5%) of each such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of such late
payment. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of Lessee's Default or Breach with respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder.
In the event that a late charge is payable hereunder, whether or not collected,
for three (3) consecutive installments of Base Rent, then notwithstanding any
provision of this Lease to the contrary, Base Rent shall, at Lessor's option,
become due and payable quarterly in advance.

13.5 Interest. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due as to scheduled payments (such as Base
Rent) or within thirty (30) days following the date on which it was due for
non-scheduled payment, shall bear interest from the date when due, as to
scheduled payments, or the thirty-first (31st) day after it was due as to
non-scheduled payments. The interest ("Interest") charged shall be equal to the
prime rate reported in the Wall Street Journal as published closest prior to the
date when due plus four percent (4%), but shall not exceed the maximum rate
allowed by law. Interest is payable in addition to the potential late charge
provided for in Paragraph 13.4. 

13.6 Breach by Lessor.

(a) Notice of Breach. Lessor shall not be deemed in breach of this Lease
unless Lessor fails within a reasonable time to perform an obligation required
to be performed by Lessor. For purposes of this Paragraph, a reasonable time
shall in no event be less than thirty (30) days after receipt by Lessor, and any
Lender whose name and address shall have been furnished Lessee in writing for
such purpose, of written notice specifying wherein such obligation of Lessor has
not been performed; provided, however, that if the nature of Lessor's obligation
is such that more than thirty (30) days are reasonably required for its
performance, then Lessor shall not be in breach if performance is commenced
within such thirty (30) day period and thereafter diligently pursued to
completion.

(b) Performance by Lessee on Behalf of Lessor. In the event that neither
Lessor nor Lender cures said breach within thirty (30) days after receipt of
said notice, or if having commenced said cure they do not diligently pursue it
to completion, then Lessee may elect to cure said breach at Lessee's expense and
offset from

12

Rent an amount equal to the greater of one month's Base Rent or the Security
Deposit, and to pay an excess of such expense under protest, reserving Lessee's
right to reimbursement from Lessor. Lessee shall document the cost of said cure
and supply said documentation to Lessor. 

14. Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively "Condemnation"), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than ten percent (10%) of any building portion of the
premises, or more than twenty-five percent (25%) of the land area portion of the
premises not occupied by any building, is taken by Condemnation, Lessee may, at
Lessee's option, to be exercised in writing within ten (10) days after Lessor
shall have given Lessee written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this Lease as of the date the condemning authority takes
such possession. If Lessee does not terminate this Lease in accordance with the
foregoing, this Lease shall remain in full force and effect as to the portion of
the Premises remaining, except that the Base Rent shall be reduced in proportion
to the reduction in utility of the Premises caused by such Condemnation.
Condemnation awards and/or payments shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold, the value of the part taken, or for severance damages; provided,
however, that Lessee shall be entitled to any compensation for Lessee's
relocation expenses, loss of business goodwill and/or Trade Fixtures, without
regard to whether or not this Lease is terminated pursuant to the provisions of
this Paragraph. All Alterations and Utility Installations made to the Premises
by Lessee, for purposes of Condemnation only, shall be considered the property
of the Lessee and Lessee shall be entitled to any and all compensation which is
payable therefor. In the event that this Lease is not terminated by reason of
the Condemnation, Lessor shall repair any damage to the Premises caused by such
Condemnation.

15. Brokers' Fee.

15.1 Additional Commission. Not used.

15.2 Assumption of Obligations. Not used.

15.3 Representations and Indemnities of Broker Relationships. Lessee and
Lessor each represent and warrant to the other that it has had no dealings with
any person, firm, broker or finder (other than the Brokers, if any) in
connection with this Lease, and that no one other than said named Brokers is
entitled to any commission or finder's fee in connection herewith. Lessee and
Lessor do each hereby agree to indemnify, protect, defend and hold the other
harmless from and against liability for compensation or charges which may be
claimed by any such unnamed broker, finder or other similar party by reason of
any dealings or actions of the indemnifying Party, including any costs,
expenses, attorneys' fees reasonably incurred with respect thereto.

16. Estoppel Certificates.

(a) Each Party (as "Responding Party") shall within ten (10) days after
written notice from the other Party (the "Requesting Party") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "Estoppel Certificate" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by Requesting
Party.

(b) If the Responding Party shall fail to execute or deliver the Estoppel
Certificate within such ten day period, the Requesting Party may execute an
Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party's performance, and (iii)
if Lessor is the Requesting Party, not more than one month's rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party's Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate.

(c) If Lessor desires to finance, refinance, or sell the Premises, or any
part thereof, Lessee and all Guarantors shall deliver to any potential lender or
purchaser designated by Lessor such financial statements as may be reasonably
required by such lender or purchaser, including but not limited to Lessee's
financial statements for the past three (3) years. All such financial statements
shall be received by Lessor and such lender or purchaser in confidence and shall
be used only for the purposes herein set forth.

17. Definition of Lessor. The term "Lessor" as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such
transfer or assignment and delivery of the Security Deposit, as aforesaid, the
prior Lessor shall be relieved of all liability with respect to the obligations
and/or covenants under this Lease thereafter to be performed by the Lessor.
Subject to the foregoing, the obligations and/or covenants in this Lease to be
performed by the Lessor shall be binding only upon the Lessor as hereinabove
defined. Notwithstanding the above, and subject to the provisions of Paragraph
20 below, the original Lessor under this Lease, and all subsequent holders of
the Lessor's interest in this Lease shall remain liable and responsible with
regard to the potential duties and liabilities of Lessor pertaining to Hazardous
Substances as outlined in Paragraph 6 above. 

18. Severability. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof. 

19. Days. Unless otherwise specifically indicated to the contrary, the word
"days" as used in this Lease shall mean and refer to calendar days.

20. Limitation on Liability. Subject to the provisions of Paragraph 17 above,
the obligations of Lessor under this Lease shall not constitute personal
obligations of Lessor, the individual partners of Lessor or its or their
individual partners, directors, officers or shareholders, and Lessee shall look
to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse

13

against the individual partners of Lessor, or its or their individual partners,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.

21. Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party. The liability (including court costs and Attorneys'
fees), of any Broker with respect to negotiation, execution, delivery or
performance by either Lessor or Lessee under this Lease or any amendment or
modification hereto shall be limited to an amount up to the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation
on each Broker's liability shall not be applicable to any gross negligence or
willful misconduct of such Broker. 

23. Notices.

23.1 Notice Requirements. All notices required or permitted by this Lease
shall be in writing and may be delivered in person (by hand or by courier) or
may be sent by regular, certified or registered mail or U.S. Postal Service
Express Mail, with postage prepaid, or by facsimile transmission, and shall be
deemed sufficiently given if served in a manner specified in this Paragraph 23.
The addresses noted adjacent to a Party's signature on this Lease shall be that
Party's address for delivery or mailing of notices. Either Party may by written
notice to the other specify a different address for notice, except that upon
Lessee's taking possession of the Premises, the Premises shall constitute
Lessee's address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.

23.2 Date of Notice. Any notice sent by registered or certified mail,
return receipt requested, shall be deemed given on the date of delivery shown on
the receipt card, or if no delivery date is shown, the postmark thereon. If sent
by regular mail the notice shall be deemed given forty-eight (48) hours after
the same is addressed as required herein and mailed with postage prepaid.
Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given twenty-four (24) hours after
delivery of the same to the Postal Service or courier. Notices transmitted by
facsimile transmission or similar means shall be deemed delivered upon telephone
confirmation of receipt, provided a copy is also delivered via delivery or mail.
If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day. 

24. Waivers. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof. Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. The acceptance of Rent by
Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by
Lessee may be accepted by Lessor on account of moneys or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lessee in
connection therewith, which such statements and/or conditions shall be of no
force or effect whatsoever unless specifically agreed to in writing by Lessor at
or before the time of deposit of such payment. 

25. Recording. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees applicable thereto. 

26. No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
one hundred fifty percent (150%) of the Base Rent applicable during the month
immediately preceding the expiration or termination. Nothing contained herein
shall be construed as consent by Lessor to any holding over by Lessee. 

27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity. 

28. Covenants and Conditions; Construction of Agreement. All provisions of this
Lease to be observed or performed by Lessee are both covenants and conditions.
In construing this Lease, all headings and titles are for the convenience of the
parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall not be construed as if prepared by one of the parties, but rather
according to its fair meaning as a whole, as if both parties had prepared it.

29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located. 

30. Subordination; Attornment; Non-Disturbance.

30.1 Subordination. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "Security Device"), now or
hereafter placed upon the Premises, to any and all advances made on the security
thereof, and to all renewals, modifications, and extensions thereof. Lessee
agrees that the holders of any such Security Devices (in this Lease together
referred to as "Lessor's Lender') shall have no liability or obligation to
perform any of the obligations of Lessor under this Lease. Any Lender may elect
to have this Lease and/or any Option granted hereby superior to the lien of its
Security Device by giving written notice thereof to Lessee, whereupon this Lease
and such

14

Options shall be deemed prior to such Security Device, notwithstanding the
relative dates of the documentation or recordation thereof.

30.2 Attornment. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall (i) be liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one (1) month's rent.

30.3 Non-Disturbance. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving a commercially reasonable non-disturbance
agreement (a "Non-Disturbance Agreement") from the Lender which Non-Disturbance
Agreement provides that Lessee's possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long
as Lessee is not in Breach hereof and attorns to the record owner of the
Premises. Further, within sixty (60) days after the execution of this Lease,
Lessor shall use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said sixty (60) days, then Lessee may, at
Lessee's option, directly contact Lessor's lender and attempt to negotiate for
the execution and delivery of a Non-Disturbance Agreement.

30.4 Self-Executing. The agreements contained in this Paragraph 30 shall
be effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

31. Attorneys' Fees. If any Party or Broker brings an action or proceeding
involving the Premises to enforce the terms hereof or to declare rights
hereunder, the Prevailing Party (as hereafter defined) in any such proceeding,
action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such
fees may be awarded in the same suit or recovered in a separate suit, whether or
not such action or proceeding is pursued to decision or judgment. The term,
"Prevailing Party" shall include, without limitation, a Party or Broker who
substantially obtains or defeats the relief sought, as the case may be, whether
by compromise, settlement, judgment, or the abandonment by the other Party or
Broker of its claim or defense. The attorneys' fees award shall not be computed
in accordance with any court fee schedule, but shall be such as to fully
reimburse all attorneys' fees reasonably incurred. In addition, Lessor shall be
entitled to attorneys' fees, costs and expenses incurred in the preparation and
service of notices of Default and consultations in connection therewith, whether
or not a legal action is subsequently commenced in connection with such Default
or resulting Breach. 

32. Lessor's Access; Showing Premises; Repairs. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times for the purpose of showing the same to
prospective purchasers, lenders, or lessees, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary.
All such activities shall be without abatement of rent or liability to Lessee.
Lessor may at any time place on the Premises any ordinary "For Sale" signs and
Lessor may during the last six (6) months of the term hereof place on the
Premises any ordinary "For Lease" signs. Lessee may at any time place on or
about the Premises any ordinary "For Sublease" sign. 

33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises without Lessor's prior written consent. Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
permit an auction. 

34. Signs. Except for ordinary "For Sublease" signs, Lessee shall not place any
sign upon the Premises without Lessor's prior written consent. All signs must
comply with all Applicable Requirements.

35. Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor's failure within ten (10) days following any such
event to elect to the contrary by written notice to the holder of any such
lesser interest, shall constitute Lessors election to have such event constitute
the termination of such interest. 

36. Consents. Except as otherwise provided herein, wherever in this Lease the
consent of a Party is required to an act by or for the other Party, such consent
shall not be unreasonably withheld or delayed. Lessor's actual reasonable costs
and expenses (including but not limited to architects', attorneys', engineers'
end other consultants' fees) incurred in the consideration of, or response to, a
request by Lessee for any Lessor consent, including but not limited to consents
to an assignment, a subletting or the presence or use of a Hazardous Substance,
shall be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor's consent to any act, assignment or subletting shall not
constitute an acknowledgment that no Default or Breach by Lessee of this Lease
exists, nor shall such consent be deemed a waiver of any then existing Default
or Breach, except as may be otherwise specifically stated in writing by Lessor
at the time of such consent. The failure to specify herein any particular
condition to Lessor's consent shall not preclude the imposition by Lessor at the
time of consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail
within ten (10) business days following such request.

15

37. Guarantor.

37.1 Execution. The Guarantors, if any, shall each execute a guaranty in
the form most recently published by the American Industrial Real Estate
Association, and each such Guarantor shall have the same obligations as Lessee
under this Lease.

37.2 Default. It shall constitute a Default of the Lessee if any Guarantor
fails or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor's behalf to
obligate Guarantor, and in the case of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) a Tenancy Statement, or (d)
written confirmation that the guaranty is still in effect. 

38. Quiet Possession. Subject to payment by Lessee of the Rent and performance
of all of the covenants, conditions and provisions on Lessee's part to be
observed and performed under this Lease, Lessee shall have quiet possession and
quiet enjoyment of the Premises during the term hereof.

39. Options.

39.1 Definition. "Option" shall mean: (a) the right to extend the term of
or renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (b) not used; (c) not used.

39.2 Options Personal To Original Lessee. Each Option granted to Lessee in
this Lease is personal to the original Lessee, and cannot be assigned or
exercised by anyone other than said original Lessee and only while the original
Lessee is in full possession of the Premises and, if requested by Lessor, with
Lessee certifying that Lessee has no intention of thereafter assigning or
subletting.

39.3 Multiple Options. In the event that Lessee has any multiple Options
to extend or renew this Lease, a later Option cannot be exercised unless the
prior Options have been validly exercised.

39.4 Effect of Default on Options.

(a) Lessee shall have no right to exercise an Option: (i) during the
period commencing with the giving of any notice of monetary Default and
continuing until said monetary Default is cured, (ii) during the period of time
any Rent is unpaid (without regard to whether notice thereof is given Lessee),
(iii) during the time Lessee is in monetary Breach of this Lease, or (iv) in the
event that Lessee has been given three (3) or more notices of separate monetary
Default, whether or not the monetary Defaults are cured, during the twelve (12)
month period immediately preceding the exercise of the Option.

(b) The period of time within which an Option may be exercised shall not
be extended or enlarged by reason of Lessee's inability to exercise an Option
because of the provisions of Paragraph 39.4(a).

(c) An Option shall terminate and be of no further force or effect,
notwithstanding Lessee's due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term, (i) Lessee fails to
pay Rent for a period of thirty (30) days after such Rent becomes due (without
any necessity of Lessor to give notice thereof), (ii) Lessor gives to Lessee
three (3) or more notices of separate Default during any twelve (12) month
period, whether or not the Defaults are cured, or (iii) if Lessee commits a
Breach of this Lease. 

40. Multiple Buildings. If the Premises are a part of a group of buildings
controlled by Lessor, Lessee agrees that it will observe all reasonable rules
and regulations which Lessor may make from time to time for the management,
safety, and care of said properties, including the care and cleanliness of the
grounds and including the parking, loading and unloading of vehicles, and that
Lessee will pay its fair share of common expenses incurred in connection
therewith.

41. Security Measures. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.

42. Reservations. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.

43. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay. 

44. Authority. If either Party hereto is a corporation, trust, limited liability
company, partnership, or similar entity, each individual executing this Lease on
behalf of such entity represents and warrants that he or she is duly authorized
to execute and deliver this Lease on its behalf. Each party shall, within thirty
(30) days after request, deliver to the other party satisfactory evidence of
such authority.

45. Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.

46. Offer. Preparation of this Lease by either Party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto. 

47. Amendments. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.

16

48. Multiple Parties. If more than one person or entity is named herein as
either Lessor or Lessee, such multiple Parties shall have joint and several
responsibility to comply with the terms of this Lease. 

49. Mediation and Arbitration of Disputes. An Addendum requiring the Mediation
and/or the Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease |_| is |X| is not attached to this Lease.

LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY,
LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT
RELATES. THE PARTIES ARE URGED TO:

1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 

2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES,THE ZONING OF THE PREMISES,THE STRUCTURAL
INTEGRITY,THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY
OF THE PREMISES FOR LESSEE'S INTENDED USE.

WARNING: IF THE PREMISES IS LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES IS LOCATED.

The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.

By LESSOR:                          By LESSEE:

ROSE VENTURES V, INC.,              FAIRCHILD TECHNOLOGIES USA, INC.
a California corporation            a __________________ corporation

By: /s/ Stephen P. Diamond          By: /s/ William Ward
-------------------------           --------------------------
Stephen P. Diamond                  William Ward
President                           President

By: /s/ Thomas G. Haury
-------------------------
Thomas G. Haury

/s/ Carleen S. Haury
-------------------------
Carleen S. Haury

Individual Owners
3600 Pruneridge Avenue, Suite 370
Santa Clara, CA 95051
(408) 247-1111

NOTE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the most
current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 So. Flower
Street, Suite 600, Los Angeles, California 90017. (213) 687-8777. Fax No. (213)
687-8616

Address for notices to Lessee: Fairchild Technologies, Inc. (47613 Warm Springs
Blvd., Freemont, CA 94539; Tel.: 510-659-8370; FAX: 510-659-9407; Attention:
President); with a copy to The Fairchild Corporation (Hand Delivery: Dulles
Airport, 300 West Service Rd., Suite 400, Chantilly, VA; Mail: P.O. Box 10803,
Chantilly, VA 20153; Tel: 703-478-5800; Fax: 703-478-5767; Attention: General
Counsel).

17

ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL
SINGLE-TENANT LEASE - NET

This is an Addendum to that certain Standard Industrial/Commercial
Single-Tenant Lease - Net ("Lease") dated September 19, 1997, between ROSE
VENTURES V., INC., THOMAS G. HAURY and CARLEEN S. HAURY, as Lessor, and
FAIRCHILD TECHNOLOGIES USA, INC., as Lessee. To the extent that the terms,
covenants or conditions of this Addendum modify, conflict with or are in
addition to any of the terms, covenants or conditions of the Lease, the terms,
covenants and conditions of this Addendum shall control. In all other respects,
the terms, covenants and conditions of the Lease shall have full force and
effect.

50. Base Rent; Annual Adjustments.

On each year anniversary of the Commencement Date, the base monthly rent
in effect just preceding such anniversary date shall be adjusted upward by a
three percent (3%) increase.

51. Lessor's Building Modifications.

A. On or before the Commencement Date of the Lease, Lessor, at its
expense, shall install, or cause to be installed, a new roof on the building
which is part of the leased premises. Said roof shall be installed by a licensed
contractor, with all necessary permits therefor.

B. On or before the Commencement Date of the Lease, Lessor, at its
expense, shall install, or cause to be installed, one (1) dock high loading door
and associated improvements in accordance with plans, specifications and
drawings therefor, to be prepared at Lessor's instance and expense, which plans
shall be objected to (and if so, revised by Lessor and resubmitted) or approved
by Lessee within three (3) days after receipt thereof from Lessor. Said door and
dock improvements shall be installed by a qualified reputable licensed
contractor, subject to the reasonable prior approval of Lessee, which approval
will not be unreasonably withheld or delayed, who submits the lowest bid
therefor, such work to be done with all necessary permits therefor.

52. Lessee's Initial Building Modifications

A. Lessee intends to install tenant improvements in the building pursuant
to plans and specifications to be prepared at Lessee's instance and expense,
which shall be subject to Lessor's prior written consent in accordance with
paragraph 7.3(b) of the Lease. Lessor agrees to pay up to the sum of One Million
One Hundred Sixty-eight Thousand Four Hundred Eighty Thousand Dollars
($1,168,480.00) toward the actual cost of such tenant improvements, as
established by invoices for such tenant improvements.

B. If the actual cost of said tenant improvements is less than
$1,168,480.00, or if Lessee elects to pay any of such costs itself, (the
"reduced cost"), then for each $1,000.00 (or part thereof) of such reduced cost
(up to, but not more than $584,240.00 of such reduced cost), the Base Rent shall
be adjusted downwards by $16.61 per month.

C. Any costs to complete the tenant improvements hereunder which are not
required to be paid by Lessor shall be paid by Lessee in full when the same
become due and payable.

D. Except as expressly modified herein, the provisions of paragraph 7 of
the Lease shall apply to all of the tenant improvements contemplated by Lessee
hereunder.

E. Lessor shall provide and pay for four (4) hours of space planning for
Lessee using Lessor's space planner as soon as practicable following the
execution of this Lease by all parties hereto.

F. All tenant improvements paid for by Lessor during the initial term,
including those under subparagraphs (A) and (B) hereof, shall be deemed owned by
Landlord from and after the date of installation thereof. All of the tenant
improvements installed by or at the expense of the Tenant during the initial
term of the Lease shall be deemed owned by Lessor as of the last day of the
initial term, whether or not said Lease is extended.

G. Lessee may have access to the leased premises following the execution
hereof and before the Commencement Date to complete the Improvements
contemplated under this Addendum Paragraph 52.

53. Option to Extend Lease.

Reference is made to paragraph 39 of the Lease setting forth provisions
governing Options under this Lease. Lessor hereby grants to Lessee an Option to
extend the initial term of this Lease, subject to the provisions of said
paragraph 39. Said Option shall be for an additional term of five (5) years
following the

18

last day of the initial term hereof. Written notice of Lessee's exercise of said
Option shall be given to Lessor not more than 180 days, nor less than 90 days
before the last day of the initial term of the Lease. Failure to give Lessor
such notice as aforesaid shall cause said option to lapse forthwith and
thereafter shall have no further force or effect, and may not be exercisable by
Lessee. The basic monthly rent during the first year of the Option term shall be
ninety-five percent (95%) of the then fair market rental value of the leased
premises in its then existing condition subject to the annual three percent (3%)
adjustment increases as provided in paragraph 50 hereof. Within thirty (30) days
prior to the commencement of the Option term, Lessor and Lessee shall negotiate
and attempt to agree on the rental for the Option term. In the event the Lessor
and Lessee are unable to agree, then within ten (10) days after the Option term
begins, the same shall be submitted to binding arbitration to determine said
rental rate. Each party shall select an appraiser familiar with commercial
industrial office rental property rates for buildings and property similarly
situated to the leased property. The two appraisers so selected shall establish
the rent by agreement within twenty (20) days after their appointment. Upon
failure of the two (2) appraisers to agree, they shall select a third appraiser
similarly qualified to them who shall determine said rental rate within twenty
(20) days after his appointment. The rate so fixed shall be effective
retroactively to the commencement date of the Option term, but in no event shall
it be less than the rental rate in effect during the last year of the initial
term of the Lease. The fees and costs of the appraiser selected by each party
shall be born by that party. The fees and costs of any third appraiser selected
by the two (2) appraisers shall be born equally by the Lessor and the Lessee.
The appraisers selected may be licensed appraisers, or real estate brokers or
licensed sales agents who are active in leasing and offering property for lease
which is comparable in type and location to the leased premises.

54. Earthquake Insurance; Lessee Liable for Deductible.

Notwithstanding the provisions of paragraph 8.3 of the Lease, the policy
of insurance referenced therein shall include coverage against the perils of
flood and earthquake risk, and Lessee shall indemnify Lessor for any loss, cost
of damage not covered by reason of the deductible amount provided for in said
insurance policy or policies. Lessor shall notify Lessee when annual renewal
quotes for such insurance are known. Lessee may obtain its own policy of such
insurance covering Lessor as the primary Insured if such policy provides
comparable coverage. An original copy of such policy naming Lessor as primary
insured shall be delivered to Lessor by or at the instance of Lessee, and a
certificate of such insurance showing that it is in effect shall be provided to
Lessor before Lessor's existing policy covering such risks expires.

Each year, Lessor shall provide Lessee with an estimate of the cost of
renewing the earthquake insurance coverage with the Lessor's insurance carrier.
If that insurance coverage rate is better than Lessee is able to obtain through
its carrier, Lessor shall allow Fairchild to obtain such earthquake insurance
coverage through the Lessor's insurance policy.

55. Lessor's Repair Obligations.

Notwithstanding anything in paragraph 7 of the Lease to the contrary,
Lessor, upon receipt of written notice of defects or damage from Lessee, shall
maintain, repair and replace, at Lessor's instance and expense, any structural
elements of the roof, bearing walls and foundation of the building on the leased
premises. Lessor shall be entitled to use any insurance proceeds available to
pay for all or a portion of the cost of maintaining, repairing or replacing the
same.

56. Assignment and Subletting; Payment of Bonus Rent to Lessor.

In the event of the occurrence of any assignment or subletting of all or
any part of the leased premises hereunder with Lessor's prior written consent
and otherwise in accordance with paragraph 12 of the Lease, any "bonus rent", as
hereinafter defined, received by the Lessee from its assignee(s) or subtenant(s)
shall be paid over to Lessor upon Lessee's receipt thereof. SEE ADDENDUM 67 FOR
THE DEFINITION OF BONUS RENT.

57. Addition to Section 6.2(e), Lessor Indemnification.

Lessor shall indemnify, defend and hold Lessee, its agents, employees and
lenders, if any, harmless from and against any and all loss and/or damages,
liabilities, judgments, claims, expense, penalties, and reasonable attorneys'
and consultants' fees arising out of or involving such Lessor Hazardous
Substance Obligations, or for any breach of representations expressly set forth
in this Addendum to Section 6.2(e) of the Lease. No termination of this Lease,
and no cancellation or release agreement entered into by Lessor and Lessee,
unless expressly provided otherwise therein, shall release Lessor from its
obligations under this Lease with respect to Lessor Hazardous Substance
Obligations under this section 6.2(e).

Lessor represents to the best of its knowledge, and without further
inquiry, that (i) there are no existing environmental claims relating to or
affecting the leased premises (including land and building); and that (ii) it
does not have any knowledge of any potential environment claims relating to or
affecting the leased premises (including land and building).

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58. Addition to Section 6.2(g), Lessor Termination Option.

Notwithstanding the foregoing, the Lease may not be terminated by Lessor
under this Section 6.2(g) until such time as (a) Lessee has had a reasonable
opportunity to find other suitable and comparable facilities, and (b) Lessor
reimburses Lessee for the cost of relocation and the amortized cost of tenant
improvements which have been paid for by Lessee over the remainder of the
initial lease term hereunder.

59. Addition to Section 7.1, Lessee's Obligations.

Lessor shall deliver to Lessee at least fifteen (15) days prior to the
Lease Commencement Date copies of all warranties (if any) for any Building
component for which Lessee has maintenance obligations under Section 7.1 of the
Lease. Lessor shall remain a beneficiary of such warranties, entitled to enforce
the same, and shall exert best reasonable efforts to assist Lessee in becoming
an additional beneficiary thereof entitled also to enforce the same.

60. Addition to Section 7.4(b), Removal.

Notwithstanding anything herein to the contrary, the initial tenant
improvements and alterations by Lessee done at the commencement of the Lease
shall not be subject to removal. Any additional tenant improvements and
alterations made by Lessee from time to time after the Commencement Date, shall
not be subject to removal unless at the time of giving consent for such
alterations or improvements Lessor indicates in writing that it will require
their removal at Lease termination. Lessee reserves the right to remove same at
its election.

61. Addition to Section 8.7, Indemnity.

Notwithstanding any contrary provision in Section 8.7, or any other
provision of the Lease, Lessee shall have no obligation to indemnify, protect,
defend or hold harmless the leased premises, lessor or any other party, persons
or entities, from any loss, claims, damages, expense or liabilities arising out
of, involving or dealing with: (i) hazardous Substances (except as provided in
Section 6.2(d) of the Lease); (ii) structural defects and maintenance, repair
and replacement obligations that remain the responsibility of Lessor as
expressly referenced under Section 7.2 and Addendum paragraph 55; (iii) any
breach of express warranties by Lessor; (iv) any gross negligence or wilful
misconduct on the part of the Lessor, its agents, employees or representatives;
or (v) to the extent any liability arises from representatives.

62. Add Section 12.3(e), Assignment to Affiliates or Successors.

Notwithstanding anything contained in the Lease to the contrary, and
provided that the Lessee is not then in default, Lessee shall have the
unrestricted right, from time to time, without consent of the Lessor, to assign
and/or sublet the leased premises to: (a) any parent, subsidiary or affiliate
company of Lessee; (b) any company that purchases all or substantially all of
the assets of Lessee; or (c) a surviving company in conjunction with a merger,
consolidation or public offering of stock involving Lessee; provided in each
instance that the Lessee and its Guarantors, without further notice to its
Guarantors, shall remain jointly and severally liable with the assignee or
sublessee and shall not be released from their obligations under the Lease and
Guaranty.

63. Addition to Section 13.3, Inducement Recapture.

Notwithstanding anything to the contrary, the parties acknowledge and
agree that improvements paid for by Lessor pursuant to Addendum paragraph 52 are
not Inducement Provisions subject to recovery hereunder.

64. Addition to Section 30.3, Non-Disturbance.

As a condition precedent to Lessee's obligations hereunder, Lessor shall
deliver as soon as reasonably practicable (and in any event prior to the Lease
Commencement Date), a Non-Disturbance and Attornment Agreement (in commercially
reasonable form acceptable to Lessor's Lenders) from Lessor's lenders having a
Security Device on the Building. Except for such lender's Security Devices,
Lessor represents and warrants that there are no ground leases or other
financial encumbrances (other than the lien of current taxes and assessments not
yet due) affecting the Building or the Property.

65. Short Form Memorandum of Lease.

Lessor and Lessee agree to execute and record at the instance and expense
of Lessee a Short Form Memorandum of the Lease in the Official Records of
Alameda County, California, following the execution hereof.

20

66. DEFINITION OF APPLICABLE PERIOD FOR PURPOSES OF SECTION 9 (DAMAGE OR
DESTRUCTION).

The term "Applicable Period," as used in Section 9 of the Lease, shall
mean a period of 90 days from the date Lessor obtains permits to complete the
work (repair of damaged or destroyed improvements on the Premises), but in any
event not longer than 150 days from the date of damage or destruction.

67. DEFINITION OF BONUS RENT FOR PURPOSES OF ADDENDUM 56 (ASSIGNMENT AND
SUBLETTING; PAYMENT OF BONUS RENT TO LESSOR).

The term "Bonus Rent," as used in Addendum 56 of the Lease, shall mean any
payment of money or other consideration or thing of value paid to Lessee by its
assignee(s) or subtenant(s) which exceed the basic rental payable by Lessee to
Lessor (on a prorated basis), for all or any portion of the Leased Premises
assigned or subleased by the Lessee, but shall exclude: (i) payments in an
amount sufficient for Lessee to recoup the unamortized portion of any tenant
improvements paid for by the Lessee prior to the date of such assignment or
sublease, and (ii) payments in an amount sufficient for Lessee to recoup the
cost of any improvements or other expenses incurred by Lessee in connection with
such assignment or sublease (such as leasing commissions or additional tenant
improvements paid for by Lessee in connection with such assignment or sublease).

68. Right of First Refusal to Purchase Building.

Lessor grants Lessee a right of first refusal to purchase the Premises
pursuant to this Section. If Lessor receives a bona fide offer to sell the
Premises (the "Purchase Offer,") and it intends to accept the Purchase Offer.
Lessor will give a written copy of the Purchase Offer to Lessee, and Lessee will
have the right to accept the Purchase Offer by written notice to Lessor given
within 5 business days after Lessee's receipt of the Purchase Offer. If Lessee
accepts the Purchase Offer, Lessee will be bound to purchase the Premises from
Lessor, and Lessor will be bound to sell the Premises to Lessee, in accordance
with the terms of the Purchase Offer.

This right of first refusal shall not apply to Security Interests on the
Premises; provided, however, that Lessee shall have the right to bid at any
foreclosure sale of the Premises.

This right of first refusal shall not apply to transactions between Rose
Ventures V, Inc. on the one hand and Thomas G. Haury and Carleen S. Haury on the
other hand.

If Lessee is given notice of a Purchase Offer, and Lessee does not accept
the Purchase Offer: (i) if the Premises are subsequently sold pursuant to such
Purchase Offer, Lessee shall have no further rights of first refusal; (ii) if,
however, the Premises are not sold pursuant to such Purchase Offer, Lessee shall
continue to have a right of first refusal as per the terms hereof.

If Lessee purchases the Premises pursuant to this right of first refusal,
prepaid rent will be credited against the purchase price.

The memorandum of lease to be recorded with respect to this Lease
Agreement shall include in it a recording of this right of first refusal.

Executed as of the 30th day of September, 1997.

"Lessor"

ROSE VENTURES V, INC.

By: /s/ Stephen P. Diamond
------------------------------
Stephen P. Diamond
Its President

/s/ Thomas G. Haury
----------------------------------
Thomas G. Haury

/s/ Carleen S. Haury
----------------------------------
Carleen S. Haury

21

"Lessee"

FAIRCHILD TECHNOLOGIES USA, INC.

By: /s/ William Ward
-------------------------------
William Ward, President

22

EXHIBIT 10.21

PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

BETWEEN THE CORT JOINT VENTURE

AND

SPENCER FOUNTAIN VALLEY HOLDINGS, INC.

ESCROW HOLDER:                            TITLE COMPANY:                        

Chicago Title Company                     Chicago Title Company                 
16969 Von Karman, Suite 200               16969 Von Karman, Suite 200           
Irvine, California  92714                 Irvine, California  92714             
Attn: Margie Wheeler, Escrow Officer      Attn: Ms. Suzie Calwell, Title Officer
Telephone: (714) 263-2556                 Telephone: (714) 263-4035             
Facsimile: (714) 263-0356                 Facsimile: (714) 263-1022             
Escrow No.: 8307031-M23                   Title Order No.: 8300228              

PURCHASE AND SALE AGREEMENT
AND JOINT ESCROW INSTRUCTIONS

This Purchase and Sale Agreement and Joint Escrow Instructions (the
"Agreement") is made as of June 12, 1998 by and between SPENCER FOUNTAIN VALLEY
HOLDINGS, INC., a California corporation ("Seller") and WELLS DEVELOPMENT
CORPORATION, a Georgia corporation ("Purchaser").

RECITALS

A. Seller is currently the owner of that certain real property
located in the County of Orange, State of California, commonly known as 10700
Spencer Avenue, Fountain Valley and more particularly described in Exhibit "A"
attached hereto and incorporated herein by this reference (the "Land"). The Land
is currently improved by a concrete tilt up office building containing
approximately 52,000 square feet of space (the "Building"). The Land, the
Building and all other improvements, structures and fixtures thereon are
sometimes collectively referred to herein as the "Real Property."

B. Purchaser wishes to purchase from Seller, and Seller wishes to
sell to Purchaser, the Real Property and the other Property described in Section
1 below in accordance with the Letter of Intent and pursuant to the terms and
conditions of this Agreement.

NOW THEREFORE, in consideration of the mutual covenants, promises
and undertakings set forth in this Agreement, Purchaser and Seller agree as
follows:

1. Purchase and Sale. Upon and subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to sell to Purchaser and Purchaser
hereby agrees to buy the following:

(a) the Real Property, together with all easements,
hereditaments and appurtenances thereto;

(b) all furniture, furnishings, fixtures, equipment,
machinery, and other tangible personal property owned by Seller and
used by Seller in connection with the management, operation,
maintenance and repair of the Real Property and located on the Real
Property (the "Project Personal Property"); and

(c) all governmental approvals, permits and licenses
pertaining to the Real Property (the "Approvals"), and

(d) all right, title and interest of Seller in and to any
site, architectural, mechanical, electrical, plumbing and structural
plans, studies and related documents pertaining to the Real Property
(the "Project Plans").

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The Real Property, the Project Personal Property, the Approvals and the Project
Plans are collectively referred to herein as the "Property".

2. Purchase Price. The purchase price for the Property (the "Purchase
Price") shall be Six Million Five Hundred Thousand and No/100 Dollars
($6,500,000.00).

3. Method of Payment of Purchase Price. The Purchase Price shall be
payable by Purchaser to Seller as follows:

3.1 Deposit. The amount of One Hundred Thousand and No/100 Dollars
($100,000.00) (the "Deposit") shall be deposited in cash by Purchaser into the
Escrow (as defined in Section 4.1) within two (2) Business Days following the
Opening of Escrow (as defined in Section 4.1). Upon receipt of the Deposit,
Escrow Holder shall invest the same in an interest bearing account acceptable to
Purchaser. Unless Purchaser terminates the Escrow pursuant to this Agreement on
or before the Feasibility Date, the Deposit shall become non-refundable to
Purchaser, provided that Seller shall have fulfilled all of its obligations
hereunder. Purchaser shall receive a credit in the amount of the Deposit against
the Purchase Price in the event that the closing of the Escrow (the "Closing")
takes place at the time and in the manner provided in this Agreement. All
interest earned on the Deposit shall be returned to Purchaser.

3.2 Payment of Balance of Purchase Price. The entire balance of the
Purchase Price shall be paid by Purchaser in cash into the Escrow prior to the
Closing. As used in this Agreement, the term "cash" shall mean immediately
available U.S. funds transferred by certified check or wire transfer.

4. Escrow.

4.1 Opening; Joint Instructions. The purchase and sale of the
Property shall be completed through an escrow (the "Escrow") at the office of
the escrow holder identified on page 1 hereof ("Escrow Holder"). This Agreement
shall constitute joint escrow instructions to the Escrow Holder in connection
with the Escrow. The Escrow shall be deemed to be "opened" as of the date (the
"Opening of Escrow") upon which the Escrow Holder holds fully executed original
counterparts of this Agreement executed by Seller and Purchaser. Escrow Holder
shall promptly notify Purchaser and Seller of the date which constitutes the
Opening of Escrow.

4.2 Additional Instructions. Purchaser and Seller hereby agree to
execute such additional instructions not inconsistent with this Agreement as may
be reasonably required by the Escrow Holder.

4.3 Closing Deadline. As used herein, the "Closing Deadline" shall
mean the date which is three (3) Business Days following the Feasibility Date.
The Closing shall occur as soon as possible after the satisfaction of all of the
conditions contained in this Agreement, but in no event later than the Closing
Deadline. Time is specifically of the essence as to the Closing Deadline. The
Closing Deadline shall not be extended except by the mutual written agreement of
Purchaser and Seller.

4.4 Seller's Deliveries Prior to Closing. Seller shall deliver to
the Escrow Holder, prior to the Closing, the following documents and funds:

(a) a grant deed to the Property, in the form attached hereto
as Exhibit "F", duly executed and acknowledged by Seller and in
recordable form (the "Grant Deed");

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(b) a bill of sale in the form attached hereto as Exhibit "B"
fully executed by Seller (the "Bill of Sale");

(c) three executed original counterparts of an assignment and
assumption of contracts and warranties in the form attached hereto
as Exhibit "C", executed by Seller (the "Assignment of Contracts and
Warranties");

(d) three executed original counterparts of an assignment and
assumption of leases in the form attached hereto as Exhibit "D",
executed by Seller (the "Assignment of Leases");

(e) federal and state non-foreign seller affidavits in the
forms attached hereto as Exhibits "E-1" and "E-2", respectively,
executed by Seller (collectively, the "Affidavits");

(f) a statement of documentary transfer tax due and request
that the tax declaration not be made a part of the permanent record,
in the form attached hereto as Exhibit "G" (the "Transfer Tax
Statement");

(g) an executed original of an estoppel certificate (the
"Tenant Estoppel") in substantially the form of Exhibit "H" hereto
pertaining to the lease (the "Lease") with Cort Furniture Rental
Corporation (the "Tenant") and a Subordination, Nondisturbance and
Attornment Agreement (the "SNDA") between the Tenant and Purchaser's
lender (if any) in form and content reasonably acceptable to
Purchaser's lender (if any) and the Tenant. Although Seller shall
use reasonable efforts to obtain the Tenant Estoppel and the SNDA,
Seller's inability to obtain the Tenant Estoppel and the SNDA by the
Closing Deadline shall not constitute a breach or default by Seller.
However, Purchaser's receipt of the Tenant Estoppel and the SNDA
shall be a condition precedent to Purchaser's obligation to acquire
the Property;

(h) an executed original of a lease guaranty (the "Lease
Guaranty") in substantially the form of Exhibit "I" hereto executed
by Cort Business Services Corporation, a Delaware corporation
("Lease Guarantor"). Although Seller shall use reasonable efforts to
obtain the Lease Guaranty, Seller's inability to obtain the Lease
Guaranty by the Closing Deadline shall not constitute a breach or
default by Seller. However, Purchaser's receipt of the Lease
Guaranty shall be a condition precedent to Purchaser's obligation to
acquire the Property; and

(i) all other sums and documents reasonably required of Seller
by Escrow Holder to carry out and close this Escrow pursuant to this
Agreement.

4.5 Purchaser's Deliveries Prior to Closing. Purchaser shall deliver
to the Escrow Holder, prior to the Closing, the balance of the Purchase Price
and the following documents:

(a) three executed original counterparts of the Assignment of
Contracts and Warranties;

(b) three executed original counterparts of the Assignment of
Leases; and

(c) all other sums and documents reasonably required of
Purchaser by Escrow Holder to carry out and close this Escrow.

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4.6 Actions at Closing. At the Closing, the Escrow Holder shall do
the following:

(a) cause the Grant Deed and the SNDA (if any) to be recorded
in the Official Records of Orange County, California and cause the
Transfer Tax Statement to be delivered to the recorder's office with
instructions to attach the Transfer Tax Statement to the Grant Deed
following recordation of the Grant Deed;

(b) cause the Bill of Sale, complete original counterparts of
the Assignment of Contracts and Warranties, complete original
counterparts of the Assignment of Leases, the Affidavits, the Tenant
Estoppel, the Lease Guaranty and an owner's policy of title
insurance or commitment therefor pursuant to Section 5.3 hereof to
be delivered to Purchaser; and

(c) deliver to Seller complete original counterparts of the
Assignment of Contracts and Warranties, complete original
counterparts of the Assignment of Leases, and the Purchase Price
(less costs and expenses to be paid by Seller under Section 4.8 and
any amounts required to be withheld under Section 4.4(e) hereof).

4.7 Cancellation of Escrow.

(a) In the event that the Closing does not occur at the time
and in the manner provided in this Agreement due to the material
failure of Purchaser to comply with any of its obligations under
this Agreement ("Purchaser Default"), Seller shall have the right to
cancel the Escrow by written notice to Purchaser and the Escrow
Holder. Upon such cancellation, all costs of the Escrow
(collectively, the "Cancellation Costs") shall be paid by Purchaser.

(b) In the event that the Closing does not occur at the time
and in the manner provided in this Agreement due to the material
failure of Seller to comply with any of its obligations under this
Agreement ("Seller Default"), Purchaser shall have the right to
cancel the Escrow by written notice to Seller and the Escrow Holder.
Upon such cancellation, Seller shall return the Deposit to Purchaser
and the Cancellation Costs shall be paid by Seller.

(c) In the event that the Closing does not occur at the time
and in the manner provided in this Agreement for any reason other
than a Purchaser Default or Seller Default, either Purchaser or
Seller may, at any time after the Closing Deadline, cancel the
Escrow by written notice to the other and to the Escrow Holder. Upon
such cancellation, Seller shall return the Deposit to Purchaser and
the Cancellation Costs shall be divided equally between Purchaser
and Seller.

(d) Upon any cancellation of the Escrow, all instruments and
documents deposited with the Escrow Holder shall be returned to the
parties who deposited the same.

(e) The rights and remedies set forth in this Section 4.7
shall not be exclusive of any other rights or remedies which
Purchaser or Seller may have by law or in equity in the event of
breach of this Agreement, provided however that Seller's exclusive
remedy in the event of a Purchaser Default shall be to receive the
Deposit as full liquidated damages and to require Purchaser to pay
the Cancellation Costs pursuant to Section 4.7(a), above.

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4.8 Fees, Closing Costs and Prorations. The costs incidental to the
Closing shall be paid as follows:

(a) Seller shall pay: (i) the documentary transfer tax payable
in connection with the recordation of the Grant Deed as set forth in
the Transfer Tax Statement; (ii) the premium for the CLTA standard
coverage owner's title policy obtained by Purchaser or, if Purchaser
obtains an ALTA extended coverage owner's policy, then that portion
of the premium which would have been payable for a CLTA standard
coverage owner's policy; (iii) one-half (2) of the Escrow Holder's
escrow fees; and (iv) the broker's commission to Collins Commercial
Corporation.

(b) Purchaser shall pay: (i) the cost of any title insurance
endorsements requested by Purchaser and, if Purchaser elects to
obtain an ALTA extended coverage owner's policy rather than a CLTA
standard coverage owner's policy, then the portion of the premium
attributable to the ALTA extended coverage; (ii) the cost of
obtaining any survey of the Property obtained by Purchaser; (iii)
the cost of recording the Grant Deed and the SNDA (if any); and (iv)
one-half (2) of the Escrow Holder's escrow fees.

(c) Purchaser and Seller shall each pay their own legal fees
and other incidental expenses incurred in connection with the
transaction contemplated by this Agreement.

(d) Rents which have actually been received by Seller for the
month ("Current Month") in which the Closing occurs shall be
prorated as of the Closing. All rents or charges due prior to the
Current Month and Seller's pro rata share of any unpaid rent for the
Current Month ("Current Month Unpaid Rent") shall be the property of
Seller, and shall be paid over to Seller by Purchaser immediately
upon receipt by Purchaser. Purchaser shall apply payments received
after Closing first to current rent then due and then to past rent
starting with the most recent delinquency. All prepaid rents and
charges for the period following the Closing and all security
deposits or other deposits of tenants held by Seller shall be paid
by Seller to Purchaser at Closing.

(e) All utility charges, maintenance and repair expenses,
taxes, assessments, insurance premiums and all other operating
expenses which are the landlord's responsibility under the Lease
shall be prorated as of the Closing based upon the latest available
information. Any such items which are the responsibility of the
tenant under the Lease shall not be prorated. If supplemental real
property taxes are the landlord's responsibility under the Lease,
then Seller agrees that, after the Closing and upon receipt of a
Supplemental Tax Bill from the County of Orange Tax Assessor's
Office by Seller or Purchaser, Seller will meet with Purchaser to
determine the amount of any Supplemental Taxes affecting the
Property. Seller shall pay to Purchaser the portion of the
Supplemental Taxes which the parties agree is attributable to the
period of time prior to the Closing.

(f) Any other costs or expenses in connection with the
transaction contemplated by this Agreement shall be apportioned in
the manner customary in the County in which the Property is located.

5. Title.

5.1 Preliminary Title Report. Seller shall obtain and deliver to
Purchaser on or prior to the Opening of Escrow a current preliminary title
report prepared by Chicago Title Insurance Company with respect to the Property
(the "Preliminary Title

-5-

Report") and copies of all underlying title documents referenced in the
Preliminary Title Report.

5.2 Permitted Exceptions. Seller shall convey to Purchaser fee
simple title to the Property, subject only to the following (referred to
collectively herein as the "Permitted Exceptions"):

(a) The Title Company's standard printed exceptions and
exclusions on its standard form CLTA (or, if Purchaser so elects,
its ALTA extended coverage) owner's policy of title insurance;

(b) All other covenants, conditions, restrictions, exceptions,
reservations, rights, rights of way, easements and other matters
(other than deeds of trust and other monetary encumbrances which are
to be paid at Closing) affecting title shown in the Preliminary
Title Report, except any of the same which pursuant to Section 8 are
(i) disapproved by Purchaser, and (ii) which Seller agrees in
writing to cure;

(c) General and special taxes and assessments not then
delinquent; and

(d) Instruments recorded with the mutual approval of Purchaser
and Seller.

5.3 Title Insurance. At the Closing, the Escrow Holder shall deliver
to Purchaser a CLTA standard coverage owner's policy of title insurance (or, if
Purchaser so elects pursuant to Section 5.4, an ALTA extended coverage owner's
policy of title insurance) issued by the Title Company or a commitment by the
Title Company to issue such a policy, with liability in the amount of the
Purchase Price, showing title to the Property to be vested in Purchaser subject
only to the Permitted Exceptions.

5.4 ALTA Extended Coverage Title Policy; Supplements to Preliminary
Title Report. Purchaser may elect to receive an American Land Title Association
extended coverage owner's policy of title insurance, provided that (i) Purchaser
pays for any required survey and the increased premium of an ALTA extended
coverage owner's policy over the premium for a CLTA standard coverage owner's
policy, and (ii) neither the obtaining of any required survey nor the issuance
of an ALTA extended coverage owner's policy shall delay the Closing beyond the
Closing Deadline. If any timely obtained ALTA survey, or any supplements to the
Preliminary Title Report, disclose any title defects that materially affect
Purchaser's use of the Property (minor encroachments and easements not
materially affecting Purchaser's use of the Property shall be deemed Permitted
Exceptions), Purchaser's sole remedy shall be to terminate this Agreement upon
written notice to Seller and Escrow Holder on or before the Feasibility Date, in
which event the Deposit shall be returned to Purchaser and Section 4.7(c) hereof
shall apply.

6. Lease and Contracts.

6.1 Delivery of Lease, Contracts and Other Documents. Seller shall,
on or before the Opening of Escrow, deliver to Purchaser copies of (i) the Lease
and any commission agreements relating to the Lease, (ii) all contracts,
representations, warranties and agreements pertaining to the ownership,
operation, management, maintenance and use of the Property for the past two
years (collectively, the "Contracts"), (iii) any existing boundary, as-built and
topographic surveys, appraisals, environmental reports and building inspection
reports of the Property in Seller's possession, and (iv) operating statements
for the Property for the past two years. Further, Seller shall use reasonable
efforts to obtain prior to the Feasibility Date (at Purchaser's sole cost and
expense) reliance letters addressed to Purchaser, Purchaser's assigns and any
lender, by the parties 

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who prepared the appraisal, environmental report and building inspection
reports. In no event shall Seller's failure to obtain such reliance letters
constitute a breach or default by Seller.

6.2 Performance of Lease and Contracts. From and after the Opening
of Escrow until the Closing, Seller agrees that it will continue to perform all
of its obligations under the Lease and the Contracts. From and after the Opening
of Escrow, Seller will not amend or terminate the Lease or any of the Contracts
without the express prior written consent of Purchaser, which consent shall not
be unreasonably withheld.

6.3 Originals at Closing. At the Closing, Seller shall deliver to
Purchaser outside of Escrow the executed originals of those Contracts (if any)
which will survive the Closing, and the Lease (including any amendments
thereto), together with all property management books, records, operating
reports and files pertaining to the Property.

7. Purchaser's Inspection. Purchaser and Purchaser's agents are hereby
granted a license, for a period of thirty (30) calendar days following the
Opening of Escrow (the "Feasibility Period"), to enter upon and inspect the
Property and all improvements, fixtures, equipment and personal property located
thereon or affixed thereto. Seller agrees to cooperate with Purchaser and
Purchaser's agents in connection with such inspection, and to make available for
Purchaser's inspection and copying (any copying to be at Purchaser's expense)
all of Seller's books and records, appraisals, building plans and
specifications, soils reports, engineering studies, environmental reports and
other materials in Seller's possession relating to the Property. Seller further
understands that Purchaser or Purchaser's representatives may contact the Tenant
(and/or any guarantor of the Lease) during the Feasibility Period in an effort
to obtain financial information concerning the Tenant (and/or any guarantor of
the Lease), and Seller has no objection to such efforts by Purchaser or
Purchaser's representatives. Purchaser shall repair any damage to the Property,
and shall defend, indemnify and hold Seller, its shareholders, directors,
officers, employees and agents harmless from and against any and all claims,
suits, judgments, losses, damages or liabilities of any nature (including
without limitation reasonable attorneys fees and costs of suit) directly arising
from the entry upon the Property by Purchaser, its employees, agents,
independent contractors and consultants.

8. Purchaser's Approval Items. This Agreement and each of Purchaser's
obligations in connection herewith are expressly conditioned upon Purchaser's
approval, in the exercise of Purchaser's sole and absolute discretion, of each
of the following items on or before the last day of the Feasibility Period (the
"Feasibility Date"):

(a) the Lease and the financial condition of the Tenant and
the guarantor of the Lease;

(b) all Contracts;

(c) the Preliminary Title Report and underlying recorded
documents;

(d) the status and condition of the Property and any
improvements, fixtures, appurtenances and equipment located thereon
or affixed thereto;

(e) all items made available for Purchaser's inspection
pursuant to Section 7 above; and

(f) all other aspects of the Property.

-7-

If Purchaser fails to give written notice to Seller and Escrow Holder of
Purchaser's approval of all of the foregoing items on or prior to the
Feasibility Date, Purchaser shall be deemed to have disapproved such matters and
the Escrow shall terminate immediately following the Feasibility Date, in which
event Section 4.7(c) shall apply. If Purchaser notifies Seller and Escrow Holder
in writing of Purchaser's approval of all of the foregoing items on or prior to
the Feasibility Date, then the Deposit shall become non-refundable to Purchaser
pursuant to Section 3.1 hereof.

9. Seller's Representations and Warranties. As used in this Section 9, the
phrase "to the best knowledge and belief of Seller" means to the actual
knowledge of John Kocmur, Seller's Vice President, without any independent
investigation or inquiry. John Kocmur is the corporate officer of Seller having
primary responsibility for management of the Property and, as a result, the most
knowledge of any corporate officers of Seller regarding the Property. Seller
hereby makes the following representations, covenants and warranties, each of
which shall survive for a period of 18 months following the Closing:

(a) Seller is a corporation, duly organized and validly
existing under the laws of the State of California. Seller has the
requisite right, power, legal capacity and authority to enter into
and fully perform each and all of its obligations under this
Agreement. The individuals executing this Agreement on behalf of
Seller have the requisite right, power, legal capacity and authority
to execute and enter into this Agreement on behalf of Seller, to
legally bind Seller to the terms and provisions of this Agreement
and to execute all other documents and take all other actions as may
reasonably be necessary to perform each and all of Seller's
obligations under this Agreement.

(b) To the best knowledge and belief of Seller, there is
presently no pending or contemplated condemnation of the Real
Property or any part thereof, and Seller has made no commitment to
any governmental or quasi-governmental entity or to any other person
or entity which relates to the Real Property or imposes upon Seller
or Seller's successors or assigns any obligation to pay or
contribute property or money or to construct, install or maintain
any improvements on or off the Real Property.

(c) To the best knowledge and belief of Seller, the closing of
the transaction contemplated by this Agreement will not constitute
or result in any default or event which, with or without notice or
lapse of time, or both, would result in a violation of any
applicable law, ordinance or regulation or a default, breach or
violation of, or the creation of any lien or other encumbrance
pursuant to, any agreement, instrument or arrangement by which
Seller or the Real Property or any portion thereof is bound.

(d) To the best knowledge and belief of Seller, the Real
Property, including the improvements as constructed and as operated
by Seller, conforms to, and is operated, maintained, and leased in
accordance with all applicable city, county, state, federal and
other applicable laws, statutes, ordinances, rules and regulations.
Seller has not received any notification from any city, county,
state or federal authority alleging that the Real Property,
including the improvements, as constructed and as operated by
Seller, do not conform to or are not operated, maintained, and
leased in accordance with all such applicable laws, statutes,
ordinances, rules and regulations.

(e) Except as disclosed in the environmental reports made
available for Purchaser's inspection pursuant to Section 7 hereof,
Seller has received no written notice from any third parties, prior
owners of the Real 

-8-

Property, or any federal, state or local governmental agency,
indicating that any Hazardous Substance remedial or clean-up work
will be required on the Real Property. To the best knowledge and
belief of Seller, there have not been any on-site spills, releases,
discharges or disposal of Hazardous Substances which have occurred
on the Property during Seller's ownership of the Real Property. For
purposes of this Agreement, the term "Hazardous Substances" shall
include all substances which are classified as hazardous substances
or hazardous wastes under any of the following laws, rules and
regulations: (i) the Toxic Substances Control Act, 15 U.S.C.,
Section 2601 et. seq., (ii) the Clean Water Act, 33 U.S.C., Section
1251 et seq., (iii) the Resource and Conservation and Recovery Act,
42 U.S.C., Section 6901 et seq., (iv) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.,
Section 9601, et seq., (v) the Hazardous Materials Transportation
Act, 49 U.S.C., Section 1801, et seq., (vi) the California Hazardous
Waste Control Act, Health and Safety Code, Section 25100 et seq.,
(vii) the California Hazardous Substance Account Act, Health and
Safety Code, Section 25249.5 et seq., (viii) the California Waste
Management Act, Health and Safety Code, Section 25170.1 et seq.,
(ix) Health and Safety Code, Section 2550, Hazardous Materials
Release Response Plans and Inventory, (x) the California
Porter-Cologne Water Quality Control Act, Water Code, Section 13000
et seq., or (xi) other federal or state laws, rules and regulations,
all as amended.

(f) To the best knowledge and belief of Seller, there are no
taxes, assessments (special, general or otherwise) or bonds of any
nature affecting the Real Property, or any portion thereof, except
as disclosed in the Preliminary Title Report.

(g) The Lease is the only existing lease or rental agreement
pursuant to which any person or entity is occupying any portion of
the Real Property. The Lease is in full force and effect and, to the
best knowledge and belief of Seller (i) there are no present uncured
defaults thereunder, and (ii) no commissions are due and payable
with respect to the Lease or any renewal thereof.

(h) Seller acknowledges that Purchaser may be required by the
Securities and Exchange Commission to file audited financial
statements for one to three years with regard to the Property. At no
cost or liability to Seller, Seller shall (i) cooperate with
Purchaser, its counsel, accountants, agents, and representatives,
provide them with access to Seller's books and records with respect
to the ownership, management, maintenance, and operation of the
Property for the applicable period, and permit them to copy the
same, (ii) execute a form of "rep" letter in form and substance
reasonably satisfactory to Seller, and (iii) furnish Purchaser with
such additional information concerning the same as Purchaser shall
reasonably request. Purchaser will pay all costs and expenses
associated with any such audit.

10. Purchaser's Representations and Warranties. Purchaser hereby makes the
following representations, covenants and warranties, each of which shall survive
for a period of one year following the Closing:

(a) Purchaser is a corporation, duly organized and existing
under the laws of the State of Georgia and is duly qualified to
transact business in the State of California, to the extent such
qualification is necessary; and

(b) Purchaser has the requisite right, power, legal capacity
and authority to enter into and fully perform each and all of its
obligations under this Agreement. The individuals executing this
Agreement on behalf of Purchaser have the requisite right, power,
legal capacity and authority to execute and enter into this
Agreement on behalf of Purchaser, to legally bind Purchaser to the
terms 

-9-

and provisions of this Agreement and to execute all other documents
and take all other actions as may reasonably be necessary to perform
each and all of Purchaser's obligations under this Agreement.

11. Change in Circumstance. If, following the Opening of Escrow, either
Seller or Purchaser (the "representing party") first becomes aware of some
changed fact or circumstance which would require material changes to any of the
representations or warranties made by the representing party in Section 9 or 10
above in order to make such representations or warranties accurate, then the
representing party shall immediately give written notice of such changed fact or
circumstance to the other party, but such notice shall not relieve the
representing party of its obligation to consummate this transaction. When the
representing party notifies the other party of any changed fact or circumstance,
then the other party may terminate this Agreement, in which event Section 4.7(c)
shall apply (except that the representing party shall pay all Cancellation
Costs). So long as the representations and warranties made by the representing
party were true and accurate as of the Opening of Escrow, such representing
party shall not be liable to the other party if a changed fact or circumstance
makes a representation or warranty untrue and if the representing party
discloses such fact to the other party in accordance with this Section 11.

12. As-Is Purchase.

(a) Purchaser's Investigation. Purchaser is, or prior to the
Feasibility Date will be, familiar with the Property and has or will
make such independent investigations as it deems necessary or
appropriate concerning the use or sale of the Property, including
but not limited to (i) any desired investigations or analysis of the
economic value of the Property or the feasibility of marketing the
Property for the purposes intended by Purchaser; (ii) soils reports
and hazardous waste and toxic materials studies; (iii) the physical
condition of the Real Property; (iv) the use of the Building for
Purchaser's intended purpose; (v) the size, dimensions, location or
topography of the Real Property; (vi) the adequacy of water, sewage
or any other utilities serving the Building; and (vii) all other
matters concerning the use, development or sale of the Property.

(b) No Reliance. Purchaser is relying solely upon its own
inspection, investigation and analysis of the foregoing matters in
purchasing the Property and is not relying in any way upon any
representations, cost information, statements, agreements,
warranties, studies, reports, descriptions, guidelines or other
information or material furnished by Seller or its representatives,
whether oral or written, express or implied, of any nature
whatsoever regarding any of the foregoing matters, except as
specifically set forth in Section 9 of this Agreement.

(c) "AS-IS". Purchaser acknowledges that it is a sophisticated
purchaser who is familiar with this type of property and that it is
acquiring the Property "AS-IS," without representation by Seller or
its representatives as to any matter except as specifically set
forth in Section 9 of this Agreement.

13. No Assignment by Purchaser. Except as otherwise provided in this
Section 13, Purchaser shall be permitted to assign Purchaser's rights and
delegate Purchaser's obligations hereunder only with the prior written consent
of Seller, which consent may be granted or withheld in Seller's sole and
absolute discretion. Notwithstanding the foregoing, Purchaser shall, upon
written notice to Seller but without the need for Seller's consent, be permitted
to assign Purchaser's rights and delegate Purchaser's obligations hereunder to
another entity which is an affiliate of Purchaser.

14. Treatment of Deposit. The Deposit shall be credited toward the
Purchase Price in the event that the Closing takes place at the time and in the
manner provided in

-10-

this Agreement. The Deposit shall be retained by Seller as liquidated damages
upon cancellation of the Escrow by Seller pursuant to Section 4.7(a) following a
Purchaser Default. The Deposit shall be returned to Purchaser upon cancellation
of the Escrow pursuant to Section 4.7(b) or 4.7(c) hereof.

15. LIQUIDATED DAMAGES ON PURCHASER DEFAULT. PURCHASER AND SELLER HEREBY
ACKNOWLEDGE AND AGREE THAT, IN THE EVENT OF A PURCHASER DEFAULT, SELLER WILL
SUFFER DAMAGES IN AN AMOUNT WHICH WILL, DUE TO THE SPECIAL NATURE OF THE
TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THE SPECIAL NATURE OF THE
NEGOTIATIONS WHICH PRECEDED THIS AGREEMENT, BE IMPRACTICAL OR EXTREMELY
DIFFICULT TO ASCERTAIN. IN ADDITION, PURCHASER WISHES TO HAVE A LIMITATION
PLACED UPON THE POTENTIAL LIABILITY OF PURCHASER TO SELLER IN THE EVENT OF A
PURCHASER DEFAULT, AND WISHES TO INDUCE SELLER TO WAIVE OTHER REMEDIES WHICH
SELLER MAY HAVE IN THE EVENT OF A PURCHASER DEFAULT. PURCHASER AND SELLER, AFTER
DUE NEGOTIATION, HEREBY ACKNOWLEDGE AND AGREE THAT THE AMOUNT OF THE DEPOSIT (AS
THE SAME EXISTS FROM TIME TO TIME UNDER THIS AGREEMENT) REPRESENTS A REASONABLE
ESTIMATE OF THE DAMAGES WHICH SELLER WILL SUSTAIN IN THE EVENT OF SUCH PURCHASER
DEFAULT. PURCHASER AND SELLER HEREBY AGREE THAT SELLER MAY, IN THE EVENT OF A
PURCHASER DEFAULT, TERMINATE THIS AGREEMENT BY WRITTEN NOTICE TO PURCHASER AND
ESCROW HOLDER, CANCEL THE ESCROW AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES.
SUCH RETENTION OF THE DEPOSIT BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED
DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA
CIVIL CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN
THE MEANING OF SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE, OR ANY
SIMILAR PROVISION. FOLLOWING TERMINATION OF THIS AGREEMENT, CANCELLATION OF THE
ESCROW AND RETENTION OF THE DEPOSIT AS LIQUIDATED DAMAGES PURSUANT TO THIS
SECTION 15, ALL OF THE RIGHTS AND OBLIGATIONS OF PURCHASER AND SELLER UNDER THIS
AGREEMENT SHALL BE TERMINATED.

PURCHASER AND SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE
PROVISIONS OF THIS SECTION 15 AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO
BE BOUND BY ITS TERMS.

"Seller":                                      "Purchaser":                     

/s/ [ILLEGIBLE]                                /s/ BMC
- ---------------------------------              ---------------------------------

16. Risk of Loss. It shall be a condition to Purchaser's obligation to
purchase the Property that no damage, destruction or loss (whether or not
covered by insurance) in excess of Fifty Thousand and No/100 Dollars
($50,000.00), and no other event or condition, not existing on the Feasibility
Date, shall have occurred and shall exist at Closing. In the event of damage,
destruction or loss which is $50,000 or less (i) to the extent that the damage,
destruction or loss is not insured, then there shall be a reduction in the
Purchase Price in any amount necessary to repair such damage, destruction or
loss, and (ii) to the extent that the damage, destruction or loss is insured,
any insurance proceeds shall be assigned to Purchaser at Closing, or shall be
used to cure such damage in a timely manner, provided such insurance proceeds
are sufficient to cure the damage.

-11-

17. Brokers. Purchaser and Seller each represent and warrant to each other
that it has not engaged or dealt with any broker, finder or other agent in
connection with this Agreement or the transactions contemplated hereby other
than Collins Commercial Corporation (the "Broker"). Seller shall pay, outside of
Escrow pursuant to a separate agreement, a real estate commission to the Broker,
and Purchaser shall have no responsibility therefor. Purchaser and Seller each
hereby indemnify and hold the other harmless from and against all costs,
expenses or liabilities (including without limitation attorneys fees and court
costs, whether or not taxable and whether or not any action is prosecuted to
judgment) incurred by the indemnified party in connection with any claim or
demand by a person or entity for any broker's, finder's or other commission or
fee in connection with the indemnifying party's entry into this Agreement and
the transactions contemplated hereby.

18. Condemnation. At Closing, no part of the Property shall be subject to
notice of acquisition or condemnation or shall previously have been acquired by
authority of any governmental agency in the exercise of its power of eminent
domain or by private purchase in lieu thereof, nor at Closing shall there be any
written threat or written evidence of the imminence of any such acquisition or
purchase.

19. Miscellaneous.

19.1 Notices. All notices, approvals, disapprovals or elections
required or permitted to be given under this Agreement shall be in writing and
shall be (i) delivered personally, (ii) sent via Federal Express (or another
comparable overnight messenger service), or (iii) sent via telefacsimile to the
parties at the following addresses:

If to Seller:     Spencer Fountain Valley Holdings, Inc.
12520 High Bluff Drive, Suite 100
San Diego, California 92130
Attention: Mr. John I. Kocmur
Facsimile:(619) 481-4968

With a copy to:   Sheppard, Mullin, Richter & Hampton LLP
650 Town Center Drive, 4th Floor
Costa Mesa, California 92626-1925
Attention: Brent R. Liljestrom, Esquire
Facsimile:(714) 513-5130

If to Purchaser:  Wells Development Corporation
3885 Holcomb Bridge Road
Atlanta, Georgia 30092
Attention: Mr. Michael C. Berndt
Facsimile: (770) 840-7224

With a copy to:   O'Callaghan & Stumm, L.P.
127 Peachtree Street, N.E., Suite 1330
Atlanta, Georgia 30303
Attention: William O'Callaghan, Esquire
Facsimile: (404) 522-3080

Personally delivered notices shall be deemed given upon actual personal delivery
to the intended recipient. Notices given by telefacsimile shall be deemed given
upon completion of transmission to the receiving telefacsimile machine. Notices
sent via Federal Express (or another comparable overnight messenger service)
shall be deemed given the immediately following business day.

-12-

19.2 Attorneys' Fees. In the event of any action between Purchaser
and Seller for enforcement of any of the terms or conditions of this Agreement,
the prevailing party in such action shall be entitled to recover its reasonable
costs and expenses, including without limitation taxable court costs and
attorneys' fees, as awarded by a court of competent jurisdiction.

19.3 Entire Agreement. This Agreement contains all of the agreements
of Purchaser and Seller with regard to the transactions contemplated hereby, and
supersedes all prior agreements, understandings and negotiations, whether
written or oral.

19.4 Amendment. This Agreement shall not be modified or amended
except by an instrument in writing duly executed by both Purchaser and Seller.

19.5 Successors. Subject to the restrictions on Purchaser's right to
assign as set forth in Section 13 hereof, the provisions of this Agreement shall
be binding upon and shall inure to the benefit of the successors in interest and
assigns of Purchaser and Seller.

19.6 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.

19.7 Headings. The paragraph headings and captions in this Agreement
are for convenience only and shall not limit or define the contents of this
Agreement.

19.8 Time. Time is of the essence of this Agreement, it being
understood that the time for performance of each obligation, including without
limitation the Closing Deadline, has been the subject of negotiation by the
parties.

19.9 Further Assurances. Seller and Purchaser agree that they will,
at any time and from time to time after the Closing, upon the request of the
other party, execute, acknowledge and deliver all such further deeds,
assignments, transfers, conveyances, powers of attorney and assurances as may be
reasonably required for the effective assignment, transferring, granting or
conveying of any or all of the assets or property to be assigned to them as
provided herein, at the cost of the requesting party.

19.10 Business Days. As used herein, "Business Days" means all days
other than Saturdays, Sundays, federal holidays and holidays in the State of
California.

IN WITNESS WHEREOF, this Agreement has been executed as of the day
and year first above written.

"Purchaser":

WELLS DEVELOPMENT CORPORATION, a 
Georgia corporation

By:    /s/ Brian M. Conlon
--------------------------------------------

Brian M. Conlon - Executive Vice President
--------------------------------------------
[Printed Name and Title]

-13-

"Seller":

SPENCER FOUNTAIN VALLEY HOLDINGS, INC., 
a California corporation

By   /s/ John I. Kocmur
--------------------------------------------
John I. Kocmur, its Vice President

-14-

EXHIBIT 10.22

FIRST AMENDMENT TO

PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS

BETWEEN THE CORT JOINT VENTURE

AND

SPENCER FOUNTAIN VALLEY HOLDINGS, INC

FIRST AMENDMENT TO PURCHASE AND SALE
AGREEMENT AND JOINT ESCROW INSTRUCTIONS

THIS FIRST AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS is made and entered into as of the 16th day of July, 1998, by and
between WELLS DEVELOPMENT CORPORATION, a Georgia corporation ("Purchaser") and
SPENCER FOUNTAIN VALLEY HOLDINGS, INC., a California corporation ("Seller").

W I T N E S S E T H:

WHEREAS, the parties hereto entered into that certain PURCHASE AND SALE
AGREEMENT AND JOINT ESCROW INSTRUCTIONS (the "Agreement") dated as of June 12,
1998, relating to that certain property located at 10700 Spencer Avenue,
Fountain Valley, California and being more particularly described therein; and

WHEREAS, the parties desire to amend certain provisions of the Agreement;

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein set forth, and other good and valuable
consideration the receipt, adequacy and sufficiency of which are hereby
expressly acknowledged by the parties hereto, Seller and Purchaser do hereby
covenant and agree as follows:

1. The "Feasibility Period" as defined in Section 7 of the Agreement shall
be deemed to mean the period ending on July 27, 1998. July 27, 1998, shall be
the "Feasibility Date" and July 30, 1998, shall be the "Closing Deadline", as
said terms are defined in the Agreement.

2. Purchaser is in the process of obtaining an ALTA survey of the Property
(the "Survey"). Purchaser anticipates the receipt of an appraisal (the
"Appraisal") momentarily and an environmental report (the "Environmental Report"
on July 20, 1998. Further, Purchaser has not received an executed tenant
estoppel (the "Tenant Estoppel"). Other than items which may be disclosed by the
Survey, Appraisal, Environmental Report, or Tenant Estoppel (all of which
Purchaser reserves the right to review and have its lender review and make
objections based thereon), Purchaser acknowledges that it has approved all of
the Purchaser's approval items set forth in Section 8 of the agreement except
for subparagraph 8(c) and 8(d) thereof.

3. Except as expressly modified by the terms and conditions hereof, the
terms and conditions of the Agreement shall remain unchanged and in full force
and effect.

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

"PURCHASER":

WELLS DEVELOPMENT CORPORATION, a Georgia corporation

By: /s/ Michael C. Berndt
--------------------------------
Title: VP
-----------------------------

"SELLER":

SPENCER FOUNTAIN VALLEY HOLDINGS, INC.

By:   
--------------------------------
John I. Kocmur, Vice President

-1-

EXHIBIT 10.23

PROMISSORY NOTE

FROM THE COURT JOINT VENTURE

TO

NATIONSBANK, N.A.

PROMISSORY NOTE

$4,875,000.00                                                      July 30, 1998

1. Payment Schedule and Maturity Date. FOR VALUE RECEIVED, the undersigned
(herein called "Maker") hereby promises to pay to the order of NationsBank,
N.A., a national banking association ("Lender"), without offset, in immediately
available funds in lawful money of the United States of America, at NationsBank
Plaza, 600 Peachtree Street, N.E. in the City of Atlanta, Fulton County,
Georgia, the principal sum of FOUR MILLION EIGHT HUNDRED SEVENTY-FIVE THOUSAND
AND NO/100 DOLLARS ($4,875,000.00) (or the unpaid balance of all principal
advanced against this Note, if that amount is less) together with interest on
the unpaid principal balance of this Note from day to day outstanding as
hereinafter provided, as follows:

a. Primary Maturity Date. Unless duly extended as hereinafter provided,
the final maturity of the indebtedness evidenced by this Note shall be July 30,
1999 (the "Primary Maturity Date").

b. Extended Maturity Date. Maker shall have the right and option (the
"Extension Option") to extend the final maturity of the indebtedness evidenced
by this Note from the Primary Maturity Date to January 30, 2000 (the "Extended
Maturity Date"), upon the conditions that (a) Maker shall give to Lender, no
earlier than May 16, 1999, and no later than June 30, 1999, written notice of
the exercise by Maker of the Extension Option; (b) there shall not exist, either
on the date of such notice (the "Notice Date") or on the Primary Maturity Date,
any default under the Mortgage (hereinafter defined) or any other Loan Document
(hereinafter defined); (c) there shall not have occurred, from and after the
date of this Note, any material adverse change in the business or financial
condition of Maker, Wells Development Corporation, a Georgia corporation, Wells
Operating Partnership, L.P., a Delaware limited partnership, or Leo F. Wells,
III, or any material adverse change in the condition or value of the Property
(hereinafter defined); (d) Maker shall make a prepayment of principal in an
amount (if any) sufficient to cause the outstanding principal balance of the
indebtedness evidenced by this Note to be reduced, prior to the Primary Maturity
Date, to an amount no greater than Four Million Three Hundred Seventy-Five
Thousand and No/100 Dollars ($4,375,000.00); and (e) Maker shall pay to Lender,
simultaneously with the giving of written notice of Maker's exercise of the
Extension Option, an additional origination fee in the amount of Six Thousand
One Hundred and No/100 Dollars ($6,100.00).

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 1

c. Maturity Date. The terms "Maturity Date" and "the final maturity of the
indebtedness evidenced by this Note" as used in this Note mean either the
Primary Maturity Date, if the Extension Option is not duly exercised by Maker,
or the Extended Maturity Date, if the Extension Option is duly exercised by
Maker.

d. Interest Installments. All interest accruing hereunder from the date
hereof through the Maturity Date shall be due and payable in arrears commencing
on September 1, 1998, and continuing on the first (1st) day of each succeeding
calendar month thereafter through and including the first (1st) day of the
calendar month in which the Maturity Date occurs.

e. Principal Installments. Commencing on September 1, 1998, and continuing
on the first (1st) day of each succeeding calendar month thereafter through and
including the first (1st) day of the calendar month in which the Maturity Date
occurs, Maker shall pay to Lender equal consecutive monthly installments of
principal in the amount of Eight Thousand Five Hundred Eighty-Seven and No/100
Dollars ($8,587.00) each.

f. Final Payment of Principal and Interest. The entire outstanding
principal balance of this Note together with all accrued and unpaid interest
thereon shall be finally due and payable on the Maturity Date.

2. Security; Loan Documents. The security for this Note includes a Deed of
Trust, Assignment, Security Agreement and Fixture Filing (which, as it may have
been or may be amended, restated, modified or supplemented from time to time, is
herein called the "Mortgage") of even date herewith from Maker to Lender,
conveying and encumbering certain property in Orange County, California
described therein (the "Property"). This Note, the Mortgage and any other
documents now or hereafter securing, guaranteeing or executed in connection with
the loan evidenced by this Note, are, as the same have been or may be amended,
restated, modified or supplemented from time to time, herein sometimes called
individually a "Loan Document" and together the "Loan Documents."

3. Interest Rate.

(a) Stated Rate. Subject to the further provisions of this Section
3, the unpaid principal balance of this Note from day to day outstanding which
is not past due shall bear interest at a rate per annum equal to the lesser of
(i) the Maximum Rate (hereinafter defined) or (ii) the Stated Rate (hereinafter
defined) computed on the Annual Basis (hereinafter defined). The term "Stated
Rate" as used in this Note means a variable rate per annum equal to either (i)
the Prime Rate (hereinafter defined); or (ii) at the election of Maker, but
subject to the terms and conditions set forth herein, the Variable Eurodollar
Basis 

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 2

(hereinafter defined). The Stated Rate shall, unless otherwise specified herein,
change with each change in the Prime Rate or Variable Eurodollar Rate, as the
case may be, as of the date of any such change, without notice, subject always
to the limitations set out in this Section 3; provided, however, that if on any
day the Variable Rate shall exceed the maximum permitted by application of the
Maximum Rate in effect on that day, the Variable Rate shall be limited to, but
shall remain at and vary with, the maximum permitted by application of the
Maximum Rate on that day and on each day thereafter until the total amount of
interest accrued at the Variable Rate on the unpaid balance of this Note equals
the total amount of interest which would have accrued if there were no
limitation by the Maximum Rate, or until the earlier payment in full of this
Note.

The term "Annual Basis" as used in this Note means computation of interest for
the actual number of days elapsed and as if each year were composed of 360 days;
however, use of the Annual Basis is subject always to limitation by the Maximum
Rate and in no event shall any such computation result in an amount of interest
in excess of the Maximum Amount (hereinafter defined). In any event, all
interest at the Maximum Rate shall be computed on the Annual Basis of 365 days
(366 in a leap year).

The term "Business Day" as used in this Note means any day on which the offices
of Lender are open for the conduct of its banking business in Atlanta, Georgia
and also on which commercial banks are open for international business
(including dealings in United States dollar deposits) in London, England.

The term "Eurodollar Borrowing" means any portion of the indebtedness evidenced
by this Note which bears interest at the Variable Eurodollar Basis.

The term "Eurodollar Reserve Percentage" as used in this Note means the reserve
percentage applicable from day to day under regulations issued from time to time
by the Board of Governors of the Federal Reserve System (or if more than one
such percentage is so applicable, the daily average for such percentage for
those days during which any such percentage shall be applicable) for determining
the maximum reserve requirement (including, without limitation, any basic,
marginal, supplemental or emergency reserve requirement) for Lender in respect
of liabilities or assets consisting of or including "Eurocurrency Liabilities"
as defined in Regulation D of the Board of Governors of the Federal Reserve
Board as from time to time in effect, whether or not Lender has any Eurocurrency
liabilities subject to such reserve requirement at that time. Eurodollar
Borrowings shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of credits for
proration, exceptions or offsets that may be available from time to time to
Lender. The Variable Eurodollar Basis shall be adjusted 

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 3

automatically on and as of the effective date of any change in the Eurodollar
Reserve Percentage.

The term "Maximum Rate" as used in this Note means the maximum nonusurious rate
of interest per annum permitted by whichever of applicable United States federal
law or the law of the State of Georgia permits the higher interest rate,
including to the extent permitted by applicable law, any amendments thereof
hereafter or any new law hereafter coming into effect to the extent a higher
Maximum Rate is permitted thereby. The Maximum Rate shall be applied by taking
into account all amounts characterized by applicable law as interest on the debt
evidenced by this Note, so that the aggregate of all interest does not exceed
the maximum nonusurious amount permitted by applicable law (the "Maximum
Amount").

The term "Prime Rate" as used in this Note means, on any day, the rate of
interest per annum then most recently established by Lender as its "prime rate."
Any such rate is a general reference rate of interest, may not be related to any
other rate, and may not be the lowest or best rate actually charged by Lender to
any customer or a favored rate and may not correspond with future increases or
decreases in interest rates charged by other lenders or market rates in general.

The term "Variable Eurodollar Basis" as used in this Note means a per annum rate
of interest (rounded upwards, if necessary, to the nearest whole one-sixteenth
of 1%) determined pursuant to the following formula:

Variable Eurodollar Basis =     [Variable Eurodollar Rate] 
-----------------------------------
[100% - Eurodollar Reserve Percentage]

PLUS two hundred twenty (220) basis points, after adjustment for
insurance costs and other appropriate regulatory costs and
adjustments.

The term "Variable Eurodollar Rate" as used in this Note means, as such rate
changes each day, without notice, the rate per annum appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in United States dollars at approximately 11:00 a.m. (London time) for a
thirty-day period, with the applicable Variable Eurodollar Rate for each day
being the Variable Eurodollar Rate that appeared, as aforesaid, two Business
Days prior to such day. If for any reason such rate is not available, the term
"Variable Eurodollar Rate" shall mean, as such rate changes each day, without
notice, the rate per annum appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in United States dollars at approximately
11:00 a.m. (London time) for a thirty-day period, with the applicable Variable
Eurodollar Rate for each day being 

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 4

the Variable Eurodollar Rate that appeared, as aforesaid, two Business Days
prior to such day; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates.

(b) Election of Stated Rate. The Stated Rate as of the date hereof
is the Variable Eurodollar Basis. Maker may elect to change the Stated Rate from
the Prime Rate to the Variable Eurodollar Basis, or from the Variable Eurodollar
Basis to the Prime Rate, once per calendar month, which election shall be
effective on the first (1st) Business Day following receipt by Lender of written
notice from Maker setting forth the rate elected. Any portion of the outstanding
principal balance hereof which, prior to the Maturity Date, does not bear
interest at the Variable Eurodollar Basis shall bear interest at the Prime Rate.

(c) Application of Maximum Rate. Notwithstanding anything herein to
the contrary, if on any day the Stated Rate shall exceed the maximum permitted
by application of the Maximum Rate in effect on that day, the Stated Rate shall
be limited to, but shall remain at and vary with, the maximum permitted by
application of the Maximum Rate on that day and on each day thereafter until the
total amount of interest accrued at the Stated Rate on the unpaid balance of
this Note equals the total amount of interest which would have accrued if there
were no limitation by the Maximum Rate, or until the earlier payment in full of
this Note.

(d) Suspension of Eurodollar Borrowings. If, at any time,

(i) Lender shall have reasonably determined (which determination
shall be conclusive and binding) that by reason of circumstances affecting
the London interbank market or other Eurodollar market, as applicable,
adequate and reasonable means do not exist for ascertaining the Variable
Eurodollar Basis, or

(ii) Lender shall have reasonably determined (which determination
shall be conclusive and binding) that the Variable Eurodollar Basis will
not adequately and fairly reflect the cost to Lender of any Eurodollar
Borrowing,

then Lender shall forthwith give notice thereof to Maker, whereupon until Lender
notifies Maker that the circumstances giving rise to such suspension no longer
exist, the obligation of Lender to allow new Eurodollar Borrowings shall be
suspended.

(e) Conversion to Prime Rate. If, after the date of this Note, the
adoption of any applicable law, rule or regulation, or any change therein, or
any change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Lender (or any of its non-United States
offices) with any request or directive (whether or not having the force of law)
of any such authority, central bank 

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 5

or comparable agency shall make it unlawful or impossible for Lender to make,
maintain or fund Eurodollar Borrowings, Lender shall forthwith give notice
thereof to Maker, whereupon until Lender notifies Maker that the circumstances
giving rise to such suspension no longer exist, the obligation of Lender to
allow Eurodollar Borrowings shall be suspended. If Lender shall determine that
it may not lawfully continue to maintain any outstanding Eurodollar Borrowing to
maturity and shall so specify in such notice, such Eurodollar Borrowing shall be
immediately converted to a borrowing at the Prime Rate.

(f) Additional Compensation To Lender. If, after the date of this
Note, the adoption of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency:

(i) shall subject Lender to any tax, duty or other direct charge
with respect to Eurodollar Borrowings or this Note or shall change the
basis of taxation of payments to Lender of the principal of or interest on
Eurodollar Borrowings or any other amounts due under this Note in respect
of Eurodollar Borrowings or its obligations to allow Eurodollar Borrowings
(except for changes in the rate of tax on the overall net income of Lender
imposed by the jurisdiction in which Lender's principal executive office
is located); or

(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but excluding with respect to any Eurodollar Borrowing any such
requirement included in an applicable Eurodollar Reserve Percentage)
against assets of, deposits with or for the account of, or credit extended
by, Lender or shall impose on Lender or the interbank market for
Eurodollar deposits any other condition affecting Eurodollar Borrowings,
this Note or the obligation of Lender to allow Eurodollar Borrowings;

and the result of any of the foregoing is to increase the cost to Lender of
allowing or maintaining Eurodollar Borrowings or to reduce the amount of any sum
received or receivable by Lender under this Note with respect thereto, by an
amount deemed by Lender, in its good faith judgment, to be material, then,
within 

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 6

fifteen (15) days after demand by Lender, Maker shall pay to Lender such
additional amount or amounts as will compensate Lender for such increased cost
or reduction. Lender will promptly notify Maker of any event of which it has
knowledge, occurring after the date hereof, which will entitle Lender to
compensation pursuant to this paragraph. A certificate of Lender claiming
compensation under this paragraph, setting forth the additional amount or
amounts to be paid to it hereunder and explaining in reasonable detail the
estimates, data and calculations of such amount, shall be conclusive and binding
in the absence of manifest error. In determining such amount, Lender may use any
reasonable averaging and attribution methods. In lieu of paying the compensation
to Lender described in this paragraph, Maker may elect, promptly upon receiving
notice from Lender of the event entitling Lender to such compensation, to have
any Eurodollar Borrowing converted to a borrowing at the Prime Rate.

(g) Past Due Rate. From and after maturity (whether by acceleration
or otherwise), any principal of, and to the extent permitted by applicable law,
any interest on this Note, and any other sum payable hereunder, shall bear
interest, payable on demand, at a rate per annum (the "Past Due Rate") equal to
the lesser of (i) the Stated Rate plus four percent (4%) or (ii) the Maximum
Rate.

(h) Late Charge. If any principal or interest is not paid when due,
Maker shall pay, on demand, a late charge of four cents ($.04) for each dollar
of each installment which becomes past due for a period exceeding ten (10) days
to help defray the added expense incurred in handling said delinquent
installment, provided that in no event shall interest be due or payable in
excess of the Maximum Rate.

4. Prepayment. Maker may prepay the principal balance of this Note, in
full at any time or in part from time to time, provided that (i) Lender shall
have actually received from Maker at least five (5) business days' prior written
notice of Maker's intent to prepay, of the amount of principal which will be
prepaid (the "Prepaid Principal") and of the date on which the prepayment will
be made; (ii) the prepayment must not, in Lender's judgment, result in a breach
or loss of rights under any commitment or agreement by any third party for
payment or purchase of the loan evidenced by this Note or of the Property; (iii)
each prepayment shall be in the amount of $1,000.00 or a larger integral
multiple of $1,000.00 (unless the prepayment retires the outstanding balance of
this Note in full); and (iv) each prepayment shall be in the amount of 100% of
the Prepaid Principal, plus accrued unpaid interest thereon to the date of
prepayment, plus any other sums which have become due to Lender under the Loan
Documents on or before the date of prepayment but have not been paid. If this
Note is prepaid in full, any commitment of Lender for further advances shall
automatically terminate.

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 7

5. Certain Provisions Regarding Payments. All payments made as scheduled
on this Note shall be applied, to the extent thereof, to accrued but unpaid
interest, unpaid principal, and any other sums due and unpaid to Lender under
the Loan Documents, in such manner and order as Lender may elect in its
discretion. All prepayments on this Note shall be applied, to the extent
thereof, to accrued but unpaid interest on the amount prepaid, to the remaining
principal installments, and any other sums due and unpaid to Lender under the
Loan Documents, in such manner and order as Lender may elect in its discretion,
including but not limited to application to principal installments in inverse
order of maturity. Except to the extent that specific provisions are set forth
in this Note or another Loan Document with respect to application of payments,
all payments received by the holder hereof shall be applied, to the extent
thereof, to the indebtedness secured by the Mortgage in such manner and order as
Lender may elect in its discretion, any instructions from Maker or anyone else
to the contrary notwithstanding. Remittances in payment of any part of the
indebtedness other than in the required amount in immediately available U.S.
funds shall not, regardless of any receipt or credit issued therefor, constitute
payment until the required amount is actually received by the holder hereof in
immediately available U.S. funds and shall be made and accepted subject to the
condition that any check or draft may be handled for collection in accordance
with the practice of the collecting bank or banks. Acceptance by the holder
hereof of any payment in an amount less than the amount then due on any
indebtedness shall be deemed an acceptance on account only and shall not in any
way excuse the existence of a Default (hereinafter defined). Payments received
after 2:00 o'clock p.m. Atlanta, Georgia time shall be deemed to be received on,
and shall be posted as of, the following business day.

6. Defaults. It shall be a default ("Default") under this Note and each of
the other Loan Documents if (a) any principal, interest or other amount of money
due under this Note is not paid in full when due, regardless of how such amount
may have become due; or (b) there shall occur any default or event of default
under the Mortgage or any other Loan Document. Upon the occurrence of a Default,
subject to the terms of Section 4.2 of the Mortgage, the holder hereof shall
have the rights to declare the unpaid principal balance and accrued but unpaid
interest on this Note at once due and payable (and upon such declaration, the
same shall be at once due and payable), to foreclose any liens and security
interests securing payment hereof and to exercise any of its other rights,
powers and remedies under this Note, under any other Loan Document, or at law or
in equity.

7. Rights Cumulative. All of the rights, remedies, powers and privileges
(together, "Rights") of the holder hereof provided for in this Note and in any
other Loan Document are 

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 8

cumulative of each other and of any and all other Rights at law or in equity.
The resort to any Right shall not prevent the concurrent or subsequent
employment of any other appropriate Right. No single or partial exercise of any
Right shall exhaust it, or preclude any other or further exercise thereof, and
every Right may be exercised at any time and from time to time. No failure by
the holder hereof to exercise, nor delay in exercising any Right, including but
not limited to the right to accelerate the maturity of this Note, shall be
construed as a waiver of any Default or as a waiver of any Right. Without
limiting the generality of the foregoing provisions, the acceptance by the
holder hereof from time to time of any payment under this Note which is past due
or which is less than the payment in full of all amounts due and payable at the
time of such payment, shall not (i) constitute a waiver of or impair or
extinguish the right of the holder hereof to accelerate the maturity of this
Note or to exercise any other Right at the time or at any subsequent time, or
nullify any prior exercise of any such Right, or (ii) constitute a waiver of the
requirement of punctual payment and performance or a novation in any respect.

8. Costs of Collection. If any holder of this Note retains an attorney in
connection with any Default or at maturity or to collect, enforce or defend this
Note or any other Loan Document in any lawsuit or in any probate,
reorganization, bankruptcy or other proceeding, or if Maker sues any holder in
connection with this Note or any other Loan Document and does not prevail, then
Maker agrees to pay to each such holder, in addition to principal, interest and
any other sums owing to Lender under the Loan Documents, all reasonable costs
and expenses incurred by such holder in trying to collect this Note or in any
such suit or proceeding, including reasonable attorneys' fees.

9. Controlling Agreement. All parties to the Loan Documents intend to
comply with applicable usury law. All existing and future agreements regarding
the debt evidenced by this Note are hereby limited and controlled by the
provisions of this Section. In no event (including but not limited to
prepayment, default, demand for payment, or acceleration of maturity) shall the
interest taken, reserved, contracted for, charged or received under this Note or
under any of the other Loan Documents or otherwise, exceed the Maximum Amount.
If, from any possible construction of any document, interest would otherwise be
payable in excess of the Maximum Amount, then, ipso facto, such document shall
be reformed and the interest payable reduced to the Maximum Amount, without
necessity of execution of any amendment or new document. If the holder hereof
ever receives interest in an amount which apart from this provision would exceed
the Maximum Amount, the excess shall, without penalty, be applied to the unpaid
principal of this Note in inverse order of maturity of installments and not to
the payment of interest, or be refunded to the payor, at the election of the
holder hereof in its sole 

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 9

discretion or as required by applicable law. The holder hereof does not intend
to charge or receive unearned interest on acceleration. All interest paid or
agreed to be paid to the holder hereof shall be spread throughout the full term
(including any renewal or extension) of the debt so that the amount of interest
does not exceed the Maximum Amount.

10. General Provisions. Time is of the essence with respect to Maker's
obligations under this Note. Maker and all sureties, endorsers, guarantors and
any other party now or hereafter liable for the payment of this Note in whole or
in part, hereby severally (i) waive demand, presentment for payment, notice of
dishonor and of nonpayment, protest, notice of protest, notice of intent to
accelerate, notice of acceleration and all other notices (except any notices
which are specifically required by this Note or any other Loan Document), filing
of suit and diligence in collecting this Note or enforcing any of the security
herefor; (ii) agree to any substitution, subordination, exchange or release of
any such security or the release of any party primarily or secondarily liable
hereon; (iii) agree that the holder hereof shall not be required first to
institute suit or exhaust its remedies hereon against Maker or others liable or
to become liable hereon or to perfect or enforce its rights against them or any
security herefor; (iv) consent to any extensions or postponements of time of
payment of this Note for any period or periods of time and to any partial
payments, before or after maturity, and to any other indulgences with respect
hereto, without notice thereof to any of them; and (v) submit (and waive all
rights to object) to non-exclusive personal jurisdiction in the State of
Georgia, and venue in the county in which payment is to be made as specified in
Section 1 of this Note, for the enforcement of any and all obligations under the
Loan Documents.

Maker and all other parties to this Note severally waive any and all homestead
and exemption rights which any of them or the family of any of them may have
under or by virtue of the Constitution or laws of the United States of America
or of any state as against this Note, any renewal hereof, or any indebtedness
evidenced hereby. Maker and all other parties to this Note jointly and severally
transfer, convey and assign to Lender or any other holder a sufficient amount of
property or money set apart as exempt to pay the indebtedness evidenced hereby,
or any renewal hereof and do hereby, jointly and severally, appoint Lender and
any other holder the attorney-in-fact for each of them to claim any and all
homestead exemptions allowed by law.

A determination that any provision of this Note is unenforceable or invalid
shall not affect the enforceability or validity of any other provision and the
determination that the application of any provision of this Note to any person
or circumstance is illegal or unenforceable shall not affect the enforceability
or validity of such provision as it may apply to other persons or circumstances.

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 10

This Note may not be amended except in a writing specifically intended for the
purpose and executed by the party against whom enforcement of the amendment is
sought. The holder of this Note may, from time to time, sell or offer to sell
the loan evidenced by this Note, or interests therein, to one or more assignees
or participants and is hereby authorized to disseminate any information it now
has or hereafter obtains pertaining to the loan evidenced by this Note,
including, without limitation, any security for this Note and credit or other
information on Maker, any of its principals and any guarantor of this Note, to
any assignee or participant or prospective assignee or prospective participant,
holder's affiliates, including NationsBanc Montgomery Securities LLC, any
regulatory body having jurisdiction over the holder of this Note and to any
other parties as necessary or appropriate in the holder of this Note's
reasonable judgment. Maker shall execute, acknowledge and deliver any and all
instruments reasonably requested by the holder of this Note in connection
therewith and to the extent, if any, specified in any such assignment or
participation, such companies, assignees or participants shall have the rights
and benefits with respect to this Note and the other Loan Documents as such
persons would have if such persons were Lender hereunder. Maker warrants and
represents to Lender and all other holders of this Note that the loan evidenced
by this Note is and will be for business or commercial purposes and not
primarily for personal, family, or household use. The terms, provisions,
covenants and conditions hereof shall be binding upon Maker and the
representatives, successors and assigns of Maker. Captions and headings in this
Note are for convenience only and shall be disregarded in construing it. THIS
NOTE, AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION, SHALL BE GOVERNED BY
GEORGIA LAW (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE
UNITED STATES FEDERAL LAW.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[Signatures Begin on Following Page]

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 11

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

MAKER:

Wells/Orange County Associates,
a Georgia joint venture

By:   Wells Operating Partnership, L.P.,
a Delaware limited partnership,
Joint Venture Partner

By:   Wells Real Estate Investment
Trust, Inc.,
a Maryland corporation,
General Partner

By: /s/ Brian M. Conlon
----------------------------------
Name: Brian M. Conlon
--------------------------------
Title: Executive Vice President
-------------------------------

[CORPORATE SEAL]

By:   Wells Development Corporation,
a Georgia corporation,
Joint Venture Partner

By: /s/ Brian M. Conlon
----------------------------------
Name: Brian M. Conlon
--------------------------------
Title: Executive Vice President
-------------------------------

[CORPORATE SEAL]

Maker's Federal Tax
Identification Number:  58-2404574

WELLS/ORANGE COUNTY ASSOCIATES
PROMISSORY NOTE 
PAGE 12

EXHIBIT 10.24

DEED OF TRUST

BETWEEN THE CORT JOINT VENTURE

AND

NATIONSBANK, N.A.

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

James H. Keaten, Esq.
Troutman Sanders LLP
NationsBank Plaza - Suite 5200
600 Peachtree Street, N.E.
Atlanta, Georgia  30308-2216

INSTRUCTIONS TO RECORDER:
Index this document as
(i)   a deed of trust; 
(ii)  an assignment of rents; 
(iii) a security agreement; and 
(iv)  a fixture filing

================================================================================
DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING
STATE OF GEORGIA

COUNTY OF FULTON

THIS DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND
FIXTURE FILING (the "Security Instrument") is made and entered into as of the
30th day of July, 1998, by WELLS/ORANGE COUNTY ASSOCIATES, a Georgia joint
venture comprised of Wells Development Corporation, a Georgia corporation, and
Wells Operating Partnership, L.P., a Delaware limited partnership ("Borrower"),
in favor of CHICAGO TITLE COMPANY, with an address of 16969 Von Karman, Irvine,
California 92606 ("Trustee"), and NATIONSBANK, N.A., a national banking
corporation, together with its successors and assigns ("Lender").

ARTICLE 1 - CERTAIN DEFINITIONS; GRANTING CLAUSES; SECURED INDEBTEDNESS

Section 1.1. Certain Definitions and Reference Terms. In addition to
other terms defined herein, each of the following terms shall have the meaning
assigned to it:

"Promissory Note": Promissory Note dated of even date herewith made
by Borrower payable to the order of Lender in the principal face amount of FOUR
MILLION EIGHT HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS ($4,875,000.00),
bearing interest at a variable rate as therein provided, and finally maturing on
July 30, 1999, unless extended to January 30, 2000, pursuant to the terms of
said Note, which, by this reference, is made a part hereof.

Section 1.2. Property. The Borrower, in consideration of the
indebtedness herein recited, irrevocably grants, conveys

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 1

and assigns to the Trustee and the Trustee's successors and assigns, in trust,
with power of sale, all of the following described land, real property
interests, buildings, improvements, fixtures, furniture and appliances and other
personal property: (a) the real estate (herein called the "Land") described in
Exhibit A which is attached hereto and incorporated herein by reference, and (i)
all improvements now or hereafter situated or to be situated on the Land (herein
together called the "Improvements"); and (ii) all right, title and interest of
Borrower, now owned or hereafter acquired, in and to (1) all streets, roads,
alleys, easements, rights-of-way, licenses, rights of ingress and egress,
vehicle parking rights and public places, existing or proposed, abutting,
adjacent, used in connection with or pertaining to the Land or the Improvements;
(2) any strips or gores between the Land and abutting or adjacent properties;
(3) all options to purchase or lease the Land or the Improvements or any portion
thereof or interest therein, and any greater estate in the Land or the
Improvements; (4) all claims, actions and causes of action, both in law and in
equity, with respect to the Property or the Improvements; and (5) all water and
water rights, timber, crops and mineral interests on or pertaining to the Land
(the Land, Improvements and other rights, titles and interests referred to in
this clause (a) being herein sometimes collectively called the "Premises"); (b)
all fixtures, equipment, systems, machinery, furniture, furnishings, appliances,
inventory, goods, building and construction materials, supplies, and articles of
personal property, of every kind and character, now owned or hereafter acquired
by Borrower, which are now or hereafter attached to or situated in, on or about
the Land or the Improvements, or used in or necessary to the complete and proper
planning, development, use, occupancy or operation thereof, or acquired (whether
delivered to the Land or stored elsewhere) for use or installation in or on the
Land or the Improvements, and all renewals and replacements of, substitutions
for and additions to the foregoing (the properties referred to in this clause
(b) being herein sometimes collectively called the "Accessories," all of which
are hereby declared to be permanent accessions to the Land); (c) all (i) plans
and specifications for the Improvements; (ii) Borrower's rights, but not
liability for any breach by Borrower, under all commitments (including any
commitment for financing to pay any of the secured indebtedness, as defined
below), insurance policies, contracts and agreements for the design,
construction, operation or inspection of the Improvements and other contracts
and general intangibles (including but not limited to trademarks, trade names,
goodwill and symbols) related to the Premises or the Accessories or the
operation thereof; (iii) deposits (including but not limited to Borrower's
rights in tenants' security deposits, deposits with respect to utility services
to the Premises, and any deposits or reserves hereunder

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 2

or under any other Loan Document for taxes, insurance or otherwise), rebates or
refunds of impact fees or other taxes, assessments or charges, money, accounts,
instruments, documents, notes and chattel paper arising from or by virtue of any
transactions related to the Premises or the Accessories; (iv) permits, licenses,
franchises, certificates, development rights, commitments and rights for
utilities, and other rights and privileges obtained in connection with the
Premises or the Accessories; (v) leases, rents, royalties, bonuses, issues,
profits, revenues and other benefits of the Premises and the Accessories
(without derogation of Article 3 hereof); (vi) oil, gas and other hydrocarbons
and other minerals produced from or allocated to the Land and all products
processed or obtained therefrom, and the proceeds thereof; and (vii)
engineering, accounting, title, legal, and other technical or business data
concerning the Property which are in the possession of Borrower or in which
Borrower can otherwise grant a security interest; and (d) all (i) proceeds of or
arising from the properties, rights, titles and interests referred to above in
this Section 1.2, including but not limited to proceeds of any sale, lease or
other disposition thereof, proceeds of each policy of insurance relating thereto
(including premium refunds), proceeds of the taking thereof or of any rights
appurtenant thereto, including change of grade of streets, curb cuts or other
rights of access, by eminent domain or transfer in lieu thereof for public or
quasi-public use under any law, and proceeds arising out of any damage thereto;
(ii) all claims, actions and causes of action, both in law and in equity, with
respect to the Property or the Improvements; and (iii) other interests of every
kind and character which Borrower now has or hereafter acquires in, to or for
the benefit of the properties, rights, titles and interests referred to above in
this Section 1.2 and all property used or useful in connection therewith,
including but not limited to rights of ingress and egress and remainders,
reversions and reversionary rights or interests; and if the estate of Borrower
in any of the property referred to above in this Section 1.2 is a leasehold
estate, this conveyance shall include, and the lien and interest created hereby
shall encumber and extend to, all other or additional title, estates, interests
or rights which are now owned or may hereafter be acquired by Borrower in or to
the property demised under the lease creating the leasehold estate; TO HAVE AND
TO HOLD the foregoing rights, interests and properties, and all rights, estates,
powers and privileges appurtenant thereto (herein collectively called the
"Property"), to the use, benefit and behoof of Lender, forever, in fee simple
subject to the Permitted Encumbrances (as hereafter defined).

Section 1.3. Security Interest. As additional collateral and further
security for the indebtedness secured hereby, to the fullest extent permitted by
applicable law,

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Borrower hereby assigns and grants to Lender a security interest in all of the
Property which constitutes personal property or fixtures (herein sometimes
collectively called the "Collateral"). In addition to its rights hereunder or
otherwise, Lender shall have all of the rights of a secured party under the
Uniform Commercial Code as adopted in the State of California, or under the
Uniform Commercial Code in force in any other state to the extent the same is
applicable law.

Section 1.4. Note, Loan Documents, Other Obligations. This Security
Instrument is made to secure and enforce the payment and performance of the
following promissory notes, obligations, indebtedness and liabilities and all
renewals, extensions, supplements, increases, and modifications thereof in whole
or in part from time to time: (a) the Promissory Note and all other notes given
in substitution therefor or in modification, supplement, increase, renewal or
extension thereof, in whole or in part (such note or notes, whether one or more,
as from time to time renewed, extended, supplemented, increased or modified and
all other notes given in substitution therefor, or in modification, renewal or
extension thereof, in whole or in part, being hereinafter called the "Note");
(b) all indebtedness and other obligations owed by Borrower to Lender, or any
affiliate of Lender, now or hereafter incurred or arising pursuant to or
permitted by the provisions of the Note, this Security Instrument, the
Environmental Indemnity Agreement (the "Environmental Agreement") of even date
herewith between Borrower and Lender, or any other document now or hereafter
evidencing, governing, guaranteeing, securing or otherwise executed in
connection with the loan evidenced by the Note, including but not limited to any
loan or credit agreement, tri-party financing agreement, purchase and sale
agreement with respect to the Property or other agreement between Borrower and
Lender, or among Borrower, Lender and any other party or parties, pertaining to
the repayment or use of the proceeds of the loan evidenced by the Note (the
Note, this Security Instrument, the Environmental Agreement and such other
documents, as they or any of them may have been or may be from time to time
renewed, extended, supplemented, increased or modified, being herein sometimes
collectively called the "Loan Documents"); and (c) all other loans and future
advances made by Lender to Borrower and all other debts, obligations and
liabilities of Borrower of every kind and character now or hereafter existing in
favor of Lender, however and whenever incurred, whether direct or indirect,
primary or secondary, joint or several, fixed or contingent, secured or
unsecured, and whether originally payable to Lender or to a third party and
subsequently acquired by Lender; provided, however, and notwithstanding the
foregoing provisions of this clause (c), this Security Instrument shall not
secure any such other loan, advance, debt, obligation or liability with respect

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to which Lender is by applicable law prohibited from obtaining a lien or
security title on real estate nor shall this clause (c) operate or be effective
to constitute or require any assumption or payment by any person, in any way, of
any debt of any other person to the extent that the same would violate or exceed
the limit provided in any applicable usury or other law. The indebtedness
referred to in this Section 1.4 is hereinafter sometimes referred to as the
"secured indebtedness" or the "indebtedness secured hereby."

ARTICLE 2 - Representations, Warranties and Covenants

Section 2.1. Borrower represents, warrants, and covenants as
follows:

(a) Payment and Performance. Borrower will make due and punctual
payment of the secured indebtedness. Borrower will timely and properly perform
and comply with all of the covenants, agreements, and conditions imposed upon it
by this Security Instrument and the other Loan Documents and will not permit a
default to occur hereunder or thereunder. Time shall be of the essence in this
Security Instrument.

(b) Title and Permitted Encumbrances. Borrower has, in Borrower's
own right, and Borrower covenants to maintain, lawful, good and marketable fee
simple title to the Property, is lawfully seized and possessed of the Property
and every part thereof, and has the right to convey the same, free and clear of
all liens, charges, claims, interests, and encumbrances except for (i) the
matters, if any, set forth under the heading "Permitted Exceptions" in Exhibit B
hereto, which are Permitted Exceptions only to the extent the same are valid and
subsisting and affect the Property, (ii) the liens and security interests
evidenced by this Security Instrument, (iii) other liens and security interests
(if any) in favor of Lender (the matters described in the foregoing clauses (i),
(ii) and (iii) being herein called the "Permitted Encumbrances"). Borrower, and
Borrower's successors and assigns, will warrant and forever defend title to the
Property, subject as aforesaid, to Lender and its successors and assigns,
against the claims and demands of all persons claiming or to claim the same or
any part thereof. Borrower will punctually pay, perform, observe and keep all
covenants, obligations and conditions in or pursuant to any Permitted
Encumbrance and will not modify or permit modification of any Permitted
Encumbrance without the prior written consent of Lender. Inclusion of any matter
as a Permitted Encumbrance does not constitute approval or waiver by Lender of
any existing or future violation or other breach thereof by Borrower, by the
Property or otherwise. If any right or interest of Lender in the Property or any
part thereof shall be endangered or questioned or

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shall be attacked directly or indirectly, Lender (whether or not named as the
party to legal proceedings with respect thereto) is hereby authorized and
empowered to take such steps as in its discretion may be proper for the defense
of any such legal proceedings or the protection of such right or interest of
Lender, including but not limited to the employment of independent counsel, the
prosecution or defense of litigation, and the compromise or discharge of adverse
claims. All expenditures so made of every kind and character shall be a demand
obligation (which obligation Borrower hereby promises to pay) owing by Borrower
to Lender, and Lender shall be subrogated to all rights of the person receiving
such payment.

(c) Taxes and Other Impositions. Borrower will pay, or cause to be
paid, all taxes, assessments and other charges or levies imposed upon or against
or with respect to the Property or the ownership, use, occupancy or enjoyment of
any portion thereof, or any utility service thereto, as the same become due and
payable, including but not limited to all ad valorem taxes assessed against the
Property or any part thereof, and shall deliver promptly to Lender such evidence
of the payment thereof as Lender may require.

(d) Insurance.

I. Required Insurance. Borrower shall obtain and maintain at
Borrower's sole expense: (1) Lender title insurance issued to Lender covering
the Premises as required by Lender; (2) all-risk insurance with respect to all
insurable Property, against loss or damage by fire, lightning, windstorm,
explosion, hail, tornado and such hazards as are presently included in so-called
"all-risk" coverage and against such other insurable hazards as Lender may
require, in an amount not less than 100% of the full replacement cost, including
the cost of debris removal, without deduction for depreciation and sufficient to
prevent Borrower and Lender from becoming a coinsurer, such insurance to be in
builder's risk (non-reporting) form during and with respect to any construction
on the Premises; (3) if and to the extent any portion of the Improvements is in
a special flood hazard area, a flood insurance policy in an amount equal to the
lesser of the principal face amount of the Note or the maximum amount available;
(4) comprehensive general public liability insurance, on an "occurrence" basis,
for the benefit of Borrower and Lender as named insureds; (5) statutory workers'
compensation insurance with respect to any work on or about the Premises; and
(6) such other insurance on the Property as may from time to time be required by
Lender (including but not limited to rental loss or business interruption
insurance, boiler and machinery insurance, earthquake insurance, and war risk
insurance) and against other insurable hazards or casualties which at the time
are commonly

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insured against in the case of premises similarly situated, due regard being
given to the height, type, construction, location, use and occupancy of
buildings and improvements. All insurance policies shall be issued and
maintained by insurers, in amounts, with deductibles, and in form satisfactory
to Lender, and shall require not less than thirty (30) days' prior written
notice to Lender of any cancellation or change of coverage. All insurance
policies maintained, or caused to be maintained, by Borrower with respect to the
Property, except for public liability insurance, shall provide that each such
policy shall be primary without right of contribution from any other insurance
that may be carried by Borrower or Lender and that all of the provisions
thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured. If any insurer which has
issued a policy of title, hazard, liability or other insurance required pursuant
to this Security Instrument or any other Loan Document becomes insolvent or the
subject of any bankruptcy, receivership or similar proceeding or if in Lender's
reasonable opinion the financial responsibility of such insurer is or becomes
inadequate, Borrower shall, in each instance promptly upon the request of Lender
and at Borrower's expense, obtain and deliver to Lender a like policy (or, if
and to the extent permitted by Lender, a certificate of insurance) issued by
another insurer, which insurer and policy meet the requirements of this Security
Instrument or such other Loan Document, as the case may be. Without limiting the
discretion of Lender with respect to required endorsements to insurance
policies, all such policies for loss of or damage to the Property shall contain
a standard Lender clause (without contribution) naming Lender as Lender with
loss proceeds payable to Lender notwithstanding (i) any act, failure to act or
negligence of or violation of any warranty, declaration or condition contained
in any such policy by any named insured; (ii) the occupation or use of the
Property for purposes more hazardous than permitted by the terms of any such
policy; (iii) any foreclosure or other action by Lender under the Loan
Documents; or (iv) any change in title to or ownership of the Property or any
portion thereof, such proceeds to be held for application as provided in the
Loan Documents. The originals of each initial insurance policy (or to the extent
permitted by Lender, a copy of the original policy and a satisfactory
certificate of insurance) shall be delivered to Lender at the time of execution
of this Security Instrument, with premiums fully paid, and each renewal or
substitute policy (or certificate) shall be delivered to Lender, with premiums
fully paid, at least ten (10) days before the termination of the policy it
renews or replaces. Borrower shall pay all premiums on policies required
hereunder as they become due and payable and promptly deliver to Lender evidence
satisfactory to Lender of the timely payment thereof. If any loss occurs at any
time when

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Borrower has failed to perform Borrower's covenants and agreements in this
paragraph, Lender shall nevertheless be entitled to the benefit of all insurance
covering the loss and held by or for Borrower, to the same extent as if it had
been made payable to Lender. Upon any foreclosure hereof or transfer of title to
the Property in extinguishment of the whole or any part of the secured
indebtedness, all of Borrower'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. Lender 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, and the expenses incurred by
Lender in the adjustment and collection of insurance proceeds shall be a part of
the secured indebtedness and shall be due and payable to Lender on demand.
Lender 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 Borrower. Subject to
the terms of Subsection II, below, any proceeds received by Lender shall, after
deduction therefrom of all reasonable expenses actually incurred by Lender,
including attorneys' fees, at Lender's option be (1) released to Borrower, or
(2) applied (upon compliance with such terms and conditions as may be required
by Lender) to repair or restoration, either partly or entirely, of the Property
so damaged, or (3) applied to the payment of the secured indebtedness in such
order and manner as Lender, in its sole but reasonable discretion, may elect,
whether or not due. In any event, the unpaid portion of the secured indebtedness
shall remain in full force and effect and the payment thereof shall not be
excused. Borrower 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.

II. Restoration Advances.

(i) Lender agrees that in the event that all or a portion of the
Improvements shall be destroyed or damaged by fire, explosion, windstorm, hail
or any other casualty against which insurance is required under this Security
Instrument, Lender will elect to apply the insurance proceeds which remain after
payment of the expenses of collection thereof as provided in Subsection I, above
(called the "Proceeds" below in this Subsection), or so much thereof as is
required, to restoration of the portion of the Premises damaged, as nearly as
practicable to

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its value, character and condition immediately prior to such casualty (the
"Restoration"), provided that all of the following conditions precedent are
satisfied in full not later than ninety (90) days after the date on which the
casualty loss occurs:

A) no default shall have occurred and shall remain uncured following
the expiration of any grace or cure period;

B) all tenants having present or future possessory rights under
Leases (hereinafter defined), including without limitation the tenant
under the that certain Standard Industrial/Commercial Single-Tenant
Lease-Net (the "Cort Furniture Lease") dated October 25, 1988, by and
between Spencer Fountain Valley Holdings, Inc., a California corporation,
as Lessor, and Cort Furniture Rental Corporation, a New York corporation,
as Lessee, the Lessor's interest thereunder having been assigned to
Borrower, have agreed in a manner satisfactory to Lender that their Leases
will continue in full force and effect and, if necessary, the time for
taking or regaining possession of the demised premises under such Leases
will be extended by the time necessary to complete the Restoration;

C) all parties having operating, management or franchise interests
in, and arrangements concerning, the Property have agreed that they will
continue their interests and arrangements for the contract terms then in
effect following the Restoration;

D) all parties having commitments to provide financing with respect
to the Property, to purchase Borrower's interest in full or in part in the
Property or to purchase or pay the loan evidenced by the Note
(collectively, "Commitment Providers") have agreed in a manner
satisfactory to Lender that their commitments will continue in full force
and effect and, if necessary, the expiration of such commitments will be
extended by the time necessary to complete the Restoration;

E) Borrower has presented evidence satisfactory to Lender, and
Lender has reasonably determined, that the Restoration can be accomplished
within a reasonable period of time and in any event prior to the Maturity
Date (as defined in the Note);

F) Borrower has delivered or caused to be delivered to Lender, and
Lender has approved, complete final plans and specifications (the
"Restoration Plans") for the work to be performed in connection with the
Restoration (hereinafter

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called the "Restoration Work") prepared and sealed by an architect (the
"Architect") acceptable to Lender, with evidence satisfactory to Lender of
the approval of the Restoration Plans by all Commitment Providers and by
all governmental authorities and all tenants under Leases whose approval
is required;

G) Borrower has delivered or caused to be delivered to Lender a
signed estimate approved in writing by the Architect, stating the entire
cost of completing the Restoration Work;

H) Borrower has entered into, and has furnished to Lender a copy of,
a fixed price construction contract satisfactory to Lender, with a
contractor reasonably acceptable to Lender, bonded to the extent required
by Lender, for the Restoration Work;

I) if Lender has determined that (i) the projected cost of the
Restoration Work substantially in accordance with the Restoration Plans
exceeds (ii) the available Proceeds held by Lender, then Borrower has
deposited with Lender funds sufficient to cover the excess cost;

J) Borrower has furnished all insurance coverage required by Lender
pursuant to Subsection 2.1(d)(I), above; and

K) Lender has determined that it will not incur any liability to any
person as a result of such use of the Proceeds.

If all of the foregoing conditions have not been satisfied within
the time limit specified above, then Lender may, at its option, apply such
Proceeds to the indebtedness secured hereby, whether or not due, in such order
and manner as Lender elects.

(ii) To the extent that Lender elects to apply the Proceeds to the
restoration or reconstruction of the Improvements, then disbursement of the
Proceeds for Restoration or Restoration Work shall be subject to and shall be
made in accordance with the customary practices of Lender governing the
disbursement of construction loans. If Lender determines from time to time that
(i) the estimated cost of the Restoration substantially in accordance with the
Restoration Plans exceeds (ii) the available Proceeds held by Lender plus all
other available funds deposited by Borrower with Lender for the purpose of the
Restoration, then Borrower shall deposit additional funds with Lender to cover
the excess cost before Lender shall be

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required to disburse any such Proceeds or other available funds for Restoration
costs. Any such funds provided by Borrower to cover excess costs shall be used
for the costs of Restoration prior to disbursement of any of the Proceeds for
such costs.

(iii) Any such Proceeds and additional funds provided by Borrower
which are held by Lender under this Subsection II shall be held by Lender in an
account of Lender's selection until disbursed for Restoration or otherwise
applied as herein provided. Lender's receipt and custody of such Proceeds or
additional funds shall not constitute a repayment of any of the indebtedness
secured hereby, unless and until such Proceeds or additional funds are actually
applied against the indebtedness secured hereby in accordance with this Security
Instrument. No disbursement of such Proceeds for Restoration costs shall
constitute an advance of the loan evidenced by the Note or increase the
principal amount of such loan. If surplus Proceeds remain after completion of
the Restoration and payment of all costs therefor, then such surplus Proceeds
shall be applied against the indebtedness secured hereby in such manner and
order as Lender elects. If surplus funds then remain from additional funds
provided by Borrower to cover excess costs of Restoration, then such surplus
funds shall be returned to Borrower, provided that no uncured default shall
exist hereunder.

(iv) In any event, upon the occurrence of a default at any time, and
the expiration of any applicable grace or cure period without the curing
thereof, Lender may (but has no obligation to) apply all or any portion of such
Proceeds or additional funds provided by Borrower in Lender's possession to the
payment of the indebtedness secured hereby, whether or not due, in such order
and manner as Lender elects, and/or to the cure of any default without waiving
the same.

(e) Reserve for Insurance, Taxes and Assessments. Upon request of
Lender, to secure certain of Borrower's obligations in paragraphs (c) and (d)
above, but not in lieu of such obligations, Borrower will deposit with Lender a
sum equal to ad valorem taxes, assessments and charges (which charges for the
purpose of this paragraph shall include without limitation any recurring charge
which could result in a lien against the Property) against the Property for the
current year and the premiums for such policies of insurance for the current
year, all as estimated by Lender and prorated to the end of the calendar month
following the month during which Lender's request is made, and thereafter will
deposit with Lender, on each date when an installment of principal and/or
interest is due on the Note, sufficient funds (as estimated from time to time by
Lender) to permit Lender to pay at least fifteen (15) days prior to the
delinquency date thereof, the next maturing ad valorem taxes,

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assessments and charges and premiums for such policies of insurance. Lender
shall have the right to rely upon tax information furnished by applicable taxing
authorities in the payment of such taxes or assessments and shall have no
obligation to make any protest of any such taxes or assessments. Any excess over
the amounts required for such purposes shall be held by Lender for future use,
applied to any secured indebtedness or refunded to Borrower, at Lender's option,
and any deficiency in such funds so deposited shall be made up by Borrower upon
demand of Lender. All such funds so deposited shall bear interest at the rate
applicable to the account selected by Lender for such funds, may be mingled with
the general funds of Lender and shall be applied by Lender toward the payment of
such taxes, assessments, charges and premiums when statements therefor are
presented to Lender by Borrower (which statements shall be presented by Borrower
to Lender a reasonable time before the applicable amount is delinquent);
provided, however, that, if a default shall have occurred hereunder, such funds
may at Lender's option be applied to the payment of the secured indebtedness in
the order determined by Lender in its sole discretion, and that Lender may (but
shall have no obligation) at any time, in its discretion, apply all or any part
of such funds toward the payment of any such taxes, assessments, charges or
premiums which are past due, together with any penalties or late charges with
respect thereto. The conveyance or transfer of Borrower's interest in the
Property for any reason (including without limitation the foreclosure of a
subordinate lien or security interest or a transfer by operation of law) shall
constitute an assignment or transfer of Borrower's interest in and rights to
such funds held by Lender under this paragraph but subject to the rights of
Lender hereunder.

(f) Condemnation. Borrower shall notify Lender immediately of any
threatened or pending proceeding for condemnation affecting the Property or
arising out of damage to the Property, and Borrower shall, at Borrower's
expense, diligently prosecute any such proceedings. Lender shall have the right
(but not the obligation) to participate in any such proceeding and to be
represented by counsel of its own choice. Lender shall be entitled to receive
all sums which may be awarded or become payable to Borrower 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 Borrower for injury or damage to the Property. Borrower shall,
promptly upon request of Lender, execute such additional assignments and other
documents as may be necessary from time to time to permit such participation and
to enable Lender to collect and receipt for any such sums. All such sums are
hereby assigned to Lender, and shall, after deduction therefrom of all
reasonable expenses actually incurred by Lender,

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including attorneys' fees, at Lender's option be (1) released to Borrower, or
(2) applied (upon compliance with such terms and conditions as may be required
by Lender) to repair or restoration of the Property so affected, or (3) applied
to the payment of the secured indebtedness in such order and manner as Lender,
in its sole but reasonable discretion, may elect, whether or not due. In any
event the unpaid portion of the secured indebtedness shall remain in full force
and effect and the payment thereof shall not be excused. Lender 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 Borrower. Lender is hereby
authorized, in the name of Borrower, to execute and deliver valid acquittances
for, and to appeal from, any such award, judgment or decree. All costs and
expenses (including but not limited to attorneys' fees) incurred by Lender in
connection with any condemnation shall be a demand obligation owing by Borrower
(which Borrower hereby promises to pay) to Lender pursuant to this Security
Instrument.

(g) Compliance with Legal Requirements. The Property and the use,
operation and maintenance thereof and all activities thereon do and shall at all
times comply with all applicable Legal Requirements (defined below). The
Property is not, and shall not be, dependent on any other property or premises
or any interest therein other than the Property to fulfill any requirement of
any Legal Requirement. Borrower shall not, by act or omission, permit any
building or other improvement not subject to the lien and interest of this
Security Instrument to rely on the Property or any interest therein to fulfill
any requirement of any Legal Requirement. No part of the Property constitutes a
nonconforming use under any zoning law or similar law or ordinance. Borrower has
obtained and shall preserve in force all requisite zoning, utility, building,
health, environmental and operating permits from the governmental authorities
having jurisdiction over the Property. If Borrower 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,
Borrower will promptly furnish a copy of such notice or claim to Lender.
Borrower has received no notice and has no knowledge of any such noncompliance.
As used in this Security Instrument: (i) the term "Legal Requirement" means any
Law (defined below), 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; and (ii) the term
"Law" means any federal, state or local law, statute, ordinance, code, rule,
regulation, license, permit,

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authorization, decision, order, injunction or decree, domestic or foreign.

(h) Maintenance, Repair and Restoration. Borrower will keep the
Property 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,
Borrower will not, without the prior written consent of Lender, which consent
shall not be unreasonably withheld (i) remove from the Property any fixtures or
personal property conveyed or encumbered by this Security Instrument except such
as is replaced by Borrower by an article of equal suitability and value, owned
by Borrower, free and clear of any lien or security interest (except that
created by this Security Instrument), or (ii) make any structural alteration to
the Property or any other alteration thereto which impairs the value thereof. If
any act or occurrence of any kind or 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, Borrower shall give prompt
notice thereof to Lender and Borrower shall promptly, at Borrower's sole cost
and expense and regardless of whether insurance or condemnation proceeds (if
any) shall be available or sufficient for the purpose, 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.

(i) No Other Liens. Borrower will not, without the prior written
consent of Lender, create, place or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or allow to remain, any
deed to secure debt, Security Instrument, voluntary or involuntary lien, whether
statutory, constitutional or contractual, security title, interest, encumbrance
or charge, or conditional sale or other title retention document, against or
covering the Property, or any part thereof, other than the Permitted
Encumbrances, regardless of whether the same are expressly or otherwise
subordinate to the lien or security interest created in this Security
Instrument, and should any of the foregoing become attached hereafter in any
manner to any part of the Property without the prior written consent of Lender,
Borrower will cause the same to be promptly discharged and released. Borrower
will own all parts of the Property and will not acquire any fixtures, equipment
or other property forming a part of the Property pursuant to a lease, license,
security agreement or similar agreement, whereby any party has or may obtain the
right to repossess or remove same, without the prior written consent of

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Lender, which consent shall not be unreasonably withheld. If Lender consents to
the voluntary grant by Borrower of any deed to secure debt, lien, security
interest, or other encumbrance (hereinafter called "Subordinate Lien") conveying
or encumbering any of the Property or if the foregoing prohibition is determined
by a court of competent jurisdiction to be unenforceable as to a Subordinate
Lien, any such Subordinate Lien shall contain express covenants to the effect
that: (1) the Subordinate Lien is unconditionally subordinate to this Security
Instrument and all Leases (hereinafter defined); (2) if any action (whether
judicial or pursuant to a power of sale) shall be instituted to foreclose or
otherwise enforce the Subordinate Lien, no tenant of any of the Leases
(hereinafter defined) shall be named as a party defendant, and no action shall
be taken that would terminate any occupancy or tenancy without the prior written
consent of Lender; (3) Rents (hereinafter defined), if collected by or for the
holder of the Subordinate Lien, shall be applied first to the payment of the
secured indebtedness then due and expenses incurred in the ownership, operation
and maintenance of the Property in such order as Lender may determine, prior to
being applied to any indebtedness secured by the Subordinate Lien; (4) written
notice of default under the Subordinate Lien and written notice of the
commencement of any action (whether judicial or pursuant to a power of sale) to
foreclose or otherwise enforce the Subordinate Lien or to seek the appointment
of a receiver for all or any part of the Property shall be given to Lender with
or immediately after the occurrence of any such default or commencement; and (5)
neither the holder of the Subordinate Lien, nor any purchaser at foreclosure
thereunder, nor anyone claiming by, through or under any of them shall succeed
to any of Borrower's rights hereunder without the prior written consent of
Lender.

(j) Operation of Property. Borrower will operate the Property 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. Borrower will
keep the Property occupied so as not to impair the insurance carried thereon.
Borrower 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 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. Borrower 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.
Borrower will not impose any easement, restrictive

WELLS/ORANGE COUNTY ASSOCIATES
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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
Lender, which consent shall not be unreasonably withheld. Borrower will not do
or suffer to be done any act whereby the value of any part of the Property may
be lessened. Borrower will preserve, protect, renew, extend and retain all
material rights and privileges granted for or applicable to the Property.
Without the prior written consent of Lender pursuant to paragraph (u) of this
Section 2.1, 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. Borrower will cause all debts and liabilities of any
character (including without limitation all debts and liabilities for labor,
material and equipment 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.

(k) Financial Matters. Borrower is solvent after giving effect to
all borrowings contemplated by the Loan Documents and no proceeding under any
Debtor Relief Law (hereinafter defined) is pending (or, to Borrower's knowledge,
threatened) by or against Borrower, or any affiliate of Borrower, 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 Borrower to Lender 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
Borrower or, to Borrower's knowledge, of any tenant under any lease described
therein. For the purposes of this paragraph, "Borrower" shall also include any
person liable directly or indirectly for the secured indebtedness or any part
thereof and any joint venturer or general partner of Borrower.

(l) Status of Borrower; Suits and Claims; Loan Documents. Borrower
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

WELLS/ORANGE COUNTY ASSOCIATES
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located, and (iii) possessed of all requisite power and authority to carry on
its business and to own and operate the Property. Each Loan Document executed by
Borrower has been duly authorized, executed and delivered by Borrower, and the
obligations thereunder and the performance thereof by Borrower in accordance
with their terms are and will continue to be within Borrower'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 Borrower or the Property is subject, and do not
and will not result in the creation of any encumbrance against any assets or
properties of Borrower, or any other person liable, directly or indirectly, for
any of the secured indebtedness, except as expressly contemplated by the Loan
Documents. There is no suit, action, claim, investigation, inquiry, proceeding
or demand pending (or, to Borrower's knowledge, threatened) against Borrower or
against any person liable directly or indirectly for the secured indebtedness or
which affects the Property (including, without limitation, any which challenges
or otherwise pertains to Borrower'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 Borrower's knowledge,
threatened) against Borrower or against any other person liable directly or
indirectly for the secured indebtedness, except as has been disclosed in writing
to Lender in connection with the loan evidenced by the Note. The Loan Documents
constitute legal, valid and binding obligations of Borrower (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. Borrower is not a "foreign person" within the
meaning of the Internal Revenue Code of 1986, as amended, Sections 1445 and 7701
(i.e. Borrower 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 purposes, and is not for personal, family, household or
agricultural purposes. Borrower will not cause or permit any change to be made
in its name, identity, or corporate or partnership structure, unless Borrower
shall have notified Lender of such change prior to the effective date of such
change, and shall have first taken all action required by Lender for the purpose
of further perfecting or protecting the lien and security interest of Lender in
the Property. Borrower's principal place of business and chief executive office,
and the place where Borrower keeps its books and records concerning the
Property, has for the preceding four months been and will continue to be (unless
Borrower notifies Lender of any change in writing prior to the date of such
change)

WELLS/ORANGE COUNTY ASSOCIATES
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the address of Borrower set forth at the end of this Security Instrument.

(m) Certain Environmental Matters.

(i) Definitions. As used in this Security Instrument: (1)
"Environmental Claim" means any investigative, enforcement, cleanup, removal,
containment, remedial or other governmental or regulatory action at any time
threatened, instituted or completed pursuant to any applicable Environmental
Requirement against Borrower or against or with respect to the Property or any
use or activity on the Property, and any claim at any time threatened or made by
any person against Borrower or against or with respect to the Property or any
use or activity on the Property, relating to damage, contribution, cost
recovery, compensation, loss or injury resulting from any Hazardous Substance;
(2) "Environmental Requirement" means any Legal Requirement which pertains to
ground or air or water or noise pollution or contamination, underground or
aboveground tanks, health or the environment, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended ("RCRA"), and all environmental laws, ordinances, regulations and rules
of the State of California and each agency, instrumentality and subdivision
thereof having jurisdiction over the Premises; and (3) "Hazardous Substance"
means any substance, whether solid, liquid or gaseous: (a) which is listed,
defined or regulated as a "hazardous substance", "hazardous waste" or "solid
waste", or otherwise classified as hazardous or toxic, in or pursuant to any
Environmental Requirement; or (b) which is or contains asbestos, radon, any
polychlorinated biphenyl, urea formaldehyde foam insulation, or explosive or
radioactive material; or (c) which causes or poses a threat to cause a
contamination or nuisance on the Property or on any adjacent property or a
hazard to the environment or to the health or safety of persons on the Property.
As used in this paragraph (m), the word "on" when used with respect to the
Property or adjacent property means "on, in, under, above or about".

(ii) Representations and Warranties. Borrower represents and
warrants to Lender, without regard to whether Lender has or hereafter obtains
any knowledge or report of the environmental condition of the Property, as
follows: (1) during the period of Borrower's ownership of the Property, the
Property has not been used for industrial or manufacturing purposes, for
landfill, dumping or other waste disposal activity or operation, for generation,
storage, use, sale, treatment, processing, recycling or disposal of any
Hazardous Substance, or for any other use that would give rise to the release of
any Hazardous Substance on the Property; (2) to the best of Borrower's

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knowledge after inquiry in accordance with good commercial or customary
practices, no use of the Property described in clause (1) preceding occurred at
any time prior to the period of Borrower's ownership of the Property nor did any
such use on any adjacent property occur during or at any time prior to the
period of Borrower's ownership of the Property, and there is no Hazardous
Substance, storage tank (or similar vessel), sump or well on the Property; (3)
Borrower has received no notice and has no knowledge of any Environmental Claim
or any completed, pending, proposed or threatened investigation or inquiry
concerning the presence or release of any Hazardous Substance on the Property or
on any adjacent property or concerning whether any condition, use or activity on
the Property or on any adjacent property is in violation of any Environmental
Requirement; (4) the present conditions, uses and activities on the Property do
not violate any Environmental Requirement and the use of the Property which
Borrower (and each tenant and subtenant, if any) makes and intends to make of
the Property complies and will comply with all applicable Environmental
Requirements; (5) the Property is not currently on, and to the best of
Borrower's knowledge after inquiry in accordance with good commercial or
customary practices, has never been on, any federal or state "superfund" or
"superlien" list; and (6) neither Borrower, nor to Borrower's knowledge any
tenant or subtenant, has obtained or is required to obtain any permit or other
authorization to construct, occupy, operate, use or conduct any activity on any
of the Property by reason of any Environmental Requirement.

(iii) Violations. Borrower will not cause, commit, permit or allow
to continue any violation of any Environmental Requirement by Borrower or by or
with respect to the Property or any use or activity on the Property, or the
attachment of any environmental lien to the Property. Borrower will not place,
install, dispose of or release, or cause, permit or allow the placing,
installation, disposal or release of, any Hazardous Substance or storage tank
(or similar vessel) on the Property and will keep the Property free of any
Hazardous Substance. Notwithstanding the foregoing provisions of this Subsection
(iii), Borrower shall not be in default under this Subsection (iii) should
Borrower store minimal quantities of substances on the Premises which
technically could be considered Hazardous Substance, provided that: such
substances are of a type and are held only in a quantity normally used in
connection with the construction, occupancy or operation of comparable buildings
(such as cleaning fluids, and supplies normally used in the day to day operation
of business offices), such substances are being held, stored and used in
complete and strict compliance with all applicable Environmental Requirements,
and the indemnity in Section 7 of the Environmental Agreement shall always apply
to such substances, and it shall be and continue to be the

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PAGE 19

responsibility of Borrower to take all remedial actions required under and in
accordance with Subsection (vi), below, in the event of any unlawful release of
any such substance.

(iv) Notice to Lender. Borrower will promptly advise Lender in
writing of any Environmental Claim or of the discovery of any Hazardous
Substance on the Property, as soon as Borrower first obtains knowledge thereof,
including a full description of the nature and extent of the Environmental Claim
and/or Hazardous Substance and all relevant circumstances.

(v) Site Assessments and Information. If Lender shall ever have
reason to believe that any Hazardous Substance affects the Property, or if any
Environmental Claim is made or threatened, or if a default shall have occurred,
Borrower will at its expense provide to Lender from time to time, in each case
within 30 days of Lender's request, a report (including all drafts thereof if
requested by Lender) of an environmental assessment of the Property made after
the date of Lender's request and of such scope (including but not limited to the
taking of soil borings, air and groundwater samples and other above and below
ground testing) as Lender may request and by a consulting firm acceptable to
Lender. Borrower will cooperate with each consulting firm making any such
assessment and will supply to the consulting firm, from time to time and
promptly on request, all information available to Borrower to facilitate the
completion of the assessment and report.

(vi) Remedial Actions. Without limitation of Lender's rights to
declare a default and to exercise all remedies available by reason thereof, if
any Hazardous Substance is discovered on the Property at any time and regardless
of the cause, Borrower shall: (1) promptly at Borrower's sole risk and expense
remove, treat and dispose of the Hazardous Substance in compliance with all
applicable Environmental Requirements and solely under Borrower's name (or if
removal is prohibited by any Environmental Requirement, take whatever action is
required by applicable Environmental Requirements), in addition to taking such
other action as is necessary to have the full use and benefit of the Property as
contemplated by the Loan Documents, and provide Lender with satisfactory
evidence thereof; and (2) if requested by Lender, provide to Lender within 30
days of Lender's request a bond, letter of credit or other financial assurance
evidencing to Lender's satisfaction that all necessary funds are readily
available to pay the costs and expenses of the actions required by clause (1)
preceding and to discharge any assessments or liens established against the
Property as a result of the presence of the Hazardous Substance on the Property.

WELLS/ORANGE COUNTY ASSOCIATES
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(n) Further Assurances. Borrower will, promptly on request of
Lender, (i) correct any defect, error or omission which may be discovered in the
contents, execution or acknowledgment of this Security Instrument or any other
Loan Document; (ii) execute, acknowledge, deliver, procure and record and/or
file such further documents (including, without limitation, further Security
Instruments, security agreements, financing statements, continuation statements,
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 Security Instrument and the other Loan Documents, to more fully identify
and subject to the liens and 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 Lender to protect the lien or the 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 Lender to enable Lender to comply with the requirements or
requests of any agency having jurisdiction over Lender or any examiners of such
agencies with respect to the indebtedness secured hereby, Borrower or the
Property. Borrower shall pay all costs connected with any of the foregoing,
which shall be a demand obligation owing by Borrower (which Borrower hereby
promises to pay) to Lender pursuant to this Security Instrument.

(o) Fees and Expenses. Without limitation of any other provision of
this Security Instrument or of any other Loan Document and to the extent not
prohibited by applicable law, Borrower will pay, and will reimburse to Lender on
demand to the extent paid by Lender: (i) all appraisal fees, filing and
recording fees, taxes, brokerage fees and commissions, abstract fees, title
search or examination fees, title policy and endorsement premiums and fees,
uniform commercial code search fees, escrow fees, reasonable attorneys' fees,
architect fees, construction consultant fees, environmental inspection fees,
survey fees, and all other out-of-pocket costs and expenses of every character
incurred by Borrower or Lender 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 Security
Instrument, 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 Borrower as owner of the Property;
and (ii) all costs and expenses, including reasonable attorneys' fees and
expenses, incurred or expended in connection with the exercise of any right

WELLS/ORANGE COUNTY ASSOCIATES
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PAGE 21

or remedy, or the enforcement of any obligation of Borrower, hereunder or under
any other Loan Document.

(p) Indemnification.

(i) Borrower will indemnify and hold harmless Lender from and
against, and reimburse Lender on demand for, any and all Indemnified Matters
(defined below). For purposes of this paragraph (p), the term "Lender" shall
include the directors, officers, partners, employees and agents of Lender, and
any persons owned or controlled by, owning or controlling, or under common
control or affiliated with Lender. 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 paragraph (p) by Borrower
to Lender shall be a demand obligation owing by Borrower (which Borrower hereby
promises to pay) to Lender pursuant to this Security Instrument. Nothing in this
paragraph, elsewhere in this Security Instrument or in any other Loan Document
shall limit or impair any rights or remedies of Lender (including without
limitation any rights of contribution or indemnification) against Borrower or
any other person under any other provision of this Security Instrument, any
other Loan Document, any other agreement or any applicable Legal Requirement.

(ii) As used herein, the term "Indemnified Matters" means any and
all claims, demands, liabilities (including strict liability), losses, damages
(including consequential damages), causes of action, judgments, penalties, 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 Lender 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 Security Instrument 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 at any time
on or before the Release Date, any act performed or omitted to be performed
hereunder or under

WELLS/ORANGE COUNTY ASSOCIATES
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PAGE 22

any other Loan Document, any breach by Borrower of any representation, warranty,
covenant, agreement or condition contained in this Security Instrument or in any
other Loan Document, any default as defined herein or any claim under or with
respect to any Lease (hereinafter defined) or arising under the Environmental
Agreement. The term "Release Date" as used herein means the earlier of the
following two dates: (i) the date on which the indebtedness and obligations
secured hereby have been paid and performed in full and this Security Instrument
has been cancelled and satisfied of record, or (ii) the date on which this
Security Instrument is fully and finally foreclosed or a conveyance by deed in
lieu of such foreclosure is fully and finally effective, and possession of the
Property has been given to the purchaser or grantee free of occupancy and claims
to occupancy by Borrower and Borrower's heirs, devisees, representatives,
successors and assigns; provided, that if such payment, performance, release,
foreclosure or conveyance is challenged, in bankruptcy proceedings or otherwise,
the Release Date shall be deemed not to have occurred until such challenge is
rejected, dismissed or withdrawn with prejudice. The indemnities in this
paragraph (p) shall not terminate upon the Release Date or upon the
cancellation, satisfaction, foreclosure or other termination of this Security
Instrument but will survive the Release Date, foreclosure of this Security
Instrument or conveyance in lieu of foreclosure, the repayment of the secured
indebtedness, the discharge, cancellation and satisfaction of this Security
Instrument and the other Loan Documents, any bankruptcy or other debtor relief
proceeding, and any other event whatsoever.

(q) Records and Financial Reports. Borrower will keep accurate books
and records in accordance with sound accounting principles in which full, true
and correct entries shall be promptly made with respect to the Property and the
operation thereof, and will permit all such books and records to be inspected
and copied, and the Property to be inspected and photographed, by Lender and its
representatives during normal business hours and at any other reasonable times.
Without limitation of other or additional requirements in any of the other Loan
Documents, Borrower will furnish to Lender (i) current operating statements
itemizing all income and expenses of the Property for each quarter (and for the
fiscal year through the end of such quarter) as soon as reasonably practicable
but in any event within fifteen (15) days after the end of such quarter and for
the fiscal year of Borrower within sixty (60) days after the end thereof
including also a projection of such operations for the next fiscal year; and
(ii) a balance sheet (including disclosure of all contingent liabilities) and an
income statement of Borrower, for each fiscal year of Borrower as soon as
reasonably practicable following the end of such fiscal year, but

WELLS/ORANGE COUNTY ASSOCIATES
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in any event within ninety (90) days after the end thereof. Each financial
statement submitted pursuant to this paragraph shall be prepared in accordance
with generally accepted accounting principles, consistently applied, and be
certified in writing as true and correct by a representative of Borrower
acceptable to Lender. Borrower will furnish to Lender at Borrower's expense all
evidence which Lender may from time to time reasonably request as to compliance
with all provisions of the Loan Documents. Any inspection or audit of the
Property or the books and records of Borrower, or the procuring of documents and
financial and other information, by or on behalf of Lender shall be for Lender's
protection only, and shall not constitute any assumption of responsibility to
Borrower or anyone else with regard to the condition, construction, maintenance
or operation of the Property nor Lender's approval of any certification given to
Lender nor relieve Borrower of any of Borrower's obligations. Lender may from
time to time assign or grant participations in the secured indebtedness and
Borrower consents to the delivery by Lender to any acquirer or prospective
acquirer of any interest or participation in or with respect to all or part of
the secured indebtedness such information as Lender now or hereafter has
relating to the Property, Borrower, any party obligated for payment of any part
of the secured indebtedness, any tenant or guarantor under any lease affecting
any part of the Property and any agent or guarantor under any management
agreement affecting any part of the Property.

(r) Taxes on Note or Security Instrument. Borrower will promptly pay
all income, franchise and other taxes owing by Borrower and any stamp taxes or
other taxes (unless such payment by Borrower is prohibited by law) which may be
required to be paid with respect to the Note, this Security Instrument or any
other instrument evidencing or securing any of the secured indebtedness,
excepting any amounts to be paid under the present California Security
Instrument tax laws, which amounts shall be paid by Lender. In the event of the
enactment after this date of any law of any governmental entity applicable to
Lender, the Note, the Property or this Security Instrument deducting from the
value of property for the purpose of taxation any lien or interest thereon, or
imposing upon Lender the payment of the whole or any part of the taxes or
assessments or charges or liens herein required to be paid by Borrower, or
changing in any way the laws relating to the taxation of Security Instruments or
security agreements or debts secured by Security Instruments or security
agreements or the interest of the Lender or secured party in the property
covered thereby, or the manner of collection of such taxes, so as to affect this
Security Instrument or the indebtedness secured hereby or Lender, then, and in
any such event, Borrower, upon demand by Lender, shall pay such taxes,
assessments, charges or liens, or reimburse Lender

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therefor; provided, however, that if in the opinion of counsel for Lender (i) it
might be unlawful to require Borrower to make such payment or (ii) the making of
such payment might result in the imposition of interest beyond the maximum
amount permitted by law, then and in such event, Lender may elect, by notice in
writing given to Borrower, to declare all of the indebtedness secured hereby to
be and become due and payable sixty (60) days from the giving of such notice.

(s) Statement Concerning Note or Security Instrument. Borrower shall
at any time and from time to time furnish within seven (7) days of request by
Lender a written statement in such form as may be required by Lender stating
that (i) the Note, this Security Instrument and the other Loan Documents are
valid and binding obligations of Borrower, enforceable against Borrower in
accordance with their terms; (ii) the unpaid principal balance of the Note;
(iii) the date to which interest on the Note is paid; (iv) the Note, this
Security Instrument and the other Loan Documents have not been released,
subordinated or modified; and (v) there are no offsets or defenses against the
enforcement of the Note, this Security Instrument or any other Loan Document. If
any of the foregoing statements are untrue, Borrower shall, alternatively,
specify the reasons therefor.

(t) Annual Appraisal. Lender may at its option obtain at Borrower's
expense, once in each year (or as otherwise reasonably requested by Lender) an
appraisal of the Property or any part thereof prepared in accordance with
written instructions from Lender by a third-party appraiser engaged directly by
Lender. Each such appraiser and appraisal shall be satisfactory to Lender. The
costs of each such appraisal shall be a part of the secured indebtedness and
shall be payable by Borrower to Lender on demand (which obligation Borrower
hereby promises to pay).

(u) Mineral Interests. Borrower agrees that the making of any oil,
gas or mineral lease or the sale or conveyance of any mineral interest or right
to explore for minerals under, through or upon the Property would impair the
value of the Property as security for payment of the indebtedness secured hereby
and that Borrower shall have no right, power or authority to lease the Property,
or any part thereof, for oil, gas or other mineral purposes, or to grant, assign
or convey any mineral interest of any nature, or the right to explore for oil,
gas and other minerals, without first obtaining from Lender express written
permission, which permission shall not be valid until recorded. Borrower further
agrees that if Borrower shall make any such lease or attempt to grant any such
mineral rights without such prior written permission, then Lender shall have the
option, without notice, to declare the same to be a default

WELLS/ORANGE COUNTY ASSOCIATES
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hereunder and to declare the indebtedness secured hereby immediately due and
payable. Whether or not Lender shall consent to such lease or grant of mineral
rights, Lender shall receive the entire consideration to be paid for such lease
or grant of mineral rights, with the same to be applied upon the indebtedness
secured hereby; provided, however, that the acceptance of such consideration
shall in no way impair the lien of this Security Instrument on the Property,
including all mineral rights.

(v) Year 2000 Compliance. Borrower has (i) initiated a review and
assessment of all areas within its business and operations (including those
affected by suppliers and vendors) that could be adversely affected by the "Year
2000 Problem" (that is, the risk that computer applications used by Borrower (or
its suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Borrower reasonably believes that all computer
applications (including those of its suppliers and vendors) that are material to
its business and operations will on a timely basis be able to perform properly
date-sensitive functions for all dates before and after January 1, 2000 (that
is, will be "Year 2000 Compliant"), except to the extent that a failure to do so
could not reasonably be expected to cause a material adverse change in the
financial condition, results of operations, business or properties of Borrower
(a "Material Adverse Change"). Borrower will promptly notify Lender in the event
that Borrower discovers or determines that any computer application (including
those of its suppliers and vendors) that is material to its business and
operations will not be Year 2000 Compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to cause a Material
Adverse Change.

Section 2.2. Performance by Lender on Borrower's Behalf. Borrower
agrees that, if Borrower fails to perform any act or to take any action which
under any Loan Document Borrower is required to perform or take, or to pay any
money which under any Loan Document Borrower is required to pay, and whether or
not the failure then constitutes a default hereunder or thereunder, and whether
or not there has occurred any default or defaults hereunder or the secured
indebtedness has been accelerated, Lender, in Borrower's name or its own name,
may, but shall not be obligated to, perform or cause to be performed such act or
take such action or pay such money, and any expenses so incurred by Lender and
any money so paid by Lender shall be a demand obligation owing by Borrower to
Lender (which obligation Borrower hereby promises to pay), shall be a part of
the indebtedness

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secured hereby, and Lender, upon making such payment, shall be subrogated to all
of the rights of the person, entity or body politic receiving such payment.
Lender and its designees shall have the right to enter upon the Property at any
time and from time to time for any such purposes. No such payment or performance
by Lender shall waive or cure any default or waive any right, remedy or recourse
of Lender. Any such payment may be made by Lender in reliance on any statement,
invoice or claim without inquiry into the validity or accuracy thereof. Each
amount due and owing by Borrower to Lender pursuant to this Security Instrument
shall bear interest, from the date such amount becomes due until paid, at the
rate per annum provided in the Note for interest on past due principal owed on
the Note but never in excess of the maximum nonusurious amount permitted by
applicable law, which interest shall be payable to Lender on demand; and all
such amounts, together with such interest thereon, shall automatically and
without notice be a part of the indebtedness secured hereby. The amount and
nature of any expense by Lender hereunder and the time when paid shall be fully
established by the certificate of Lender or any of Lender's officers or agents.

Section 2.3. Absence of Obligations of Lender with Respect to
Property. Notwithstanding anything in this Security Instrument to the contrary,
including, without limitation, the definition of "Property" and/or the
provisions of Article 3 hereof, (i) to the extent permitted by applicable law,
the Property is composed of Borrower's rights, title and interests therein but
not Borrower's obligations, duties or liabilities pertaining thereto, (ii)
Lender neither assumes nor shall have any obligations, duties or liabilities in
connection with any portion of the items described in the definition of
"Property" herein, either prior to or after obtaining title to such Property,
whether by foreclosure sale, the granting of a deed in lieu of foreclosure or
otherwise, and (iii) Lender may, at any time prior to or after the acquisition
of title to any portion of the Property as above described, advise any party in
writing as to the extent of Lender's interest therein and/or expressly disaffirm
in writing any rights, interests, obligations, duties and/or liabilities with
respect to such Property or matters related thereto. Without limiting the
generality of the foregoing, it is understood and agreed that Lender shall have
no obligations, duties or liabilities prior to or after acquisition of title to
any portion of the Property, as lessee under any lease or purchaser or seller
under any contract or option unless Lender elects otherwise by written
notification.

ARTICLE 3 - Collateral Assignment of Leases and Rents

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Section 3.1. Assignment. As additional security for the indebtedness
secured hereby, Borrower hereby assigns to Lender all Rents (hereinafter
defined) and all of Borrower's rights in and under all Leases (hereinafter
defined). Upon the occurrence of a default hereunder, Lender shall have the
right, power and privilege (but shall be under no duty) to demand possession of
the Rents, which demand shall to the fullest extent permitted by applicable law
be sufficient action by Lender to entitle Lender to immediate and direct payment
of the Rents (including delivery to Lender of Rents collected for the period in
which the demand occurs and for any subsequent period), for application as
provided in this Security Instrument, all without the necessity of any further
action by Lender, including, without limitation, any action to obtain possession
of the Land, Improvements or any other portion of the Property or any action for
the appointment of a receiver. Borrower hereby authorizes and directs the
tenants under the Leases to pay Rents to Lender upon written demand by Lender,
without further consent of Borrower, without any obligation to determine whether
a default has in fact occurred and regardless of whether Lender has taken
possession of any portion of the Property, and the tenants may rely upon any
written statement delivered by Lender to the tenants. Any such payment to Lender
shall constitute payment to Borrower under the Leases, and Borrower hereby
appoints Lender as Borrower's lawful attorney-in-fact for giving, and Lender is
hereby empowered to give, acquittances to any tenants for such payments to
Lender after a default. The assignment contained in this Section shall become
null and void upon the release of this Security Instrument. As used herein: (i)
"Lease" means each existing or future lease, sublease (to the extent of
Borrower's rights thereunder), usufruct or other agreement under the terms of
which any person has or acquires any right to occupy or use the Property, or any
part thereof, or interest therein, and each existing or future guaranty of
payment or performance thereunder, and all extensions, renewals, modifications
and replacements of each such lease, sublease, usufruct, agreement or guaranty;
and (ii) "Rents" means all of the rents, revenue, income, profits and proceeds
derived and to be derived from the Property or arising from the use or enjoyment
of any portion thereof or from any Lease, including but not limited to
liquidated damages following default under any such Lease, all proceeds payable
under any policy of insurance covering loss of rents resulting from
untenantability caused by damage to any part of the Property, all of Borrower's
rights to recover monetary amounts from any tenant in bankruptcy including,
without limitation, rights of recovery for use and occupancy and damage claims
arising out of Lease defaults, including rejections, under any applicable Debtor
Relief Law (as hereinafter defined), together with any sums of money that may
now or at any time hereafter be or become due and payable to Borrower by virtue
of any and all royalties,

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overriding royalties, bonuses, delay rentals and any other amount of any kind or
character arising under any and all present and all future oil, gas, mineral and
mining leases covering the Property or any part thereof, and all proceeds and
other amounts paid or owing to Borrower under or pursuant to any and all
contracts and bonds relating to the construction or renovation of the Property.

Section 3.2. Covenants, Representations and Warranties Concerning
Leases and Rents. Borrower covenants, represents and warrants that: (i) Borrower
has good title to, and is the owner of the entire landlord's interest in, the
Leases and Rents hereby assigned and authority to assign them; (ii) all Leases
are valid and enforceable, and in full force and effect, and are unmodified
except as stated therein; (iii) neither Borrower nor any tenant in the Property
is in default under its Lease (and no event has occurred which with the passage
of time or notice or both would result in a default under its Lease) or is the
subject of any bankruptcy, insolvency or similar proceeding; (iv) unless
otherwise stated in a Permitted Encumbrance, no Rents or Leases have been or
will be assigned, mortgaged, pledged or otherwise encumbered and no other person
has or will acquire any right, title or interest in such Rents or Leases; (v) no
Rents have been waived, released, discounted, set off or compromised; (vi)
except as stated in the Leases, Borrower has not received any funds or deposits
from any tenant for which credit has not already been made on account of accrued
Rents; (vii) Borrower shall perform all of its obligations under the Leases and
enforce the tenants' obligations under the Leases to the extent enforcement is
prudent under the circumstances; (viii) Borrower will not, without the prior
written consent of Lender, which consent shall not be unreasonably withheld,
enter into any Lease after the date hereof, or waive, release, discount, set
off, compromise, reduce or defer any Rent, receive or collect Rents more than
one (1) month in advance, grant any rent-free period to any tenant, reduce any
Lease term or waive, release or otherwise modify any other material obligation
under any Lease, renew or extend any Lease except in accordance with a right of
the tenant thereto in such Lease, approve or consent to an assignment of a Lease
or a subletting of any part of the premises covered by a Lease, or settle or
compromise any claim against a tenant under a Lease in bankruptcy or otherwise;
(ix) Borrower will not, except in good faith where the tenant is in material
default thereunder, terminate or consent to the cancellation or surrender of any
Lease having an unexpired term of one year or more unless promptly after the
cancellation or surrender a new Lease of such premises is made with a new tenant
having a credit standing, in Lender's judgment, at least equivalent to that of
the tenant whose Lease was cancelled, on substantially the same terms as the
terminated or cancelled Lease; (x) Borrower will not execute any

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Lease except in accordance with the Loan Documents and for actual occupancy by
the tenant thereunder; (xi) Borrower shall give prompt notice to Lender, as soon
as Borrower first obtains notice, of any claim, or the commencement of any
action, by any tenant or subtenant under or with respect to a Lease regarding
any claimed damage, default, diminution of or offset against Rent, cancellation
of the Lease, or constructive eviction, excluding, however, notices of default
under residential Leases, and Borrower shall defend, at Borrower's expense, any
proceeding pertaining to any Lease, including, if Lender so requests, any such
proceeding to which Lender is a party; (xii) Borrower shall as often as
requested by Lender, within ten (10) days of each request, deliver to Lender a
complete rent roll of the Property in such detail as Lender may require and
financial statements of the tenants, subtenants and guarantors under the Leases
to the extent available to Borrower, and deliver to such of the tenants and
others obligated under the Leases specified by Lender written notice of the
assignment in Section 3.1 hereof in form and content satisfactory to Lender;
(xiii) promptly upon request by Lender, Borrower shall deliver to Lender
executed originals of all Leases and copies of all records relating thereto;
(xiv) there shall be no merger of the leasehold estates, created by the Leases,
with the fee estate of the Land without the prior written consent of Lender; and
(xv) Lender may at any time and from time to time by specific written instrument
intended for the purpose, unilaterally subordinate the lien of this Security
Instrument to any Lease, without joinder or consent of, or notice to, Borrower,
any tenant or any other person, and notice is hereby given to each tenant under
a Lease of such right to subordinate. No such subordination shall constitute a
subordination to any lien or other encumbrance, whenever arising, or improve the
right of any junior lienholder; and nothing herein shall be construed as
subordinating this Security Instrument to any Lease.

Section 3.3. No Liability of Lender. Lender's acceptance of this
assignment shall not be deemed to constitute Lender a "Lender in possession,"
nor obligate Lender to appear in or defend any proceeding relating to any Lease
or to the Property, or to take any action hereunder, expend any money, incur any
expenses, or perform any obligation or liability under any Lease, or assume any
obligation for any deposit delivered to Borrower by any tenant and not as such
delivered to and accepted by Lender. Lender shall not be liable for any injury
or damage to person or property in or about the Property, or for Lender's
failure to collect or to exercise diligence in collecting Rents, but shall be
accountable only for Rents that it shall actually receive. Neither the
assignment of Leases and Rents nor enforcement of Lender's rights regarding
Leases and Rents (including collection of Rents) nor possession of the Property
by

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Lender nor Lender's consent to or approval of any Lease (nor all of the same),
shall render Lender liable on any obligation under or with respect to any Lease
or constitute affirmation of, or any subordination to, any Lease, occupancy, use
or option. If Lender seeks or obtains any judicial relief regarding Rents or
Leases, the same shall in no way prevent the concurrent or subsequent employment
of any other appropriate rights or remedies nor shall same constitute an
election of judicial relief for any foreclosure or any other purpose. Lender
neither has nor assumes any obligations as lessor or landlord with respect to
any Lease. The rights of Lender under this Article 3 shall be cumulative of all
other rights of Lender under the Loan Documents or otherwise.

ARTICLE 4 - Default

Section 4.1. Events of Default. The occurrence of any one of the
following shall be a default under this Security Instrument ("Default" or
"default"):

(a) Failure to Pay Indebtedness. Any of the secured indebtedness is
not paid when due, regardless of how such amount may have become due, and such
failure is not cured within the applicable grace or cure period provided for in
Section 4.2 of this Security Instrument.

(b) Nonperformance of Covenants. Any covenant, agreement or
condition herein or in any other Loan Document (other than covenants otherwise
addressed in another paragraph of this Section, such as covenants to pay the
secured indebtedness) is not fully and timely performed, observed or kept, and
such failure is not cured within the applicable grace or cure period provided
for in Section 4.2 of this Security Instrument.

(c) Representations. Any statement, representation or warranty in
any of the Loan Documents, or in any financial statement or any other writing
heretofore or hereafter delivered to Lender in connection with the secured
indebtedness is false, misleading or erroneous in any material respect on the
date hereof or on the date as of which such statement, representation or
warranty is made.

(d) Bankruptcy or Insolvency. The owner of the Property or any
person liable, directly or indirectly, for any of the secured indebtedness (or
any general partner or joint venturer of such owner, if the owner is a general
partnership or joint venture):

(1) (i) Executes an assignment for the benefit of creditors, or
takes any action in furtherance thereof; or (ii) admits in writing its inability
to pay, or fails to pay, its

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debts generally as they become due; or (iii) as a debtor, files a petition,
case, proceeding or other action pursuant to, or voluntarily seeks the benefit
or benefits of, Title 11 of the United States Code as now or hereafter in effect
or any other 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 (Title 11 of the United States Code and such other laws
being herein called "Debtor Relief Laws"), or takes any action in furtherance
thereof; or (iv) 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

(2) 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 (i) admits,
acquiesces in or fails to contest diligently the material allegations thereof,
or (ii) the petition, case, proceeding or other action results in entry of any
order for relief or order granting relief sought against it, or (iii) in a
proceeding under the Federal Bankruptcy Code, the case is converted from one
chapter to another, or (iv) 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

(3) 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 (4) 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

(4) Fails to have discharged within a period of ten (10) days any
attachment, sequestration, or similar writ levied upon any of its property; or

(5) Fails to pay immediately any final money judgment against it.

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(e) Transfer of the Property. There occurs 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: (i) sales or transfers of items of the
Accessories which have become obsolete or worn beyond practical use and which
have been replaced by adequate substitutes, owned by Borrower, having a value
equal to or greater than the replaced items when new; and (ii) the grant, in the
ordinary course of business, of a leasehold interest in a part of the
Improvements to a tenant for occupancy, not containing a right or option to
purchase and not in contravention of any provision of this Security Instrument
or of any other Loan Document. Lender may, in its sole discretion, waive a
default under this paragraph, but it shall have no obligation to do so, and any
waiver may be conditioned upon such one or more of the following (if any) which
Lender may require: the grantee's integrity, reputation, character,
creditworthiness and management ability being satisfactory to Lender in its sole
judgment and such grantee's executing, prior to such sale or transfer, a written
assumption agreement containing such terms as Lender may require, a principal
paydown on the Note, an increase in the rate of interest payable under the Note,
a transfer fee, a modification of the term of the Note, and any other
modification of the Loan Documents which Lender may require.

(f) Transfer of Ownership of Borrower. There occurs any sale,
pledge, encumbrance, assignment or transfer, voluntarily or involuntarily,
whether by operation of law or otherwise, of any interest in Borrower, without
the prior written consent of Lender.

(g) Grant of Easement, Etc. Without the prior written consent of
Lender, which will not be unreasonably withheld, Borrower 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 affect the Property.

(h) Abandonment. The owner of the Property abandons any of the
Property.

(i) Default Under Other Lien. A default or event of default occurs
and is continuing under any lien, security interest or assignment covering the
Property or any part thereof (whether or not Lender has consented, and without
hereby implying Lender'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

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institutes foreclosure or other proceedings for the enforcement of its remedies
thereunder.

(j) Destruction. The Property is so demolished, destroyed or damaged
that, in the reasonable opinion of Lender, 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.

(k) 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 (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, 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.

(l) Liquidation, Etc. There occurs a liquidation, termination,
dissolution, merger, consolidation or failure to maintain good standing in the
State of Georgia (or in the case of an individual, the death or legal
incapacity) of the owner of the Property or any person obligated to pay any part
of the secured indebtedness.

(m) Material, Adverse Change. In Lender's reasonable opinion, the
prospect of payment of all or any part of the secured indebtedness has been
impaired because of a material, adverse change in the financial condition,
results of operations, business or properties of the owner of the Property or
any person liable, directly or indirectly, for any of the secured indebtedness,
or of any general partner or joint venturer thereof (if such owner or other
person is a partnership or joint venture).

(n) Enforceability; Priority. Any Loan Document shall for any reason
without Lender'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 Lender; or the liens, interests, Security
Instruments or security interests of Lender 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

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challenged or denied by Borrower or any person obligated to pay any part of the
secured indebtedness.

(o) Other Loan Documents; Cort Furniture Lease. A default or event
of default occurs under any Loan Document, other than this Security Instrument,
or a default or event of default occurs under the Cort Furniture Lease, and the
same is not remedied within the applicable period of grace (if any) provided in
such document.

Section 4.2. Notice and Cure. Lender agrees, by its acceptance of
this Security Instrument, that notwithstanding anything to the contrary
contained herein or in any of the other Loan Documents, upon the occurrence of
any default of the type described in Subparagraphs (a) or (b) of Section 4.1 of
this Security Instrument, Lender will not accelerate the maturity of the Note or
the secured indebtedness and will not exercise any of its other rights and
remedies hereunder or under the other Loan Documents until and unless Lender has
first given notice of such default to Borrower, in the manner prescribed in
Section 6.12 of this Security Instrument, and Borrower has failed to cure such
default within the following periods of time:

(a) If such default is a default of the type described in
Subparagraph (a) of Section 4.1 of this Security Instrument, Borrower shall have
a period of ten (10) days from and after the effective date of such notice
within which to cure such default; or

(b) If such default is a default of the type described in
Subparagraph (b) of Section 4.1 of this Security Instrument, Borrower shall have
a period of thirty (30) days from and after the effective date of such notice
within which to cure such default.

After the occurrence of three (3) such defaults, and the giving of
notice thereof by Lender, Lender shall not be obligated to give to Borrower any
further notice of default or opportunity to cure the same. The agreements set
forth in this Section 4.2 do not and shall not be deemed to prevent or prohibit
Lender from withholding any advances of the secured indebtedness, following the
occurrence of a default, until and unless such default shall have been cured.

If Lender shall fail to give such notice and right to cure to
Borrower as provided herein, the sole and exclusive remedy of Borrower for such
failure shall be to seek appropriate equitable relief to enforce the agreement
to give such notice and right to cure and to have any acceleration of the
maturity of the Note and the secured indebtedness postponed or revoked and
foreclosure or other proceedings in connection therewith delayed or terminated
pending or upon the curing of such default in the

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manner and during the period of time permitted by such agreement, and Borrower
shall have no right to damages or any other type of relief not herein
specifically set out against Lender, all of which damages or other relief are
hereby waived by Borrower. Nothing herein or in any of the other Loan Documents
shall operate or be construed to add on or make cumulative any cure or grace
periods specified in any of the Loan Documents.

ARTICLE 5 - Remedies

Section 5.1. Certain Remedies. If a default shall occur, Lender may
(but shall have no obligation to) exercise any one or more of the following
remedies, without additional notice (unless notice is required by applicable
statute):

(a) Acceleration. Lender may at any time and from time to time
declare any or all of the secured indebtedness immediately due and payable and
such secured indebtedness shall thereupon be immediately due and payable,
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 Borrower. Without limitation of the
foregoing, upon the occurrence of a default described in clauses (i), (iii) or
(iv) of subparagraph (1) of paragraph (d) of Section 4.1, hereof, all of the
secured indebtedness 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 Borrower.

(b) Enforcement of Assignment of Rents. Prior or subsequent to
taking possession of any portion of the Property or taking any action with
respect to such possession, Lender may: (1) collect and/or sue for the Rents in
Lender'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 indebtedness in such manner and order as Lender
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 Borrower to transfer all security deposits and records thereof to Lender
together with original counterparts of the Leases.

(c) Foreclosure.

(i) Method of Foreclosure. Lender, at Lender's option, may either:
(1) accelerate the secured indebtedness, including all accrued interest,
pursuant to paragraph (a) of this Section 5.1 and foreclose the lien of this
Security Instrument by

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judicial proceeding, or (2) declare the secured indebtedness immediately due and
payable, without deduction, and foreclose this Security Instrument by the power
of sale hereby granted.

(ii) Power of Sale. Should Lender elect to foreclose by exercise of
the power of sale contained herein, Lender shall notify Trustee and shall, if
required, deposit with Trustee the Note, the original or a certified copy of
this Security Instrument, and such other documents, receipts and evidences of
expenditures made and secured hereby as Trustee may require. Upon receipt of
such notice from Lender, Trustee shall cause to be recorded and delivered to
Borrower such notice as may then be required by law and by this Security
Instrument. Trustee shall, without demand on Borrower, after lapse of such time
as may then be required by law and after recordation of such notice of default
and after notice of sale has been given as required by law, sell the Property at
the time and place of sale fixed by it in said notice of sale, either as a whole
or in separate lots or parcels or items as Trustee 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. Trustee shall
deliver to the purchaser or purchasers at such sale its good and sufficient deed
or deeds conveying the property so sold, but 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, Borrower, Trustee or Lender, may purchase at such sale, and Borrower
hereby covenants to warrant and defend the title of such purchaser or
purchasers.

(iii) Foreclosure Sale; Proceeds. After deducting all costs, fees
and expenses of Trustee and of this Security Instrument, including, without
limitation, costs of evidence of title and actual and customary attorneys' fees
of Trustee or Lender in connection with a sale as provided in subparagraph (i)
above, Trustee shall apply the proceeds of such sale (a) first, to the payment
of all sums expended by Lender under the terms of any of the Loan Documents and
not yet repaid, together with interest on such sums at the Default Rate as set
forth in the Note, (b) second, to the payment of all sums expended under the
terms hereof not then repaid, with accrued interest at the rate of interest
equal to the rate then in effect under the Note, or if the Note has been repaid,
the rate that would have been in effect under the Note, (c) third, to the
payment of all other sums then secured hereby, and (d) fourth, the remainder, if
any, to the person or persons legally entitled thereto.

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(iv) Additional Remedies. Trustee and Lender shall have all powers,
rights and remedies under applicable law whether or not specifically or
generally granted or described in this Security Instrument. Nothing contained
herein shall be construed to impair or to restrict such powers, rights and
remedies or to preclude any procedures or process otherwise available to
trustees or beneficiaries under deeds of trust in the State of California.
Trustee and Lender, and each of them, shall be entitled to enforce the payment
and performance of any indebtedness or obligations secured hereby and to
exercise all rights and powers under this Security Instrument or under any other
Loan Document or other agreement or any laws now or hereafter in force,
notwithstanding the fact that some or all of the indebtedness and obligations
secured hereby may now or hereafter be otherwise secured, whether by Security
Instrument, deed of trust, pledge, lien, assignment or otherwise. Neither the
acceptance of this Security Instrument nor its enforcement, whether by court
action or pursuant to the power of sale or other powers contained herein, shall
prejudice or in any manner affect Trustee's or Lender's right to realize upon or
enforce any other rights or security now or hereafter held by Trustee or Lender.
Trustee and Lender, and each of them, shall be entitled to enforce this Security
Instrument and any other rights or security now or hereafter held by Lender or
Trustee in such order and manner as they or either of them may in their absolute
discretion determine. No remedy herein conferred upon or reserved to Trustee or
Lender is intended to be exclusive of any other remedy contained herein or by
law provided or permitted, but each shall be cumulative and in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity.
Every power or remedy given by any of the Loan Documents to Trustee or Lender,
or to which either of them may be otherwise entitled, may be exercised,
concurrently or independently, from time to time and as often as may be deemed
expedient by Trustee or Lender, and either of them may pursue inconsistent
remedies. By exercising or by failing to exercise any right, option or election
hereunder, Lender shall not be deemed to have waived any provision hereof or to
have released Borrower from any of the obligations secured hereby unless such
waiver or release is in writing and signed by Lender. The waiver by Lender of
Borrower's failure to perform or observe any term, covenant or condition
referred to or contained herein to be performed or observed by Borrower shall
not be deemed to be a waiver of such term, covenant or condition or of any
subsequent failure of Borrower to perform or observe the same or any other such
term, covenant or condition referred to or contained herein, and no custom or
practice which may develop between Borrower and Lender during the term hereof
shall be deemed a waiver of or in any way affect the right of Lender to insist
upon the performance by Borrower of the

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obligations secured hereby in strict accordance with the terms hereof or of any
other Loan Document.

(d) Uniform Commercial Code. Without limitation of Lender's rights
of enforcement with respect to the Collateral or any part thereof in accordance
with the procedures for foreclosure of real estate, Lender may exercise its
rights of enforcement with respect to the Collateral or any part thereof under
the Uniform Commercial Code as adopted in the State of California (or under the
Uniform Commercial Code in force in any other state to the extent the same is
applicable law) and in conjunction with, in addition to or in substitution for
those rights and remedies: (1) Lender may enter upon Borrower's premises to take
possession of, assemble and collect the Collateral or, to the extent and for
those items of the Collateral permitted under applicable law, to render it
unusable; (2) Lender may require Borrower to assemble the Collateral and make it
available at a place Lender designates which is mutually convenient to allow
Lender to take possession or dispose of the Collateral; (3) written notice
mailed to Borrower as provided herein at least five (5) days prior to the date
of public sale of the Collateral or prior to the date after which private sale
of the Collateral will be made shall constitute reasonable notice; (4) any sale
made pursuant to the provisions of this paragraph shall be deemed to have been a
public sale conducted in a commercially reasonable manner if held
contemporaneously with and upon the same notice as required for the sale of the
Property under power of sale as provided in paragraph (c) above in this Section
5.1; (5) in the event of a foreclosure sale, whether made by Lender under the
terms hereof, or under judgment of a court, the Collateral and the other
Property may, at the option of Lender, be sold as a whole; (6) it shall not be
necessary that Lender take possession of the Collateral or any part thereof
prior to the time that any sale pursuant to the provisions of this Section is
conducted and it shall not be necessary that the Collateral or any part thereof
be present at the location of such sale; (7) with respect to application of
proceeds of disposition of the Collateral under Section 5.2 hereof, the costs
and expenses incident to disposition shall include the reasonable expenses of
retaking, holding, preparing for sale or lease, selling, leasing and the like
and the reasonable attorneys' fees and legal expenses incurred by Lender; (8)
any and all statements of fact or other recitals made in any bill of sale or
assignment or other instrument evidencing any foreclosure sale hereunder as to
nonpayment of the secured indebtedness or as to the occurrence of any default,
or as to Lender having declared all of such indebtedness to be due and payable,
or as to notice of time, place and terms of sale and of the properties to be
sold having been duly given, or as to any other act or thing having been duly
done by Lender, shall be taken as prima facie evidence of the

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truth of the facts so stated and recited; and (9) Lender 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 Lender, including the sending of notices and the
conduct of the sale, but in the name and on behalf of Lender.

(e) Right of Rescission. Lender may from time to time rescind any
notice of default or notice of sale before any Trustee's sale in accordance with
the laws of the State of California. The exercise by Lender of such right of
rescission shall not constitute a waiver of any breach or default then existing
or subsequently occurring, or impair the right of Lender to execute and deliver
to Trustee, as above provided, other declarations or notices of default to
satisfy the obligations of this Security Instrument or secured hereby, nor
otherwise affect any provision, covenant or condition of any Loan Document or
any of the rights, obligations or remedies of Trustee or Lender hereunder or
thereunder.

(f) Full Reconveyance. Upon written request of Lender stating that
all sums secured hereby have been paid, upon surrender to Trustee of the Note
and the original or a certified copy of this Security Instrument for
cancellation and retention, and upon payment of its fees, Trustee shall fully
reconvey, without warranty, the entire remaining Property then held hereunder.
The recitals in such reconveyance of any matters of facts shall be conclusive
proof of the truthfulness thereof. The grantee in such reconveyance may be
described as "the person or persons legally entitled thereto."

(g) Fixture Filing. This Security Instrument constitutes a fixture
filing under the fixture filing provisions of the UCC, Sections 9-313 and
9-402(6) as enacted and under the equivalent statutes in the State of
California, as amended or recodified from time to time.

(h) Border Zone Property. Borrower represents and warrants that the
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 Property that is
reasonably likely to cause the Property or any part thereof to be designated as
Border Zone Property.

(i) Entry on Property. Lender is authorized, prior or subsequent to
the institution of any foreclosure proceedings, to the fullest extent permitted
by applicable law, to enter upon the Property, or any part thereof, and to take
possession of the Property and all books and records relating thereto, and to

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exercise without interference from Borrower any and all rights which Borrower
has with respect to the management, possession, operation, protection or
preservation of the Property. Lender shall not be deemed to have taken
possession of the Property or any part thereof except upon the exercise of its
right to do so, and then only to the extent evidenced by its demand and overt
act specifically for such purpose. All costs, expenses and liabilities of every
character incurred by Lender in managing, operating, maintaining, protecting or
preserving the Property shall constitute a demand obligation of Borrower (which
obligation Borrower hereby promises to pay) to Lender pursuant to this Security
Instrument. If necessary to obtain the possession provided for above, Lender may
invoke any and all legal remedies to dispossess Borrower. In connection with any
action taken by Lender pursuant to this Section, Lender shall not be liable for
any loss sustained by Borrower resulting from any failure to let the Property or
any part thereof, or from any act or omission of Lender in managing the Property
unless such loss is caused by the willful misconduct and bad faith of Lender,
nor shall Lender be obligated to perform or discharge any obligation, duty or
liability of Borrower arising under any lease or other agreement relating to the
Property or arising under any Permitted Encumbrance or otherwise arising.
Borrower hereby assents to, ratifies and confirms any and all actions of Lender
with respect to the Property taken under this Section.

(J) Termination of Commitment to Lend. Lender may terminate any
commitment or obligation to lend or disburse funds under any Loan Document.

Section 5.2. Intentionally Deleted.

Section 5.3. Lender as Purchaser. Lender shall have the right to
become the purchaser at any sale held by Lender or substitute or successor or by
any receiver or public officer or at any public sale, and Lender shall have the
right to credit upon the amount of Lender's successful bid, to the extent
necessary to satisfy such bid, all or any part of the secured indebtedness in
such manner and order as Lender may elect.

Section 5.4. Remedies Cumulative. All rights and remedies provided
for herein and in any other Loan Document are cumulative of each other and of
any and all other rights and remedies existing at law or in equity, and Lender
shall, in addition to the rights and remedies provided herein or in any other
Loan Document, be entitled to avail itself of all such other rights and remedies
as may now or hereafter exist at law or in equity for the collection of the
secured indebtedness and the enforcement of the covenants herein and the
foreclosure of the liens and interests evidenced hereby, and the resort to any
right

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or remedy provided for hereunder or under any such other Loan Document or
provided for by law or in equity shall not prevent the concurrent or subsequent
employment of any other appropriate right or rights or remedy or remedies.

Section 5.5. Lender's Discretion as to Security. Lender may resort
to any security given by this Security Instrument or to any other security now
existing or hereafter given to secure the payment of the secured indebtedness,
in whole or in part, and in such portions and in such order as may seem best to
Lender in its sole and uncontrolled discretion, and any such action shall not in
any way be considered as a waiver of any of the rights, benefits, liens or
interests evidenced by this Security Instrument.

Section 5.6. Borrower's Waiver of Certain Rights. To the full extent
Borrower may do so, Borrower agrees that Borrower will not at any time insist
upon, plead, claim or take the benefit or advantage of any law now or hereafter
in force providing for any stay, extension or redemption, homestead, moratorium,
reinstatement, marshalling or forbearance, and Borrower, for Borrower,
Borrower's successors and assigns, and for any and all persons ever claiming any
interest in the Property, to the extent permitted by applicable law, hereby
waives and releases all rights of redemption, stay of execution, reinstatement,
notice of intention to mature or declare due the whole of the secured
indebtedness, notice of election to mature or declare due the whole of the
secured indebtedness and all rights to a marshaling of assets of Borrower,
including the Property, or to a sale in inverse order of alienation in the event
of foreclosure of the liens and/or security interests hereby created. Borrower
shall not have or assert any right under any statute or rule of law pertaining
to the marshaling of assets, sale in inverse order of alienation, the exemption
of homestead, the administration of estates of decedents, or other matters
whatever to defeat, reduce or affect the right of Lender under the terms of this
Security Instrument to a sale of the Property for the collection of the secured
indebtedness without any prior or different resort for collection, or the right
of Lender under the terms of this Security Instrument to the payment of the
secured indebtedness out of the proceeds of sale of the Property in preference
to every other claimant whatever. Borrower waives any right or remedy which
Borrower may have or be able to assert, pursuant to any provision of applicable
law, pertaining to the rights and remedies of sureties. If any law referred to
in this Section and now in force, of which Borrower or Borrower's successors or
assigns or any other persons claiming any interest in the Property might take
advantage despite this Section, shall hereafter be repealed or cease to be in
force, such law shall not thereafter be deemed to preclude the

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application of this Section. Appraisement of the Property is hereby expressly
waived, or not, at the option of Lender, such option to be exercised at the time
judgment is rendered in any foreclosure hereof, or at any time prior thereto.

Section 5.7. Delivery of Possession After Foreclosure. In the event
there is a foreclosure sale hereunder and at the time of such sale, Borrower or
Borrower's successors or assigns are occupying or using the Property, or any
part thereof, each and all shall immediately become the tenant of the purchaser
at such sale, which tenancy shall be a tenancy from day to day, terminable at
the will of either landlord or tenant, at a reasonable rental per day based upon
the value of the property occupied, such rental to be due daily to the
purchaser; and to the extent permitted by applicable law, the purchaser at such
sale shall, notwithstanding any language herein apparently to the contrary, have
the sole option to demand immediate possession following the sale or to permit
the occupants to remain as tenants at will. In the event the tenant fails to
surrender possession of said property upon demand, the purchaser shall be
entitled to institute and maintain a summary action for possession of the
property (such as an action for forcible detainer) in any court having
jurisdiction.

Section 5.8. Withdrawal, Discontinuance or Abandonment of
Proceedings. In the case Lender shall have proceeded to enforce any right, power
or remedy under this Security Instrument by foreclosure, entry or otherwise or
in the event that Lender shall have commenced advertising the intended exercise
of the right of foreclosure provided hereunder, and such proceeding or
advertisement shall be withdrawn, discontinued or abandoned for any reason, or
shall be determined adversely to Lender, then, in every such case (i) Borrower
and Lender shall be restored to their former positions and rights, (ii) all
rights, powers and remedies of Lender shall continue as if no such proceeding
had been taken, (iii) each and every default declared and remaining uncured
prior to such withdrawal, discontinuance or abandonment shall and shall be
deemed to be a continuing default, and (iv) neither this Security Instrument,
the Note, the secured indebtedness nor any other instrument concerned therewith
shall be or shall be deemed to have been reinstated or otherwise affected by
such withdrawal, discontinuance or abandonment, and Borrower hereby expressly
waives the benefit of any statute or rule of law which would produce a result
contrary to or in conflict with the foregoing.

ARTICLE 6 - Miscellaneous

Section 6.1. Scope of Security Instrument. This Security Instrument
is a Security Instrument, collateral

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assignment, security agreement and financing statement, and also covers proceeds
and fixtures.

Section 6.2. Notice to Account Debtors. In addition to the rights
granted elsewhere in this Security Instrument, Lender may at any time notify the
account debtors or obligors of any accounts, chattel paper, negotiable
instruments or other evidences of indebtedness included in the Collateral to pay
Lender directly.

Section 6.3. Waiver by Lender. Lender may at any time and from time
to time by a specific writing intended for the purpose: (a) waive compliance by
Borrower with any covenant herein made by Borrower to the extent and in the
manner specified in such writing; (b) consent to Borrower's doing any act which
hereunder Borrower is prohibited from doing, or to Borrower's failing to do any
act which hereunder Borrower is required to do, to the extent and in the manner
specified in such writing; (c) release any part of the Property or any interest
therein from the lien and security interest of this Security Instrument; or (d)
release any party liable, either directly or indirectly, for the secured
indebtedness or for any covenant herein or in any other Loan Document, without
impairing or releasing the liability of any other party. No such act shall in
any way affect the rights or powers of Lender hereunder except to the extent
specifically agreed to by Lender in such writing.

Section 6.4. No Impairment of Security. The lien, interest and other
security rights of Lender hereunder or under any other Loan Document shall not
be impaired by any indulgence, moratorium or release granted by Lender
including, but not limited to, any renewal, extension or modification which
Lender may grant with respect to any secured indebtedness, or any surrender,
compromise, release, renewal, extension, exchange or substitution which Lender
may grant in respect of the Property, or any part thereof or any interest
therein, or any release or indulgence granted to any endorser, guarantor or
surety of any secured indebtedness. The taking of additional security by Lender
shall not release or impair the lien, interest or other security rights of
Lender hereunder or affect the liability of Borrower or of any endorser,
guarantor or surety, or improve the right of any junior lienholder in the
Property (without implying hereby Lender's consent to any junior lien).

Section 6.5. Acts Not Constituting Waiver by Lender. Lender may
waive any default without waiving any other prior or subsequent default. Lender
may remedy any default without waiving the default remedied. Neither failure by
Lender to exercise, nor delay by Lender in exercising, nor discontinuance of the
exercise of any right, power or remedy (including but not

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limited to the right to accelerate the maturity of the secured indebtedness or
any part thereof) upon or after any default shall be construed as a waiver of
such default or as a waiver of the right to exercise any such right, power or
remedy at a later date. No single or partial exercise by Lender of any right,
power or remedy hereunder shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right, power or remedy hereunder may be
exercised at any time and from time to time. No modification or waiver of any
provision hereof nor consent to any departure by Borrower therefrom shall in any
event be effective unless the same shall be in writing and signed by Lender and
then such waiver or consent shall be effective only in the specific instance,
for the purpose for which given and to the extent therein specified. No notice
to nor demand on Borrower in any case shall of itself entitle Borrower to any
other or further notice or demand in similar or other circumstances. Remittances
in payment of any part of the secured indebtedness other than in the required
amount in immediately available U.S. funds shall not, regardless of any receipt
or credit issued therefor, constitute payment until the required amount is
actually received by Lender in immediately available U.S. funds and shall be
made and accepted subject to the condition that any check or draft may be
handled for collection in accordance with the practice of the collecting bank or
banks. Acceptance by Lender of any payment in an amount less than the amount
then due on any secured indebtedness shall be deemed an acceptance on account
only and shall not in any way excuse the existence of a default hereunder.

Section 6.6. Borrower's Successors. If the ownership of the Property
or any part thereof becomes vested in a person other than Borrower, Lender may,
without notice to Borrower, deal with such successor or successors in interest
with reference to this Security Instrument and to the indebtedness secured
hereby in the same manner as with Borrower, without in any way vitiating or
discharging Borrower's liability hereunder or for the payment of the
indebtedness or performance of the obligations secured hereby. No transfer of
the Property, no forbearance on the part of Lender, and no extension of the time
for the payment of the indebtedness secured hereby given by Lender shall operate
to release, discharge, modify, change or affect, in whole or in part, the
liability of Borrower hereunder for the payment of the indebtedness or
performance of the obligations secured hereby or the liability of any other
person hereunder for the payment of the indebtedness secured hereby. Borrower
agrees that it shall be bound by any modification of this Security Instrument or
any of the other Loan Documents made by Lender and any subsequent owner of the
Property, with or without notice to such Borrower, and no such modifications
shall impair the obligations of such Borrower under this Security Instrument or
any other Loan Document. Nothing in this Section or elsewhere in this Security

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Instrument shall be construed to imply Lender's consent to any transfer of the
Property.

Section 6.7. Place of Payment; Forum. All secured indebtedness which
may be owing hereunder at any time by Borrower shall be payable at the place
designated in the Note (or if no such designation is made, at the address of
Lender indicated at the end of this Security Instrument). Borrower hereby
irrevocably submits generally and unconditionally for itself and in respect of
its property to the non-exclusive jurisdiction of any Georgia state court or any
United States federal court sitting in the county in which the secured
indebtedness is payable, and to the non-exclusive jurisdiction of any state or
United States federal court sitting in the state in which any of the Property is
located, over any suit, action or proceeding arising out of or relating to this
Security Instrument or the secured indebtedness. Borrower hereby agrees and
consents that, in addition to any methods of service of process provided for
under applicable law, all service of process in any such suit, action or
proceeding in any Georgia state court or any United States federal court sitting
in the county in which the secured indebtedness is payable may be made by
certified or registered mail, return receipt requested, directed to Borrower at
its address stated in this Security Instrument, or at a subsequent address of
Borrower of which Lender received actual notice from Borrower in accordance with
this Security Instrument, and service so made shall be complete five (5) days
after the same shall have been so mailed.

Section 6.8. Subrogation to Existing Liens; Vendor's Lien. To the
extent that proceeds of the Note are used to pay indebtedness secured by any
outstanding lien, interest, charge or prior encumbrance against the Property,
such proceeds have been advanced by Lender at Borrower's request, and Lender
shall be subrogated to any and all rights, interests and liens owned by any
owner or holder of such outstanding liens, security interests, charges or
encumbrances, however remote, irrespective of whether said liens, interests,
charges or encumbrances are released, and all of the same are recognized as
valid and subsisting and are renewed and continued and merged herein to secure
the secured indebtedness, but the terms and provisions of this Security
Instrument shall govern and control the manner and terms of enforcement of the
liens, security interests, charges and encumbrances to which Lender is
subrogated hereunder. It is expressly understood that, in consideration of the
payment of such indebtedness by Lender, Borrower hereby waives and releases all
demands and causes of action for offsets and payments in connection with the
said indebtedness. If all or any portion of the proceeds of the loan evidenced
by the Note or of any other secured indebtedness has been advanced for the
purpose of paying

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the purchase price for all or a part of the Property, no vendor's lien is
waived; and Lender shall have, and is hereby granted, a vendor's lien on the
Property as cumulative additional security for the secured indebtedness. Lender
may foreclose under this Security Instrument or under the vendor's lien without
waiving the other or may foreclose under both.

Section 6.9. Application of Payments to Certain Indebtedness. If any
part of the secured indebtedness cannot be lawfully secured by this Security
Instrument or if any part of the Property cannot be lawfully subject to the lien
and interest hereof to the full extent of such indebtedness, then all payments
made shall be applied on said indebtedness first in discharge of that portion
thereof which is not secured by this Security Instrument.

Section 6.10. Compliance with Usury Laws. It is the intent of
Borrower and Lender and all other parties to the Loan Documents to conform to
and contract in strict compliance with applicable usury law from time to time in
effect. All agreements between Lender and Borrower (or any other party liable
with respect to any indebtedness under the Loan Documents) are hereby limited by
the provisions of this Section which shall override and control all such
agreements, whether now existing or hereafter arising. In no way, nor in any
event or contingency (including but not limited to prepayment, default, demand
for payment, or acceleration of the maturity of any obligation), shall the
interest taken, reserved, contracted for, charged, chargeable, or received under
this Security Instrument, the Note or any other Loan Document or otherwise,
exceed the maximum nonusurious amount permitted by applicable law (the "Maximum
Amount"). If, from any possible construction of any document, interest would
otherwise be payable in excess of the Maximum Amount, any such construction
shall be subject to the provisions of this Section and such document shall ipso
facto be automatically reformed and the interest payable shall be automatically
reduced to the Maximum Amount, without the necessity of execution of any
amendment or new document. If Lender shall ever receive anything of value which
is characterized as interest under applicable law and which would apart from
this provision be in excess of the Maximum Amount, an amount equal to the amount
which would have been excessive interest shall, without penalty, be applied to
the reduction of the principal amount owing on the secured indebtedness in the
inverse order of its maturity and not to the payment of interest, or refunded to
Borrower or the other payor thereof if and to the extent such amount which would
have been excessive exceeds such unpaid principal. The right to accelerate
maturity of the Note or any other secured indebtedness does not include the
right to accelerate any interest which has not otherwise accrued on the

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date of such acceleration, and Lender does not intend to charge or receive any
unearned interest in the event of acceleration. All interest paid or agreed to
be paid to Lender shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full stated term
(including any renewal or extension) of such indebtedness so that the amount of
interest on account of such indebtedness does not exceed the Maximum Amount. As
used in this Section, the term "applicable law" shall mean applicable laws of
the State of Georgia, or the federal laws of the United States applicable to
this transaction, whichever laws allow the greater interest, as such laws now
exist or may be changed or amended or come into effect in the future.

Section 6.11. Cancellation of Security Instrument. If all of the
secured indebtedness be paid as the same becomes due and payable and all of the
covenants, warranties, undertakings and agreements made in this Security
Instrument are kept and performed, and all obligations, if any, of Lender for
further advances have been terminated, then, and in that event only, this
Security Instrument shall be cancelled by Lender in due form at Borrower's cost.
Without limitation, all provisions herein for indemnity of Lender shall survive
discharge of the secured indebtedness and any foreclosure, release or
termination of this Security Instrument.

Section 6.12. Notices. All notices, requests, consents, demands and
other communications required or which any party desires to give hereunder or
under any other Loan Document shall be in writing and, unless otherwise
specifically provided in such other Loan Document, shall be deemed sufficiently
given or furnished if delivered by personal delivery, by courier, or by
registered or certified United States mail, postage prepaid, addressed to the
party to whom directed at the addresses specified at the end of this Security
Instrument (unless changed by similar notice in writing given by the particular
party whose address is to be changed) or by telex, or facsimile. Any such notice
or communication shall be deemed to have been given and to be effective either
at the time of personal delivery or, in the case of courier or mail, as of the
date of first attempted delivery at the address and in the manner provided
herein, or, in the case of telex, when transmitted (answerback confirmed), or,
in the case of facsimile, upon receipt. Notwithstanding the foregoing, no notice
of change of address shall be effective except upon receipt. This Section shall
not be construed in any way to affect or impair any waiver of notice or demand
provided in any Loan Document or to require giving of notice or demand to or
upon any person in any situation or for any reason.

Section 6.13. Invalidity of Certain Provisions. A determination that
any provision of this Security Instrument is

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unenforceable or invalid shall not affect the enforceability or validity of any
other provision and the determination that the application of any provision of
this Security Instrument to any person or circumstance is illegal or
unenforceable shall not affect the enforceability or validity of such provision
as it may apply to other persons or circumstances.

Section 6.14. Gender; Titles; Construction. Within this Security
Instrument, words of any gender shall be held and construed to include any other
gender, and words in the singular number shall be held and construed to include
the plural, unless the context otherwise requires. Titles appearing at the
beginning of any subdivisions hereof are for convenience only, do not constitute
any part of such subdivisions, and shall be disregarded in construing the
language contained in such subdivisions. The use of the words "herein,"
"hereof," "hereunder" and other similar compounds of the word "here" shall refer
to this entire Security Instrument and not to any particular Article, Section,
paragraph or provision. The term "person" and words importing persons as used in
this Security Instrument shall include firms, associations, partnerships
(including limited partnerships), joint ventures, trusts, corporations and other
legal entities, including public or governmental bodies, agencies or
instrumentalities, as well as natural persons.

Section 6.15. Reporting Compliance. Borrower agrees to comply with
any and all reporting requirements applicable to the transaction evidenced by
the Note and secured by this Security Instrument which are set forth in any law,
statute, ordinance, rule, regulation, order or determination of any governmental
authority, including but not limited to The International Investment Survey Act
of 1976, The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Lender to furnish Lender with evidence of such
compliance.

Section 6.16. Lender's Consent. Except where otherwise expressly
provided herein, in any instance hereunder where the approval, consent or the
exercise of judgment of Lender is required or requested, (i) the granting or
denial of such approval or consent and the exercise of such judgment shall be
within the sole discretion of Lender, and Lender shall not, for any reason or to
any extent, be required to grant such approval or consent or exercise such
judgment in any particular manner, regardless of the reasonableness of either
the request or Lender's judgment, and (ii) no approval or consent of Lender
shall be deemed to have been given except by a specific writing

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intended for the purpose and executed by an authorized representative of Lender.

Section 6.17. Borrower. Unless the context clearly indicates
otherwise, as used in this Security Instrument, "Borrower" means the Borrower
named in Section 1.1 hereof. Each signatory who signs on behalf of Borrower
represents and warrants to Lender that this instrument is executed, acknowledged
and delivered by Borrower's duly authorized representatives.

Section 6.18. Execution; Recording. This Security Instrument has
been executed in several counterparts, all of which are identical, and all of
which counterparts together shall constitute one and the same instrument. The
date or dates reflected in the acknowledgments hereto indicate the date or dates
of actual execution of this Security Instrument, but such execution is as of the
date shown on the first page hereof, and for purposes of identification and
reference the date of this Security Instrument shall be deemed to be the date
reflected on the first page hereof. Borrower will cause this Security Instrument
and all amendments and supplements thereto and substitutions therefor and all
financing statements and continuation statements relating thereto to be
recorded, filed, re-recorded and refiled in such manner and in such places as
Lender shall reasonably request and will pay all such recording, filing,
re-recording and refiling taxes, fees and other charges.

Section 6.19. Successors and Assigns. The terms, provisions,
covenants and conditions hereof shall be binding upon Borrower, and the
successors and assigns of Borrower, and shall inure to the benefit of Lender and
the successors and assigns of Lender and shall constitute covenants running with
the Land. All references in this Security Instrument to Borrower shall be deemed
to include all such successors and assigns of Borrower, and all references in
this Security Instrument to Lender shall be deemed to include all such
successors and assigns of Lender.

Section 6.20. Modification or Termination. The Loan Documents may
only be modified or terminated by a written instrument or instruments intended
for that purpose and executed by the party against which enforcement of the
modification or termination is asserted. Any alleged modification or termination
which is not so documented shall not be effective as to any party.

Section 6.21. No Partnership, Etc.. The relationship between Lender
and Borrower is solely that of lender and borrower. Lender has no fiduciary or
other special relationship with Borrower. Nothing contained in the Loan
Documents is intended to create any partnership, joint venture, association or

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 50

special relationship between Borrower and Lender or in any way make Lender a
co-principal with Borrower with reference to the Property. All agreed
contractual duties between Borrower and Lender are set forth herein and in the
other Loan Documents and any additional implied covenants or duties are hereby
disclaimed. Any inferences to the contrary of any of the foregoing are hereby
expressly negated.

Section 6.22. Disclosure of Information. Lender may, from time to
time, sell or offer to sell the Loan, or interests therein, to one or more
assignees or participants and is hereby authorized to disseminate any
information it now has or hereafter obtains pertaining to the Loan, including,
without limitation, any security for the Loan and credit or other information on
the Project, Borrower, any of its principals and any guarantor, to any assignee
or participant or prospective assignee or prospective participant, to Security
Instrument's affiliates, including without limitation NationsBanc Capital
Markets, Inc., to any regulatory body having jurisdiction over Lender and to any
other parties as necessary or appropriate in Lender's reasonable judgment.
Borrower shall execute, acknowledge and deliver any and all instruments
reasonably requested by Lender in connection therewith and to the extent, if
any, specified in any such assignment or participation, such companies,
assignees or participants shall have the rights and benefits with respect to the
Loan Documents as such persons would have if such persons were Lender hereunder.

Section 6.23. Applicable Law. The enforceability of this Security
Instrument shall be governed by California law only for purposes of determining
the following: (i) the applicable conflict of law rules in this Security
Instrument and the other Loan Documents, (ii) whether this Security Instrument
transfers or creates an interest in real property for security purposes or
otherwise, (iii) the nature of an interest in real property that is transferred
or created by this Security Instrument, (iv) the method for foreclosure of a
lien on real property and the exercise of any other remedy with respect to the
real property or the Rents or profits therefrom, (v) the nature of an interest
in real property that results from foreclosure, and (vi) the manner and effect
of recording or failing to record evidence of a transaction that transfers or
creates an interest in real property. Except as expressly set out above, the
enforceability of this Security Instrument and the other Loan Documents shall be
governed by Georgia law.

Section 6.24. Effective as a Financing Statement. This Security
Instrument shall be effective as a financing statement filed as a fixture filing
with respect to all fixtures included within the Property and is to be filed for
record in the

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 51

real estate records of each county where any part of the Property (including
said fixtures) is situated. This Security Instrument shall also be effective as
a financing statement covering minerals or the like (including oil and gas) and
accounts and is to be filed for record in the real estate records of each county
where any part of the Property is situated. This Security Instrument shall also
be effective as a financing statement covering any other Property and may be
filed in any other appropriate filing or recording office. The mailing address
of Borrower is the address of Borrower set forth at the end of this Security
Instrument and the address of Lender from which information concerning the
security interests hereunder may be obtained is the address of Lender set forth
at the end of this Security Instrument. A carbon, photographic or other
reproduction of this Security Instrument or of any financing statement relating
to this Security Instrument shall be sufficient as a financing statement for any
of the purposes referred to in this Section.

Section 6.25. Entire Agreement. The Loan Documents constitute the
entire understanding and agreement between Borrower and Lender with respect to
the transactions arising in connection with the indebtedness secured hereby and
supersede all prior written or oral understandings and agreements between
Borrower and Lender with respect to the matters addressed in the Loan Documents.
Borrower hereby acknowledges that, except as incorporated in writing in the Loan
Documents, there are not, and were not, and no persons are or were authorized by
Lender to make, any representations, understandings, stipulations, agreements or
promises, oral or written, with respect to the matters addressed in the Loan
Documents.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES

IN WITNESS WHEREOF, this Security Instrument has been executed and
sealed by Borrower as of the date first written on page 1 hereof.

Borrower:

Wells/Orange County Associates,
a Georgia joint venture

By:   Wells Operating Partnership, L.P.,
a Delaware limited partnership,

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 52

Joint Venture Partner

By:   Wells Real Estate Investment
Trust, Inc.,
a Maryland corporation,
General Partner

By: /s/ Brian M. Conlon
-----------------------------------
Name: Brian M. Conlon
---------------------------------
Title: Executive Vice President
--------------------------------

[CORPORATE SEAL]

By:   Wells Development Corporation,
a Georgia corporation,
Joint Venture Partner

By: /s/ Brian M. Conlon
-----------------------------------
Name: Brian M. Conlon
---------------------------------
Title: Executive Vice President
--------------------------------

[CORPORATE SEAL]

The address and federal tax identification 
number of Borrower are:

3885 Holcomb Bridge Road
Norcross, Georgia  30092

Federal Tax No. 58-2404574

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 53

The address of Lender is (including county):

NationsBank, N.A.
NationsBank Plaza - 6th Floor
600 Peachtree Street, N.E.
Atlanta, Fulton County,
Georgia  30308

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 54

ACKNOWLEDGMENT

STATE OF GEORGIA  :
:  ss
COUNTY OF FULTON  :

Before me, a notary public in and for said County and State, on this
28th day of July, 1998, personally appeared Brian M. Conlon, to me known to be
the identical person who subscribed the name of Wells/Orange County Associates,
a Georgia joint venture ("Borrower"), to the foregoing instrument in his/her
capacity as Executive Vice President of Wells Real Estate Investment Trust,
Inc., a Maryland corporation, which is the General Partner of Wells Operating
Partnership, L.P., a Delaware limited partnership, one of the Joint Venture
Partners of Borrower, and in his/her capacity as Executive Vice President of
Wells Development Corporation, a Georgia corporation, the other Joint Venture
Partner of Borrower, and acknowledged to me that he/she executed the same as
his/her free and voluntary act and deed and as the free act and voluntary deed
of such Joint Venture Partners and of Borrower for the uses and purposes therein
set forth.

/s/ W. L. O'Callaghan
--------------------------------------
NOTARY PUBLIC

My Commission Expires:

[SEAL]
--------------------------------------
[NOTARIAL SEAL]

WELLS/ORANGE COUNTY ASSOCIATES
DEED OF TRUST
PAGE 55

EXHIBIT 10.25

JOINT VENTURE AGREEMENT

OF

THE CORT JOINT VENTURE

JOINT VENTURE AGREEMENT
OF
WELLS/ORANGE COUNTY ASSOCIATES

THIS JOINT VENTURE AGREEMENT (the "Agreement") is made and entered into as
of the 27th day of July, 1998, by and between WELLS OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership having Wells Real Estate Investment Trust, Inc.,
a Maryland corporation, as general partner ("Wells OP"), and WELLS DEVELOPMENT
CORPORATION, a Georgia corporation ("Wells Development"). Each of the parties
may also be referred to herein as a "Venturer" and together as the "Venturers."

W I T N E S S E T H :

WHEREAS, the Venturers desire to joint venture the acquisition,
development, operation and sale of real properties according to the terms and
conditions set forth herein;

NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter set forth, the parties hereto covenant and agree as follows:

1. DEFINITIONS.

For the purposes of this Agreement, the following defined terms
shall have the meanings ascribed thereto.

1.1 "Administrative Venturer" means the Entity responsible for the
conduct of the ordinary and usual business of the Venture and the implementation
of the decisions of the Venturers, all as is more fully set forth in Subsection
4.2 hereof. The initial Administrative Venturer shall be Wells OP.

1.2 "Agreed Value" means with respect to Contributed Property the
fair market value of such property as of the date of contribution to the Venture
as determined by the general partners of the Venturers.

1.3 "Approve," "Approved" or "Approval" means, as to the subject
matter thereof and as the context may require, an express consent evidenced by
and contained in a written statement signed by the approving Entity. A copy of
each such written statement shall be kept at the office of the respective
Venturer and shall be available for inspection by the other Venturer upon
request.

1.4 "Bankrupt" or "Bankruptcy" means the occurrence of one or more
of the following events:

(i) The appointment of a permanent or temporary receiver of the
assets and properties of the Venture or a Venturer, and the failure to secure
the removal thereof within 60 days after such appointment;

(ii) The adjudication of the Venture or a Venturer as bankrupt or
the commission by the Venture or a Venturer of an act of bankruptcy;

(iii) The making by the Venture or a Venturer of an assignment for
the benefit of creditors;

(iv) The levying upon or attachment by process of the assets and
properties of the Venture or a Venturer; or

(v) The use by the Venture or a Venturer, whether voluntary or
involuntary, of any debt or relief proceedings under the present or future law
of any state or of the United States.

1.5 "Capital Account" means a separate account maintained for each
Venturer in a manner which complies with Treasury Regulation Section 1.704-1(b),
as may be amended or revised from time to time.

1.6 "Capital Contributions" means the aggregate contributions to the
capital of the Venture made by the Venturers as Capital Contributions pursuant
to Subsection 3.1 hereof.

1.7 "Contributed Property" means the interest of each Venturer
contributing property (excluding cash or cash equivalents) to the Venture in
such property.

1.8 "Defaulting Venturer" means any Venturer failing to perform any
of the obligations of such Venturer under this Agreement or violating the
provisions of this Agreement.

1.9 "Distribution Percentage Interests" means collectively the
interests in the income, gains, losses, deductions, credits, Net Cash Flow,
Extraordinary Receipts, as determined by Subsection 3.2 hereof, as such may be
adjusted from time to time as provided in this Agreement.

1.10 "Entity" means any person, corporation, partnership (general or
limited), joint venture, association, joint stock company, trust or other
business entity or organization.

1.11 "Extraordinary Receipts" means those funds of the Venture which
are derived from (i) the net proceeds of any casualty insurance insuring any of
the Properties or any portion thereof, to the extent not applied to the repair,
restoration or replacement of the Properties or any portion thereof as may be
Approved by the Venturers; (ii) the net proceeds of any condemnation, or any
taking by eminent domain, or any transfer in lieu thereof, of any of the
Properties, or any portion thereof, to the extent not applied to the repair,
restoration or reconstruction of any remaining portion of the Properties as may
be Approved by the Venturers; (iii) the net proceeds of any sale of any of the
Properties, or any portion thereof; and (iv) the

2

net proceeds of any indebtedness (or any refinancing of such indebtedness)
secured in whole or in part by any of the Properties or any portion thereof.

1.12 "Fiscal Year" means the fiscal year of the Venture established
under Subsection 3.4(c) hereof.

1.13 "I.R.C." means the Internal Revenue Code of 1986, as amended.

1.14 "Lease" means a lease or rental agreement now or hereafter
existing between the Venture, as lessor or landlord (whether initially or by
assignment) and an Entity.

1.15 "Leasing Agreements" means, collectively, those certain Leasing
and Tenant Coordinating Agreements between the Venturers as "Owner" and Wells
Management Company, Inc. as "Agent" therein, concerning the leasing of the
Properties.

1.16 "Major Decisions" means any decision or action to (i) convey by
the Venture substantially all the assets of the Venture; (ii) acquire any
Property or an interest in a Property, except for the acquisition of that
certain office building located at 10700 Spencer Avenue, Fountain Valley, Orange
County, California leased to Cort Furniture Rental Corporation (the "Cort
Furniture Building"), which is hereby Approved by the Venturers; (iii) finance
or borrow or execute any promissory note or other obligation (other than a
Lease) or mortgage or other encumbrance in the name of or on behalf of the
Venture, except for that certain loan from NationsBank, N.A. in the amount of
approximately $4,875,000 to finance the acquisition of the Cort Furniture
Building to constitute a mortgage and encumbrance upon the Cort Furniture
Building, which is hereby Approved by the Venturers; (iv) retain the services of
a manager other than Wells Management Company, Inc.; (v) approve each
construction and architectural contract and all architectural plans,
specifications and drawings and all revisions or changes thereof in connection
with the development and construction of any improvements for the Properties;
(vi) reduce any portion of the insurance program for the Properties or the
Venture; (vii) determine any fee or other amount to be paid to either Venturer
or any affiliate of a Venturer; (viii) make any expenditure or incur any
obligation by or on behalf of the Venture involving a sum in excess of $15,000
for any transaction or group of similar transactions except for expenditures
made and obligations incurred pursuant to and specifically set forth in a budget
Approved by the Venturers; (ix) adjust, settle or compromise any claim,
obligation, debt, demand, suit or judgment against the Venture or any Venturer
in its capacity as a Venturer, or waive any breach of or default in any monetary
or non-monetary obligation owed to the Venture, involving singly or in the
aggregate an amount in excess of $15,000, or in the initiation of any such claim
or suit for the benefit of the Venture; (x) convey or sell any Properties or
authorize the conveyance or sale of all Properties; (xi) admit any new Venturer
to the Venture; (xii) cause the Venture to be admitted as a joint venturer to
any other joint venture; and (xiii) make any other decision or action which by
the provisions of this Agreement is required to be Approved by the Venturers or
which in a material respect affects the Venture or any of the assets or
operations thereof. All Major Decisions shall be made by the Venturers in a
timely manner with

3

due regard for the necessity of obtaining and evaluating the information
necessary for making such Major Decisions.

1.17 "Management Agreements" means, collectively, those certain
Management Agreements between the Venturers as "Owner" and Wells Management
Company, Inc. as "Manager" therein, concerning the management of the Property.

1.18 "Manager" means Wells Management Company, Inc.

1.19 "Net Cash Flow" means for a given fiscal period, those funds of
the Venture constituting the gross cash receipts of the Venture from the
operation of the Properties (including interest and proceeds from business
interruption or rent insurance) for such period exclusive of Capital
Contributions by the Venturers and Extraordinary Receipts, which are available
for distribution to the Venturers following (i) the payment of all operating,
fixed cost and capital expenditures of the Venture, for which no reserves have
been established, applicable to such period; (ii) the payment of all principal
and interest with respect to any debt secured by any mortgage permitted by this
Agreement; and (iii) the establishment by the Venturers of appropriate reserves
for taxes, debt service, maintenance, repairs and other expenses and working
capital requirements of the Venture including, without limitation, accruals for
real estate taxes, insurance and other annual expense items (unless and to the
extent the same are escrowed with a mortgagee).

1.20 "Nondefaulting Venturer" in the context wherein one or more
Venturers become a Defaulting Venturer, means the remaining Venturers (provided
the remaining Venturers are not also Defaulting Venturers).

1.21 "Notice" means a written advice or notification required or
permitted by this Agreement, as more particularly provided in Subsection 8.1
hereof.

1.22 "Prime Rate" means the rate of interest announced from time to
time by NationsBank, N.A. as its prime rate. In the event the prime rate of
NationsBank, N.A. is hereafter discontinued or becomes unascertainable, the
Administrative Venturer shall designate a comparable reference rate to be the
Prime Rate.

1.23 "Property" means any particular tract of land (and all rights
and appurtenances incident thereto) owned or to be owned by the Venture or owned
or to be owned by any joint venture, partnership, limited liability company or
other entity in which the Venture owns an economic or beneficial interest and
all improvements located, constructed or developed thereon or to be constructed
or developed thereon.

1.24 "Properties" means, collectively, all Property of the Venture
at any given time.

4

1.25 "Purchasing Party" means the Venturer other than the Selling
Party in the event of a proposed transfer described in Subsection 6.4 hereof.

1.26 "Selling Party" means the Venturer desiring to transfer its
interest in a transaction described in Subsection 6.4 hereof.

1.27 "Venture" means the joint venture formed pursuant to the laws
of the State of Georgia by this Agreement.

1.28 "Venturer" or "Venturers" means the party or parties to this
Agreement and all permitted successors and assigns thereof.

1.29 Other terms defined in this Agreement:

Term                                Section
----                                -------

"Assignment"                        6.1
"Right of First Refusal"            6.2
"Certification"                     6.4(a)
"Accepting Venturer"                6.5(a)
"Dissenting Venturer"               6.5(a)

2. THE VENTURE.

2.1 Formation of Venture. The Venturers hereby enter into and form
the Venture as a joint venture for the limited purposes and scope set forth
herein. The rights and obligations of the Venturers and the status,
administration and termination of the Venture shall be governed by the laws of
the State of Georgia. The Venture is being formed for the sole purpose of
acquiring, owning, developing, operating and eventually selling the Properties.

2.2 Purposes and Scope of Venture. Subject to the provisions of this
Agreement, the activities of the Venture shall be limited strictly to the
acquisition, ownership, financing, development, leasing, operation, sale and
management of the Properties for the production of income and profit, either
directly or through the ownership of joint ventures, partnerships, limited
liability companies or other entities, including all activities reasonably
necessary or desirable to accomplish such purposes, and shall not be extended by
implication or otherwise unless Approved by all venturers. Nothing in this
Agreement shall be deemed to restrict in any way the freedom of any Venturer to
conduct any other business or activity whatsoever (including, without
limitation, the acquisition, development, leasing, sale, operation and
management of other real property) without any accountability to the Venture or
any other Venturer, even if such business or activity competes with the business
of the Venture, it being understood by each Venturer that the other Venturer may
be interested directly or indirectly in various other businesses and
undertakings not included in the Venture.

5

2.3 Name of Venture. The business and affairs of the Venture shall
be conducted under the name "Wells/Orange County Associates" (or such other
names as shall be approved by both Venturers), and such name shall be used at
all times in connection with the business and affairs of the Venture. The
Venturers shall execute any assumed or fictitious name certificate or
certificates required by law to be filed in connection with the formation of the
Venture and shall cause such certificate or certificates to be filed in the
appropriate records.

2.4 Scope of Authority. Except as otherwise expressly and
specifically provided in this Agreement, no Venturer shall have any authority to
act for, or assume any obligations or responsibility on behalf of, any other
Venturer or the Venture.

2.5 Principal Place of Business. The principal place of business and
initial office of the Venture shall be located at 3885 Holcomb Bridge Road,
Norcross, Georgia 30092, and may be relocated as may be from time to time
Approved by the Venturers.

2.6 Representations, Warranties and Indemnity. In order to induce
the other Venturer to enter into this Agreement, each Venturer does hereby make
to each other Venturer the representations and warranties hereinafter set forth,
and does hereby agree to indemnify and hold each other Venturer harmless from
any and all loss, expense or liability any other Venturer may suffer as a result
of any inaccuracy as of the date hereof in any representation and warranty set
forth below:

(a) Authorization. The execution and delivery of this
Agreement has been duly authorized by the agreements by which each Venturer was
either created or currently governed.

(b) Claims. There is no claim, litigation, proceeding or
governmental investigation pending, or, so far as is known to each Venturer,
threatened, against or relating to each Venturer, or the transactions
contemplated by this Agreement which does or would reasonably be expected
materially and adversely to affect the ability of each Venturer to enter into
this Agreement or to carry out its obligations hereunder, and there is not any
basis for any such claim, litigation, proceeding or governmental investigation.

(c) Conflicts. Neither the consummation of the transactions
contemplated by this Agreement to be performed, nor the fulfillment of the
terms, conditions and provisions of this Agreement, conflict with or will result
in the breach of any of the terms, conditions or provisions of, or constitute a
default under, the agreements by which each Venturer was created or is currently
governed or any material agreement, indenture, instrument or undertaking to
which each Venturer is a party.

(d) Investment Objectives. The investment objectives of each
Venturer with respect to the Properties and the objectives of the Venture are:
(i) to maximize Net Cash Flow; (ii) to preserve, protect and return the
Venturers' investment in the Venture; and (iii) to realize appreciation upon the
sale of the Properties.

6

(e) Charges to the Venturer. Neither Venturer will be charged,
directly or indirectly, more than once for the same services.

2.7 Term of Venture.

(a) Commencement. The Venture term shall begin on the date of
this Agreement as set forth above and end upon dissolution of the Venture.

(b) Dissolution and Termination. Dissolution shall occur upon
the occurrence of any of the events described in Section 7 of this Agreement.
Upon dissolution, the assets shall be liquidated in due course and distributed
as provided in Subsection 3.3(c)(i) hereof. The Venture shall continue until
termination in accordance with the relevant dissolution and termination
provisions of the Georgia Uniform Partnership Act.

3. FINANCIAL STRUCTURE.

3.1 Capital Contributions. The Venturers shall from time to time
make Capital Contributions to the Venture in such amounts as are agreed to by
the Venturers. In addition, Wells Development shall be obligated to transfer,
assign and contribute, and hereby agrees to transfer, assign and contribute, to
the Venture all of its right, title and interest, as purchaser, in and to its
contract to acquire the Cort Furniture Building.

3.2 Distribution Percentage Interest. The Distribution Percentage
Interest of each of the Venturers shall be equal to the percentage equivalent
(rounded to the nearest one-hundredth of a percent) of a fraction, the numerator
of which is the aggregate of all Capital Contributions (or the Agreed Value
thereof) made by the Venturer pursuant to Subsection 3.1 hereof, and the
denominator of which is the aggregate amount of all Capital Contributions (or
the Agreed Value thereof) made by all of the Venturers pursuant to Subsection
3.1 hereof. Each Venturer's interest in the Venture shall always be proportional
to its Capital Contributions.

Each Venturer (the "First Venturer") does hereby agree to indemnify
and hold the other Venturer (the "Second Venturer") harmless from and against
any claim, action, liability, loss, damage, cost or expense, including, without
limitation, attorney's fees and expenses incurred by the Second Venturer by
reason of (i) any act or omission of the First Venturer in connection with the
operation of the Venture and the Properties, or (ii) the claims made by third
parties to the extent that the Second Venturer's percentage share of the total
liability, loss, damage, cost or expense incurred by the Venture and the
Venturers in connection with such claims exceeds its Distribution Percentage
Interest at the time such liability, loss, damage, cost or expense is suffered
or incurred. Upon dissolution, each Venturer shall look solely to the assets of
the Venture for the return of its investment, and if the Venture Property
remaining after payment or discharge of the debts and liabilities of the
Venture, including debts and liabilities owed to one or more of the Venturers,
is insufficient to return the aggregate Capital Contributions of each Venturer,
such Venturers shall have no recourse against the Venture or any other Venturer.

7

3.3 Allocations and Distributions. Allocations for accounting
purposes and for federal, state and local income tax purposes of each item of
income, loss, deduction and gain, and distributions of Net Cash Flow and
Extraordinary Receipts shall be allocated among the Venturers as follows:

(a) Allocation of Tax Items. For federal, state and local
income tax purposes and for purposes of maintaining the Venturers' Capital
Accounts, except as otherwise provided herein, each item of income, gain, loss
and deduction of the Venture for each tax year shall be allocated to the
Venturers in accordance with their Distribution Percentage Interests.

(b) Net Cash Flow. All distributions of Net Cash Flow shall be
made to the Venturers in accordance with each such Venturer's Distribution
Percentage Interest and shall be made at such intervals as may be approved by
the Venturers, but in no event less frequently than quarterly.

(c) Extraordinary Receipts. Distributions of Extraordinary
Receipts shall be made as follows:

(i) Distributions Not in Connection With Dissolution.
Distribution of Extraordinary Receipts not generated in connection with an event
of dissolution shall be made as follows: first, to the establishment of any
reserve approved by the Venturers; and second, to the Venturers based on their
respective Distribution Percentage Interests.

(ii) Distributions in Connection With Dissolution.
Distribution of Extraordinary Receipts generated in connection with an event of
dissolution (as well as the other assets of the Venture) shall be made as
follows: first, to the payment of debts and liabilities of the Venture to
creditors (including all mortgages, but excluding any other debts or liabilities
to Venturers or affiliates of Venturers), and to the expenses of liquidation;
second, to the establishment of such reserves as the Venturers may deem
reasonably necessary for contingent or unforeseen liabilities or obligations of
the Venture, which may be held in escrow for a reasonable period of time and
then distributed pursuant to the remainder of this Subsection; third, to the
repayment of any remaining debts and obligations of the Venture to the Venturers
or affiliates of the Venturers; and fourth, to the Venturers in accordance with
the positive balances in their respective Capital Accounts.

(d) Compliance with Section 704(c). To comply with Section
704(c) of the I.R.C., items of income, gain, loss, depreciation and cost
recovery deductions attributable to Contributed Property shall be allocated for
federal income tax purposes among the Venturers in the manner provided under
Section 704(c) of the I.R.C. taking into account the variation, if any, between
the Agreed Value of such Property and its adjusted tax basis at the time of
contribution.

(e) Qualified Income Offset. Notwithstanding any provision to
the contrary contained herein, in the event that any Venturer receives an
adjustment, allocation or

8

distribution described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
(5) or (6) which causes a deficit balance in such Venturer's Capital Account,
such Venturer will be allocated items of income or gain (consisting of a pro
rata portion of each item of partnership income, including gross income, and
gain for such year) in an amount and manner sufficient to eliminate such deficit
balance as quickly as possible, all in accordance with Treasury Regulations
Section 1.704-1(b)(2)(ii)(d). (It is the intent of the Venturers that the
foregoing provision constitute a "Qualified Income Offset," as defined in
Treasury Regulations Section 1.704-1(b)(2)(ii)(d), and the foregoing provision
shall in all events be interpreted so as to constitute a valid "Qualified Income
Offset.")

3.4 Income Taxes and Accounting.

(a) Income Tax Returns. All income tax returns of the Venture
shall be prepared on an accrual basis (except to the extent as may otherwise be
Approved by all Venturers or be required by law, statute or regulation governing
such tax and returns).

(b) Elections. Any provision of this Agreement to the contrary
notwithstanding, solely for federal income tax purposes, each of the Venturers
hereby recognizes that the Venture will be subject to all provisions of
Subchapter K of Chapter 1 of Subtitle A of the I.R.C.; provided, however, that
the filing of U.S. Partnership Returns of Income shall not be construed to
extend the purposes of the Venture or expand the obligations or liabilities of
the Venturers. The Venture shall file an election under Section 754 of the
I.R.C. only in the event of a transfer or proposed transfer by any one or more
Venturers of all or any part of their interest or interests in the Venture to
any Entity. Such election shall be filed by the Venture upon the request of any
Venturer made with respect to the income tax return for the period which
includes the date of transfer of such interest in the Venture; such request
shall be in writing and shall be made not less than 60 days prior to the initial
date established by law for filing such income tax return.

(c) Fiscal Year. The Venture shall operate on a calendar year
basis.

(d) Books of Account. The books of account of the Venture and
the Venturer's Properties shall be kept and maintained at all times by the
Administrative Venturer or the delegated representative thereof at the principal
place of business of the Administrative Venturer. The books of account shall be
maintained on an accrual basis, unless otherwise determined by the
Administrative Venturer, in accordance with generally accepted accounting
principles, consistently applied, and shall show all items of income and expense
relating to the Venture and the Properties.

(e) Reports. The Administrative Venturer shall cause to be
prepared at the expense of the Venture and furnished to each of the Venturers
the information and data with respect to the Venture during the Fiscal Year as
shall enable each Venturer on a timely basis to prepare or cause to be prepared
the reports required under their respective partnership agreements to be made to
their partners. In addition, within 60 days after the end of each Fiscal

9

Year, the Administrative Venturer shall use its best efforts to cause to be
prepared and to deliver to each Venturer a report setting forth in sufficient
detail all such information and data with respect to business transactions
effected by or involving the Venture during such Fiscal Year as shall enable the
Venture and each Venturer to prepare its federal, state and local income tax
returns on a timely basis in accordance with the laws, rules and regulations
then prevailing. The Administrative Venturer shall cause to be prepared federal,
state and local tax returns required of the Venture and submit such returns to
the Venturers no later than 30 days prior to the date required for the filing
thereof and shall file the same.

(f) Records. Any Venturer shall have the right at all
reasonable times during usual business hours to audit, examine and make copies
of the books of account of the Venture. Such right may be exercised through any
agent or employee of such Venturer designated by such Venturer or by an
independent certified public accountant designated by such Venturer. Any
Venturer shall bear all expenses incurred in any examination or audit made for
such Venturer's account.

(g) Audits. In the event that the Internal Revenue Service or
any other governmental agency with jurisdiction shall conduct, commence or give
notification of intent to conduct or commence any audit or other investigation
of the books, records, tax returns or other affairs of the Venture, the
Administrative Venturer shall immediately advise the Venturers thereof by
Notice. The Administrative Venturer shall be the "tax matters partner," as that
term is defined by I.R.C., if one is needed for the Venture.

3.5 Banking. Funds of the Venture shall be deposited in an account
or accounts of a type, in form and name and in a bank or banks selected by the
Administrative Venturer. No funds other than Venture funds shall be deposited in
any such account. Withdrawals from bank accounts shall be made by the
Administrative Venturer and by such other parties as may be designated by the
Venturers.

4. MANAGEMENT.

4.1 Authority of Administrative Venturer. The overall management and
control of the business and affairs of the Venture shall be vested in the
Venturers, collectively, acting by and through the Administrative Venturer. The
Administrative Venturer shall have responsibility for establishing the policies
and operating procedures with respect to the business and affairs of the Venture
and for making all decisions, except as otherwise provided herein and except
Major Decisions, as to all matters which the Venture has authority to perform,
as fully as if the Venturers were themselves making such decisions. All
decisions, other than Major Decisions, with respect to the management and
control of the Venture made by the Administrative Venturer shall be binding on
the Venture and all Venturers. The Administrative Venturer shall be responsible
for performing, or for causing to be performed, all acts necessary to accomplish
the purposes of the Venture. No act shall be taken, sum expended, decision made
or obligation incurred by the Venture, or any Venturer, with respect to a matter
within the scope of any of the Major Decisions, unless such matter has been
Approved by all of the Venturers.

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Except as otherwise expressly provided for in this Agreement, documents executed
by or behalf of the Venture shall be executed only with the Approval of the
Administrative Venturer.

4.2 Administrative Venturer. The initial Administrative Venturer
shall be Wells OP. The Administrative Venturer shall, at the expense of the
Venture, discharge or cause the discharge of the duties of the Administrative
Venturer unless and until (i) the Administrative Venturer resigns as the
Administrative Venturer, or (ii) the Administrative Venturer becomes a
Defaulting Venturer. In the event of an occurrence described in either clause
(i) or (ii) of the immediately preceding sentence, the then current
Administrative Venturer shall thereupon be relieved from any further performance
of the functions of the Administrative Venturer under this Agreement and a
replacement for the Administrative Venturer shall be appointed by a majority in
interest of the other Venturers. In the event an Entity not a Venturer shall be
appointed to be Administrative Venturer, such Entity shall discharge the
functions of the Administrative Venturer under this Agreement but shall not be
entitled to any of the rights, titles or interests of a Venturer. The breach or
violation by the Administrative Venturer of any provision of this Subsection, or
of any other duty or obligation imposed upon the Administrative Venturer by this
Agreement, shall subject to the Administrative Venturer to the provisions of
Subsection 4.4 hereof as a Defaulting Venturer (provided the Administrative
Venturer is then also a Venturer) only if such breach or violation by the
Administrative Venturer involves fraud, negligence or willful misconduct.
Furthermore, the Administrative Venturer shall be liable to the Venture and to
the Venturers for any breach or violation of the Administrative Venturer's
duties and obligations under this Subsection only if such breach or violation
involves fraud, negligence or willful misconduct.

(a) Records. The Administrative Venturer shall maintain or
cause to be maintained at the expense of the Venture, books of account as
described in Subsection 3.4(d) hereof.

(b) Property Taxes and Licenses. The Administrative Venturer
shall cause to be filed each year timely ad valorem tax returns for the
Properties.

(c) Leases. The Administrative Venturer is authorized to
negotiate and execute Leases on behalf of the Venture without further Approval
of the Venturers and is authorized to delegate this responsibility pursuant to a
management agreement. Initially, this responsibility will be delegated to the
Manager under the Management Agreements and Leasing Agreements by and between
the Venturers and the Manager.

(d) Indemnity. The Venture shall indemnify and hold the
Administrative Venturer harmless against all claims, actions, liability, loss,
damage, cost or expense, including attorney's fees and expenses, by reason of
any act or omission of the Administrative Venturer that is duly authorized and
performed in accordance with the terms and provisions of this Agreement.
However, any Entity which is both the Administrative Venturer and a Venturer
shall be responsible as a Venturer, to the extent of the proportionate liability
thereof, for such obligation for the Venture to so indemnify and hold harmless
the

11

Administrative Venturer. The liability of the Venturers under this Subsection
shall be several, and not joint, and shall be shared in proportion to the
Distribution Percentage Interests of the Venturers.

4.3 Compensation of Venturers. No payment will be made by the
Venture to any Venturer for the services of such Venturer or any affiliate,
partner or employee of any Venturer, other than as provided in the Management
Agreements and the Leasing Agreements.

4.4 Defaulting Venturer. If any Venturer fails to perform any of its
obligations under this Agreement or violates the terms of this Agreement, such
Venturer shall be a Defaulting Venturer and the Nondefaulting Venturer shall
have the right to give such Defaulting Venturer a Notice specifically setting
forth the nature of the default and stating that such Defaulting Venturer shall
have a period of 15 days to pay any sums of money specified therein as due and
owing to the Venture or to any Venturer, or 30 days (or such longer period as is
specified in the next succeeding sentence) to cure any other default specified
in such Notice. If the monies specified are not paid within such 15 day period
or such Defaulting Venturer does not cure all other defaults within such 30 day
period, or, if the defaults are not capable of being cured within such 30 day
period, such Defaulting Venturer has not commenced in good faith the curing of
such defaults within such 30 days period and does not thereafter prosecute to
completion with diligence and continuity the curing thereof, the Nondefaulting
Venturer shall have all rights provided in Subsections 4.4(a) through 4.4(c)
below, in addition to any other rights it may have under the Georgia Uniform
Partnership Act. If a Defaulting Venturer completely cures all of such defaults
within the aforesaid cure periods, then such defaults shall be deemed no longer
to exist and such Venturer shall be deemed no longer to constitute a Defaulting
Venturer unless and until another default by such Venturer occurs. A Defaulting
Venturer shall have no power or authority to bind the Venture or the Venturers
but shall cooperate with and, to the extent requested, assist the Nondefaulting
Venturers in every way possible.

(a) Equitable Relief. The Nondefaulting Venturer may bring any
proceeding in the nature of injunction, specific performance or other equitable
remedy, it being acknowledged by each of the Venturers that damages at law may
be an inadequate remedy for a default or threatened breach of this Agreement.

(b) Damages. The Nondefaulting Venturer may bring any action
at law by or on behalf of itself or the Venture as may be permitted in order to
recover damages.

(c) Dissolution. The Nondefaulting Venturer may institute such
proceedings as may be appropriate to secure an accounting and to dissolve, wind
up and terminate the Venture.

(d) Additional Remedies. The rights and remedies of the
Venturers under this Agreement shall not be mutually exclusive; that is, the
exercise of one or more of the provisions hereof shall not preclude the exercise
of any other provisions hereof, except as may

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be expressly provided in this Agreement. Each of the Venturers confirms that
damages at law may be an inadequate remedy for a breach or threatened breach of
this Agreement and agrees that, in the event of a breach or threatened breach of
any provision hereof, the respective rights and obligations hereunder shall be
enforceable by specific performance, injunction or other equitable remedy, but
nothing herein contained is intended to, nor shall it, limit or affect any right
or rights at law or by statute or otherwise of any Venturer aggrieved as against
any other Venturer for breach or threatened breach of any provisions of this
Agreement, it being the intention of this Subsection to make clear the Agreement
of the Venturers that the respective rights and obligations of the Venturers
under this Agreement shall be enforceable in equity as well as at law or
otherwise.

4.5 Limitation on Authority. Notwithstanding any provision of this
Agreement to the contrary, neither Venturer shall have the authority to take any
action which, if taken singularly by such Venturer separate from the Venture,
would be prohibited by such Venturer's

4.6 Holding Title as Nominee. With the consent of the other
Venturers, any Venturer shall be authorized to hold title to a Property or
Properties as agent or as nominee on behalf of the Venture.

5. INSURANCE.

5.1 Minimum Insurance Requirements. The Venture shall carry and
maintain in force the insurance hereinafter described, the premiums for which
shall be a cost and expense of the Venture.

(a) Liability Insurance. Comprehensive general liability
insurance for the benefit of the Venture and the Venturers as named insureds
against claims for "personal injury" liability.

(b) Other Insurance. Such other insurance as the Venturers may
reasonably deem to be necessary or as may be required by any mortgagee of any
Property of the Venture.

5.2 Insureds. All of the policies of insurance described in
Subsection 5.1 shall name the Venture and each of the Venturers as named
insureds, as their respective interests may appear. All such insurance shall be
effected under policies issued by insurers and be in forms and for amounts
Approved by both Venturers.

6. TRANSFERS AND OTHER DISPOSITIONS.

6.1 Prohibited Transfers. No Venturer may sell, transfer, assign,
mortgage, pledge, hypothecate or otherwise dispose of, encumber or permit or
suffer any encumbrance on (all referred to as "Assignment"), all or any part of
the interest of such Venturer in the Venture or in the Properties (including,
but not limited to, the right to receive any distributions under

13

this Agreement) unless such an Assignment is Approved by all Venturers, provided
that this restriction on Assignment shall not apply to the Assignment of units
of partnership interests or beneficial interests in a Venturer. Any Assignment
made in violation of this Section 6 shall be void.

6.2 Exceptions. The prohibition in Subsection 6.1 hereof shall not
apply to: (a) an Assignment permitted under Subsection 6.4 hereof ("Right of
First Refusal"); or (b) an Assignment of all or a part of its interest in the
Venture by Wells Development to Wells Real Estate Fund X, L.P., Wells Real
Estate Fund XI, L.P. or a joint venture between said Wells Real Estate Fund X,
L.P. and Wells Real Estate Fund XI, L.P., which is hereby Approved by Wells OP.

6.3 Notice. Each Venturer shall promptly by Notice inform the other
Venturer of the occurrence of any disposition not required to have been Approved
by the other Venturer.

6.4 Right of First Refusal. If any Selling Party shall desire to
transfer (for the purposes of this Subsection the terms "transfer" and
"transferred" include any and all types of disposition) all or any portion of
its interest in the Venture to any Entity, such Selling Party may consummate
such transfer only if (i) such sale is a sale of Selling Party's interest in the
Venture separate and distinct from any other property, (ii) the consideration
payable is cash and/or note(s) and not an interest in other property, and (iii)
the provisions and conditions of Subsections (a) through (d) hereof have been
complied with.

(a) Certification. The Selling Party shall deliver to the
Purchasing Party a written certification ("Certification") reflecting (i) the
name of the prospective transferee of the entire interest of the Selling Party
in the Venture; (ii) the price for which, and the terms upon which, the Selling
Party is willing to transfer and such prospective transferee is willing to buy
the entire interest of the Selling Party in the Venture (which price and terms
shall be based either upon preliminary discussions and negotiations, evidenced
in a writing signed by the prospective transferee, between the Selling Party and
such prospective transferee or upon a fully negotiated and executed purchase
agreement, a copy of which shall be furnished to the Purchasing Party); and
(iii) whether the Selling Party has any interest, financial or otherwise, in the
prospective transferee and whether, to the best knowledge of the Selling Party,
there exists any other contract or offer for the purchase of all or any portion
of the Properties or of the Selling Party's interest in the Venture. Such
Certification shall be accompanied by a request (in the form of a Notice) by the
Selling Party to the Purchasing Party to either Approve such transfer and
prospective transferee or to purchase the Selling Party's interest in the
Venture for the price and upon the terms provided in such Certification. The
Selling Party may transfer the interest of the Selling Party in the Venture only
to such prospective transferee or to the Purchasing Party. The Purchasing Party
must either approve such prospective transferee or purchase the interest of the
Selling Party in the Venture.

(b) Purchasing Party's Rights. The Purchasing Party shall have
the right either (i) to allow the Selling Party to transfer the interest of the
Selling Party in the

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Venture for a price and upon terms no more favorable to the prospective
transferee than those reflected, and to the prospective transferee named in the
Certification, or (ii) to purchase the Selling Party's entire interest in the
Venture at the price contained in the Certification and on the other terms and
conditions of the Certification. The price for which, and the terms upon which,
the Selling Party shall transfer its interest in the Venture shall, by way of
illustration and not limitation, be deemed "more favorable" than those reflected
in the Certification if (i) the total actual transfer price is lower than that
set forth in such Certification, (ii) a lesser portion of the price is paid in
cash at the time of the transfer than that set forth in such Certification, or
(iii) the portion of the price not paid in cash at the time of the transfer is
payable over a longer period of time, at a lower interest rate or with lower or
less frequent periodic payments than those set forth in such Certification.

(c) Notice of Election. The Purchasing Party shall have a
period of 60 days after receipt of the Selling Party's Certification specified
in Subsection 6.4(a) hereof to serve upon the Selling Party a Notice which shall
specify whether such Purchasing Party will Approve a transfer to such
prospective transferee, or whether the Purchasing Party shall purchase the
entire interest of the Selling Party as provided in Subsection 6.4(b) hereof. If
the Purchasing Party fails to give such Notice within the allocated time, the
Purchasing Party shall be deemed to have approved the transfer of the interest
to such prospective transferee, and the Purchasing Party shall, if requested by
the Selling Party, execute, acknowledge and deliver such documents, or cause the
same to be executed, acknowledged and delivered, including without limitation,
the rights and restrictions contained in this Section 6 with respect to further
transfers. Any such new Venturer shall execute and deliver to the other
Venturers such documents as the other Venturers may reasonably request
confirming the assumption by such new Venturer of the obligations of the Selling
Party under this Agreement. At the time of closing of a transfer to a third
party transferee pursuant to this Subsection 6.4, the Purchasing Party shall
execute and deliver to the Selling Party and such transferee a written estoppel
certificate in recordable form pursuant to which the Purchasing Party shall
certify and agree that to the best of the Purchasing Party's knowledge and
belief the pending transfer is permitted pursuant to this Subsection (provided,
that to the best of the Purchasing Party's knowledge and belief such transfer
is, in fact, permitted by this Subsection). In such estoppel certificate, the
Purchasing Party shall waive any further right whatsoever to attempt to force a
rescission or setting aside of such transfer; provided, however, the Purchasing
Party shall expressly reserve any rights thereafter to pursue any action for
damages against both the Selling Party and the transferee should the Purchasing
Party thereafter determine that, contrary to the Purchasing Party's earlier best
knowledge and belief, the transfer was in fact not consummated in strict
accordance with the terms of this Section 6.

(d) Power of Attorney. In the event that either (i) the
Purchasing Party shall have failed to respond, in the manner and within the time
required by Subsection 6.4(c) hereof, to the Selling Party's Certification
specified in Subsection 6.4(a) hereof, or (ii) the Purchasing Party shall have
served upon the Selling Party a Notice specifying that the Purchasing Party has
approved a transfer to a prospective transferee of the Selling Party as
contemplated by Subsection 6.4(c) hereof, and the Purchasing Party shall have
thereafter failed

15

or refused, within ten days after receipt of a Notice from the other Venturer
requesting same, to execute, acknowledge and deliver such documents, or cause
the same to be done, as shall be required to effectuate a transfer of such
interest in accordance with the Certification, then, and in either of such
events, the Selling Party may execute, acknowledge and deliver such documents
for, on behalf of and in the stead of the Purchasing Party, and such execution,
acknowledgment and delivery by the Selling Party shall be for all purposes as
effective against and binding upon the Purchasing Party as though such
execution, acknowledgment and delivery had been by the Purchasing Party;
provided, however, that no such documents executed by the Selling Party shall
contain any undertaking on behalf of the Purchasing Party beyond the scope of
the undertakings necessary for the Selling Party to effectuate such transfer.
Each Venturer does hereby irrevocably constitute and appoint each other Venturer
as the true and lawful attorney in fact of such Venture and the successors and
assigns thereof, in the name, place and stead of such Venturer or the successors
or assigns thereof, as the case may be, to execute, acknowledge and deliver such
documents in the event such Venturer shall be the Purchasing Party under the
circumstances contemplated by this Subsection 6.4(d). It is expressly
understood, intended and agreed by each Venturer, for such Venturer and the
successors and assigns thereof, that the grant of the power of attorney to each
other Venturer pursuant to this Subsection 6.4(d) is coupled with an interest,
is irrevocable and shall survive the death, termination or legal incompetency of
such granting Venturer, as the case may be, or the assignment of the interest of
such granting Venturer in the Venture, or the dissolution of the Venture.

6.5 Offer from Third Party to Purchase the Property.

(a) In the event that one of the Venturers receives a bona fide
offer from an unrelated third party for the sale of all or substantially all of
the Properties or last remaining Property owned by the Venture at the time of
such offer, which offer such Venturer wishes to accept (the "Accepting
Venturer"), but the other Venturer wishes to reject, the Venturer not desiring
to sell the Property or Properties pursuant to said offer (the "Dissenting
Venturer") must elect within thirty (30) days after receipt by the Dissenting
Venturer of notice of said offer from the Accepting Venturer to either (i)
purchase the Accepting Venturer's entire interest in the Venture on the same
terms and conditions as the third party offer to purchase; or (ii) consent to
the sale of the Properties or last remaining Property of the Venturer pursuant
to such third party offer. The Accepting Venturer shall deliver to the
Dissenting Venturer a written notice (the "Notice") reflecting (i) the name and
address of the person or entity desiring to purchase the Properties or last
remaining Property of the Venture; (ii) the sales price to be paid by such
person or entity; and (iii) shall include a copy of the third party offer. In
the event that the Dissenting Venturer elects to purchase the Accepting
Venturer's entire interest in the Venture, the purchase price payable for the
Accepting Partner's interest in the Venture shall be equal to the amount such
Accepting Venturer would have received if the Property or Properties had been
sold to such unrelated third party in accordance with the terms of its offer,
after payment of all sales commissions and other fees and expenses which would
have been due and payable upon the sale of said Property or Properties and the
repayment of all debts of the Venture, if any.

16

(b) As set forth above, the Dissenting Venturer shall have 30 days
after receipt of the Notice in which to make its election. The election of the
Dissenting Venturer shall be made by written notice to the Accepting Venturer.
In the event that the Dissenting Venturer elects to purchase the Accepting
Venturer's interest in the Venture pursuant to alternative (i) above, the
Dissenting Venturer shall have an additional 30 days following the receipt of
the Notice within which to close the purchase of the Accepting Venturer's
interest in the Venture. The failure of the Dissenting Venturer to either elect
to purchase the Accepting Venturer's interest in the Venture pursuant to
subparagraph (a)(i) above within 30 days after the receipt by the Dissenting
Venturer of the Notice, or the failure to close the purchase of the Accepting
Venturer's interest in the Venture within the foregoing time period shall be
conclusively deemed to constitute a consent to the sale of the Properties or
last remaining Property of the Venturer pursuant to such third party offer.

(c) The closing of any purchase and sale under this Section 6.5
shall be held at the principal office of the Venturer or at such other place as
shall be mutually agreed to by the Venturers within 30 days following the
receipt by the Accepting Venturer of written notice that the Dissenting Venturer
has exercised its option to purchase the Accepting Venturer's interest in the
Venture. At the closing, an appropriate assignment of the Accepting Venturer's
interest in the Venture, with covenants against Assignor's acts, together with
such other instruments and documents as may be necessary or appropriate to
effect the transfer of the Accepting Venturer's interest in the Venture, shall
be executed and delivered. The Venturers shall also execute and deliver an
amendment to this Agreement, if appropriate. The purchase price payable to the
Accepting Venturer shall be paid at closing by wire transfer of immediately
available federal funds. Effective the date of closing, the Accepting Venturer
shall cease to be a member of the Venture, and the Accepting Venturer shall have
no further rights, duties or obligations with respect to the Venture arising out
of this Agreement. Subsequent to the closing date, the Accepting Venturer shall
have no further interest in the Venture's capital, income, profits, losses,
gains, allocations or distributions.

(d) Upon any default or breach of any provision of this Section 6.5,
the nonbreaching party shall be entitled to sue such defaulting party and
recover damages or enforce the terms hereof by specific performance.

(e) In the event that either (i) the Dissenting Venturer shall have
failed to respond, in the manner and within the time required by Subsection
6.5(a) hereof, to the Accepting Venturer's Notice specified in Subsection 6.5(a)
hereof, or (ii) the Dissenting Venturer shall have served upon the Accepting
Venturer a notice specifying its intent to approve the transfer of the
Properties or Property, and the Dissenting Venturer shall have thereafter failed
or refused within ten (10) days after receipt of a notice from the Accepting
Venturer requesting same to execute, acknowledge and deliver such documents,
instruments and writings, or to cause the same to be done, as required to
effectuate the contemplated sale of the Properties, or (iii) the Dissenting
Venturer shall have failed to close the purchase of the Accepting Venturer's
interest in the Venture within the time period set forth in Subsection 6.5(c)
hereof, then, in such event, the Accepting Venturer may execute, acknowledge and
deliver such

17

documents, instruments and writings for, and on behalf of, and in the name,
place and stead of, the Dissenting Venturer, and such execution, acknowledgment
and delivery by such Accepting Venturer shall be for all purposes as effective
against and binding upon the Venture and the Dissenting Venturer as if such
execution, acknowledgment and delivery had been made by the Dissenting Venturer;
provided, however, that no such documents executed by the Accepting Venturer
pursuant to the terms hereof shall contain any undertaking on behalf of the
Dissenting Venturer beyond the scope of the undertaking as necessary for the
Accepting Venturer to effectuate the transfer and sale of the Properties of the
Venture. Each Venturer does hereby irrevocably constitute and appoint each other
Venturer as its true and lawful attorney-in-fact of such Venturer and its
successors and assigns, in the name, place and stead of such Venturer or its
successors or assigns, as the case may be, to execute, acknowledge and deliver
any and all such deeds, assignments, documents, instruments and writings in the
event such Venturer shall be the Dissenting Venturer under the circumstances
contemplated by this Subsection 6.5(e). It is expressly understood, intended and
agreed by each Venturer, for such Venturer and its successors and assigns, that
the grant of the power of attorney to each other Venturer pursuant to this
Subsection 6.5(e) is coupled with an interest, is irrevocable and shall survive
the death, termination or legal incompetence of such granting Venturer, as the
case may be, or the assignment of the interest of such granting Venturer in the
Venture, or the dissolution of the Venture.

7. DISSOLUTION AND TERMINATION.

The Venture shall dissolve on December 31, 2028, or upon the
occurrence of any of the following:

(i) A decree of a court of competent jurisdiction declaring
dissolution;

(ii) Sale of all or substantially all of the assets of the Venture;

(iii) The Venture or either Venturer is adjudicated insolvent or
bankrupt;

(iv) Termination of either of the Venturers; or

(v) Unanimous consent of the Venturers.

Upon the occurrence of any of the events set forth in this Section 7, Notice
thereof shall be given to all of the Venturers by the Administrative Venturer
and the Administrative Venturer shall, as required by Subsection 2.7(b) hereof,
proceed to terminate and wind up the Venture and shall distribute the
Extraordinary Receipts (and the other assets of the Venture) resulting therefrom
in accordance with Subsection 3.3(c) hereof.

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8. MISCELLANEOUS PROVISIONS.

8.1 Notices. Notices given under this Agreement shall be in writing
and shall be deemed to have been properly given or served by the deposit of such
with the United States Postal Service, or any official successor thereto,
designated as registered or certified mail, return receipt requested, bearing
adequate postage and addressed as hereinafter provided. The time period in which
a response to any such Notice must be given or any action taken with respect
thereto, however, shall commence to run from the date of receipt on the return
receipt of the Notice. Rejection or other refusal to accept or the inability to
deliver because of changed address or status of which no Notice was given to the
Administrative Venturer shall be deemed to be receipt of the Notice sent. In the
event that registered or certified mail is not being accepted for prompt
delivery, each Notice may then be served by personal service addressed as
hereinafter provided. By giving to the other Venturer at least 30 days' Notice
thereof, any Venturer shall have the right from time to time during the term of
this Agreement to change his Notice address(es) and to specify as his Notice
address(es) any other address(es) within the continental United States of
America. Each Notice to the Venturers shall be sent to the addresses set forth
below (unless such Notice address is properly changed):

Wells Operating Partnership, L.P.
3885 Holcomb Bridge Road
Norcross, Georgia 30092

Wells Development Corporation
3885 Holcomb Bridge Road
Norcross, Georgia 30092

8.2 Governing Law. This Agreement and the obligations of the
Venturers hereunder shall be interpreted, construed and enforced in accordance
with the laws of the State of Georgia, including the Georgia Uniform Partnership
Act.

8.3 Fees and Commissions. Except as may otherwise be provided
herein, each Venturer hereby represents to each other Venturer that there are no
claims for brokerage or other commissions or finder's or other similar fees in
connection with the transactions contemplated by this Agreement insofar as such
claims shall be based on arrangements or agreements made by or on behalf of the
Venturer so representing, and each Venturer so representing hereby indemnifies
and agrees to hold harmless each other Venturer from and against all
liabilities, cost, damages and expenses from any such claims.

8.4 Waiver. No consent or waiver, express or implied, by any
Venturer to or of any breach or default by any other Venturer in the performance
by such other Venturer of the obligations thereof under this Agreement shall be
deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such other Venturer of the same or any other
obligations of such other Venturer under this Agreement. Failure on the part of
any Venturer to complain or any act or failure to act of any other Venturer or
to declare any

19

other Venturer in default, irrespective of how long such failure continues,
shall not constitute a waiver of such Venturer of the rights thereof under this
Agreement.

8.5 Severability. If any provision of this Agreement or the
application thereof to any Entity or circumstances shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to any other Entity or circumstance shall not be affected
thereby and shall be enforced to the greatest extent permitted by law.

8.6 Status Reports. Recognizing that each Venturer may find it
necessary from time to time to establish to third parties such as accountants,
banks, mortgagees or the like, the then current status of performance hereunder,
upon the written request of any other Venturer, made from time to time by
Notice, each Venturer shall furnish promptly a written statement (in recordable
form, if requested) on the status of any matter pertaining to this Agreement to
the best of the knowledge and belief of the Venturer making such statement.

8.7 Entire Agreement - Amendment. This Agreement constitutes the
entire agreement of the Venturers with respect to the subject matter hereof.
Neither this Agreement nor any provision hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the Venturer against whom enforcement of the change, waiver, discharge or
termination is sought. The execution of any amendment to this Agreement, or the
execution of any other agreement or amendment thereto, by all Venturers shall
establish that such execution was made in accordance with any applicable
requirements for Approval.

8.8 Terminology. All personal pronouns used in this Agreement,
whether used in the masculine, feminine or neuter gender, shall include all
other genders; the singular shall include the plural; and the plural shall
include the singular. Titles of Sections, Subsections and Paragraphs in this
Agreement are for convenience only, and neither limit nor amplify the provisions
of this Agreement, and all references in this Agreement to Sections, Subsections
or Paragraphs shall refer to the Section, Subsection or Paragraph of this
Agreement unless specific reference is made to another document or instrument.

8.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
together shall comprise but a single instrument.

8.10 Successors and Assigns. Subject to the restrictions on
transfers and encumbrances set forth herein, this Agreement shall inure to the
benefit of and be binding upon the Venturers and their respective heirs,
executors, legal representatives, successors and assigns. Whenever in this
Agreement a reference to any Entity or Venturer is made, such reference shall be
deemed to include a reference to the heirs, executors, legal representatives,
successors and assigns of such Entity or Venturer.

20

IN WITNESS WHEREOF, the undersigned Venturers have executed this Joint
Venture Agreement of Wells/Orange County Associates under seal as of the day and
year first above written.

WELLS OPERATING PARTNERSHIP, L.P.
A Delaware Limited Partnership

By:   Wells Real Estate Investment Trust, Inc.
A Maryland Corporation
(As General Partner)

Signed, sealed and delivered      By:  /s/ Leo F. Wells, III
in the presence of:                   ------------------------------------------
Leo F. Wells, III
President
/s/ Michael C. Berndt
- --------------------------------
Unofficial Witness

/s/ Cheryl Redmond
- --------------------------------
Notary Public

CHERYL REDMOND
NOTARY PUBLIC
EXPIRES
GEORGIA
MAY 3, 2002
CHEROKEE COUNTY

WELLS DEVELOPMENT CORPORATION
A Georgia Corporation

Signed, sealed and delivered      By:  /s/ Leo F. Wells, III                    
in the presence of:                   ------------------------------------------
Leo F. Wells, III                       
President                               
/s/ Michael C. Berndt
- --------------------------------
Unofficial Witness

/s/ Cheryl Redmond
- --------------------------------
Notary Public

CHERYL REDMOND
NOTARY PUBLIC
EXPIRES
GEORGIA
MAY 3, 2002
CHEROKEE COUNTY

21

EXHIBIT 10.26

AGREEMENT FOR THE PURCHASE AND SALE

OF JOINT VENTURE INTEREST

BETWEEN WELLS DEVELOPMENT CORPORATION

AND

THE FUND X-XI JOINT VENTURE

AGREEMENT FOR THE PURCHASE
AND SALE OF JOINT VENTURE INTEREST

THIS AGREEMENT, made and entered into as of the 30th day of July, 1998, by
and between WELLS DEVELOPMENT CORPORATION, a Georgia corporation whose address
is 3885 Holcomb Bridge Road, Norcross, Georgia 30092 ("Seller"), WELLS
MANAGEMENT COMPANY, INC., whose address is 3885 Holcomb Bridge Road, Norcross,
Georgia 30092 ("Guarantor") and FUND X AND FUND XI ASSOCIATES, a Georgia joint
venture comprised of Wells Real Estate Fund X, L.P., a Georgia limited
partnership, and Wells Real Estate Fund XI, L.P., a Georgia limited partnership,
whose address is 3885 Holcomb Bridge Road, Norcross, Georgia 30092
(collectively, the "Purchaser").

W I T N E S S E T H:

Whereas, Seller has entered into that certain Purchase and Sale Agreement
and Joint Escrow Instructions (the "Purchase Agreement") with Spencer Fountain
Valley Holdings, Inc. dated as of June 12, 1998, as amended, relating to certain
improved property situated in Fountain Valley, California and being more
particularly described on Exhibit A hereto (the "Property"); and

WHEREAS, Seller intends to assign its rights under the Purchase Agreement
to WELLS/ORANGE COUNTY ASSOCIATES, a Georgia joint venture between Seller and
Wells Operating Partnership, L.P., a Delaware limited partnership (the "Joint
Venture") and contribute the Earnest Money received by it hereunder in exchange
for an interest in the Joint Venture (the "Joint Venture Interest"); and

Whereas, The Joint Venture will acquire the Property with the funds
contributed by Seller and funds obtained through a loan in the amount of
$4,875,000 (the "Loan") from NationsBank, N.A.; and

WHEREAS, the property is subject to that certain Standard Industrial
Lease-Net with Cort Furniture Rental Corporation (the "Lease") relating to the
Property; and

WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
acquire from Seller the Joint Venture Interest upon the terms and conditions
hereinafter set forth; and

WHEREAS, Guarantor is an affiliate of Seller and will benefit from this
transaction;

NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein set forth, the receipt, adequacy and sufficiency
of which are hereby expressly acknowledged by the parties hereto, Seller and
Purchaser do hereby covenant and agree as follows:

1. Agreement to Buy and Sell. Upon the terms and conditions set forth in
this Agreement, and subject to acquisition of the Property by the Joint Venture
pursuant to the Purchase Agreement, Purchaser agrees to buy from Seller and
Seller agrees to sell to Purchaser the Joint Venture Interest.

2. Earnest Money. Within three (3) business days after the effective date
of this Agreement, Purchaser shall deliver to Seller, Purchaser's check, in the
amount of $1,500,000 (said amount being herein referred to as the "Earnest
Money"), which Earnest Money shall be held and disbursed pursuant to this
Agreement. The Earnest Money, plus any other funds advanced by Purchaser to
Seller, shall be applied as a credit to the Purchase Price (as hereinafter
defined) or otherwise paid to Seller or refunded to Purchaser as provided
herein. The parties hereto acknowledge that some or all of the Earnest Money
shall be utilized by Seller to be contributed as a capital contribution to the
Joint Venture with respect to Seller's Joint Venture Interest. Purchaser may but
shall not be required to pay additional funds to Seller thereby increasing the
Earnest Money and Purchase Price by an equivalent amount, in which event Seller
shall contribute such funds to the Joint Venture in exchange for an increased
ownership interest. Guarantor joins in the execution of this Agreement for the
sole purpose of guaranteeing Seller's obligations to Purchaser hereunder
regarding the repayment of the Earnest Money, which guaranty shall be evidenced
by the execution and delivery of that certain Guarantee of Refund of Earnest
Money in the form attached as Exhibit B hereto.

3. Purchase Price. Subject to adjustment and credits as otherwise
specified in this Agreement, the purchase price (the "Purchase Price") to be
paid 

by Purchaser to Seller for the Joint Venture Interest shall be approximately
$1,500,000, the precise amount to be the amount contributed by Seller to the
Joint Venture. It is the intent of the parties that Seller shall not make any
profit or incur any loss in connection with this transaction and to that end,
Seller agrees to cause the Joint Venture to hold in an interest bearing account
for the benefit of Purchaser any cash distributions payable to Seller prior to
Closing hereunder. The Purchase Price shall be paid by Purchaser to Seller at
the Closing by cashier's check or by wire transfer of immediately available
federal funds, less the amount of Earnest Money and subject to prorations,
adjustments, and credits as otherwise specified in this Agreement.

4. Purchaser's Right of Inspection and Seller's Cooperation. From and
after the date of this Agreement, Purchaser and its agents, engineers, or
representatives, with Seller's reasonable, good faith cooperation, shall have
the privilege of going upon the Property as needed to inspect, examine, test,
and survey the Property at all reasonable times and from time to time. Such
privilege shall include the right to make said tests, borings, and other tests
to obtain information necessary to determine surface and subsurface conditions.
Such privilege shall also include the right to make any other tests deemed
reasonably necessary by Purchaser. Purchaser hereby indemnifies and holds Seller
harmless from any liens, claims, liabilities, and damages incurred through the
exercise of such privilege. The obligations of Purchaser under the preceding
sentence shall survive any termination of this Agreement. Seller shall make
available to Purchaser all work product in the possession of Seller relating to
the Property, including surveys, site plans, environmental audits, soils tests,
market studies, Seller's owner's title policy and all other information provided
to Seller or obtained by Seller with respect to the Property.

5. Special Conditions to Closing. Notwithstanding any other provision to
the contrary contained in this Agreement, Purchaser's obligations hereunder are
expressly conditioned upon the following special conditions:

(a) The Joint Venture shall have paid-off the Loan in full prior to
Closing and the Joint Venture shall own title to the Property debt-free at
Closing;

(b) Purchaser shall have available to it at the date of Closing
sufficient net proceeds available for investment in properties to fully
fund the remainder of the Purchase Price;

(c) All of the representations and warranties set forth in paragraph
7 shall be true and correct in all material respects on the Date of
Closing;

(d) The receipt by Purchaser of an appraisal reflecting the value of
the Property owned by the Joint Venture as being not less than an amount
equal to the quotient of (i) the Purchase Price divided by (ii) the
percentage interest in distributions of the Joint Venture represented by
the Joint Venture Interest.

(e) The receipt by Purchaser of evidence reasonably satisfactory to
Purchaser that the Property is free of any Hazardous Materials;

(f) The receipt of evidence that Cort Furniture Rental Corporation
continues to be occupying the Property as a tenant pursuant to the Lease
paying rent on a current basis and that neither the Landlord nor the
tenant are in default with respect to the Lease; and

(g) The receipt of any necessary consents for the admission of
Purchaser as a Joint Venture partner in the Joint Venture.

In the event any of the conditions set forth above are not met on or prior to
the date of Closing, Purchaser shall be entitled to terminate this Agreement
upon written notice to Seller. If Purchaser elects to so terminate this
Agreement, Seller shall be entitled to receive the sum of Twenty-Five Dollars
($25.00) of the Earnest Money, and the balance of the Earnest Money shall be
refunded to Purchaser, whereupon, except as expressly provided to the contrary
in this Agreement, no party hereto shall have any other or further rights or
obligations under this Agreement. Seller acknowledges that the sum of
Twenty-Five Dollars ($25.00) is good and adequate consideration for the
termination rights granted to Purchaser hereunder.

-2-

6. Closing and Closing Date. The consummation of the sale by Seller and
the purchase by Purchaser of the Property (herein referred to as the "Closing")
shall be held on or before the first anniversary of the date hereof, unless
extended as hereinafter provided, at the offices of O'Callaghan & Stumm LLP, 127
Peachtree Street N.E., Suite 1330, Atlanta, Georgia 30303 or such other office
as the parties may agree at such specific time and date as shall be designated
by Purchaser in a written notice to Seller not less than three (3) business days
prior to the date of Closing or absent such notice at 10:00 a.m. on the first
anniversary of the date hereof. At Closing, Seller shall execute and deliver to
Purchaser (a) an assignment of its Joint Venture Interest in form and substance
reasonably satisfactory to Purchaser and (b) the consent of Wells Operating
Partnership, L.P. to the transfer of the Joint Venture Interest, (c) an
amendment to the Joint Venture Agreement of the Joint Venture providing for
admission of Purchaser in the place of Seller, and (d) such other documents as
may be reasonably required by Purchaser or Purchaser's counsel in order to
effectuate the transaction contemplated hereunder. At Closing, Purchaser shall
deliver to Seller the Purchase Price and shall execute and deliver to Seller a
Closing Statement and such other documents as may be reasonably required by
Seller or Seller's counsel in order to effectuate the transaction contemplated
hereby. Purchaser shall have the right to extend the closing for two successive
six month periods in the event Purchaser does not have sufficient funds
available to close the transaction.

7. Representations and Warranties of Seller. Seller hereby makes the
following representations and warranties to Purchaser, each of which shall be
deemed material:

(a) Title and Authority. The Joint Venture shall at Closing be the
owner of good and marketable fee simple record title to the Property
subject only to those matters set forth on Exhibit C hereto (the
"Permitted Encumbrances") and, if applicable, to one or more mortgages
which shall be canceled and satisfied at no cost to Purchaser at or before
the Closing, it being the intent of the parties that the Property free and
clear of any liens, claims or encumbrances except the Permitted
Encumbrances, at the time Purchaser acquires the Joint Venture Interest.
Seller has the full right, power and authority to execute and deliver this
Agreement and to consummate the purchase and sale herein contemplated and
to perform the covenants and agreement of Seller hereunder.

(b) No Litigation. There are no actions, suits, or proceedings
pending, or, to the best of Seller's knowledge, threatened by any
organization, person, individual, or governmental agency against Seller
which would impair Seller's ability to convey the Joint Venture Interest
pursuant to this Agreement or against the Property, nor does Seller know
of any basis for such action.

(c) Pre-existing Right to Acquire. No person or entity has any right
or option to acquire the Joint Venture Interest which will have any force
or effect after the execution hereof, other than Purchaser.

(d) Ownership of Joint Venture Interest. Seller owns or shall at the
time of Closing own beneficially and of record the Joint Venture Interest
free and clear of all liens, claims, pledges, options, adverse claims and
charges of any nature whatsoever.

8. Default. In the event Seller fails to comply with or perform any of the
covenants, agreements or obligations to be performed by Seller under the terms
and provisions of this Agreement, or in the event Seller's warranties and
representations set forth in this Agreement are untrue or misleading, at
Purchaser's option: (i) Purchaser shall be entitled to an immediate refund of
all Earnest Money and to thereafter exercise any and all rights and remedies
available to Purchaser at law or in equity; or (ii) Purchaser shall be entitled,
upon giving written notice to Seller as herein provided, to terminate this
Agreement. Upon any such termination, all Earnest Money shall be immediately
returned to Purchaser and this Agreement and all rights and obligations created
hereunder shall be of no further force or effect. In the event Purchaser fails
to comply with or perform any of the covenants, agreements or obligations to be
performed by Purchaser under the terms and provisions of this Agreement,
Seller's sole and exclusive remedy for any such default shall be to terminate
this Agreement and to receive $100 of the Earnest Money as full liquidated
damages for such default, the parties hereto acknowledging that it is impossible
to more precisely estimate the damages to be suffered by Seller upon Purchaser's
default, whereupon all rights and obligations created hereby shall terminate and
be of no further force or effect whatsoever.

9. Assignment. Purchaser's rights and duties under this Agreement shall be
freely transferable and assignable by Purchaser, either in full or in part, and
in the event of any such transfer or assignment, Seller shall look solely to
such transferee or assignee for the performance of all obligations, covenants,
conditions, and agreements imposed upon Purchaser pursuant to the terms of this
Agreement.

10. Broker's Commission. Seller shall and does hereby indemnify and hold
harmless Purchaser from and against any claim for any real estate sales
commission, finder's fees, or like compensation in connection with the sale
contemplated hereby and arising out of any act or agreement of Seller. Likewise,

-3-

Purchaser shall and does hereby indemnify and hold harmless Seller from and
against any claim for any real estate sales commission, finder's fees or like
compensation in connection with the sale contemplated hereby and arising out of
any act or agreement of Purchaser.

11. Notices. Any notices which may be permitted or required hereunder
shall be in writing and sent or hand delivered to the addresses set forth
herein, and shall be deemed to have been duly given as of the date and time the
same are either personally delivered (if delivered by hand or by overnight
courier) or, if mailed, on the third (3rd) business day following the date same
is deposited with the United States Postal Service, postage prepaid, to be
mailed by registered or certified United States mail, return receipt requested.

12. Time Periods. If the time period by which any right, option, or
election provided under this Agreement must be exercised, or by which any act
required hereunder must be performed, or by which the Closing must be held,
expires on a Saturday, Sunday or holiday, then such time period shall be
automatically extended through the close of business on the next regularly
scheduled business day.

13. Survival of Provisions. All covenants, warranties, and agreements set
forth in this Agreement shall survive the execution or delivery of any and all
deeds and other documents at any time executed or delivered under, pursuant to
or by reason of this Agreement, and shall survive the payment of all monies made
under, pursuant to, or by reason of this Agreement.

14. Severability. This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable laws, ordinances,
rules and regulations. If any provision of this Agreement, or the application
thereof to any person or circumstance, shall for any reason and to any extent be
invalid or unenforceable, the remainder of this Agreement and the application of
such provision to other persons or circumstances shall not be affected thereby
but rather shall be enforced to the greatest extent permitted by law.

15. General Provisions. No failure of either party to exercise any power
given hereunder or to insist upon strict compliance with any obligation
specified herein, and no custom or practice at variance with the terms hereof,
shall constitute a waiver of either party's right to demand exact compliance
with the terms hereof. This Agreement contains the entire agreement of the
parties hereto, and no prior representations, inducements, promises, or
agreements, oral or otherwise, between the parties not embodied herein or in
said Letter Agreement shall be of any force or effect. Any amendment to this
Agreement shall not be binding upon Seller or Purchaser unless such amendment is
in writing and executed by both. The provisions of this Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
heirs, legal representatives, successors, and assigns. Time is of the essence in
this Agreement. This Agreement may be executed in multiple counterparts, each of
which shall constitute an original, but all of which taken together shall
constitute one and the same agreement. The headings inserted at the beginning of
each paragraph are for convenience only, and do not add to or subtract from the
meaning of the contents of each paragraph. This Agreement shall be construed and
interpreted under the laws of the State of Georgia. Except as otherwise provided
herein, all rights, powers, and privileges conferred hereunder upon the parties
shall be cumulative but not restrictive to those given by law. All personal
pronouns used in this Agreement, whether used in the masculine, feminine, or
neuter gender shall include all genders, and all references herein to the
singular shall include the plural and vice versa. The parties do not intend and
this Agreement shall not be deemed to create a joint venture, partnership, or
any other relationship between Seller and Purchaser or the Joint Venture and
Purchaser except that of contracting parties.

16. Effective Date. For purposes of the calculations of any time periods
set forth in this Agreement, the effective date of this Agreement shall be
deemed to be the latest of the dates set forth below, or the date this Agreement
is last initialed, whichever is later.

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

"SELLER":

WELLS DEVELOPMENT CORPORATION, a Georgia corporation

By: /s/ Michael C. Berndt
-------------------------------

Title:  Vice President
----------------------------

Date: July 30, 1998

-4-

"GUARANTOR":

WELLS MANAGEMENT COMPANY, INC.

By:  /s/ Michael C. Berndt
-------------------------------  

Title:  Vice President
----------------------------  

Date: July 30, 1998                  

"PURCHASER":

FUND X AND FUND XI ASSOCIATES, a Georgia joint venture

By:   WELLS REAL ESTATE FUND X, L.P.,
a Georgia limited partnership, as
administrative venturer

By:   Wells Partners, L.P., a Georgia limited
partnership, general partner

By:   Wells Capital, Inc., a
Georgia corporation
General Partner

By:  /s/ Michael C. Berndt
-------------------------------   

Title:  Vice President
----------------------------   

Date: July 30, 1998                   

-5-

EXHIBIT 23.2

CONSENT OF ARTHUR ANDERSON LLP

EXHIBIT 23.2

[LETTERHEAD OF ARTHUR ANDERSEN LLP]

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
and to all references to our Firm included in or made a part of this
registration statement.

/s/ Arthur Andersen LLP

Atlanta, Georgia
August 14, 1998

EXHIBIT 24.1

POWER OF ATTORNEY

POWER OF ATTORNEY
-----------------

Each person whose signature appears below hereby constitutes and appoints Leo
F. Wells, III and Brian M. Conlon, or either of them acting singly, as his true
and lawful attorney-in-fact, for him and in his name, place and stead, to sign
any and all post-effective amendments to this Registration Statement or any
additional Registration Statement filed pursuant to Rule 462 and to cause the
same to be filed with the Securities and Exchange Commission hereby granting to
said attorneys-in-fact and each of them full power and authority to do and
perform all and every act and thing whatsoever requisite or desirable to be done
in and about the premises as fully to all intents and purposes as the
undersigned might or could do in person, hereby ratifying and confirming all
acts and things that said attorneys-in-fact or either of them may do or cause to
be done by virtue of these presents.

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Power of Attorney has been signed below on May 7, 1998, by the following persons
and in the capacities indicated.

Signatures                    Title
- ----------                    -----

/s/ Leo F. Wells, III         President and Director
- --------------------------    (Principal Executive Officer)
Leo F. Wells, III            

/s/ Brian M. Conlon           Executive Vice President (Principal
- --------------------------    Financial and Accounting Officer)
Brian M. Conlon               and Director

/s/ John L. Bell              Director
- --------------------------
John L. Bell

/s/ Richard W. Carpenter      Director
- --------------------------
Richard W. Carpenter

/s/ Walter W. Sessoms         Director
- --------------------------
Walter W. Sessoms 

/s/ Bud Carter                Director
- ---------------------------
Bud Carter 

/s/ William H. Keogler, Jr.   Director
- ---------------------------
William H. Keogler, Jr. 

/s/ Donald S. Moss            Director
- ---------------------------
Donald S. Moss 

/s/ Neil H. Strickland        Director
- ---------------------------
Neil H. Strickland