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                                                                    Exhibit 10.2


                        GLADSTONE COMMERCIAL CORPORATION

                           2003 EQUITY INCENTIVE PLAN

                             ADOPTED: JUNE 10, 2003
                     APPROVED BY STOCKHOLDERS: JUNE 10, 2003
                         TERMINATION DATE: JUNE 9, 2013


1.         PURPOSES.

           (a)  ELIGIBLE STOCK AWARD RECIPIENTS. The persons eligible to receive
Stock Awards are Employees, Directors and Consultants.

           (b)  AVAILABLE STOCK AWARDS. The purpose of the Plan is to provide a
means by which eligible recipients of Stock Awards may be given an opportunity
to benefit from increases in value of the Common Stock through the granting of
the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock
Options, (iii) stock bonuses and (iv) rights to acquire restricted stock.

           (c)  GENERAL PURPOSE. The Company, by means of the Plan, seeks to
retain the services of the group of persons eligible to receive Stock Awards, to
secure and retain the services of new members of this group and to provide
incentives for such persons to exert maximum efforts for the success of the
Company and its Affiliates.

2.         DEFINITIONS.

           (a)  "AFFILIATE" means any parent corporation or subsidiary
corporation of the Company, whether now or hereafter existing, as those terms
are defined in Sections 424(e) and (f), respectively, of the Code and any
investment adviser or external management company providing services to the
Company.

           (b)  "BOARD" means the Board of Directors of the Company.

           (c)  "CAPITALIZATION ADJUSTMENT" has the meaning ascribed to that
term in Section 11(a).

           (d)  "CHANGE IN CONTROL" means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:

                (i) any Exchange Act Person becomes the Owner, directly or
indirectly, of securities of the Company representing more than fifty percent
(50%) of the combined voting power of the Company's then outstanding securities
other than by virtue of a merger, consolidation or similar transaction.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
(A) on account of the acquisition of securities of the Company by an
institutional investor, any affiliate thereof or any other Exchange Act Person
that acquires the Company's securities in a transaction or series of related
transactions that are primarily a private financing transaction for the Company
or (B) solely because the level of Ownership held by any



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Exchange Act Person (the "Subject Person") exceeds the designated percentage
threshold of the outstanding voting securities as a result of a repurchase or
other acquisition of voting securities by the Company reducing the number of
shares outstanding, provided that if a Change in Control would occur (but for
the operation of this sentence) as a result of the acquisition of voting
securities by the Company, and after such share acquisition, the Subject Person
becomes the Owner of any additional voting securities that, assuming the
repurchase or other acquisition had not occurred, increases the percentage of
the then outstanding voting securities Owned by the Subject Person over the
designated percentage threshold, then a Change in Control shall be deemed to
occur;

                (ii) there is consummated a merger, consolidation or similar
transaction involving (directly or indirectly) the Company if, immediately after
the consummation of such merger, consolidation or similar transaction, the
stockholders of the Company immediately prior thereto do not Own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
Entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (50%) of the combined outstanding voting power of the parent of
the surviving Entity in such merger, consolidation or similar transaction;

                (iii) the stockholders of the Company approve or the Board
approves a plan of complete dissolution or liquidation of the Company, or a
complete dissolution or liquidation of the Company shall otherwise occur;

                (iv) there is consummated a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries, other than a sale, lease, license or other
disposition of all or substantially all of the consolidated assets of the
Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the
combined voting power of the voting securities of which are Owned by
stockholders of the Company in substantially the same proportion as their
Ownership of the Company immediately prior to such sale, lease, license or other
disposition; or

           The term Change in Control shall not include a sale of assets, merger
or other transaction effected exclusively for the purpose of changing the
domicile of the Company.

           Notwithstanding the foregoing or any other provision of this Plan,
the definition of Change in Control (or any analogous term) in an individual
written agreement between the Company or any Affiliate and the Participant shall
supersede the foregoing definition with respect to Stock Awards subject to such
agreement (it being understood, however, that if no definition of Change in
Control or any analogous term is set forth in such an individual written
agreement, the foregoing definition shall apply).

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

           (f)  "COMMITTEE" means a committee of one or more members of the
Board appointed by the Board in accordance with Section 3(c).

           (g)  "COMMON STOCK" means the common stock of the Company.

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           (h)  "COMPANY" means Gladstone Commercial Corporation, a Maryland
corporation.

           (i)  "CONSULTANT" means any person, including an advisor, (i) engaged
by the Company or an Affiliate to render consulting or advisory services and who
is compensated for such services or (ii) serving as a member of the Board of
Directors of an Affiliate and who is compensated for such services. However, the
term "Consultant" shall not include Directors who are not compensated by the
Company for their services as Directors, and the payment of a director's fee by
the Company for services as a Director shall not cause a Director to be
considered a "Consultant" for purposes of the Plan.

           (j)  "CONTINUOUS SERVICE" means that the Participant's service with
the Company or an Affiliate, whether as an Employee, Director or Consultant, is
not interrupted or terminated. A change in the capacity in which the Participant
renders service to the Company or an Affiliate as an Employee, Consultant or
Director or a change in the entity for which the Participant renders such
service, provided that there is no interruption or termination of the
Participant's service with the Company or an Affiliate, shall not terminate a
Participant's Continuous Service. For example, a change in status from an
Employee of the Company to a Consultant to an Affiliate or to a Director shall
not constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party's sole discretion, may determine
whether Continuous Service shall be considered interrupted in the case of any
leave of absence approved by that party, including sick leave, military leave or
any other personal leave. Notwithstanding the foregoing, a leave of absence
shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company's leave of absence policy
or in the written terms of the Participant's leave of absence.

           (k)  "CORPORATE TRANSACTION" means the occurrence, in a single
transaction or in a series of related transactions, of any one or more of the
following events:

                (i) a sale or other disposition of all or substantially all, as
determined by the Board in its discretion, of the consolidated assets of the
Company and its Subsidiaries;

                (ii) a sale or other disposition of at least ninety percent
(90%) of the outstanding securities of the Company;

                (iii) a merger, consolidation or similar transaction following
which the Company is not the surviving corporation; or

                (iv) a merger, consolidation or similar transaction following
which the Company is the surviving corporation but the shares of Common Stock
outstanding immediately preceding the merger, consolidation or similar
transaction are converted or exchanged by virtue of the merger, consolidation or
similar transaction into other property, whether in the form of securities, cash
or otherwise.

           (l)  "COVERED EMPLOYEE" means the chief executive officer and the
four (4) other highest compensated officers of the Company for whom total
compensation is required to be reported to stockholders under the Exchange Act,
as determined for purposes of Section 162(m) of the Code.



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           (m)  "DIRECTOR" means a member of the Board.

           (n)  "DISABILITY" means the permanent and total disability of a
person within the meaning of Section 22(e)(3) of the Code.

           (o)  "EMPLOYEE" means any person employed by the Company or an
Affiliate. Service as a Director or payment of a director's fee by the Company
for such service or for service as a member of the Board of Directors of an
Affiliate shall not be sufficient to constitute "employment" by the Company or
an Affiliate.

           (p)  "ENTITY" means a corporation, partnership or other entity.

           (q)  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

           (r)  "EXCHANGE ACT PERSON" means any natural person, Entity or
"group" (within the meaning of Section 13(d) or 14(d) of the Exchange Act),
except that "Exchange Act Person" shall not include (A) the Company or any
Subsidiary of the Company, (B) any employee benefit plan of the Company or any
Subsidiary of the Company or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or any Subsidiary of the Company,
(C) an underwriter temporarily holding securities pursuant to an offering of
such securities, or (D) an Entity Owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
Ownership of stock of the Company.

           (s)  "FAIR MARKET VALUE" means, as of any date, the value of the
Common Stock determined as follows:

                (i) If the Common Stock is listed on any established stock
exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market,
the Fair Market Value of a share of Common Stock shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted
on such exchange or market (or the exchange or market with the greatest volume
of trading in the Common Stock) on the last market trading day prior to the day
of determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable.

                (ii) In the absence of such markets for the Common Stock, the
Fair Market Value shall be determined in good faith by the Board.

           (t)  "INCENTIVE STOCK OPTION" means an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.

           (u)  "NON-EMPLOYEE DIRECTOR" means a Director who either (i) is not
currently an employee or officer of the Company or its parent or a subsidiary,
does not receive compensation, either directly or indirectly, from the Company
or its parent or a subsidiary, for services rendered as a consultant or in any
capacity other than as a Director (except for an amount as to which disclosure
would not be required under Item 404(a) of Regulation S-K promulgated pursuant
to the Securities Act ("Regulation S-K")), does not possess an interest in any
other transaction for which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in



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a business relationship for which disclosure would be required pursuant to Item
404(b) of Regulation S-K; or (ii) is otherwise considered a "non-employee
director" for purposes of Rule 16b-3.

           (v)  "NONSTATUTORY STOCK OPTION" means an Option not intended to
qualify as an Incentive Stock Option.

           (w)  "OFFICER" means a person who is an officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.

           (x)  "OPTION" means an Incentive Stock Option or a Nonstatutory Stock
Option granted pursuant to the Plan.

           (y)  "OPTION AGREEMENT" means a written agreement between the Company
and an Optionholder evidencing the terms and conditions of an individual Option
grant. Each Option Agreement shall be subject to the terms and conditions of the
Plan.

           (z)  "OPTIONHOLDER" means a person to whom an Option is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Option.

           (aa) "OUTSIDE DIRECTOR" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation" who
receives compensation for prior services (other than benefits under a
tax-qualified retirement plan) during the taxable year, has not been an officer
of the Company or an "affiliated corporation", and does not receive remuneration
from the Company or an "affiliated corporation," either directly or indirectly,
in any capacity other than as a Director or (ii) is otherwise considered an
"outside director" for purposes of Section 162(m) of the Code.

           (bb) "OWN," "OWNED," "OWNER," "OWNERSHIP" A person or Entity shall be
deemed to "Own," to have "Owned," to be the "Owner" of, or to have acquired
"Ownership" of securities if such person or Entity, directly or indirectly,
through any contract, arrangement, understanding, relationship or otherwise, has
or shares voting power, which includes the power to vote or to direct the
voting, with respect to such securities.

           (cc) "PARTICIPANT" means a person to whom a Stock Award is granted
pursuant to the Plan or, if applicable, such other person who holds an
outstanding Stock Award.

           (dd) "PLAN" means this Gladstone Commercial Corporation 2003 Equity
Incentive Plan.

           (ee) "RULE 16B-3" means Rule 16b-3 promulgated under the Exchange Act
or any successor to Rule 16b-3, as in effect from time to time.

           (ff) "SECURITIES ACT" means the Securities Act of 1933, as amended.

           (gg) "STOCK AWARD" means any right granted under the Plan, including
an Option, a stock bonus and a right to acquire restricted stock.



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           (hh) "STOCK AWARD AGREEMENT" means a written agreement between the
Company and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.

           (ii) "SUBSIDIARY" means, with respect to the Company, (i) any
corporation of which more than fifty percent (50%) of the outstanding capital
stock having ordinary voting power to elect a majority of the board of directors
of such corporation (irrespective of whether, at the time, stock of any other
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly or
indirectly, Owned by the Company, and (ii) any partnership in which the Company
has a direct or indirect interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%).

           (jj) "TEN PERCENT STOCKHOLDER" means a person who Owns (or is deemed
to Own pursuant to Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Affiliates.

3.         ADMINISTRATION.

           (a)  ADMINISTRATION BY BOARD. The Board shall administer the Plan
unless and until the Board delegates administration to a Committee, as provided
in Section 3(c).

           (b)  POWERS OF BOARD. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:

                (i) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; what type or combination of types of Stock Award shall be
granted; the provisions of each Stock Award granted (which need not be
identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of
Common Stock with respect to which a Stock Award shall be granted to each such
person.

                (ii) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.

                (iii) To effect, at any time and from time to time, with the
consent of any adversely affected Optionholder, (1) the reduction of the
exercise price of any outstanding Option under the Plan, (2) the cancellation of
any outstanding Option under the Plan and the grant in substitution therefor of
(A) a new Option under the Plan covering the same or a different number of
shares of Common Stock, (B) a stock bonus, (C) the right to acquire restricted
stock, and/or (D) cash, or (3) any other action that is treated as a repricing
under generally accepted accounting principles.

                (iv) To amend the Plan or a Stock Award as provided in Section
12.



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                (v) To terminate or suspend the Plan as provided in Section 13.

                (vi) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company and that are not in conflict with the provisions of the Plan.

           (c)  DELEGATION TO COMMITTEE.

                (i) GENERAL. The Board may delegate administration of the Plan
to a Committee or Committees of one (1) or more members of the Board, and the
term "Committee" shall apply to any person or persons to whom such authority has
been delegated. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in this Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest in
the Board the administration of the Plan.

                (ii) SECTION 162(m) AND RULE 16B-3 COMPLIANCE. In the discretion
of the Board, the Committee may consist solely of two or more Outside Directors,
in accordance with Section 162(m) of the Code, and/or solely of two or more
Non-Employee Directors, in accordance with Rule 16b-3. In addition, the Board or
the Committee may delegate to a committee of one or more members of the Board
the authority to grant Stock Awards to eligible persons who are either (a) not
then Covered Employees and are not expected to be Covered Employees at the time
of recognition of income resulting from such Stock Award, (b) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code, or
(c) not then subject to Section 16 of the Exchange Act.

           (d)  EFFECT OF BOARD'S DECISION. All determinations, interpretations
and constructions made by the Board in good faith shall not be subject to review
by any person and shall be final, binding and conclusive on all persons.

4.         SHARES SUBJECT TO THE PLAN.

           (a)  SHARE RESERVE. Subject to the provisions of Section 11(a)
relating to Capitalization Adjustments, the Common Stock that may be issued
pursuant to Stock Awards shall not exceed in the aggregate six hundred twenty
five thousand (625,000) shares.

           (b) REVERSION OF SHARES TO THE SHARE RESERVE. If any Stock Award
shall for any reason expire or otherwise terminate, in whole or in part, without
having been exercised in full, or if any shares of Common Stock issued to a
Participant pursuant to a Stock Award are forfeited back to or repurchased by
the Company because of or in connection with the failure to meet a contingency
or condition required to vest such shares in the Participant, the shares of
Common Stock that have not been acquired, as well as such Stock Award or the
shares of Common Stock forfeited or repurchased under such Stock Award shall
revert to and again become available for issuance under the Plan; provided,
however, that subject to the provisions of Section 11(a) relating to
Capitalization Adjustments, the aggregate maximum number of shares of Common



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Stock that may be issued as Incentive Stock Options shall be six hundred twenty
five thousand (625,000) shares.

           (b)  SOURCE OF SHARES. The shares of Common Stock subject to the Plan
may be unissued shares or reacquired shares, bought on the market or otherwise.

5.         ELIGIBILITY.

           (a)  ELIGIBILITY FOR SPECIFIC STOCK AWARDS. Incentive Stock Options
may be granted only to Employees. Stock Awards other than Incentive Stock
Options may be granted to Employees, Directors and Consultants.

           (b)  TEN PERCENT STOCKHOLDERS. A Ten Percent Stockholder shall not be
granted an Incentive Stock Option unless the exercise price of such Option is at
least one hundred ten percent (110%) of the Fair Market Value of the Common
Stock on the date of grant and the Option is not exercisable after the
expiration of five (5) years from the date of grant.

           (c)  SECTION 162(m) LIMITATION ON ANNUAL GRANTS. Subject to the
provisions of Section 11(a) relating to Capitalization Adjustments, no Employee
shall be eligible to be granted Options covering more than three hundred twelve
thousand five hundred (312,500) shares of Common Stock during any calendar year.

           (d)  CONSULTANTS. A Consultant shall not be eligible for the grant of
a Stock Award if, at the time of grant, a Form S-8 Registration Statement under
the Securities Act ("Form S-8") is not available to register either the offer or
the sale of the Company's securities to such Consultant because of the nature of
the services that the Consultant is providing to the Company, because the
Consultant is not a natural person, or because of any other rule governing the
use of Form S-8, unless the Company determines both (i) that such grant (A)
shall be registered in another manner under the Securities Act (e.g., on a Form
S-3 Registration Statement) or (B) does not require registration under the
Securities Act in order to comply with the requirements of the Securities Act,
if applicable, and (ii) that such grant complies with the securities laws of all
other relevant jurisdictions.

           (e)  LIMITATION ON OWNERSHIP. Unless otherwise approved by the
Board, no Stock Award may be granted to a Participant who, upon exercise of all
Options then held by such Participant, would Own in excess of 9.8% of the
outstanding shares of capital stock of the Company.

6.         OPTION PROVISIONS.

           Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. All Options shall be separately
designated Incentive Stock Options or Nonstatutory Stock Options at the time of
grant, and, if certificates are issued, a separate certificate or certificates
shall be issued for shares of Common Stock purchased on exercise of each type of
Option. The provisions of separate Options need not be identical, but, subject
to such differing provisions as may be contained in any individually negotiated
written agreement between the Company and a Participant, each Option shall
include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:

           (a)  TERM. Subject to the provisions of Section 5(b) regarding Ten
Percent Stockholders, no Incentive Stock Option shall be exercisable after the
expiration of ten (10) years from the date on which it was granted.



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           (b)  EXERCISE PRICE OF AN INCENTIVE STOCK OPTION. Subject to the
provisions of Section 5(b) regarding Ten Percent Stockholders, the exercise
price of each Incentive Stock Option shall be not less than one hundred percent
(100%) of the Fair Market Value of the Common Stock subject to the Option on the
date the Option is granted. Notwithstanding the foregoing, an Incentive Stock
Option may be granted with an exercise price lower than that set forth in the
preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

           (c)  EXERCISE PRICE OF A NONSTATUTORY STOCK OPTION. The exercise
price of each Nonstatutory Stock Option shall be not less than eighty-five
percent (85%) of the Fair Market Value of the Common Stock subject to the Option
on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory
Stock Option may be granted with an exercise price lower than that set forth in
the preceding sentence if such Option is granted pursuant to an assumption or
substitution for another option in a manner satisfying the provisions of Section
424(a) of the Code.

           (d)  CONSIDERATION. The purchase price of Common Stock acquired
pursuant to an Option shall be paid, to the extent permitted by applicable
statutes and regulations, either (i) in cash at the time the Option is exercised
or (ii) at the discretion of the Board at the time of the grant of the Option
(or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to
the Company of other Common Stock, (2) according to a deferred payment or other
similar arrangement with the Optionholder or (3) in any other form of legal
consideration that may be acceptable to the Board. Unless otherwise specifically
provided in the Option, the purchase price of Common Stock acquired pursuant to
an Option that is paid by delivery to the Company of other Common Stock
acquired, directly or indirectly from the Company, shall be paid only by shares
of the Common Stock of the Company that have been held for more than six (6)
months (or such longer or shorter period of time required to avoid a charge to
earnings for financial accounting purposes). To the extent applicable state
corporate laws so require, payment of the Common Stock's "par value," as defined
by applicable state statutes, shall be made in cash and not by deferred payment

           In the case of any deferred payment arrangement, interest shall be
compounded at least annually and shall be charged at the minimum rate of
interest necessary to avoid (1) the treatment as interest, under any applicable
provisions of the Code, of any amounts other than amounts stated to be interest
under the deferred payment arrangement and (2) the treatment of the Option as a
variable award for financial accounting purposes.

           (e)  TRANSFERABILITY OF AN INCENTIVE STOCK OPTION. An Incentive Stock
Option shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

           (f)  TRANSFERABILITY OF A NONSTATUTORY STOCK OPTION. A Nonstatutory
Stock Option shall be transferable to the extent provided in the Option
Agreement. If the Nonstatutory Stock



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Option does not provide for transferability, then the Nonstatutory Stock Option
shall not be transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the Optionholder
only by the Optionholder. Notwithstanding the foregoing, the Optionholder may,
by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionholder, shall thereafter be entitled to exercise the Option.

           (g)  VESTING GENERALLY. The total number of shares of Common Stock
subject to an Option may, but need not, vest and therefore become exercisable in
periodic installments that may, but need not, be equal. The Option may be
subject to such other terms and conditions on the time or times when it may be
exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The
provisions of this Section 6(g) are subject to any Option provisions governing
the minimum number of shares of Common Stock as to which an Option may be
exercised.

           (h)  TERMINATION OF CONTINUOUS SERVICE. In the event that an
Optionholder's Continuous Service terminates (other than upon the Optionholder's
death or Disability), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise such Option as of the date
of termination) but only within such period of time ending on the earlier of (i)
the date three (3) months following the termination of the Optionholder's
Continuous Service (or such longer or shorter period specified in the Option
Agreement or (ii) the expiration of the term of the Option as set forth in the
Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option
shall terminate.

           (i)  EXTENSION OF TERMINATION DATE. An Optionholder's Option
Agreement may also provide that if the exercise of the Option following the
termination of the Optionholder's Continuous Service (other than upon the
Optionholder's death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration
requirements under the Securities Act, then the Option shall terminate on the
earlier of (i) the expiration of the term of the Option set forth in Section
6(a) or (ii) the expiration of a period of three (3) months after the
termination of the Optionholder's Continuous Service during which the exercise
of the Option would not be in violation of such registration requirements.

           (j)  DISABILITY OF OPTIONHOLDER. In the event that an Optionholder's
Continuous Service terminates as a result of the Optionholder's Disability, the
Optionholder may exercise his or her Option (to the extent that the Optionholder
was entitled to exercise such Option as of the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, after termination, the Optionholder does not
exercise his or her Option within the time specified herein, the Option shall
terminate.

           (k)  DEATH OF OPTIONHOLDER. In the event that (i) an Optionholder's
Continuous Service terminates as a result of the Optionholder's death or (ii)
the Optionholder dies within the period (if any) specified in the Option
Agreement after the termination of the Optionholder's Continuous Service for a
reason other than death, then the Option may be exercised (to the extent



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the Optionholder was entitled to exercise such Option as of the date of death)
by the Optionholder's estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
option upon the Optionholder's death pursuant to Section 6(e) or 6(f), but only
within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the
Option Agreement or (2) the expiration of the term of such Option as set forth
in the Option Agreement. If, after death, the Option is not exercised within the
time specified herein, the Option shall terminate.

           (l)  EARLY EXERCISE. The Option may, but need not, include a
provision whereby the Optionholder may elect at any time before the
Optionholder's Continuous Service terminates to exercise the Option as to any
part or all of the shares of Common Stock subject to the Option prior to the
full vesting of the Option. Any unvested shares of Common Stock so purchased may
be subject to a repurchase option in favor of the Company or to any other
restriction the Board determines to be appropriate. The Company will not
exercise its repurchase option until at least six (6) months (or such longer or
shorter period of time required to avoid a charge to earnings for financial
accounting purposes) have elapsed following exercise of the Option unless the
Board otherwise specifically provides in the Option.

7.         PROVISIONS OF STOCK AWARDS OTHER THAN OPTIONS.

           (a)  STOCK BONUS AWARDS. Each stock bonus agreement shall be in such
form and shall contain such terms and conditions as the Board shall deem
appropriate. The terms and conditions of stock bonus agreements may change from
time to time, and the terms and conditions of separate stock bonus agreements
need not be identical, but each stock bonus agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

                (i) CONSIDERATION. A stock bonus may be awarded in consideration
for past services actually rendered to the Company or an Affiliate for its
benefit.

                (ii) VESTING. Shares of Common Stock awarded under the stock
bonus agreement may, but need not, be subject to a share repurchase option in
favor of the Company in accordance with a vesting schedule to be determined by
the Board.

                (iii) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the
event that a Participant's Continuous Service terminates, the Company may
reacquire any or all of the shares of Common Stock held by the Participant that
have not vested as of the date of termination under the terms of the stock bonus
agreement. The Company will not exercise its repurchase option until at least
six (6) months (or such longer or shorter period of time required to avoid a
change to earnings for financial accounting purposes) have elapsed following
receipt of the stock bonus unless otherwise specifically provided in the stock
bonus agreement.

                (iv) TRANSFERABILITY. Rights to acquire shares of Common Stock
under the stock bonus agreement shall be transferable by the Participant only
upon such terms and conditions as are set forth in the stock bonus agreement, as
the Board shall determine in its



                                       11
<PAGE>

discretion, so long as Common Stock awarded under the stock bonus agreement
remains subject to the terms of the stock bonus agreement.

           (b)  RESTRICTED STOCK AWARDS. Each restricted stock purchase
agreement shall be in such form and shall contain such terms and conditions as
the Board shall deem appropriate. The terms and conditions of the restricted
stock purchase agreements may change from time to time, and the terms and
conditions of separate restricted stock purchase agreements need not be
identical, but each restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions:

                (i) PURCHASE PRICE. The purchase price of restricted stock
awards shall not be less than eighty-five percent (85%) of the Common Stock's
Fair Market Value on the date such award is made or at the time the purchase is
consummated.

                (ii) CONSIDERATION. The purchase price of Common Stock acquired
pursuant to the restricted stock purchase agreement shall be paid either: (i) in
cash at the time of purchase; (ii) at the discretion of the Board, according to
a deferred payment or other similar arrangement with the Participant; or (iii)
in any other form of legal consideration that may be acceptable to the Board in
its discretion; provided, however, that to the extent applicable state corporate
laws so require, payment of the Common Stock's "par value," as defined by
applicable state statutes, shall be made in cash and not by deferred payment.

                (iii) VESTING. Shares of Common Stock acquired under the
restricted stock purchase agreement may, but need not, be subject to a share
repurchase option in favor of the Company in accordance with a vesting schedule
to be determined by the Board.

                (iv) TERMINATION OF PARTICIPANT'S CONTINUOUS SERVICE. In the
event that a Participant's Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held
by the Participant that have not vested as of the date of termination under the
terms of the restricted stock purchase agreement. The Company will not exercise
its repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting
purposes) have elapsed following the purchase of the restricted stock unless
otherwise provided in the restricted stock purchase agreement.

                (v) TRANSFERABILITY. Rights to acquire shares of Common Stock
under the restricted stock purchase agreement shall be transferable by the
Participant only upon such terms and conditions as are set forth in the
restricted stock purchase agreement, as the Board shall determine in its
discretion, so long as Common Stock awarded under the restricted stock purchase
agreement remains subject to the terms of the restricted stock purchase
agreement.

8.         COVENANTS OF THE COMPANY.

           (a)  AVAILABILITY OF SHARES. During the terms of the Stock Awards,
the Company shall keep available at all times the number of shares of Common
Stock required to satisfy such Stock Awards.



                                       12
<PAGE>

           (b)  SECURITIES LAW COMPLIANCE. The Company shall seek to obtain from
each regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to grant Stock Awards and to issue and sell shares
of Common Stock upon exercise of the Stock Awards; provided, however, that this
undertaking shall not require the Company to register under the Securities Act
the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of Common Stock
under the Plan, the Company shall be relieved from any liability for failure to
issue and sell Common Stock upon exercise of such Stock Awards unless and until
such authority is obtained.

9.         USE OF PROCEEDS FROM STOCK.

           Proceeds from the sale of Common Stock pursuant to Stock Awards shall
constitute general funds of the Company.

10.        MISCELLANEOUS.

           (a)  ACCELERATION OF EXERCISABILITY AND VESTING. The Board shall have
the power to accelerate the time at which a Stock Award may first be exercised
or the time during which a Stock Award or any part thereof will vest in
accordance with the Plan, notwithstanding the provisions in the Stock Award
stating the time at which it may first be exercised or the time during which it
will vest.

           (b)  STOCKHOLDER RIGHTS. No Participant shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares
of Common Stock subject to such Stock Award unless and until such Participant
has satisfied all requirements for exercise of the Stock Award pursuant to its
terms.

           (c)  NO EMPLOYMENT OR OTHER SERVICE RIGHTS. Nothing in the Plan or
any instrument executed or Stock Award granted pursuant thereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate
in the capacity in effect at the time the Stock Award was granted or shall
affect the right of the Company or an Affiliate to terminate (i) the employment
of an Employee with or without notice and with or without cause, (ii) the
service of a Consultant pursuant to the terms of such Consultant's agreement
with the Company or an Affiliate or (iii) the service of a Director pursuant to
the Bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is
incorporated, as the case may be.

           (d)  INCENTIVE STOCK OPTION $100,000 LIMITATION. To the extent that
the aggregate Fair Market Value (determined at the time of grant) of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any Optionholder during any calendar year (under all plans of the
Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in
which they were granted) shall be treated as Nonstatutory Stock Options,
notwithstanding any contrary provision of a Stock Award Agreement.



                                       13
<PAGE>

           (e)  INVESTMENT ASSURANCES. The Company may require a Participant, as
a condition of exercising or acquiring Common Stock under any Stock Award, (i)
to give written assurances satisfactory to the Company as to the Participant's
knowledge and experience in financial and business matters and/or to employ a
purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or
she is capable of evaluating, alone or together with the purchaser
representative, the merits and risks of exercising the Stock Award; and (ii) to
give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant's own
account and not with any present intention of selling or otherwise distributing
the Common Stock. The foregoing requirements, and any assurances given pursuant
to such requirements, shall be inoperative if (1) the issuance of the shares of
Common Stock upon the exercise or acquisition of Common Stock under the Stock
Award has been registered under a then currently effective registration
statement under the Securities Act or (2) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the Common Stock.

           (f)  WITHHOLDING OBLIGATIONS. To the extent provided by the terms of
a Stock Award Agreement, the Participant may satisfy any federal, state or local
tax withholding obligation relating to the exercise or acquisition of Common
Stock under a Stock Award by any of the following means (in addition to the
Company's right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii)
authorizing the Company to withhold shares of Common Stock from the shares of
Common Stock otherwise issuable to the Participant as a result of the exercise
or acquisition of Common Stock under the Stock Award; provided, however, that no
shares of Common Stock are withheld with a value exceeding the minimum amount of
tax required to be withheld by law (or such lesser amount as may be necessary to
avoid variable award accounting); or (iii) delivering to the Company owned and
unencumbered shares of Common Stock.

11.        ADJUSTMENTS UPON CHANGES IN STOCK.

           (a)  CAPITALIZATION ADJUSTMENTS. If any change is made in, or other
event occurs with respect to, the Common Stock subject to the Plan or subject to
any Stock Award without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, reincorporation, stock
dividend, dividend in property other than cash, stock split, liquidating
dividend, combination of shares, exchange of shares, change in corporate
structure or other transaction not involving the receipt of consideration by the
Company (each a "Capitalization Adjustment"), the Plan will be appropriately
adjusted in the class(es) and maximum number of securities subject to the Plan
pursuant to Sections 4(a) and 4(b) and the maximum number of securities subject
to award to any person pursuant to Section 5(c), and the outstanding Stock
Awards will be appropriately adjusted in the class(es) and number of securities
and price per share of Common Stock subject to such outstanding Stock Awards.
The Board shall make such adjustments, and its determination shall be final,
binding and conclusive.



                                       14
<PAGE>

(The conversion of any convertible securities of the Company shall not be
treated as a transaction "without receipt of consideration" by the Company.)

           (b)  DISSOLUTION OR LIQUIDATION. In the event of a dissolution or
liquidation of the Company, then all outstanding Options shall terminate
immediately prior to the completion of such dissolution or liquidation, and
shares of Common Stock subject to the Company's repurchase option may be
repurchased by the Company notwithstanding the fact that the holder of such
stock is still in Continuous Service.

           (c)  CORPORATE TRANSACTION. In the event of a Corporate Transaction,
any surviving corporation or acquiring corporation may assume or continue any or
all Stock Awards outstanding under the Plan or may substitute similar stock
awards for Stock Awards outstanding under the Plan (it being understood that
similar stock awards include, but are not limited to, awards to acquire the same
consideration paid to the stockholders or the Company, as the case may be,
pursuant to the Corporate Transaction), and any reacquisition or repurchase
rights held by the Company in respect of Common Stock issued pursuant to Stock
Awards may be assigned by the Company to the successor of the Company (or the
successor's parent company), if any, in connection with such Corporate
Transaction. In the event that any surviving corporation or acquiring
corporation does not assume or continue any or all such outstanding Stock Awards
or substitute similar stock awards for such outstanding Stock Awards, then with
respect to Stock Awards that have not been assumed, continued or substituted and
that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction, the vesting of such Stock
Awards (and, if applicable, the time at which such Stock Awards may be
exercised) shall (contingent upon the effectiveness of the Corporate
Transaction) be accelerated in full to a date prior to the effective time of
such Corporate Transaction as the Board shall determine (or, if the Board shall
not determine such a date, to the date that is five (5) days prior to the
effective time of the Corporate Transaction), the Stock Awards shall terminate
if not exercised (if applicable) at or prior to such effective time, and any
reacquisition or repurchase rights held by the Company with respect to such
Stock Awards held by Participants whose Continuous Service has not terminated
shall (contingent upon the effectiveness of the Corporate Transaction) lapse.
With respect to any other Stock Awards outstanding under the Plan that have not
been assumed, continued or substituted, the vesting of such Stock Awards (and,
if applicable, the time at which such Stock Award may be exercised) shall not be
accelerated, unless otherwise provided in a written agreement between the
Company or any Affiliate and the holder of such Stock Award, and such Stock
Awards shall terminate if not exercised (if applicable) prior to the effective
time of the Corporate Transaction.

           (d)  CHANGE IN CONTROL. A Stock Award held by any Participant whose
Continuous Service has not terminated prior to the effective time of a Change in
Control may be subject to additional acceleration of vesting and exercisability
upon or after such event as may be provided in the Stock Award Agreement for
such Stock Award or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant, but in the absence of such
provision, no such acceleration shall occur.



                                       15
<PAGE>

12.        AMENDMENT OF THE PLAN AND STOCK AWARDS.

           (a)  AMENDMENT OF PLAN. The Board at any time, and from time to time,
may amend the Plan. However, except as provided in Section 11(a) relating to
Capitalization Adjustments, no amendment shall be effective unless approved by
the stockholders of the Company to the extent stockholder approval is necessary
to satisfy the requirements of Section 422 of the Code.

           (b)  STOCKHOLDER APPROVAL. The Board, in its sole discretion, may
submit any other amendment to the Plan for stockholder approval, including, but
not limited to, amendments to the Plan intended to satisfy the requirements of
Section 162(m) of the Code and the regulations thereunder regarding the
exclusion of performance-based compensation from the limit on corporate
deductibility of compensation paid to Covered Employees.

           (c)  CONTEMPLATED AMENDMENTS. It is expressly contemplated that the
Board may amend the Plan in any respect the Board deems necessary or advisable
to provide eligible Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated
thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

           (d)  NO IMPAIRMENT OF RIGHTS. Rights under any Stock Award granted
before amendment of the Plan shall not be impaired by any amendment of the Plan
unless (i) the Company requests the consent of the Participant and (ii) the
Participant consents in writing.

           (e)  AMENDMENT OF STOCK AWARDS. The Board at any time, and from time
to time, may amend the terms of any one or more Stock Awards; provided, however,
that the rights under any Stock Award shall not be impaired by any such
amendment unless (i) the Company requests the consent of the Participant and
(ii) the Participant consents in writing.

13.        TERMINATION OR SUSPENSION OF THE PLAN.

           (a)  PLAN TERM. The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on the day before the
tenth (10th) anniversary of the date the Plan is adopted by the Board or
approved by the stockholders of the Company, whichever is earlier. No Stock
Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.

           (b)  NO IMPAIRMENT OF RIGHTS. Suspension or termination of the Plan
shall not impair rights and obligations under any Stock Award granted while the
Plan is in effect except with the written consent of the Participant.

14.        EFFECTIVE DATE OF PLAN.

           The Plan shall become effective as determined by the Board, but no
Stock Award shall be exercised (or, in the case of a stock bonus, shall be
granted) unless and until the Plan has been approved by the stockholders of the
Company, which approval shall be within twelve (12) months before or after the
date the Plan is adopted by the Board.



                                       16
<PAGE>

15.        CHOICE OF LAW.

           The law of the State of Maryland shall govern all questions
concerning the construction, validity and interpretation of this Plan, without
regard to such state's conflict of laws rules.



                                     * * * *



List of Attachments

Attachment I:  Form of Stock Option Agreement
Attachment II:  Form of Grant Notice
Attachment III:  Form of Notice of Exercise



                                       17
<PAGE>



                                  Attachment I

                         Form of Stock Option Agreement



<PAGE>



                                                      AWARD NO._________________
                                                      NAME: ____________________

                        GLADSTONE COMMERCIAL CORPORATION
                           2003 EQUITY INCENTIVE PLAN

                             STOCK OPTION AGREEMENT
              (INCENTIVE STOCK OPTION OR NONSTATUTORY STOCK OPTION)


           Pursuant to your Stock Option Grant Notice ("GRANT NOTICE") and this
Stock Option Agreement, Gladstone Commercial Corporation ("COMPANY") has granted
you an option under its 2003 Equity Incentive Plan ("PLAN") to purchase the
number of shares of the Company's Common Stock indicated in your Grant Notice at
the exercise price indicated in your Grant Notice. Defined terms not explicitly
defined in this Stock Option Agreement but defined in the Plan shall have the
same definitions as in the Plan.

           The details of your option are as follows:

           1.   VESTING. Subject to the limitations contained herein, your
                option will vest as provided in your Grant Notice, provided that
                vesting will cease upon the termination of your Continuous
                Service.

           2.   NUMBER OF SHARES AND EXERCISE PRICE. The number of shares of
                Common Stock subject to your option and your exercise price per
                share referenced in your Grant Notice may be adjusted from time
                to time for Capitalization Adjustments.

           3.   EXERCISE PRIOR TO VESTING ("EARLY EXERCISE"). If permitted in
                your Grant Notice (i.e., the "Exercise Schedule" indicates that
                "Early Exercise" of your option is permitted) and subject to the
                provisions of your option, you may elect at any time that is
                both (i) during the period of your Continuous Service and (ii)
                during the term of your option, to exercise all or part of your
                option, including the nonvested portion of your option;
                provided, however, that:

                a.   a partial exercise of your option shall be deemed to cover
                     first vested shares of Common Stock and then the earliest
                     vesting installment of unvested shares of Common Stock;

                b.   any shares of Common Stock so purchased from installments
                     that have not vested as of the date of exercise shall be
                     subject to the purchase option in favor of the Company as
                     described in the Company's form of Early Exercise Stock
                     Purchase Agreement;

                c.   you shall enter into the Company's form of Early Exercise
                     Stock Purchase Agreement with a vesting schedule that will
                     result in the same vesting as if no early exercise had
                     occurred; and



                                       1.
<PAGE>

                d.   if your option is an Incentive Stock Option, then, to the
                     extent that the aggregate Fair Market Value (determined at
                     the time of grant) of the shares of Common Stock with
                     respect to which your option plus all other Incentive Stock
                     Options you hold are exercisable for the first time by you
                     during any calendar year (under all plans of the Company
                     and its Affiliates) exceeds one hundred thousand dollars
                     ($100,000), your option(s) or portions thereof that exceed
                     such limit (according to the order in which they were
                     granted) shall be treated as Nonstatutory Stock Options.

           4.   METHOD OF PAYMENT. Payment of the exercise price is due in full
                upon exercise of all or any part of your option. You may elect
                to make payment of the exercise price in cash or by check or in
                any other manner PERMITTED BY YOUR GRANT NOTICE, which may
                include one or more of the following:

                a.   In the Company's sole discretion at the time your option is
                     exercised and provided that at the time of exercise the
                     Common Stock is publicly traded and quoted regularly in The
                     Wall Street Journal, pursuant to a program developed under
                     Regulation T as promulgated by the Federal Reserve Board
                     that, prior to the issuance of Common Stock, results in
                     either the receipt of cash (or check) by the Company or the
                     receipt of irrevocable instructions to pay the aggregate
                     exercise price to the Company from the sales proceeds.

                b.   Provided that at the time of exercise the Common Stock is
                     publicly traded and quoted regularly in The Wall Street
                     Journal, by delivery of already-owned shares of Common
                     Stock either that you have held for the period required to
                     avoid a charge to the Company's reported earnings
                     (generally six (6) months) or that you did not acquire,
                     directly or indirectly from the Company, that are owned
                     free and clear of any liens, claims, encumbrances or
                     security interests, and that are valued at Fair Market
                     Value on the date of exercise. "Delivery" for these
                     purposes, in the sole discretion of the Company at the time
                     you exercise your option, shall include delivery to the
                     Company of your attestation of ownership of such shares of
                     Common Stock in a form approved by the Company.
                     Notwithstanding the foregoing, you may not exercise your
                     option by tender to the Company of Common Stock to the
                     extent such tender would violate the provisions of any law,
                     regulation or agreement restricting the redemption of the
                     Company's stock.

                c.   Pursuant to the following deferred payment alternative:

                     1) Not less than one hundred percent (100%) of the
                          aggregate exercise price, plus accrued interest, shall
                          be due four (4) years from date of exercise or, at the
                          Company's election, upon termination of your
                          Continuous Service.



                                       2.
<PAGE>

                     2) Interest shall be compounded at least annually and
                          shall be charged at the minimum rate of interest
                          necessary to avoid (1) the treatment as interest,
                          under any applicable provisions of the Code, of any
                          amounts other than amounts stated to be interest under
                          the deferred payment arrangement and (2) the treatment
                          of the Option as a variable award for financial
                          accounting purposes.

                     3) If so required by applicable state corporate law,
                          payment of the Common Stock's "par value," as defined
                          in the applicable corporate statute, shall be made in
                          cash and not by deferred payment.

                     4) In order to elect the deferred payment alternative,
                          you must, as a part of your written notice of
                          exercise, give notice of the election of this payment
                          alternative and, in order to secure the payment of the
                          deferred exercise price to the Company hereunder, if
                          the Company so requests, you must tender to the
                          Company a promissory note and a pledge agreement
                          covering the purchased shares of Common Stock, both in
                          form and substance satisfactory to the Company, or
                          such other or additional documentation as the Company
                          may request.

           5.   WHOLE SHARES. You may exercise your option only for whole shares
                of Common Stock.

           6.   SECURITIES LAW COMPLIANCE. Notwithstanding anything to the
                contrary contained herein, you may not exercise your option
                unless the shares of Common Stock issuable upon such exercise
                are then registered under the Securities Act or, if such shares
                of Common Stock are not then so registered, the Company has
                determined that such exercise and issuance would be exempt from
                the registration requirements of the Securities Act. The
                exercise of your option also must comply with other applicable
                laws and regulations governing your option, and you may not
                exercise your option if the Company determines that such
                exercise would not be in material compliance with such laws and
                regulations.

           7.   TERM. You may not exercise your option before the commencement
                or after the expiration of its term. Subject to such differing
                terms that may be included in an individually negotiated written
                agreement between you and the Company, the term of your option
                commences on the Date of Grant and expires upon the earliest of
                the following:

                A.   three (3) months after the termination of your Continuous
                     Service for any reason other than your Disability or death,
                     provided that if during any part of such three (3) month
                     period your option is not exercisable solely because of the
                     condition set forth in Section 6, your option shall not
                     expire until the earlier of the Expiration Date or until it
                     shall have been



                                       3.
<PAGE>

                     exercisable for an aggregate period of three (3) months
                     after the termination of your Continuous Service;

                b.   twelve (12) months after the termination of your Continuous
                     Service due to your Disability;

                c.   eighteen (18) months after your death if you die either
                     during your Continuous Service or within three (3) months
                     after your Continuous Service terminates;

                d.   the Expiration Date indicated in your Grant Notice; or

                e.   the day before the tenth (10th) anniversary of the Date of
                     Grant.

           If your option is an Incentive Stock Option, note that to obtain the
federal income tax advantages associated with an Incentive Stock Option, the
Code requires that at all times beginning on the date of grant of your option
and ending on the day three (3) months before the date of your option's
exercise, you must be an employee of the Company or an Affiliate, except in the
event of your death or Disability. The Company has provided for extended
exercisability of your option under certain circumstances for your benefit but
cannot guarantee that your option will necessarily be treated as an Incentive
Stock Option if you continue to provide services to the Company or an Affiliate
as a Consultant or Director after your employment terminates or if you otherwise
exercise your option more than three (3) months after the date your employment
with the Company or an Affiliate terminates.

           8.   EXERCISE.

                a.   You may exercise the vested portion of your option (and the
                     unvested portion of your option if your Grant Notice so
                     permits) during its term by delivering a Notice of Exercise
                     (in a form designated by the Company) together with the
                     exercise price to the Secretary of the Company, or to such
                     other person as the Company may designate, during regular
                     business hours, together with such additional documents as
                     the Company may then require.

                b.   By exercising your option you agree that, as a condition to
                     any exercise of your option, the Company may require you to
                     enter into an arrangement providing for the payment by you
                     to the Company of any tax withholding obligation of the
                     Company arising by reason of (1) the exercise of your
                     option, (2) the lapse of any substantial risk of forfeiture
                     to which the shares of Common Stock are subject at the time
                     of exercise, or (3) the disposition of shares of Common
                     Stock acquired upon such exercise.

                c.   If your option is an Incentive Stock Option, by exercising
                     your option you agree that you will notify the Company in
                     writing within fifteen (15) days after the date of any
                     disposition of any of the shares of the Common Stock issued
                     upon exercise of your option that occurs within two (2)
                     years after



                                       4.
<PAGE>

                     the date of your option grant or within one (1) year after
                     such shares of Common Stock are transferred upon exercise
                     of your option.

                d.   By exercising your option you agree that you shall not
                     sell, dispose of, transfer, make any short sale of, grant
                     any option for the purchase of, or enter into any hedging
                     or similar transaction with the same economic effect as a
                     sale, any shares of Common Stock or other securities of the
                     Company held by you, for a period of time specified by the
                     managing underwriter(s) (not to exceed one hundred eighty
                     (180) days) following the effective date of a registration
                     statement of the Company filed under the Securities Act
                     ("LOCK UP PERIOD"); provided, however, that nothing
                     contained in this section shall prevent the exercise of a
                     repurchase option, if any, in favor of the Company during
                     the Lock Up Period. You further agree to execute and
                     deliver such other agreements as may be reasonably
                     requested by the Company and/or the underwriter(s) that are
                     consistent with the foregoing or that are necessary to give
                     further effect thereto. In order to enforce the foregoing
                     covenant, the Company may impose stop-transfer instructions
                     with respect to your shares of Common Stock until the end
                     of such period. The underwriters of the Company's stock are
                     intended third party beneficiaries of this Section 8(d) and
                     shall have the right, power and authority to enforce the
                     provisions hereof as though they were a party hereto.

           9.   TRANSFERABILITY. Your option is not transferable, except by will
                or by the laws of descent and distribution, and is exercisable
                during your life only by you, except that if your option is a
                nonstatutory stock option, you may assign or grant your option
                to a trust, individual retirement account or pension plan for
                your benefit. Notwithstanding the foregoing, by delivering
                written notice to the Company, in a form satisfactory to the
                Company, you may designate a third party who, in the event of
                your death, shall thereafter be entitled to exercise your
                option.

           10.  OPTION NOT A SERVICE CONTRACT. Your option is not an employment
                or service contract, and nothing in your option shall be deemed
                to create in any way whatsoever any obligation on your part to
                continue in the employ of the Company or an Affiliate, or of the
                Company or an Affiliate to continue your employment. In
                addition, nothing in your option shall obligate the Company or
                an Affiliate, their respective stockholders, Boards of
                Directors, Officers or Employees to continue any relationship
                that you might have as a Director or Consultant for the Company
                or an Affiliate.

           11.  WITHHOLDING OBLIGATIONS.

                a.   At the time you exercise your option, in whole or in part,
                     or at any time thereafter as requested by the Company, you
                     hereby authorize withholding from payroll and any other
                     amounts payable to you, and otherwise agree to make
                     adequate provision for (including by means of a "cashless
                     exercise" pursuant to a program developed under Regulation
                     T as promulgated by the Federal Reserve Board to the extent
                     permitted by the Company), any sums required to satisfy the
                     federal, state, local and



                                       5.
<PAGE>

                     foreign tax withholding obligations of the Company or an
                     Affiliate, if any, which arise in connection with the
                     exercise of your option.

                b.   Upon your request and subject to approval by the Company,
                     in its sole discretion, and compliance with any applicable
                     legal conditions or restrictions, the Company may withhold
                     from fully vested shares of Common Stock otherwise issuable
                     to you upon the exercise of your option a number of whole
                     shares of Common Stock having a Fair Market Value,
                     determined by the Company as of the date of exercise, not
                     in excess of the minimum amount of tax required to be
                     withheld by law (or such lower amount as may be necessary
                     to avoid variable award accounting). If the date of
                     determination of any tax withholding obligation is deferred
                     to a date later than the date of exercise of your option,
                     share withholding pursuant to the preceding sentence shall
                     not be permitted unless you make a proper and timely
                     election under Section 83(b) of the Code, covering the
                     aggregate number of shares of Common Stock acquired upon
                     such exercise with respect to which such determination is
                     otherwise deferred, to accelerate the determination of such
                     tax withholding obligation to the date of exercise of your
                     option. Notwithstanding the filing of such election, shares
                     of Common Stock shall be withheld solely from fully vested
                     shares of Common Stock determined as of the date of
                     exercise of your option that are otherwise issuable to you
                     upon such exercise. Any adverse consequences to you arising
                     in connection with such share withholding procedure shall
                     be your sole responsibility.

                c.   You may not exercise your option unless the tax withholding
                     obligations of the Company and/or any Affiliate are
                     satisfied. Accordingly, you may not be able to exercise
                     your option when desired even though your option is vested,
                     and the Company shall have no obligation to issue a
                     certificate for such shares of Common Stock or release such
                     shares of Common Stock from any escrow provided for herein
                     unless such obligations are satisfied.

           12.  NOTICES. Any notices provided for in your option or the Plan
                shall be given in writing and shall be deemed effectively given
                upon receipt or, in the case of notices delivered by mail by the
                Company to you, five (5) days after deposit in the United States
                mail, postage prepaid, addressed to you at the last address you
                provided to the Company.

           13.  GOVERNING PLAN DOCUMENT. Your option is subject to all the
                provisions of the Plan, the provisions of which are hereby made
                a part of your option, and is further subject to all
                interpretations, amendments, rules and regulations, which may
                from time to time be promulgated and adopted pursuant to the
                Plan. In the event of any conflict between the provisions of
                your option and those of the Plan, the provisions of the Plan
                shall control.

                                    * * * * *


                                       6.
<PAGE>

                                  Attachment II
                              Form of Grant Notice


<PAGE>


                                                      Award No. _________

                                                     NAME: _____________________

                        GLADSTONE COMMERCIAL CORPORATION
                            STOCK OPTION GRANT NOTICE
                          (2003 EQUITY INCENTIVE PLAN)

Gladstone Commercial Corporation (the "Company"), pursuant to its 2003 Equity
Incentive Plan (the "Plan"), hereby grants to Optionholder an option to purchase
the number of shares of the Company's Common Stock set forth below. This option
is subject to all of the terms and conditions as set forth herein and in the
Stock Option Agreement, the Plan and the Notice of Exercise, all of which are
attached hereto and incorporated herein in their entirety.

Optionholder:
                                          --------------------------------------
Date of Grant:
                                          --------------------------------------
Vesting Commencement Date:
                                          --------------------------------------
Number of Shares Subject to Option:
                                          --------------------------------------
Exercise Price (Per Share):
                                          --------------------------------------
Total Exercise Price:
                                          --------------------------------------
Expiration Date:
                                          --------------------------------------

TYPE OF GRANT:     |_| Incentive Stock Option(1)  |_|  Nonstatutory Stock Option

EXERCISE SCHEDULE: |_| Same as Vesting Schedule   |_|  Early Exercise Permitted

VESTING SCHEDULE:  [TO BE ADDED]
PAYMENT:           By one or a combination of the following items (described in
                   the Stock Option Agreement):

                       By cash or check
                       Pursuant to a Regulation T Program if the Shares are
                       publicly traded
                       By delivery of already-owned shares if the Shares are
                       publicly traded

ADDITIONAL TERMS/ACKNOWLEDGEMENTS: The undersigned Optionholder acknowledges
receipt of, and understands and agrees to, this Grant Notice, the Stock Option
Agreement and the Plan. Optionholder further acknowledges that as of the Date of
Grant, this Grant Notice, the Stock Option Agreement and the Plan set forth the
entire understanding between Optionholder and the Company regarding the
acquisition of stock in the Company and supersede all prior oral and written
agreements on that subject with the exception of (i) options previously granted
and delivered to Optionholder under the Plan, and (ii) the following agreements
only:

           OTHER AGREEMENTS:             ---------------------------------------

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


GLADSTONE COMMERCIAL CORPORATION               OPTIONHOLDER:


By:
    -----------------------------              ---------------------------------
            Signature                                      Signature

Title:                                         Date:
       --------------------------                   ----------------------------

Date:
     ----------------------------

ATTACHMENTS:  Stock Option Agreement, 2003 Equity Incentive Plan and Notice of
              Exercise

--------------------------
(1) If this is an incentive stock option, it (plus your other outstanding
incentive stock options) cannot be first exercisable for more than $100,000 in
any calendar year. Any excess over $100,000 is a nonstatutory stock option.

<PAGE>


                                 Attachment III

                           Form of Notice of Exercise




<PAGE>




                               NOTICE OF EXERCISE

Gladstone Commercial Corporation
1750 Tysons Blvd.
Fourth Floor
McLean, VA  22102
                                               Date of Exercise: _______________
Ladies and Gentlemen:

       This constitutes notice under my stock option that I elect to purchase
the number of shares for the price set forth below.

       Type of option (check one):     Incentive  |_|      Nonstatutory  |_|

       Stock option dated:                   _______________

       Number of shares as
       to which option is
       exercised:                            _______________

       Certificates to be
       issued in name of:                    _______________

       Total exercise price:                 $______________

       Cash payment delivered
       herewith:                             $______________

       Promissory Note delivered
       herewith:                             $______________

       Value of ________ shares of
       Gladstone Commercial Corporation
       stock delivered herewith(2):          $______________

       By this exercise, I agree (i) to provide such additional documents as
you may require pursuant to the terms of the 2003 Equity Incentive Plan, (ii) to
provide for the payment by me to you (in the manner designated by you) of your
withholding obligation, if any, relating to the exercise of this option, and
(iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the
shares of Common Stock issued upon exercise of this option that occurs within
two (2) years after the date


--------------------------
(2) Shares must meet the public trading requirements set forth in the option.
Shares must be valued in accordance with the terms of the option being
exercised, must have been owned for the minimum period required in the option,
and must be owned free and clear of any liens, claims, encumbrances or security
interests. Certificates must be endorsed or accompanied by an executed
assignment separate from certificate.

<PAGE>

of grant of this option or within one (1) year after such shares of Common Stock
are issued upon exercise of this option.

       I hereby make the following certifications and representations with
respect to the number of shares of Common Stock of the Company listed above (the
"Shares"), which are being acquired by me for my own account upon exercise of
the Option as set forth above:

       [I acknowledge that the Shares have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and are deemed to
constitute "restricted securities" and "control securities" under Rule 144
promulgated under the Securities Act. I warrant and represent to the Company
that I have no present intention of distributing or selling said Shares, except
as permitted under the Securities Act and any applicable state securities laws.]

       I further acknowledge that all certificates representing any of the
Shares subject to the provisions of the Option shall have endorsed thereon
appropriate legends reflecting the foregoing limitations, as well as any legends
reflecting restrictions pursuant to the Company's Articles of Incorporation,
Bylaws and/or applicable securities laws.

                                Very truly yours,


                                -----------------------------
<PAGE>
                        GLADSTONE COMMERCIAL CORPORATION

                                 FIRST AMENDMENT
                                       TO
                           2003 EQUITY INCENTIVE PLAN

                                    RECITALS

      A. On June 10, 2003, the Board of Directors and stockholders of GLADSTONE
COMMERCIAL CORPORATION, a Maryland corporation (the "COMPANY"), adopted the 2003
Equity Incentive Plan (the "PLAN").

      B. By action of the Board of Directors and stockholders on July 17, 2003,
the Company adopted the following amendment to the Plan:

                                    AMENDMENT

      1. Section 4(a) of the Plan shall be amended and restated in its entirety
to read as follows:

      (A) SHARE RESERVE. Subject to the provisions of Section 11(a) relating to
      Capitalization Adjustments, the capital stock that may be issued pursuant
      to Stock Awards shall not exceed in the aggregate seven hundred fifty nine
      thousand (759,000).

      2. Except as set forth in this First Amendment, the Plan shall be
unaffected hereby and shall remain in full force and effect.

                                      * * *

      I hereby certify that the foregoing amendment to the Plan was duly adopted
by the Board of Directors and stockholders of Gladstone Commercial Corporation
on July 17, 2003.

      Executed on this 17th day of July, 2003.


                                                    /s/ Terry L. Brubaker
                                            ------------------------------------
                                            Terry L. Brubaker, COO and Secretary