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                                                                    EXHIBIT 10.2

                                 PROMISSORY NOTE


                                LOAN TERMS TABLE

LENDER:  National Realty Funding L.C., a Missouri limited liability company, 
         its successors and assigns
LOAN NO.:  6347
LENDER'S ADDRESS:  911 Main Street, Suite #1400, Kansas City, Missouri  64105
LENDER'S FACSIMILE NO.:  (816) 221-8848
BORROWER:  Captec Franchise Capital Partners L.P. III, a Delaware limited 
           partnership
BORROWER'S ADDRESS:  24 Frank Lloyd Wright Drive, Lobby L, 4th Floor, P.O. 
                     Box 544, Ann Arbor, Michigan  48106-0544
BORROWER'S FACSIMILE NO.:  (734) 994-1376
BORROWER'S TAX IDENTIFICATION NUMBER: 38-3160141
PROPERTY:  Each real  property  and the  improvements  thereon  located as  
described  on  Schedule  A attached  hereto and incorporated herein by reference
(collectively referred to as the "PROPERTIES" or individually as a "PROPERTY")
NOTE DATE: March 30, 1999
ORIGINAL PRINCIPAL AMOUNT:  $1,994,000.00
MATURITY DATE: April 1, 2009
INTEREST RATE: 8.50 percent (8.50%) per annum
INITIAL INTEREST PAYMENT PER DIEM:  $470.81
MONTHLY PAYMENT:  $17,304.40
MONTHLY  INTEREST ONLY PAYMENT DATE: May 1, 1999 and on the first day of each 
successive  month thereafter to and including April 1, 2001
MONTHLY PAYMENT DATE: May 1, 2001 and on the first day of each successive month 
thereafter
FINANCIAL STATEMENT REPORTING DEPOSIT:  $85.00
DEFEASANCE LOCK-OUT PERIOD: The period of time commencing on the Note Date and
expiring on the date (the "Defeasance Lock-Out Expiration Date") which is two
(2) years and fifteen (15) days after the "startup day" within the meaning of
Section 860G(a)(9) of the Internal Revenue Code of 1986, as amended (together
with any successor statute and the related Treasury Department Regulations
including temporary regulations, the "Code") of any "real estate mortgage
investment conduit" within the meaning of Section 860D of the Code ("REMIC")
that holds this Note
PREPAYMENT CONSIDERATION: During the Defeasance Lock-Out Period, the greater of:
(a) 5% of the Outstanding Principal Balance (hereinafter defined) of the Note
which is being prepaid, or (b) the Yield Maintenance Amount (hereinafter
defined)



     1.   LOAN AMOUNT AND RATE. FOR VALUE RECEIVED, Borrower promises to pay to 
the order of Lender, the Original Principal Amount (or so much thereof as is
outstanding from time to time, which is referred to herein as the "Outstanding
Principal Balance"), with interest on 


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the unpaid Outstanding Principal Balance from the date of disbursement of the
Loan (as hereinafter defined) proceeds of this Promissory Note ("Note") at the
Interest Rate. Interest shall be calculated on the basis of a three hundred
sixty (360) day year composed of twelve (12) months of thirty (30) days each
except that interest due and payable for a period less than a full month shall
be calculated by multiplying the actual number of days elapsed in such period by
a daily rate based on a 360 day year. The loan evidenced by this Note will
sometimes hereinafter be called the "Loan". The above Loan Terms Table
(hereinafter referred to as the "Table") is a part of the Note and all terms
used in this Note that are defined in the Table shall have the meanings set
forth therein.

     2.   PRINCIPAL AND INTEREST PAYMENTS. Payments of principal and interest 
shall be made as follows:

     (a)  An interest payment on the date of disbursement in an amount 
calculated by multiplying the Initial Interest Payment Per Diem by the number of
days from (and including) the date of the disbursement of the Loan proceeds
through the last day of the calendar month in which the disbursement was made;
and

     (b)  Interest only at the Interest Rate shall be payable in arrears on the
Outstanding Principal Balance on the Monthly Interest Only Payment Date through
and including April 1, 2001; and

     (c)  A Monthly Payment on each Monthly Payment Date until the Maturity 
Date, each of such payments to be applied: (i) to the payment of interest
computed at the Interest Rate; and (ii) the balance applied toward the reduction
of the principal balance of the Loan; and

     (d)  If not sooner paid, the balance of the principal amount of the Loan, 
all unpaid interest thereon, and all other amounts owed to Lender pursuant to
this Note or any other Loan Document (as hereinafter defined) or otherwise in
connection with the Loan or the security for the Loan shall be due and payable
on the Maturity Date.

     3.   SECURITY FOR NOTE. This Note is secured by first deeds of trust, 
mortgages, or deeds to secure debt (which are herein collectively referred to as
the "SECURITY INSTRUMENTS" or individually as a "SECURITY INSTRUMENT")
encumbering each Property. This Note, the Security Instruments, and all other
documents and instruments evidencing and/or securing this Note whether now or
hereafter executed by Borrower or others in connection with or related to the
Loan, including any assignments of leases and rents, other assignments, security
agreements, financing statements, guaranties, indemnity agreements (including
environmental indemnity agreements), letters of credit, or completion/repair,
debt service, tenant finish/leasing commissions, earn-out or other
escrow/holdback or similar agreements or arrangements, together with all
amendments, modifications, substitutions or replacements thereof, are sometimes
herein collectively referred to as the "LOAN DOCUMENTS" or individually as a
"LOAN DOCUMENT". All amounts that are now or in the future become due and
payable under this Note, the Security Instruments, or any other Loan Document,
including any Prepayment Consideration (as hereinafter defined) and all
applicable expenses, costs, charges, and fees will be referred to herein as the
"DEBT." The remedies of Lender as provided in this Note, any other Loan

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Document, or under applicable law shall be cumulative and concurrent, may be
pursued singularly, successively, or together at the sole discretion of Lender,
and may be exercised as often as an occasion shall occur. The failure to
exercise any right or remedy shall not be construed as a waiver or release of
the right or remedy respecting the same or any subsequent default.

     4.   FINANCIAL STATEMENT REPORTING DEPOSIT; REBATE OF DEPOSIT. In addition 
to and concurrently with each interest only payment and with each Monthly
Payment, Borrower shall also pay to Lender a constant monthly amount equal to
the Financial Statement Reporting Deposit. On the first day of the fourteenth
(14th) month following the date of the initial disbursement of funds under this
Note (the "Disbursement Date"), and on an annual basis thereafter during the
term of this Note, Lender shall remit to Borrower a portion of the Financial
Statement Reporting Deposit then held by Lender in an amount equal to the
aggregate amount of the Financial Statement Reporting Deposit actually received
by Lender during the twelve (12) month period ending upon the immediately prior
annual anniversary of the Disbursement Date (the "Annual Compliance Period")
provided that no Event of Default (as hereinafter defined), including any
failure by Borrower to strictly comply with the financial reporting requirements
set forth in the Security Instruments, is currently existing or has occurred in
the Annual Compliance Period.

     5.   PAYMENTS. All amounts payable hereunder shall be payable in lawful 
money of the United States of America to Lender at Lender's Address or such
other place as the holder hereof may designate in writing. Each payment made
hereunder shall be made in immediately available funds and must state the
Borrower's Loan Number. If any payment of principal or interest on this Note is
due on a day other than a Business Day (as hereinafter defined), such payment
shall be made on the next succeeding Business Day, and such extension of time
shall be included in computing interest in connection with such payment. Any
payment on this Note received after 2:00 o'clock p.m. (CST or other applicable
current time in Kansas City, Missouri) shall be deemed to have been made on the
next succeeding Business Day. All amounts due under this Note shall be payable
without set off, counterclaim, or any other deduction whatsoever. All payments
from Borrower to Lender following the occurrence and during the continuance of
an Event of Default shall be applied in such order and manner as Lender elects
in its sole discretion in reduction of costs, expenses, charges, disbursements
and fees payable by Borrower hereunder or under any other Loan Document, in
reduction of interest due on unpaid principal, or in reduction of principal.
Lender may, without notice to Borrower or any other person, accept one or more
partial payments of any sums due or past due hereunder from time to time while
an uncured Event of Default exists hereunder, after Lender accelerates the
indebtedness evidenced hereby, and/or after Lender commences enforcement of its
remedies under any Loan Document or applicable law, without thereby waiving any
Event of Default, rescinding any acceleration, or waiving, delaying, or
forbearing in the pursuit of any remedies under the Loan Documents. Lender may
endorse and deposit any check or other instrument tendered in connection with
such a partial payment without thereby giving effect to or being bound by any
language purporting to make acceptance of such instrument an accord and
satisfaction of the indebtedness evidenced hereby. As used herein, the term
"Business Day" shall mean a day upon which commercial banks are not authorized
or required by law to close in Kansas City, Missouri.


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     6.   LATE CHARGE. If any sum payable under this Note or any other Loan 
Document is not received by Lender by close of business on the fifth (5th) day
after the date on which it was due, Borrower shall pay to Lender an amount (the
"Late Charge") equal to the lesser of (a) five percent (5%) of the full amount
of such sum or (b) the maximum amount permitted by applicable law in order to
help defray the expenses incurred by Lender in handling and processing such
delinquent payment and to compensate Lender for the loss of the use of such
delinquent payment. Any such Late Charge shall be secured by the Security
Instruments and other Loan Documents. The collection of any Late Charge shall be
in addition to, and shall not constitute a waiver of or limitation of, a default
or Event of Default hereunder or a waiver of or limitation of any other rights
or remedies that Lender may be entitled to under any Loan Document or applicable
law.

     7.   DEFAULT RATE. Upon the occurrence and during the continuance of an 
Event of Default (including the failure of Borrower to make full payment on the
Maturity Date), Lender shall be entitled to receive and Borrower shall pay
interest on the Outstanding Principal Balance at the rate of four percent (4%)
per annum above the Interest Rate ("Default Rate") but in no event greater than
the maximum rate permitted by applicable law. Interest shall accrue and be
payable at the Default Rate from the occurrence of an Event of Default until all
Events of Default have been fully cured. Such accrued interest, if not paid on
demand, shall be added to the Outstanding Principal Balance, and interest shall
accrue on such accrued interest at the Default Rate until fully paid. Such
accrued interest shall be secured by the Security Instruments and other Loan
Documents. Borrower agrees that Lender's right to collect interest at the
Default Rate is given for the purpose of compensating Lender at reasonable
amounts for Lender's added costs and expenses that occur as a result of
Borrower's default and that are difficult to predict in amount, such as
increased general overhead, concentration of management resources on problem
loans, and increased cost of funds. Lender and Borrower agree that Lender's
collection of interest at the Default Rate is not a fine or penalty, but is
intended to be and shall be deemed to be reasonable compensation to Lender for
increased costs and expenses that Lender will incur if there occurs an Event of
Default hereunder. Collection of interest at the Default Rate shall not be
construed as an agreement or privilege to extend the Maturity Date or to limit
or impair any rights and remedies of Lender under any Loan Documents. If
judgment is entered on this Note, interest shall continue to accrue
post-judgment at the greater of (a) the Default Rate or (b) the applicable
statutory judgment rate.

     8.   COLLECTION EXPENSES. Borrower shall pay on demand, in addition to the
principal and interest due, all reasonable expenses of protecting the security
for this Note and all expenses of enforcement and collection, including costs
for title insurance searches and endorsements, retention of collection agents,
court costs and litigation expenses in connection with any proceedings of any
nature, including appellate and bankruptcy proceedings, and all reasonable
attorneys' fees and expenses, whether incurred as part of or separately from any
formal legal proceedings.

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     9    PREPAYMENT; DEFEASANCE.

     (A)  PREPAYMENT.

          (i)   RESTRICTIONS. Voluntary prepayment of this Note is prohibited 
except during the last ninety (90) days of the term when prepayment may be made
in whole, but not in part, without payment of any premium or penalty, on any
Monthly Payment Date. However, if (a) the tenant of any Property (each a
"TENANT") shall validly exercise its purchase option to acquire such Property in
accordance with the terms of its lease (each a "PURCHASE OPTION") at any time
prior to the Defeasance Lock-out Expiration Date, (b) Borrower complies in all
respects with the applicable provisions of this Section 9(a), and (c) as of the
Prepayment Date (as hereinafter defined), no Event of Default exists and no
event exists that, with the passage of time, giving of notice, or modification
or termination of the automatic stay of Section 362 of the Bankruptcy Code, may
become an Event of Default ("Default"), Borrower shall be permitted and is
hereby obligated to prepay the Loan in part but not in whole. Each such
prepayment shall be deemed a "PURCHASE OPTION PREPAYMENT", and the entire amount
payable by Tenant under such lease to exercise its Purchase Option (the
"PURCHASE PRICE") shall be paid directly to Lender for application by Lender as
hereinafter provided. Notwithstanding anything to the contrary contained herein,
Borrower shall use best efforts to cause such Purchase Option Prepayments to
occur during the first twenty (20) calendar days of any month during the term of
this Note.

          (ii)  NOTICE. Borrower shall give written notice to Lender specifying 
the date on which a Purchase Option Prepayment shall be made (the "PREPAYMENT
DATE"). Borrower shall cause Lender to receive this notice not more than sixty
(60) days and not less than (30) days prior to the Prepayment Date. If the
Purchase Option is exercised, the amount of the Purchase Option Prepayment shall
be due and payable on the Prepayment Date, unless (a) an event shall occur
outside of Borrower's control that prevents the Purchase Option Prepayment, or
(b) Borrower has elected not to consummate the transaction which would result in
the Purchase Option Prepayment. If such an event shall occur, the Note, Security
Instruments and Loan Documents shall continue in full force and effect as if the
notice of prepayment had not been given.

          (iii) PREPAYMENT CONSIDERATION. The entire Purchase Price shall be 
used to make the Purchase Option Prepayment and pay the Prepayment Consideration
attributable thereto. Borrower acknowledges that the amount to be allocated as
between the Prepayment Consideration and the Purchase Option Prepayment cannot
be determined until on or about the Prepayment Date. Lender shall determine in
its sole discretion the amount of the Purchase Option Prepayment to be applied
to the Outstanding Principal Balance and the amount to be applied to the
Prepayment Consideration, which shall be computed in accordance with the Table
and Section 9(a)(iv) hereof. Borrower acknowledges that the Prepayment
Consideration is a bargained for consideration and not a penalty, and Borrower
recognizes that Lender will incur substantial additional costs and expenses in
the event of a Purchase Option Prepayment and that the Prepayment Consideration
compensates Lender for such costs and expenses and the loss of Lender's
investment opportunity for the principal amount being prepaid during the period
from the Prepayment Date until the Maturity Date. Borrower agrees that Lender
shall not, as a 


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condition to receiving any Prepayment Consideration, be obligated to actually
reinvest the amount prepaid in any treasury obligation or in any other manner
whatsoever.

          (iv)  YIELD MAINTENANCE AMOUNT. The "YIELD MAINTENANCE AMOUNT" (as the
term is used in the Table and elsewhere in this Note) shall mean the excess of:
(A) the present value, as of the Prepayment Date, of each of the then remaining
scheduled payments of principal and interest payable under this Note from the
Prepayment Date through the Maturity Date (including any balloon payment)
determined by: (1) subtracting from each then remaining scheduled payment of
principal and interest the amount of principal and interest that is still
scheduled to be paid on the due date thereof following the Purchase Option
Prepayment; and (2) discounting such payments (using simple discounting) at the
Discount Rate (hereinafter defined); over (B) the amount of principal being
prepaid. The term "DISCOUNT RATE" shall mean the rate that, when compounded
monthly, is equivalent to the Treasury Rate (hereinafter defined) when
compounded semi-annually. The term "TREASURY RATE" shall mean the yield
calculated by the linear interpolation of the yields, as reported in Federal
Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S.
Government Securities/Treasury Constant Maturities for the week ending prior to
the Prepayment Date, of U.S. Treasury constant maturities with maturity dates
(one longer and one shorter) most nearly approximating the Maturity Date. (If
Release H.15 is no longer published, Lender shall select a comparable
publication to determine the Treasury Rate.)

          (v)   Borrower shall provide to Lender on or before the Prepayment 

          Date:

                (a) an opinion  satisfactory to Lender in its sole discretion of
          a qualified valuation expert satisfactory to Lender in its sole
          discretion, stating, among other things but without substantive
          qualification, that (1) the loan-to-value ratio of the Loan and all of
          the collateral for the Loan under the Loan Documents will not in such
          expert's opinion change significantly as a result of the Purchase
          Option Prepayment and partial release and any other transactions that
          occur pursuant to the provisions of this Section 9(a); and (2)
          immediately after the occurrence of such transaction the fair market
          value of the collateral that secures the Loan will be at least equal
          to eighty percent (80%) of the amount of the Loan; and

                (b) an opinion of counsel for Borrower  satisfactory to Lender 
          in its sole discretion, delivered to Lender by counsel satisfactory to
          Lender in its sole discretion, stating, among other things but without
          substantive qualification, that (1) neither the Purchase Option
          Prepayment nor any other transaction that occurs pursuant to the
          provisions of this Section 9(a) has caused or will cause the Loan
          (including for this purpose the Loan Documents) to cease to be a
          "qualified mortgage" within the meaning of Section 860G of the Code,
          either under the provisions of Treasury Regulation Sections
          1.860G-2(a)(8) or 1.860G-2(b) (as such regulations may be amended or
          superseded from time to time) or under any other provision of the Code
          or otherwise, and (2) each of any REMIC or any other entity that holds
          this Note will not cease to be qualified as a REMIC or as such 


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          other type of entity as a result of the Purchase Option Prepayment
          and/or any other transaction that occurs pursuant to the provisions of
          this Section 9(a).

          (vi)  Borrower shall pay all costs and expenses including reasonable 
attorneys' fees incurred by Lender or its servicers or other agent(s) in
connection with any Purchase Option Prepayment and related transactions,
including review of the foregoing opinions and any court costs and litigation
expenses incurred in connection with any attempted revocation or nullification
of the exercise of any Purchase Option by a Tenant.

          (vii) It shall be an event of default under this Note (a "PURCHASE 
OPTION PREPAYMENT DEFAULT") if (a) Borrower fails to strictly comply with all of
the requirements of the preceding clauses (i) through (vi) of this Section 9(a)
on or before the Prepayment Date, (b) the disposition of a Property pursuant to
the exercise of any Purchase Option is consummated (whether in accordance with
the terms of the lease, by order of any court or otherwise), and (c) Lender
receives or is required to receive the Purchase Price. If a Purchase Option
Prepayment Default shall occur, Lender may declare the entire Debt, including
the principal balance of the Loan (deducting therefrom the amount of the
Purchase Price actually received by Lender, which shall be applied to the
Outstanding Principal Balance), all accrued interest, and all costs, expenses,
charges and fees payable under any Loan Document, together with any applicable
Default Prepayment Consideration (which shall be calculated on the entire
Outstanding Principal Balance without deduction for the amount of the Purchase
Price), immediately due and payable.

     (B)  DEFEASANCE.

          (i)  FULL DEFEASANCE. Provided that as of the Release Date (as 
hereinafter defined) the Debt has not been accelerated, no Default or Event of
Default exists, Borrower may cause the release of the Properties from the liens
of the Security Instruments and the other Loan Documents (a "FULL DEFEASANCE")
on any Monthly Payment Date following the Defeasance Lock-out Expiration Date
upon Borrower's satisfaction of the following conditions:

               (A)  Borrower shall provide Lender not less than thirty (30) days
          prior written notice specifying a Monthly Payment Date (such Date, or
          any extended date upon which Borrower and Lender may mutually agree is
          referred to herein as the "RELEASE DATE") on which the Full Defeasance
          transaction is to be consummated;

               (B)  On the Release  Date  Borrower  shall pay in full all 
          accrued and unpaid interest and all other sums due under this Note and
          under the other Loan Documents up to the Release Date, including all
          costs and expenses including attorneys' fees incurred by Lender or its
          servicers or other agent(s) or to or on behalf of any rating agencies
          in connection with such release and related transactions (including
          the review of the proposed Defeasance Collateral and the preparation
          of the Defeasance Security Agreement (as hereinafter defined) and
          related documentation) together with a defeasance processing fee in an
          amount equal to one-half of one percent (0.5%) of the then Outstanding
          Principal Balance but in no event less than (A) $10,000 or greater
          than (B) $20,000; and

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               (C)  Borrower shall deliver the following, all of which must be
          satisfactory to Lender in its sole discretion, at or prior to the
          release of the Properties and substitution of the Defeasance
          Collateral:

                    (1)  Direct,  non-callable  and  non-redeemable  securities
               evidencing an obligation to pay principal and interest in a full
               and timely manner that are direct obligations of the United
               States of America for the payment of which its full faith and
               credit is pledged ("GOVERNMENT SECURITIES") in amounts sufficient
               to pay all scheduled principal and interest payments required
               under this Note (the "DEFEASANCE COLLATERAL"), which securities
               provide for payments prior, but as close as possible, to the
               Business Day prior to each successive Monthly Payment Date
               occurring after the Release Date, with each such payment being
               equal to or greater than the amount of the corresponding Monthly
               Payment required to be made hereunder for the balance of the term
               hereof plus the amount required to be paid on the Maturity Date
               (the "SCHEDULED DEFEASANCE PAYMENTS"), each of which shall be
               duly endorsed by the holder thereof as directed by Lender or
               accompanied by a written instrument of transfer in form and
               substance satisfactory to Lender in its sole discretion
               (including such instruments as may be required by the depository
               institution or other entity holding such securities or the issuer
               thereof, as the case may be, to effectuate book-entry transfers
               and pledges through the book-entry facilities of such
               institution) in order to perfect upon the delivery of the
               Defeasance Security Agreement (as hereinafter defined) a valid,
               first priority lien and security interest therein in favor of
               Lender in conformity with all applicable state and federal laws
               governing granting of such security interest;

                    (2)  any and all agreements,  certificates,  opinions,  
               documents or instruments required by Lender in its sole
               discretion in connection with the Full Defeasance including (a) a
               pledge and security agreement, in form and substance satisfactory
               to Lender in its sole discretion, creating a first priority
               security interest in favor of Lender in the Defeasance Collateral
               (the "DEFEASANCE SECURITY AGREEMENT"), and (b) any and all
               agreements, certificates, opinions, documents, or instruments
               required by Lender in its sole discretion that affect or relate
               in any way to the maintenance by any REMIC that holds this Note
               of its qualification and status for tax purposes as a REMIC
               (collectively "REMIC QUALIFICATION DOCUMENTS");

                    (3)  a certificate  of Borrower  certifying  that (a) all of
               the requirements set forth in this Section 9(b) have been
               satisfied, (b) the transactions that are being carried out
               pursuant to this Section 9(b) (including specifically the release
               of the lien of the Security Instrument) are being effected to
               facilitate the disposition of the Property or any other customary
               commercial transaction and not as part of an arrangement to


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               collateralize a REMIC offering with obligations that are not real
               estate mortgages, and (c) the amounts of the Defeasance
               Collateral comply with all the requirements of this Section
               including the requirement that the Defeasance Collateral shall
               generate monthly amounts equal to or greater than the Scheduled
               Defeasance Payments;

                    (4)  an opinion of counsel for Borrower  satisfactory to 
               Lender in its sole discretion, delivered to Lender by counsel
               satisfactory to Lender in its sole discretion, stating, among
               other things but without substantive qualification, that (a)
               Lender has a valid, duly perfected, first priority security
               interest in the Defeasance Collateral and that the Defeasance
               Security Agreement is enforceable against Borrower in accordance
               with its terms, (b) neither the Full Defeasance nor any other
               transaction that occurs pursuant to the provisions of this
               Section 9(b) has caused or will cause the Loan (including for
               this purpose the Loan Documents) to cease to be a "qualified
               mortgage" within the meaning of Section 860G of the Code, either
               under the provisions of Treasury Regulation Sections
               1.860G-2(a)(8) or 1.860G-2(b) (as such regulations may be amended
               or superseded from time to time) or under any other provision of
               the Code or otherwise, and (c) each of any REMIC or any other
               entity that holds this Note will not cease to be qualified as a
               REMIC or as such other type of entity as a result of the Full
               Defeasance and/or any other transaction that occurs pursuant to
               the provisions of this Section 9(b);

                    (5)  a certificate  and opinion  delivered by an independent
               certified public accounting firm acceptable to Lender in its sole
               discretion (a) certifying that the amounts of the Defeasance
               Collateral comply with all the requirements of this Section
               including the requirement that the Defeasance Collateral shall
               generate monthly amounts equal to or greater than the Scheduled
               Defeasance Payments; (b) setting forth the change in the yield of
               the Loan that results from the Full Defeasance and any other
               transactions that occur pursuant to the provisions of this
               Section 9(b), including supporting computations which shall be
               made in a manner that is consistent with the provisions of
               Treasury Regulation Sections 1.1001-3(e)(1) and (2), and (c)
               opining that such change has not constituted or caused and will
               not constitute or cause a significant modification of the Loan
               (including for this purpose the Loan Documents) under such
               provisions of the regulations;

                    (6)  written  confirmation  from the rating agencies that
               have rated any of the securities issued by any REMIC that holds
               this Note to the effect that the Full Defeasance will not result
               in a downgrading, withdrawal or qualification of the respective
               ratings in effect immediately prior to such Full Defeasance for
               any rated securities then outstanding, and if required by any
               rating agency or Lender, a non-consolidation opinion 


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<PAGE>   10

               with respect to the Defeasance Obligor (as hereinafter defined)
               in form and substance satisfactory to Lender and such rating
               agency; and

                    (7)  Borrower shall (unless  otherwise  agreed to in writing
               by Lender in its sole discretion), at Borrower's sole expense,
               assign all of its obligations under this Note, together with the
               Defeasance Collateral, to a successor entity ("DEFEASANCE
               OBLIGOR") designated by Borrower and approved by Lender in its
               sole discretion that is a single purpose, bankruptcy remote
               entity as determined by Lender in its sole discretion. The
               Defeasance Obligor shall execute an assumption agreement pursuant
               to which it shall assume Borrower's obligations under this Note,
               the Loan Documents, and the Defeasance Security Agreement. As
               conditions to such assignment and assumption, Borrower shall (a)
               deliver to Lender an opinion of counsel satisfactory to Lender in
               its sole discretion, delivered to Lender by counsel satisfactory
               to Lender in its sole discretion, stating, among other things,
               that such assumption agreement has been duly authorized and is
               enforceable against Borrower and the Defeasance Obligor in
               accordance with its terms, that the Note, the Defeasance Security
               Agreement and the other Loan Documents, as so assumed, have been
               duly authorized and are enforceable against the Defeasance
               Obligor in accordance with their respective terms, and that the
               delivery of the Defeasance Collateral to the Defeasance Obligor
               does not constitute a fraudulent transfer, preferential payment,
               or other voidable transfer under applicable bankruptcy law,
               subject only to such reasonable and customary conditions,
               limitations, exceptions and assumptions as are reasonably
               satisfactory to Lender, and (b) pay all costs and expenses
               including attorneys' fees incurred by Lender or its servicer or
               other agent(s) in connection with such assignment and assumption
               (including the review of the proposed transferee and the
               preparation of the assumption agreement and related
               documentation). Upon such assumption, Borrower shall be relieved
               of its obligations under this Note, the Defeasance Security
               Agreement and the other Loan Documents, other than those
               obligations which are specifically intended to survive the
               payment of this Note and the termination, satisfaction or
               assignment of this Note, the Defeasance Security Agreement or the
               other Loan Documents or the exercise of Lender's rights and
               remedies under any of such documents and instruments.

               (D)  Upon  compliance  with the  requirements  of this Section,  
          Lender shall release the Properties from the liens of the Security
          Instruments and the other Loan Documents, and the Defeasance
          Collateral shall constitute collateral which shall secure this Note
          and all other obligations under the Loan Documents. Lender will, at
          Borrower's expense, execute and deliver any agreements reasonably
          requested by Borrower to release the liens of the Security Instruments
          from the Properties. Borrower, pursuant to the Defeasance Security
          Agreement, 


                                       10

<PAGE>   11

          shall authorize and direct that the payments received from Defeasance
          Collateral be made directly to Lender and applied to satisfy the
          obligations of Borrower under this Note.

               (E)  Upon the release of the Properties in accordance with this
          Section 9(b), Borrower shall have no further right to prepay this
          Note. Borrower shall pay any revenue, documentary stamp or intangible
          taxes or any other tax or charge due in connection with the transfer
          of this Note or otherwise required to accomplish the agreements of
          this Section.

               (F)  If any notice of Full Defeasance is given pursuant to 
          Section 9(b)(i)(A), Borrower shall be required to defease the Loan on
          the Release Date (unless such notice is revoked by Borrower prior to
          the Release Date in which event Borrower shall immediately reimburse
          Lender for any and all reasonable costs and expenses incurred by
          Lender in connection with Borrower's giving of such notice and
          revocation).

               (G)  At  Borrower's  request,  Lender may agree in its sole  
          discretion that Lender or its servicer or other agent, acting on
          Borrower's behalf as Borrower's agent and attorney-in-fact, shall
          purchase the Defeasance Collateral that Borrower is required to
          deliver to Lender pursuant to Section 9(b)(i)(C)(1). If such an
          agreement is made then Borrower shall deposit with Lender or Lender's
          servicer or other agent, as directed by Lender or Lender's agent(s),
          on or prior to the Release Date a sum of money sufficient to purchase
          the Defeasance Collateral. By making such deposit Borrower shall
          thereby appoint Lender or Lender's servicer or other agent as
          Borrower's agent and attorney-in-fact, with full power of
          substitution, for the purpose of purchasing the Defeasance Collateral
          with the funds so provided and delivering the Defeasance Collateral to
          Lender pursuant to Section 9(b)(i)(C)(1).

               (H)  Notwithstanding any release of the Security Instrument or 
          any Full Defeasance hereunder, the Defeasance Obligor shall, and
          hereby agrees to be, bound by and obligated under Sections 3.1
          (Payment of Debt), 7.2 (Further Acts Etc.), 7.4(a) (Estoppel
          Certificates), 11.2 (Application of Proceeds), 11.7 (Other Rights
          Etc.) and 14.2 (Marshalling and Other Matters) and Article 13
          (Indemnification) of the Security Instrument; provided, however, that
          all references therein to "PROPERTY" or "PERSONAL PROPERTY" shall be
          deemed to refer only to the Defeasance Collateral delivered to Lender.

          (ii) PARTIAL DEFEASANCE. If any Tenant shall have validly exercised 
its Purchase Option to acquire a Property after the Defeasance Lock-out
Expiration Date, Borrower may cause the release of such Property from the lien
of the Security Instrument encumbering such Property and the other Loan
Documents and substitute collateral as provided herein (a "PARTIAL DEFEASANCE")
on any Monthly Payment Date following the Defeasance Lock-Out

                                       11

<PAGE>   12

Expiration Date provided that, as of the Release Date, the Debt has not been
accelerated, no Default or Event of Default exists, and upon satisfaction of the
following conditions:

               (A)  Immediately  available  funds shall have been wired to 
          Lender's servicing agent or other designee (the "SERVICER") or, if
          there is no Servicer, Lender or Lender's designee (Servicer, Lender,
          or Lender's designee being herein sometimes referred to for this
          purpose as the "DEFEASANCE AGENT") in an amount (the "PROCEEDS") equal
          to the greater of (1) the Purchase Price of such Property, net of
          closing costs, or (2) the net present value as determined by the
          Defeasance Agent in its sole discretion, using the weighted average
          yield of the Government Securities purchased pursuant to Section
          9(b)(ii)(B) as the discount rate to compute such value, of the partial
          defeasance principal amount set forth on Schedule B attached hereto
          attributable to the Property that is the subject of the Purchase
          Option (the "PARTIAL DEFEASANCE PRINCIPAL AMOUNT") together with
          interest thereon at the Interest Rate from the Release Date to the
          Maturity Date;

               (B)  Borrower  hereby  appoints  Defeasance  Agent as  Borrower's
          agent and attorney-in-fact to utilize all Proceeds (or as much of the
          Proceeds as is possible) to purchase Government Securities, which
          securities provide for payments ("PARTIAL SCHEDULED DEFEASANCE
          PAYMENTS") that replicate as closely as possible (ie. are made in the
          same proportions as) the scheduled payments due under -- this Note for
          the balance of the term hereof including the amount (adjusted to
          reflect any Purchase Option Prepayments received by Lender prior to
          the Defeasance Lock-Out Expiration Date) required to be paid on the
          Maturity Date, all as determined by the Defeasance Agent in its sole
          discretion (all such Government Securities are hereinafter referred to
          as the "PARTIAL DEFEASANCE COLLATERAL"). If the Defeasance Agent
          determines in its sole discretion that all Proceeds cannot be used to
          purchase Partial Defeasance Collateral, then such excess Proceeds
          shall be delivered to Borrower. Each Government Security included in
          the Partial Defeasance Collateral shall be duly endorsed by the holder
          thereof as directed by Lender or accompanied by a written instrument
          of transfer in form and substance satisfactory to Lender in its sole
          discretion (including such instruments as may be required by the
          depository institution or other entity holding such securities or the
          issuer thereof, as the case may be, to effectuate book-entry transfers
          and pledges through the book-entry facilities of such institution) in
          order to perfect upon the delivery of the Defeasance Security
          Agreement a valid, first priority lien and security interest therein
          in favor of Lender in conformity with all applicable state and federal
          laws governing granting of such security interest.

               (C)  Borrower shall have provided Lender with not less than 
          thirty (30) days prior written notice specifying the Release Date on
          which the Partial Defeasance transaction is to be consummated;


                                       12

<PAGE>   13

               (D)  On the Release Date,  Borrower shall have paid in full all 
          accrued and unpaid interest and all other sums due under this Note and
          under the other Loan Documents up to the Release Date, including all
          costs and expenses including reasonable attorneys' fees incurred by
          Lender or the Defeasance Agent or to or on behalf of any rating
          agencies in connection with such release and related transactions
          (including the review of the proposed Partial Defeasance Collateral
          and the preparation of the Defeasance Security Agreement and related
          documentation) together with a defeasance processing fee in an amount
          equal to one-half of one percent (0.5%) of the portion of the
          Outstanding Principal Balance being defeased, but in no event less
          than (A) $10,000 or greater than (B) $20,000; and

               (E)  Defeasance Agent shall have obtained, as Borrower's agent 
          and on Borrower's behalf at Borrower's sole cost and expense, the
          following, all of which must be satisfactory to Lender in its sole
          discretion, at or prior to the release of any Property and
          substitution of the Partial Defeasance Collateral:

                    (1)  any and all agreements, certificates, opinions or
               documents required by Lender in its sole discretion in connection
               with the Partial Defeasance including a Defeasance Security
               Agreement and any REMIC Qualification Documents;

                    (2)  a certificate  certifying that (a) all of the  
               requirements set forth in this Section 9(b)(ii) have been
               satisfied, (b) the transactions that are being carried out
               pursuant to this Section 9(b)(ii) (including specifically the
               release of the lien of any Security Instrument) are being
               effected to facilitate the disposition of one or more of the
               Properties or any other customary commercial transaction and not
               as part of an arrangement to collateralize a REMIC offering with
               obligations that are not real estate mortgages, and (c) the
               amounts of the Partial Defeasance Collateral comply with all the
               requirements of this section including, the requirement that the
               Partial Defeasance Collateral shall generate monthly amounts
               equal to or greater than the Partial Scheduled Defeasance
               Payments required to be paid under this Note through the Maturity
               Date;

                    (3)  an opinion of counsel for Borrower  satisfactory to 
               Lender in its sole discretion, delivered to Lender by counsel
               satisfactory to Lender in its sole discretion, stating, among
               other things but without substantive qualification, that (a)
               Lender has a valid, duly perfected, first priority security
               interest in the Partial Defeasance Collateral and that the
               Defeasance Security Agreement is enforceable against Borrower in
               accordance with its terms, (b) neither the Partial Defeasance nor
               any other transaction that occurs pursuant to the provisions of
               this Section 9(b)(ii) has caused or will cause the Loan
               (including for this purpose the Loan Documents) to cease to be a
               "qualified mortgage" within the meaning of


                                       13

<PAGE>   14

               Section 860G of the Code, either under the provisions of Treasury
               Regulation Sections 1.860G-2(a)(8) or 1.860G-2(b) (as such
               regulations may be amended or superseded from time to time) or
               under any other provision of the Code or otherwise, and (c) each
               of any REMIC or any other entity that holds this Note will not
               cease to be qualified as a REMIC or as such other type of entity
               as a result of the Partial Defeasance and/or any other
               transaction that occurs pursuant to the provisions of this
               Section 9(b)(ii);

                    (4)  a certificate  and opinion  delivered by an independent
               certified public accounting firm acceptable to Lender in its sole
               discretion (a) certifying that the amounts of the Partial
               Defeasance Collateral comply with all the requirements of this
               Section including the requirement that the Partial Defeasance
               Collateral shall generate monthly amounts equal to or greater
               than the Partial Scheduled Defeasance Payments; and (b) setting
               forth the change in the yield of the Loan that results from any
               Partial Defeasance and any other transactions that occur pursuant
               to the provisions of this Section 9(b)(ii), including supporting
               computations which shall be made in a manner that is consistent
               with the provisions of Treasury Regulation Sections
               1.1001-3(e)(1) and (2), and opining that such change has not
               constituted or caused and will not constitute or cause a
               significant modification of the Loan (including for this purpose
               the Loan Documents) under such provisions of the regulations;

                    (5)  written  confirmation  from the rating agencies that 
               have rated any of the securities issued by any REMIC that holds
               this Note to the effect that no Partial Defeasance will result in
               a downgrading, withdrawal or qualification of the respective
               ratings in effect immediately prior to such Partial Defeasance
               for any rated securities then outstanding, and if required by any
               rating agency or Lender, a non-consolidation opinion with respect
               to the Defeasance Obligor in form and substance satisfactory to
               Lender and such rating agency; and

                    (6)  Defeasance  Agent, as Borrower's  agent and  
               attorney-in-fact, shall cause Borrower, at Borrower's sole
               expense, to assign an undivided interest in the Note equal to the
               percentage obtained by dividing the Partial Defeasance Principal
               Amount by the original principal amount of the Loan (the "PARTIAL
               DEFEASANCE PORTION") together with the Partial Defeasance
               Collateral, to the Defeasance Obligor. The Defeasance Obligor
               shall execute an assumption agreement pursuant to which it shall
               assume Borrower's obligations under this Note with respect to the
               Partial Defeasance Portion and the Defeasance Security Agreement.
               As conditions to such assignment and assumption, Defeasance Agent
               shall obtain for Lender, at Borrower's sole expense and on
               Borrower's behalf, an opinion of counsel satisfactory to Lender
               in its sole discretion delivered 


                                       14

<PAGE>   15

               by counsel satisfactory to Lender in its sole discretion stating,
               among other things, that such assumption agreement has been duly
               authorized and is enforceable against Borrower and the Defeasance
               Obligor in accordance with its terms, that the Note and the
               Defeasance Security Agreement, as so assumed, have been duly
               authorized and are enforceable against the Defeasance Obligor in
               accordance with their respective terms, and that the delivery of
               the Partial Defeasance Collateral to the Defeasance Obligor does
               not constitute a fraudulent transfer, preferential payment, or
               other voidable transfer under applicable bankruptcy law, subject
               only to such reasonable and customary conditions, limitations,
               exceptions and assumptions as are reasonably satisfactory to
               Lender. Borrower shall be solely responsible for paying all
               reasonable costs and expenses including attorneys' fees incurred
               by Lender or Defeasance Agent or other agent(s) in connection
               with such assignment and assumption (including the review of the
               proposed transferee and the preparation of the assumption
               agreement and related documentation).

               (F)  Upon  compliance  with the  requirements  of this  
          Section 9(b)(ii), Lender shall release the Property involved in the
          Partial Defeasance from the lien of the Security Instrument
          encumbering such Property, and the Partial Defeasance Collateral shall
          constitute a portion of the collateral securing this Note. Lender
          will, at Borrower's expense, execute and deliver any agreements
          reasonably requested by Borrower or Defeasance Agent to release the
          lien of the Security Instrument from such Property. Borrower, pursuant
          to the Defeasance Security Agreement, shall authorize and direct that
          the payments received from the Partial Defeasance Collateral be made
          directly to Lender and applied to partially satisfy the obligations of
          Borrower under this Note. Upon determination of the Partial Scheduled
          Defeasance Payments, the portion of the Monthly Payment payable from
          sources other than Partial Defeasance Collateral shall be adjusted by
          subtracting the monthly Partial Scheduled Defeasance Payment from the
          amount of the Monthly Payment, and Borrower shall thereafter be
          required on each Monthly Payment to pay on each Monthly Payment Date
          such portion of the Monthly Payment from sources of funds other than
          the Partial Defeasance Collateral.

               (G)  Borrower shall pay any revenue, documentary stamp or
          intangible taxes or any other tax or charge due in connection with the
          transfer of the Partial Defeasance Interest in this Note or otherwise
          required to accomplish the agreements of this Section.

               (H)  If any notice of Partial Defeasance is given pursuant to
          Section 9(b)(ii)(C), Defeasance Agent shall be required to defease all
          or any portion of the Loan on a Release Date (unless such notice is
          revoked by Borrower prior to such Release Date in which event Borrower
          shall immediately reimburse Lender and Defeasance Agent for any and
          all reasonable costs and expenses


                                       15

<PAGE>   16


          incurred by Lender or Defeasance Agent in connection with Borrower's
          giving of such notice and revocation).

               (I)  Borrower hereby irrevocably appoints Defeasance Agent as
          Borrower's agent and attorney-in-fact, which appointment is coupled
          with an interest and with full power of substitution, for the purpose
          of purchasing the Defeasance Collateral with the Proceeds and
          delivering the Partial Defeasance Collateral to Lender pursuant to
          Sections 9(b)(ii)(A) and (B). Borrower hereby ratifies and confirms
          all acts done or omitted to be done by Defeasance Agent under the
          authority of such power of attorney.

               (J)  Notwithstanding  any  release  of  any  Security  Instrument
          or any Partial Defeasance hereunder, the Defeasance Obligor shall, and
          hereby agrees to be, bound by and obligated under Sections 3.1
          (Payment of Debt), 7.2 (Further Acts Etc.), 7.4(a) (Estoppel
          Certificates), 11.2 (Application of Proceeds), 11.7 (Other Rights
          Etc.) and 14.2 (Marshalling and Other Matters) and Article 13
          (Indemnification) of the Security Instruments; provided, however (a)
          all references therein to "PROPERTY" or "PERSONAL PROPERTY" shall be
          deemed to refer only to the Partial Defeasance Collateral delivered to
          Lender, and (b) the Defeasance Obligor shall be only obligated to pay
          a portion of the Debt equal to the Partial Defeasance Portion.

               (K)  It shall be an event of default  under this Note (a "PARTIAL
          DEFEASANCE DEFAULT") if (a) Borrower fails to strictly comply with all
          of the requirements of the preceding clauses (A) through (J) of this
          Section 9(b)(ii) on or before the Release Date, (b) the disposition of
          a Property pursuant to the exercise of any Purchase Option is
          consummated (whether in accordance with the terms of the lease, by
          order of any court, or otherwise), and (c) Lender receives or is
          required to receive the Purchase Price. If a Partial Defeasance
          Default shall occur, Lender may declare the entire Debt, including the
          principal balance of the Loan (deducting therefrom the amount of the
          Purchase Price actually received by Lender, which shall be applied to
          the Outstanding Principal Balance), all accrued interest, and all
          costs, expenses, charges and fees payable under any Loan Document,
          together with any applicable Default Prepayment Consideration (which
          shall be calculated on the entire Outstanding Principal Balance
          without deduction for the amount of the Purchase Price), immediately
          due and payable.

     (C)  DEFAULT PREPAYMENT. If a Default Prepayment (as hereinafter defined) 
occurs, such Default Prepayment shall be deemed to be a voluntary prepayment
under this Note and in such case the applicable Default Prepayment Consideration
(as hereinafter defined) shall be due and payable to Lender in connection with
such Default Prepayment. The Default Prepayment Consideration shall be secured
by all security and collateral for the Loan and shall be added to the
Outstanding Principal Balance for all purposes including accrual of interest,
judgment on the Note, foreclosure (whether through power of sale, judicial
proceeding, or otherwise), redemption, and bankruptcy (including pursuant to
Section 506 of the United States Bankruptcy Code). The 


                                       16
<PAGE>   17

term "DEFAULT PREPAYMENT" shall mean a prepayment of the principal amount of
this Note made after occurrence of a Default or Event of Default under any
circumstances including a prepayment in connection with reinstatement of any
Security Instrument provided by statute under foreclosure proceedings or
exercise of power of sale, any statutory right of redemption exercised by
Borrower or any other party having a statutory right to redeem or prevent
foreclosure or power of sale, any sale in foreclosure or under exercise of a
power of sale or otherwise (including pursuant to a credit bid made by Lender in
connection with such sale), or any other collection action by Lender.
Classification and treatment of Lender's claim pursuant to a plan of
reorganization in bankruptcy shall also be deemed to be a Default Prepayment
hereunder. The "DEFAULT PREPAYMENT CONSIDERATION" (as the term is used in this
Note) shall mean the present value, as of the date of the occurrence of the
Default, of the remaining scheduled payments of principal and interest from the
date of the occurrence of the Default through the Maturity Date (including any
balloon payment), which shall be determined by discounting such payments (using
simple discounting) at the Discount Rate less the amount of principal being
prepaid.

     10.  MAXIMUM RATE PERMITTED BY LAW. All agreements in this Note and all 
other Loan Documents are expressly limited so that in no contingency or event
whatsoever, whether by reason of acceleration of maturity of the indebtedness
evidenced hereby or otherwise, shall the amount agreed to be paid hereunder for
the use, forbearance, or detention of money exceed the highest lawful rate
permitted under applicable usury laws. If, from any circumstance whatsoever,
fulfillment of any provision of this Note or any other Loan Document at the time
performance of such provision shall be due shall involve exceeding any usury
limit prescribed by law that a court of competent jurisdiction may deem
applicable hereto, then, ipso facto, the obligations to be fulfilled shall be
reduced to allow compliance with such limit, and if, from any circumstance
whatsoever, Lender shall ever receive as interest an amount that would exceed
the highest lawful rate, the receipt of such excess shall be deemed a mistake
and shall be canceled automatically or, if theretofore paid, such excess shall
be credited against the principal amount of the indebtedness evidenced hereby to
which the same may lawfully be credited, and any portion of such excess not
capable of being so credited shall be refunded immediately to Borrower.

     11.  EVENTS OF DEFAULT; ACCELERATION OF AMOUNT DUE. Lender may in its sole
discretion, without notice to Borrower, declare the entire Debt, including the
principal balance of the Loan, all accrued interest, and all costs, expenses,
charges and fees payable under any Loan Document, together with any applicable
Default Prepayment Consideration, immediately due and payable, and Lender shall
have all remedies available to it at law or equity for collection of the amounts
due, if any of the following (the "EVENTS OF DEFAULT") occurs and continues
beyond any applicable cure period:

     (a)  Borrower fails to make full and punctual payment of any amount payable
on a monthly basis hereunder, under any Security Instrument, or under any other
Loan Document, which failure is not cured on or before the fifth (5th) day after
the date of written notice from Lender to Borrower of such failure;


                                       17


<PAGE>   18

     (b)  Borrower fails to make full payment of the Debt when due, whether on 
the Maturity Date, upon acceleration or prepayment, or otherwise, following the
expiration of any applicable grace period provided in the Security Instrument or
any other Loan Document;

     (c)  Borrower fails to make full and punctual payment of any Late Charges, 
costs and expenses due hereunder, or any other sum of money required to be paid
hereunder (other than any payment described in subclauses (a) and (b)
immediately above) or under the Security Instruments or any other Loan Document
which failure is not cured on or before the twentieth (20th) day after Lender's
written notice to Borrower that such payment is required; or

     (d)  a Prepayment Purchase Option Default or a Partial Defeasance Default 
shall occur; or

     (e)  an Event of Default occurs under any Security Instrument or any other 
Loan Document.

     12.  TIME OF ESSENCE. Time is of the essence with regard to each provision
contained in this Note.

     13.  TRANSFER AND ASSIGNMENT. This Note may be freely transferred and 
assigned by Lender. Borrower's right to transfer its rights and obligations with
respect to the Debt, and to be released from liability under this Note, shall be
governed by the Security Instruments.

     14.  AUTHORITY OF PERSONS EXECUTING NOTE. Borrower warrants and represents 
that the persons or officers who are executing this Note and the other Loan
Documents on behalf of Borrower have full right, power and authority to do so,
and that this Note and the other Loan Documents constitute valid and binding
documents, enforceable against Borrower in accordance with their terms, and that
no other person, entity, or party is required to sign, approve, or consent to,
this Note.

     15.  SEVERABILITY. The terms of this Note are severable, and should any 
provision be declared by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions shall, at the option of Lender, remain
in full force and effect and shall in no way be impaired.

     16.  BORROWER'S WAIVERS. Borrower and all others liable hereon hereby waive
presentation for payment, demand, notice of dishonor, protest, and notice of
protest, notice of intent to accelerate, and notice of acceleration, stay of
execution and all other suretyship defenses to payment generally. No release of
any security held for the payment of this Note, or extension of any time periods
for any payments due hereunder, or release of collateral that may be granted by
Lender from time to time, and no alteration, amendment or waiver of any
provision of this Note or of any of the other Loan Documents, shall modify,
waive, extend, change, discharge, terminate or affect the liability of Borrower
and any others that may at any time be liable for the payment of this Note or
the performance of any covenants contained in any of the Loan Documents.


                                       18

<PAGE>   19

     17.  GOVERNING LAW. This Note has been delivered to and accepted by Lender 
in the State of Missouri, and shall be governed and construed generally
according to the laws of the State of Missouri without regard to the conflicts
of law provisions thereof ("GOVERNING STATE").

     18.  JURISDICTION AND VENUE. BORROWER HEREBY CONSENTS TO PERSONAL 
JURISDICTION IN THE GOVERNING STATE AND IN EACH JURISDICTION IN WHICH ANY
PROPERTY IS LOCATED (EACH A "SITUS STATE"). VENUE OF ANY ACTION BROUGHT TO
ENFORCE THIS NOTE OR ANY OTHER LOAN DOCUMENT OR ANY ACTION RELATING TO THE LOAN
OR THE DEBT OR THE RELATIONSHIPS CREATED BY OR UNDER THE LOAN DOCUMENTS
("ACTION") SHALL, AT THE ELECTION OF LENDER, BE IN (AND IF ANY ACTION IS
ORIGINALLY BROUGHT IN ANOTHER VENUE, THE ACTION SHALL AT THE ELECTION OF LENDER
BE TRANSFERRED TO) EITHER A STATE OR FEDERAL COURT OF APPROPRIATE JURISDICTION
LOCATED IN THE GOVERNING STATE OR IN EACH SITUS STATE. BORROWER HEREBY CONSENTS
AND SUBMITS TO THE PERSONAL JURISDICTION OF THE STATE COURTS OF THE GOVERNING
STATE AND EACH SITUS STATE AND OF FEDERAL COURTS LOCATED IN THE GOVERNING STATE
AND EACH SITUS STATE IN CONNECTION WITH ANY ACTION AND HEREBY WAIVES ANY AND ALL
PERSONAL RIGHTS UNDER THE LAWS OF ANY OTHER STATE TO OBJECT TO JURISDICTION
WITHIN SUCH STATE FOR PURPOSES OF ANY ACTION. Borrower hereby waives and agrees
not to assert, as a defense to any Action or a motion to transfer venue of any
Action, (i) any claim that it is not subject to such jurisdiction, (ii) any
claim that any Action may not be brought against it or is not maintainable in
those courts or that this Note or any of the other Loan Documents may not be
enforced in or by those courts, or that it is exempt or immune from execution,
(iii) that the Action is brought in an inconvenient forum, or (iv) that the
venue for the Action is in any way improper.

     19.  NOTICES. Any notice required or permitted to be given hereunder must 
be in writing and given (a) by depositing same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested; (b) by delivering the same in person to
such party; (c) by transmitting a facsimile copy to the correct facsimile phone
number of the intended recipient (with a second copy sent by registered or
certified regular mail); or (d) by depositing the same into the custody of a
nationally recognized overnight delivery service addressed to the party to be
notified. In the event of mailing, notices shall be deemed effective three (3)
days after posting; in the event of overnight delivery, notices shall be deemed
effective on the next Business Day following deposit with the delivery service;
in the event of personal service or facsimile transmissions, notices shall be
deemed effective when delivered. For purposes of notice, the addresses of the
parties shall be as set forth in the Table. From time to time either party may
designate another address than the address set forth for all purposes of this
Note by giving the other party no less than ten (10) days' advance notice of
such change of address in accordance with the notice provisions hereof.

     20.  AVOIDANCE OF DEBT PAYMENTS. To the extent that any payment to Lender 
and/or any payment or proceeds of any collateral received by Lender in reduction
of the Debt is subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be 

                                       19


<PAGE>   20

repaid to a trustee, to Borrower (or Borrower's successor) as a debtor in
possession, or to a receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then the portion of the Debt
intended to have been satisfied by such payment or proceeds shall remain due and
payable hereunder, be evidenced by this Note, and shall continue in full force
and effect as if such payment or proceeds had never been received by Lender
whether or not this Note has been marked "paid" or otherwise cancelled or
satisfied and/or has been delivered to Borrower, and in such event Borrower
shall be immediately obligated to return the original Note to Lender and any
marking of "paid" or other similar marking shall be of no force and effect.

     21.  NONRECOURSE. Lender shall not be entitled to recover any deficiency 
judgment against Borrower or any general partner or limited partner of Borrower
on this Note, provided, however, the foregoing shall not be interpreted to: (a)
impair or affect the right of Lender to enforce any of its rights or remedies
(other than any right to a deficiency judgment) provided for in any of the Loan
Documents or under applicable law in full accordance with the terms thereof
including but not limited to the right of Lender to name Borrower or any general
partner of Borrower as a party defendant in any action or suit for specific
performance, foreclosure, or sale (or similar remedy) under the Security
Instrument, or any other Loan Document; (b) impair or affect the validity or
enforceability of any guaranty, indemnity agreement (including but not limited
to any environmental indemnity agreement), letter of credit, or other similar
third party agreement or undertaking made in connection with this Note, the
Security Instrument, or any other Loan Document; (c) impair or affect Lender's
right to offset any and all amounts outstanding under any of the Loan Documents
against any claim or amount that may be asserted against Lender by Borrower or
any partners, members, shareholders, or other owners of legal or beneficial
interests in Borrower; (d) affect the validity or enforceability of or impair
the right of Lender to bring suit and obtain specific performance or personal,
recourse judgment to enforce the liability of Borrower or any other person or
entity to the extent of, and Borrower hereby agrees to be personally liable for,
any loss, damage, cost, expense, liability, or claim incurred by or made against
Lender (including all attorneys' fees and expenses and other collection and
litigation expenses) arising out of or in connection with any of the following:

          (i)   Borrower or any affiliate, agent, or employee of Borrower
     misappropriates any rents or other Property income or collateral proceeds
     including but not limited to insurance or condemnation proceeds or awards;

          (ii)  Borrower or any affiliate, agent, or employee of Borrower fails 
     to apply or pay over any tenant security deposits or other refundable
     deposits in accordance with the terms of the applicable lease or other
     agreement or the Security Instrument or any other Loan Document;

          (iii) Borrower or any affiliate, agent, or employee of Borrower 
     receives rents or other payments from tenants more than one month in
     advance and fails to apply them in accordance with the Loan Documents;

                                       20

<PAGE>   21

          (iv)   following the occurrence and during the continuance of an Event
     of Default, Borrower or any affiliate, agent, or employee of Borrower
     (including Borrower in its capacity as a debtor or debtor in possession in
     a bankruptcy proceeding) fails either to apply rents or other Property
     income, whether collected before or after such Event of Default, to the
     ordinary, customary, and necessary expenses of operating the Property or,
     upon demand, to deliver such rents or other Property income to Lender;

          (v)    waste is committed on the Property during a period while 
     Borrower or any affiliate, agent, or employee of Borrower is in possession
     thereof ("waste" meaning the diminution in the Property's value resulting
     from Borrower's negligent or willful failure to manage, maintain, repair
     and otherwise operate the Property in a commercially reasonable manner);

          (vi)   any damage to the Property or the Lender is caused as a result 
     of the intentional misconduct or gross negligence of Borrower or any
     affiliate, agent, or employee of Borrower;

          (vii)  any Property is removed in violation of the terms of the Loan 
     Documents;

          (viii) Borrower fails, in accordance with the terms of the Loan 
     Documents, to maintain insurance or to pay taxes, assessments, or other
     liens or claims that could create liens affecting the Property (unless
     Lender is escrowing funds therefor and fails to make such payments or has
     taken possession of the Property following an Event of Default, has
     received all rents from the Property applicable to the period for which
     such insurance, taxes or other items are due, and thereafter fails to make
     such payments);

          (ix)   there is any fraud or material misrepresentation by Borrower or
     any of its affiliates, any guarantor, any indemnitor or any agent,
     employee, or other person with actual or apparent authority to make
     statements or representations on behalf of Borrower, any affiliate of
     Borrower, or any guarantor or indemnitor ("apparent authority" meaning such
     authority as the principal knowingly or negligently permits the agent to
     assume, or which he holds the agent out as possessing); or

          (x)    Borrower fails, following the occurrence and during the 
     continuance of an Event of Default, to deliver to Lender on demand all
     security deposits, books and records relating to the Property and in the
     possession or control of Borrower or any affiliate, agent, or employee of
     Borrower.

Nothing herein shall be deemed to constitute a waiver by Lender of any right
Lender may have under Sections 506(a), 506(b), 1111(b) or any other provision of
the United States Bankruptcy Code to file a claim for the full amount of the
Debt (as defined in the Security Instrument) or to require that all collateral
shall continue to secure all of the Debt.

     22.  MISCELLANEOUS. Neither this Note nor any of the terms hereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing executed by the party against which enforcement of the
termination, amendment, supplement, 


                                       21

<PAGE>   22

waiver or modification is sought. If Borrower consists of more than one person
or entity, then the obligations and liabilities of each person or entity shall
be joint and several. As used in this Note, (i) the terms "include", "including"
and similar terms shall be construed as if followed by the phrase "without being
limited to," (ii) words of masculine, feminine, or neuter gender shall mean and
include the correlative words of the other genders, and words importing the
singular number shall mean and include the plural number, and vice versa, (iii)
all captions to the Sections hereof are used for convenience and reference only
and in no way define, limit or describe the scope or intent of, or in any way
affect, this Note, (iv) no inference in favor of, or against, Lender or Borrower
shall be drawn from the fact that such party has drafted any portion hereof or
any other Loan Document, and (v) the words "Lender" and "Borrower" shall include
their respective successors, assigns, heirs, personal representatives, executors
and administrators. In the event of a conflict between or among the terms,
covenants, conditions or provisions of the Loan Documents, the term(s),
covenant(s), condition(s) and/or provision(s) that Lender may elect to enforce
from time to time so as to enlarge the interest of Lender in its security,
afford Lender the maximum financial benefits or security for the Debt, and/or
provide Lender the maximum assurance of payment of the Debt in full shall
control. BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS BEEN PROVIDED WITH
SUFFICIENT AND NECESSARY TIME AND OPPORTUNITY TO REVIEW THE TERMS OF THIS NOTE,
THE SECURITY INSTRUMENT, AND EACH OF THE LOAN DOCUMENTS, WITH ANY AND ALL
COUNSEL IT DEEMS APPROPRIATE, AND THAT NO INFERENCE IN FAVOR OF, OR AGAINST,
LENDER OR BORROWER SHALL BE DRAWN FROM THE FACT THAT EITHER SUCH PARTY HAS
DRAFTED ANY PORTION HEREOF, OR THE SECURITY INSTRUMENT, OR ANY OF THE LOAN
DOCUMENTS.

     23.  WAIVER OF COUNTERCLAIM AND JURY TRIAL. BORROWER HEREBY KNOWINGLY 
WAIVES THE RIGHT TO ASSERT ANY COUNTERCLAIM, OTHER THAN A COMPULSORY
COUNTERCLAIM, IN ANY ACTION OR PROCEEDING BROUGHT AGAINST BORROWER BY LENDER OR
ITS AGENTS. ADDITIONALLY, BORROWER AND LENDER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION BASED ON THE LOAN OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THE
LOAN, THIS NOTE, THE SECURITY INSTRUMENT, OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN), OR
ACTION OF BORROWER OR LENDER. THIS PROVISION IS A MATERIAL INDUCEMENT FOR
LENDER'S MAKING OF THE LOAN.

     24.  LOAN DOCUMENTS. Notwithstanding anything to the contrary contained
herein or in the Loan Documents to the contrary, the term "Loan Documents" shall
not include any Environmental Indemnity Agreement executed by Borrower to Lender
with respect to the Property located in Washington.


                                       22

<PAGE>   23

     Intending to be fully bound, Borrower has executed this Note effective
as of the day and year first above written.

BORROWER:                       CAPTEC  FRANCHISE  CAPITAL  PARTNERS  
                                L.P. III, a Delaware limited partnership

                                By: CAPTEC NET LEASE REALTY, INC., a
                                    Delaware corporation, its General Partner


                                By: Gary A. Bruder
                                   -------------------------------------
                                Name: Gary A. Bruder               
                                     -----------------------------------
                                Title: Vice President            
                                      ----------------------------------


                                       23


<PAGE>   24


     Pay to the order of National Realty Finance L.C., a Missouri limited
liability company, without recourse.

                                NATIONAL  REALTY  FUNDING L.C., a Missouri  
                                limited  liability company



                                By:
                                   ---------------------------------------
                                Print Name:          
                                            ------------------------------
                                Print Title:
                                            ------------------------------
                                                  
     Pay to the order of                                   , without recourse.
                         ----------------------------------

                                NATIONAL  REALTY  FINANCE L.C., a Missouri  
                                limited  liability company


                                By:
                                   ---------------------------------------
                                Print Name:          
                                            ------------------------------
                                Print Title:
                                            ------------------------------

                                       24

<PAGE>   25


STATE OF Michigan   )
        ---------   )  ss.
COUNTY OF Washtenaw )
          ----------

     On this 26th day of March, 1999, before me, MARCIA O. NELGEBAUER, a Notary
Public in and for said state, personally appeared Gary A. Bruder, Vice President
of Captec Net Lease Realty, Inc., a Delaware corporation, general partner of
Captec Franchise Capital Partners L.P. III, a Delaware limited partnership,
known to be the person who executed the within instrument on behalf of said
limited partnership and acknowledge to me that he executed the same for the
purposes therein stated.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, the day and year last above written.

                                      /s/ Marcia O. Nelgebauer
                                      ----------------------------------------
MARCIA O. NELGEBAUER                  MARCIA O. NELGEBAUER
Notary Public, Washtenaw County, MI
My Commission Expires, June 12, 2002


                                      ----------------------------------------
                                      (Type, print or stamp the Notary's name 
                                      below his or her signature.)


My Commission Expires:

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


                                       25
<PAGE>   26


                                   SCHEDULE A

                      LOCATION OF REAL PROPERTY COLLATERAL

1.   Taco Bell, 45590 Gratiot Avenue, Macomb, Michigan 48042.

2.   Jack-in-the-Box, 160th & Meridian East, Puyallup, Washington.

3.   Tony Roma's, 4521 Southside Boulevard, Jacksonville, Florida 32216.


                                       26
<PAGE>   27


SCHEDULE B

                                   CAPTEC III


                             Allocated Loan                Partial Defeasance
Name/Address                     Amount                    Principal Amount(1)
------------                 --------------                -------------------
Taco Bell                     $372,333.00                     $465,416.00
45590 Gratiot Avenue
Macomb, Michigan 48042



---------------
     (1) 125% of Allocated Loan Amount