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

                                    FORM 10-K

                        FOR ANNUAL AND TRANSITION REPORTS
                     PURSUANT TO SECTIONS 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

(Mark One)

     [x]  ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2001

                                       OR

     [ ] TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15 (d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

                        For the transition period from to

                        Commission file number 001-15581

                       CNL AMERICAN PROPERTIES FUND, INC.
             (Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>

<c>
                  Florida                                59-3239115
    (State or other jurisdiction of          (I.R.S. EmployerIdentification No.)
     incorporation or organization)

</TABLE>

                             450 South Orange Avenue
                             Orlando, Florida 32801
          (Address of principal executive offices, including zip code)

       Registrant's telephone number, including area code: (407) 540-2000

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

  Title of each class:                     Name of exchange on which registered:
      None                                             Not Applicable

           Securities registered pursuant to section 12(g) of the Act:

                     Common Stock, $0.01 par value per share
                                (Title of class)

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

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

     Aggregate  market  value of the voting stock held by  nonaffiliates  of the
registrant:  The registrant  has made three  offerings of Shares of common stock
(the "Shares") on Form S-11 under the  Securities  Act of 1933, as amended.  The
number of Shares held by  non-affiliates  as of March 15,  2002 was  38,784,588.
Since no established market for such Shares exists, there is no market value for
such Shares. Each Share was originally sold at $20 per Share.

     The number of Shares of common stock  outstanding  as of March 28, 2002 was
44,075,641.

                      DOCUMENTS INCORPORATED BY REFERENCE:

        Registrant incorporates by reference portions of the CNL American
 Properties Fund, Inc. Definitive Proxy Statement for the 2002 Annual Meeting of
     Stockholders (Items 10, 11, 12 and 13 of Part III) to be filed no later
                              than April 30, 2002.

<PAGE>

                                     PART I

Item 1.  Business

     CNL  American  Properties  Fund,  Inc.,  a  Maryland   corporation,   is  a
self-advised real estate investment trust ("REIT"). The Company's operations are
divided into two business segments,  real estate and specialty finance. The real
estate segment  operates  principally  through CNL Restaurant  Properties,  Inc.
("CNL-RP"),  a wholly owned subsidiary of the Company, and CNL APF Partners, LP,
a limited  partnership  wholly owned by CNL-RP and in which CNL APF GP Corp. and
CNL APF LP,  subsidiaries of the Company,  serve as general and limited partner,
respectively.  The  specialty  finance  segment  operates  through the Company's
wholly-owned subsidiary CNL Franchise Network Corp and a partnership between the
Company and Bank of America, CNL Franchise Network, LP ("CNL-FN"). The Company's
subsidiaries  also include CNL Fund  Advisors,  Inc.,  CNL  Financial GP Holding
Corp.,  CNL Financial LP Holding,  LP, CNL Financial  Services GP Corp.  and CNL
Financial  Services,  LP.  The  term  "Company"  includes,  unless  the  context
otherwise  requires,  CNL  American  Properties  Fund,  Inc.  and its direct and
indirect  subsidiaries.  Please  see  note  13  of  the  Company's  Consolidated
Financial  Statements  appearing in Item 8 of this report for certain  financial
information about the Company's two business segments.

     The Company provides a complete range of financial,  development,  advisory
and other real estate services to operators of national and regional  restaurant
chains.  The  Company's  ability  to offer  complete  "turn-key,"  build-to-suit
development services, from site selection to construction  management,  together
with its  ability to provide  its  customers  with  financing  options,  such as
triple-net leasing,  mortgage loans and secured equipment  financing,  makes the
Company a preferred  provider for all of the real estate related  business needs
of operators of national and regional  restaurant  chains. At December 31, 2001,
the Company has financial  interests in over 1200 properties  diversified  among
more than 100 concepts in 47 states.  The Company's  servicing  portfolio of net
lease properties and mortgages includes over 2,500 units of which over 1,300 are
serviced on behalf of third parties.

     The  Company  was  formed in May 1994,  at which time it  received  initial
capital  contributions  of $200,000 for 10,000  shares of the  Company's  common
stock,  par value  $0.01 per share  ("Company  Shares").  Since  inception,  the
Company has completed  three separate public  offerings of Company  Shares.  The
Company  received the final proceeds of $210,736 from its third public  offering
of Company  Shares in January  1999,  at which point the  Company  had  received
aggregate  subscription  proceeds  from  its  three  offerings  of  $747,464,420
(37,373,221  Company  Shares),  including  $5,572,261  (278,613  Company Shares)
issued through the Company's reinvestment plan. Net proceeds to the Company from
its three  offerings and the initial capital  contributions,  after deduction of
stock issuance costs, totaled  $670,351,200,  all of which have been invested in
properties or mortgage loans.

     The Company's goal is to be a leading  provider of financial,  development,
advisory  and other real estate  services to  operators of national and regional
restaurant  chains.  In  furtherance  of this goal,  on September  1, 1999,  the
Company became internally advised and gained complete  acquisition,  development
and in-house  management  functions by acquiring its external advisor,  CNL Fund
Advisors,  Inc. (the "Advisor").  Prior to September 1, 1999, the Company had no
employees,  so the Advisor provided these functions on behalf of the Company and
was responsible for the day-to-day operations of the Company,  including raising
capital, investment analysis,  acquisitions, due diligence, asset management and
accounting  services.  The  acquisition of the Advisor also provided the Company
with restaurant development capabilities including site selection,  construction
management and build-to-suit development.

     At the same time that it acquired  the  Advisor,  the Company  acquired CNL
Financial  Corporation and CNL Financial  Services,  Inc. which are referred to,
together,  as the CNL  Restaurant  Financial  Services  Group,  to increase  its
financing  capabilities  and  expand  its  mortgage  loan  portfolio.   The  CNL
Restaurant  Financial  Services  Group makes and services  mortgage  loans,  and
securitizes  a portion of such loans,  to  operators  of national  and  regional
restaurant  chains  comparable to the restaurant  chain operators that currently
are tenants of the Company.

     Upon consummation of the mergers on September 1, 1999, all employees of the
acquired  entities became employees of the Company,  and any obligations for the
Company  to pay  fees  to the  Advisor  (such  as  acquisition  fees  and  asset
management  fees)  under the  advisory  agreement  between  the  Company and the
Advisor terminated.

     Subsequent  to  acquiring  the  Advisor,   the  Company   examined  various
alternatives  to improve  its  capital  position  and to further  diversify  its
business  platform  in  an  attempt  to  maximize  stockholder  value  over  the
long-term.  The  Company  adopted  a  new  strategy  to  service  the  franchise
restaurant  marketplace  made  possible  by  the  REIT  Modernization  Act.  The
Company's new strategy focused on two segments of the Company's operations - the
Company's  existing real estate segment and a specialty  finance  segment allied
with a major financial  institution as its strategic partner.  In June 2000, the
Company  formed a  partnership,  CNL Franchise  Network,  L.P.  ("CNL-FN" or the
"Partnership") and contributed  certain assets and operations in exchange for an
84.39% interest. Bank of America, contributed its franchise finance originations
group in exchange for a 9.18% non-voting redeemable interest in the Partnership.
Bank of America  also served as lender at the time of alliance on a $500 million
warehouse credit facility and a $43.75 million  subordinated  debt facility (the
"Subordinated Note Payable"),  as well as administrative agent on a $125 million
revolving  credit  facility and as provider of a $175 million bridge  financing.
Bank of America's  interest in the  Partnership on a fully diluted basis after a
conversion  of the fully  committed  Subordinated  Note  Payable is 29.12%.  The
strategic alliance with Bank of America reduces the Company's reliance on public
markets to raise capital by  broadening  the  Company's  financial  products and
offerings and enhancing the Company's securitization platform.

     The Company also issued a 6.43% limited  partnership  interest in CNL-FN to
CNL  Financial  Group,  Inc.,  an  affiliate  of a director of the  Company,  in
exchange  for  the  operations  of CNL  Advisory  Services,  Inc.  ("CAS").  CAS
specializes in providing  merger,  acquisition  and other  advisory  services to
restaurant operators and expands the Company's services to the sector.

     The Company has also explored  alternatives in which to direct its existing
loan and lease assets,  including the tax-deferred  real estate exchange market.
While asset securitization is one sales channel for loans or leases,  another is
the  tax-deferred  real estate exchange market allowed under Section 1031 of the
Internal  Revenue  Code  ("Section  1031  Exchanges").  Generally,  Section 1031
Exchanges  allow an investor who realizes a gain from selling  appreciated  real
estate to defer paying taxes on such gain by  reinvesting  the sales proceeds in
like-kind real estate.  The Company conducts Section 1031 Exchanges  through its
CNL-FN  subsidiary  and through a  partnership  with a third party  client.  The
Company and its partnership sold approximately  $108.0 million of real estate in
Section 1031  exchanges,  generating  $9.1 million in gains in 2001. The Company
expects this sales channel to grow  significantly  in 2002. In addition,  CNL-FN
will  continue  to  investigate  other  sales  channels  in which to direct  its
existing  loan  and  lease  assets  while  the  securitization   market  remains
unappealing.

     The Company's Second Amended and Restated Articles of Incorporation require
it to provide stockholder liquidity by December 31, 2005, either by listing on a
national exchange, by merging with another public company or by liquidating. The
Company's  shares,  while  public,  are not listed on a national  exchange.  The
Company pursued but eventually  abandoned a listing  strategy in 1999 because of
unsatisfactory  market  conditions in the publicly traded REIT market.  Instead,
the  Company  entered  into a  partnership  with Bank of  America,  building  an
origination and  securitization  business that enabled it to not have to rely on
the public equity markets.

     The Company  continues to monitor the public  markets and intends to either
list on a national  exchange or merge with another company by December 31, 2005.
The Company's  Board of Directors  does not intend to liquidate the Company.  To
comply with certain tax  guidelines  governing  taxable REIT  subsidiaries,  the
Company  may pursue  other  alternatives  related to CNL-FN  that would  provide
stockholder  liquidity  for all or a  portion  of the  Company's  investment  by
December 31, 2005.

     The  Company's  customer  base  is  characterized  by  a  large  number  of
individual  customers,  each with  divergent  needs and most  enjoying  multiple
relationships  with the  Company.  Management  identified  a need to upgrade its
information systems in order to integrate its services more efficiently.  During
2000, the Company  invested $4 million to upgrade its information  systems.  The
implementation  of these changes became effective in the fourth quarter of 2000.
In addition,  the Company  spent $1.2 million in research and  evaluation  of an
e-commerce presence for the purchase and sale of real estate and related Company
services.  The Company  expects  that its updated  systems and  technology  will
enable it to serve  restaurant  operators more  efficiently.  Management did not
incur similar types or amounts of capital expenditures in 2001.

Leases

     As of December  31,  2001,  the Company had  acquired,  either  directly or
indirectly  through  joint  venture  arrangements,  651  properties,  which  are
generally subject to long-term, triple-net leases. Although there are variations
in the  specific  terms of the  leases,  the  following  summarizes  the general
structure of the Company's  leases.  The leases of the  properties  owned by the
Company and the joint ventures in which the Company is a co-venturer provide for
initial terms generally  ranging from 13 to 25 years and expire between 2006 and
2024. The leases are on a triple-net basis which means the lessee is responsible
for all repairs and maintenance,  property taxes,  insurance and utilities.  The
leases of the  properties  provide  for  minimum  base  annual  rental  payments
(payable  in  monthly   installments)  ranging  from  approximately  $31,000  to
$369,000. In addition, certain leases provide for percentage rent based on sales
in excess of a specified amount. In addition, the majority of the leases provide
that,  commencing in specified lease years (generally the sixth lease year), the
annual base rent required under the terms of the lease will increase.

     Generally,  the Company's property leases provide for two to five five-year
or ten-year  renewal  options  subject to the same terms and  conditions  as the
initial  lease.  Lessees of 520 of the Company's 651  properties  also have been
granted  options to purchase  the  property at the  property's  then fair market
value after a specified portion of the lease term has elapsed. Fair market value
will be determined  through an appraisal by an independent  appraisal  firm. The
option  purchase  price may equal the  Company's  original  cost to purchase the
property (including  acquisition  costs),  plus a specified  percentage from the
date of the lease or a specified  percentage of the Company's purchase price, if
that amount is greater  than the  property's  fair market  value at the time the
purchase option is exercised.

     The leases also generally  provide that, in the event the Company wishes to
sell the property subject to that lease, the Company first must offer the lessee
the right to purchase the property on the same terms and conditions, and for the
same price,  as any offer which the  Company  has  received  for the sale of the
property.

Major Tenants

     During 2001, no single  lessee,  borrower or restaurant  chain  contributed
more than ten percent of the Company's total rental,  earned,  investment income
and  interest  income  relating  to  its  properties,  mortgage  loans,  secured
equipment leases and certificates.  In the event that certain lessees, borrowers
or restaurant  chains  contribute more than ten percent of the Company's rental,
earned,  investment  income and interest income in future years,  any failure of
such  lessees,  borrowers  or  restaurant  chains  could  materially  affect the
Company's  income.  As of December 31, 2001,  no single  lessee or borrower,  or
group of affiliated lessees or borrowers,  leased properties or was the borrower
under mortgage loans with an aggregate carrying value in excess of 20 percent of
total assets of the Company.

Real Estate Held for Sale

     The Company has developed a program  through which it may  profitably  sell
certain real estate  properties to private investors as an alternative to either
retaining the properties as a long-term investment or offering to sell net lease
cash flows in the  securitization  marketplace.  As of December  31,  200l,  the
Company has a total of $171.6 million assets  classified as Real Estate Held for
Sale.  For the twelve months ended  December 31, 2001,  the total gross proceeds
from real estate  sales  aggregated  to $105.6  million;  cost of sales to $97.6
million.  The  accounting  for these  properties  differs  from that of  similar
properties without this designation as the Company does not record  depreciation
or  accrued  rent  on  these  properties.  The  properties  held  for  sale  are
contemplated being sold within the first year.

     From time to time, certain properties  classified as long-term  investments
may be subsequently  re-designated to held for sale classification.  The company
has  re-designated  93 properties with a net book value of $115.7 million during
2001.

Mortgage Loans

     Mortgage  loans held for sale are  wholly or  partially  collateralized  by
first mortgages on the land and/or buildings of franchised restaurant businesses
and  consist  of   approximately   $300.2   million  in  fixed-rate   loans  and
approximately  $6.7 million in  variable-rate  loans at December  31, 2001.  The
fixed-rate  loans carry a weighted average interest rate of 9.59 percent and the
variable-rate   loans  carry   interest  rates  that  adjust  monthly  based  on
fluctuations  in 30-day LIBOR  (averaging  8.43 percent  throughout  2001).  The
mortgage loans are due in monthly  installments with maturity dates ranging from
2002 to 2021. The fixed-rate  mortgage loans generally  prohibit  prepayment for
certain periods or include prepayment penalties.

Competition

     The  fast-food,  family-style  and casual  dining  restaurant  business  is
characterized by intense  competition.  The operators of the restaurants located
on the  Company's  properties  compete  with  independently  owned  restaurants,
restaurants which are part of local or regional chains, and restaurants in other
well-known national chains, including those offering different types of food and
service.

     Local  competition  may enhance a restaurant's  success rather than detract
from it. Many successful  fast-food,  family-style and casual dining restaurants
are located in "eating  islands",  areas within  which a variety of  restaurants
operate.  This variety allows diners an  opportunity  to diversify  their eating
habits,  giving them an  incentive  to return in the future.  As a result,  fast
food, family style and casual dining  restaurants  frequently  experience better
operating results when there are other restaurants in the area.

     The Company  competes with other persons and entities in locating  suitable
properties to acquire and in locating  purchasers for properties  held for sale.
The Company also competes with other financing  sources such as banks,  mortgage
lenders and  sale/leaseback  companies for suitable  tenants for its properties,
borrowers  for its  mortgage  loans and  lessees and  borrowers  for its Secured
Equipment Leases.

     The  recessionary  economy and  historically  low  interest  rates at which
mortgage  financing  could be  accessed  contributed  to a decline  in net lease
volume in 2001 while the low  interest  rates made loan  referrals  to portfolio
providers more attractive.  Management believes that the Company's volume levels
may increase in 2002 due to the projected  rebound in the economy as well as the
opportunities afforded by the continued consolidation in the financing arena and
the Company's  ability to provide a diverse array of financial  products to meet
client's  needs.  Competition  in the  financing  arena  continues  to be fierce
despite the exit of numerous  competitors,  as remaining competitors appear well
capitalized and provide  meaningful  competition.  The Company believes that the
rationalization in the financing marketplace will be of long term benefit to the
company as well as other experienced, well capitalized competitors.

     The Company recycles its capital by periodically conducting securitizations
of loans and net leases,  by conducting  whole loan sales and by selling  select
properties to private investors.  By recycling its capital, the Company believes
that it maintains  brand loyalty and fosters  ongoing  client  relationships  by
providing  the  Company  with an  opportunity  to offer a variety  of  financing
solutions  to the sector.  While  consolidation  in the  industry has created an
opportunity  to  potentially  increase  volume,  it has  also  led to  increased
investor scrutiny of franchise-backed securities issued in a securitization.  In
order to mitigate the  volatility in the  securitization  market the Company has
engaged in a strategy to  diversify  its capital  sources.  Alternative  capital
strategies  include whole loan sales,  structured  note  offerings and increased
loan referrals to portfolio  providers as well as the sale of select  properties
to private investors.  The creation of diversified  capital channels will enable
the  Company to provide a diverse  array of  financial  products  to satisfy the
needs of its clients.  In addition,  management believes that it will create the
most stable platform for long-term growth and  profitability by diversifying its
capital sources and products.

Employees

     As of December 31, 2001, the Company employed 132 associates.


Item 2.  Properties

     As of December 31, 2001, the Company owned,  either  directly or indirectly
through  joint  venture  arrangements,  651  properties,  located  in 40 states.
Reference  is made to the Schedule of Real Estate and  Accumulated  Depreciation
filed  with this  report for a listing of the  properties  and their  respective
costs, including acquisition fees and certain acquisition expenses.

     As of December 31, 2001, the Company owned 562 of the 651 properties in fee
simple and ten properties through joint venture arrangements.

     As of December  31,  2001,  36 of the 651  properties  owned by the Company
consisted of building  only.  The Company does not own the  underlying  land. In
connection with the acquisition of each of these properties, the Company entered
into either a tri-party  agreement  with the tenant and the owner of the land or
an assignment of interest in the ground lease with the landlord, as described in
Item 1. Business-Leases.

     As of  December  31,  2001,  the Company  had  pledged  426  properties  as
collateral related to the Secured Credit Facility and Bonds Payable.

Description of Properties

     Land. The Company's  property lot sizes range from  approximately  4,000 to
199,000 square feet depending upon building size and local demographic  factors.
Sites  purchased by the Company are in locations  zoned for commercial use which
have been reviewed for traffic patterns and volume.


<PAGE>

     The  following  table  lists  the  properties  owned by the  Company  as of
December 31, 2001 by state. More detailed information  regarding the location of
the  properties  is  contained  in the  Schedule of Real Estate and  Accumulated
Depreciation filed with this report.

                                                               Total Number of
                    State                                  Restaurant Properties

                   Alabama                                             23
                   Arizona                                             18
                   California                                          35
                   Colorado                                            13
                   Connecticut                                          1
                   Delaware                                             1
                   Florida                                             84
                   Georgia                                             23
                   Idaho                                                3
                   Illinois                                            27
                   Indiana                                              9
                   Iowa                                                 7
                   Kansas                                               8
                   Kentucky                                             9
                   Louisiana                                           11
                   Maryland                                             7
                   Michigan                                            13
                   Minnesota                                           10
                   Mississippi                                          9
                   Missouri                                            28
                   Nebraska                                             3
                   Nevada                                               4
                   New Hampshire                                        3
                   New Jersey                                           6
                   New Mexico                                           4
                   New York                                             4
                   North Carolina                                      23
                   Ohio                                                52
                   Oklahoma                                            10
                   Oregon                                               6
                   Pennsylvania                                        11
                   Rhode Island                                         1
                   South Carolina                                      13
                   Tennessee                                           33
                   Texas                                               85
                   Utah                                                 4
                   Virginia                                            22
                   Washington                                          14
                   West Virginia                                       11
                   Wisconsin                                            3
                                                                  --------------
                   TOTAL PROPERTIES                                   651
                                                                  ==============

     Buildings. The buildings generally are rectangular and are constructed from
various  combinations of stucco,  steel,  wood,  brick and tile.  Building sizes
range from approximately  1,000 to 12,700 square feet.  Generally,  buildings on
properties  owned by the Company are  freestanding  and are  surrounded by paved
parking areas.  Buildings are suitable for conversion to various uses,  although
modifications may be required prior to use for other than restaurant operations.
As of December 31, 2001, two of the Company's properties were under construction
or renovation.  Depreciation  expense is computed for buildings and improvements
using the straight-line  method using a depreciable life of 39 years for federal
income tax purposes.  As of December 31, 2001,  the aggregate  depreciated  cost
basis of the properties owned by the Company (including properties owned through
joint ventures) for federal income tax purposes was $443.0 million.

     The  following  table  lists  the  properties  owned by the  Company  as of
December 31, 2001 by restaurant chain.

           Restaurant Chain                          Number of Properties

           Jack in the Box                                      62
           International House of Pancakes                      48
           Golden Corral                                        47
           Pizza Hut                                            44
           Arby's                                               38
           Burger King                                          36
           Bennigan's                                           27
           Chevy's Fresh Mex                                    25
           Black Eyed Pea                                       25
           Steak & Ale                                          20
           Denny's                                              19
           Ruby Tuesday                                         18
           Baker's Square                                       17
           Applebee's                                           15
           Darryl's                                             15
           Other                                               195
                                                              -----
           TOTAL:                                              651
                                                              =====

     Management  considers the  properties to be well  maintained and sufficient
for the Company's operations.

     Management   believes  that  the  properties  are  adequately   covered  by
insurance.  In  addition,  the Company has  obtained  contingent  liability  and
property  coverage.  This insurance is intended to reduce the Company's exposure
in the unlikely event a tenant's  insurance  policy lapses or is insufficient to
cover a claim relating to the property.

     Leases. The Company leases the properties to operators of selected national
and  regional  fast-food  restaurant  chains.  The  leases  are  generally  on a
long-term  "triple  net"  basis,  meaning  that the  tenant is  responsible  for
repairs,  maintenance,  property taxes,  utilities and insurance.  Generally,  a
lessee is required, under the terms of its lease agreement, to make such capital
expenditures as may be reasonably necessary to refurbish  restaurant  buildings,
premises, signs and equipment so as to comply with the lessee's obligations,  if
applicable,  under the  franchise  agreement  to reflect the current  commercial
image of its restaurant  chain.  These capital  expenditures  are required to be
paid by the lessee during the term of the lease.  The terms of the leases of the
properties owned by the Company are described in Item 1. Business - Leases.

     At December 31, 2001,  2000,  1999, 1998 and 1997, the properties were 92%,
95%, 97%, 99% and 100%  occupied,  respectively.  The following is a schedule of
the average rent per property for the years ended December 31:
<TABLE>
<CAPTION>

<c>
                                    2001               2000               1999              1998               1997
                                --------------     --------------    ---------------    --------------     --------------

Rental Revenues (1)               $   84,775,244     $  91,520,103      $  61,907,812      $  33,129,661      $ 15,490,615
Properties (2)                               644               725                642                408               244
Average Rent Per Property         $     131,639      $     126,235      $      96,430      $      81,200      $     63,486
</TABLE>

(1)  Rental  income  includes  the  Company's  share of rental  income  from the
     properties owned through joint venture  arrangements.  Rental revenues have
     been  adjusted,  as  applicable,  for any amounts for which the Company has
     established  an  allowance  for  doubtful  accounts.  Rents do not  include
     properties under construction at December 31, 2001.

(2)  Excludes  properties  that  were  vacant  at  December  31 and that did not
     generate rental revenues during the year.

     The following  table lists  properties  owned by the Company as of December
31, 2001 by tenant and  includes  average  age of  buildings,  annualized  total
rental  revenue and percent of total  revenue.  To  calculate  annualized  total
rental  revenue,  the Company  multiplied  the monthly  rental  revenue for each
restaurant  property  owned and leased at December 31, 2001 by 12 to present the
annualized  rental revenues for a 12 month period.  The Company has not included
any  contingent  rental income in the  calculation  of  annualized  total rental
revenue.
<TABLE>
<CAPTION>

<c>


                                                 Total Number
                                                     of                             Annualized
Tenant                                           Restaurant        Average Age         Total           Percent of
------                                           Properties       of Buildings         Rental        Total Rental
                                                     (1)            (years)         Revenue(2)           Revenue
                                               --------------    --------------    -------------    --------------

IHOP Properties, Inc.                                 48               4.4          $ 5,654,967             7.49%
Jack in the Box Eastern Division, L.P.                33               3.0            3,387,158             4.49%
Jack in the Box, Inc.                                 30               3.1            3,595,382             4.76%
Golden Corral Corporation                             40               3.3            6,404,451             8.48%
S&A Properties Corporation                            40              20.2            6,803,726             9.01%
Castle Hill Holdings V, L.L.C.                        20              18.0              450,472             0.60%
Houlihan's Restaurants, Inc.                          19              21.3            2,785,195             3.69%
Vicorp Restaurant, Inc.                               18              19.7            2,418,886             3.20%
Rio Bravo Acquisitions, Inc.                          15               2.0            3,670,320             4.86%
Other                                                339               7.9           40,329,913            53.42%
                                                    -----                          -------------      ------------
Total                                                602                            $75,500,470           100.00%
                                                    =====                          =============      ============
</TABLE>

(1)  Excludes  properties that were vacant at December 31, 2001 and that did not
     generate rental revenues during the year.

(2)  The Company has straight-lined  the contractual  increases in rental income
     over the life of each of the leases in order to calculate rental revenue in
     accordance with generally accepted accounting principles.

     The following  table shows the aggregate  number of leases in the Company's
property  portfolio  which expire each  calendar  year through the year 2016, as
well as the number of leases  which expire  after  December 31, 2016.  The table
does not reflect the  exercise  of any of the  renewal  options  provided to the
tenant under the terms of such leases.
<TABLE>
<CAPTION>

<c>
                                                                                 Base Rent
                                                                --------------------------------------------
         Year                              Number (1)               Amount(2)                 Percent
         ----
                                        ------------------      ------------------       -------------------

          2002                                    12                   $ 700,154                  0.89%
          2003                                    --                          --                     --
          2004                                     1                     100,935                  0.13%
          2005                                     8                     892,500                  1.14%
          2006                                     7                     679,942                  0.87%
          2007                                    --                          --                     --
          2008                                     2                     217,492                  0.28%
          2009                                     2                     179,208                  0.23%
          2010                                    13                   1,339,350                  1.71%
          2011                                    19                   2,452,643                  3.13%
          2012                                    33                   4,645,518                  5.93%
          2013                                    39                   4,591,102                  5.86%
          2014                                    87                  14,018,265                 17.89%
          2015                                    37                   4,657,197                  5.94%
          2016                                    70                   4,939,217                  6.30%
       Thereafter                                299                  38,934,403                 49.70%
                                            ---------             ---------------             ----------
           Total                                 629                 $78,347,926                100.00%
                                            =========             ===============             ==========

</TABLE>

(1)  Excludes properties for which the leases have been terminated.

(2)  The Company has straight-lined  the contractual  increases in rental income
     over the life of each of the leases in order to calculate rental revenue in
     accordance with generally accepted accounting principles.


Item 3.  Legal Proceedings

     As of December 31, 2001,  neither the Company nor any of its properties was
a party to or the subject of any material pending legal proceedings.


Item 4.  Submission of Matters to a Vote of Security Holders

         None.


                                     PART II


Item 5.  Market for Registrant's Common Equity and Related Stockholder Matters

     As of March 15, 2002,  there were 32,357  stockholders  of record of common
stock. There is no public trading market for the Company Shares, and even though
the Company intends to list the Company Shares on the New York Stock Exchange or
other  national  securities  exchange or  over-the-counter  market no later than
December 31, 2005,  there is no  assurance  that listing will occur.  If listing
occurs,  there is no assurance  that a public market for the Company Shares will
develop.  In October  1998,  the Board of  Directors  elected to  implement  the
Company's  redemption  plan.  Under the redemption  plan, the Company elected to
redeem Company Shares,  subject to certain  conditions and  limitations.  During
1999, the Company  terminated the redemption  plan. As of December 31, 2001, the
Company  estimates  that the  fair  value  per  share is  $17.13.  (For  Florida
intangible  tax purposes,  this is the  equivalent of the Just Value per share.)
The Company  obtained this  valuation  from a third party firm,  which based its
valuation on an analysis of comparable  publicly  traded real estate  investment
trusts and a discounted  cash flow analysis.  Because the Company Shares are not
publicly  traded,  investors are cautioned  that the estimated fair value of the
shares may not be realized upon sale of the shares.

     The Company expects to make  distributions to the stockholders  pursuant to
the  provisions of the Articles of  Incorporation.  For the years ended December
31, 2001 and 2000, the Company declared cash  distributions of $66.5 million and
$66.3 million,  respectively, to stockholders.  For federal income tax purposes,
20 percent and 40 percent of distributions paid in 2001 and 2000,  respectively,
were   considered  to  be  ordinary  income  and  80  percent  and  60  percent,
respectively,  were considered to be a return of capital. No amounts distributed
to  stockholders  for the years ended December 31, 2001 and 2000 are required to
be or have been  treated by the Company as a return of capital  for  purposes of
calculating the stockholders'  return on their invested  capital.  The following
table  presents  total  distributions  and  distributions  per Company Share (In
Thousands, except for per share data):
<PAGE>

<TABLE>
<CAPTION>

<c>
                                 First             Second             Third             Fourth             Year
                             --------------    ---------------    --------------    ---------------   ---------------
  2001 Quarter
  Total distributions
      declared                      $16,582            $16,582           $16,582           $16,720            $66,467
  Distributions per
      Share                            0.38               0.38              0.38              0.38               1.52

  2000 Quarter
  Total distributions

      declared                      $16,582            $16,582           $16,582           $16,582            $66,330
  Distributions per
      Share                            0.38               0.38              0.38              0.38               1.52

</TABLE>

     In March 2002, the Company declared  distributions to stockholders of $16.8
million ($0.38124 per Share) payable in March 2002.

     The Company  intends to continue  to declare  distributions  of cash to the
stockholders.

Item 6.  Selected Financial Data (In Thousands)

<TABLE>
<CAPTION>

<c>
                                           2001             2000            1999            1998            1997
                                       --------------   --------------  --------------  --------------   ------------
Year ended December 31:
    Revenues                               $ 264,815        $ 116,633        $ 75,501        $ 42,187       $19,458
    Net earnings/(loss)                      (24,452)           2,927         (49,837)         32,152        15,564
    Cash distributions declared               66,466           66,329          60,079          39,449        16,854
    Funds from operations (2)                 32,080           32,688          45,455          37,191        17,733
    Earnings/(loss) per Share (1)              (0.56)            0.07           (1.26)           1.21          1.33
    Cash distributions declared
       per Share (1)                            1.52             1.52            1.52            1.52          1.49
    Weighted average number
       of shares outstanding (1)              43,590           43,496          39,403          26,648        11,712

At December 31:
    Total assets                         $ 1,559,114      $ 1,599,503      $1,138,193        $680,352      $339,078
    Long-term obligations                    484,815          312,484              --              --            --
    Total stockholders' equity (3)           526,182          607,738         672,214         660,810       321,638

</TABLE>

(1)  All Share and per Share  amounts have been  restated  herein to reflect the
     one-for-two reverse stock split.

(2)  Funds from  operations  are net  earnings  determined  in  accordance  with
     Generally Accepted Accounting  Principles  ("GAAP") excluding  depreciation
     and  amortization,  gains  and  losses on sale of real  estate,  impairment
     provisions  and  nonrecurring  items of income and expense of the  Company.
     Funds from operations are generally  considered by industry  analysts to be
     the most  appropriate  measure of  performance.  FFO (i) does not represent
     cash generated from operating activities determined in accordance with GAAP
     (which, unlike FFO, generally reflects all cash effects of transactions and
     other events that enter into the  determination  of net earnings),  (ii) is
     not  necessarily  indicative of cash flow  available to fund cash needs and
     (iii) should not be considered as an alternative to net earnings determined
     in  accordance  with  GAAP  as an  indication  of the  Company's  operating
     performance,  or to cash  flow  from  operating  activities  determined  in
     accordance  with GAAP as a measure  of either  liquidity  or the  Company's
     ability to make  distributions.  Accordingly,  the Company believes that in
     order to facilitate a clear  understanding of the  consolidated  historical
     operating  results of the Company,  FFO should be considered in conjunction
     with  the  Company's  net  earnings  and  cash  flows  as  reported  in the
     accompanying  consolidated financial statements and notes thereto. However,
     the  Company's  measure of FFO may not be  comparable  to similarly  titled
     measures of other REITS because these REITS may not apply the definition of
     FFO in the same manner as the Company.

(3)  Includes  subscriptions  received  of $0, $0,  $210,736,  $385,523,966  and
     $222,482,560,  net of  stock  issuance  costs  of  $1,493,437,  $1,493,436,
     $1,662,749,  $38,415,512  and  $22,422,045 for the years ended December 31,
     2001,  2000,  1999,  1998 and 1997,  respectively,  and net of $50,891  and
     $639,528 of common  stock shares  retired for the years ended  December 31,
     1999 and 1998,  respectively.  Stock  issuance  costs  consist  of  selling
     commissions,  marketing  support and due  diligence  expense  reimbursement
     fees,  soliciting  dealer  servicing fees and  organizational  and offering
     expenses.  The ratio of stock issuance costs to subscriptions  received was
     0, 0,  1:0.13,  1:10 and 1:10  during  2001,  2000,  1999,  1998 and  1997,
     respectively.





<TABLE>
<CAPTION>

<c>

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations
</TABLE>

     The following information,  including, without limitation, the Quantitative
and Qualitative Disclosures About Market Risk that are not historical facts, may
be  forward-looking  statements  within  the  meaning  of  Section  27A  of  the
Securities Act of 1933 and Section 21E of the  Securities  Exchange Act of 1934.
These  statements  generally  are  characterized  by the  use of  terms  such as
"believe,"   "expect"  and  "may."  Although  the  company   believes  that  the
expectations  reflected  in  such  forward-looking  statements  are  based  upon
reasonable  assumptions,  the company's  actual results could differ  materially
from those set forth in the forward-looking statements. Factors that might cause
such a difference include:  changes in general economic  conditions,  changes in
real  estate  conditions,  availability  of capital  from  borrowings  under the
company's credit facilities, the availability of other debt and equity financing
alternatives,  changes in interest  rates  under the  company's  current  credit
facilities and under any  additional  variable rate debt  arrangements  that the
company  may enter into the  future,  the  ability of the  company to  refinance
amounts  outstanding  under its credit facilities at maturity on terms favorable
to the company,  the ability of the company to locate  suitable  tenants for its
restaurant  properties  and  borrowers  for its mortgage  loans,  the ability of
tenants and borrowers to make payments under their  respective  leases,  secured
equipment  leases or  mortgage  loans,  the  ability of the  company to re-lease
properties  that are  currently  vacant or that become vacant and the ability of
the company to  securitize  or sell  mortgage  loans on a  favorable  and timely
basis.  Given  these  uncertainties,  readers are  cautioned  not to place undue
reliance on such statements.

Organization and Business

     CNL American  Properties  Fund,  Inc.  ("CNL-APF"  or the  "Company")  is a
self-advised  real  estate  investment  trust  ("REIT")  operating  as a holding
company  for  two  primary  subsidiary  operating   companies,   CNL  Restaurant
Properties,  Inc. and CNL Franchise  Network,  Corp.  The Company was founded in
1994 and at December 31, 2001, has financial  interests in over 1,200 properties
diversified among more than 100 restaurant  concepts in 47 states. The Company's
total real estate  holdings  subject to lease  includes 800  properties of which
approximately  150  properties  are classified as held for sale. At December 31,
2001, the servicing  portfolio of net lease  properties  and mortgages  included
over 2,500 units of which over 1,300 are serviced on behalf of third parties.

     The  Company's  operations  are divided  into two business  segments,  real
estate and specialty  finance.  The real estate  segment,  operated  principally
through the Company's  wholly owned subsidiary CNL Restaurant  Properties,  Inc.
("CNL-RP") and its subsidiaries, is charged with overseeing and maximizing value
on a  portfolio  of  primarily  long-term  triple-net  lease  properties.  Those
responsibilities   related  to  the  real  estate  segment   include   portfolio
management,  property management and dispositions.  In addition,  CNL-RP manages
approximately  $649.9 million in affiliate  portfolios and earns management fees
related thereto.  The specialty finance segment,  operated through the Company's
wholly-owned subsidiary CNL Franchise Network Corp ("CNL-FNC") and a partnership
with Bank of America, CNL Franchise Network, LP ("CNL-FN") and its subsidiaries,
delivers financial solutions in the forms of financing,  servicing,  development
and advisory services to national and regional restaurant operators.

     Effective January 1, 2001,  CNL-FNC elected to be treated as a taxable REIT
subsidiary  ("TRS") pursuant to the provisions of the REIT Modernization Act. As
a TRS,  CNL-FNC will be able to engage in activities that would  previously have
caused income to the Company from CNL-FN to be disqualified  from being eligible
REIT  income  under the  federal  income  tax  rules  governing  REITs.  CNL-FNC
originates  mortgages and triple-net  lease properties for sale to third parties
and, in some cases,  securitization.  CNL-FNC  also  performs net lease and loan
servicing  on behalf of third  parties.  While the  Company  intends to continue
managing its existing core portfolio of real estate leases and loans, management
expects that the activities of CNL-FNC will be an increasingly  significant part
of the Company's business on a going-forward basis.

Liquidity and Capital Resources

CNL American Properties Fund, Inc.

     CNL-APF is primarily a holding company that receives distributions from its
two primary  subsidiaries,  CNL-RP and CNL-FNC. In 2001, CNL-APF did not receive
any distributions from CNL-FNC.  CNL-APF  distributions to stockholders  totaled
approximately $66.5 million in 2001, compared to $66.3 million and $60.1 million
in 2000 and 1999,  respectively.  The 2001  distribution  was  primarily  funded
through  distributions  from CNL-RP, but also included a loan from an affiliate,
which was subsequently  converted to stock,  stock purchases by an affiliate and
borrowings  on the Company's  line of credit.  No amounts  distributed  or to be
distributed to the stockholders as of March 15, 2002, are required to be or have
been treated by the Company as a return of capital for  purposes of  calculating
the stockholders' return on their invested capital.

     Because the Company is  committed  to reinvest  cash flow in the  specialty
finance segment as opposed to distributing  excess cash, the Company's Chairman,
through a private company affiliate,  CNL Financial Group, Inc.,  advanced $12.4
million to the Company during 2001 to ensure that the Company could maintain its
historical  distribution  level to  stockholders.  The  Company  is  pursuing  a
strategy built around CNL-RP's strong capital base and stable cash flows coupled
with CNL-FNC's  specialty finance growth business.  In 2002, the Company intends
to reinvest the majority of excess cash flows or pay down debt in its  specialty
finance business and not distribute those funds.

Specialty Finance Segment (CNL Franchise Network Corporation)

     In June 2000 the Company  divided its  operations  into the real estate and
specialty  finance  businesses.  The objective of the Company was to combine the
real estate segment, an entity with a strong capital base and stable cash flows,
with a  specialty  finance  growth  business  that  could  partner  with a large
financial institution and provide an additional source of liquidity. The Company
and Bank of America  entered into an alliance in June 2000 that provided a broad
product  offering  primarily  focused on the  origination  of triple-net  lease,
securitized  debt and  portfolio  loan  financing.  The  portfolio  loan product
provided CNL-FN fees without  assuming  ownership risk. In forming the alliance,
the Company invested certain of its CNL-RP assets and operations into CNL-FN and
Bank of America provided CNL-FN with a $43.75 million subordinated debt facility
and a $500.0 million warehouse credit facility.  The business strategy of CNL-FN
targeted the  origination of triple-net  leases and loans,  temporarily  putting
those assets on warehouse credit facilities and periodically  securitizing those
assets.  In a  securitization  the Company sells or transfers a pool of loans or
properties with triple-net  leases to certain special purpose entities which, in
turn,  issue to  investors  securities  backed  by an  interest  in the  revenue
originating from the loans or triple-net  leases.  These transactions serve as a
way to recycle and diversify capital.

     The Company  expected to continue its business of  originating  securitized
loans and net leases and selling or refinancing these assets in future franchise
securitizations,  having  completed  similar  transactions  in 1998 and 1999. In
August of 2000 the Company  successfully  completed the first  securitization of
triple-net  leases in the franchise  asset class,  which is a refinancing  under
accounting rules.  However,  the franchise  asset-backed  securitization  market
began to experience  considerable volatility in late 2000 and throughout 2001 as
a result of rising  delinquencies  among  previously  securitized  loan pools of
competitors.  In addition, falling treasury rates,  macroeconomic  uncertainties
and sluggish  restaurant sales contributed to market  volatility.  What resulted
were wider bond spreads that translated into investors demanding higher interest
rates on the  securities  issued in  securitizations  and an increase in ratings
actions.  In public  securitizations,  the  quality of the  underlying  loans is
periodically reviewed by rating agencies to affirm the ratings originally issued
on the bonds sold to  investors.  Should an issuer suffer a ratings  action,  it
could result in material adverse consequences  impacting the issuer's ability to
successfully   sell  or  refinance  the  loans  underlying  the   securitization
transaction  and thereby render future forays into  securitization  transactions
uneconomical.  Many  of the  Company's  competitors  experienced  downgrades  or
ratings actions on bonds previously  issued,  and either shut down operations or
did not have the capital to continue to originate new financing.  The Company to
date has  avoided  any rating  action of  previously  securitized  loan or lease
pools.

     The events in the franchise finance sector resulted in CNL-FN using private
market sales channels to either refinance or sell  approximately  $162.5 million
in loans  during  2001.  At December  31,  2001,  the Company is holding  $430.2
million in debt from warehouse credit  facilities.  This debt was collateralized
by $315.8  million in  mortgage  loans held for sale and $171.6  million in real
estate held for sale. As a result of the market volatility,  in October 2001 the
Company  and Bank of  America  renegotiated  certain  terms  of their  strategic
alliance. The following points summarize the noteworthy developments:

     o   Bank of America  agreed to  provide a $10.0  million  unsecured  credit
         facility (the "Liquidity  Facility") to CNL-RP.  The Liquidity Facility
         is for a term of one year and contains an option to extend the facility
         subject to renewal  of the  warehouse  credit  facility  maintained  by
         CNL-FN.  CNL-RP then  entered  into a $10.0  million  unsecured  credit
         facility  (the  "Mirror   Credit   Facility")   with  CNL-FN  that  has
         substantially the same terms as the Liquidity Facility.  The purpose of
         the Mirror  Credit  Facility is to augment the  liquidity of CNL-FN for
         working  capital  and meeting  any margin  calls on CNL-FN's  warehouse
         credit facilities.

     o   Bank of America  agreed to provide a two-year  $30.0 million  unsecured
         revolving credit facility (the "Revolver") to CNL-RP in connection with
         the payoff of CNL-RP's then-current revolving credit facility.

     o   CNL-FN  agreed to  remove or sell by  October  13,  2002  approximately
         $187.0 million in restaurant  loans currently held as collateral  under
         the Bank of  America  warehouse  credit  facility.  CNL-FN  and  CNL-RP
         provided a guarantee of $15.0 million, which will be reduced ratably as
         certain  conditions  are  met,  including  the  removal  or sale of the
         restaurant  loans.  In the event a balance  exists on October 13, 2002,
         CNL-FN, or CNL-RP in the event CNL-FN does not have adequate liquidity,
         will  remit  the  balance  of the  guarantee  to  Bank  of  America  as
         additional enhancement capital against the remaining balance.

     o   CNL-FN  and  CNL-RP  agreed  to a $15.0  million  guarantee  on Bank of
         America's subordinated debt facility,  which consists of a note payable
         having an outstanding amount of $43.75 million as of December 31, 2001.
         The $15.0 million  guarantee has  provisions  for its reduction tied to
         achievement of an earnings target,  full  availability of the Liquidity
         Facility  and the  removal  of the $187.0  million  in loans  described
         above.   CNL-FN  may  also  prepay  the   subordinated   note.  If  the
         subordinated  note  guarantee is not paid by October 13, 2002,  Bank of
         America  will  have a  one-month  option  to  convert  the  outstanding
         guarantee  to a  preferred  security  of CNL-RP with a face value of 80
         percent of the outstanding  guarantee.  The terms will be substantially
         equivalent to the subordinated note.

     o   Bank of America agreed to forfeit a conversion feature on $15.0 million
         of the $43.75 million  subordinated note, which reduced their potential
         ownership percentage of CNL-FN from 29.12 percent to 22.28 percent.

     o   Bank of America  agreed to renew its  warehouse  credit  facility  with
         CNL-FN.  Step-down  provisions take the facility from $325.0 million to
         $275.0 million by April 1, 2002.

     During 2001,  recognizing  the  volatility  in the  franchise  asset-backed
securitization  market,  the Company  redirected the origination  efforts of its
specialty finance segment to triple-net  leases. A triple-net lease is a form of
financing to a restaurant operator whereby the Company purchases the real estate
and  subsequently  leases  it to  the  restaurant  operator  under  a  long-term
triple-net  lease.  The triple-net lease is a long-term lease with periodic rent
increases  and requires the tenant to pay  expenses on the  property.  The lease
somewhat  insulates  the Company from  requiring  significant  cash outflows for
maintenance,  repair or insurance;  however, if the tenant experiences financial
problems, rental payments could be interrupted.

     The Company also explored alternatives in which to direct its existing loan
and lease assets,  including the tax-deferred real estate exchange market. While
asset  securitization  is one sales channel for loans or leases,  another is the
tax-deferred  real estate  exchange  market  allowed  under  Section 1031 of the
Internal  Revenue  Code  ("Section  1031  Exchanges").  Generally,  Section 1031
Exchanges  allow an investor who realizes a gain from selling  appreciated  real
estate to defer paying taxes on such gain by  reinvesting  the sales proceeds in
like-kind  real estate.  In addition,  the Company is a partner in a partnership
with a third party client through which similar  activities  are performed.  The
Company and its partnership sold  approximately  $108.0 million  generating $9.1
million in gains in Section  1031  exchanges in 2001.  The Company  expects this
sales channel to grow  significantly in 2002. In addition,  CNL-FN will continue
to  investigate  other sales  channels in which to direct its existing  loan and
lease assets while the securitization market remains unappealing.

     In 2001,  CNL-FNC's primary cash flows were derived from lease and interest
income earned in excess of interest expense paid ("net spread"),  net gains from
Section 1031 Exchanges and servicing revenues. Significant cash outflows consist
of operating  expenses and capital  enhancements in the loan portfolio.  Through
its warehouse credit facility  provided by Bank of America and by another lender
to its subsidiary,  CNL-FN,  CNL-FNC enjoyed a credit capacity of $525.0 million
as of December 31,  2001.  The  facilities  are  periodically  marked-to-market,
incorporating both asset securitization  market assumptions,  assumptions on the
Company's derivatives and delinquency assumptions.  Primarily as a result of the
volatility  in the  franchise  asset-backed  sector  in 2001,  CNL-FN  met $21.2
million in capital enhancements on its facilities.  Over the course of the year,
CNL-FN had fully drawn its subordinated  note payable and in February 2002, drew
$5.0 million on the Mirror Credit Facility.

     In 2002,  the  Company  intends  to focus  origination  efforts  within its
specialty  finance segment on the triple-net lease financing  product.  CNL-FN's
warehouse  facilities provide advances for approximately 95 percent of appraised
real estate value. The Company expects the remaining five percent to be provided
by cash flow from CNL-FN's operations.  Cash from operations could be negatively
impacted if interest rates increased significantly, reducing the net spread.

     At December 31, 2001,  CNL-FN has  approximately  $51.9  million in capital
supporting its loan and lease  portfolio.  During 2002, as the loans are sold or
refinanced and the leased  restaurant  properties are sold, part of that capital
is expected to be released.  CNL-FN  expects to reinvest  most of its capital in
new  loans or  triple-net  leases  in 2002.  Should  CNL-FN  meet its  financial
performance  objectives in 2002, it will consider  making a distribution  to the
Company in the fourth quarter of 2002.

     Liquidity risks within the Company's  specialty finance segment include the
possible  occurrence of economic events that could have a negative impact on the
franchise   asset-backed   securitization  market  and  affect  the  quality  or
perception   of  the  loans  or  leases   underlying   CNL-FN's   securitization
transactions.  The quality of the  securitized  loans and leases is periodically
reviewed by rating agencies to affirm or alter the ratings  originally issued on
the bonds sold to investors.  Upon the  occurrence  of a  significant  amount of
delinquencies  and/or  defaults,  one or more of the three  rating  agencies may
choose to place a specific transaction on ratings watch or even downgrade one or
more classes of  securities to a lower  rating.  Conversely,  upon above average
performance of the securities backed by a specific pool of loans or leases,  one
or more  rating  agencies  could also chose to  upgrade a given  transaction  by
changing the original rating on one or more  securities to a higher rating.  The
predecessor  to CNL-FN  executed  a public  securitization  in  August  1998 and
subsequently  CNL-FN executed a public  securitization  in November 1999 whereby
approximately  $571.7  million in loans were sold to a  third-party  entity that
subsequently  issued  securities to investors.  In addition,  CNL-FN  executed a
private  structured  note offering in 2001 that refinanced  approximately  $60.8
million in loans  transferred  to a consolidated  special  purpose  entity.  The
entity  subsequently  issued $42.6  million in  securities  to an investor.  The
entities on all three of these  transactions are bankruptcy  remote entities and
are separate legal entities whose assets are not available to satisfy the claims
of creditors of the Company,  any  subsidiary or its  affiliates.  To date,  the
ratings  on the loans  underlying  the  securities  issued in all three of these
transactions  have been  affirmed.  Should the loans  underlying  the securities
undergo a negative  ratings action,  CNL-FN could  experience  material  adverse
consequences  impacting its ability to successfully sell or refinance the $187.0
million in loans  related  to the $15.0  million  guarantee  in favor of Bank of
America,  and could  suffer  effects  limiting  its  ability to engage in future
securitization  transactions.  To potentially avoid those  consequences,  CNL-FN
could choose to contribute capital to serve as additional  collateral supporting
one or more of these  entities used to facilitate a  securitization  in order to
avoid a negative ratings action.

     In summary,  the Company's  specialty  finance  segment expects to meet its
liquidity  requirements  in 2002 with a combination of cash from  operations and
borrowings  on the  warehouse  credit  facilities.  CNL-FN  renews its warehouse
credit facilities annually and to date has been successful in doing so. CNL-FN's
longer-term liquidity requirements are expected to be met through the successful
renewal  of  its  warehouse  credit  facilities,  successful  execution  of  the
Company's Section 1031 Exchange business, portfolio debt origination fees, asset
securitizations  and augmented by operating cash flows provided by servicing and
advisory services. However, there can be no assurance that future expansion will
be successful due to competitive, regulatory, market, economic or other factors.

Real Estate Segment (CNL Restaurant Properties, Inc.)

     CNL-RP  operates  as a real  estate  company  and its cash flows  primarily
consist of rental income from tenants on restaurant  properties owned,  interest
income on mortgage  loans,  dispositions  of properties  and income from holding
residual  interests in prior loan  securitizations.  The Company's cash outflows
are  predominantly  interest  expense,   operating  expenses,   reinvestment  of
disposition proceeds and distributions to the Company.

     CNL-RP's  short-term debt includes the $30.0 million  Revolver entered into
in October 2001 and a $48.7 million secured note payable entered into in October
1999 (the "Secured Credit  Facility").  The Secured Credit  Facility  matures on
February 18, 2003 and CNL-RP anticipates  selling properties to pay off the note
during 2002. The Company, from time to time, utilizes the Revolver to manage the
timing of inflows and outflows.  The Company's  Revolver is a two-year facility,
maturing in October 2003, and includes a one-year  renewal  option.  At December
31, 2001, the Revolver had an outstanding balance of $10.0 million.

     CNL-RP also had medium-term and long-term bond financing.  In October 2001,
CNL-RP issued $132.0 million in medium-term bonds,  Series 2001. The bonds carry
an interest rate of LIBOR plus 48 basis points and mature in 2006. The bonds are
collateralized  by 119 properties with a carrying value of approximately  $179.6
million.  Proceeds  from the bond  issuance  were  applied to pay down  CNL-RP's
previous  $125.0  million  Revolver  and the  Secured  Credit  Facility by $45.0
million.  In August 2000, CNL-RP issued Triple Net Lease Mortgage Bonds,  Series
2000-A.  The bonds had an  aggregate  principal  balance of $280.9  million with
anticipated  maturities  of August 2009 (Class A-1) and April 2017 (Class  A-2).
The  debt is fixed  at a rate of  7.925  percent.  At  December  31,  2001,  the
outstanding  principal balance on the Series 2000-A bonds was $270.4 million and
was  collateralized  by 257 properties  with a carrying  value of  approximately
$332.6 million.

     In  2002,  CNL-RP's  strategy  for the  Secured  Credit  Facility  includes
refinancing  the facility or selling  properties,  the proceeds of which will be
applied to pay off the Secured Credit Facility and principal  obligations on the
Series 2001 and Series 2000-A  long-term bond  financings.  In addition,  CNL-RP
will  continue  to sell  non-performing  and under  performing  assets  and will
reinvest those proceeds in higher-yielding investments.

     Liquidity risks within the real estate business  include the potential that
a tenant's financial condition could deteriorate, causing it to fail to make its
rent payments and thereby  reducing  CNL-RP's income.  Generally,  CNL-RP uses a
triple-net lease to lease its properties to its tenants. The triple-net lease is
a long-term  lease with periodic  rent  increases and requires the tenant to pay
expenses on the property.  The lease  somewhat  insulates  CNL-RP from requiring
significant cash outflows for maintenance,  repair or insurance; however, if the
tenant experiences financial problems, rental payments could be interrupted.

     In addition,  CNL-RP faces other liquidity risks, including the possibility
that it will be unable to meet its obligations under the Secured Credit Facility
and the possibility  that it could be liable for the $15.0 million  guarantee on
Bank of America's  subordinated  debt  facility if CNL-FN fails to remove $187.0
million of restaurant loans currently  residing on the Bank of America warehouse
credit  facility by October 13, 2002. In the event that CNL-RP  defaulted on its
obligations  under the Secured  Credit  Facility,  CNL-RP  would have to pay the
outstanding  balance,  which could  materially  adversely  affect the  Company's
liquidity and capital resources.

     CNL-RP  believes the  combination of availability on its line of credit and
the projected  disposition  volume in 2002 will permit it to meet its short-term
liquidity  objectives.  Long-term  liquidity  requirements will be met through a
combination  of selectively  disposing  assets and  reinvesting  the proceeds in
higher-yielding investments and cash from operating activities.

Interest Rate Risk

     Floating interest rates on the Revolver, Secured Credit Facility,  Mortgage
Warehouse Facility and the 2001 Series bonds expose the Company to interest rate
risk. As of December 31, 2001,  the Company had $10.0  million,  $48.7  million,
$430.2 million and $130.4 million outstanding under its Revolver, Secured Credit
Facility,  Mortgage  Warehouse  Facility and the 2001 Series bonds.  The Company
believes  it has  mitigated  this  risk by  entering  into  interest  rate  swap
agreements and an interest rate cap agreement,  which the Company  believes will
reduce the impact of fluctuating interest rates on its floating rate debt.

     In addition,  the Company invests in certain financial instruments that are
subject to various  forms of market  risk such as  interest  rate  fluctuations,
credit  risk and  prepayment  risk.  Management  believes  that the value of its
mortgage  loans held for sale and  investments  held for sale could  potentially
change as a result of fluctuating  interest rates, credit risk, market sentiment
and other external forces, which could materially adversely affect the Company's
liquidity and capital resources.

     Generally,  the Company uses derivative  financial  instruments  (primarily
interest rate swap  contracts) to hedge against  fluctuations  in interest rates
from the time it originates and holds  fixed-rate  mortgage loans until the time
it sells them.  The Company will terminate  certain of these  contracts and both
the gain or loss on the sale of the loans and the additional gain or loss on the
termination  of the interest rate swap  contracts are measured and recognized in
the consolidated statement of operations. Under interest rate swaps, the Company
agrees with other parties to exchange,  at specified  intervals,  the difference
between fixed-rate and floating-rate interest amounts calculated by reference to
an agreed upon notional principal amount.

     Management  estimates  that a  one-percentage  point  increase in long-term
interest  rates as of December 31, 2001 would have resulted in a decrease in the
fair value of its fixed-rate loans of $14.6 million.  This decline in fair value
would have been offset by an increase in the fair value of certain interest rate
swap positions of $11.8 million. In addition, a one-percentage point increase in
short-term  interest  rates for the year  ended  December  31,  2001  would have
resulted in  additional  interest  costs of  approximately  $6.5  million.  This
sensitivity  analysis contains certain simplifying  assumptions (for example, it
does not  consider  the impact of changes in  prepayment  risk or credit  spread
risk).  Therefore,  although it gives an indication of the Company's exposure to
interest  rate  change,  it is not  intended to predict  future  results and the
Company's actual results will likely vary.

     Management believes inflation has not significantly  affected the Company's
earnings  because the inflation rate has remained  moderate.  Additionally,  the
Company's earnings  primarily reflect long-term  investments with fixed rents or
interest rates. The Company mainly finances these investments with a combination
of equity,  senior notes and borrowings  under the revolving  lines of credit or
warehouse  facilities.   During  inflationary   periods,   which  generally  are
accompanied  by rising  interest  rates,  the  Company's  ability to grow may be
adversely affected because the yield on new investments may increase at a slower
rate than new borrowing  costs.  However,  sustained low inflation could lead to
net lease  pricing  pressure  as  tenants  request  decreasing  rates for longer
maturities.

Critical Accounting Policies

     The Company  records the  acquisition  of land,  buildings and equipment at
cost,  including  acquisition,  closing and construction  period interest costs.
Land and buildings are leased to restaurant  operators generally on a triple-net
basis,  which means that the tenant is  responsible  for all operating  expenses
relating to the property,  including property taxes, insurance,  maintenance and
repairs.  The  property and secured  equipment  leases held for  investment  are
accounted for using either the direct  financing or the operating  method unless
the Company has classified these properties pursuant to their intent to sell. In
connection  with lease  accounting,  management  estimates  residual  values and
collectable rents.

     Management reviews its properties and loans for impairment  whenever events
or changes in circumstances  indicate that the carrying amount of the assets may
not be  recoverable.  Management  determines  whether  impairment  in value  has
occurred by comparing the estimated future  undiscounted  cash flows,  including
the residual value of the property or collateral,  with the carrying cost of the
individual  asset.  If  impairment  is  indicated,  the assets are  adjusted  to
estimated fair value.

     Mortgage loans held for sale are loans  originated that the Company intends
to sell or securitize. They are recorded at fair market value which is estimated
using  quoted  prices,  the  present  value of the  expected  cash flows and the
estimated  impact of any  defaults,  and may  therefore be recorded at an amount
greater than cost.  The Company  utilizes  derivative  instruments  to partially
offset the effect of  fluctuating  interest  rates on the value of its  mortgage
loans  held for sale.  As long as the  Company  qualifies  for hedge  accounting
treatment,  valuation  adjustments relating to these loans,  including increases
above cost, and any gains or losses on related hedge  instruments  are reflected
in the statement of operations.

     Certain  loans  originated by the Company were sold to  independent  trusts
that,  in turn,  issued  securities  to investors  backed by these  assets.  The
Company retains the servicing rights and participates in certain cash flows from
the trusts.  The  present  value of  expected  excess of net cash  flows,  after
payment of principal and interest to bond or other certificate holders, over the
estimated  cost of  servicing  is  recorded  at the  time of sale as a  retained
interest.  Retained  interests  in  securitized  assets  are  included  in other
investments.  Accounting  for the retained  interests  requires that the Company
estimate,  using market trends and historical  experience,  expected prepayments
and defaults.  This  information is considered,  along with prevailing  discount
rates and the terms of the bonds and certificates, to arrive at an initial value
and to periodically review the value for gains or losses. Permanent impairments,
representing the excess of carrying value over estimated current fair value, are
recorded as an expense. Unrealized gains and losses are not reflected in current
earnings  but  are   reflected  in   stockholder's   equity  as  part  of  other
comprehensive income (loss).

     The Company has also entered into certain derivative  contracts in order to
hedge its exposure to  fluctuations  in interest rates on variable rate debt. As
long as certain  criteria for hedge accounting are met the changes in fair value
of these  contracts is reflected in other  comprehensive  income (loss) and as a
component of  stockholders'  equity.  If the requirements are not met changes in
the fair value of these contracts are reflected in earnings.

Results from Operations

     The Company experienced a net loss of $24.5 million in 2001 compared to net
earnings  of $2.9  million  and a net loss of $49.8  million  in 2000 and  1999,
respectively.  The Company  operated as one segment during 1999 and through June
2000,  the date of its strategic  alliance with Bank of America.  Thereafter the
Company operated through its real estate and specialty finance segments. Because
of the lack of  comparability,  the discussion below focuses on the consolidated
financial  performance of the Company. As appropriate,  this discussion includes
information on segment operating results.

Revenues

     Revenues in 2001 were $264.8  million  compared to $116.6 million and $75.5
million in 2000 and 1999,  respectively.  Revenue from sales of real estate were
$105.6 million in 2001 compared to $0.0 in 2000 and 1999.  During the year ended
December 31, 2001 CNL-FN began its program of selling real estate  properties to
private investors in Section 1031 Exchanges,  and as a result the gross proceeds
from Section 1031 Exchanges now appear as a component of operating revenues. The
costs  associated with these sales were $97.6 million and they are now reflected
as a  component  of  expenses.  In  addition,  the  Company  is a  partner  in a
partnership  with a third party client  through  which  similar  activities  are
performed.  During 2001, the Company and its partnership  sold $108.0 million in
restaurant  properties as a Section 1031 Exchange generating $9.1 million in net
gains or partnership earnings.

     Rental income from operating  leases,  earned income from direct  financing
leases and interest  income from mortgage,  equipment and notes  receivables was
$140.3  million in 2001 compared to $107.4 million and $69.1 million in 2000 and
1999, respectively.  The 2001 increase resulted from Company efforts to increase
its base of income earning leases and loans.  The average yield on the loans and
leases in 2001 was 10.0  percent  compared to 9.1  percent in 2000.  The average
outstanding  balance of loans and leases in 2001 was $1.4  billion  compared  to
$1.2 billion in 2000.

     Investment  and interest  income was $5.8 million in 2001  compared to $8.2
million  and $6.7  million  in 2000 and 1999,  respectively.  From  August  1999
through  October 2000 the Company held a residual  investment in a pool of loans
that was subsequently liquidated.

     During the years ended December 31, 2001,  2000 and 1999 the Company earned
$13.9  million,  $7.9 million and $0.3 million,  respectively,  in other income.
This increase is attributable to the inclusion of servicing  operations  revenue
associated  with the  Company's  September  1999  acquisition  of CNL  Financial
Services,  Inc.,  consulting  revenues  associated  with the Company's June 2000
acquisition  of the  operations  of CNL Advisory  Services,  Inc.,  construction
management   services  revenues  associated  with  the  Company's  January  2001
acquisition of CNL Restaurant  Property Services,  Inc. and referral fees earned
from bank product  referrals  associated  with the Company's  June 2000 alliance
with Bank of America.

Expenses

     General  operating and  administrative  expenses were  approximately  $30.4
million,  $24.9 million and $8.8 million for the years ended  December 31, 2001,
2000 and 1999,  respectively.  Effective  September 1, 1999,  the Company became
internally  advised  and  internal  costs to acquire  properties  are  generally
expensed.  In addition,  the Company developed its securitization and investment
sales strategies and incurred  increased costs in managing a maturing  portfolio
throughout 2000 and 2001.  General and  administrative  expenses include amounts
associated with advisory activities subsequent to the acquisition of CAS in June
2000, reflecting a full year in 2001. Also, in January 2001 the Company acquired
the Development Company operations adding approximately $2.9 million in expenses
in this category during the year ended December 31, 2001.

     Interest expense was $68.5 million, $47.6 million and $10.2 million for the
years ended  December 31,  2001,  2000 and 1999,  respectively.  The Company has
continued to expand its operations through increased  property  acquisitions and
origination  of  mortgage  loans  substantially  funded  through  the  Company's
Mortgage Warehouse  Facilities.  The increase in interest expense corresponds to
revenue  growth of $138.6  million  between  2000 and  2001,  and $38.3  million
between 1999 and 2000 as the Company leveraged  additional  volume.  Maintaining
sufficient  volume is key to the Company's  ability to maintain its  competitive
position in this business. The Company has also incurred debt to finance certain
transaction  costs  incurred  in 1999 and  2000  associated  with the  Company's
strategic initiatives.  These include expenses associated with the transition to
an internally  advised REIT,  the proposed  merger with the CNL Income Funds and
with listing the Company's shares,  both of which were  subsequently  withdrawn,
and costs  associated  with the  strategic  alliance  with Bank of  America as a
partner.

     Expense categories such as property expenses, state taxes, and depreciation
and amortization  expenses have reflected and will continue to reflect the level
of assets  invested in leased  properties.  The Company  has  decreased  certain
property  expenses,  in part, through decreasing the length of time necessary to
re-lease a defaulted  tenant's  property.  In addition,  this category  includes
amortization on intangible  assets,  such as goodwill.  During 2001, the Company
has  amortized  $3.1  million  in  goodwill  pursuant  to  existing   accounting
standards.  In July  2001,  the  Financial  Accounting  Standards  Board  issued
Statement of Financial Accounting Standards No. 141 Business  Combinations ("FAS
141") and Statement of Financial Accounting Standards No. 142 Goodwill and Other
Intangible Assets ("FAS 142"). FAS 141 requires business combinations  initiated
after June 30, 2001 to be accounted for using the purchase method of accounting,
and  broadens  the  criteria  for  recording  intangible  assets  separate  from
goodwill.  Recorded  goodwill and intangibles will be evaluated  against the new
criteria and may result in certain intangibles being subsumed into goodwill,  or
alternatively,   amounts  initially  recorded  as  goodwill  may  be  separately
identified  and recognized  apart from  goodwill.  FAS 142 requires the use of a
non-amortization   approach  to  account  for  purchased  goodwill  and  certain
intangibles. Under a non-amortization approach, goodwill and certain intangibles
will not be amortized into results of operations,  but instead would be reviewed
for impairment and written down and charged to results of operations only in the
periods in which the recorded value of goodwill and certain  intangibles is more
than its fair value.  The Company expects that the adoption of these  accounting
standards  will have the impact of reducing  its  amortization  of goodwill  and
intangibles  commencing January 1, 2002; however,  impairment reviews may result
in future periodic write-downs.

     The Company  adopted  Statement of Financial  Accounting  Standards No. 133
("FAS 133"),  as amended,  on January 1, 2001,  which  requires  all  derivative
instruments to be recorded on the balance sheet at fair value. Effective January
1, 2001,  the Company  recorded a  cumulative  effect  adjustment  loss of $21.2
million  to  recognize  at fair  value all  derivative  instruments  at that are
designated as fair-value hedging instruments. The Company recorded an offsetting
cumulative  effect  adjustment gain of $17.4 million to recognize the difference
(attributable  to the hedged risks) between the carrying  values and fair values
of  related  hedged  assets or  liabilities.  The  adoption  of FAS 133  thereby
resulted in a $3.8 million charge against Company earnings.

     Effective January 1, 2001, the Company's subsidiary,  CNL Franchise Network
Corp.  ("CNL-FNC"),  elected to be treated as a taxable REIT subsidiary  ("TRS")
pursuant  to the  provisions  of  the  REIT  Modernization  Act.  As a TRS,  its
operating  partnership,  CNL-FN,  is able to engage in  activities  resulting in
income that  previously  would have been  disqualified  from being eligible REIT
income under the federal income tax regulations. The treatment of loan valuation
adjustments, loss reserves, loan fees, depreciation, and other items for federal
income tax  purposes  differs from the  treatment  of these items for  financial
reporting  purposes.  In the  aggregate,  the Company has an excess of available
future  deductible  items over future taxable items and as such may benefit from
these items when the  taxable  subsidiaries  produce a greater  level of taxable
income.  At present,  the Company has not recorded this potential future benefit
because the subsidiaries  involved do not have sufficient historical earnings on
which to base a potential future benefit.

     Throughout 2001, many economic indicators suggested the U.S. economy was in
recession.  On September  11, the country was  challenged  further by the tragic
events in New York, Washington D.C. and Pennsylvania. Throughout the period, the
government has responded with stimuli in various forms including  action by U.S.
Federal Reserve  policymakers to decrease interest rates. In addition,  Congress
enacted  legislation to decrease personal income tax rates.  Management believes
that the Company will benefit from the stimuli as interest  rates on  short-term
borrowings  have reached  historic lows. In addition,  the  restaurant  industry
should benefit from the economic  stimuli.  While certain  restaurant chains and
franchise  operators in 2001  experienced  financial  difficulties  arising from
diverse factors  including  deterioration  in operations,  over leverage and the
general  economy,  management  expects the Company's  core customer - the casual
dining and quick service franchise operators - to sustain operations during this
downturn.  While management believes its underwriting standards are effective in
assessing  the credit  strength and  management  of a restaurant  operator,  the
Company is not immune from the  cyclical  nature of the business and many of its
clients  may  continue to be affected  by poor  performance  of some  restaurant
chains.  Although the Company's operating lease agreements and loans provide the
Company  the  right  to  terminate  an  investment,  evict an  operator,  demand
immediate  repayment,  or take other  remedies,  bankruptcy  laws afford certain
rights to a party that has filed for bankruptcy or  reorganization.  An operator
in bankruptcy  may be able to restrict the Company's  ability to collect  unpaid
rent or  interest  and to collect  interest  during the  bankruptcy  proceeding.
Further, the Company may be required to fund certain expenses in order to retain
control of the  property or to take  possession  of the property or even control
the franchise, which may expose the Company to successor liabilities and further
affect liquidity.

     In 2001, the Company  recorded $28.2 million in provision for loss on loans
compared to $1.8  million and $1.0  million in 2000 and 1999,  respectively.  In
addition the Company  recorded  $27.2 million in  impairment  provisions in 2001
compared to $2.6  million and $7.8 million in 2000 and 1999,  respectively.  The
provisions  increased  significantly  in 2001  primarily  as a result of Phoenix
Restaurant Group, Inc. and its subsidiaries  (collectively referred to as "PRG")
filing  bankruptcy on October 31, 2001. During 2001, an affiliate of the Company
advanced  approximately  $5.8  million  to PRG.  The  proceeds  were used to pay
outstanding  obligations,  including  obligations  to the  Company.  CNL-RP  has
provided  loans and  equipment  lease or  triple-net  lease  financing to PRG of
approximately $61.2 million.

     In the two weeks prior to the  bankruptcy  filing,  PRG closed 40 operating
Black-Eyed  Pea  units  as  well  as 25  operating  Denny's  units.  With  these
reductions,  PRG now operates 44 Denny's and 48 Black-Eyed  Peas. PRG is seeking
to  reorganize  while  keeping some of its  restaurants  operating.  In order to
permit  continued  operation  of the open stores and  preserve  the value of its
investments  with PRG, the Company entered into a commitment in November 2001 to
advance   $3.5   million  to  PRG  as   interim   financing,   referred   to  as
debtor-in-possession  financing.  As of March 19, 2002, the Company had advanced
$3.25  million  to PRG.  CNL-RP is  analyzing  a  variety  of  alternatives  for
maximizing the value of the remaining investment.

     On January 18, 2002 the Company filed an  involuntary  bankruptcy  petition
against Roadhouse Grill, Inc.,  franchisor of the casual steak chain,  Roadhouse
Grill.  CNL-RP owns 13 Roadhouse Grill properties and CNL-FN owns one. Roadhouse
Grill has not submitted to the petition and ultimately,  the Federal  Bankruptcy
Court will rule on this matter.  The bankruptcy  filing is expected to result in
the return of one or two CNL-RP sites  enabling  management  to sell or re-lease
the  property.  The  Company's  impairment  provisions  include $3.7 million for
Roadhouse Grill which was recorded in the fourth quarter of 2001.

     In January 2002,  Houlihan's  Restaurant  Group ("HRG") filed for voluntary
bankruptcy  under the  provisions of Chapter 11. HRG operates and franchises the
Houlihan's concept, operates the Darryl's and J. Gilbert's concepts and operates
five separately branded seafood  restaurants.  CNL-RP had financed 19 Houlihan's
or Darryl's units totaling $26.3 million. As of January 31, 2002 the leases were
current.  Eleven of the 19 leases have been rejected.  Condemnation proceeds are
in escrow for a partial  taking on one of the eleven  sites.  The  remaining  10
rejected sites have been retaken and marketing  efforts are  proceeding.  All of
the sites  not  rejected  are  currently  operating.  The  Company's  impairment
provisions include $4.9 million for HRG which was recorded in the fourth quarter
of 2001.



Item 7a.   Quantitative and Qualitative Disclosures About Market Risk

This  information  is described  above in Item 7.  Management's  Discussion  and
Analysis of Financial Condition and Results of Operations.


<PAGE>


Item 8.  Financial Statements and Supplementary Data









               Report of Independent Certified Public Accountants



To the Board of Directors and Stockholders of
CNL American Properties Fund, Inc.


In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated statements of operations, of stockholders' equity and comprehensive
income/(loss),  and of cash flows present fairly, in all material respects,  the
financial   position  of  CNL  American   Properties   Fund,  Inc.  (a  Maryland
corporation) and its subsidiaries at December 31, 2001 and 2000, and the results
of their  operations  and their  cash  flows for each of the three  years in the
period  ended  December  31,  2001  in  conformity  with  accounting  principles
generally accepted in the United States of America. In addition, in our opinion,
the financial  statement  schedules  listed in the index  apprearing  under item
14(a) (2) present fairly,  in all material  respects,  the information set forth
therein when read in conjunction with the related  financial  statements.  These
financial statements and financial statement schedules are the responsibility of
the Company's  management;  our responsibility is to express an opinion on these
financial  statements and financial  statment  schedules based on our audits. We
conducted our audits of these  statements in accordance with auditing  standards
generally  accepted in the United States of America,  which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements,  assessing the accounting  principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 1 to the consolidated  financial statements,  on January 1,
2001 the  Company  changed its method of  accounting  for  derivative  financial
instruments.




/s/ PricewaterhouseCoopers LLP
Orlando, Florida
March 19, 2002




<PAGE>





                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                    (In Thousands except for per share data)
<TABLE>
<CAPTION>

<c>
                                                                                      December 31,
                                                                              2001                    2000
                                                                         ---------------         ---------------
ASSETS

Real estate investment properties                                         $    652,218             $    785,604
Net investment in direct financing leases                                      137,104                  169,222
Real estate held for sale                                                      171,564                      ---
Mortgage loans held for sale                                                   315,835                  394,321
Mortgage, equipment and other notes receivable                                 103,962                   72,771
Other investments                                                               32,797                   33,519
Cash and cash equivalents                                                       19,333                   23,772
Restricted cash                                                                 12,456                    1,876
Receivables, less allowance for doubtful accounts
    of $4,315 and $7,257, respectively                                           4,990                    3,370
Accrued rental income                                                           19,322                   16,028
Intangibles and other assets                                                    89,533                   99,020
                                                                       ----------------        -----------------
                                                                          $  1,559,114             $  1,599,503
                                                                       ================        =================

LIABILITIES AND STOCKHOLDERS' EQUITY

Credit facility                                                            $    10,000              $    80,000
Note payable                                                                    48,731                   85,617
Mortgage warehouse facilities                                                  430,169                  463,765
Subordinated note payable                                                       43,750                   34,000
Bonds payable                                                                  441,065                  278,484
Due to related parties                                                           5,201                    6,569
Other payables                                                                  35,505                   24,857
                                                                       ----------------        -----------------
       Total liabilities                                                     1,014,421                  973,292
                                                                       ----------------        -----------------

Minority interests, including redeemable partnership interest                   18,511                   18,473
                                                                       ----------------        -----------------

Commitments and Contingencies (Note 14)

Stockholders' equity:
    Preferred stock, without par value.  Authorized
       and unissued 3,000,000 shares                                                --                       --
    Excess shares, $0.01 par value per share.
       Authorized and unissued 78,000,000 shares                                    --                       --
    Common stock, $0.01 par value per share.  Authorized
       62,500,000 shares, issued 44,112,943 and 43,533,221
       shares, respectively, outstanding 44,075,641 and
           43,495,919 shares, respectively                                         441                      435
    Capital in excess of par value                                             798,154                  789,926
    Accumulated other comprehensive income                                       1,370                      242
    Accumulated distributions in excess of net earnings                       (273,783)                (182,865)
                                                                       ----------------        -----------------
       Total stockholders' equity                                              526,182                  607,738
                                                                       ----------------        -----------------

                                                                          $  1,559,114             $  1,599,503
                                                                       ================        =================
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                    (In Thousands, except for per share data)
<TABLE>
<CAPTION>

<c>
                                                                                Year Ended December 31,
                                                                     2001                 2000                 1999
                                                                 --------------       --------------       -------------

Revenues:
    Sale of real estate                                            $  105,645             $     --            $     --
    Rental income from operating leases                                82,339               69,717              49,755
    Earned income from direct financing leases                         15,145               16,064              12,153
    Interest income from mortgage, equipment and other
       notes receivables                                               42,855               21,589               7,203
    Investment and interest income                                      5,845                8,205               6,683
    Net decrease in value of mortgage loans
       held for sale, net of related hedge                             (5,070)             (6,855)                (551)
    Gain on sale of mortgage loans                                      4,120                   --                  --
    Other income                                                       13,936                7,913                 258
                                                               ---------------      ---------------      --------------
                                                                      264,815              116,633              75,501
                                                               ---------------      ---------------      --------------
Expenses:
    Cost of real estate sold                                           97,587                   --                  --
    General operating and administrative                               30,388               24,946               8,820
    Interest expense                                                   68,542               47,612              10,205
    Property expenses                                                   2,919                2,598               1,316
    State and other taxes                                                 964                1,193                 906
    Depreciation and amortization                                      21,197               17,714              10,346
    Transaction costs                                                      --               10,315               6,799
    Loss on investment in securities                                      122                5,348                  --
    Loss on termination of cash flow hedge accounting                   8,060                   --                  --
    Provision for loss on loans                                        28,200                1,804               1,037
    Advisor acquisition expense                                            --                   --              76,334
    Impairment provisions                                              27,174                2,576               7,779
                                                                                    ---------------      --------------
                                                               ---------------
                                                                      285,153              114,106             123,542
                                                               ---------------      ---------------      --------------
Earnings/(loss) before minority interest in (income)/
  loss of consolidated joint ventures, equity in
  earnings of unconsolidated joint venture and loss
  on sales of assets                                                  (20,338)               2,527             (48,041)
Minority interest in (income)/loss of
    consolidated joint ventures                                          (242)               1,024                 (41)
Equity in earnings of unconsolidated joint venture                      1,106                   97                  97
Loss on sales of assets                                                (1,137)                (721)             (1,852)
                                                               ---------------      ---------------      --------------
Earnings/(loss) before cumulative effect of accounting
    change                                                            (20,611)               2,927             (49,837)
Cumulative effect of accounting change                                 (3,841)                  --                  --
                                                               ---------------      ---------------      --------------
Net earnings/(loss)                                            $      (24,452)      $        2,927       $     (49,837)
                                                               ===============      ===============      ==============

Earnings/(loss) per share of common stock (basic and diluted):
       Before cumulative effect of accounting change           $        (0.47)      $         0.07       $       (1.26)
       Cumulative effect of accounting change                           (0.09)                  --                  --
                                                               ---------------      ---------------      --------------
Net earnings / (loss)                                          $        (0.56)      $         0.07       $       (1.26)
                                                               ===============      ===============      ==============

Weighted average number of shares
    of common stock outstanding                                    43,589,985           43,495,919          39,402,941
                                                               ===============      ===============      ==============

</TABLE>
          See accompanying notes to consolidated financial statements.

<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME/(LOSS)

                  Years Ended December 31, 2001, 2000 and 1999
                                 (In Thousands)
<TABLE>
<CAPTION>

<c>

                                                                       Accumulated    Accumulated
                                       Common stock                   distributions     other                            Compre-
                                    -----------------   Capital in      in excess       compre-                          hensive
                                      Number     Par    excess of         of net        hensive                          Income/
                                    of Shares   value   par value        earnings     income/(loss)       Total           (loss)
                                    ---------   -----   ----------    -------------   -------------    ------------     ----------


Balance at December 31, 1998           37,338   $ 373    $ 669,984    $      (9,547)             --    $    660,810     $       --

Subscriptions received for common
   stock through public offering           11      --          211               --              --             211             --

Stock issuance costs                       --      --       (1,663)              --              --          (1,663)            --

Common stock issued
    through merger                      6,150      62      122,938               --              --         123,000             --

Net loss                                   --      --           --          (49,837)             --         (49,837)       (49,837)

Other comprehensive loss,
    market revaluation on
    available for sale securities          --      --           --               --            (177)           (177)          (177)
                                                                                                                        ----------
Total comprehensive loss                   --      --           --               --              --              --     $  (50,014)
                                                                                                                        ==========
Retirement of common stock                 (3)     --          (51)              --              --             (51)            --

Distributions declared and
    paid ($1.52 per share)                 --      --           --          (60,079)             --         (60,079)            --
                                    ---------  ------   ----------    -------------   -------------    ------------
Balance at December 31, 1999           43,496     435      791,419         (119,463)           (177)        672,214             --

Stock issuance costs                       --      --       (1,493)              --              --          (1,493)            --

Net earnings                               --      --           --            2,927              --           2,927          2,927

Other comprehensive income,
    market revaluation on
    available for sale securities          --      --           --               --             419             419            419
                                                                                                                        ----------
Total comprehensive income                 --      --           --               --              --              --     $    3,346
                                                                                                                        ==========
Distributions declared and
    paid ($1.52 per share)                 --      --           --          (66,329)             --         (66,329)
                                    ---------  -------  ----------    -------------   -------------    ------------

Balance at December 31, 2000           43,496  $   435  $  789,926    $    (182,865)    $      242     $    607,738
                                    =========  =======  ==========    =============   =============    ============

</TABLE>


          See accompanying notes to consolidated financial statements.

<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY AND COMPREHENSIVE INCOME/(LOSS)

                  Years Ended December 31, 2001, 2000 and 1999
                                 (In Thousands)

<TABLE>
<CAPTION>

<c>
                                                                           Accumulated      Accumulated
                                           Common stock                   distributions       other                        Compre-
                                      ------------------    Capital in      in excess         compre-                      hensive
                                       Number       Par     excess of         of net          hensive                      income/
                                      of Shares    value    par value        earnings      income/(loss)       Total        (loss)
                                      ---------    -----    ----------    -------------    -------------    ----------    ----------

Balance at December 31, 2000             43,496    $ 435    $  789,926    $    (182,865)   $         242    $  607,738    $      --

Shares issued                               580        6         9,722               --               --         9,728           --

Stock issuance costs                         --       --        (1,494)              --               --        (1,494)          --

Net loss                                     --       --            --          (24,452)              --       (24,452)     (24,452)

Other comprehensive income,
    market revaluation on
    available for sale securities            --       --            --               --              839           839          839

Cumulative effect adjustment
    to recognize fair value of
    cash flow hedges                         --       --            --               --           (5,172)       (5,172)      (5,172)

Reclassification of cash flow
    hedge losses to statement of
    operations                               --       --            --               --            8,060         8,060        8,060

Current period adjustment to
    recognize  change in fair value
    of cash flow hedges                      --       --            --               --           (2,599)       (2,599)      (2,599)
                                                                                                                          ---------
Total comprehensive loss                     --       --            --               --               --            --    $ (23,324)
                                                                                                                          =========
Distributions declared and
    paid ($1.52 per share)                   --       --            --          (66,466)              --       (66,466)
                                      ---------    -----    ----------    -------------    -------------    ----------

Balance at December 31, 2001             44,076    $ 441    $  798,154    $    (273,783)   $       1,370    $  526,182
                                      =========    =====    ==========    =============    =============    ==========
</TABLE>



<PAGE>


                           See accompanying notes to consolidated financial
statements.


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
<TABLE>
<CAPTION>

<c>
                                                                                      Year Ended December 31,
                                                                            2001                 2000              1999
                                                                       ------------         -----------       -----------
Cash Flows from Operating Activities:

   Net earnings/(loss)                                                 $    (24,452)        $     2,927       $   (49,837)
                                                                       ------------         -----------       -----------
   Adjustments to reconcile net earnings (loss) to net cash
      provided by operating activities:
         Depreciation  and amortization                                      21,197              17,714            10,346
         Cumulative effect adjustment                                         3,841                  --                --
         Advisor acquisition expense                                             --                  --            76,333
         Impairment provisions                                               27,174               2,576             7,779
         Provision for loss on loans                                         28,200               2,027             1,988
         Loss on sales of assets                                              1,137                 721             1,852
         Gain on sale of mortgage loans                                      (4,119)                --                 --
         Increase in real estate held for sale                              (37,507)                --                 --
         Loss on investment in securities                                       122               5,348                --
         Net decrease in value of mortgage loans held for sale,
             net of related hedge                                             5,070               6,855               551
         Equity in earnings of joint venture, net of distributions             (397)                  7                28
         Proceeds from sale of loans                                        105,975                  --           294,228
         Proceeds from securitization transaction                                --                  --           257,812
         Purchase of other investments                                           --                  --           (31,247)
         Investment in mortgage loans held for sale                        (116,995)           (205,584)         (266,302)
         Collection on mortgage loans held for sale                          37,267               6,981             2,073
         Changes in other operating assets and liabilities                    1,689               4,466             1,657
                                                                       ------------         -----------       -----------
                   Total adjustments                                         72,654            (158,889)          357,098
                                                                       ------------         -----------       -----------
Net Cash Provided by (Used in) Operating Activities                          48,202            (155,962)          307,261
                                                                       ------------         -----------       -----------

Cash Flows from Investing Activities:

   Additions to real estate investment properties                           (26,052)           (160,901)        (286,411)
   Investment in direct financing leases                                        ---             (15,369)         (63,664)
   Proceeds from sale of assets                                              12,659              15,869            7,555
   Proceeds from sale or maturities of securities                               982               7,721              ---
   Investment in mortgage, equipment and other notes receivable             (11,458)            (11,131)         (31,005)
   Collection on mortgage, equipment and other notes receivable               9,325               8,335            3,894
   Investment in joint venture                                                  (10)                ---             (187)
   Purchase of other investments                                                ---              (2,832)            ---
   Redemption of certificates of deposit                                        ---                  --            2,000
   Increase in restricted cash                                              (10,580)             (1,876)             ---
   Increase in intangibles and other assets                                     ---                (378)          (1,862)
                                                                       ------------      ---------------      -----------
      Net cash used in investing activities                                 (25,134)           (160,562)        (369,680)
                                                                       ------------      ---------------      -----------
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

                CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
                                 (In Thousands)
<TABLE>
<CAPTION>

<c>
                                                                                      Year Ended December 31,
                                                                              2001             2000                 1999
                                                                          -----------     ------------       ------------

   Cash Flows from Financing Activities:
      Reimbursement of costs paid by related parties on
         behalf of the Company                                            $        --     $         --       $     (1,492)
      Proceeds from borrowings on credit facility,  note payable and
         subordinated note payable                                             63,949          397,538            439,941

      Payment on credit facility,  note payable and subordinated note
         payable                                                             (159,590)        (586,425)          (61,580)
      Proceeds from borrowings on mortgage warehouse facilities               325,264          301,227            27,101
      Payments on mortgage warehouse facilities                              (358,860)          (7,719)         (352,809)
      Contribution from minority interest of
         consolidated joint venture                                                --               40               740
      Subscriptions received from stockholder                                   9,692               --               211
      Retirement of shares of common stock                                         --               --               (51)
      Distributions to minority interest                                         (234)            (147)              (67)
      Distributions to stockholders                                           (66,466)         (66,330)          (60,079)
      Loan from stockholder                                                     2,708               --                 --
      Payment of stock issuance costs                                          (1,493)          (1,493)              (737)
      Issuance of bonds                                                       177,223          280,906                 --
      Payment on bonds                                                        (10,066)          (2,422)                --
      Payment of loan costs and bond issuance costs                            (9,634)         (20,891)            (5,947)
                                                                          -----------     ------------       ------------
             Net cash (used in) provided by financing activities              (27,507)         294,284            (14,769)
                                                                          -----------     ------------       -------------

Net Decrease in Cash and Cash Equivalents                                      (4,439)         (22,240)           (77,188)

Cash and Cash Equivalents at Beginning of Year                                 23,772           46,012            123,200
                                                                          -----------     ------------       ------------

Cash and Cash Equivalents at End of Year                                  $    19,333     $     23,772       $     46,012
                                                                          ===========     ============       ============

Supplemental Schedule of Non-Cash Investing
   and Financing Activities:

      Related parties paid certain acquisition and stock
             issuance costs on behalf of the Company as follows:
             Acquisition costs                                            $        --     $         --       $        579
             Stock issuance costs                                                  --               --                124
                                                                          -----------     ------------       ------------

                                                                          $        --     $         --       $        703
                                                                          ===========     ============       ============

      Capital lease obligation incurred for the lease
         of the Company's office space and furniture                      $        --     $         --       $     10,057
                                                                          ===========     ============       ============

      Interest paid                                                       $    66,569     $     39,023       $     10,937
                                                                          ===========     ============       ============

      Interest capitalized                                                $       390     $      2,253       $      3,889
                                                                          ===========     ============       ============


          See accompanying notes to consolidated financial statements.
</TABLE>

<PAGE>




                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                  Years Ended December 31, 2001, 2000 and 1999


1.     Significant Accounting Policies:
       -------------------------------

       Organization - CNL American  Properties Fund, Inc. is a self-administered
       real estate investment trust ("REIT") that offers financial, development,
       advisory and other real estate  services to operators of select  national
       and regional fast food, family-style and casual dining restaurant chains.
       The term "Company" includes,  unless the context otherwise requires,  CNL
       American  Properties  Fund,  Inc. and its majority  owned and  controlled
       subsidiaries.  These  subsidiaries  include CNL-APF Partners,  LP and CNL
       Franchise Network, LP.

       On June 1, 2000, the Company formed CNL Franchise Network,  LP ("CNL-FN")
       and  transferred  certain  assets and  operations to it in exchange for a
       combined  general and limited  partnership  interest of 84.39 percent.  A
       limited  partnership  interest  of 9.18  percent  was  issued  to Bank of
       America in exchange for its franchise finance business unit. In addition,
       a  limited  partnership  interest  of  6.43  percent  was  issued  to CNL
       Financial  Group,  Inc.,  an affiliate  of a director of the Company,  in
       exchange for its merger,  acquisition and advisory services business. The
       excess of the  purchase  price  over the fair  value of the net  tangible
       assets acquired from the new partners of approximately  $17.0 million was
       recorded as goodwill. This partnership and the related Strategic Alliance
       Agreement with Bank of America expanded the Company's  financial products
       and  services.  The bank's  interest is  redeemable at their option under
       certain  conditions  after a specified  date for a cash  payment of $14.3
       million.

       On September 1, 1999, the Company  acquired CNL Fund Advisors,  Inc. (the
       "Advisor"),  CNL Financial  Corporation and CNL Financial Services,  Inc.
       ("CNL  Restaurant  Financial  Services  Group") by issuing  6.15  million
       shares.  Prior  to  the  acquisition,  the  Advisor  and  CNL  Restaurant
       Financial  Services  Group  had been  affiliated  with the  Company.  The
       acquisitions were accounted under the purchase method of accounting.  The
       Company  expensed the $76.3 million  excess of the purchase  price of the
       Advisor  over the fair  value of the net  acquired  assets.  The  Company
       recognized  $45.7  million  in excess  purchase  price of CNL  Restaurant
       Financial Services Group.




<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


1.     Significant Accounting Policies - Continued:
       -------------------------------------------

       Principles of  Consolidation - The consolidated  financial  statements of
       the Company  include its majority  owned and controlled  affiliates.  All
       significant  intercompany  balances and transactions  among  consolidated
       affiliates  have been  eliminated.  The equity  method of  accounting  is
       applied to those  investments  in joint  ventures that are not subject to
       control by the  Company due to the  significance  of rights held by other
       parties.

       Use of Estimates - Preparation of the financial  statements in accordance
       with generally accepted accounting principles requires management to make
       estimates  and  assumptions  relating  to the  reporting  of  assets  and
       liabilities  and the  disclosure  of contingent  assets and  liabilities.
       Significant  estimates included  provisions for impairment of real estate
       and  loans,  valuation  of loans  held for  sale and  valuation  of other
       investments. Actual results could differ from those estimates.

       Real Estate and Lease  Accounting  - The Company  records its  properties
       comprised of land,  buildings and equipment at cost.  Management  reviews
       its properties for impairment whenever events or changes in circumstances
       indicate  that the carrying  amount of the assets may not be  recoverable
       through operations or sale.  Management  determines whether impairment in
       value has occurred by comparing the estimated  future  undiscounted  cash
       flows,  including the residual  value of the property,  with the carrying
       cost of the individual property.  If impairment is indicated,  the assets
       are  adjusted to  estimated  fair  value.  Properties  acquired  that the
       Company intends to sell or securitize  within one year of acquisition are
       recorded at cost. Rental income is recognized without regard to potential
       future rent increases and the asset is not depreciated. Revenue from sale
       of real estate is recognized  at the time of closing when  collectibility
       of the sales  price is  reasonably  assured and the  earnings  process is
       substantially complete.

       Properties  leased to restaurant  operators are generally on a triple-net
       basis,  which means the tenant is responsible for all operating  expenses
       relating  to  the  property,   including   property   taxes,   insurance,
       maintenance  and repairs.  The leases are  accounted for using either the
       direct financing or the operating method.

             Direct financing method - The leases accounted for using the direct
             financing  method are recorded at the net  investment  that, at the
             inception of the lease, generally represents the cost of the asset.
             Unearned  income is deferred and amortized to income over the lease
             terms so as to  produce a constant  periodic  rate of return on net
             investment in the leases.



<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999

1.     Significant Accounting Policies - Continued:
       -------------------------------------------

              Operating method - Land, building and secured equipment leases are
              accounted for using the operating method. Revenue is recognized as
              rentals are earned and  depreciation is charged to operations on a
              straight-line  basis over the life of the related  assets.  Rental
              income is recognized on a straight-line basis over the lease term.
              Buildings  and  equipment  are  depreciated  on the  straight-line
              method over their  estimated  useful  lives of 30 and seven years,
              respectively.

       Loans - The Company  originates  loans to restaurant  operators  that are
       generally  secured by real estate or equipment.  The Company accounts for
       loans depending on the following classification:

              Mortgage loans held for sale - Loans  originated  that the Company
              intends  to  sell  or  securitize  generally  within  one  year of
              origination  are recorded at fair market value.  Quoted prices for
              similar loans and the present value of the expected cash flows net
              of the estimated impact of any defaults are used to determine fair
              value.  The  Company  segregates  its loans held for sale into two
              portfolios and  determines  fair market value in the aggregate for
              each portfolio.

              Mortgage,  equipment and other notes receivable - Loans originated
              that are  expected to be held until  maturity  are recorded at the
              lower of cost or market  value and are reduced  for any  estimated
              future  loss.  Whenever  it  appears  that  future  collection  on
              specific  notes  appears  doubtful,   a  valuation   allowance  is
              established.  The allowance  represents the difference between the
              carrying  amount and the  amount  management  expects to  receive.
              Increases  and  decreases in the  allowance  due to changes in the
              measurement  of the impaired  loans are included in the  provision
              for loss on loans.  Loans  continue to be  classified  as impaired
              unless  they are  brought  fully  current  and the  collection  of
              scheduled  interest and principal is considered  probable.  When a
              loan  or  portion  of a  loan,  including  an  impaired  loan,  is
              determined to be uncollectible,  the portion deemed  uncollectible
              is charged  against the allowance and  subsequent  recoveries,  if
              any,  are  credited  to the  allowance.  Accrual  of  interest  is
              discontinued when management believes,  after considering economic
              and  business   conditions  and  collection   efforts,   that  the
              borrowers' financial condition is such that collection of interest
              is doubtful. Subsequent interest is recorded as income.

       Borrowers are charged a fee to originate their loan,  which is recognized
       as income over the related loan life, or when the loan is sold.


<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Securitizations  - Certain  loans are  originated  and sold to entities
         that, in turn,  issue  securities to investors  backed by these assets.
         The Company retains the servicing rights and participates in cash flows
         from the retained  equity  positions  and lower rated  securities.  The
         present value of the expected  cash flows for each  retained  security,
         after  payment  of  principal  and  interest  to  third-party  bond  or
         certificate  holders,  over the estimated cost of servicing is recorded
         at the  time of sale as a  retained  interest.  Retained  interests  in
         securitized  assets are included in other  investments.  Accounting for
         the retained  interests  requires that the Company estimate their value
         using market trends and historical experience, expected prepayments and
         defaults.  This  information  is  considered,   along  with  prevailing
         discount rates and the terms of the bonds and  certificates,  to arrive
         at current fair value amounts.

         Restricted   Cash  -  Restricted  cash  relates  to  cash  received  in
         connection  with  securitized   assets  that  are  subject  to  certain
         restrictions until released by the trustee.

         Cash and Cash  Equivalents  - The Company  considers  all highly liquid
         investments  with a maturity of three months or less when  purchased to
         be cash equivalents. These amounts may exceed federally insured levels,
         however the company has not experienced any such losses.

         Investments - Investments classified as held to maturity securities are
         carried at amortized cost. Investments classified as available for sale
         securities are stated at fair market value. The market value adjustment
         is included in accumulated other comprehensive income.

         Derivative  Financial  Instruments  - The Company  utilizes  derivative
         instruments  to  partially  offset the effect of  fluctuating  interest
         rates on the  value of its  mortgage  loans  held for sale and the cash
         flows associated with a portion of its variable-rate  debt. The Company
         adopted  Statement  of  Financial  Accounting  Standards  No. 133 ("FAS
         133"),  as amended,  on January 1, 2001,  which requires all derivative
         instruments to be recorded on the balance sheet at fair value.  Changes
         in the value of  derivatives  associated  with hedge  transactions  are
         recorded either in current  earnings or in other  comprehensive  income
         depending on the type.

             Fair-value hedge  transactions - When the Company hedges changes in
             the fair value of an asset or liability,  the effective  changes in
             the value of the derivative  instrument are generally offset in the
             income statement by changes in the value of the hedged item.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


1.     Significant Accounting Policies - Continued:
       -------------------------------------------

             Cash-flow hedge  transactions - When the Company hedges variability
             of cash flows  related to a  variable-rate  asset or liability or a
             forecasted  transaction,  effective  changes  in the  value  of the
             derivative  instrument are reported in other  comprehensive  income
             and  subsequently  recognized in operations in the periods in which
             earnings are impacted by the  variability  of the cash flows of the
             hedged item or forecasted transaction.

         The ineffective portion of all hedges are reflected in earnings.

         Effective  January 1, 2001,  the Company  recorded a cumulative  effect
         adjustment  loss  of  $21.2  million  to  recognize  the  value  of all
         derivative  instruments  that  are  designated  as  fair-value  hedging
         instruments  and an offsetting  cumulative  effect  adjustment of $17.4
         million to  recognize  the excess of the fair values of related  hedged
         assets over the carrying value. In addition,  effective January 1, 2001
         a cumulative effect  adjustment  through  stockholders'  equity of $5.2
         million  was  recorded  to  recognize  at  fair  value  all  derivative
         instruments that are designated as cash-flow hedging instruments.

         During 2001,  the Company  determined  that a forecasted  debt issuance
         would not occur and also terminated a cash flow hedge upon repayment of
         the  related  debt.  The  termination  of  the  hedges  and  the  hedge
         accounting for the related derivative  instruments  resulted in an $8.0
         million charge to the statement of operations.

         Loan Costs - Loan costs  incurred in connection  with the note payable,
         credit and mortgage  warehouse  facilities  and bonds payable have been
         capitalized  and are being  amortized over the term of the related debt
         using  the  straight-line   method  which  approximates  the  effective
         interest  method.  Loan costs are  included  in  intangibles  and other
         assets in the financial  statements.  As of December 31, 2001 and 2000,
         the  Company  had  capitalized  loan costs of $32.2  million  and $28.0
         million,  respectively and recorded  accumulated  amortization of $13.0
         million and $8.7 million, respectively.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Income  Taxes - The  Company has made an election to be taxed as a REIT
         for federal  income tax  purposes.  The Company  generally  will not be
         subject to federal  corporate  income taxes on amounts  distributed  to
         stockholders,  providing  it  distributes  at least 95  percent  of its
         taxable income and meets certain other requirements for qualifying as a
         REIT. Earnings and profits, which determine the taxability of dividends
         to  stockholders,  differ  from  reported  net  income  as a result  of
         differing  treatment  of  items  for  financial  reporting  versus  tax
         purposes,  such as  different  lives  and  methods  used to  depreciate
         investment properties.  Notwithstanding qualification as a REIT for tax
         purposes,  the Company is subject to certain  state taxes on its income
         and property.

         Effective  January 1, 2001,  the  Company's  subsidiary,  CNL Franchise
         Network  Corp.  ("CNL-FNC"),  elected to be  treated as a taxable  REIT
         subsidiary ("TRS") pursuant to the provisions of the REIT Modernization
         Act. As a TRS, its operating Partnership,  CNL-FN, is able to engage in
         activities   resulting  in  income  that  previously  would  have  been
         disqualified  from being  eligible REIT income under the federal income
         tax  regulations.  Certain  activities  reside within  CNL-FNC that are
         therefore subject to federal income taxes.

         Earnings Per Share - Basic earnings per share are calculated based upon
         net earnings (income available to common  stockholders)  divided by the
         weighted  average number of shares of common stock  outstanding  during
         the reporting period.  The Company's  subsidiary,  CNL-FN,  has entered
         into a subordinated note payable with a conversion  feature that allows
         one of the  partners to convert the note into  additional  ownership of
         the  subsidiary.  For the years ended  December 31, 2001 and 2000,  the
         impact of this conversion feature was not dilutive.

         Reclassification   -  Certain  items  in  the  prior  years'  financial
         statements have been reclassified to conform to the 2001  presentation.
         These  reclassifications  had no effect on stockholders'  equity or net
         earnings.




<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Goodwill - Goodwill  is recorded in  intangibles  and other  assets and
         represents  the excess of the purchase price and related costs over the
         fair  value  assigned  to the net assets and  liabilities  of  acquired
         operations.  Goodwill is  amortized  on a  straight-line  basis using a
         20-year life and relates to the following acquisitions:

             CNL Financial Services, Inc. and CNL Financial Corporation acquired
             on  September  1, 1999 as more fully  described  in Note 1 -- $40.5
             million.

             Bank of America  franchise  origination's  group and CNL  Financial
             Group, Inc.'s advisory services operations- acquired as part of the
             formation of CNL-FN in June 2000 as more fully  described  above --
             $13.2 million and $2.6 million, respectively.

         For  the  years  ended   December   31,  2001  and  2000,   accumulated
         amortization  related to  goodwill is $4.9  million  and $1.8  million,
         respectively,  and $3.1  million  and $1.8  million,  respectively,  is
         recorded as amortization expense.

         Subsequent  to December  31, 2001,  the Company  will cease  amortizing
         goodwill as required by FAS 142.  This  standard  requires the use of a
         non-amortization approach to account for purchased goodwill and certain
         intangibles.  Under a non-amortization  approach,  goodwill and certain
         intangibles  will not be  amortized  into  results of  operations,  but
         instead would be reviewed for  impairment  and written down and charged
         to results of operations only in the periods in which the then recorded
         value of goodwill and certain intangibles is more than its fair value.

         The  Company  expects  the  adoption  of this  standard  to  result  in
         decreased  amortization  of goodwill  and is  currently  unaware of any
         impairment in its recorded value.

         Consolidated  Statement  of Cash  Flows  -  Supplemental  Disclosure  -
         Effective  May 11, 2001,  the Company  reclassified  $60.9 million from
         mortgage loans held for sale as investments in mortgage,  equipment and
         other notes receivable.

         From  time  to  time,  certain   properties   classified  as  long-term
         investments  may  be  subsequently   re-designated  to  held  for  sale
         classification. The Company re-designated 93 properties with a net book
         value of $115.7 million during 2001.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         During the year ended December 31, 1999,  the Company issued  3,800,000
         shares of common stock for $76 million to acquire the net assets of CNL
         Fund Advisors, Inc. and its subsidiary.  During the year ended December
         31, 1999, the Company also issued  2,350,000 shares of common stock for
         $47 million to acquire the net assets of CNL Financial  Services,  Inc.
         and CNL Financial Corporation and its subsidiaries.

         During  the year  ended  December  31,  2000,  the  Company  formed CNL
         Franchise Network, LP ("CNL-FN").  CNL-FN issued partnership  interests
         to Bank of America and CNL  Financial  Group,  Inc. in exchange for the
         following:

             Bank of America contributed $14.3 million for the operations of its
             franchise finance business which was recorded as goodwill.

             CNL Financial Group, Inc.  contributed its merger,  acquisition and
             advisory services group consisting of the following:

                                                                (In Thousands)
                      Cash                                            $    40
                      Receivables                                          25
                      Due from related parties                            409
                      Other assets                                        363
                      Goodwill                                          2,725
                                                               --------------

                      Total Assets                                      3,562
                                                               --------------

                      Accounts payable and accrued expenses               123
                      Due to related parties                               40
                      Other payables                                      199
                                                               --------------

                      Total liabilities                                   362
                                                               --------------

                      Net equity                                     $  3,200
                                                               ==============


         In October 2000, a trust  liquidated and distributed  $170.3 million in
         mortgage  loans and $139.5 million in related  mortgage  warehouse debt
         facilities to satisfy the Company's investment.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


1.       Significant Accounting Policies - Continued:
         -------------------------------------------

         Other  New  Accounting  Standards  - In  October  2001,  the  Financial
         Accounting  Standards  Board issued  Statement of Financial  Accounting
         Standards  No.  144  "Accounting  for the  Impairment  or  Disposal  of
         Long-Lived Assets" (FAS 144). This statement requires that a long-lived
         asset be  tested  for  recoverability  whenever  events or  changes  in
         circumstances indicate that its carrying amount may not be recoverable.
         The carrying  amount of a  long-lived  asset is not  recoverable  if it
         exceeds the sum of the undiscounted  cash flows expected to result from
         the use and eventual  disposition of the asset. The assessment is based
         on the  carrying  amount  of the  asset  at the date it is  tested  for
         recoverability.  An  impairment  loss is  recognized  when the carrying
         amount of a long-lived  asset exceeds its fair value.  If an impairment
         is recognized,  the adjusted  carrying amount of a long-lived  asset is
         its new cost basis.  The adoption of FAS 144 is required in fiscal year
         2002 and is not expected to impact the carrying  value of the Company's
         long-lived assets upon adoption.

2.       Real Estate Investment Properties:
         ---------------------------------

         Real estate investment  properties consist of the following at December
         31:

                                                       (In Thousands)
                                                  2001             2000
                                                ---------       ----------
           Land                                $  328,327       $  381,351
           Buildings                              356,845          418,659
           Equipment                                2,143            2,346
                                               ----------       ----------
                                                  687,315          802,356
           Less accumulated depreciation          (36,813)         (24,922)
                                               ----------       ----------
                                                  650,502          777,434
           Construction in progress                 1,716            8,170
                                               ----------       ----------

                                               $  652,218       $  785,604
                                               ==========       ==========



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


2.       Real Estate Investment Properties - Continued:
         ---------------------------------------------

         During 2001 and 2000,  the Company  sold several  properties  that were
         subject to operating  leases and received net proceeds of $11.2 million
         and $12.2 million,  respectively,  and recorded  losses of $1.0 million
         and $0.7 million, respectively.

         In 2001 and 2000, the Company's real estate segment recorded provisions
         for  impairment of $20.9 million and $1.7  million,  respectively.  The
         tenants of these  properties  experienced  financial  difficulties  and
         ceased payment of rents under the terms of their lease agreements.  The
         provisions  represent the amount necessary to reduce the carrying value
         to the  estimated  net  realizable  values of the  properties  based on
         discounted cash flows of sale or re-lease terms.

         Substantially  all property leases have initial terms of 13 to 25 years
         (most  expiring  between 2006 and 2024) and provide for scheduled  rent
         increases,  and in some cases,  contingent  rent. The leases  generally
         allow  the  tenant to  purchase  the  property  at the  greater  of the
         Company's  purchase  price plus a specified  percentage  or fair market
         value at specified  times.  Fixed and  determinable  lease revenues are
         recognized on a straight-line  basis over the terms of the leases.  For
         the  years  ended  December  31,  2001,  2000  and  1999,  the  Company
         recognized $6.9 million,  $9.4 million and $5.1 million,  respectively,
         of such accrued rental income.

         Future  minimum   contractual  lease  payments  to  be  received  under
         noncancellable operating leases at December 31, 2001 (In Thousands) are
         as follows:

                     2002                               $    61,646
                     2003                                    62,718
                     2004                                    64,473
                     2005                                    65,467
                     2006                                    65,194
                     Thereafter                             666,522
                                                        -----------

                                                        $   986,020
                                                        ===========





<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


3.       Net Investment in Direct Financing Leases:
         -----------------------------------------

         The components of net investment in direct financing leases at December
         31 follows:

                                                        2001             2000
                                                     ----------      ----------
                                                           (In Thousands)
              Minimum lease payments
                  receivable                         $  280,553      $  348,616
              Estimated residual values                  28,538          37,949
              Interest receivable from
                  secured equipment leases                   26              63
              Less unearned income                     (172,013)       (217,406)
                                                     ----------      ----------
              Net investment in direct
                  financing leases                   $  137,104      $  169,222
                                                     ==========      ==========

         The  following  is a schedule of future  minimum  lease  payments to be
         received  on  direct   financing   leases  at  December  31,  2001  (In
         Thousands):

                           2002                          $    17,284
                           2003                               17,423
                           2004                               17,288
                           2005                               17,225
                           2006                               17,069
                           Thereafter                        194,264
                                                         -----------

                                                         $   280,553
                                                         ===========

         The Company's  real estate  segment  recorded  provisions for losses on
         direct  financing  leases  totaling  $6.3  million  and  $0.9  million,
         respectively,  during  the  years  ended  December  31,  2001  and 2000
         respectively.  The tenants of these  properties  experienced  financial
         difficulties and ceased payment of rents under the terms of their lease
         agreements. The provisions represent the amount necessary to reduce the
         carrying values of the direct  financing  leases to their estimated net
         realizable  values based on  discounted  cash flows of sale or re-lease
         terms.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


4.       Real Estate Held for Sale:
         --------------------------

         Real  estate held for sale  consist of the  following  at December  31,
         2001:

                                                            (In Thousands)

              Land and buildings                              $  171,564


5.       Mortgage Loans Held for Sale:
         ----------------------------

         Mortgage loans held for sale are wholly or partially  collateralized by
         first  mortgages  on land and/or  buildings  of  franchised  restaurant
         businesses  and consist of  approximately  $300.2 million in fixed-rate
         loans and approximately $6.7 million in variable-rate loans at December
         31, 2001. The fixed-rate  loans carry a weighted  average interest rate
         of 9.59 percent and the  variable-rate  loans carry interest rates that
         adjust monthly based on  fluctuations  in 30-day LIBOR  (averaging 8.43
         percent  throughout  2001).  The  mortgage  loans  are  due in  monthly
         installments  with  maturity  dates  ranging  from  2002 to  2021.  The
         fixed-rate  mortgage loans  generally  prohibit  prepayment for certain
         periods or include prepayment penalties.

         Mortgage loans held for sale at December 31 consist of the following:

                                                    2001           2000
                                                 ---------      ---------
                                                     (In Thousands)

              Outstanding principal         $    306,887     $   400,952
              Accrued interest income              2,059           3,049
              Deferred financing income           (1,640)         (2,274)
              Valuation adjustment                 8,529          (7,406)
                                            --------------   ------------
                                            $    315,835     $   394,321
                                            ==============   ============


         The valuation  adjustment at December 31, 2001 reflects the increase in
         current  value  over  historical  cost  of  $15.8  million,  net  of an
         estimated  $7.3  million  decline  in value  associated  with  borrower
         delinquencies.




<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


6.       Mortgage, Equipment and Other Notes Receivable:
         ----------------------------------------------

         Mortgage, equipment and other notes receivable consist of the following
         at December 31:

                                                        2001           2000
                                                    -----------    ---------
                                                         (In Thousands)

          Outstanding principal                    $  132,519     $  71,545
          Accrued interest income                         694         3,632
          Deferred financing income                      (893)          (86)
          Unamortized loan costs/premiums               1,273           788
          Allowance for uncollectible notes           (29,631)       (3,108)
                                                  ------------    -----------
                                                   $  103,962     $  72,771
                                                  ============    ===========

         Approximately  $87.5  million  and  $24.7  million  of the  outstanding
         principal  balance as of December 31, 2001 and 2000,  respectively,  is
         secured by mortgages.  The remaining  principal is secured by equipment
         and other collateral.  As of December 31, 2001 and 2000,  approximately
         $40  million  and $13.6  million in notes  receivable  were  considered
         impaired  and  approximately  $38.5  million and $3.9  million  were on
         non-accrual status with regard to recognition of interest.  The Company
         recognized  $1.0  million  and $0.2  million of  interest  income as of
         December 31, 2001 and 2000, respectively, on impaired loans.

         Changes  in the  allowance  for  loan  losses  for  2001  and  2000 are
         summarized as follows (In Thousands):

                                                            2001           2000
                                                        ---------    -----------

          Balance at beginning of year                 $   3,108      $   1,949
          Provision for loan losses                       28,200          1,804
          Recoveries on loans previously charged off          --             --
          Loans charged off                               (1,677)          (645)
                                                       -----------   -----------
          Balance at end of year                       $  29,631      $   3,108
                                                      ============    ==========

         Management  believes the net carrying  value of the notes  approximates
         fair value based on current  rates at which similar loans would be made
         to borrowers with similar credit and for similar maturities.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


7.       Other Investments:
         -----------------

         In August 1998, the Company acquired an investment in certain franchise
         loan certificates (the "1998 Certificates") issued in connection with a
         mortgage  loan  securitization  transaction  sponsored by CNL Financial
         Corporation,  which was an affiliate  prior to its  acquisition  by the
         Company  in 1999 (see Note 1).  Certain of the 1998  Certificates  bear
         interest  at an 8.4  percent  pass  through  rate  per  annum  and  the
         remainder  bear  interest  at  adjustable   pass  through  rates  which
         generated an effective  yield of 8.74 percent in 2001.  At December 31,
         2001 the carrying  value of this  investment  was $16.0 million and the
         fair  market  value of the 1998  Certificates  was $10.3  million.  The
         difference  between the carrying  value and fair value is the result of
         using a higher  discount  rate at December 31, 2001 to  determine  fair
         value as compared to the rate used to price the initial investment.

         In  connection  with the merger on September 1, 1999 of the Company and
         CNL  Restaurant  Financial  Services  Group (see Note 1),  the  Company
         acquired investments in an interest-only certificate and other residual
         interests  with a fair market value of $5.2 million.  The interest only
         certificate  and  the  other  residual   interests  are  classified  as
         available  for sale  and are  carried  at fair  market  value  based on
         estimated  discounted cash flows.  The  accumulated  unrealized gain at
         December 31, 2001 was $ 1.1 million.

         In August 1999, the Company created and retained a residual interest in
         a $500 million loan sale facility  syndicated  with two third  parties.
         This facility permitted the Company to sell loans on a regular basis to
         a trust.  As of December 31, 1999, the Company had sold $300 million in
         loans to the trust.  In October of 2000,  the trust  liquidated and the
         Company  received  mortgage loans net of related debt of  approximately
         $31  million  and  recorded  a loss of  approximately  $3.1  million on
         liquidation of the residual interest.

         Certain  mortgage loans were securitized in November 1999 and franchise
         loan trust  certificates  were sold to  investors.  The  securitization
         resulted in a loss of  approximately  $1 million.  The Company retained
         certain subordinated  investment  securities ("the 1999 Certificates").
         The 1999 Certificates  totaling $21.1 million at December 31, 1999 were
         recorded by allocating  the previous  carrying  amount of the mortgages
         between  the  assets  sold and the  retained  interests  based on their
         relative   fair  values.   Approximately   $7.7  million  of  the  1999
         Certificates  were  classified  as available  for sale and were sold in
         April 2000. The remaining  balance of  approximately  $13.4 million are
         classified as held to maturity.  As of December 31, 2001, an other than
         temporary  impairment  of  approximately  $2.3  million on the residual
         value of the investment has been recognized.


<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


7.       Other Investments - Continued:
         -----------------------------

         The key  assumptions  used in  calculating  the value of these retained
         interests  at the time of  securitization  are based on  normal  market
         assumptions as follows:

         o   five  percent   prepayment   penalty  computed  after  taking  into
             consideration the period of time covered by a yield maintenance and
             lockout prepayment penalties;

         o   a cumulative default ratio (CDR) of zero;

         o   prevailing  market  discount  rates at the  time of  securitization
             generally ranging from 8.36 percent to 65.1 percent; and

         o   weighted  average  lives  ranging  from 6.17 to 17.81  years on the
             certificated traunches.

         Subsequently,  the values of the retained securities are measured using
         updated  prepayment and CDR assumptions  with adjustments to prevailing
         market discount rates based on consultations with investment bankers.

         The following  table shows the effects on an individual  key assumption
         under   two   negative   scenarios.   Prepayment   assumptions,   after
         consideration  of  yield  maintenance  and  lockout,  would  not have a
         further material impact on these scenarios.
<TABLE>
<CAPTION>

<c>
                                                                1998-1                   1999-1
                                                             Certificates             Certificates
                                                           ($ in millions)         ($ in millions)
                                                          ------------------       -----------------

         Fair value of retained interests                        $15.6                   $12.9

         Weighted-average life (in years) of
             certificated traunches.                              11.4                    15.1

         Residual cash flows discount rate (annual)

         Impact on fair value of 100 bp adverse change           $(0.7)                  $(0.7)
         Impact on fair value of 200 bp adverse change           $(1.3)                  $(1.3)

         Expected Credit Losses (annual rate)

         Impact on fair value of 2% adverse change               $(3.0)                  $(1.0)
         Impact on fair value of 3% adverse change               $(4.6)                  $(1.4)

</TABLE>


<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


7.       Other Investments - Continued:
         -----------------------------

         These  sensitivities  are hypothetical and should be used with caution.
         Changes in fair value based on a percentage  variation  in  assumptions
         generally cannot be extrapolated because the relationship of the change
         in assumption to the change in fair value may not be linear.  Also, the
         effect of a variation in a particular  assumption  on the fair value of
         the  retained  interest  is  calculated   without  changing  any  other
         assumption;  in reality, changes in one factor may result in changes in
         another (for example,  increases in market interest rates may result in
         lower prepayments and increased credit losses),  which might magnify or
         counteract the sensitivities.

         The  following  table  represents  the  securitized  portfolio  and all
         managed loans as of December 31 (In Thousands):

<TABLE>
<CAPTION>

<c>
                                                                                              Principal Amount > 60 Days
                                                             Total Principal Amount                    Past Due
                                                        ---------------------------------    ------------------------------
                        Type of Loan                        2001               2000              2001             2000
         -------------------------------------------    --------------    ---------------    -------------    -------------
                                                               (In Thousands)                     (In Thousands)

         Mortgage loans                                      $ 870,953     $     940,136        $ 38,757         $  8,209
         Equipment and other loans                              44,993            46,871          31,164           41,314
                                                      ---------------- -----------------  ---------------   --------------

         Total loans managed or
              securitized                                      915,946           987,007          69,921           49,523

         Less:
              Loans securitized                               (475,904)         (512,154)        (10,139)              --
              Loans held for sale or
                  securitization                              (307,523)         (403,308)        (18,617)          (1,162)
                                                      ---------------- -----------------  ---------------   --------------

         Loans held in portfolio (Note 6)                    $ 132,519        $   71,545        $ 41,165         $ 48,361
                                                      ================ =================  ===============   ==============
</TABLE>

         The Company had net  charge-offs  during the years ended  December  31,
         2001 and 2000 of $3.4 million and $0, respectively.




<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


7.       Other Investments - Continued:
         -----------------------------

         The following  table  summarizes  cash flows  received from and paid to
         securitization trusts for the years ended December 31 (In Thousands):

                                                      2001        2000
                                                  ---------    ---------

          Servicing fees received                 $   1,730    $   1,826
          Other cash flows received on
              retained interests                      8,517        7,557
          Servicing advances                          5,746           66
          Repayments of servicing advances            3,796           --

8.       Borrowings:
         ----------

         Borrowings consist of the following at December 31 (In Thousands):

<TABLE>
<CAPTION>

<c>
                                                                 2001                            2000
                                                     -----------------------------  -------------------------------
                                                         Amount      Average Rate          Amount      Average Rate
                                                     -----------------------------  -------------------------------

           Revolver                                  $   10,000           6.55%     $      80,000          8.80%
           Note Payable                                  48,731           6.98%            85,617          6.98%
           Mortgage Warehouse Facilities                430,169           5.13%           463,765          7.98%
           Subordinated Note Payable                     43,750           8.50%            34,000          8.50%
           Series 2000-A Bonds Payable                  270,392           7.88%           278,484          7.88%
           Series 2001-4 Bonds Payable                   40,311           8.90%                 -               -
           Series 2001 Bonds Payable                    130,362           2.82%                 -               -
                                                     ------------                   --------------

                                                     $   973,715                    $      941,866
                                                     ============                   ==============

</TABLE>

         CNL-RP has a $10.0 million  unsecured  credit  facility (the "Liquidity
         Facility").  The  facility  is for a term of one year and  contains  an
         option to extend the  facility  subject  to  renewal  of the  warehouse
         credit facility maintained by CNL-FN.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


8.       Borrowings - Continued:
         ----------------------

         In October 2001, the Company  entered into a two-year  unsecured  $30.0
         million  revolving  credit  facility  (the  "Revolver").   Interest  on
         advances under the Revolver accrue at LIBOR plus 225 basis points.  The
         Revolver includes financial  covenants that provide for the maintenance
         of certain  financial ratios. As of December 31, 2001, the Revolver had
         an outstanding balance of $10.0 million.

         The Company entered into a note payable in 1999 in the amount of $147.0
         million.  During 2001 and 2000, the Company applied  proceeds  received
         from the issuance of bonds to pay down the note.  Borrowings  under the
         note bear interest at the rate of the lender's commercial paper plus 56
         basis points per annum.  As of December 31, 2001, the interest rate was
         6.98 percent. The note is collateralized by mortgages on properties and
         matures in February  2003. The note includes  financial  covenants that
         provide for the maintenance of certain financial ratios.

         CNL-FN maintains mortgage  warehouse  facilities with a total borrowing
         capacity of $525.0  million that bear interest at LIBOR plus a weighted
         average of 94 basis points per annum.  In connection with entering into
         the  Revolver  in  October  2001,  the  Company  agreed to  reduce  the
         borrowing capacity by $50.0 million by April 1, 2002. In addition,  the
         Company  entered into a guarantee  related to removal or disposition of
         approximately  $187.0  million  of  loans.  The  guarantee  is  reduced
         pro-rata as loans are  removed.  If any  amounts are still  outstanding
         relating to these loans in October  2002,  the Company will be required
         to remit the $15.0 million net of any pro rata reductions so achieved.

         In June 2000, CNL-FN entered into a $43.75 million senior  subordinated
         note payable.  The principal  balance  together with unpaid interest is
         due in full in 2007.  In October  2001,  the Company  agreed to a $15.0
         guarantee  for a portion of the  subordinated  note.  The guarantee has
         provisions for its reduction  tied to achievement of earnings  targets,
         full availability of the facility and removal of the targeted amount of
         loans from the mortgage  warehouse  facility.  The Company also amended
         the note to permit  prepayments.  If any of the  targets are not met by
         October 13,  2002,  the lender will have a one-month  option to convert
         exactly 80 percent of the guarantee to a preferred  security of CNL-APF
         Partners,  LP with terms  substantially  equivalent to the subordinated
         note. As part of the agreement,  Bank of America agreed to reduce their
         potential ownership  percentage in CNL Franchise Network, LP from 29.12
         percent to 22.28 percent.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


8.       Borrowings - Continued:
         ----------------------

         In August of 2000, the Company issued triple net lease mortgage  bonds,
         Series 2000-A.  Collateral for the bonds consist of 257 commercial real
         estate  properties  operated as restaurants  leased to tenants,  with a
         carrying   value  of  $332.5  million  at  December  31,  2001.  It  is
         anticipated  that the  $103.7  million  of the bonds  will have a final
         payment date in August 2009 and the remainder will have a final payment
         date in  April  2017.  The  bond  indenture  provides  for an  optional
         redemption at their  remaining  principal  balance when remaining rents
         due under the leases that serve as collateral are less than ten percent
         of the aggregate initial rents due under the leases.

         In May 2001, the Company issued Asset Backed Bonds,  Series 2001-4. The
         proceeds of $42.1 million were applied to pay down short-term debt. The
         Company applied 63 mortgage loans as collateral for the bonds which had
         a carrying  value of  approximately  $60.3  million as of December  31,
         2001.  The  offering  resulted in an initial  weighted  average life of
         approximately  7.8 years and a rate of interest of  approximately  8.90
         percent per annum. The bond indenture  requires  monthly  principal and
         interest  payments  received from borrowers to be applied to the bonds.
         The bond  indenture  also  provides for an optional  redemption  of the
         bonds at their remaining  principal  balance when the remaining amounts
         due under the loans  that  serve as  collateral  for the bonds are less
         than 15 percent  of the  aggregate  amounts  due under the loans at the
         time of issuance.

         In October 2001,  the Company issued $131.0 million in Triple Net Lease
         Mortgage  Bonds,  Series 2001.  Collateral for the bonds consist of 119
         commercial real estate  properties  operated as restaurant  units which
         have a carrying  value of  approximately  $181.2 million as of December
         31, 2001.  The bonds are scheduled to amortize  over a 15-year  period,
         but mature in five years.  Interest is payable monthly at LIBOR plus 48
         basis points. The Company incurred $5.1 million in bond issuance costs,
         which is being amortized over five years,  and entered into an interest
         rate cap agreement with a strike rate of 4.5 percent to protect against
         future  increases  in  LIBOR.  The  proceeds  were  used to pay off the
         Company's  previous  $125.0 million credit  facility and  approximately
         $44.8  million was  applied to pay down the  Company's  secured  credit
         facility.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


8.       Borrowings - Continued:
         ----------------------

         The  following  schedule  of  maturities  on  outstanding  indebtedness
         assumes  that  loan  repayments  are  made  on the  mortgage  warehouse
         facilities  in  accordance  with  loan   amortization   schedules  with
         corresponding  lender  extensions  of the  facilities  and  that  bonds
         payable amortize in accordance with estimated payment amounts.

                                                 (In Thousands)
                     2002                         $    33,942
                     2003                              72,563
                     2004                              42,327
                     2005                              30,180
                     2006                              32,327
                     Thereafter                       762,376
                                                  ------------

                                                  $   973,715
                                                  ============

         In the event the mortgage  warehouse  lenders do not grant  extensions,
         outstanding  indebtdness  of  approximately  $251.8  million and $178.4
         million will be due in October 2002 and March 2003, respectively.

9.       Income Tax:
         ----------

         For  income tax  purposes  the  Company's  TRS  treats  loan  valuation
         adjustments,  loss reserves, loan fees,  depreciation,  and other items
         different  from the  treatment of these items for  financial  reporting
         purposes.  In  the  aggregate,  the  Company's  TRS  has an  excess  of
         available future deductible items over future taxable items and as such
         may benefit  from these items when the taxable  subsidiaries  produce a
         greater  level of taxable  income.  At  present,  the  Company  has not
         recorded  this  potential   future  benefit  because  the  subsidiaries
         involved do not have sufficient  historical earnings on which to base a
         potential future benefit.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


9.       Income Tax - Continued:
         ----------------------

         The consolidated  provision for federal income taxes is composed of the
         following  estimates  for the  year  ending  December  31,  2001 of the
         Company's TRS (In Thousands):

                                                               Federal Tax
                                                              ---------------

             Expected tax at US statutory rate                $           136
             Adjustments arising from:
                    Non-deductible goodwill amortization                  902
                    Hedge and loan valuation related items                203
                    Unconsolidated affiliates                          (1,228)
                    Loan origination fees                                (117)
                    Other                                                 (79)
             Valuation allowances                                         183
                                                              ---------------
             Provision (benefit) for income taxes             $            --
                                                              ===============

         Through December 31, 2000, the Taxable REIT Subsidiary had not been
         subject to federal income tax. The components of the net deferred tax
         asset as of December 31, 2001 are as follows:
<TABLE>
<CAPTION>

<c>
                                                                     (In Thousands)
             Deferred tax asset:
                    Hedge and loan valuation related differences       $   5,266
                    Loan origination fees                                    535
                    Net operating losses                                     183
                    Other                                                  1,000
                                                                       ---------
                    Total                                                  6,984
             Valuation allowance                                          (6,984)
                                                                       ---------
                          Net recorded deferred tax asset              $      --
                                                                       =========
</TABLE>


<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


10.      Distributions:
         -------------

         For the years ended December 31, 2001, 2000 and 1999,  approximately 20
         percent, 40 percent and 97 percent,  respectively, of the distributions
         received by  stockholders  were  considered  to be ordinary  income and
         approximately 80 percent,  60 percent and three percent,  respectively,
         were  considered a return of capital for federal  income tax  purposes.
         Distributions  were funded through cash from operations,  borrowings on
         the Company's  credit  facility,  stock purchases by an affiliate and a
         loan from an affiliate, subsequently converted to equity.


11.      Related Party Transactions:

         The   following   summarizes   the  more   significant   related  party
         transactions with affiliated entities:
<TABLE>
<CAPTION>

<c>
                                                                For the year ending
                                                                     December 31:
                                                         -------------------------------
         Amounts received (paid) in thousands              2001      2000           1999
                                                         -------    -------     --------

         Services purchased from affiliates (1)          $(4,564)   $(4,492)    $(12,432)

         Rent to affiliates for office space (2)          (1,007)      (888)        (835)

         Servicing fees from affiliates (3)                3,656      1,560          ---

         Interest income from an affiliated joint
            venture (4)                                    2,024        150          ---

         Sale (purchase) of properties from an
            affiliate (5)                                 13,430        ---      (39,700)

         Affiliate advances to Company for note (6)        2,700        ---          ---

         Affiliate purchase of stock (7)                   9,700        ---          ---

         Affiliate purchase of equipment leases (8)        1,100        ---          ---

</TABLE>

<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


11.      Related Party Transactions - Continued:
         --------------------------------------

         (1) Services  purchased from affiliates  include human  resources,  tax
             planning  and  compliance,   computer  systems  support,   investor
             relations and other  services  including  property and  acquisition
             management services prior to September 1999.

         (2) Future commitments due under the operating lease are as follows (In
             Thousands):

                     2002                             $    1,043
                     2003                                  1,074
                     2004                                  1,106
                     2005                                  1,139
                     2006                                  1,173
                     Thereafter                           10,496
                                                      ----------

                                                      $   16,031
                                                      ==========

         (3) Property management and other  administrative  services provided to
             affiliates investing in restaurant net lease properties and loans.

         (4) Interest income ranging from 9.1 to 9.2 percent received from loans
             made to an affiliated  joint venture.  The outstanding loan balance
             at December 31, 2001 and 2000 was $16.7  million and $6.9  million,
             respectively, earning interest.

         (5) The Company sold 11 properties to  affiliates  during 2001.  During
             1999,  over 40  properties  were  acquired by the  Company  from an
             affiliate.

         (6) Amounts  borrowed from affiliates in the form of demand  promissory
             notes that bear interest at LIBOR plus 2.5 percent.

         (7) Amounts borrowed from affiliates  similar to the terms described in
             (6) above, that were subsequently extinguished through the issuance
             of 579,722 shares of Company stock.

         (8) Proceeds  received from an affiliate for the purchase of collection
             rights of the  current  and future  cash  flows of three  equipment
             leases, for which no gain or loss was recognized.



<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


11.      Related Party Transactions - Continued:
         --------------------------------------

         In February 2002,  the Company  approved the purchase of a five percent
         limited partner  ownership in an affiliate owning the building in which
         the Company  occupies  space.  The  purchase  price is  comprised  of a
         payment of $150,000 and assumption of a $1.3 million guarantee.

         During  the  year  ended  December  31,  2001,  an  affiliate  advanced
         approximately  $5.8 million to Phoenix  Restaurant  Group, Inc. and its
         subsidiaries (collectively referred to as `PRG"), a tenant and borrower
         of the Company. PRG used these proceeds to pay outstanding obligations,
         including obligations to the Company.

12.      Concentration of Credit Risk:

         No individual  lessee or borrower,  or affiliated  groups of lessees or
         borrowers or restaurant chains represented more than ten percent of the
         Company's  revenues  during the years ended December 31, 2001,  2000 or
         1999.

         Although the Company's properties are geographically diverse throughout
         the  United  States  and  lessees  and  borrowers  operate a variety of
         restaurant concepts,  15 restaurant chains constitute 70 percent of the
         Company's properties.  Failure of any one of these restaurant chains or
         any significant lessees or borrowers could significantly impact results
         of  operations  if the  Company  is not  able  to  timely  protect  its
         interest.

         Cash accounts and other liquid investments  maintained on behalf of the
         Company  at  commercial  banks may  exceed  federally  insured  levels;
         however, the Company has not experienced any losses in such accounts.

13.      Segment Information:
         -------------------

         In June 1, 2000, the Company created separate legal entities to operate
         and measure two distinct  lines of business.  CNL-APF  Partners LP is a
         real estate  company that oversees real estate,  mortgage and equipment
         loans  generally  until  maturity.  CNL  Franchise  Network,  LP  is  a
         specialty  finance  company focused on originating  sale-leaseback  and
         debt  financing  with the  intent to sell or  securitize  these  assets
         generally within a year.




<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


13.      Segment Information - Continued:
         -------------------------------

         The following  tables summarize the results for the years 2001 and 2000
         for  the  portfolio  management  and  specialty  finance  segments  (In
         Thousands):
<TABLE>
<CAPTION>

<c>
                                                                 Year Ended December 31, 2001
                                                     -----------------------------------------------------
                                                                                              Consolidated
                                                                    Specialty                    Totals
                                                      Real Estate    Finance   Eliminations   Year Ended
                                                     ------------   ---------  ------------   ------------

          Revenues                                   $     98,537   $ 168,317  $    (2,039)    $   264,815
                                                     ------------   ---------  ------------   ------------

          Cost of real estate sold                             --      97,587            --         97,587
          General operating and
               administrative expenses                      8,994      22,595        (1,201)        30,388
          Property expenses and state and
               other taxes                                  3,707         176            --          3,883
          Interest expense                                 38,566      30,739          (763)        68,542
          Depreciation and amortization                    14,127       7,145           (75)        21,197
          Provision for losses on assets                   26,906         268            --         27,174
          Loss on sale of assets                            1,116          21            --          1,137
          Loss on investment in securities                     --         122            --            122
          Cumulative effect of accounting
               change                                          --       3,841            --          3,841
          Loss on termination of cash flow
               hedge                                        1,643       6,417            --          8,060
          Provision for loan losses                        28,200          --            --         28,200
          Minority interest and equity
               earnings                                       132        (996)           --           (864)
                                                     ------------   ---------  ------------   ------------
                                                          123,391     167,915        (2,039)       289,267
                                                     ------------   ---------  ------------   ------------


          Net earnings/(loss)                        $    (24,854)  $     402  $         --   $    (24,452)
                                                     ============   =========  =============  ============

          Assets at December 31, 2001                $    916,473   $ 642,641  $         --   $  1,559,114
          Investments accounted for under
               the equity method at
               December 31, 2001                            1,058         N/A           N/A          1,058
          Additions to long-lived assets:
               Real estate                                  3,769      22,283            --         26,052
</TABLE>


<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


13.      Segment Information - Continued (In Thousands):
         ----------------------------------------------
<TABLE>
<CAPTION>

<c>
                                                                      June - December 2000
                                                                 --------------------------------

                                                                                                    Consolidated
                                                     January 1 -                     Specialty       Totals
                                                    May 31, 2000     Real Estate      Finance        Year Ended
                                                  --------------   -------------  ------------    ---------------

         Revenues                                 $      40,733     $     61,016  $     14,884    $       116,633
                                                  --------------   -------------  ------------    ---------------
         General operating and
              administrative expenses                     7,249            6,400        11,297             24,946
         Property expenses and state
              and other taxes                               603            3,188            --              3,791
         Interest expense                                15,178           20,854        11,580             47,612
         Depreciation and amortization                    5,555            8,380         3,779             17,714
         Transaction cost                                 1,440            8,174           701             10,315
         Provision for Losses on assets                      67            2,509            --              2,576
         (Gain) loss on sale of assets                      (26)             747            --                721
         Loss on investment in
              securities                                     --               --         5,348              5,348
         Provision for loan losses                        1,804               --            --              1,804
         Minority interest and equity
              earnings                                       21               29        (1,171)            (1,121)
                                                  --------------   -------------  ------------    ----------------
                                                         31,891           50,281        31,534            113,706
                                                  --------------   -------------  ------------    ----------------

         Net earnings/(loss)                      $       8,842     $     10,735  $    (16,650)   $         2,927
                                                  ==============   =============  ============    ================

         Assets at December 31, 2000                        N/A     $    990,840      $608,663        $ 1,599,503
         Investments accounted for
              under the equity method at
              December 31, 2000                             N/A            1,067           N/A              1,067
         Additions to long-lived assets:
              Real estate                                50,581           15,792       109,897            176,270

</TABLE>


<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED

                  Years Ended December 31, 2001, 2000 and 1999


14.      Commitments and Contingencies:

         In the  ordinary  course  of  business,  the  Company  has  outstanding
         commitments  to qualified  borrowers  and tenants.  These  commitments,
         including  development   agreements,   if  accepted  by  the  potential
         borrowers,  obligate the Company to provide  funding.  The accepted and
         unfunded commitment totaled approximately $19.4 million at December 31,
         2001, of which $5.8 million has been scheduled for closing.

15.      Selected Quarterly Financial Data:
         ---------------------------------

         The following table presents  selected  unaudited  quarterly  financial
         data for each fiscal  quarter  during the years ended December 31, 2001
         and 2000 (In Thousands, except for per share data):

<TABLE>
<CAPTION>

<c>
               2001 Quarter               First       Second      Third      Fourth        Year
         --------------------------     --------     --------    --------   ---------    ---------

         Revenue                        $ 46,920     $ 41,270    $ 39,199   $ 137,426 *  $ 264,815
         Earnings/(loss)
            before cumulative
            effect of
            accounting change             12,015        5,195     (27,644)    (10,177)     (20,611)
         Cumulative effect of
            accounting change             (3,841)          --          --         --        (3,841)
         Net earnings/(loss)               8,174        5,195     (27,644)    (10,177)     (24,452)
         Earnings/(loss) per
            share (Basic
            and Diluted)                    0.19         0.12       (0.64)      (0.23)       (0.56)

                2000 Quarter               First       Second      Third       Fourth       Year
         --------------------------     --------     --------    --------   ---------    ---------

         Revenue                        $ 26,512     $ 25,874    $ 27,988   $  36,259    $ 116,633
         Net earnings/(loss)               7,379          655       3,576      (8,683)       2,927
         Earnings/(loss) per
         share (Basic
            and Diluted)                    0.17         0.02        0.08       (0.20)        0.07
</TABLE>


         *  Reflects a  reclassification  to present  revenue  from sale of real
            estate at gross rather than net.




<PAGE>


Item 9.    Changes in and  Disagreements  with  Accountants  on  Accounting  and
           Financial Disclosure

           None.


                                    PART III


Item 10.   Directors and Executive Officers of the Registrant

     The  information  required by this Item is incorporated by reference to the
Company's  Definitive  Proxy  Statement to be filed with the Commission no later
than April 30, 2002.

Item 11.   Executive Compensation

     The  information  required by this Item is incorporated by reference to the
Company's  Definitive  Proxy  Statement to be filed with the Commission no later
than April 30, 2002.

Item 12.   Security Ownership of Certain Beneficial Owners and Management

     The  information  required by this Item is incorporated by reference to the
Company's  Definitive  Proxy  Statement to be filed with the Commission no later
than April 30, 2002.

Item 13.   Certain Relationships and Related Transactions

     The  information  required by this Item is incorporated by reference to the
Company's  Definitive  Proxy  Statement to be filed with the Commission no later
than April 30, 2002.


                                     PART IV


Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)      The following documents are filed as part of this report.

         1.  Consolidated Financial Statements

                  Report of Independent Certified Public Accountants.

                  Consolidated Balance Sheets at December 31, 2001 and 2000.

                  Consolidated  Statements  of  Operations  for the years  ended
                  December 31, 2001, 2000 and 1999.

                  Consolidated    Statements   of   Stockholders'   Equity   and
                  Comprehensive  Income (Loss) for the years ended  December 31,
                  2001, 2000 and 1999.

                  Consolidated  Statements  of Cash  Flows for the  years  ended
                  December 31, 2001, 2000 and 1999.

                  Notes to Consolidated Financial Statements.



<PAGE>


         2.  Financial Statement Schedules

                  Schedule II - Vauation and Qualifying Accounts for the years
                  ended December 31, 2001, 2000 and 1999.

                  Schedule  III - Real Estate and  Accumulated  Depreciation  at
                  December 31, 2001.

                  Notes  to  Schedule   III  -  Real   Estate  and   Accumulated
                  Depreciation at December 31, 2001.

                  Schedule IV - Mortgage  Loans on Real  Estate at December  31,
                  2001.

                  All other Schedules are omitted as the required information is
                  inapplicable  or is presented in the  financial  statements or
                  notes thereto.

         3.  Exhibits

                  2.1      Agreement  and  Plan  of  Merger,  by and  among  the
                           Registrant, CFA Acquisition Corp., CNL Fund Advisors,
                           Inc.  and CNL  Group,  Inc.,  dated  March  11,  1999
                           (included  as  Exhibit  10.38  to  the   Registrant's
                           Registration Statement No. 333-74329 on Form S-4 (the
                           "Form  S-4") as  originally  filed  and  incorporated
                           herein by reference).

                  2.2      Agreement  and  Plan  of  Merger,  by and  among  the
                           Registrant,  CFC Acquisition  Corp.,  CFS Acquisition
                           Corp., CNL Financial  Corp., CNL Financial  Services,
                           Inc., CNL Group,  Inc., Five Arrows Realty Securities
                           L.L.C.,  Robert A. Bourne,  Curtis B.  McWilliams and
                           Brian  Fluck,  dated  March  11,  1999  (included  as
                           Exhibit 10.39 to the Form S-4 as originally filed and
                           incorporated herein by reference).

                  3.1      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated  Articles  of   Incorporation,   as  amended
                           (included  as Exhibit  3.1 to the  Registrant's  Form
                           10-Q  for  the  quarter   ended  June  30,  1999  and
                           incorporated herein by reference).

                  3.2      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated  Bylaws  (included  as  Exhibit  3.2  to the
                           Registrant's  Registration Statement No. 333-37657 on
                           Form S-11 and incorporated herein by reference).

                  3.3      CNL American Properties Fund, Inc. Second Amended and
                           Restated  Articles  of  Incorporation   (included  as
                           Exhibit  3.3 to the  Registrant's  Form  10-Q for the
                           quarter ended June 30, 2000 and  incorporated  herein
                           by reference).

                  4.1      Form of Stock Certificate (included as Exhibit 4.5 to
                           the Registrant's  Registration Statement No. 33-78790
                           on Form S-11 and incorporated herein by reference).

                  10.1     Form of  Indemnification  Agreement dated as of April
                           18, 1995, between the Registrant and each of James M.
                           Seneff,  Jr., Robert A. Bourne, G. Richard Hostetter,
                           J. Joseph Kruse, Richard C. Huseman,  John T. Walker,
                           Jeanne A. Wall,  Lynn E. Rose and Edgar J. McDougall,
                           dated as of January 27, 1997,  between the Registrant
                           and Steven D.  Shackelford,  dated as of February 18,
                           1998,   between   the   Registrant   and   Curtis  B.
                           McWilliams,  and  dated  as  of  September  1,  1999,
                           between the  Registrant and each of Howard J. Singer,
                           John L. Farren,  Timothy J. Neville,  Michael I. Wood
                           and Barry L. Goff  (included  as Exhibit  10.9 to the
                           Registrant's  Registration Statement No. 333-15411 on
                           Form S-11 and incorporated herein by reference).

                  10.2     Amended and Restated Agreement of Limited Partnership
                           of CNL APF Partners, LP (included as Exhibit 10.50 to
                           Amendment  No.  2 to the  Form  S-4 and  incorporated
                           herein by reference).

                  10.3     Amended and  Restated  Credit  Agreement by and among
                           CNL  APF  Partners,   LP,  Registrant,   First  Union
                           National  Bank,  First Union Capital  Markets  Group,
                           Banc of America  Securities LLC,  NationsBank,  N.A.,
                           The  Chase   Manhattan   Bank  and  other   financial
                           institutions, dated June 9, 1999 (included as Exhibit
                           10.51  to  Amendment  No.  1  to  the  Form  S-4  and
                           incorporated herein by reference).

                  10.4     First   Amendment  to  Amended  and  Restated  Credit
                           Agreement  dated as of December  31, 1999 between CNL
                           APF Partners,  LP and First Union  National  Bank, as
                           Agent  (included as Exhibit 10.4 to the  Registrant's
                           Form 10-K for the year ended  December  31,  1999 and
                           incorporated herein by reference).

                  10.5     Franchise  Receivable Funding and servicing Agreement
                           dated  as  of  October  14,  1999   between  CNL  APF
                           Partners,   LP  and   Neptune   Funding   Corporation
                           (included  as Exhibit 10.5 to the  Registrant's  Form
                           10-K  for  the  year  ended  December  31,  1999  and
                           incorporated herein by reference).

                  10.6     Interim  Wholesale  Mortgage  Warehouse  and Security
                           Agreement dated as of September 18, 1998, and Amended
                           Agreement dated as of August 30, 1999 between CNL APF
                           Partners,   LP  and  Prudential   Securities   Credit
                           Corporation   (included   as  Exhibit   10.6  to  the
                           Registrant's  Form 10-K for the year  ended  December
                           31, 1999 and incorporated herein by reference).

                  10.7     1999 Performance  Incentive Plan (included as Exhibit
                           10.1  to  Amendment   No.  1  to  the  Form  S-4  and
                           incorporated herein by reference).

                  10.8     Registration   Rights  Agreement  by  and  among  the
                           Registrant,  Robert A. Bourne,  Curtis B. McWilliams,
                           John T. Walker,  Howard Singer, Steven D. Shackelford
                           and CNL  Group,  Inc.,  dated  as of March  11,  1999
                           (included as Exhibit  10.40 to Amendment No. 1 to the
                           Form S-4 and incorporated herein by reference).

                  10.9     Registration   Rights  Agreement  by  and  among  the
                           Registrant,  Five Arrows  Realty  Securities  L.L.C.,
                           James M. Seneff,  Jr.,  Robert A.  Bourne,  Curtis B.
                           McWilliams and CNL Group, Inc., dated as of March 11,
                           1999 (included as Exhibit 10.41 to Amendment No. 1 to
                           the Form S-4 and incorporated herein by reference).

                  10.10    Employment   Agreement  by  and  between   Curtis  B.
                           McWilliams and the  Registrant,  dated  September 15,
                           1999 (included as Exhibit 10.42 to Amendment No. 2 to
                           the Form S-4 and incorporated herein by reference).

                  10.11    Employment   Agreement  by  and  between   Steven  D.
                           Shackelford and the  Registrant,  dated September 15,
                           1999 (included as Exhibit 10.43 to Amendment No. 2 to
                           the Form S-4 and incorporated herein by reference).

                  10.12    Employment  Agreement  by and between  John T. Walker
                           and  the   Registrant,   dated   September  15,  1999
                           (included as Exhibit  10.44 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.13    Employment  Agreement by and between Howard J. Singer
                           and  the   Registrant,   dated   September  15,  1999
                           (included as Exhibit  10.45 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.14    Employment Agreement by and between Barry L. Goff and
                           the Registrant, dated September 15, 1999 (included as
                           Exhibit  10.46 to Amendment No. 2 to the Form S-4 and
                           incorporated herein by reference).

                  10.15    Employment  Agreement by and between Robert W. Chapin
                           and  the   Registrant,   dated   September  15,  1999
                           (included as Exhibit  10.47 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.16    Employment   Agreement  by  and  between  Timothy  J.
                           Neville and the Registrant,  dated September 15, 1999
                           (included as Exhibit  10.48 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.17    Holdback  Agreement by and among the  Registrant  and
                           Stockholders,  dated  August 31,  1999  (included  as
                           Exhibit  10.56 to Amendment No. 2 to the Form S-4 and
                           incorporated herein by reference).

                  10.18    Amended  and   Restated   Credit  and   Reimbursement
                           Agreement by and among CNL APF Partners,  LP, CNL APF
                           LP Corp., CNL APF GP Corp., Bank of America, N.A. and
                           Bank of America  Securities LLC, dated as of June 15,
                           2000  (included as Exhibit 10.18 to the  Registrant's
                           Form 10-Q for the quarter ended June 30, 2000).

                  10.19    Employment  Agreement by and between Michael Wood and
                           the  Registrant,  dated August 31, 1999  (included as
                           Exhibit 10.19 to the  Registrant's  Form 10-Q for the
                           quarter ended March 31, 2001).

                  10.20    Employment  Agreement by and between Brent Heaton and
                           the Registrant, dated September 29, 1999 (included as
                           Exhibit 10.20 to the  Registrant's  Form 10-Q for the
                           quarter ended March 31, 2001).

                  10.21    Addendum to Employment Agreement dated as of November
                           1, 1999, between the Registrant and Curtis McWilliams
                           (included as Exhibit 10.21 to the  Registrant's  Form
                           10-Q for the  quarter  ended  March  31,  2001).  The
                           following   persons   have  signed  a   substantially
                           identical   Addendum  relating  to  their  respective
                           employment   agreements;   Steve  Shackelford  (dated
                           November 1, 1999),  John  Walker  (dated  November 3,
                           1999), Barry Goff (dated November 1, 1999), and Brent
                           Heaton (dated November 3, 1999).

                  10.22    Addendum to Employment Agreement dated as of November
                           1, 1999,  between the  Registrant  and Robert  Chapin
                           (included as Exhibit 10.22 to the  Registrant's  Form
                           10-Q for the  quarter  ended  March  31,  2001).  The
                           following   persons   have  signed  a   substantially
                           identical   Addendum  relating  to  their  respective
                           employment agreements:  Howard Singer (dated November
                           1, 1999),  Michael Wood (dated  November 8, 1999) and
                           Timothy Neville (dated November 24, 1999).

                  10.23    Second  Addendum to Employment  Agreement dated as of
                           June 16,  2000,  between  the  Registrant  and Curtis
                           McWilliams   (included   as  Exhibit   10.23  to  the
                           Registrant's  Form 10-Q for the  quarter  ended March
                           31,  2001).  The  following  persons  have  signed  a
                           substantially  identical Second Addendum  relating to
                           their respective employment agreements: Howard Singer
                           (dated June 19, 2000),  Robert Chapin (dated June 20,
                           2000) and Brent Heaton (dated October 30, 2000).

                  10.24    Second  Addendum to Employment  Agreement dated as of
                           August 20,  2000,  between the  Registrant  and Barry
                           Goff  (included as Exhibit 10.24 to the  Registrant's
                           Form 10-Q for the quarter ended March 31, 2001).

                  10.25    Second  Addendum to Employment  Agreement dated as of
                           September 1, 2000,  between the  Registrant and Steve
                           Shackelford   (included  as  Exhibit   10.25  to  the
                           Registrant's  Form 10-Q for the  quarter  ended March
                           31, 2001).

                  10.26    Second  Addendum to Employment  Agreement dated as of
                           2000,  between the  Registrant  and  Timothy  Neville
                           (included as Exhibit 10.26 to the  Registrant's  Form
                           10-Q for the quarter ended March 31, 2001).

                  10.27    Second  Addendum to Employment  Agreement dated as of
                           October 24, 2000,  between the Registrant and Michael
                           Wood  (included as Exhibit 10.27 to the  Registrant's
                           Form 10-Q for the quarter ended March 31, 2001).

                  10.28    Second  Addendum to Employment  Agreement dated as of
                           October 25,  2000,  between the  Registrant  and John
                           Walker (included as Exhibit 10.28 to the Registrant's
                           Form 10-Q for the quarter ended March 31, 2001).

                  10.29    Amended and Restated Master Purchase  Agreement dated
                           as of October 11, 2001, among Bank of America,  N.A.,
                           CNL Financial VII, LP and CNL Franchise  Network,  LP
                           (filed herewith).

                  10.30    Third  Amended and  Restated  Side Letter dated as of
                           October 11, 2001,  among Bank of America,  N.A.,  CNL
                           Financial  VII,  LP and  CNL  Franchise  Network,  LP
                           (filed herewith).


                  21       Subsidiaries of the Registrant (filed herewith).

(b)      The  Registrant  filed no reports on Form 8-K during the period October
         1, 2001 through December 31, 2001.

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto duly  authorized,  on the 29th day of
March, 2002.

                                             CNL AMERICAN PROPERTIES FUND, INC.

                                                             By:

                                             /s/ JAMES M. SENEFF, JR.
                                             -----------------------------------
                                             James M. Seneff, Jr.
                                             co-Chief Executive Officer


                                             /s/ CURTIS B. McWILLIAMS
                                             -----------------------------------
                                             Curtis B. McWilliams
                                             co-Chief Executive Officer



<PAGE>


     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>

<c>

                 Signature                   Title                                Date


/s/ JAMES M. SENEFF, JR.       Director, Chairman of the Board and            March 28, 2002
--------------------------
James M. Seneff, Jr.           co-Chief Executive Officer
                               (Principal Executive Officer)


/s/ CURTIS B. McWILLIAMS       co-Chief Executive Officer                     March 28, 2002
--------------------------
Curtis B. McWilliams           (Principal Executive Officer)



/s/ STEVEN D. SHACKELFORD      Executive Vice President,                      March 28, 2002
--------------------------
Steven D. Shackelford          Chief Financial Officer, Secretary and
                               Treasurer (Principal Financial and
                               Accounting Officer)

/s/ ROBERT A. BOURNE           Director                                       March 28, 2002
--------------------------
Robert A. Bourne



/s/ G. RICHARD HOSTETTER       Director                                       March 28, 2002
--------------------------
G. Richard Hostetter



/s/ J. JOSEPH KRUSE            Director                                       March 28, 2002
--------------------------
J. Joseph Kruse



/s/ RICHARD C. HUSEMAN         Director                                       March 28, 2002
--------------------------
Richard C. Huseman


</TABLE>





<PAGE>



                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                  Years Ended December 31, 2001, 2000 and 1999


<TABLE>
<CAPTION>

<c>
                                                       Additions                        Deductions
                                               ----------------------------    -----------------------------

                                 Balance at     Charged       Charged to        Deemed                           Balance
                                  Beginning        to           Other          Uncollec-                          at End
    Year         Description       of Year      Costs and      Accounts          tible          Collected        of Year
                                                Expenses
   --------    ----------------  ------------  ------------  --------------    -----------     -------------  --------------

    1999       Allowance for
                   doubtful
                   accounts
               (a)                $2,056,815   $1,036,928     $3,057,049       $ 572,483        $   389,093     $  5,189,216
                                 ============  ============  ==============    ===========     =============  ==============


    2000       Allowance for
                   doubtful
                   accounts       $5,189,216   $1,678,144     $ 5,414,580  (b) $ 543,173  (c)   $ 1,069,187     $ 10,669,580
               (a)
                                 ============  ============  ==============    ===========     =============  ==============

    2001       Allowance for
                   doubtful
                   accounts       $10,669,580  $  452,276     $ 1,371,314      $2,557,461 (c)    $4,119,549      $ 5,816,160
               (a)
                                 ============  ============  ==============    ===========     =============  ==============


         (a)  Deducted from receivables and accrued rental income on the balance sheet.

         (b)  Reduction of rental, earned and other income.

         (c)  Amounts written off as uncollectible.
</TABLE>


<PAGE>

<TABLE>
<CAPTION>

<c>


                                              CNL AMERICAN PROPERTIES FUND, INC. AND SUBSIDIARIES

                                            SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                                                  December 31, 2001
</TABLE>



<TABLE>
<CAPTION>

<c>

                                                          Costs                Gross Amount                                 Life on
                                                          Capitalized          at Which                                     Which
                                                          Subsequent to        Carried at                                 Deprecia-
                                        Initial Cost     Acquistion            Close of Period                              tion in
                                                                                                                            Latest
                                             Buildings                                           Accumu-   Date of          Income
                                             and                               Building          lated     Con-             State-
                        Impair- Emcum-       Improve   Improve- Carrying       and Improve-      Depreci-  struc-  Date     ment is
                        ment    brance Land  ments     ments    Costs    Land  ments       Total tion      tion    Acquired Computed
</TABLE>

<TABLE>
<CAPTION>

<c>

Properties the Company
has invested in Under
Operating Leases:

Applebee's Restaurants:
Antioch, Tennessee              (o)  609,696   770,331             - -       609,696   770,331 1,380,027  86,126    1991   8/98  (e)
Clarksville, Tennessee          (o)  556,070   983,010             - -       556,070   983,010 1,539,080 109,904    1995   8/98  (e)
Columbia, Tennessee             (o)  625,868   936,068             - -       625,868   936,068 1,561,936 104,656    1996   8/98  (e)
Cookeville, Tennessee           (o)  489,867 1,003,630             - -       89,867  1,003,630 1,493,497 112,209    1993   8/98  (e)
Hendersonville, Tennessee       (o)  549,651   966,628             - -       549,651   966,628 1,516,279 108,073    1994   8/98  (e)
Hermitage, Tennessee            (o)  735,272   827,474             - -       735,272   827,474 1,562,746  92,515    1992   8/98  (e)
Hopkinsville, Kentucky          (o)  390,058   943,019             - -       390,058   943,019 1,333,077 105,433    1997   8/98  (e)
Lebanon, Tennessee              (o)  568,168   925,046             - -       568,168   925,046 1,493,214 103,424    1998   8/98  (e)
Madison, Tennessee              (o)  740,165   835,996             - -       740,165   835,996 1,576,161  93,467    1995   8/98  (e)
Montclair, California                874,094                 880,494 -       874,094   880,494 1,754,588  93,807    1997  12/96  (e)
Moscow, Idaho                        537,410         -             - -       537,410        (g)  537,410      (h)   1999   8/99  (h)
Rockford, Illinois              (o)  603,828         -             - -       603,828        (g)  603,828      (h)   1996   1/99  (h)
Salem, Oregon                        778,321         -     1,153,535 -       778,321 1,153,535 1,931,856  85,376    1999  10/99  (e)

Arby's Restaurants:
Allen, Texas                    (o)  508,994         -             - -       508,994        (g)  508,994       (h)  1999  12/99  (h)
Arab, Alabama                   (o)  230,720   455,946             - -       230,720   455,946   686,666   53,301   1988   5/98  (e)
Atlanta, Georgia                (o)  648,459         -       655,353 -       648,459   655,353 1,303,812   47,469   1998   8/98  (e)
Auburndale, Florida             (o)  326,788   391,270             - -       326,788   391,270   718,058   38,439   1995   1/99  (e)
Avon, Indiana                   (o)  338,486   497,282             - -       338,486   497,282   835,768   88,337   1996   9/96  (e)
Bartow, Florida                 (o)  226,428   414,175             - -       226,428   414,175   640,603   19,558   1995   1/99  (e)
Brooksville, Florida            (o)  266,606   421,780             - -       266,606   421,780   688,386   19,917   1994   1/99  (e)
Brooksville, Florida            (o)  248,277   368,959             - -       248,277   368,959   617,235   17,423   1984   1/99  (e)
Canton, Georgia                 (o)  586,476         -       606,850 -       586,476   606,850 1,193,326   61,627   1998  12/98  (e)
Columbus, Ohio                  (o)  441,770         -       594,458 -       441,770   594,458 1,036,228   43,058   1998   7/98  (e)
Columbus, Ohio                  (o)  483,868         -       576,483 -       483,868   576,483 1,060,351   58,442   1999  12/98  (e)
Douglasville, Georgia           (o)  708,710         -       546,363 -       708,710   546,363 1,255,074   35,214   1999  12/99  (e)
Flower Mound, Texas             (o)  434,130         -       618,352 -       434,130   618,352 1,052,482   39,488   2000   1/00  (e)
Grand Rapids, Michigan          (o)  312,670         -             - -       312,670        (g)  312,670       (h)  1995   8/95  (h)
Greensboro, North Carolina      (o)  363,478   404,650             - -       363,478   404,650   768,128   59,519   1990   8/97  (e)
Greenville, North Carolina      (o)  277,986   490,143             - -       277,986   490,143   768,128   72,094   1995   8/97  (e)
Hudson, Florida                 (o)  270,539   488,818             - -       270,539   488,818   759,357   23,083   1993   1/99  (e)
Indianapolis, Indiana           (o)  439,935         -       677,335 -       439,935   677,335 1,117,269   48,937   2000  12/99  (e)
Jonesville, North Carolina      (o)  228,364   539,764             - -       228,364   539,764   768,128   79,393   1995   8/97  (e)
Kernersville, North Carolina    (o)  273,325   413,077             - -       273,325   413,077   686,402   60,759   1994   8/97  (e)
Kinston, North Carolina         (o)  268,545   485,160             - -       268,545   485,160   753,705   71,362   1995   8/97  (e)
Lakeland, Florida               (o)  235,996   452,008             - -       235,996   452,008   688,004   21,345   1990   1/99  (e)
Lawrenceville, Georgia          (o)  668,582         -       755,749 -       668,582   755,749 1,424,331   39,871   1999   6/00  (e)
Lexington, North Carolina       (o)  320,924   463,347             - -       320,924   463,347   784,271   69,438   1992   7/97  (e)
Myrtle Beach, South Carolina    (o)  421,481         -       633,406 -       421,481   633,406 1,054,887   49,853   1999   7/99  (e)
New Port Richey, Florida        (o)  242,777   398,029             - -       242,777   398,029   640,806   18,796   1992   1/99  (e)
Orange Park, Florida            (o)  463,047         -       592,539 -       463,047   592,539 1,055,586   44,579   1998   5/98  (e)
Plant City, Florida             (o)  196,251   443,976             - -       196,251   443,976   640,226   22,199   1991   1/99  (e)
Redford , Michigan              (o)  412,516         -       673,289 -       412,516   673,289 1,085,805   63,845   1998   1/99  (e)
Renton, Washington              (o)  583,115         -       778,732 -       583,115   778,732 1,361,847   41,100   1999   5/00  (e)
Tampa, Florida                  (o)  322,412   371,694             - -       322,412   371,694   694,106   36,516   1992   1/99  (e)
The Colony, Texas               (o)  504,327         -             - -       504,327        (g)  504,327       (h)  1999  12/99  (h)
Vancouver, Washington           (o)  733,180         -       665,895 -       733,180   665,895 1,399,075   61,953   1999   3/99  (e)
Walker, Michigan                (o)  498,403         -       701,467 -       498,403   701,467 1,199,871   52,610   1999   9/99  (e)
Whitehall, Ohio                 (o)  522,786         -       289,350 -       522,786   289,350   812,136   29,755   1998  12/98  (e)
Bakers Square Restaurants:
Alsip, Illinois                 (o)  449,010   728,259             - -       449,010   728,259 1,177,269   50,851   1978  10/99  (e)
Burbank, Illinois               (o)  679,830 1,041,258             - -       679,830 1,041,258 1,721,088   72,706   1987  10/99  (e)
Cherry Valley, Illinois         (o)  419,238   848,874             - -       419,238   848,874 1,268,112   59,273   1979  10/99  (e)
Coon Rapids, Minnesota          (o)  543,966 1,131,838             - -       543,966 1,131,838 1,675,804   79,031   1991  10/99  (e)
Deerfield, Illinois             (o)  573,069   468,307             - -       573,069   468,307 1,041,376   32,700   1980  10/99  (e)
Downers Grove, Illinois         (o)  537,805   778,410             - -       537,805   778,410 1,316,215   36,758   1978  10/99  (e)
Homewood, Illinois              (o)  601,418   760,181             - -       601,418   760,181 1,361,599   35,897   1978  10/99  (e)
LaGrange, Illinois              (o)  591,206   770,392             - -       591,206   770,392 1,361,599   36,380   1977  10/99  (e)
Lansing, Illinois               (o)  647,562   869,687             - -       647,562   869,687 1,517,248   60,726   1977  10/99  (e)
Mankato, Minnesota              (o)  488,663 1,141,844             - -       488,663 1,141,844 1,630,506   79,729   1992  10/99  (e)
Matteson, Illinois              (o)  664,403   852,845             - -       664,403   852,845 1,517,248   59,550   1970  10/99  (e)
Merrillville, Indiana           (o)  567,083 1,176,715             - -       567,083 1,176,715 1,743,798   82,164   1978  10/99  (e)
Palatine, Illinois              (o)  686,927   674,672             - -       686,927   674,672 1,361,599   31,860   1999  10/99  (e)
Palos Heights, Illinois         (o)  375,257   734,314             - -       375,257   734,314 1,109,571   51,273   1977  10/99  (e)
Saint Charles, Illinois         (o)  614,512   630,952             - -       614,512   630,952 1,245,464   44,056   1977  10/99  (e)
Westmont, Illinois              (o)  518,276   591,047             - -       518,276   591,047 1,109,323   41,270   1980  10/99  (e)
Willowbrook, Illinois           (o)  586,045   718,306             - -       586,045   718,306 1,304,351   50,156   1977  10/99  (e)
<PAGE>

Bandana's Bar-B-Q Restaurants:
Arnold, Missouri            (m) (o)  373,239           -     873,481 -       373,239   873,481 1,246,720   70,272   1999   6/99  (e)
Collinsville, Illinois      (m) (o)  346,699     829,363           - -       346,699   829,363 1,176,062   77,570   1987   3/99  (e)
Columbia, Missouri          (m) (o)  501,566           -     920,312 -       501,566   920,312 1,421,878   30,428   1985   1/99  (e)
Crystal City, Missouri      (m)      273,460     875,101           - -       273,460   875,101 1,148,561   60,462   1999   8/99  (e)
Fenton, Missouri            (m)      624,303           -   1,026,766 -       624,303 1,026,766 1,651,068   88,695   1986   3/99  (e)

Bennigan's Restaurants:
Arvada, Colorado                (o)  714,194   1,302,733           - -       714,194 1,302,733 2,016,927  206,092   1997   4/97  (e)
Batavia, Illinois               (o)  944,185           -   1,529,062 -       944,185 1,529,062 2,473,247  101,937   2000   1/00  (e)
Bedford, Texas                  (o)  768,333           -           - -       768,333        (g)  768,333       (h)  1986   6/98  (h)
Canton, Ohio                    (o)1,433,543           -     835,463 -     1,433,543   835,463 2,269,006   41,773   2000   5/00  (e)
Clearwater, Florida             (o)  900,038           -           - -       900,038        (g)  900,038       (h)  1979   6/98  (h)
Colorado Springs, Colorado      (o)  794,255           -           - -       794,255        (g)  794,255       (h)  1979   6/98  (h)
Copley, Ohio                    (o)1,433,543           -     835,463 -     1,433,543   835,463 2,269,006   41,773   2000   5/00  (e)
Englewood, Colorado             (o)  665,141           -           - -       665,141        (g)  665,141       (h)  1984   6/98  (h)
Englewood, New Jersey           (o)1,460,179     901,042           - -     1,460,179   901,042 2,361,220  106,418   1982   6/98  (e)
Florham Park, New Jersey        (o)1,077,645           -           - -     1,077,645        (g)1,077,645       (h)  1983   6/98  (h)
Glenview, Illinois              (o)1,019,248           -   1,789,742 -     1,019,248 1,789,742 2,808,991   69,601   2000  11/00  (e)
Grapevine, Texas                (o)1,038,598           -   1,523,346 -     1,038,598 1,523,346 2,561,944  105,506   1999  11/99  (e)
Houston, Texas                  (o)  908,502           -           - -       908,502        (g)  908,502       (h)  1979   6/98  (h)
Jacksonville, Florida           (o)  779,387           -           - -       779,387        (g)  779,387       (h)  1983   6/98  (h)
Jacksonville, Florida           (o)  832,557           -           - -       832,557        (g)  832,557       (h)  1981   6/98  (h)
Lone Tree, Colorado             (o)1,075,230           -   1,502,305 -     1,075,230 1,502,305 2,577,535   79,270   1999   6/00  (e)
Mount Laurel, New Jersey        (o)1,305,939   1,030,685           - -     1,305,939 1,030,685 2,336,624  121,729   1982   6/98  (e)
North Richland Hills, Texas     (o)  886,048           -           - -       886,048        (g)  886,048       (h)  1979   6/98  (h)
Ocala, Florida                  (o)  693,453           -   1,072,916 -       693,453 1,072,916 1,766,369   80,469   1998  12/98  (e)
Oklahoma City, Oklahoma         (o)  756,750           -           - -       756,750        (g)  756,750       (h)  1986   6/98  (h)
Orlando, Florida                (o)1,585,461     874,143           - -     1,585,461   874,143 2,459,604  103,241   1978   6/98  (e)
Pensacola, Florida              (o)  692,093           -           - -       692,093        (g)  692,093       (h)  1983   6/98  (h)
Saint Louis Park, Minnesota     (o)  885,111           -           - -       885,111        (g)  885,111       (h)  1976   6/98  (h)
Tampa, Florida                  (o)  741,286           -           - -       741,286        (g)  741,286       (h)  1980   6/98  (h)
Woodridge, Illinois             (o)  789,680           -           - -       789,680        (g)  789,680       (h)  1987  12/98  (h)

Big Boy Restaurants:
Las Vegas, Nevada           (m)      656,263           -   1,312,746 -       656,263 1,312,746 1,969,009  109,825   1997   1/98  (e)
Mansfield, Ohio             (m)      366,776           -     778,584 -       366,776   778,584 1,145,360   73,829   1999   1/99  (e)
O'Fallon, Missouri          (m)      369,314           -     704,550 -       369,314   704,550 1,073,864   64,814   1984   2/99  (e)
Overland Park, Kansas       (m)      466,949           -     630,982 -       466,949   630,982 1,097,931   56,863   1984   4/99  (e)
Saint Clairsville, Ohio     (m)      437,383           -     770,447 -       437,383   770,447 1,207,830   74,424   1991   2/99  (e)

Black Angus Restaurants:
Dublin, California              (o)1,023,054           -   1,275,135 -     1,023,054 1,275,135 2,298,188   95,635   1999   9/99  (e)
Orem, Utah                      (o)  799,168           -   1,229,788 -       799,168 1,229,788 2,028,956   91,192   1999  10/99  (e)

Black-eyed Pea Restaurants:
Fort Worth, Texas           (m)      679,384           -    ,028,766 -       679,384 1,028,766 1,708,150   73,988   1999  11/99  (e)
Glendale, Arizona           (m)      744,764           -    ,082,896 -       744,764 1,082,896 1,827,660   97,245   1998   4/99  (e)
Grapevine, Texas            (m)      892,828           -    ,323,506 -       892,828 1,323,506 2,216,334   95,417   1999   9/99  (e)
Herndon, Virginia           (m)      362,141     989,635           - -       362,141   989,635 1,351,776  114,350   1996   7/98  (e)
Hillsboro, Texas                     404,881           -           - -       404,881        (g)  404,881       (h)  1996  10/97  (h)
Killeen, Texas              (m)      518,990           -    ,013,637 -       518,990 1,013,637 1,532,627   75,740   1999   9/99  (e)
McKinney, Texas             (m)      690,692           -    ,121,270 -       690,692 1,121,270 1,811,961   88,237   1999   7/99  (e)
Mesa, Arizona               (m)      784,939     863,063           - -       784,939   863,063 1,648,002    5,550   1994   9/97  (e)
Mesa, Arizona               (m)      821,177           -    ,050,746 -       821,177 1,050,746 1,871,923   78,378   1999  10/99  (e)
Norman, Oklahoma            (m)      568,489           -     958,822 -       568,489   958,822 1,527,311   87,023   1998   3/99  (e)

Boston Market Restaurants:
Atlanta, Georgia                 (o)   774,448         -     507,587 -       774,448   507,587 1,282,034   80,363   1997   4/97  (e)
Columbus, Ohio                   (o)   353,608   606,470           - -       353,608   606,470   960,078   78,245   1997   5/98  (e)
Gambrills, Maryland              (o)   667,992         -     661,776 -       667,992   661,776 1,329,768   97,423   1997   8/97  (e)
Glendale, Arizona                (o)   566,562   403,730           - -       566,562   403,730   970,292   53,416   1997   4/98  (e)
Indianapolis, Indiana            (o)   885,567         -     648,755 -       885,567   648,755 1,534,322   93,704   1997   9/97  (e)
Jessup, Maryland            (m)        631,336         -     675,111 -       631,336   675,111 1,306,447  101,261   1997   7/97  (e)
Lansing, Michigan                (o)   515,827         -     572,706 -       515,827   572,706 1,088,532   81,128   1997  10/97  (e)
Newport News, Virginia                 473,596   586,377           - -       473,596   586,377 1,059,974   87,951   1997   7/97  (e)
Riverdale, Maryland              (o)   526,092         -     504,483 -       526,092   504,483 1,030,575   71,464   1997  10/97  (e)
Waldorf, Maryland                (o)   651,867         -     775,634 -       651,867   775,634 1,427,501  116,338   1997   7/97  (e)
Warwick, Rhode Island            (o)   234,685   589,367           - -       234,685   589,367   824,052   77,830   1994   4/98  (e)

Burger King Restaurants:
Asheboro, North Carolina               597,021   962,188           - -       597,021   962,188 1,559,210   89,607   1982   3/99  (e)
Burbank, Illinois                (o)   543,095         -     552,491 -       543,095   552,491 1,095,586   38,436   1996   8/96  (e)
Chadbourn, North Carolina              217,079         -     858,549 -       217,079   858,549 1,075,628   69,357   1999   4/99  (e)
Chattanooga, Tennessee           (o)   680,192         -     526,711 -       680,192   526,711 1,206,903   36,643   1997   5/97  (e)
Chattanooga, Tennessee           (o)   769,842         -     376,964 -       769,842   376,964 1,146,806   26,225   1997   5/97  (e)
Chicago, Illinois                (o)   917,717         -     713,170 -       917,717   713,170 1,630,887   49,614   1996   2/97  (e)
Clinton, North Carolina                349,582         -           - -       349,582        (g)  349,582       (h)  1999   2/00  (h)
Columbus, Ohio                         445,471   434,907           - -       445,471   434,907   880,378   40,502   1971   3/99  (e)
Coon Rapids, Minnesota                 387,913   560,993           - -       387,913   560,993   948,906   52,244   1991   3/99  (e)
Cut Off, Louisiana                     323,106 1,219,165           - -       323,106 1,219,165 1,542,270  113,538   1991   3/99  (e)
Highland, Indiana                (o)   672,815         -     553,461 -       672,815   553,461 1,226,275   38,503   1996   8/96  (e)
<PAGE>

John's Island, South Carolina          477,686   719,221           - -       477,686   719,221 1,196,907   66,980   1989   3/99  (e)
Kent, Ohio                       (o)   233,468   689,696           - -       233,468   689,696   923,164  112,941   1970  12/96  (e)
Lacey, Washington                      308,272         -           - -       308,272        (g)  308,272       (h)  1993   1/99  (h)
Lake Charles, Louisiana                360,438 1,062,531           - -       360,438 1,062,531 1,422,969   98,951   1988   3/99  (e)
Lancaster, Ohio                        339,900   745,696           - -       339,900   745,696 1,085,597   69,445   1987   3/99  (e)
Lynnwood, Washington                   448,745   626,866           - -       448,745   626,866 1,075,610   59,328   1988   1/99  (e)
Manchester, New Hampshire              775,925   458,838           - -       775,925   458,838 1,234,763   42,731   1971   3/99  (e)
Montgomery, Alabama         (m)        379,798   695,812           - -       379,798   695,812 1,075,610   65,853   1990   1/99  (e)
Montgomery, Alabama         (m)        402,927         -           - -       402,927        (g)  402,927       (h)  1988   1/99  (h)
Natchez, Mississippi                   273,353   718,493           - -       273,353   718,493   991,846   66,912   1973   3/99  (e)
Oak Lawn, Illinois               (o) 1,211,346         -     741,406 -     1,211,346   741,406 1,952,753   51,579   1996   9/96  (e)
Ooltewah, Tennessee              (o)   546,261         -     658,946 -       546,261   658,946 1,205,207   45,842   1997   7/97  (e)
Opelousas, Louisiana                   625,123   958,670           - -       625,123   958,670 1,583,793   89,279   1974   3/99  (e)
Portland, Oregon                       500,000         -           - -       500,000         -   500,000       (f)  2001  10/01  (f)
Rochester, New Hampshire               261,321   802,689           - -       261,321   802,689 1,064,010   74,753   1975   3/99  (e)
Shelton, Washington                    424,416   822,399           - -       424,416   822,399 1,246,814   77,834   1995   1/99  (e)
Spanaway, Washington                   416,548   762,244           - -       416,548   762,244 1,178,792   23,094   1998   2/01  (e)
Saint Paul, Minnesota                  281,966   581,637           - -       281,966   581,637   863,603   54,167   1967   3/99  (e)
Tampa, Florida              (m)        481,173         -     652,659 -       481,173   652,659 1,133,832   43,386   1999   1/00  (e)
Tappahannock, Virginia                 363,327   596,839           - -       363,327   596,839   960,166   55,582   1987   3/99  (e)
Warren, Michigan                       375,952   820,967           - -       375,952   820,967 1,196,919   76,455   1987   3/99  (e)
Wilmington, North Carolina             348,663         -     701,825 -       348,663   701,825 1,050,488   57,808   1999   4/99  (e)

Chevy's Fresh Mex Restaurants:
Altamonte Springs, Florida       (o) 1,259,828 1,623,073           - -     1,259,828 1,623,073 2,882,901  147,114   1999   4/99  (e)
Annapolis, Maryland                  1,372,280        -            - -     1,372,280        (g)1,372,280       (h)  1999  12/99  (h)
Arapahoe, Colorado               (o)   986,426 1,680,312           - -       986,426 1,680,312 2,666,738  228,696   1994  12/97  (e)
Atlanta, Georgia                 (o) 1,463,644 1,874,198           - -     1,463,644 1,874,198 3,337,842  169,876   1999   4/99  (e)
Auburn Hills, Michigan           (o) 1,122,087 2,017,496           - -     1,122,087 2,017,496 3,139,583  182,864   1999   4/99  (e)
Beaverton, Oregon                (o)   938,162 1,681,670           - -       938,162 1,681,670 2,619,832  228,662   1995  12/97  (e)
Bloomington, Minnesota           (o)   869,178 1,309,759           - -       869,178 1,309,759 2,178,937  118,716   1999   4/99  (e)
Brandon, Florida                 (o)   844,185 1,425,740           - -       844,185 1,425,740 2,269,926  129,228   1999   4/99  (e)
Clearwater, Florida              (o)   984,259 1,103,690           - -       984,259 1,103,690 2,087,949  100,038   1999   4/99  (e)
Greenbelt, Maryland              (o)   945,234 1,475,339           - -       945,234 1,475,339 2,420,573  200,607   1994  12/97  (e)
Independence, Missouri           (o) 1,239,264 1,490,392           - -     1,239,264 1,490,392 2,729,656  135,088   1999   4/99  (e)
Jacksonville, Florida            (o) 1,725,325 1,574,207           - -     1,725,325 1,574,207 3,299,532  142,685   1999   4/99  (e)
Kissimmee, Florida               (o)   570,815 1,536,290           - -       570,815 1,536,290 2,107,105  139,248   1999   4/99  (e)
Lake Mary, Florida               (o)    88,077 2,019,028           - -        88,077 2,019,028 2,107,105  183,003   1999   4/99  (e)
Lake Oswego, Oregon              (o)   963,047 1,505,671           - -       963,047 1,505,671 2,468,718  204,731   1995  12/97  (e)
Las Vegas, Nevada                (o) 1,156,847 1,188,272           - -     1,156,847 1,188,272 2,345,119  115,852   1997  12/98  (e)
Merriam, Kansas                  (o) 1,032,271 1,074,834           - -     1,032,271 1,074,834 2,107,105   97,422   1999   4/99  (e)
Naperville, Illinois             (o)   960,779 1,365,563           - -       960,779 1,365,563 2,326,342  166,891   1990   5/98  (e)
Nashville, Tennessee             (o)   956,799 2,692,320           - -       956,799 2,692,320 3,649,119  244,030   1999   4/99  (e)
Olathe, Kansas                   (o)   470,047 1,541,280           - -       470,047 1,541,280 2,011,327  139,700   1999   4/99  (e)
Orlando, Florida                 (o) 1,495,716 1,674,517           - -     1,495,716 1,674,517 3,170,232  151,777   1999   4/99  (e)
Tampa, Florida                   (o)   869,408 1,548,972           - -       869,408 1,548,972 2,418,380  140,398   1999   4/99  (e)
Tampa, Florida                   (o)   878,358 1,449,034           - -       878,358 1,449,034 2,327,392  131,339   1999   4/99  (e)
Taylor, Michigan                 (o)   844,918 1,712,340           - -       844,918 1,712,340 2,557,257  155,205   1999   4/99  (e)

Chick-Fil-A Restaurant:
Rockwall, Texas                  (o)   528,118         -     340,297 -       528,118   340,297   868,415   61,788   1996  10/96  (e)

Chipotle Mexican Grill Restaurant:
Upland, California               (o)   788,248         -     209,449 -       788,248   209,449   997,697   38,397   1996   7/96  (e)

Culpepper Restaurant:
Bridgeton, Missouri         (m)             --   595,741           - -             -   595,741   595,741   20,465   1989   3/99  (e)

Darryl's Restaurants:
Evansville, Indiana         (m)  (o)   563,479         -           - -       563,479        (g)  563,479       (h)  1983   6/97  (h)
Hampton, Virginia                (o)   698,367   523,919           - -       698,367   523,919 1,222,286   36,029   1983   6/97  (e)
Huntsville, Alabama         (m)  (o)   777,842   609,765           - -       777,842   609,765 1,387,607   41,932   1981   6/97  (e)
Knoxville, Tennessee        (m)  (o)   589,574         -           - -       589,574        (g)  589,574       (h)  1983   6/97  (h)
Louisville, Kentucky             (o)   647,375         -           - -       647,375        (g)  647,375       (h)  1983   6/97  (h)
Mobile, Alabama                        495,195         -           - -       495,195        (g)  495,195       (h)  1983   6/97  (h)
Montgomery, Alabama         (m)  (o)   346,380         -           - -       346,380        (g)  346,380       (h)  1984   6/97  (h)
Nashville, Tennessee        (m)  (o)   513,218         -           - -       513,218        (g)  513,218       (h)  1981   6/97  (h)
Orlando, Florida                     1,485,631   772,853           - -     1,485,631   772,853 2,258,484  119,054   1983   6/97  (e)
Pensacola, Florida               (o)   389,394         -           - -       389,394        (g)  389,394       (h)  1983   6/97  (h)
Raleigh, North Carolina     (m)      1,131,164   719,865           - -     1,131,164   719,865 1,851,029  109,974   1972   6/97  (e)
Raleigh, North Carolina     (m)  (o)   840,525   465,154           - -       840,525   465,154 1,305,679   33,316   1980   6/97  (e)
Richmond, Virginia          (m)  (o)   618,125         -           - -       618,125        (g)  618,125       (h)  1982   6/97  (h)
Richmond, Virginia                     311,196         -           - -       311,196        (g)  311,196       (h)  1982   6/97  (h)
Winston-Salem, North Carolina          436,867         -           - -       436,867        (g)  436,867       (h)  1978   6/97  (h)

Del Taco Restaurant:
Mesa, Arizona                    (o)   642,483         -     581,759 -       642,483   581,759 1,224,242   42,301   1999  10/99  (e)

Denny's Restaurants:
Duncan, South Carolina           (o)   219,702         -           - -       219,702        (g)  219,702       (h)  1992   3/99  (h)
Greensboro, North Carolina       (o)   361,025   572,098           - -       361,025   572,098   933,123   53,278   1992   3/99  (e)
Greenville, South Carolina       (o)   457,851   454,566           - -       457,851   454,566   912,417   42,333   1985   3/99  (e)
Houston, Texas                   (o)   392,818   664,851           - -       392,818   664,851 1,057,669   61,916   1985   3/99  (e)
Kansas City, Missouri                  400,847         -     826,367 -       400,847   826,367 1,227,214   65,172   1997   6/99  (e)
Landrum, South Carolina          (o)   155,398         -           - -       155,398        (g)  155,398       (h)  1992   3/99  (h)
Lee's Summit, Missouri      (m)        539,650         -     670,448 -       539,650   670,448 1,210,098   54,542   1979   5/99  (e)
McKinney, Texas             (m)        439,961         -     608,063 -       439,961   608,063 1,048,024    4,121   1996   4/96  (e)
Merriam, Kansas             (m)        644,889         -     991,991 -       644,889   991,991 1,636,880   86,577   1981   5/99  (e)
Mooresville, North Carolina      (o)   307,292         -           - -       307,292        (g)  307,292       (h)  1992   3/99  (h)
North Kansas City, Missouri (m)        450,010         -     760,630 -       450,010   760,630 1,210,640   66,198   1979   5/99  (e)
Pasadena, Texas                        466,555         -     506,094 -       466,555   506,094   972,649  106,838   1981   9/95  (e)
Santee, South Carolina           (o)   328,506   358,314           - -       328,506   358,314   686,819   33,369   1992   3/99  (e)
<PAGE>

Sedalia, Missouri           (m)        318,979         -   1,013,110 -       318,979 1,013,110 1,332,089   89,052   1999   5/99  (e)
Shawnee, Oklahoma                      528,090         -     625,653 -       528,090   625,653 1,153,743  132,077   1987   9/95  (e)
Tampa, Florida              (m)        397,302         -           - -       397,302        (g)  397,302       (h)  1997   8/97  (h)
Topeka, Kansas                   (o)   414,731         -           - -       414,731        (g)  414,731       (h)  1989   3/99  (h)
Winter Springs, Florida          (o)   555,232         -           - -       555,232        (g)  555,232       (h)  1994   3/99  (h)

Einstein Brothers' Bagels Restaurants:
Dearborn, Michigan                     464,957         -     178,078 -       464,957   178,078   643,035   26,710   1997   7/97  (e)
Springfield, Virginia                  633,691         -           - -       633,691         -   633,691       (f)  1997   7/97  (f)

Fazoli's Restaurant:
Southaven, Mississippi           (o)   485,013         -           -  -   485,013           (g)  485,013       (h)  1999   2/99  (h)

Golden Corral Family Steakhouse Restaurants:
Bellevue, Nebraska                     440,812         -   1,039,283 -       440,812 1,039,283 1,480,095   94,200   1999   4/99  (e)
Brunswick, Georgia                     456,629         -   1,170,630 -       456,629 1,170,630 1,627,259  127,780   1998   9/98  (e)
Carlsbad, New Mexico                   384,221         -     643,854 -       384,221   643,854 1,028,074  135,919   1995   9/95  (e)
Cleburne, Texas                        359,455         -     653,853 -       359,455   653,853 1,013,308  136,213   1995  10/95  (e)
Clovis, New Mexico                     426,349   805,517           - -       426,349   805,517 1,231,866   93,002   1997   7/98  (e)
Columbia, Missouri               (o)   848,133         -   1,008,678 -       848,133 1,008,678 1,856,811  100,648   1999   1/99  (e)
Columbia, Tennessee                    442,218   930,207           - -       442,218   930,207 1,372,424   99,103   1996  12/96  (e)
Columbus, Ohio                       1,031,098         -   1,092,939 -     1,031,098 1,092,939 2,124,037  224,650   1995  11/95  (e)
Cookeville, Tennessee                  806,377         -   1,086,502 -       806,377 1,086,502 1,892,879   88,562   1999   7/99  (e)
Corpus Christi, Texas                  576,548         -     934,918 -       576,548   934,918 1,511,466  135,036   1997   9/97  (e)
Corsicana, Texas                       349,227         -     699,756 -       349,227   699,756 1,048,983  149,664   1995   8/95  (e)
Council Bluffs, Iowa                   546,078         -     993,149 -       546,078   993,149 1,539,227  113,100   1998   8/98  (e)
Davenport, Iowa                        601,296 1,344,016           - -       601,296 1,344,016 1,945,312  121,452   1998   4/99  (e)
Dover, Delaware                      1,043,108         -    977,508  -     1,043,108   977,508 2,020,616  198,208   1995  12/95  (e)
Dubuque, Iowa                          564,242         -   1,056,315 -       564,242 1,056,315 1,620,557  120,294   1998   8/98  (e)
Duncan, Oklahoma                       161,390         -   1,028,945 -       161,390 1,028,945 1,190,335  140,043   1997  11/97  (e)
Edmond, Oklahoma                       569,664         -   1,017,781 -       569,664 1,017,781 1,587,445  118,732   1998   7/98  (e)
Enid, Oklahoma                         364,536         -     865,147 -       364,536   865,147 1,229,683  120,152   1997  11/97  (e)
Evansville, Indiana                    601,394         -   1,194,533 -       601,394 1,194,533 1,795,926   86,406   1999   7/99  (e)
Evansville, Indiana              (o)   585,396         -   1,519,454 -       585,396 1,519,454 2,104,850   97,422   1999  12/99  (e)
Flowood, Mississippi             (o)   595,717         -   1,094,345 -       595,717 1,094,345 1,690,062   73,255   1999  12/99  (e)
Fort Dodge, Iowa                       320,880         -   1,155,880 -       320,880 1,155,880 1,476,760  113,620   1999   1/99  (e)
Fort Walton Beach, Florida             590,538         -   1,176,436 -       590,538 1,176,436 1,766,974  156,848   1997   1/98  (e)
Fort Wayne, Indiana                    740,240         -   1,378,548 -       740,240 1,378,548 2,118,788   88,340   1999  12/99  (e)
Fort Worth, Texas                      640,320   898,171           - -       640,320   898,171 1,538,491  192,101   1995   8/95  (e)
Henderson, Kentucky                    380,659         -   1,127,382 -       380,659 1,127,382 1,508,042   97,543   1999   4/99  (e)
Hopkinsville, Kentucky      (m)        456,646         -     861,803 -       456,646   861,803 1,318,449   90,135   1996   2/97  (e)
Jacksonville, Florida                  615,554         -   1,184,073 -       615,554 1,184,073 1,799,628  171,023   1997   9/97  (e)
Jacksonville, Florida                  541,264         -   1,173,738 -       541,264 1,173,738 1,715,002  169,530   1997   9/97  (e)
Jacksonville, Florida            (o)   681,984         -   1,345,152 -       681,984 1,345,152 2,027,136   87,148   1999  12/99  (e)
Kansas City, Missouri                  409,153         -     943,712 -       409,153   943,712 1,352,865  133,684   1997  10/97  (e)
Lufkin, Texas                          479,197         -     954,051 -       479,197   954,051 1,433,248  161,651   1997   1/97  (e)
Moberly, Missouri                      374,230         -     838,342 -       374,230   838,342 1,212,572  130,402   1997   5/97  (e)
Mobile, Alabama                        428,841         -   1,031,457 -       428,841 1,031,457 1,460,298  140,384   1997  12/97  (e)
Muskogee, Oklahoma                     395,839         -     887,540 -       395,839   887,540 1,283,379  110,935   1997   4/98  (e)
Olathe, Kansas                         548,821         -   1,099,448 -       548,821 1,099,448 1,648,268  137,421   1997   4/98  (e)
Omaha, Nebraska                        570,004         -   1,271,666 -       570,004 1,271,666 1,841,669  123,912   1998  12/98  (e)
Orlando, Florida                        72,404         -           - -        72,404        -     72,404       (f)  2001   5/00  (f)
Palatka, Florida                       322,433         -     987,385 -       322,433   987,385 1,309,818   135,645  1997  12/97  (e)
Pensacola, Florida                     657,606         -   1,347,285 -       657,606 1,347,285 2,004,890   132,468  1999   3/99  (e)
Port Richey, Florida                   626,999         -   1,130,692 -       626,999 1,130,692 1,757,691   202,431  1996   9/96  (e)
Rock Hill, South Carolina        (o)   718,003         -   1,202,177 -       718,003 1,202,177 1,920,181    89,754  1999  10/99  (e)
Tampa, Florida                         825,650         -   1,161,192 -       825,650 1,161,192 1,986,842   228,288  1995   2/96  (e)
Texarkana, Texas                 (o)   664,537         -   1,136,955 -       664,537 1,136,955 1,801,492    53,690  2000   7/00  (e)
Tulsa , Oklahoma                 (o)   705,094         -   1,305,383 -       705,094 1,305,383 2,010,477    98,282  1999   9/99  (e)
Universal City, Texas                  357,429         -     650,249 -       357,429   650,249 1,007,678   137,269  1995   9/95  (e)
Winchester, Kentucky                   303,633         -     970,489 -       303,633   970,489 1,274,123   148,261  1997   6/97  (e)

Ground Round Restaurants:
Allentown, Pennsylvania          (o)   405,631   884,954           - -       405,631   884,954 1,290,585   125,247  1983  10/97  (e)
Cincinnati, Ohio                 (o)   282,099   534,632           - -       282,099   534,632   816,731    75,666  1981  10/97  (e)
Dubuque, Iowa                    (o)   693,733   810,458           - -       693,733   810,458 1,504,190   114,703  1982  10/97  (e)
Ewing Township, New Jersey       (o)   371,254   685,847           - -       371,254   685,847 1,057,101    95,162  1979  11/97  (e)
Janesville, Wisconsin            (o)   451,235   548,178           - -       451,235   548,178   999,412    77,583  1982  10/97  (e)
Kalamazoo, Michigan              (o)   287,331   712,081           - -       287,331   712,081   999,412   100,780  1980  10/97  (e)
Parma, Ohio                      (o)   388,699   793,475           - -       388,699   793,475 1,182,173   112,300  1977  10/97  (e)
Reading, Pennsylvania            (o)   728,574   793,410           - -       728,574   793,410 1,521,984   112,291  1982  10/97  (e)
Waterloo, Iowa                   (o)   436,471   659,089           - -       436,471   659,089 1,095,560    93,280  1982  10/97  (e)
Wauwatosa, Wisconsin             (o)   627,680   804,399           - -       627,680   804,399 1,432,079   113,846  1977  10/97  (e)

Guthrie's Restaurant:
Hoover, Alabama                  (o)   493,536   619,786           - -       493,536   619,786 1,113,322    89,520  1997   9/97  (e)

Hardee's Restaurants:
Chalkville, Alabama              (o)   201,069   465,165           - -       201,069   465,165   666,234    43,320  1992  3/99   (e)
Columbia, Tennessee              (o)   226,300         -           - -       226,300        (g)  226,300        (h) 1993  3/99   (h)
Gulf Shores, Alabama             (o)   409,444   604,784           - -       409,444   604,784 1,014,229    56,322  1993  3/99   (e)
Horn Lake, Mississippi           (o)   302,787         -           - -       302,787        (g)  302,787        (h) 1993  3/99   (h)
Johnson City, Tennessee                215,567         -           - -       215,567        (g)  215,567        (h) 1993  3/99   (h)
Mobile, Alabama                        336,696         -           - -       336,696        (g)  336,696        (h) 1993  3/99   (h)
Petal, Mississippi               (o)   324,298   420,017           - -       324,298   420,017   744,315    39,115  1993  3/99   (e)
Rock Hill, South Carolina              256,050   476,149           - -       256,050   476,149   732,198    44,343  1993  3/99   (e)
Tusculum, Tennessee              (o)   217,396   522,802           - -       217,396   522,802   740,199    48,687  1993  3/99   (e)
Warrior, Alabama                 (o)   177,659         -           - -       177,659        (g)  177,659        (h) 1992  3/99   (h)
West Point, Mississippi          (o)   173,386         -           - -       173,386        (g)  173,386        (h) 1993  3/99   (h)

Houlihan's Restaurants:
Bethel Park, Pennsylvania              846,183   595,601           - -       846,183   595,601 1,441,783    90,990  1972  6/97   (e)
<PAGE>

Langhorne, Pennsylvania     (m)        817,039   648,765           - -       817,039   648,765 1,465,804    99,112  1976  6/97   (e)
Plymouth Meeting, Pennsylvania       1,181,460   908,880           - -     1,181,460   908,880 2,090,340   138,849  1974  6/97   (e)

International House Of Pancakes Restaurants:
Auburn, Washington               (o)   632,811 1,135,312           - -       632,811 1,135,312 1,768,123    97,988  1997  4/99   (e)
Castle Rock, Colorado            (o)   540,896         -   1,196,239 -       540,896 1,196,239 1,737,135    83,418  1999 10/99   (e)
Clarksville, Tennessee           (o)   375,987   964,430           - -       375,987   964,430 1,340,417    97,676  1997 12/98   (e)
Corpus Christi, Texas            (o)   567,462         -           - -       567,462        (g)  567,462        (h) 1997  8/99   (h)
Elk Grove, California            (o)   584,766         -           - -       584,766        (g)  584,766        (h) 1997  8/97   (h)
Fairfax, Virginia                (o) 1,096,763   649,916           - -     1,096,763   649,916 1,746,679    46,549  1995  6/97   (e)
Fort Worth, Texas                (o)   501,388   746,474           - -       501,388   746,474 1,247,862    86,874  1997  9/98   (e)
Fort Worth, Texas                (o)   565,639   923,669           - -       565,639   923,669 1,489,308    82,877  1998  4/99   (e)
Greeley, Colorado                (o)   416,279         -     867,972 -       416,279   867,972 1,284,251    88,145  1998 12/98   (e)
Greenville, South Carolina       (o)   476,847   961,606           - -       476,847   961,606 1,438,453    93,753  1998 12/98   (e)
Hollywood, California            (o) 1,407,002         -           - -     1,407,002        (g)1,407,002        (h) 1996  6/97   (h)
Homewood, Alabama                (o)   545,112 1,029,900           - -       545,112 1,029,900 1,575,012   104,307  1996 12/98   (e)
Houston, Texas                   (o)   645,365   790,258           - -       645,365   790,258 1,435,624    57,240  1996  7/97   (e)
Kansas City, Missouri            (o)   512,481   831,202           - -       512,481   831,202 1,343,683    90,578  1998  9/98   (e)
Killeen, Texas                   (o)   380,687   775,713           - -       380,687   775,713 1,156,399    84,531  1997  9/98   (e)
Lake Jackson, Texas              (o)   460,167   744,128           - -       460,167   744,128 1,204,295    53,899  1997  8/97   (e)
Leesburg, Virginia               (o)   665,015   580,798           - -       665,015   580,798 1,245,813    90,266  1994  5/97   (e)
Leon Valley, Texas               (o)   593,624   918,024           - -       593,624   918,024 1,511,648    89,588  1997 12/98   (e)
Loveland, Colorado               (o)   488,259         -           - -       488,259        (g)  488,259        (h) 1997  8/97   (h)
Murfreesboro, Tennessee          (o)   647,414   871,268           - -       647,414   871,268 1,518,683    87,843  1998 12/98   (e)
Phoenix, Arizona                 (o)   668,112   941,796           - -       668,112   941,796 1,609,907    84,504  1998  4/99   (e)
Port Arthur, Texas               (o)   382,950   957,912           - -       382,950   957,912 1,340,862    93,393  1997 12/98   (e)
Poughkeepsie, New York           (o)   504,533   806,624           - -       504,533   806,624 1,311,157    92,762  1996  7/98   (e)
Pueblo, Colorado                 (o)   387,562   891,943           - -       387,562   891,943 1,279,505    90,416  1997 12/98   (e)
Roseville, Michigan              (o)   282,868   843,648           - -       282,868   843,648 1,126,517    85,058  1997 12/98   (e)
Southaven, Mississippi           (o)   579,175 1,176,434           - -       579,175 1,176,434 1,755,609   114,698  1997 12/98   (e)
Stockbridge, Georgia             (o)   765,743   652,671           - -       765,743   652,671 1,418,413    47,274  1997  7/97   (e)
Victoria, Texas                  (o)   319,237         -           - -       319,237       (g)   319,237        (h) 1997  8/97   (h)

J. Gilbert's Restaurant:
McLean, Virginia                       944,585   689,363           - -       944,585   689,363 1,633,948   105,314  1971  6/97   (e)

Jack in the Box Restaurants:
Allen, Texas                     (o)   711,642         -     726,339 -       711,642   726,339 1,437,981    68,173  1999  3/99   (e)
Austin, Texas                    (o)   447,208         -     880,283 -       447,208   880,283 1,327,490    51,350  1999  3/00   (e)
Avondale, Arizona                (o)   605,063         -     623,222 -       605,063   623,222 1,228,286    45,141  1998  8/98   (e)
Bacliff, Texas                   (o)   419,488         -     697,861 -       419,488   697,861 1,117,349   102,648  1997  8/97   (e)
Carson, California               (o)   457,821         -     708,581 -       457,821   708,581 1,166,402    49,671  1999 10/99   (e)
Chandler, Arizona                (o)   481,456         -     636,588 -       481,456   636,588 1,118,043    67,428  1998  9/98   (e)
Chandler, Arizona                (o)   604,724         -     600,686 -       604,724   600,686 1,205,411    53,559  1999  4/99   (e)
Channelview, Texas                     361,238         -     711,595 -       361,238   711,595 1,072,833   102,780  1997  9/97   (e)
Corinth, Texas                   (o)   396,864         -     576,370 -       396,864   576,370   973,234    41,329  1997  9/97   (e)
Corning, California              (o)   163,533   994,490           - -       163,533   994,490 1,158,024    75,858  1999  9/99   (e)
Dallas, Texas                    (o)   369,886         -     467,819 -       369,886   467,819   837,706    33,885  1997  3/97   (e)
Enumclaw, Washington             (o)   124,468         -     773,506 -       124,468   773,506   897,973   115,919  1997  7/97   (e)
Florissant, Missouri             (o)   389,265         -     779,211 -       389,265   779,211 1,168,476   101,623  1997  2/98   (e)
Folsom, California               (o)   635,343         -     652,472 -       635,343   652,472 1,287,815    45,351  1997  9/97   (e)
Fort Worth, Texas                (o)   341,693         -     732,173 -       341,693   732,173 1,073,866    42,710  2000  4/00   (e)
Fort Worth, Texas                (o)   482,309   716,199           - -       482,309   716,199 1,198,508    54,080  1999  8/99   (e)
Fresno, California               (o)   462,813         -     548,493 -       462,813   548,493 1,011,305    37,893  1998  8/98   (e)
Fresno, California               (o)   286,850         -     606,547 -       286,850   606,547   893,397    89,214  1997  8/97   (e)
Georgetown, Texas                (o)   499,875         -     866,353 -       499,875   866,353 1,366,228    60,199  1999 12/99   (e)
Granbury, Texas                  (o)   404,270         -     831,716 -       404,270   831,716 1,235,986    53,957  1999 12/99   (e)
Gun Barrel City, Texas           (o)   284,046         -     549,495 -       284,046   549,495   833,541    39,801  1998  5/98   (e)
Hillsboro, Oregon                (o)   699,776         -     864,724 -       699,776   864,724 1,564,500    62,143  1999  9/99   (e)
Hollister, California            (o)   537,223         -     592,536 -       537,223   592,536 1,129,759    93,739  1997  4/97   (e)
Houston, Texas                   (o)   403,002         -     610,815 -       403,002   610,815 1,013,817   108,584  1996  9/96   (e)
Houston, Texas                   (o)   375,776         -     643,445 -       375,776   643,445 1,019,221   114,301  1996  9/96   (e)
Houston, Texas                   (o)   370,342         -     548,107 -       370,342   548,107   918,449    85,186  1997  5/97   (e)
Houston, Texas                   (o)   420,521         -     543,338 -       420,521   543,338   963,859    82,938  1997  6/97   (e)
Houston, Texas                   (o)   545,485         -     527,020 -       545,485   527,020 1,072,504   102,471  1996  3/96   (e)
Humble, Texas                    (o)   390,509         -     542,599 -       390,509   542,599   933,108    38,802  1997 12/96   (e)
Humble, Texas                    (o)   372,584   746,622           - -       372,584   746,622 1,119,206    53,730  1999  9/99   (e)
Humble, Texas                    (o)   437,667         -     591,877 -       437,667   591,877 1,029,544   105,218  1996  9/96   (e)
Hutchins, Texas                  (o)   272,937         -     653,792 -       272,937   653,792   926,729    47,356  1998  4/98   (e)
Irvine, California               (o)   899,898         -     733,701 -       899,898   733,701 1,633,599    66,770  1999  4/99   (e)
Kent, Washington                 (o)   737,038         -     553,688 -       737,038   553,688 1,290,725    40,105  1997  4/97   (e)
Las Vegas, Nevada                (o)   730,674         -     547,445 -       730,674   547,445 1,278,120    39,653  1997  4/97   (e)
Los Angeles, California          (o) 1,076,096         -     591,340 -     1,076,096   591,340 1,667,436    58,904  1999  1/99   (e)
Los Angeles, California          (o)   911,754         -     531,018 -       911,754   531,018 1,442,772    36,909  1997  5/97   (e)
Los Angeles, California          (o)   740,616         -     678,189 -       740,616   678,189 1,418,805    92,216  1997  9/97   (e)
Los Angeles, California          (o)   853,821         -     602,301 -       853,821   602,301 1,456,122    41,864  1998  5/98   (e)
Lufkin, Texas                    (o)   418,351         -     651,064 -       418,351   651,064 1,069,415    68,961  1998  9/98   (e)
Lufkin, Texas                    (o)   363,967         -     776,605 -       363,967   776,605 1,140,572    74,097  1999  2/99   (e)
Menlo Park, California           (o)   685,448   860,792           - -       685,448   860,792 1,546,240    54,995  1999 12/99   (e)
Moscow, Idaho                    (o)   217,851         -     751,664 -       217,851   751,664   969,515   118,913  1992  4/97   (e)
Nacogdoches, Texas               (o)   383,591         -     643,055 -       383,591   643,055 1,026,645    46,248  1998  5/98   (e)
Ontario, California              (o)   771,241         -     793,229 -       771,241   793,229 1,564,471    72,622  1999  4/99   (e)
Orange, Texas                    (o)   387,533         -     787,843 -       387,533   787,843 1,175,376    71,697  1999  4/99   (e)
Oxnard, California               (o)   681,663         -     642,924 -       681,663   642,924 1,324,587    96,353  1997  7/97   (e)
Palmdale, California             (o)   631,275         -     567,912 -       631,275   567,912 1,199,187    88,264  1997  5/97   (e)
Peoria, Arizona                  (o)   496,689         -     721,614 -       496,689   721,614 1,218,303    65,472  1999  4/99   (e)
Pflugerville, Texas              (o)   717,246         -     657,685 -       717,246   657,685 1,374,931    47,638  1998  6/98   (e)
Salem, Oregon                    (o)   501,168         -     699,067 -       501,168   699,067 1,200,235    50,488  1999  6/99   (e)
San Antonio, Texas               (o)   311,466         -     700,979 -       311,466   700,979 1,012,445    63,600  1999  4/99   (e)
San Antonio, Texas               (o)   274,362         -     781,797 -       274,362   781,797 1,056,159    73,378  1999  3/99   (e)
Spring, Texas                    (o)   475,748         -     719,239 -       475,748   719,239 1,194,987    52,010  1999  9/99   (e)
Saint Louis, Missouri            (o)   474,296         -     727,491 -       474,296   727,491 1,201,787    50,565  1998  9/98   (e)
<PAGE>

Tacoma, Washington               (o)   495,529         -     759,800 -       495,529   759,800 1,255,329    68,382  1999  4/99   (e)
Tigard, Oregon                   (o)   353,396         -     904,688 -       353,396   904,688 1,258,084    91,522  1999 12/98   (e)
Tyler, Texas                     (o)   289,257         -     699,525 -       289,257   699,525   988,782    61,999  1999  5/99   (e)
Waxahachie, Texas                (o)   477,580         -     538,255 -       477,580   538,255 1,015,835    38,987  1998  4/98   (e)
Weatherford, Texas               (o)   464,986         -     785,149 -       464,986   785,149 1,250,136    70,293  1999  3/99   (e)
West Sacramento, California      (o)   523,089         -     617,131 -       523,089   617,131 1,140,221    89,056  1997  9/97   (e)
Woodland, California             (o)   358,130         -     668,383 -       358,130   668,383 1,026,513    94,598  1997 10/97   (e)

Jack in the Box/Arco Gas Station-Convenience Stores:
Benicia, California              (o)   745,752 1,551,697           - -       745,752 1,551,697 2,297,449    94,826  1999  1/00   (e)
Coachella, California            (o)   370,963 1,406,532           - -       370,963 1,406,532 1,777,495    88,885  1999  2/00   (e)

Joe's Crab Shack Restaurant:
Lilburn, Georgia                 (o) 1,089,268   931,637           - -     1,089,268   931,637 2,020,905    84,443  1999  4/99   (e)

Jose Pepper's Restaurant:
Blue Springs, Missouri      (m)        251,188         -     737,672 -       251,188   737,672   988,860    62,759  1982  6/99   (e)

KFC Restaurants:
Baton Rouge, Louisiana                 106,180         -     625,743 -       106,180   625,743   731,922    41,190  1987  6/99   (e)
Baton Rouge, Louisiana                 180,532         -           - -       180,532        (g)  180,532        (h) 2000  8/00   (h)
Gretna, Louisiana                      404,923         -     385,254 -       404,923   385,254   790,177    23,808  1991  5/99   (e)
New Orleans, Louisiana                 315,037         -     541,553 -       315,037   541,553   856,591    34,061  1991  5/99   (e)
New Orleans, Louisiana                 158,829         -     491,957 -       158,829   491,957   650,785    31,271  1991  5/99   (e)
New Orleans, Louisiana                 310,574         -     532,557 -       310,574   532,557   843,132    33,488  1992  5/99   (e)
New Orleans, Louisiana                 205,795         -     564,058 -       205,795   564,058   769,853    35,864  1995  5/99   (e)
Putnam, Connecticut                    301,723         -           - -       301,723        (g)  301,723        (h) 1997  7/97   (h)

Krystal Restaurants:
Brandon, Mississippi             (o)   340,115   687,423           - -       340,115   687,423 1,027,537    49,647  2000 12/99   (e)
Chattanooga, Tennessee           (o)   445,493   594,649           - -       445,493   594,649 1,040,141    52,912  1994  3/99   (e)
Greenville, Alabama              (o)   190,146   614,193           - -       190,146   614,193   804,339    32,416  2000  5/00   (e)
Montgomery, Alabama              (o)   311,103   506,943           - -       311,103   506,943   818,045    36,613  2000 12/99   (e)
Scottsboro, Alabama              (o)   255,500   561,315           - -       255,500   561,315   816,815    35,862  1999 12/99   (e)

Leeann Chin Chinese Cuisine Restaurants:
Chanhassen, Minnesota            (o)   376,929   639,875           - -       376,929   639,875 1,016,804   131,444  1995 11/95   (e)
Golden Valley, Minnesota         (o)   665,422         -     481,311 -       665,422   481,311 1,146,733    85,500  1996  9/96   (e)

Little Lake Bryan Land:
Orlando, Florida                     6,271,201         -           - -     6,271,201         - 6,271,201        (n)   (n)   (n)  (n)

On the Border Restaurant:
San Antonio, Texas          (m)              -         -   1,190,160 -             - 1,190,160 1,190,160    11,322  1997  1/98   (e)

Pizza Hut Restaurants:
Adrian, Michigan                       242,239         -           - -       242,239         -   242,239        (f) 1989  1/96   (f)
Beaver, West Virginia                  212,053         -           - -       212,053         -   212,053        (f) 1986  5/96   (f)
Beckley, West Virginia                 209,432         -           - -       209,432         -   209,432        (f) 1978  5/96   (f)
Bedford, Ohio                          174,721         -           - -       174,721         -   174,721        (f) 1975  1/96   (f)
Belle, West Virginia                    46,737         -           - -        46,737         -    46,737        (f) 1980  5/96   (f)
Bluefield, West Virginia               120,449         -           - -       120,449         -   120,449        (f) 1986  5/96   (f)
Bolivar, Ohio                          190,009   410,096           - -       190,009   410,096   600,105    26,721  1996  3/97   (e)
Bowling Green, Ohio                    135,831   191,595           - -       135,831   191,595   327,426    12,484  1992  2/97   (e)
Bowling Green, Ohio                    200,442         -           - -       200,442         -   200,442        (f) 1985  1/96   (f)
Carrollton, Ohio                       187,082   533,487           - -       187,082   533,487   720,569    34,760  1990  3/97   (e)
Cleveland, Ohio                        116,849         -           - -       116,849         -   116,849        (f) 1978  1/96   (f)
Cleveland, Ohio                        226,163         -           - -       226,163         -   226,163        (f) 1987  1/96   (f)
Cleveland, Ohio                        126,494         -           - -       126,494         -   126,494        (f) 1986  1/96   (f)
Collinsville, Illinois                 507,544         -     328,353 -       507,544   328,353   835,897    49,250  1997  7/97   (e)
Cooper City, Florida             (o)   267,703   128,483           - -       267,703   128,483   396,187     5,353  1998 10/00   (e)
Cross Lanes, West Virginia             215,881         -           - -       215,881         -   215,881        (f) 1990  5/96   (f)
Defiance, Ohio                         242,239         -           - -       242,239         -   242,239        (f) 1977  1/96   (f)
East Cleveland, Ohio                   194,012         -           - -       194,012         -   194,012        (f) 1986  1/96   (f)
Euclid, Ohio                           202,050         -           - -       202,050         -   202,050        (f) 1983  1/96   (f)
Huntington, West Virginia              212,093         -           - -       212,093         -   212,093        (f) 1978  5/96   (f)
Hurricane, West Virginia               180,803         -           - -       180,803         -   180,803        (f) 1978  5/96   (f)
Lambertville, Michigan                  99,166         -           - -        99,166         -    99,166        (f) 1994  1/96   (f)
Marathon, Florida                (o)   161,249   234,940           - -       161,249   234,940   396,188     9,789  1980 10/00   (e)
Marietta, Ohio                         169,454         -           - -       169,454         -   169,454        (f) 1986  5/96   (f)
Mayfield Heights, Ohio                 202,552         -           - -       202,552         -   202,552        (f) 1980  4/96   (f)
Middleburg Heights, Ohio               216,518         -           - -       216,518         -   216,518        (f) 1975  1/96   (f)
Millersburg, Ohio                      213,090   635,104           - -       213,090   635,104   848,194    41,381  1989  3/97   (e)
Milton, West Virginia                   99,815         -           - -        99,815         -    99,815        (f) 1986  5/96   (f)
Monroe, Michigan                       152,215         -           - -       152,215         -   152,215        (f) 1994  1/96   (f)
New Philadelphia, Ohio                 149,206         -     388,321 -       149,206   388,321   537,527    25,302  1975  3/97   (e)
New Philadelphia, Ohio                 223,981   442,758           - -       223,981   442,758   666,739    28,849  1983  3/97   (e)
North Olmsted, Ohio                    259,922         -           - -       259,922         -   259,922        (f) 1976  1/96   (f)
Norwalk, Ohio                          261,529         -           - -       261,529         -   261,529        (f) 1993  1/96   (f)
Rocky River, Ohio                      142,570         -           - -       142,570         -   142,570        (f) 1977  1/96   (f)
Ronceverte, West Virginia               99,733         -           - -        99,733         -    99,733        (f) 1991  5/96   (f)
Sandusky, Ohio                         259,922         -           - -       259,922         -   259,922        (f) 1978  1/96   (f)
Seven Hills, Ohio                      239,023         -           - -       239,023         -   239,023        (f) 1983  1/96   (f)
Steubenville, Ohio                     228,199   475,421           - -       228,199   475,421   703,620    30,977  1983  3/97   (e)
Strongsville, Ohio                     186,476         -           - -       186,476         -   186,476        (f) 1976  4/96   (f)
Toledo, Ohio                           128,604         -           - -       128,604         -   128,604        (f) 1988  4/96   (f)
Toledo, Ohio                           176,170         -           - -       176,170         -   176,170        (f) 1985  1/96   (f)
Toledo, Ohio                           197,227         -           - -       197,227         -   197,227        (f) 1978  1/96   (f)
Toledo, Ohio                           208,480         -           - -       208,480         -   208,480        (f) 1975  1/96   (f)
Uhrichsville, Ohio                     279,779   562,521           - -       279,779   562,521   842,300    36,652  1983  3/97   (e)
Weirton, West Virginia      (m)             -    178,187           - -             -   178,187   178,187    28,933  1979  3/97   (e)
Wellsburg, West Virginia               167,170   168,363           - -       167,170   168,363   335,533    27,338  1980  3/97   (e)
<PAGE>

Pollo Tropical Restaurants:
Coral Springs, Florida           (o)   852,746 1,108,491           - -       852,746 1,108,491 1,961,237   117,109  1994  9/98   (e)
Davie, Florida                   (o)   712,865   873,395           - -       712,865   873,395 1,586,260    92,271  1993  9/98   (e)
Fort Lauderdale, Florida         (o)   397,878   923,975           - -       397,878   923,975 1,321,852    97,615  1996  9/98   (e)
Lake Worth, Florida              (o)   435,465   915,232           - -       435,465   915,232 1,350,697    96,691  1994  9/98   (e)
Miami, Florida                   (o)   789,680   604,283           - -       789,680   604,283 1,393,964    65,961  1995  9/98   (e)
Miami, Florida                   (o)   683,560   614,256           - -       683,560   614,256 1,297,816    67,049  1995  9/98   (e)
Miami, Florida                   (o)   911,013 1,011,766           - -       911,013 1,011,766 1,922,779   110,440  1993  9/98   (e)
Miami, Florida                   (o)   654,766 1,195,901           - -       654,766 1,195,901 1,850,667   130,539  1994  9/98   (e)
Miami, Florida                   (o)  1,244,893  918,257           - -     1,244,893   918,257 2,163,149    92,580  1994 12/98   (e)
North Miami, Florida             (o)   918,258   764,150           - -       918,258   764,150 1,682,408    83,411  1995  9/98   (e)
Sunrise, Florida                 (o)   569,436   968,749           - -       569,436   968,749 1,538,185   102,345  1994  9/98   (e)

Ponderosa Restuarants:
Appleton, Wisconsin                    181,153   561,582           - -       181,153   561,582   742,735    41,439  1980 10/99   (e)
Blue Springs, Missouri           (o)   691,797         -   1,136,902 -       691,797 1,136,902 1,828,699   131,367  1997  4/98   (e)
Eureka, Missouri                       379,675   604,449           - -       379,675   604,449   984,124    44,602  1999 10/99   (e)
Indiana, Pennsylvania                  714,789         -   1,317,317 -       714,789 1,317,317 2,032,106    73,184  2000  5/00   (e)
Johnstown, Pennsylvania          (o)   599,391         -   1,159,989 -       599,391 1,159,989 1,759,380   120,130  1998 11/98   (e)
Kissimmee, Florida                     637,984   824,276           - -       637,984   824,276 1,462,260    62,980  1980 10/99   (e)
Massena, New York                      129,816   659,340           - -       129,816   659,340   789,156    48,653  1988 10/99   (e)
Middletown, New York                   214,177   853,505           - -       214,177   853,505 1,067,682    60,823  1979 10/99   (e)
Oneonta, New York                      366,941   524,341           - -       366,941   524,341   891,282    38,691  1999 10/99   (e)

Popeye's Famous Fried Chicken Restaurants:
Thomasville, Georgia             (o)   113,780   407,429           - -       113,780   407,429   521,209    43,044  1998  9/98   (e)
Valdosta, Georgia                (o)   158,880   378,057           - -       158,880   378,057   536,937    41,509  1998  9/98   (e)

Randy's Steak and Seafood Restaurant:
Murfreesboro, Tennessee                514,900         -     936,376 -       514,900    36,376 1,451,276    35,209  1995  8/97   (e)

Red Robin Restaurant:
Columbus, Ohio                         721,887         -           - -       721,887        (g)  721,887        (h) 1999  1/00   (h)

Rio Bravo Fresh Mexican Cantina Restaurant:
Morrow, Georgia                  (o)   934,922 1,842,623           - -       934,922 1,842,623 2,777,545   167,014  1999  4/99   (e)

Roadhouse Grill Restaurants:
Brandon, Florida                 (o)   914,103         -     691,171 -       914,103   691,171 1,605,274    63,836  1999  2/99   (e)
Centerville, Ohio           (m)      1,227,973         -     761,806 -     1,227,973   761,806 1,989,779    44,439  2000  3/00   (e)
Clearwater, Florida              (o) 1,370,391         -     946,608 -     1,370,391   946,608 2,317,000    82,400  1999  4/99   (e)
Columbus, Ohio              (m)        894,077         -   1,038,617 -       894,077 1,038,617 1,932,694    43,981  1999 11/99   (e)
Fairfield, Ohio                  (o) 1,151,865         -     910,321 -     1,151,865   910,321 2,062,187    67,921  1999 10/99   (e)
Fredericksburg, Virginia             1,138,168         -     616,835 -     1,138,168   616,835 1,755,003        (c)   (d) 2/01   (c)
Grove City, Ohio                       649,962         -     978,307 -       649,962   978,307 1,628,269    72,368  1999 10/99   (e)
Jacksonville, Florida                1,313,730         -     887,733 -     1,313,730   887,733 2,201,463    56,701  1999  2/00   (e)
Jacksonville, Florida            (o)   394,026         -   1,442,752 -       394,026 1,442,752 1,836,779   147,306  1998 12/98   (e)
Pensacola, Florida          (m)  (o)   927,463         -     691,228 -       927,463   691,228 1,618,691    63,778  1978  2/99   (e)
Pineville, North Carolina            1,207,143         -   1,091,507 -     1,207,143 1,091,507 2,298,651    71,589  1999  1/00   (e)
Rock Hill, South Carolina   (m)        608,698         -     903,887 -       608,698   903,887 1,512,584    45,194  1998  7/00   (e)
Roswell, Georgia            (m)        908,635         -   1,084,536 -       908,635 1,084,536 1,993,171    42,176  2000 11/00   (e)
Union Township, Ohio                   703,734         -   1,053,632 -       703,734 1,053,632 1,757,366    35,121  2000  4/00   (e)

Rubio's Baja Grill Restaurant:
Taylorsville, Utah               (o)   889,562         -     487,475 -       889,562   487,475 1,377,037    74,471  1997  6/97   (e)

Ruby Tuesday's Restaurants:
Bartow, Florida                  (o)   416,311         -     963,488 -       416,311   963,488 1,379,799    69,424  1999 11/99   (e)
Champlin, Minnesota              (o)   505,639         -           - -       505,639        (g)  505,639        (h) 1999  3/00   (h)
Colorado Springs, Colorado       (o)   696,078         -   1,005,509 -       696,078 1,005,509 1,701,587    78,768  1999  7/99   (e)
Coral Springs, Florida           (o)   715,220         -   1,012,777 -       715,220 1,012,777 1,727,997    83,820  1999  7/99   (e)
Dillon, Colorado                 (o)   556,515         -   1,132,988 -       556,515 1,132,988 1,689,503    81,009  1999 11/99   (e)
Draper, Utah                     (o)   518,832         -           - -       518,832        (g)  518,832        (h) 1999  5/99   (h)
Independence, Missouri                 980,703         -           - -       980,703        (g)  980,703        (h) 1999  3/99   (h)
Kansas City, Missouri                  633,404         -           - -       633,404        (g)  633,404        (h) 1999  2/00   (h)
Lakeland, Florida                (o)   574,441   742,781           - -       574,441   742,781 1,317,222    77,263  1998 11/98   (e)
Lakewood, Washington             (o)   430,741         -           - -       430,741        (g)  430,741        (h) 1999  1/00   (h)
London, Kentucky                 (o)   354,415         -           - -       354,415        (g)  354,415        (h) 1997 11/97   (h)
Louisville, Kentucky             (o)         -         -           - -             -        (g)        -        (h) 1999 10/99   (h)
Orange City, Florida             (o)   719,563         -           - -       719,563        (g)  719,563        (h) 1999  4/99   (h)
Puyallup, Washington                         -         -           - -             -        (g)        -        (h) 1999  6/99   (h)
Sebring, Florida                 (o)         -         -           - -             -        (g)        -        (h) 1999  7/99   (h)
Somerset, Kentucky               (o)   545,612         -     868,606 -       545,612   868,606 1,414,218   101,221  1998  7/98   (e)
Vero Beach, Florida              (o)   536,564         -   1,267,552 -       536,564 1,267,552 1,804,116    77,462  1999  1/00   (e)

Ruth's Chris Steak House Restaurants:
King of Prussia, Pennsylvania    (o)   965,223   549,565           - -       965,223   549,565 1,514,788    83,957  1977  6/97   (e)
Tampa, Florida                   (o) 1,076,442 1,062,751           - -     1,076,442 1,062,751 2,139,194   163,711  1996  6/97   (e)

Ryan's Family Steak House Restaurant:
Spring Hill, Florida             (o)   591,371         -   1,175,273 -       591,371 1,175,273 1,766,643   197,366  1996  1/97   (e)

Saint Louis Bread Company Restaurant:
Florissant, Missouri             (o)   705,522         -     626,845 -       705,522   626,845 1,332,367   106,210  1996 12/96   (e)

Sonny's Real Pit Bar-B-Q Restaurants:
Athens, Georgia                  (o)   628,688   962,524           - -       628,688   962,524 1,591,211   114,844  1981  6/98   (e)
Conyers, Georgia                       371,021   593,171           - -       371,021   593,171   964,191    70,774  1994  6/98   (e)
Doraville, Georgia               (o)   585,461   812,822           - -       585,461   812,822 1,398,282    96,982  1990  6/98   (e)
Marietta, Georgia                (o)   527,572   870,710           - -       527,572   870,710 1,398,282   103,889  1988  6/98   (e)
Norcross, Georgia                (o)   734,105   961,287           - -       734,105   961,287 1,695,392   114,696  1986  6/98   (e)
<PAGE>

Smyrna, Georgia                  (o)   634,379   643,323            - -      634,379   643,323 1,277,701    76,758  1981  6/98   (e)
Thomasville, Georgia             (o)   263,022         -            - -      263,022        (g)  263,022        (h) 1999 12/99   (h)
Venice, Florida                        498,746         -            - -      498,746        (g)  498,746        (h) 1978  7/99   (h)

Sophia's House of Pancakes Restaurant:
Benton Harbor, Michigan     (m)        168,583         -      876,117 -      168,583   876,117 1,044,700    82,973  1992  1/99   (e)

Sprint PCS Retail Store:
Saint Joseph, Missouri      (m)        378,786         -      388,489 -      378,786   388,489   767,275    65,824  1996  9/96   (e)

Steak & Ale Restaurants:
Altamonte Springs, Florida       (o) 1,006,396   690,731            - -    1,006,396   690,731 1,697,127    81,579  1979  6/98   (e)
Austin, Texas                    (o)   705,557         -            - -      705,557        (g)  705,557        (h) 1969  6/98   (h)
Birmingham, Alabama              (o)   715,432         -            - -      715,432        (g)  715,432        (h) 1993  6/98   (h)
College Park, Georgia            (o)   802,361         -            - -      802,361        (g)  802,361        (h) 1973  6/98   (h)
Conroe, Texas                    (o)   590,733         -            - -      590,733        (g)  590,733        (h) 1993  6/98   (h)
Greenville, South Carolina       (o)   670,594         -            - -      670,594        (g)  670,594        (h) 1976  6/98   (h)
Houston, Texas                   (o)   776,694         -            - -      776,694        (g)  776,694        (h) 1972  6/98   (h)
Houston, Texas                   (o)   964,354         -            - -      964,354        (g)  964,354        (h) 1973  6/98   (h)
Huntsville, Alabama              (o)   641,125         -            - -      641,125        (g)  641,125        (h) 1974  6/98   (h)
Jacksonville, Florida            (o)   670,491         -            - -      670,491        (g)  670,491        (h) 1977  6/98   (h)
Maitland, Florida                (o)   684,164         -            - -      684,164        (g)  684,164        (h) 1969  6/98   (h)
Memphis, Tennessee               (o)   810,316   798,412            - -      810,316   798,412 1,608,728    80,862  1979 12/98   (e)
Mesquite, Texas                  (o)   592,342         -            - -      592,342        (g)  592,342        (h) 1988  6/98   (h)
Miami, Florida                   (o)   594,142         -            - -      594,142        (g)  594,142        (h) 1974  6/98   (h)
Middletown, New Jersey           (o)   933,759   763,368            - -      933,759   763,368 1,697,127    90,158  1985  6/98   (e)
Norcross, Georgia                (o)   740,132         -            - -      740,132        (g)  740,132        (h) 1984 12/98   (h)
Orlando, Florida                 (o)   922,679   725,256            - -      922,679   725,256 1,647,936    85,656  1978  6/98   (e)
Palm Harbor, Florida             (o)   487,021         -            - -      487,021        (g)  487,021        (h) 1983  6/98   (h)
Pensacola, Florida               (o)   354,419         -            - -      354,419        (g)  354,419        (h) 1978  6/98   (h)
Tulsa, Oklahoma                  (o)   433,713         -            - -      433,713        (g)  433,713        (h) 1969  6/98   (h)

Super Smokers BBQ Restaurant:
Saint Peters, Missouri                 376,905   692,124            - -      376,905   692,124 1,069,028    60,992  1981  3/99   (e)

Taco Bell Restaurants:
Colonial Heights, Virginia       (o)   447,458   383,785            - -      447,458   383,785   831,243    35,411  1994  2/99   (e)
Hayes, Virginia                  (o)   299,870         -            - -      299,870        (g)  299,870        (h) 1994  2/99   (h)
Livingston, Tennessee            (o)   212,438         -            - -      212,438        (g)  212,438        (h) 1998 10/98   (h)
Richmond, Virginia               (o)   402,947         -            - -      402,947        (g)  402,947        (h) 1994  2/99   (h)
Richmond, Virginia               (o)   474,588   478,974            - -      474,588   478,974   953,562    44,194  1994  2/99   (e)
Richmond, Virginia               (o)   404,578   451,129            - -      404,578   451,129   855,707    41,625  1994  2/99   (e)
Saint Louis, Missouri            (o)   308,915   351,160            - -      308,915   351,160   660,075    37,457  1991 10/98   (e)
Saint Louis, Missouri            (o)   349,637         -            - -      349,637        (g)  349,637        (h) 1991 10/98   (h)
Wentzville, Missouri             (o)   339,250         -            - -      339,250        (g)  339,250        (h) 2000  5/00   (h)
Williamsburg, Virginia           (o)   343,906         -            - -      343,906        (g)  343,906        (h) 1994  2/99   (h)

Taco Bell/Pizza Hut Restaurants:
Arlington, Texas                       276,616         -      589,368 -      276,616   589,368   865,984    26,149  2000  8/00   (e)
Dallas, Texas                          355,763         -      496,898 -      355,763   496,898   852,661    27,605  2000  4/00   (e)
Dallas, Texas                    (o)   335,174   694,862            - -      335,174   694,862 1,030,036    54,690  1997  7/99   (e)
Dallas, Texas                          185,095         -      631,760 -      185,095   631,760   816,856        (c)   (d) 2/01   (c)

Texas Roadhouse Restaurants:
Ammon, Idaho                     (o)   504,934         -      829,740 -      504,934   829,740 1,334,674    56,755   1999 12/99  (e)
Arvada, Colorado                 (o)   538,204         -    1,149,066 -      538,204 1,149,066 1,687,270    48,581   2000  9/00  (e)
Aurora, Colorado                 (o)   656,917         -    1,208,688 -      656,917 1,208,688 1,865,605    73,055   1999  3/00  (e)
Cedar Rapids, Iowa               (o)   581,847         -    1,135,505 -      581,847 1,135,505 1,717,352    63,084   2000  5/00  (e)
College Station, Texas           (o)   520,037         -    1,074,176 -      520,037 1,074,176 1,594,213    53,709   2000  6/00  (e)
Concord, North Carolina          (o)   664,266         -      987,133 -      664,266   987,133 1,651,400    52,163   2000  5/00  (e)
Dickson City, Pennsylvania       (o)   596,439         -    1,078,721 -      596,439 1,078,721 1,675,160     9,309   2000 11/00  (e)
Gastonia, North Carolina         (o)   235,195         -    1,115,831 -      235,195 1,115,831 1,351,026    76,328   1999 12/99  (e)
Hickory, North Carolina          (o)   560,423         -    1,032,294 -      560,423 1,032,294 1,592,717    74,288   1999  9/99  (e)
Joliet, Illinois                 (o)   535,714         -    1,290,109 -      535,714 1,290,109 1,825,823    61,997   2000  7/00  (e)
Shively, Kentucky                (o)   713,534   995,529            - -      713,534   995,529 1,709,064    71,096   1998 11/99  (e)

TGI Friday's Restaurants:
El Paso, Texas                         599,160         -            - -      599,160        (g)  599,160        (h)  1992  8/98  (h)
Goodyear, Arizona                (o)   967,242         -    1,726,827 -      967,242 1,726,827 2,694,069   107,892   1999  2/00  (e)
Henderson, Nevada                (o) 1,385,425         -            - -    1,385,425        (g)1,385,425        (h)  1999 10/99  (h)
Independence, Missouri           (o)   856,278         -            - -      856,278        (g)  856,278        (h)  1999  3/99  (h)
Lakeland, Florida                      517,979         -    1,276,692 -      517,979 1,276,692 1,794,670    11,480   1993  7/99  (e)
Leawood, Kansas                  (o) 2,459,048         -            - -    2,459,048        (g)2,459,048        (h)  2000  6/00  (h)
Mesa, Arizona                    (o)   914,342         -            - -      914,342        (g)  914,342        (h)  1997  5/98  (h)
Shawnee, Kansas                  (o)   884,743         -            - -      884,743        (g)  884,743        (h)  1999  3/00  (h)
Temecula, California             (o) 1,239,565         -            - -    1,239,565        (g)1,239,565        (h)  1999 12/99  (h)
Union City, California           (o) 1,213,121         -            - -    1,213,121        (g)1,213,121    13,552   1999  4/00  (e)

Tiffany's Restaurant:
Woodson Terrace, Missouri   (m)      744,126           -    1,221,749 -      744,126 1,221,749 1,965,875    61,087   1994  5/99  (e)

Tin Alley Grill Restaurants:
Crystal, Minnesota               (o) 370,667     431,642           -  -      370,667   431,642   802,309    61,090   1981 10/97  (e)
Gloucester, New Jersey           (o) 422,489     528,849           -  -      422,489   528,849   951,338    74,847   1981 10/97  (e)

TropiGrill Restaurants:
Altamonte Springs, Florida       (o) 548,886     700,855           -  -      548,886   700,855 1,249,741    74,043   1994  9/98  (e)
Orlando, Florida                 (o) 618,372     631,369           -  -      618,372   631,369 1,249,741    66,702   1994  9/98  (e)

Village Inn Restaurant:
Omaha, Nebraska                  (o) 511,811     756,304           -  -      511,811   756,304 1,268,115    52,809   1989 10/99  (e)
<PAGE>

Wendy's Old Fashioned Hamburgers Restaurants:
Atascadero, California         (o)   485,625            -     705,993  -     485,625   705,993 1,191,618    34,425   2000  7/00  (e)
Camarillo, California          (o)   640,066            -     688,918  -     640,066   688,918 1,328,984   126,207   1996  7/96  (e)
Knoxville, Tennessee           (o)   358,027            -     444,622  -     358,027   444,622   802,649    81,455   1996  5/96  (e)
Knoxville, Tennessee           (o)   555,813            -     442,025  -     555,813   442,025   997,838    49,420   1998  8/98  (e)
Paso Robles, California        (o)   489,097            -     735,631  -     489,097   735,631 1,224,728    52,995   1999  9/99  (e)
Westlake Village, California   (o)   841,374            -     699,082  -     841,374   699,082 1,540,456    85,438   1998  5/98  (e)

     TOTAL:                      328,869,201  179,951,994 195,250,146  - 328,869,201 375,202,139 704,071,340 36,007,162
                                 ===========  =========== ===========    =========== =========== =========== ==========

Property of Joint Venture in Which
   the Company has a 59.22% Interest
   and has Invested in Under
   an Operating Lease:

Bennigan's Restaurant:
Orlando, Florida                     708,297           -   1,008,108  -      708,297 1,008,108 1,716,405   105,690   1998 11/98  (e)
                                     =======               =========         ======= ========= =========   =======


Properties the Company
has invested in Under
Direct Financing Leases:

Applebee's Restaurants:
Freeport, Illinois             (o)   197,631     1,008,908           -  -         (g)       (g)       (g)       (i)  1996  2/99  (i)
Moscow, Idaho                             --             -   1,238,460  -         (g)       (g)       (g)       (h)  1999  8/99  (h)
Rockford, Illinois             (o)         -     1,096,139           -  -         (g)       (g)       (g)       (h)  1996  1/99  (h)
Tullahoma, Tennessee           (o)   324,362     1,009,364           -  -         (g)       (g)       (g)       (i)  1995  8/98  (i)

Arby's Restaurants:
Allen, Texas                   (o)         -             -     609,272  -         (g)       (g)       (g)       (h)  1999 12/99  (h)
Circleville, Ohio              (o)   310,889             -     629,853  -         (g)       (g)       (g)       (i)  1999 12/99  (i)
Grand Rapids, Michigan         (o)         -       938,296           -  -         (g)       (g)       (g)       (h)  1995  8/95  (h)
Huntsville, Alabama                        -             -     595,801  -         (j)       (g)       (g)       (h)  1978 12/99  (h)
Newark, Ohio                               -             -     339,772  -         (j)       (g)       (g)       (h)  1999 12/99  (h)
The Colony, Texas              (o)         -             -     593,454  -         (g)       (g)       (g)       (h)  1999 12/99  (h)

Bennigan's Restaurants:
Bedford, Texas                 (o)         -       954,774           -  -         (g)       (g)       (g)       (h)  1986  6/98  (h)
Clearwater, Florida            (o)         -     1,043,049           -  -         (g)       (g)       (g)       (h)  1979  6/98  (h)
Colorado Springs, Colorado     (o)         -       902,872           -  -         (g)       (g)       (g)       (h)  1979  6/98  (h)
Englewood, Colorado            (o)         -     1,131,082           -  -         (g)       (g)       (g)       (h)  1984  6/98  (h)
Florham Park, New Jersey       (o)         -     1,092,401           -  -         (g)       (g)       (g)       (h)  1983  6/98  (h)
Houston, Texas                             -       985,394           -  -         (g)       (g)       (g)       (h)  1979  6/98  (h)
Jacksonville, Florida          (o)         -       819,356           -  -         (g)       (g)       (g)       (h)  1983  6/98  (h)
Jacksonville, Florida          (o)         -     1,061,339           -  -         (g)       (g)       (g)       (h)  1981  6/98  (h)
North Richland Hills, Texas    (o)         -       983,252           -  -         (g)       (g)       (g)       (h)  1979  6/98  (h)
Oklahoma City, Oklahoma                    -     1,015,084           -  -         (g)       (g)       (g)       (h)  1986  6/98  (h)
Pensacola, Florida             (o)         -       980,438           -  -         (g)       (g)       (g)       (h)  1983  6/98  (h)
Saint Louis Park, Minnesota    (o)         -     1,280,033           -  -         (g)       (g)       (g)       (h)  1976  6/98  (h)
Tampa, Florida                             -     1,324,729           -  -         (g)       (g)       (g)       (h)  1980  6/98  (h)
Winston-Salem, North Carolina  (o)   247,828       992,552           -  -         (g)       (g)       (g)       (i)  1982  6/98  (i)
Woodridge, Illinois            (o)         -       991,688           -  -         (g)       (g)       (g)       (h)  1987 12/98  (h)

Black-eyed Pea Restaurants:
Albuquerque, New Mexico    (m)             -       705,746           -  -         (j)       (g)       (g)       (h)  1993 10/97  (h)
Albuquerque, New Mexico    (m)             -       704,757           -  -         (j)       (g)       (g)       (h)  1993 10/97  (h)
Bedford, Texas             (m)             -       655,028           -  -         (j)       (g)       (g)       (h)  1993  3/97  (h)
Dallas, Texas                              -       698,827           -  -         (j)       (g)       (g)       (h)  1991 10/97  (h)
Dallas, Texas              (m)             -       655,011           -  -         (j)       (g)       (g)       (h)  1996  3/97  (h)
Dallas, Texas                              -       685,977           -  -         (j)       (g)       (g)       (h)  1994  8/99  (h)
Forestville, Maryland      (m)             -       681,034           -  -         (j)       (g)       (g)       (h)  1989 10/97  (h)
Fort Worth, Texas                          -       655,014           -  -         (j)       (g)       (g)       (h)  1991  3/97  (h)
Hendersonville, Tennessee                  -       735,005           -  -         (j)       (g)       (g)       (h)  1974  8/97  (h)
Hillsboro, Texas                           -             -     716,364  -         (g)       (g)       (g)       (h)  1996 10/97  (h)
Oklahoma City, Oklahoma                    -       651,523           -  -         (j)       (g)       (g)       (h)  1992  3/97  (h)
Phoenix, Arizona                           -       677,681           -  -         (g)       (g)       (g)       (h)  1991  9/97  (h)
Phoenix, Arizona                           -       682,141           -  -         (g)       (g)       (g)       (h)  1994  9/97  (h)
Phoenix, Arizona           (m)             -       677,805           -  -         (g)       (g)       (g)       (h)  1993  9/97  (h)
Scottsdale, Arizona        (m)             -             -     823,188  -         (g)       (g)       (g)       (h)  1997  9/97  (h)
Tucson, Arizona            (m)             -       678,333           -  -         (g)       (g)       (g)       (h)  1995  9/97  (h)
Waco, Texas                (m)             -       699,815           -  -         (j)       (g)       (g)       (h)  1991 10/97  (h)

Burger King Restaurants:
Clinton, North Carolina                    -             -     696,507  -         (g)       (g)       (g)       (h)  1999  2/00  (h)
Lacey, Washington                          -       840,711           -  -         (g)       (g)       (g)       (h)  1993  1/99  (h)
Montgomery, Alabama        (m)             -       966,175           -  -         (g)       (g)       (g)       (h)  1988  1/99  (h)
Olympia, Washington                        -       920,058           -  -         (j)       (g)       (g)       (h)  1996  1/99  (h)
Port Angeles, Washington                   -       696,026           -  -         (j)       (g)       (g)       (h)  1985  1/99  (h)
Prattville, Alabama        (m)       262,664       812,946           -  -         (g)       (g)       (g)       (i)  1992  1/99  (i)
Tuskegee, Alabama          (m)       127,618       899,076           -  -         (g)       (g)       (g)       (i)  1980  1/99  (i)

Chevys Fresh Mex Restaurant:
Annapolis, Maryland                        -             -   1,540,332  -         (g)       (g)       (g)       (h)  1999 12/99  (h)

Darryl's Restaurants:
Evansville, Indiana        (m)             -       974,401           -  -         (g)       (g)       (g)       (h)  1983  6/97  (h)
Knoxville, Tennessee       (m)             -       709,047           -  -         (g)       (g)       (g)       (h)  1983  6/97  (h)
Louisville, Kentucky                       -       915,201           -  -         (g)       (g)       (g)       (h)  1983  6/97  (h)
Mobile, Alabama                            -     1,009,042           -  -         (g)       (g)       (g)       (h)  1983  6/97  (h)
Montgomery, Alabama        (m)             -       952,382           -  -         (g)       (g)       (g)       (h)  1984  6/97  (h)
<PAGE>

Nashville, Tennessee       (m)               -     736,400           -  -         (g)       (g)       (g)       (h)  1981  6/97  (h)
Pensacola, Florida                           -     725,709           -  -         (g)       (g)       (g)       (h)  1983  6/97  (h)
Richmond, Virginia         (m)               -     775,617           -  -         (g)       (g)       (g)       (h)  1982  6/97  (h)
Richmond, Virginia                           -     650,175           -  -         (g)       (g)       (g)       (h)  1982  6/97  (h)
Winston-Salem, North Carolina                -     812,752           -  -         (g)       (g)       (g)       (h)  1978  6/97  (h)

Denny's Restaurants:
Akron, Ohio                      (o)   137,424     938,202           -  -         (g)       (g)       (g)       (i)  1992  3/99  (i)
Duncan, South Carolina           (o)         -     826,770           -  -         (g)       (g)       (g)       (h)  1992  3/99  (h)
Landrum, South Carolina          (o)         -     492,869           -  -         (g)       (g)       (g)       (h)  1992  3/99  (h)
Mooresville, North Carolina      (o)         -     736,649           -  -         (g)       (g)       (g)       (h)  1992  3/99  (h)
Tampa, Florida             (m)               -           -     715,957  -         (g)       (g)       (g)       (h)  1997  8/97  (h)
Topeka, Kansas                   (o)         -     700,166           -  -         (g)       (g)       (g)       (h)  1989  3/99  (h)
Winter Springs, Florida          (o)         -           -     886,915  -         (g)       (g)       (g)       (h)  1994  3/99  (h)

Fazoli's Restaurant:
Southaven, Mississippi           (o)         -     609,277           -  -         (g)       (g)       (g)       (h)  1999  2/99  (h)

Hardee's Restaurants:
Aynor, South Carolina            (o)    44,871     557,446           -  -         (g)       (g)       (g)       (i)  1993  3/99  (i)
Biscoe, North Carolina           (o)    60,301     519,290           -  -         (g)       (g)       (g)       (i)  1993  3/99  (i)
Columbia, Tennessee                          -     644,519           -  -         (g)       (g)       (g)       (h)  1993  3/99  (h)
Horn Lake, Mississippi                       -     622,268           -  -         (g)       (g)       (g)       (h)  1993  3/99  (h)
Iuka, Mississippi                      130,258     546,459           -  -         (g)       (g)       (g)       (i)  1993  3/99  (i)
Johnson City, Tennessee                      -     618,318           -  -         (g)       (g)       (g)       (h)  1993  3/99  (h)
Mobile, Alabama                              -     540,173           -  -         (g)       (g)       (g)       (h)  1993  3/99  (h)
Warrior, Alabama                 (o)         -     518,434           -  -         (g)       (g)       (g)       (h)  1992  3/99  (h)
West Point, Mississippi                      -     569,388           -  -         (g)       (g)       (g)       (h)  1993  3/99  (h)

International House Of Pancakes Restaurants:
Alexandria, Virginia             (o)         -     852,645           -  -         (j)       (g)       (g)       (h)  1972  5/99  (h)
Anderson, South Carolina         (o)         -     957,414           -  -         (j)       (g)       (g)       (h)  1997 10/98  (h)
Blue Bell, Pennsylvania          (o)         -     829,834           -  -         (j)       (g)       (g)       (h)  1997 10/99  (h)
Chesapeake, Virginia             (o)         -     059,499           -  -         (j)       (g)       (g)       (h)  1998 12/99  (h)
Christiansburg, Virginia         (o)         -     918,143           -  -         (j)       (g)       (g)       (h)  1998  1/00  (h)
Corpus Christi, Texas            (o)         -     864,457           -  -         (j)       (g)       (g)       (h)  1997  8/99  (h)
Crestwood, Illinois              (o)         -     935,262           -  -         (j)       (g)       (g)       (h)  1996 11/98  (h)
Elk Grove, California                       --   1,039,584           -  -         (g)       (g)       (g)       (h)  1997  8/97  (h)
Flagstaff, Arizona               (o)   293,762   1,121,276           -  -         (g)       (g)       (g)       (i)  1997  5/99  (i)
Fredericksburg, Virginia         (o)         -     972,595           -  -         (j)       (g)       (g)       (h)  1997  9/99  (h)
Hickory, North Carolina          (o)         -   1,202,183           -  -         (j)       (g)       (g)       (h)  1997  3/99  (h)
Hollywood, California            (o)         -     994,845           -  -         (g)       (g)       (g)       (h)  1996  6/97  (h)
Houston, Texas                   (o)         -   1,017,365           -  -         (j)       (g)       (g)       (h)  1997  7/99  (h)
Houston, Texas                   (o)         -     764,708           -  -         (j)       (g)       (g)       (h)  1998  1/00  (h)
Loveland, Colorado               (o)         -     963,597           -  -         (g)       (g)       (g)       (h)  1997  8/97  (h)
Maryville, Tennessee             (o)   243,825     963,231           -  -         (g)       (g)       (g)       (i)  1997 12/98  (i)
Montgomery, Alabama              (o)         -     843,378           -  -         (j)       (g)       (g)       (h)  1998 11/99  (h)
Pittsburg, California            (o)         -   1,014,264           -  -         (j)       (g)       (g)       (h)  1998  4/99  (h)
Plano, Texas                     (o)         -     982,443           -  -         (j)       (g)       (g)       (h)  1997  9/99  (h)
Salem, New Hampshire             (o)         -     779,153           -  -         (j)       (g)       (g)       (h)  1997  4/99  (h)
San Antonio, Texas               (o)         -   1,081,335           -  -         (j)       (g)       (g)       (h)  1997  6/99  (h)
Tuscaloosa, Alabama              (o)         -     930,720           -  -         (j)       (g)       (g)       (h)  1998  8/99  (h)
Victoria, Texas                  (o)         -     814,015           -  -         (g)       (g)       (g)       (h)  1997  8/97  (h)
Virginia Beach, Virginia         (o)         -   1,013,830           -  -         (j)       (g)       (g)       (h)  1997  4/99  (h)
Warner Robins, Georgia           (o)         -     833,493           -  -         (j)       (g)       (g)       (h)  1997  8/99  (h)

KFC Restaurants:
Baton Rouge, Louisiana                       -           -     578,860  -         (g)       (g)       (g)       (h)  2000  8/00  (h)
Port Allen, Louisiana            (o)         -     952,737           -  -         (g)       (g)       (g)       (h)  1996  5/99  (h)
Putnam, Connecticut                          -     530,846           -  -         (g)       (g)       (g)       (h)  1997  7/97  (h)

NI's International Buffet Restaurant:
Eastlake, Ohio                         256,332   1,473,307           -  -         (g)       (g)       (g)       (i)  1996 12/96  (i)

Popeye's Famous Fried Chicken Restaurant:
Starke, Florida                  (o)   208,910     427,066           -  -         (g)       (g)       (g)       (i)  1997  9/97  (i)

Red Robin Restaurant:
Columbus, Ohio                               -           -   1,397,822  -         (g)       (g)       (g)       (h)  1999  1/00  (h)

Ruby Tuesday's Restaurants:
Champlin, Minnesota              (o)         -           -   1,151,835  -         (g)       (g)       (g)       (h)  1999  3/00  (h)
Draper, Utah                     (o)         -           -   1,036,077  -         (g)       (g)       (g)       (h)  1999  5/99  (h)
Independence, Missouri                       -           -     554,092  -         (g)       (g)       (g)       (h)  1999  3/99  (h)
Kansas City, Missouri                        -           -   1,115,425  -         (g)       (g)       (g)       (h)  1999  2/00  (h)
Lakewood, Washington                         -           -   1,127,476  -         (g)       (g)       (g)       (h)  1999  1/00  (h)
London, Kentucky                 (o)         -           -     845,249  -         (g)       (g)       (g)       (h)  1997 11/97  (h)
Louisville, Kentucky             (o)         -           -   1,072,199  -         (j)       (g)       (g)       (h)  1999 10/99  (h)
Orange City, Florida             (o)         -           -   1,047,180  -         (g)       (g)       (g)       (h)  1999  4/99  (h)
Puyallup, Washington                         -           -     934,118  -         (j)       (g)       (g)       (h)  1999  6/99  (h)
Sebring, Florida                 (o)   230,901           -     775,843  -         (g)       (g)       (g)       (i)  1999  7/99  (i)
Saint George, Utah                           -           -     895,583  -         (j)       (g)       (g)       (h)  1999  9/99  (h)

Sonny's Real Pit Bar-B-Q Restaurants:
Thomasville, Georgia             (o)         -           -     988,618  -         (g)       (g)       (g)       (h)  1999 12/99  (h)
Venice, Florida                              -   1,004,407           -  -         (g)       (g)       (g)       (h)  1978  7/99  (h)

Steak & Ale Restaurants:
Austin, Texas                    (o)         -     745,609           -  -         (g)       (g)       (g)       (h)  1969  6/98  (h)
Birmingham, Alabama                          -     681,623           -  -         (g)       (g)       (g)       (h)  1993  6/98  (h)
College Park, Georgia            (o)         -     909,525           -  -         (g)       (g)       (g)       (h)  1973  6/98  (h)
Conroe, Texas                    (o)         -   1,032,606           -  -         (g)       (g)       (g)       (h)  1993  6/98  (h)
<PAGE>

Greenville, South Carolina       (o)         -   1,180,342           -  -         (g)       (g)       (g)       (h)  1976  6/98  (h)
Houston, Texas                   (o)         -   1,092,606           -  -         (g)       (g)       (g)       (h)  1972  6/98  (h)
Houston, Texas                   (o)         -     978,733           -  -         (g)       (g)       (g)       (h)  1973  6/98  (h)
Huntsville, Alabama              (o)         -     810,041           -  -         (g)       (g)       (g)       (h)  1974  6/98  (h)
Jacksonville, Florida                        -     879,060           -  -         (g)       (g)       (g)       (h)  1977  6/98  (h)
Maitland, Florida                (o)         -     791,599           -  -         (g)       (g)       (g)       (h)  1969  6/98  (h)
Mesquite, Texas                  (o)         -     908,017           -  -         (g)       (g)       (g)       (h)  1988  6/98  (h)
Miami, Florida                   (o)         -   1,176,774           -  -         (g)       (g)       (g)       (h)  1974  6/98  (h)
Norcross, Georgia                (o)         -     966,814           -  -         (g)       (g)       (g)       (h)  1984 12/98  (h)
Palm Harbor, Florida             (o)         -     816,569           -  -         (g)       (g)       (g)       (h)  1983  6/98  (h)
Pensacola, Florida               (o)         -     826,191           -  -         (g)       (g)       (g)       (h)  1978  6/98  (h)
Tulsa, Oklahoma                  (o)         -   1,067,543           -  -         (g)       (g)       (g)       (h)  1969  6/98  (h)

Taco Bell Restaurants:
Hayes, Virginia                  (o)         -     443,302           -  -         (g)       (g)       (g)       (h)  1994  2/99  (h)
Livingston, Tennessee            (o)         -           -     436,198  -         (g)       (g)       (g)       (h)  1998 10/98  (h)
Richmond, Virginia               (o)         -     575,079           -  -         (g)       (g)       (g)       (h)  1994  2/99  (h)
Saint Louis, Missouri            (o)         -     471,686           -  -         (g)       (g)       (g)       (h)  1991 10/98  (h)
Wentzville, Missouri             (o)         -           -     589,290  -         (g)       (g)       (g)       (h)        5/00  (h)
Williamsburg, Virginia           (o)         -     438,410           -  -         (g)       (g)       (g)       (h)  1994  2/99  (h)

Texas Roadhouse Restaurant:
Fayetteville, North Carolina                 -     944,114           -  -         (j)       (g)       (g)       (h)  1998  2/99  (h)

TGI Friday's Restaurants:
El Paso, Texas                               -   1,089,566           -  -         (g)       (g)       (g)       (h)  1992  8/98  (h)
Henderson, Nevada                (o)         -           -   1,973,551  -         (g)       (g)       (g)       (h)  1999 10/99  (h)
Independence, Missouri           (o)         -           -   1,664,913  -         (g)       (g)       (g)       (h)  1999  3/99  (h)
Leawood, Kansas                  (o)         -           -   1,430,005  -         (g)       (g)       (g)       (h)  2000  6/00  (h)
Mesa, Arizona                    (o)         -           -   1,440,217  -         (g)       (g)       (g)       (h)  1997  5/98  (h)
Shawnee, Kansas                  (o)         -           -   1,748,685  -         (g)       (g)       (g)       (h)  1999  3/00  (h)
Temecula, California             (o)         -           -   1,476,765  -         (g)       (g)       (g)       (h)  1999 12/99  (h)
Union City, California           (o)         -           -   1,984,765  -         (g)       (g)       (g)            1999  4/00  (h)

TGI Friday's/Redfish Looziana Roadhouse Restaurant:
San Diego, California            (o) 2,399,895           -   3,646,084  -         (g)       (g)       (g)       (i)  1998  3/99  (i)

Wendy's Old Fashioned Hamburgers Restaurants:
Carmel Mountain, California      (o)         -     594,856           -  -         (j)       (g)       (g)       (h)  1997 10/98  (h)
Knoxville, Tennessee             (o)         -           -     463,995  -         (j)       (g)       (g)       (h)  1998  9/98  (h)
San Diego, California            (o)         -           -     590,058  -         (j)       (g)       (g)       (h)  1996 12/96  (h)
Santa Maria, California          (o)         -           -     699,815  -         (j)       (g)       (g)       (h)  2000  4/00  (h)
Sevierville, Tennessee           (o)         -           -     531,726  -         (j)       (g)       (g)       (h)  1996  6/96  (h)
Seymour, Tennessee               (o)         -           -     472,670  -         (j)       (g)       (g)       (h)  1998 10/98  (h)

                                  ---------------------------------------
                                  ----------------------------------------
     TOTAL:                          5,477,471 100,248,690  42,054,989  -
                                  =================== ===================

</TABLE>



<PAGE>

                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

        NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

                                December 31, 2001


(a)      Transactions in real estate and accumulated  depreciation  during 2001,
         2000, and 1999 are summarized as follows:

<TABLE>
<CAPTION>

<c>
                                                                 Cost         Accumulated
                                                                (b)(m)        Depreciation
                                                              -------------   ------------
              Properties the Company has Invested
                  in Under Operating Leases:

                      Balance, December 31, 1998                400,193,650      6,242,782
                      Acquisitions (k)                          298,070,278             --
                      Depreciation expense (e)                           --      8,499,814
                                                              -------------   ------------

                      Balance, December 31, 1999              $ 698,263,928   $ 14,742,596
                      Acquisitions (k)                          114,897,263             --
                      Depreciation expense (e)                           --      9,697,535
                                                              -------------   ------------

                      Balance, December 31, 2000               $813,161,191   $ 24,440,131
                      Acquisitions/Dispositions/Reclasses
                       to held for sale (k)                    (109,089,851)            --
                      Depreciation expense (e)                           --     11,567,031
                                                              -------------   ------------
                      Balance December 31, 2001                $704,071,340   $ 36,007,162
                                                              =============   ============

              Property of Joint Venture in Which
                  the Company has a 59.22% Interest and
                  has Invested in Under an Operating
                  Lease:

                   Balance, December 31, 1998                 $   2,215,177   $      7,303
                   Constructing Funding
                     Adjustment                                    (498,772)            --
                   Depreciation expense                                  --         31,180
                                                              -------------   ------------

                   Balance, December 31, 1999                  $  1,716,405   $     38,483
                   Depreciation expense                                  --         33,604
                                                              -------------   ------------

                   Balance, December 31, 2000                  $  1,716,405   $     72,087
                   Depreciation Expense                                  --         33,603
                                                              -------------   ------------
                   Balance, December 31, 2001                  $1,716,405     $    105,690
                                                              =============   ============
</TABLE>


(b)      As of December 31, 2001,  2000,  and 1999,  the  aggregate  cost of the
         Properties owned by the Company and its subsidiaries for federal income
         tax  purposes  was   $745,344,972,   $870,916,565,   and   $757,550,394
         respectively. Substantially, all of the leases are treated as operating
         leases for federal income tax purposes.

(c)      Property was not placed in service as of December 31, 2001;  therefore,
         no depreciation was taken.

(d)      Scheduled for completion in 2002.

(e)      Depreciation  expense is computed for buildings and improvements  based
         upon estimated lives of 30 years.


<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2001


(f)      The  building  portion  of  this  property  is  owned  by  the  tenant;
         therefore, depreciation is not applicable.

(g)      For  financial  reporting  purposes,  certain  components  of the lease
         relating  to land  and/or  building  have  been  recorded  as a  direct
         financing  lease.  Accordingly,  costs relating to these  components of
         this lease are not shown.

(h)      For financial reporting purposes, the portion of this lease relating to
         the building has been recorded as direct  financing  lease. The cost of
         the building has been included in net  investment  in direct  financing
         leases; therefore, depreciation is not applicable.

(i)      For financial reporting  purposes,  the lease for the land and building
         has been recorded as direct  financing  lease. The cost of the land and
         building  has been  included  in net  investment  in  direct  financing
         leases; therefore, depreciation is not applicable.

(j)      The Company  owns the building  only  relating to this  property.  This
         property  is  subject  to a ground  lease  between  the  tenant  and an
         unaffiliated third party. In connection therewith,  the Company entered
         into either a tri-party  agreement with the tenant and the owner of the
         land or an assignment of interest in the ground lease with the landlord
         of the land.  The  tri-party  agreement or  assignment of interest each
         provide that the tenant is responsible  for all  obligations  under the
         ground lease and provide  certain rights to the Company to help protect
         its  interest  in the  building in the event of a default by the tenant
         under the terms of the ground lease.

(k)      During the year ended  December  31,  1999,  the Company  (i)  incurred
         acquisition  fees  totaling  $6,185,005,  paid  to  the  Advisor,  (ii)
         purchased  land and  buildings  from  affiliates  of the Company for an
         aggregate cost of approximately  $39,700,000 and (iii) paid development
         or construction  management fees to affiliates of the Company  totaling
         $56,352.  Such amounts are included in land and  buildings on operating
         leases,  net investment in direct  financing leases and other assets at
         December 31, 2001, 2000 and 1999. Effective with the acquisition of the
         Advisor in September  1999,  the Company ceased  incurring  acquisition
         fees,  therefore,  no such fees were  incurred  during the years  ended
         December 31, 2001 and 2000.

(l)      For  financial  reporting  purposes,  the  undepreciated  cost  of  the
         following  properties was written down to its net realizable  value due
         to an  anticipated  impairment  in value.  The Company  recognized  the
         impairments  by recording an  allowance  for loss on land,  building or
         investment  in direct  financing  lease as of December  31,  2001.  The
         impairments at December 31, 2001  represent the difference  between the
         properties'  carrying values and the property manager's estimate of the
         net realizable  value of the properties  based upon  anticipated  sales
         prices  to  interested  third  parties.  The  cost  of  the  properties
         presented on this schedule is the gross amount at which the  properties
         were carried at December 31, 2001, excluding the allowances for loss.




<PAGE>


                       CNL AMERICAN PROPERTIES FUND, INC.
                                AND SUBSIDIARIES

               NOTES TO SCHEDULE III - REAL ESTATE AND ACCUMULATED
                            DEPRECIATION - CONTINUED

                                December 31, 2001

(m)      These  properties have been impaired in the aggregate by $22,718,979 as
         of December 31, 2001.


(n)      The  Company  owns a  parcel  of land on  which  two  restaurants  were
         constructed during 2001.


(o)      The property is encumbered at December 31, 2001.

<PAGE>


<TABLE>
<CAPTION>

<c>
                                                                                                                   Principal Amount
                                                                                                                   of Loans Subject
                                                                                                                      to Delinquent
                                                                                                                       Principal or
                                     Interest         Final         Periodic    Prior  Face Amount   Carrying Amount       Interest
   Description                         Rate        Maturity Date  Payment Term  Liens  of Mortgages  of Mortgages


    207 loans held for sale with
     original amounts ranging                     12/03/2004 to
     from $69,000 to $17,924,000  7.53% to 10.84% 10/01/2021         N/A        N/A       N/A        $ 315,834,741     $ 40,394,101

    89 loans as mortgage notes
     receivable with original
     amounts ranging from $140,000                12/01/2001 to
     to $8,475,000                3.09% to 15.00% 01/01/2021         N/A        N/A       N/A        $  80,866,098     $ 18,120,092

</TABLE>


                                          2001           2000         1999

    Balance at beginning of period    419,903,472     63,466,474   19,631,693
    New mortgage loans                 86,630,251    370,029,447   46,738,038
    Accrued interest                     (833,527)     2,906,089      346,101
    Collection of principal              (761,778)    (7,946,989)  (2,466,072)
    Deferred financing income        (116,628,521)    (2,227,842)     (11,336)
    Unamortized loan costs                311,300       (376,164)      91,007
    Valuation loan costs               15,823,041     (6,854,932)    (551,011)
    Provision for uncollectible
     mortgage notes                    (7,743,399)       907,389     (311,946)
                                      ----------------------------------------
    Balance at end of period          396,700,839    419,903,472   63,466,474
                                      ========================================
<PAGE>


                AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

                                                    Dated as of October 11, 2001


BETWEEN:

BANK OF  AMERICA,  N.A.,  as  buyer  ("Buyer",  which  term  shall  include  any
"Principal" as defined and provided for in Annex I), or as agent pursuant hereto
("Agent"),

CNL FINANCIAL VII, LP, as seller ("Seller")

         and

CNL FRANCHISE NETWORK, LP, as originator ("Originator").


1.       APPLICABILITY

         Buyer may, from time to time, agree to enter into transactions in which
         Seller transfers to Buyer Eligible Assets against the transfer of funds
         by Buyer, with a simultaneous  agreement by Buyer to transfer to Seller
         such Purchased Assets at a date certain,  against the transfer of funds
         by  Seller.  Each such  transaction  shall be  referred  to herein as a
         "Transaction",  and,  unless  otherwise  agreed  in  writing,  shall be
         governed by this Agreement.

         This  Agreement  amends and  restates  that certain  Master  Repurchase
         Agreement,  dated as of June 16, 2000, as amended by certain amendments
         dated as of June 8, 2001,  June 13,  2001 and August  13,  2001,  among
         Buyer, Seller and Originator.

2.       DEFINITIONS AND INTERPRETATION

a)       Defined Terms.

         "Accepted Servicing  Standards" shall have the meaning assigned thereto
         in the Custody Agreement.

         "Additional  Purchased  Assets" shall have the meaning assigned thereto
         in Section 6(a) hereof.  The term "Additional  Purchased  Assets" shall
         also  include  the  Repo  Deposit  Amount  (as  defined  in the CNL APF
         Guaranty) paid by CNL APF to Buyer pursuant to the terms of the CNL APF
         Guaranty;  provided, however, that the Repo Deposit Amount shall not be
         included  in the  Market  Value  of any or  all  Purchased  Assets  for
         purposes of  calculating  either a Purchase Price for any Purchase Date
         or any margin maintenance under Section 6 herein.

         "Adjusted  Tangible  Net Worth"  means the net worth of  Originator  as
         determined in accordance  with GAAP,  minus the sum of all  intangibles
         (as  determined  in  accordance  with GAAP) other than  originated  and
         purchased servicing rights; provided,  however, whether or not required
         by GAAP, the Adjusted Tangible Net Worth of the Originator shall not be
         reduced by charges to comprehensive  net income pursuant to FAS No. 133
         and  relating  to (i) Cash  Flow  Hedges  and (ii)  all  other  hedging
         arrangements with respect to the Purchased Assets (other than Net Lease
         Loans) to the extent that such  charges  related to such other  hedging
         arrangements do not exceed $2,000,000 per quarter.

         "Affiliate"  means,  with respect to any  specified  Person,  any other
         Person  controlling  or controlled by or under common control with such
         specified Person. For the purposes of this definition,  "control" means
         the  power to  direct  the  management  and  policies  of such  Person,
         directly or indirectly, whether through the ownership of voting equity,
         by contract or otherwise.

         "Agent" means Bank of America, N.A. or any successor.

         "Agreement"   means  this  Amended  and  Restated   Master   Repurchase
         Agreement,  as it may be amended,  supplemented  or otherwise  modified
         from time to time.

         "Appraisal"  means,  with respect to a Rehab Loan,  an appraisal of the
         related   Mortgaged   Property   securing  a  Rehab  Loan  (i)  from  a
         professional real estate appraiser who (A) is a member in good standing
         of the  Appraisal  Institute  and (B) if the state in which the subject
         Mortgaged  Property is located  certifies  or licenses  appraisers,  is
         certified or licensed in such state,  (ii) conducted in accordance with
         the standards of the Appraisal  Institute,  and (iii) performed  within
         three  months of the later of (A) the date on which  the  related  Loan
         became a Rehab Loan and (B) the date such Appraisal is delivered to the
         Buyer,  or such other form of  appraisal  approved  by the Buyer in its
         sole discretion.

         "ARM Loans" means the Loans set forth in Exhibit D hereto, as such list
         may be amended  from time to time to delete any such Loans that are not
         the subject of a Transaction hereunder.

         "Bill of Sale" means a document duly executed by Seller with respect to
         each  delivery  of  documents  relating  to  the  Purchased  Assets  to
         Custodian in the form attached to the Custody Agreement.

         "Borrower"  means the  obligor or  obligors  on a Note,  including  any
         Person  that has  acquired  the  related  collateral  and  assumed  the
         obligations of the original  obligor or obligors under the Note and, in
         the case of Net  Lease  Loans,  the  Tenant  of the  related  Mortgaged
         Property.

         "Borrower  Group" means (i) the Borrowers  with respect to any group of
         Loans that are cross- defaulted,  cross-collateralized  or both or (ii)
         Borrowers that are Affiliates of each other.


         "Borrower/Guarantor  FCCR"  means,  with  respect  to each Loan for any
         period,  the ratio of (a) the sum of  Borrower's  and,  if  applicable,
         guarantor's (to the extent not already  consolidated  with  Borrower's)
         (i) pre-tax income (less  non-recurring  income for such period),  (ii)
         interest expense, (iii) all non-cash amounts in respect of depreciation
         and  amortization   and  (iv)   non-recurring   expenses   approved  by
         Originator,  (v) discretionary  management fees, and (vi) all operating
         lease or rent expense, to (b) the sum of Borrower's and, if applicable,
         guarantor's (i) interest  payments on any debt, (ii) current portion of
         principal  on  any  debt,   (iii)  current  portion  of  capital  lease
         obligations,  and (iv) all  operating  lease or rent  expense  for such
         period.

         "Business  Day" means any day other  than (i) a  Saturday  or Sunday or
         (ii) a day upon which the New York Stock Exchange,  the Federal Reserve
         Bank of New York or the  Custodian  is  obligated  by law or  executive
         order to be closed.

         "Buyer's  Margin Amount" means,  with respect to any  Transaction as of
         any date of  determination,  the  amount  obtained  by  application  of
         Buyer's Margin  Percentage to the Repurchase Price for such Transaction
         as of such date.

         "Buyer's Margin  Percentage" shall have the meaning assigned thereto in
         the Side Letter.

         "Cash Flow Hedges" means cash flow hedging transactions with respect to
         Net Lease Loans.

         "Change in Law" means (a) the adoption of any law,  rule or  regulation
         after the date of this  Agreement,(b)  any  change in any law,  rule or
         regulation  or in the  interpretation  or  application  thereof  by any
         Governmental  Authority  after  the  date  of  this  Agreement  or  (c)
         compliance  by Buyer  (or any  Affiliate  of Buyer)  with any  request,
         guideline or directive  (whether or not having the force of law) of any
         Governmental Authority made or issued after the date of this Agreement.

         "CNL APF" means CNL APF Partners, LP or any successor.

         "CNL APF Guaranty" means the Guaranty of CNL APF in favor of the Buyer,
         dated as of October 11, 2001.

         "CNL Retained Loans" shall mean Loans  identified on Exhibit F attached
         hereto.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Collateral"  shall  have the  meaning  assigned  thereto  in Section 8
         hereof.

         "Collateral  Agency  Agreement" means the Collateral  Agency Agreement,
         dated as of June  16,  2000,  as  amended,  between  Wells  Fargo  Bank
         Minnesota,  National  Association,   formerly  known  as  Norwest  Bank
         National Association, as collateral agent, and Originator.

         "Collection  Account"  shall have the meaning  assigned  thereto in the
         Custody Agreement.

         "Commitment  Fee" shall have the meaning  assigned  thereto in the Side
         Letter.

         "Computer  Tape"  means a  computer  tape or  other  electronic  medium
         generated  by or on  behalf  of  Seller  and  delivered  to  Buyer  and
         Custodian  which provides  information  relating to the Program Assets,
         including the information  set forth in the Loan Schedule,  in a format
         acceptable to Buyer.

         "Concept"  means any of the  franchise  concepts set forth in Exhibit B
         hereto,  as such list may be amended from time to time with the written
         consent  of the Buyer,  provided  that the Buyer  shall  respond to any
         request to amend such list  within two weeks  after its  receipt of any
         such  request,  provided  that Buyer shall have the right to remove any
         Concept  previously  listed  on  Exhibit  B  or  otherwise   previously
         approved,  with thirty days prior notice to Seller, if Buyer determines
         in its sole  discretion  (exercised  in good faith)  that such  concept
         should no longer be considered an approved  Concept;  provided further,
         that with respect to any Concept that Buyer determines should no longer
         be considered an approved Concept or that Buyer removes from Exhibit B,
         Buyer shall not  withdraw  its  approval to purchase a Loan  secured by
         Mortgaged  Property  operated  as such  Concept  if Buyer  has  already
         approved the purchase of such Loan under a Transaction.

         "Confirmation"  shall have the meaning assigned thereto in Section 4(b)
         hereof.

         "Construction  Loan"  means a type of  Mortgage  Loan or Net Lease Loan
         with  respect  to  which  (i) the Loan  proceeds  are  received  by the
         Borrower  in a series  of  disbursements  and used to pay the  costs of
         construction  of a new or  remodeled  franchise  facility  and  related
         improvements  and (ii) a  certificate  of  occupancy  relating  to such
         construction has not been issued.  A Construction  Loan shall no longer
         be deemed a  Construction  Loan for the purposes of this Agreement upon
         the latest to occur of (such event,  the  "Conversion"):  (i) the final
         disbursement  of  Loan  proceeds  to the  related  Borrower,  (ii)  the
         issuance  of a  certificate  of  occupancy  with  respect to all of the
         related improvements, and (iii) any amendment or modification of any of
         the  related  Loan   Documents  as  a  result  of  the   completion  of
         construction;  provided,  however,  that  any  Loan  that is  initially
         purchased  hereunder as a Construction Loan shall remain a Construction
         Loan solely for purposes of clause (xvi) of the  definition of Eligible
         Asset hereunder notwithstanding the Conversion of such Loan.

         "Custody Agreement" means the Custody and Servicing Agreement, dated as
         of June 16, 2000, as amended, among Seller, Buyer, Originator, Servicer
         and Custodian.

         "Custodian"  means Wells Fargo Bank  Minnesota,  National  Association,
         formerly known as Norwest Bank Minnesota,  National Association, or its
         successors and permitted assigns.

         "Custodian's  Loan File" shall have the meaning assigned thereto in the
         Custody Agreement.

         "Default"  means  any  event,  that,  with the  giving of notice or the
         passage of time or both, would constitute an Event of Default.


         "Default Rate" means,  as of any date of  determination,  the lesser of
         (i) the Pricing  Rate plus 4% and (ii) the maximum  rate  permitted  by
         applicable law.

         "Defaulted  Loan"  means a Loan that is  current  in respect of monthly
         payments due  thereunder  but with respect to which (i)  bankruptcy  or
         insolvency  proceedings  have been  commenced by or against the related
         Borrower,  (ii) the Servicer has declared such Loan to be in default or
         (iii) there has occurred any other material default or event of default
         (however   defined)  under  the  related  Note,   Mortgage  or  related
         agreements; provided, however, that a breach of a fixed charge coverage
         ratio  covenant  shall  not,  in and of  itself,  be deemed a  material
         default.

         "Delinquent  Loan" means a Loan for which any  related  payment has not
         been received on or before the date forty-five (45) days after the date
         on which such  payment is due  pursuant to the related  Note,  provided
         that a Delinquent Loan shall remain a Delinquent Loan until the related
         Borrower  cures  such  delinquency  and makes four  successive  monthly
         payments on a timely basis, including any related grace period.

         "Documented  Rehab Loan" means a Rehab Loan that (A) is subject to (and
         in compliance with) fully executed modification documents providing for
         the cure of any related delinquency and/or default, (B) is an REO Loan,
         (C) is subject to a final court judgment with respect to a foreclosure,
         bankruptcy  or  similar  proceeding,  (D)  is  subject  to  a  plan  of
         reorganization  approved by a bankruptcy court or is receiving adequate
         protection  payments  pursuant to an order of a bankruptcy court or (E)
         is a Net Lease Loan that was  delinquent or in default due to a default
         by the related Tenant and such Tenant has (1) entered into modification
         documents  providing  for the cure of the  related  delinquency  and/or
         default and is in compliance  with such  modification  documents or (2)
         been  replaced  by a new  Tenant,  which  is  in  occupancy  and  is in
         compliance  with  the  related  lease,  and in the  case of each of (A)
         through (E), has been approved by Buyer in its sole discretion.

         "Effective  Date" shall mean the date set forth on the top of the first
         page of this Agreement.

         "Eligible  Asset" shall have the meaning  assigned  thereto in the Side
         Letter.

         "Event of Default" shall have the meaning  assigned  thereto in Section
         18 hereof.

         "Existing Loan" shall mean each Purchased Asset subject to Transactions
         under this Agreement as of the Effective Date.

         "Existing  Mortgage  Loan"  shall mean each  Mortgage  Loan  subject to
         Transactions  under  this  Agreement  as  of  the  Effective  Date  and
         identified on Exhibit G attached hereto.

         "Exit Fee" shall have the meaning assigned thereto in the Side Letter.


         "GAAP"  shall mean  generally  accepted  accounting  principles  in the
         United States of America in effect from time to time.

         "Governmental Authority" shall mean any nation or government, any state
         or  other  political  subdivision  thereof,  or any  entity  exercising
         executive,   legislative,   judicial,   regulatory  or   administrative
         functions over Seller.

         "Guarantee"  means,  as to any Person,  any  obligation  of such Person
         directly  or  indirectly  guaranteeing  any  Indebtedness  of any other
         Person or in any manner  providing for the payment of any  Indebtedness
         of any other Person.

         "Hedge  Counterparty":  A Person (i) (A) with  long-term and commercial
         paper or  short-term  deposit  ratings  of "P-1" by  Moody's  Investors
         Service  and "A-1" by  Standard & Poor's and (B) which  shall  agree in
         writing  that,  in the event that any of its  long-term  or  commercial
         paper or  short-term  deposit  ratings cease to be at or above "A-2" by
         Moody's and "A" by Standard & Poor's,  it shall secure its  obligations
         in  accordance  with the  request of the Buyer or Buyer  shall have the
         option to treat such failure as an Early  Termination Event (as defined
         in the ISDA Master Agreement) by such Hedge Counterparty, (ii) that has
         entered into a Hedge  Instrument  and (iii) that is  acceptable  to the
         Buyer.

         "Hedge Instrument" means any interest rate cap agreement, interest rate
         floor  agreement,  interest rate swap  agreement or other interest rate
         hedging agreement entered into by the Seller or Originator with a Hedge
         Counterparty.  Each Hedge  Instrument  shall meet the  requirements set
         forth in Section 37 hereof with respect thereto.

         "Hedge  Report"  means the  weekly  report,  substantially  in the form
         attached hereto as Exhibit I, delivered by Originator,  or a designated
         third party, to Buyer and detailing each Hedge  Instrument with respect
         to the Purchased Assets, including without limitation, the value of all
         such Hedge Instruments.

         "Income"  means,  with  respect to any Program  Asset at any time,  any
         principal thereof and all interest, dividends and other collections and
         distributions thereon, but not including any commitment nor origination
         fees.


         "Indebtedness"  shall mean,  for any Person:  (a) all  obligations  for
         borrowed  money;  (b)  obligations  of such Person to pay the  deferred
         purchase or acquisition price of Property or services, other than trade
         accounts  payable (other than for borrowed money) arising,  and accrued
         expenses  incurred,  in the ordinary course of business so long as such
         trade accounts  payable are payable and paid within ninety (90) days of
         the date the respective goods are delivered or the respective  services
         are  rendered;  (c)  indebtedness  of others  secured  by a lien on the
         Property of such Person, whether or not the respective  indebtedness so
         secured has been assumed by such Person; (d) obligations (contingent or
         otherwise)  of such  Person in  respect of letters of credit or similar
         instruments  issued  for  account of such  Person;  (e)  capital  lease
         obligations  of such  Person;  (f)  obligations  of such  Person  under
         repurchase agreements or like arrangements;  (g) indebtedness of others
         guaranteed on a recourse basis by such Person;  (h) all  obligations of
         such Person  incurred in connection with the acquisition or carrying of
         fixed assets by such Person;  (i) indebtedness of general  partnerships
         of which such Person is a general partner; and (j) any other contingent
         liabilities of such Person.

         "Investment  Company Act" means the Investment  Company Act of 1940, as
         amended, including all rules and regulations promulgated thereunder.

         "Investment Policy Manual" means the CNL American Properties Fund, Inc.
         Investment  Policy  Manual,  dated  as of May,  2000,  which  has  been
         approved in writing by Buyer,  as the same may be amended  from time to
         time with the Buyer's  written  consent,  provided that the Buyer shall
         respond to proposed changes to the Investment  Policy Manual within two
         weeks after its receipt of the requested change.

         "Late-CO Loan" means a Construction  Loan with respect to which a final
         certificate of occupancy has not been issued on or before the date that
         is eight (8) months  after the earlier of the date of the related  Note
         and the date such Loan becomes a Program Asset.

         "LIBOR" shall mean,  for each day, the rate  determined by the Buyer on
         such date (or, in the event such day is not a Business  Day,  the prior
         Business  Day) on the  basis of the  offered  rate for  one-month  U.S.
         dollar deposits, as such rate appears on Telerate Page 3750 as of 11:00
         a.m.  (London  time) on such date;  provided that if such rate does not
         appear on Telerate Page 3750, the rate for such date will be determined
         on the basis of the offered rates of the Reference  Banks for one-month
         U.S. dollar  deposits,  as of 11:00 a.m. (London time) on such date. In
         such event,  the Buyer will request the principal London office of each
         of the  Reference  Banks to provide a quotation of its rate. If on such
         date,  two or more  Reference  Banks  provide such offered  quotations,
         LIBOR  shall  be the  arithmetic  mean of all such  offered  quotations
         (rounded to the  nearest  whole  multiple  of 1/16%).  If on such date,
         fewer than two Reference Banks provide such offered  quotations,  LIBOR
         shall be the higher of (i) LIBOR as  determined  on the previous  LIBOR
         determination date and (ii) the Reserve Interest Rate.  Notwithstanding
         the foregoing,  if, under the priorities  described above,  LIBOR for a
         LIBOR determination date would be based on LIBOR for the previous LIBOR
         determination date for the third consecutive LIBOR  determination date,
         the Buyer shall select an alternative  comparable index (over which the
         Buyer  has no  control),  used  for  determining  one-month  Eurodollar
         lending  rates that is calculated  and  published  (or  otherwise  made
         available) by an independent party.

         "Liquidity  Facility"  means the  revolving  liquidity  facility  in an
         aggregate  principal amount not to exceed  $10,000,000  pursuant to the
         Promissory Note and Credit Agreement (Mirror Liquidity Facility), dated
         as of October 9, 2001, between Originator and CNL APF.

         "Loan" means a Mortgage Loan or Net Lease Loan, in each case originated
         by Originator or any of its Affiliates or CNL American Properties Fund,
         Inc.  or any of its  Subsidiaries  in  accordance  with the  Investment
         Policy Manual.

         "Loan  Allocation  Table"  means,  with respect to each Loan,  the Loan
         Allocation Table substantially in the form annexed hereto as Exhibit E.

         "Loan Documents" shall have the meaning assigned thereto in the Custody
         Agreement.

         "Loan  Schedule"  means the list of Loans  delivered by  Originator  or
         Seller to Buyer and Custodian together with each Transaction Notice and
         attached by the  Custodian to the Trust Receipt and setting forth as to
         each  Loan the  related  Borrower  name,  the  address  of the  related
         Mortgaged Property and the outstanding principal balance of the Loan as
         of the  initial  Purchase  Date,  together  with any other  information
         specified by Buyer from time to time in good faith.

         "Lockbox  Agreement" means the agreement so named, in the form required
         by Buyer, to be entered into among Seller, Originator and Lockbox Bank.

         "Lockbox  Bank" means each entity acting as a lockbox bank  maintaining
         an account on behalf of the Buyer pursuant to a Lockbox Agreement.

         "Low FCCR Loan"  means any Loan that is not in  compliance  with any of
         the following minimum fixed charge coverage ratio  requirements  (based
         on the financial information of the related Borrower, Tenant, guarantor
         or Note, as  applicable,  for the prior twelve months as of the related
         date of determination  beginning with the twelve month period ending on
         September 30, 2001):

                    (i)  in   the   case   of   Mortgage    Loans,   a   minimum
                         Borrower/Guarantor FCCR of 1.2x and a minimum Note FCCR
                         of 1.2x; and

                    (ii) in  the   case   of  Net   Lease   Loans,   a   minimum
                         Borrower/Guarantor FCCR of 1.1x and a minimum Note FCCR
                         of 1.1x,  to the  extent  that the  related  Tenant  is
                         required  to  provide  note  level  data to  Seller  or
                         Originator.

         With respect to any Borrower, Tenant, guarantor or Note, as applicable,
         for which  insufficient  financial  data is available to determine  the
         foregoing  ratios based on a trailing twelve month period,  the related
         Borrower/Guarantor   FCCR  or  Note  FCCR  shall  be  determined  using
         financial  data from the first nine  months of the  fiscal  year of the
         related  date of  determination;  provided,  however,  that if  neither
         twelve  months nor nine  months of  financial  data is  available,  the
         related  Borrower/Guarantor FCCR or Note FCCR shall be determined using
         financial  data  as of the  most  recent  fiscal  year  end;  provided,
         further,  that with  respect to those  Loans for which  neither  twelve
         months nor nine months of  financial  data is  available  (except  with
         respect  to Loans  secured  by  newly  constructed  or  newly  acquired
         Mortgaged  Property),  if the related  Borrower/Guarantor  FCCR or Note
         FCCR is based on only first or second  quarter  (of the fiscal  year of
         the related date of  determination)  financial  statements  and is less
         than 1.0x, such Loans shall be Low FCCR Loans.

         "Margin Call" As defined in Section 6(a).

         "Margin  Deficit"  shall have the meaning  assigned  thereto in Section
         6(a) hereof.

         "Market  Value" means (i) with respect to any Program  Asset that is an
         Eligible  Asset, as of any date of  determination,  the market price as
         determined by Buyer in its sole discretion,  and (ii) with respect to a
         Program Asset that is not an Eligible Asset, zero.

         "Master  Contribution  Agreement" means the Amended and Restated Master
         Contribution  Agreement,  dated  as of  October  11,  2001,  among  CNL
         Franchise Network, LP, CNL Financial LP Holding, LP and Seller.

         "Master  Letter  for  Securitizations"  means  the  Master  Letter  for
         Securitizations,  dated  as of June 16,  2000,  among  Banc of  America
         Securities LLC, CNL American Properties Fund, Inc.,  Originator and CNL
         APF.

         "Master Loan Agreement"  means the Master Loan  Agreement,  dated as of
         June 16,  2000,  between  CNL Funding  2001-A,  LP and  Originator,  as
         amended, supplemented,  modified or restated from time to time, and any
         other master loan purchase agreement between Originator and a Net Lease
         Borrower approved by Buyer from time to time.

         "Material Adverse Change" means, with respect to a Person, any material
         adverse  change in the business,  condition  (financial or  otherwise),
         operations,  performance,  properties  taken as a whole or prospects of
         such Person.

         "Material  Adverse  Effect"  means (a) a Material  Adverse  Change with
         respect  to Seller or Seller and its  Affiliates  that are party to any
         Program  Document  taken as a whole;  (b) a material  impairment of the
         ability  of  Seller  or any  Affiliate  that is a party to any  Program
         Document to perform  under any Program  Document and to avoid any Event
         of Default;(c) a material  adverse effect upon the legality,  validity,
         binding effect or enforceability of any Program Document against Seller
         or any  Affiliate  that is a party to any  Program  Document;  or (d) a
         material  adverse effect upon the value or marketability of any Program
         Asset.

         "Maximum  Aggregate  Purchase  Price"  means  $325,000,000;   provided,
         however, that during the period beginning on January 1, 2002 and ending
         on March 31,  2002,  the Maximum  Aggregate  Purchase  Price shall mean
         $300,000,000; provided, further, that after March 31, 2002, the Maximum
         Aggregate Purchase Price shall mean $275,000,000.

         "Maximum Aggregate Rehab Purchase Price" means $25,000,000.

         "Mortgage"  means a mortgage,  deed of trust, or other  instrument that
         creates a lien on the related Mortgaged Property and secures a Note.


         "Mortgage Loan" means a Loan (other than a Net Lease Loan or 1031 Loan)
         secured by a valid and  enforceable,  first  priority lien on Mortgaged
         Property used in the operation of a franchise facility.

         "Mortgaged  Property"  means,  with  respect to a Mortgage  Loan or Net
         Lease Loan,  the related  Borrower's fee and/or  leasehold  interest in
         real property (including all improvements,  buildings, fixtures, leases
         and building equipment and personal property located thereon or used in
         connection therewith,  and all additions,  alterations and replacements
         made  at any  time  with  respect  to the  foregoing),  and  all  other
         collateral securing repayment of the debt evidenced by the related Note
         and the related Borrower's interest therein.

         "Net  Lease  Borrower"  shall  have the  meaning  specified  in Section
         13(g)(a) herein.

         "Net Lease Loan" means a Loan to a Net Lease  Borrower  for the purpose
         of financing the related  Mortgaged  Property by such Affiliate subject
         to a net  lease or in  connection  with a  sale-leaseback  or net lease
         transaction  with the related Tenant,  which Loan is secured by a valid
         and enforceable, first priority lien on the related Mortgaged Property;
         provided,  however,  that on and after  January 1, 2002,  all Net Lease
         Loans shall be (i)(A) Tier I or Tier II Loans with a minimum lease rate
         of 9.0%  (or such  other  rate as the  Buyer  may  approve  in its sole
         discretion) or (B) in the Buyer's sole discretion,  Tier III or Tier IV
         Loans  with a minimum  lease  rate of 9.5% (or such  other  rate as the
         Buyer  may  approve  in its  sole  discretion),  and  (ii)  secured  by
         Mortgaged Property capable of being exchanged for "like kind" property,
         as defined in Section 1031 of the Code, in the 1031  tax-free  exchange
         market;  provided,  further,  that on and after  January 1,  2002,  all
         references to "1031 Loans" herein or in the Program  Documents shall be
         deemed to be references to "Net Lease Loans."

         "Netting  Agreement" means the Master  Collateral  Security and Netting
         Agreement dated as of June 16, 2000 among Buyer and certain  Affiliates
         and the Originator and certain Affiliates.

         "90+  Delinquent  Loan" means a  Delinquent  Loan for which the related
         payment has not been  received on or before the date that is ninety-one
         or more days after the date on which such  payment is due  pursuant  to
         the related Note.

         "Non-Documented Rehab Loan" means a Rehab Loan that is not a Documented
         Rehab Loan.

         "Non-Securitizable Loan" means any Construction Loan, Late-CO Loan, CNL
         Retained  Loan,  ARM Loan, Low FCCR Loan,  Delinquent  Loan,  Defaulted
         Loan, 60+ Delinquent Loan, 90+ Delinquent Loan, Rehab Loan or any other
         Loan  that  the  Buyer   determines  in  its  sole  discretion  is  not
         securitizable;  provided, that prior to January 1, 2002, all 1031 Loans
         shall be Non-Securitizable Loans.

         "Note" means,  with respect to any Loan,  the related  promissory  note
         together  with all  riders  thereto  and  amendments  thereof  or other
         evidence of indebtedness of the related Borrower.

         "Note FCCR" means, with respect to each Loan for any period,  the ratio
         of (a) the sum, with respect to each  Mortgaged  Property  securing the
         related Note, of (i) pre-tax income (less non-recurring income for such
         period),  (ii) interest expense,  (iii) all non-cash amounts in respect
         of  depreciation  and  amortization  and  (iv)  non-recurring  expenses
         approved by Originator, (v) discretionary management fees, and (vi) all
         operating  lease or rent expense,  to (b) the sum, with respect to each
         Mortgaged  Property securing the related Note, of (i) interest payments
         on any debt, (ii) the current  portion of principal on any debt,  (iii)
         current  portion of capital lease  obligations,  and (iv) all operating
         lease or rent expense for such period;  provided, that, with respect to
         each Note secured by multiple Mortgaged Properties, the Note FCCR shall
         be  calculated  using  the  aggregate  of the  above  amounts  for each
         Mortgaged Property.

         "Notice  Date"  shall have the  meaning  assigned  thereto in Section 4
         hereof.

         "Obligations"   means  (a)  all  of  Seller's  obligation  to  pay  the
         Repurchase  Price on the  Repurchase  Date, and other  obligations  and
         liabilities  of Seller  and  Servicer,  to  Buyer,  its  Affiliates  or
         Custodian  arising under, or in connection with, the Program  Documents
         or otherwise,  whether now existing or hereafter  arising;  (b) any and
         all sums paid by Buyer or on behalf of Buyer  pursuant  to the  Program
         Documents  in order  to  preserve  any  Program  Asset or its  interest
         therein;  (c) in the  event of any  proceeding  for the  collection  or
         enforcement of any of Seller's or Servicer's indebtedness,  obligations
         or liabilities  referred to in clause (a), the  reasonable  expenses of
         retaking, holding, collecting, preparing for sale, selling or otherwise
         disposing of or realizing on any Program  Asset,  or of any exercise by
         Buyer or such  Affiliate  of its rights  under the related  agreements,
         including   without   limitation,   reasonable   attorneys'   fees  and
         disbursements  and court costs;  and (d) all of Seller's and Servicer's
         indemnity  obligations  to Buyer or Custodian  or both  pursuant to the
         Program Documents.

         "Originator"  means  CNL  Franchise  Network,  LP, a  Delaware  limited
         partnership, and its permitted successors and assigns.

         "Originator  Guaranty"  means the Amended and Restated  Guaranty of the
         Originator in favor of the Buyer, dated as of October 11, 2001.

         "Partnership  Agreement"  means the CNL Franchise  Network,  LP limited
         partnership  agreement,  dated as of June 16, 2000, among CNL Franchise
         Network GP Corp.,  CNL  Franchise  Network LP Corp.  and CNL  Financial
         Group, Inc.

         "Performing  Rehab Loan" means a  Documented  Rehab Loan (other than an
         REO Loan)  with  respect  to which the  related  Borrower  has made all
         related payments for three or more months; provided, however, that with
         respect to a  Non-Documented  Rehab  Loan,  if a Borrower  has made all
         related payments  pursuant to a workout plan evidenced by a "termsheet"
         approved  by Buyer in its sole  discretion,  then such  payments  shall
         apply towards such three-month period so long as modification documents
         consistent  with such term sheet are executed in connection  therewith;
         provided,  further,  that  no  Non-Documented  Rehab  Loan  shall  be a
         Performing Rehab Loan.


         "Person"  shall  mean  any  legal  person,  including  any  individual,
         corporation,  partnership,  association,  joint-stock  company,  trust,
         limited liability company,  unincorporated  organization,  governmental
         entity or other entity of similar nature.

         "Price  Differential" means, with respect to each Transaction as of any
         date, the aggregate amount obtained by daily application of the Pricing
         Rate for such  Transaction to the Purchase Price on a  360-day-per-year
         basis for the actual  number of days  during the period  commencing  on
         (and  including)  the Purchase Date and ending on (but  excluding)  the
         date of determination (reduced by any amount of such Price Differential
         in  respect of such  period  previously  paid by Seller to Buyer)  with
         respect to such Transaction.

         "Pricing Rate" means the per annum percentage rate for determination of
         the  Price  Differential  as set  forth in  Section  3(b)  hereof or as
         otherwise set forth in the Confirmation.

         "Prime  Rate"  means the daily  prime loan rate as reported in The Wall
         Street  Journal or if more than one rate is  published,  the highest of
         such rates.

         "Principal" shall have the meaning given to it in Annex I.

         "Program Assets" means, as of any date of determination,  all Purchased
         Assets and  Additional  Purchased  Assets then subject to  Transactions
         under this Agreement.

         "Program  Documents" means this Agreement,  the Custody Agreement,  any
         Servicing  Agreement,  the Netting Agreement,  the Originator Guaranty,
         the CNL APF  Guaranty,  any  Securities  Account  Control  Agreement or
         assignment of Hedge Instrument,  the Master Contribution Agreement, the
         Side  Letter  and any other  agreement  entered  into by Seller  and/or
         Originator,  on the one hand,  and Buyer or one of its  Affiliates  (or
         Custodian  on its  behalf)  on the other,  in  connection  herewith  or
         therewith.

         "Property"  means any right or  interest  in or to property of any kind
         whatsoever,  whether  real,  personal or mixed and whether  tangible or
         intangible.

         "Purchase  Date"  means  the date on  which  Program  Assets  are to be
         transferred by Seller to Buyer.

         "Purchase  Price" shall have the meaning  assigned  thereto in the Side
         Letter.

         "Purchased  Assets" means,  with respect to a Transaction,  the related
         Loans, together with the related Records, Servicing Rights, Seller's or
         Originator's  rights  under any related  Hedge  Instruments,  and other
         Collateral,  such other  property,  rights,  titles or interests as are
         specified on a related Transaction Notice, and all instruments, chattel
         paper,   securities,   investment  property,   accounts,   and  general
         intangibles  comprising or relating to all of the  foregoing.  The term
         "Purchased  Assets"  with respect to any  Transaction  at any time also
         shall include Additional Purchased Assets delivered pursuant to Section
         6(a) hereof.

         "Qualified  Servicer" means any corporation,  limited liability company
         or partnership that (i) is an established commercial loan servicer with
         at least five (5) years experience  servicing franchise loans, (ii) has
         a net  worth  (determined  in  accordance  with  GAAP) of not less than
         $25,000,000,  (iii) is organized and doing  business  under the laws of
         any  state of the  United  States or the  District  of  Columbia,  (iv)
         satisfies the  representations and warranties of the Servicer set forth
         in Section 5.8 of the Custody  Agreement and (v) is ranked "Average" or
         better as a primary servicer of commercial mortgage loans by Standard &
         Poor's, a Division of the McGraw Hill Companies; provided that prior to
         the occurrence of a Servicer Termination Event or Event of Default, CNL
         Financial Services, LP shall be deemed to be a Qualified Servicer.

         "Records" means all instruments,  agreements and other books,  records,
         and  reports  and data  generated  by other  media for the  storage  of
         information  maintained  by Seller or any other  person or entity  with
         respect to a Program  Asset.  Records  shall  include  the  Notes,  any
         Mortgages,  the  Custodian's  Loan  Files  and  any  other  instruments
         necessary to document or service a Loan.

         "Reference  Banks" Any  leading  banks  selected by the Agent which are
         engaged in  transactions  in Eurodollar  deposits in the  international
         Eurocurrency market with an established place of business in London.

         "Rehab Loan" means a Loan approved by the Buyer in its sole  discretion
         that is otherwise  not an Eligible  Asset  hereunder or under any other
         lending  facility  with  respect  to which  such  Loan  was  previously
         financed or  financeable,  in either case,  due to the  delinquency  or
         default  status of such Loan;  provided,  however,  that any Performing
         Rehab Loan with  respect  to which the  Borrower  has made all  related
         payments  for more  than one year  shall no  longer  be deemed a "Rehab
         Loan" and if approved by Buyer in its sole  discretion  shall otherwise
         constitute an Eligible Asset hereunder; provided, further, that no Loan
         shall become a Rehab Loan if such Loan formerly was a Rehab Loan.

         "REO Loan" means a Loan  approved by Buyer in its sole  discretion to a
         special purpose  subsidiary of the Originator  secured by a Mortgage on
         Mortgaged Property acquired by such subsidiary (or another Affiliate of
         the  Originator  and   transferred  to  such   subsidiary)   through  a
         foreclosure or  deed-in-lieu  of  foreclosure  for which all redemption
         periods and rights of appeal have expired.

         "Repurchase  Date" shall have the meaning  assigned  thereto in Section
         3(b) and shall also  include  the date  determined  by  application  of
         Section 19.

         "Repurchase  Price" means the price at which Purchased Assets are to be
         transferred  from Buyer to Seller upon  termination  of a  Transaction,
         which  will  be  determined  in  each  case   (including   Transactions
         terminable  upon  demand) as the sum of the Purchase  Price,  the Price
         Differential  and the Exit Fee, as  applicable,  as of the date of such
         determination.


         "Reserve Interest Rate" With respect to any LIBOR  determination  date,
         the rate per annum  that the  Agent  determines  to be  either  (i) the
         arithmetic mean (rounded to the nearest whole multiple of 1/16%) of the
         one-month U.S.  dollar lending rates which New York City banks selected
         by the Agent are quoting on the relevant  LIBOR  determination  date to
         the principal  London offices of leading banks in the London  interbank
         market  or (ii) in the  event  that the  Agent  can  determine  no such
         arithmetic  mean, the lowest  one-month U.S.  dollar lending rate which
         New York City  banks  selected  by the Agent are  quoting on such LIBOR
         determination date to leading European banks.

         "Securities Account Control Agreement" means an agreement,  in form and
         substance acceptable to Buyer, among Seller,  Originator,  a securities
         intermediary  and Buyer,  pursuant to which  Buyer  obtains a perfected
         security interest in one or more Hedge Instruments.

         "Servicer"  means (i) CNL Financial  Services,  LP, a Delaware  limited
         partnership,  or (ii) any other servicer  approved by Buyer in its sole
         discretion.

         "Servicer Termination Event" shall have the meaning assigned thereto in
         the Custody Agreement.

         "Servicing  Agreement"  means any  agreement  (other  than the  Custody
         Agreement)  giving rise or relating to Servicing Rights with respect to
         a Program Asset,  including any assignment or other agreement  relating
         to such agreement.

         "Servicing  Rights"  means  contractual,  possessory or other rights of
         Seller or any other Person  arising  under a Servicing  Agreement,  the
         Custody  Agreement or  otherwise,  to  administer  or service a Program
         Asset or to possess related Records.

         "Side Letter"  means the Third Amended and Restated Side Letter,  dated
         as of October 11, 2001, among Seller, Originator and Buyer.

         "60+  Delinquent  Loan" means a  Delinquent  Loan for which the related
         payment has not been  received on or before the date that is  sixty-one
         or more days after the date on which such  payment is due  pursuant  to
         the related Note.

         "Space Lease" means a leasehold  estate pursuant to which the tenant is
         leasing the building and/or other  improvements  (or a portion thereof)
         located on the  subject  real  estate  and the tenant  does not have an
         ownership interest in such building or improvements.

         "Strategic  Alliance Agreement" means the Strategic Alliance Agreement,
         dated as of June 16, 2000,  as amended,  among CNL American  Properties
         Fund,  Inc.,  CNL/CAS  Corp.  and  Banc  of  America  Mortgage  Capital
         Corporation.

         "Subordinated  Note  Agreement"  means  the  Senior  Subordinated  Note
         Agreement,  dated as of June 16,  2000,  as amended  October 11,  2001,
         between CNL Franchise Network,  LP and Banc of America Mortgage Capital
         Corporation.

         "Subsidiary"  means,  with  respect  to any  Person,  any  corporation,
         partnership  or  other  entity  of which  at  least a  majority  of the
         securities  or other  ownership  interests  having by the terms thereof
         ordinary  voting power to elect a majority of the board of directors or
         other  persons   performing  similar  functions  of  such  corporation,
         partnership or other entity (irrespective of whether or not at the time
         securities or other  ownership  interests of any other class or classes
         of such  corporation,  partnership  or other entity shall have or might
         have voting power by reason of the happening of any  contingency) is at
         the time directly or  indirectly  owned or controlled by such Person or
         one or more  Subsidiaries  of such  Person or by such Person and one or
         more Subsidiaries of such Person.

         "Substitute Assets" has the meaning assigned thereto in Section 16(a).

         "Tenant" means the tenant of a Mortgaged  Property  pursuant to a lease
         or sub-lease of such  Mortgaged  Property,  together with such tenant's
         Affiliates  and any guarantor of such tenant's  obligations  under such
         lease.

         "1031  Loan"  means a Net Lease Loan that is (i)(A) a Tier I or Tier II
         Loan with a minimum lease rate of 9.0% (or such other rate as the Buyer
         may  approve  in its  sole  discretion)  or (B)  in  the  Buyer's  sole
         discretion,  a Tier III or Tier IV Loan  with a minimum  lease  rate of
         9.5%  (or  such  other  rate  as the  Buyer  may  approve  in its  sole
         discretion),  and (ii) secured by Mortgaged  Property  capable of being
         exchanged for "like kind"  property,  as defined in Section 1031 of the
         Code, in the 1031  tax-free  exchange  market and  identified as a 1031
         Loan in the related Loan Allocation Table.

         "Termination Date" has the meaning assigned thereto in Section 27.

         "Tier I Loan" means any Loan secured by Mortgaged  Property used in the
         operation of a Tier I franchise Concept set forth in Schedule B hereto,
         as such  Schedule may be amended from time to time in writing by Seller
         and Buyer.

         "Tier II Loan" means any Loan secured by Mortgaged Property used in the
         operation  of a Tier II  franchise  Concept  set  forth in  Schedule  B
         hereto, as such Schedule may be amended from time to time in writing by
         Seller and Buyer.

         "Tier III Loan" means any Loan  secured by Mortgaged  Property  used in
         the operation of a Tier III  franchise  Concept set forth in Schedule B
         hereto, as such Schedule may be amended from time to time in writing by
         Seller and Buyer.

         "Tier IV Loan" means any Loan secured by Mortgaged Property used in the
         operation  of a Tier IV  franchise  Concept  set  forth in  Schedule  B
         hereto, as such Schedule may be amended from time to time in writing by
         Seller and Buyer.

         "Transaction" has the meaning assigned thereto in Section 1.


         "Transaction  Notice" means a written request of Seller to enter into a
         Transaction,  in the form  attached to the Custody  Agreement  which is
         delivered to Buyer and Custodian.

         "Trust Receipt" means a Trust Receipt and  Certification  as defined in
         the Custody Agreement.

         "Underwriting   Package"   means,   with  respect  to  each  Loan,  the
         Transaction Summary as defined in the Investment Policy Manual.

         "Uniform  Commercial  Code"  means the  Uniform  Commercial  Code as in
         effect  on the date  hereof  in the  State  of New York or the  Uniform
         Commercial Code as in effect in the applicable jurisdiction.

         "Wet Funded Loan" means a Loan for which the related  Custodian's  Loan
         File has not been delivered to the Custodian as of the related Purchase
         Date.

         "Wet Funded  Custodian's  Loan File"  shall have the  meaning  assigned
         thereto in the Custody Agreement.

         b) Capitalized  terms used but not defined in this Agreement shall have
            the meanings assigned thereto in the Custody Agreement.

         c) Interpretation.


         Headings are for convenience only and do not affect interpretation. The
following  rules of this  subsection  (c)  apply  unless  the  context  requires
otherwise.  The singular  includes the plural and conversely.  A gender includes
all genders. Where a word or phrase is defined, its other grammatical forms have
a corresponding meaning. A reference to a subsection,  Section, Annex or Exhibit
is, unless otherwise specified, a reference to a Section of, or annex or exhibit
to,  this  Agreement.  A  reference  to a party  to this  Agreement  or  another
agreement or document includes the party's successors and permitted  substitutes
or assigns.  A reference  to an  agreement  or document is to the  agreement  or
document as amended, modified, novated,  supplemented or replaced, except to the
extent  prohibited by any Program  Document.  A reference to legislation or to a
provision  of  legislation  includes a  modification  or  re-enactment  of it, a
legislative   provision  substituted  for  it  and  a  regulation  or  statutory
instrument  issued  under  it. A  reference  to  writing  includes  a  facsimile
transmission  and any means of reproducing  words in a tangible and  permanently
visible form. A reference to conduct includes,  without limitation, an omission,
statement  or  undertaking,  whether  or not in  writing.  An Event  of  Default
subsists  until it has been  waived in  writing  by Buyer.  The words  "hereof",
"herein",  "hereunder"  and similar words refer to this Agreement as a whole and
not to any particular  provision of this Agreement.  The term "including" is not
limiting and means "including without limitation." In the computation of periods
of time from a specified date to a later  specified  date, the word "from" means
"from and  including";  the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."  This Agreement may use several
different  limitations,  tests or  measurements  to regulate the same or similar
matters.  All such limitations,  tests and measurements are cumulative and shall
each be performed in accordance with their terms.  Unless the context  otherwise
clearly  requires,  all accounting  terms not expressly  defined herein shall be
construed, and all financial computations required under this Agreement shall be
made,  in  accordance  with GAAP,  consistently  applied.  References  herein to
"fiscal  year" and "fiscal  quarter"  refer to such fiscal  periods of Seller or
Originator, as applicable. Except where otherwise provided in this Agreement any
determination,  statement or  certificate  by Buyer or an authorized  officer of
Buyer  provided for in this Agreement is conclusive and binds the parties in the
absence of manifest  error.  A  reference  to an  agreement  includes a security
interest, guarantee, agreement or legally enforceable arrangement whether or not
in writing.  A reference to a document  includes an agreement (as so defined) in
writing or a certificate,  notice,  instrument or document,  or any  information
recorded  in  computer  disk form.  Where  Seller or  Originator  is required to
provide any  document to Buyer under the terms of this  Agreement,  the relevant
document  shall be provided in writing or printed  form  unless  Buyer  requests
otherwise.  At the request of Buyer,  the document shall be provided in computer
disk form or both printed and computer disk form.  This  Agreement is the result
of negotiations among and has been reviewed by counsel to Buyer,  Originator and
Seller,  and is the  product  of both  parties.  In the  interpretation  of this
Agreement,  no rule of construction shall apply to disadvantage one party on the
ground  that such party  proposed  or was  involved  in the  preparation  of any
particular  provision of this Agreement or this Agreement  itself.  Except where
otherwise  expressly stated Buyer may give or withhold,  or give  conditionally,
approvals and consents, may be satisfied or unsatisfied,  and may form opinions,
make  determinations  and exercise  discretion at its absolute  discretion.  Any
requirement  of good  faith,  discretion  or  judgment  by  Buyer  shall  not be
construed  to  require  Buyer to  request or await  receipt  of  information  or
documentation  not  immediately  available  from  or  with  respect  to  Seller,
Originator,  a servicer of the Program  Assets,  any other Person or the Program
Assets themselves.

3.       THE TRANSACTIONS

         a) Seller shall repurchase  Purchased Assets from Buyer on each related
Repurchase  Date. Such obligation to repurchase  subsists  without regard to any
prior or intervening  liquidation or foreclosure  with respect to each Purchased
Asset (but  liquidation  or  foreclosure  proceeds  received  by Buyer  shall be
applied to reduce the  Repurchase  Price except as otherwise  provided  herein).
Seller is  obligated to obtain the  Purchased  Assets from Buyer or its designee
(including  the  Custodian)  at  Seller's  expense  on (or  after)  the  related
Repurchase Date.

         b) Provided  that the  applicable  conditions  in Sections 9(a) and (b)
have been  satisfied,  each Purchased Asset that is repurchased by Seller on the
17th  day of each  month  (or,  if such  17th  day is not a  Business  Day,  the
immediately  following Business Day) following the related initial Purchase Date
(the day of the month so determined for each month, or any other date designated
by Seller to Buyer for such a repurchase  on at least one  Business  Day's prior
notice to Buyer,  a  "Repurchase  Date",  which term shall also include the date
determined by application of Section 19) shall automatically become subject to a
new Transaction unless Buyer is notified by Seller at least one (1) Business Day
prior to any Repurchase Date, provided that if the Repurchase Date so determined
is later than the  Termination  Date, the Repurchase  Date for such  Transaction
shall  automatically  reset to the Termination  Date, and the provisions of this
sentence as it might relate to a new Transaction  shall expire on such date. For
each new Transaction,  unless otherwise agreed, (y) the accrued and unpaid Price
Differential  shall be settled in cash on each related  Repurchase Date, and (z)
the Pricing Rate shall be as set forth in the Side Letter;  provided that,  upon
written request  delivered to Buyer not less than two (2) Business Days prior to
a Purchase Date, Seller may request that Buyer quote a Pricing Rate that will be
a fixed  percentage for the 30, 60 or 90 day period  commencing on such Purchase
Date; provided further,  however, that not more than five (5) Transactions shall
be  subject to a fixed  percentage  Pricing  Rate at any time.  In the event the
Pricing Rate is based on LIBOR,  Agent shall  establish  LIBOR on each  Business
Day, and the Pricing Rate will change upon each change in LIBOR.

         c) If Seller repurchases Purchased Assets for which the Pricing Rate is
a fixed  rate on any date  prior to the last day of the 30, 60 or 90 day  period
for which such rate is fixed or if Seller  repurchases  Purchased  Assets on any
day which is not a  Repurchase  Date for such  Purchased  Assets,  Seller  shall
indemnify  Buyer and hold Buyer harmless from any losses,  costs and/or expenses
which Buyer may sustain or incur arising from the reemployment of funds obtained
by Buyer  hereunder or from fees payable to  terminate  the deposits  from which
such funds were obtained  ("Breakage  Costs"), in each case for the remainder of
the  applicable  30,  60 or 90 day  period.  Buyer  shall  deliver  to  Seller a
statement  setting forth the amount and basis of  determination  of any Breakage
Costs in such detail as  determined  in good faith by Buyer to be  adequate,  it
being  agreed that such  statement  and the method of its  calculation  shall be
adequate and shall be conclusive and binding upon Seller, absent manifest error.
This Section shall survive  termination  of this Agreement and repurchase of all
Program Assets subject to Transactions hereunder.

4.       ENTERING INTO TRANSACTIONS; TRANSACTION NOTICE, CONFIRMATIONS

         a) Unless otherwise  agreed,  Seller or Originator shall give Buyer and
Custodian at least one (1)  Business Day prior notice (two (2) Business  Days if
Seller requests a fixed Pricing Rate) of any proposed Purchase Date (the date on
which such notice is given,  the "Notice Date").  On the Notice Date,  Seller or
Originator  shall (i) request that Buyer enter into a Transaction  by furnishing
to Buyer and Custodian a Transaction  Notice and Loan Schedule,  (ii) deliver to
Buyer a Computer Tape and (iii) deliver to Custodian the  Custodian's  Loan File
or Wet Funded  Custodian's Loan File for each Loan subject to such  Transaction.
On each Purchase Date,  including any Repurchase  Date on which Seller  transfer
Loans to Buyer,  Seller shall  transfer  Rehab Loans and CNL  Retained  Loans to
Buyer in separate Transactions from all other Purchased Assets.

         b) In the  event  that  the  parties  hereto  desire  to  enter  into a
Transaction on terms other than as set forth herein, the parties shall execute a
"Confirmation"  specifying  such terms prior to entering into such  Transaction.
Any such  Confirmation and the related  Transaction  Notice,  together with this
Agreement,  shall  constitute  conclusive  evidence of the terms agreed  between
Buyer and Seller  with  respect  to the  Transaction  to which the  Confirmation
relates.

5.       PAYMENT AND TRANSFER

         Unless otherwise  agreed,  all transfers of funds hereunder shall be in
immediately  available  funds  and  all  Program  Assets  transferred  shall  be
transferred to the Custodian pursuant to the Custody  Agreement.  Any Repurchase
Price  received by Buyer after 12:00 noon New York City time shall be applied on
the next succeeding Business Day.


6.       MARGIN MAINTENANCE

         a) If at any time the  aggregate  Market  Value of all  Program  Assets
subject to all Transactions is less than the aggregate Buyer's Margin Amount for
all such Transactions (a "Margin  Deficit"),  then Buyer may by notice to Seller
require Seller in such  Transactions,  at Buyer's  option,  to transfer to Buyer
cash or additional  Eligible Assets acceptable to Buyer  ("Additional  Purchased
Assets"),  so that the cash and  aggregate  Market Value of the Program  Assets,
including any such Additional  Purchased Assets,  will thereupon equal or exceed
such aggregate Buyer's Margin Amount (such requirement, a "Margin Call").

         b) Notice  required  pursuant to Section 6(a) may be given by any means
provided in Section 35 hereof.  Any notice  given before 1:00 p.m. New York time
on a Business Day shall be met, and the related Margin Call satisfied,  no later
than 5:00 p.m. New York time on the next  succeeding  Business Day; notice given
after 1:00 p.m.  New York time on a Business  Day shall be met,  and the related
Margin  Call  satisfied,  no later  than 2:00 p.m.  New York time on the  second
succeeding Business Day. The failure of Buyer, on any one or more occasions,  to
exercise  its  rights  hereunder,  shall  not  change  or alter  the  terms  and
conditions to which this  Agreement is subject or limit the right of Buyer to do
so at a later date.  Seller,  Originator  and Buyer each agree that a failure or
delay by Buyer to exercise its rights hereunder shall not limit or waive Buyer's
rights under this  Agreement  or otherwise  existing by law or in any way create
additional rights for Seller or Originator.

7.       INCOME PAYMENTS

         Where a particular term of a Transaction extends over the date on which
Income is paid in respect of any Purchased  Assets subject to that  Transaction,
such Income shall be the property of Buyer. Notwithstanding the foregoing, prior
to the  occurrence  of an Event of  Default,  all  Income  received,  whether by
Seller,  Originator,  Buyer,  Custodian,  Servicer or any  servicer or any other
Person,  in respect of the Program  Assets shall be applied in  accordance  with
Section 4.1(c) of the Custody Agreement.

8.       SECURITY INTEREST

         Seller and Buyer  intend that the  Transactions  hereunder  be sales to
Buyer of the  Program  Assets and not loans from Buyer to Seller  secured by the
Program  Assets.  However,  in order  to  preserve  Buyer's  rights  under  this
Agreement  in  the  event  that a  court  or  other  forum  recharacterizes  the
Transactions  hereunder  as other  than  sales,  and as  security  for  Seller's
performance  of all of its  Obligations,  Seller  hereby  grants  Buyer  a fully
perfected first priority  security interest in the following  property,  whether
now existing or hereafter  acquired:  the Program Assets,  the Records,  and all
related Servicing Rights, Property,  insurance,  Income, accounts (including any
interest of Seller in escrow accounts) and any other contract rights,  payments,
rights to payment (including  payments of interest or finance charges),  and all
instruments,  chattel paper,  securities,  investment  property,  accounts,  and
general  intangibles  and other  assets  comprising  or  relating to the Program
Assets,  any  interest in the  Program  Assets or the  servicing  of the Program
Assets,  any  securities  account,  including the  Collection  Account,  and all
security  entitlements  to  financial  assets  now or  hereafter  carried  in or
credited to any securities  account,  and any now existing or hereafter  arising
proceeds and  distributions  with respect to any of the  foregoing and any other
property,  rights,  titles or interests as are specified on a Transaction Notice
(collectively,  the  "Collateral").  The parties  acknowledge and agree that the
perfection  of such  security  interest is intended to be  accomplished  through
possession of the related Program Assets by Buyer, the Custodian or by any other
Person on Buyer's behalf,  and that such possession  unless  otherwise agreed is
for Buyer's own account and, pursuant to the Netting  Agreement,  the account of
Buyer's Affiliates pursuant thereto.

9.       CONDITIONS PRECEDENT

         a) As  conditions  precedent  to the first  Transaction  to occur on or
after the Effective Date, Buyer shall have received on or before the day of such
first Transaction the following, in form and substance satisfactory to Buyer and
duly executed by each party thereto:

               i) The Program  Documents  duly  executed  and  delivered  by the
          parties  thereto  and  being in full  force  and  effect,  free of any
          modification, breach or waiver;

               ii) Evidence that all other actions  necessary or, in the opinion
          of Buyer,  desirable  to perfect and protect  Buyer's  interest in the
          Program  Assets  and  other  Collateral  have been  taken,  including,
          without  limitation,  duly executed and filed Uniform  Commercial Code
          financing statements on Form UCC-1;

               iii) A certified copy of Seller's and Originator's partnership or
          corporate resolutions, as applicable,  approving the Program Documents
          and  Transactions   thereunder  (either  specifically  or  by  general
          resolution),  and all documents evidencing other necessary partnership
          or corporate  action or  governmental  approvals as may be required in
          connection with the Program Documents;

               iv) An incumbency  certificate of the secretaries of Seller's and
          Originator's  general partners  certifying the names,  true signatures
          and  titles  of  Seller's  and   Originator's   representatives   duly
          authorized  to  request  Transactions  hereunder  and to  execute  the
          Program Documents and the other documents to be delivered thereunder;

               v) An opinion of  Seller's  and  Originator's  counsel as to such
          matters  as Buyer may  reasonably  request  and in form and  substance
          acceptable  to  Buyer,  including  without  limitation  true  sale and
          non-consolidation opinions;

               vi) A copy  of  the  Investment  Policy  Manual  certified  by an
          officer of the Originator's general partner;

               vii) The Originator Guaranty and the CNL APF Guaranty;

               viii) A copy of the executed Liquidity Facility documents;

               ix) Any other documents reasonably requested by Buyer.

         b) The obligation of Buyer to enter into each  Transaction  pursuant to
this Agreement is subject to the following conditions precedent:

               i) Buyer or its designee shall have received on or before the day
          of a  Transaction  with  respect  to  such  Purchased  Assets  (unless
          otherwise  specified in this  Agreement)  the  following,  in form and
          substance satisfactory to Buyer and (if applicable) duly executed:

                    (A)  Transaction  Notice,  Loan  Schedule and Computer  Tape
                         delivered pursuant to Section 4(a);

                    (B)  The related Trust Receipt; and

                    (C)  Such  certificates,  customary  opinions  of counsel or
                         other  documents  as  Buyer  may  reasonably   request,
                         provided  that such  opinions  of counsel  shall not be
                         required in connection with each  Transaction but shall
                         only be required from time to time as deemed  necessary
                         by Buyer in its good faith.

               ii) No  Default or Event of Default  shall have  occurred  and be
          continuing.

               iii) Buyer shall not have determined that the  introduction of or
          a  change  in any  requirement  of law  or in  the  interpretation  or
          administration  of any requirement of law applicable to Buyer has made
          it unlawful, and no Governmental Authority shall have asserted that it
          is unlawful,  for Buyer to enter into Transactions with a Pricing Rate
          based on LIBOR.

               iv) All  representations  and warranties in the Program Documents
          shall be true and correct on the date of such Transaction.

               v) The then aggregate  outstanding Purchase Price for all Program
          Assets,   when  added  to  the  Purchase   Price  for  the   requested
          Transaction, shall not exceed (i) the Maximum Aggregate Purchase Price
          with respect to all Program Assets other than Rehab Loans and (ii) the
          Maximum  Aggregate  Rehab  Purchase  Price with respect to all Program
          Assets that are Rehab Loans.

               vi) No event or events shall have been  reasonably  determined by
          Buyer to have occurred  resulting in the effective  absence of a "repo
          market" for a period of at least two (2)  consecutive  days respecting
          loans or mortgage-backed or asset-backed securities such that Buyer is
          or was  unable to  finance  or fund  purchases  under  this  Agreement
          through the "repo market" or Buyer's customers.

               vii) The Purchased  Assets (other than 1031 Loans,  ARM Loans and
          Rehab Loans)  shall be the subject of or covered by and shall  include
          one or more Hedge  Instruments  satisfactory  to Buyer and Buyer shall
          have received  satisfactory  evidence that such Hedge  Instruments are
          fully  subject to a  Securities  Account  Control  Agreement  or other
          assignment  instrument  to Buyer  acceptable  to Buyer  and  otherwise
          comply with Section 37 hereof.

               viii) Seller shall have  delivered the  Underwriting  Package for
          each Loan  constituting a Purchased Asset in such Transaction to Buyer
          not less than three (3) Business Days prior to the date of the related
          Transaction  Notice,  and Buyer shall have  approved each such Loan in
          its sole  discretion.  Buyer agrees that it shall notify Seller of its
          approval or  disapproval  of each proposed Loan within three  Business
          Days after its receipt of the complete Underwriting Package related to
          such proposed Loan. For purposes of this  provision,  an  Underwriting
          Package  received by Buyer after 1:00 p.m. New York City time shall be
          deemed to be received on the following Business Day.

               ix) Each Loan  constituting a Purchased Asset in such Transaction
          shall have an  interest  rate not less than the 10 year U.S.  Treasury
          Note rate plus 2.75% as of the initial Purchase Date of such Purchased
          Asset.

               x) Buyer shall have  received and  approved  the Loan  Allocation
          Table  related to each Loan  constituting  a  Purchased  Asset in such
          Transaction.

               xi)  Satisfaction  of  any  conditions  precedent  to  the  first
          Transaction  on or after the Effective Date as set forth in clause (a)
          of this Section 9 that were not satisfied prior to such first Purchase
          Date.
<PAGE>

10.      RELEASE OF PURCHASED ASSETS

         Upon  timely  payment  in full of the  Repurchase  Price  and all other
Obligations  owing with respect to a Purchased  Asset, if no Default or Event of
Default has occurred and is continuing,  Buyer shall, and shall direct Custodian
to,  release such  Purchased  Asset  unless such  release  would give rise to or
perpetuate a Margin Deficit. Except as set forth in Sections 6(a) and 16, Seller
shall give at least three (3) Business  Days' prior  written  notice to Buyer if
such repurchase shall occur on other than a Repurchase Date.

         If such a Margin  Deficit is  applicable,  Buyer shall notify Seller of
the amount  thereof  and Seller may  thereupon  satisfy  the Margin  Call in the
manner specified in Section 6.

11.      RELIANCE

         With respect to any Transaction,  Buyer may conclusively rely upon, and
shall  incur no  liability  to Seller  in  acting  upon,  any  request  or other
communication  that Buyer  reasonably  believes  to have been given or made by a
person authorized to enter into a Transaction on Seller's behalf.

12.      REPRESENTATIONS AND WARRANTIES

         Each of Seller and Originator hereby represents and warrants, and shall
on and as of the Purchase  Date for any  Transaction  and on and as of each date
thereafter  through  and  including  the  related  Repurchase  Date be deemed to
represent and warrant, that:

         a) Due Organization and Qualification. Each of Seller and Originator is
duly  organized,  validly  existing and in good  standing  under the laws of the
jurisdiction under whose laws it is organized.  Each of Seller and Originator is
duly  qualified  to do  business,  is in  good  standing  and has  obtained  all
necessary licenses, permits, charters, registrations and approvals necessary for
the conduct of its business as currently  conducted and the  performance  of its
obligations under the Program Documents or any failure to obtain such a license,
permit,  charter,  registration  or approval  will not cause a Material  Adverse
Effect or impair the enforceability of any Loan.

         b) Power and Authority. Each of Seller and Originator has all necessary
partnership  or  corporate  power and  authority  to  conduct  its  business  as
currently conducted,  to execute,  deliver and perform its obligations under the
Program Documents and to consummate the Transactions.

         c) Due  Authorization.  The execution,  delivery and performance of the
Program  Documents by each of Seller and Originator has been duly  authorized by
all necessary  partnership or corporate action and do not require any additional
approvals  or  consents  or other  action by or any notice to or filing with any
Person other than any that have heretofore been obtained, given or made.

         d) Noncontravention.  None of the execution and delivery of the Program
Documents by Seller or Originator or the  consummation of the  Transactions  and
transactions thereunder:

             (i)  conflicts  with,  breaches or violates  any  provision  of the
          partnership  or corporate  agreements  of Seller or  Originator or any
          law, rule,  regulation,  order, writ,  judgment,  injunction,  decree,
          determination  or award  currently in effect having  applicability  to
          Seller or Originator or its properties;

             (ii)  constitutes a material  default by Seller or Originator under
          any  loan  or  repurchase  agreement,  mortgage,  indenture  or  other
          agreement or instrument to which Seller or Originator is a party or by
          which it or any of its properties is or may be bound or affected; or

             (iii)  results in or requires  the  creation of any lien upon or in
          respect of any of the assets of Seller or  Originator  except the lien
          relating to the Program Documents.

         e) Legal Proceedings.  There is no action,  proceeding or investigation
by or before any court,  governmental  or  administrative  agency or  arbitrator
affecting  any of the Program  Assets,  Seller,  Originator,  Servicer or any of
their Affiliates, pending or threatened, which, if decided adversely, would have
a Material Adverse Effect.

         f) Valid and  Binding  Obligations.  Each of the Program  Documents  to
which Seller,  Originator or Servicer is a party, when executed and delivered by
Seller, Originator or Servicer, as applicable,  will constitute the legal, valid
and binding  obligations  of Seller,  Originator  or  Servicer,  as  applicable,
enforceable against Seller, Originator or Servicer, as applicable, in accordance
with their respective  terms,  except as such  enforceability  may be limited by
bankruptcy,  insolvency,  reorganization,   moratorium  or  other  similar  laws
affecting creditors' rights generally and general equitable principles.

         g) Financial Statements. The financial statements of Originator, copies
of which  have been  furnished  to Buyer,  (i) are,  as of the dates and for the
periods referred to therein, complete and correct in all material respects, (ii)
present  fairly the financial  condition and results of operations of Originator
as of the dates and for the periods  indicated  and (iii) have been  prepared in
accordance with GAAP consistently  applied,  except as noted therein (subject as
to interim  statements to normal  year-end  adjustments).  Since the date of the
most recent financial  statements,  there has been no material adverse change in
such financial  condition or results of operations.  Except as disclosed in such
financial statements, Originator is not subject to any contingent liabilities or
commitments that, individually or in the aggregate,  have a material possibility
of causing a Material Adverse Change with respect to Originator.

         h)  Accuracy  of  Information.  None of the  documents  or  information
prepared  by or on behalf of Seller,  Originator  or  Servicer  and  provided by
Seller,  Originator or Servicer to Buyer relating to Seller's,  Originator's  or
Servicer's  financial  condition  contain any  statement of a material fact with
respect to Seller, Originator or Servicer or the Transactions that was untrue or
misleading  in any material  respect  when made.  Since the  furnishing  of such
documents or information, there has been no change, nor any development or event
involving a prospective  change known to Seller,  Originator  or Servicer,  that
would render any of such  documents or  information  untrue or misleading in any
material respect.

         i) No Consents. No consent, license, approval or authorization from, or
registration,  filing or declaration  with, any regulatory body,  administrative
agency, or other governmental instrumentality, nor any consent, approval, waiver
or  notification of any creditor,  lessor or other  nongovernmental  person,  is
required in connection with the execution, delivery and performance by Seller or
Originator of this Agreement or the  consummation by Seller or Originator of any
other Program Document, other than any that have heretofore been obtained, given
or made.

         j) Compliance With Law, Etc. No practice,  procedure or policy employed
or  proposed  to be  employed  by Seller or  Originator  in the  conduct  of its
businesses violates any law, regulation,  judgment,  agreement,  order or decree
applicable to it which, if enforced,  would result in either a Material  Adverse
Change with respect to Seller or Originator or a Material Adverse Effect.

         k) Solvency:  Fraudulent  Conveyance.  Each of Seller and Originator is
solvent and will not be rendered  insolvent by the Transaction and, after giving
effect to such  Transaction,  neither Seller nor Originator will be left with an
unreasonably  small  amount of  capital  with  which to engage in its  business.
Neither  Seller  nor  Originator  intends  to incur,  nor  believes  that it has
incurred,  debts  beyond its ability to pay such debts as they  mature.  Neither
Seller  nor  Originator  is   contemplating   the  commencement  of  insolvency,
bankruptcy,  liquidation or  consolidation  proceedings or the  appointment of a
receiver,  liquidator,  conservator,  trustee or similar  official in respect of
Seller or Originator or any of their assets.  The amount of consideration  being
received  by Seller  upon the sale of the  Program  Assets to Buyer  constitutes
reasonably  equivalent  value and fair  consideration  for such Program  Assets.
Seller is not transferring  any Program Assets with any intent to hinder,  delay
or defraud any of its creditors.  The amount of consideration  being received by
Originator  upon the sale and/or  contribution  of the Program  Assets to Seller
constitutes  reasonably equivalent value and fair consideration for such Program
Assets.  Originator is not  transferring  any Program  Assets with any intent to
hinder, delay or defraud any of its creditors.

         l)  Investment  Company Act  Compliance.  Seller is not  required to be
registered as an "investment  company" as defined under the  Investment  Company
Act nor as an entity  under the  control of an  "investment  company" as defined
under the Investment Company Act.

         m) Taxes. Each of Seller and Originator has filed all federal and state
tax returns  which are  required to be filed and paid all taxes,  including  any
assessments received by it, to the extent that such taxes have become due (other
than for  taxes  that are  being  contested  in good  faith or for  which it has
established  adequate reserves).  Any taxes, fees and other governmental charges
payable  by  Seller or  Originator  in  connection  with a  Transaction  and the
execution and delivery of the Program Documents have been paid.

         n) Additional  Representations.  With respect to each Loan,  Seller and
Originator,   jointly  and   severally,   hereby  make  all  of  the  applicable
representations  and warranties set forth in Appendix A to the Custody Agreement
as of the date the Custodian's Loan File or Wet Funded Custodian's Loan File, as
applicable,  is delivered to the Custodian.  Further,  as of each Purchase Date,
the Seller and the Originator  shall be deemed to have represented and warranted
in like  manner  that  neither  the  Seller  nor the  Originator  has any actual
knowledge that any such representation or warranty may have ceased to be true in
a material respect as of such date, except as otherwise stated in Section 9 of a
Transaction Notice, any such exception to identify the applicable representation
or warranty and specify in reasonable detail the related actual knowledge of the
Seller or Originator. For so long as the Servicer is an Affiliate of Originator,
knowledge  of Servicer  shall be imputed to  Originator  for this  purpose.  The
Servicer  shall be deemed to have  knowledge if any employee of the Servicer has
actual  knowledge  and the Servicing  Manager or any more senior  officer of the
Servicer has actual  knowledge  or should have actual  knowledge of the relevant
facts in the  performance of its servicing  responsibilities  in accordance with
Accepted  Servicing  Standards.  In  addition,  Originator  agrees  to make  the
representations  and warranties set forth in Appendix A to the Custody Agreement
as of the "cut-off date" of the securitization or whole loan sale of the related
Loans by Seller or Buyer, as applicable;  provided,  however, that to the extent
that Originator has at the time of such securitization or whole loan sale actual
knowledge  of  any  facts  or  circumstances  that  would  render  any  of  such
representations  and  warranties  materially  false,  Originator  shall  have no
obligation to make such materially false representation and warranty.

         o) No Broker.  Neither Seller nor Originator has dealt with any broker,
investment banker, agent, or other person, except for Buyer, who may be entitled
to any commission or  compensation in connection with the sale of Program Assets
pursuant to this  Agreement;  provided,  that if Seller or Originator  has dealt
with any broker,  investment banker,  agent, or other person,  except for Buyer,
who may be entitled to any  commission or  compensation  in connection  with the
sale  of  Program  Assets  pursuant  to  this  Agreement,   such  commission  or
compensation  shall  have  been  paid  in  full  by  Seller  or  Originator,  as
applicable.

         p) Corporate Separateness.

             (i) The  capital  of Seller  and  Originator  is  adequate  for the
          respective business and undertakings of Seller and Originator.

             (ii) Other than as provided in this Agreement and the other Program
          Documents,  Seller is not engaged in any  business  transactions  with
          Originator or any of its  Affiliates  other than  transactions  in the
          ordinary course of its business on an "arms-length" basis.

             (iii) At least one director of the general  partner of Seller shall
          be a person  who  shall at no time be, or have  been,  a  director  or
          officer  of,  employed  by any  direct  or  ultimate  parent  or other
          Affiliate of Originator, or who shall at no time be, or have been, and
          who  shall  not  have  an  Affiliate  who  at  any  time  is  or  was,
          "controlling", "controlled" by or under common "control" with or owns,
          directly or indirectly,  50% or more of, any direct or ultimate parent
          or  other  Affiliate  of  Originator;  provided,  however,  that  such
          director may serve, or may have served  previously,  with compensation
          therefor  in such a  capacity  for any other  special  purpose  entity
          formed by any Affiliate of the Seller.

             (iv) The funds and assets of the  Seller are not,  and will not be,
          commingled with the funds of any other person.

         q) Reserved.

         r)  Hedging.  With  respect to each  Purchased  Asset  (other than 1031
Loans, ARM Loans and Rehab Loans),  Seller has entered into a Hedge  Instrument,
which  Hedge  Instrument  is  identified  on the Hedge  Report,  and such  Hedge
Instrument  complies  with the  requirements  of  Section 37 hereof and is fully
subject to a Securities Account Control Agreement or other assignment instrument
acceptable to Buyer.

         s) Rehab Loans.  The schedule of Rehab Loans attached hereto as Exhibit
H is  a  complete,  true  and  accurate  list  of  the  Rehab  Loan  subject  to
Transactions as of the Effective Date.

         The  representations  and warranties set forth in this Agreement  shall
survive  transfer of the Program  Assets to Buyer and shall continue for so long
as the Program Assets are subject to this Agreement.

13.      COVENANTS OF SELLER AND ORIGINATOR

         Each of Seller and  Originator,  as applicable,  hereby  covenants with
Buyer as follows:

         a) Defense of Title.  Each of Seller and  Originator  warrants and will
defend the right,  title and interest of Buyer in and to all Collateral  against
all adverse claims and demands.

         b) No Amendment or Compromise.  Without Buyer's prior written  consent,
neither Seller,  Originator nor those acting on Seller's or Originator's  behalf
shall  amend or  modify,  or waive  any  term or  condition  of,  or  settle  or
compromise any claim in respect of, any item of the Program Assets,  any related
rights or any of the Program Documents or the Liquidity Facility,  provided that
Servicer may amend or modify a Loan if such amendment or  modification  does not
affect the amount or timing of any payment of principal or interest,  extend its
scheduled  maturity date, modify its interest rate, or constitute a cancellation
or discharge of its  outstanding  principal  balance and does not materially and
adversely  affect  the  security  afforded  by the real  property,  furnishings,
fixtures, or equipment securing the Loan.

         c)  No  Assignment.   Except  as  permitted  herein,   neither  Seller,
Originator nor any servicer shall sell,  assign,  transfer or otherwise  dispose
of, or grant any  option  with  respect  to, or pledge,  hypothecate  or grant a
security  interest in or lien on or otherwise  encumber  (except pursuant to the
Program Documents),  any of the Program Assets or any interest therein, provided
that this Section shall not prevent any transfer of Program Assets in accordance
with the Program Documents.

         d) Servicing of Loans. Seller shall cause Servicer to service, or cause
to be serviced, all Loans that are part of the Program Assets in accordance with
prudent  servicing  practices,  pending any delivery of such  servicing to Buyer
pursuant to the Servicing Agreement,  employing at least the same procedures and
exercising the same care that Servicer  customarily  employs in servicing  Loans
for its own account. Seller shall notify servicers of Buyer's interest hereunder
and Seller shall notify Buyer of the name and address of all servicers of Loans.
Buyer  shall  have  the  right  to  approve  each  servicer  and the form of all
Servicing Agreements or servicing side letter agreements. Seller shall cause the
servicer to hold or cause to be held all escrow funds  collected with respect to
such Loans in trust accounts and shall apply the same for the purposes for which
such funds were  collected.  Seller shall cause the Borrower  under each Note to
remit all payments to the Lockbox Bank and not otherwise.  Upon Buyer's request,
Seller  shall  provide  reasonably  promptly to Buyer a letter  addressed to and
agreed  to  by  each  servicer  of  Loans,  in  form  and  substance  reasonably
satisfactory  to Buyer,  advising  such  servicer  of such  matters as Buyer may
reasonably  request.  If Seller should discover that, for any reason whatsoever,
Seller or any entity responsible to Seller by contract for managing or servicing
any such Loan has failed to perform fully Seller's obligations under the Program
Documents or any of the obligations of such entities with respect to the Program
Assets, Seller shall promptly notify Buyer.

         e) Preservation of Collateral;  Collateral  Value.  Seller shall do all
things  necessary to preserve  the  Collateral  so that it remains  subject to a
first priority  perfected  security  interest  hereunder.  Without  limiting the
foregoing,  Seller and Originator  will comply with all rules,  regulations  and
other laws of any Governmental Authority and cause the Collateral to comply with
all applicable rules,  regulations and other laws. Neither Seller nor Originator
will allow any default for which Seller or  Originator is  responsible  to occur
under any Collateral or any Program  Documents and Seller and  Originator  shall
fully perform or cause to be performed when due all of its obligations under any
Collateral or the Program Documents.


         f) Maintenance of Papers,  Records and Files. Seller shall acquire, and
Seller or the  Servicer of the Program  Assets  shall  build,  maintain and have
available,  a complete  file in  accordance  with  lending  industry  custom and
practice for each Program  Asset.  Seller or the Servicer of the Program  Assets
will  maintain all such Records not in the  possession  of Custodian in good and
complete  condition in  accordance  with  industry  practices  and preserve them
against loss.

                   (i)  Seller  shall  collect  and  maintain  or  cause  to  be
         collected and maintained all Records  relating to the Program Assets in
         accordance   with  industry   custom  and  practice,   including  those
         maintained pursuant to the preceding  subsection,  and all such Records
         shall be in Custodian's  possession  unless Buyer  otherwise  approves.
         Neither  Seller nor Originator  will allow any such papers,  records or
         files  that  are an  original  or an  only  copy to  leave  Custodian's
         possession,  except for  individual  items removed in  connection  with
         servicing a specific  Loan,  in which event Seller or  Originator  will
         obtain or cause to be obtained a receipt from a financially responsible
         person for any such paper, record or file.

                   (ii) For so long as Buyer has an  interest  in or lien on any
         Program Asset,  Seller and Originator will hold or cause to be held all
         related Records in trust for Buyer.  Seller or Originator shall notify,
         or cause to be notified,  every other party holding any such Records of
         the interests and liens granted hereby.

                   (iii) Upon reasonable advance notice from Custodian or Buyer,
         Seller and Originator shall (x) make any and all such Records available
         to  Custodian or Buyer to examine any such  Records,  either by its own
         officers or employees,  or by agents or contractors,  or both, and make
         copies  of  all  or  any  portion  thereof,  (y)  permit  Buyer  or its
         authorized  agents to discuss the  affairs,  finances  and  accounts of
         Seller or Originator with its respective  chief  operating  officer and
         chief  financial  officer  and to discuss  the  affairs,  finances  and
         accounts of Seller or Originator with its independent  certified public
         accountants.

         g)  Financial  Statements:  Accountants'  Reports:  Other  Information.
Seller and Originator shall keep or cause to be kept in reasonable  detail books
and  records of account of its assets and  business  and shall  clearly  reflect
therein the transfer of Program  Assets to Buyer.  Seller and  Originator  shall
furnish or cause to be furnished to Buyer the following:

                   (i) Financial Statements. (x) As soon as available and in any
         event  within  90  days  after  the  end  of  each  fiscal  year,   the
         consolidated, audited balance sheets of Originator and Seller as of the
         end of each  fiscal  year of  Originator  and  Seller,  and the audited
         financial  statements of income and changes in equity of Originator and
         Seller,  and the  audited  statement  of cash flows of  Originator  and
         Seller,  for such fiscal year and (y) as soon as  available  and in any
         event within 45 days after the end of each quarter,  the  consolidated,
         unaudited balance sheets of Originator and Seller as of the end of each
         quarter, and the consolidated, unaudited financial statements of income
         of Originator  and Seller,  and the  unaudited  statement of changes in
         equity and cash flows of Originator, for the portion of the fiscal year
         then ended;  provided,  that Buyer may request statements of income and
         changes in equity of Seller,  which  Originator or Seller shall provide
         within 10 days of receipt of such  request;  provided,  that  Seller or
         Originator  shall not be required to provide such  statements of income
         and  changes in equity of Seller  prior to 45 days after the end of the
         related  quarter,  and (z)  within 30 days  after the end of each month
         which is not a quarter end, unaudited  statements  (excluding cash flow
         statements  and  statements of changes in equity) as provided in clause
         (y) with  respect to Seller,  CNL  Financial  VIII,  LP,  each owner of
         Mortgaged Property securing any Net Lease Loan (each such owner, a "Net
         Lease  Borrower") and,  beginning with the month ending on November 30,
         2001,  Originator,  all of which have been prepared in accordance  with
         GAAP and certified by Originator's and Seller's,  as applicable,  chief
         financial officer.  Additionally, (a) Originator shall provide to Buyer
         weekly cash  position  reports  detailing  Originator's  liquidity  and
         projections  for cash sources and uses for the 60 day period  following
         the  date of such  weekly  report,  (b)  Seller  and  Originator  shall
         promptly  furnish or cause to be  furnished to Buyer  financial,  asset
         sales,  or loan status  reports upon Buyer's  reasonable  request,  (c)
         Originator,  or a designated  third party,  shall deliver to Buyer each
         week a Hedge  Report  and (d)  Originator  shall  deliver to Buyer each
         month a report  in the form of  Exhibit  J  attached  hereto  detailing
         dispositions of Net Lease Loans.

                   (ii)  Loan   Data.   Monthly   reports   in  form  and  scope
         satisfactory to Buyer,  setting forth data regarding the performance of
         the Program Assets for the immediately  preceding month, and such other
         information  as  Buyer  may  reasonably  request,  including,   without
         limitation,   any  other  information   regarding  the  Program  Assets
         requested  by  Buyer,  the  Originator's   origination  pipeline,   the
         performance of any loans serviced by or on behalf of Originator and any
         other financial  information  regarding Originator reasonably requested
         by Buyer.

                   (iii) Monthly Servicing Diskettes.  On or before the 20th day
         of each month,  a computer tape or a diskette (or any other  electronic
         transmission  acceptable  to  Buyer)  in a format  acceptable  to Buyer
         containing such information with respect to the Program Assets as Buyer
         may reasonably request upon reasonable prior notice.

                   (iv)  Quarterly  Certification.   Seller  shall  execute  and
         deliver a quarterly certification  substantially in the form of Exhibit
         A-1  attached  hereto  and  Originator  shall  execute  and  deliver  a
         quarterly   certification    (including   all   related   calculations)
         substantially in the form of Exhibit A-2 attached hereto.

                   (v)  Investment   Committee  Binders.  The  Originator  shall
         deliver  to  Buyer  a  copy  of  each  of the  Originator's  investment
         committee binders at the time such binders are delivered to the members
         of  the  investment  committee;  provided,  however,  that  the  copies
         provided to Buyer may reflect the  redaction of  information  regarding
         loans and other investment  and/or credit  decisions  unrelated to this
         Agreement.

                   (vi) Monthly  Rehab Loan  Reports.  With respect to the Rehab
         Loans,  Seller shall  prepare and deliver a monthly  report  containing
         such  information with respect to such Rehab Loans as Buyer may request
         upon  reasonable  prior  notice.  Seller  shall use its best efforts to
         obtain, or cause to be obtained,  monthly financial statements from the
         related  Borrower of each Rehab Loan and,  upon receipt of such monthly
         financial  statements,  shall provide copies of such monthly  financial
         statements  to  Buyer.  Seller  shall  recalculate  the  Note  FCCR and
         Borrower/Guarantor  FCCR with respect to the related  Rehab Loans every
         sixty (60) days and promptly report such recalculated ratios to Buyer.

         h) Notice of  Material  Events.  Each of Seller  and  Originator  shall
promptly inform Buyer in writing of any of the following:

                   xii) any  Default,  Event of  Default or default or breach by
         Seller or Originator of any obligation under any Program  Document,  or
         the occurrence or existence of any event or circumstance that Seller or
         Originator  reasonably  expects  will with the passage of time become a
         Default,  Event of  Default  or such a  default  or breach by Seller or
         Originator;

                   xiii) any change in the insurance coverage required of Seller
         or  Originator  or any other Person  pursuant to any Program  Document,
         with copy of evidence of same attached;

                   xiv)  any  material   dispute,   litigation,   investigation,
         proceeding or suspension  between Seller or the Originator,  on the one
         hand, and any Governmental Authority or any other Person;

                   xv) any material  change in accounting  policies or financial
         reporting practices of Seller or Originator;

                   xvi)  the  occurrence  of  any  material  employment  dispute
         involving  any chief  financial  officer,  chief  executive  officer or
         president or comparable  officer of Seller or  Originator,  which has a
         material  possibility  of leading to litigation or the  termination  or
         departure  of such  officer,  and a  description  of the  strategy  for
         resolving it;

                   xvii) any event, circumstance or condition that has resulted,
         or has a possibility of resulting,  in either a Material Adverse Change
         with respect to Seller or Originator or a Material Adverse Effect; and

                   xviii) the  occurrence  of any  downgrade  in the  Servicer's
         rating or any event  that  permits a  trustee  or  applicable  party to
         remove or replace the Servicer under any securitization  transaction or
         any event,  which with the giving of notice or lapse of time,  or both,
         would become a Servicer Termination Event.

         i)  Maintenance  of  Licenses.  Each of  Seller  and  Originator  shall
maintain, all licenses,  permits or other approvals necessary for each of Seller
and Originator to conduct its business and to perform its obligations  under the
Program Documents,  and each of Seller and Originator shall conduct its business
strictly in accordance with applicable law except where failure to maintain such
licenses,  permits or other approvals  would not be reasonably  likely to have a
Material Adverse Effect.

         j) No  Withholdings  for Taxes.  Any  payments  made by Seller to Buyer
shall be free and clear of, and without deduction or withholding for, any taxes;
provided, however, that if Seller shall be required by law to deduct or withhold
any taxes  from any sums  payable  to  Buyer,  then  Seller  shall (A) make such
deductions  or  withholdings  and pay such amounts to the relevant  authority in
accordance  with  applicable  law, (B) pay to Buyer the sum that would have been
payable had such  deduction or  withholding  not been made,  and (C) at the time
Price  Differential is paid, pay to Buyer all additional amounts as specified by
Buyer to preserve the after-tax  yield Buyer would have received if such tax had
not been imposed. This provision does not apply to income taxes payable by Buyer
on its taxable income.

         k) Change in Nature of  Business.  Seller  shall not make any  material
change in the nature of its business as carried on at the date hereof.

         l) Reserved.

         m)  Limitation  on  Distributions.  If a Default  has  occurred  and is
occurring,   neither   Seller  nor   Originator   shall  pay  any  dividends  or
distributions  with respect to any capital  stock or other  equity  interests in
Seller or Originator,  whether now or hereafter  outstanding,  or make any other
distribution in respect thereof, either directly or indirectly,  whether in cash
or property or in obligations of Seller or Originator.

         n) Use of Custodian. Without the prior written consent of Buyer, Seller
and Originator  shall use no third party  custodian as document  custodian other
than the Custodian  with respect to third party  purchasers,  prospective  third
party  purchasers,  lenders and prospective  third party lenders with respect to
mortgage loans of the same type as the Program Assets.

         o) Merger of Originator.  Originator shall not at any time, directly or
indirectly, (i) liquidate or dissolve or enter into any consolidation or merger;
provided that Originator may enter into a consolidation or merger so long as (1)
Originator is the surviving entity after such  consolidation  or merger,  or the
surviving entity assumes all obligations hereunder and does not adversely impact
the capital of the guarantying entity, and (2) such consolidation or merger does
not  breach  the  provisions  of  (iii)  below;  (ii)  form or  enter  into  any
partnership,  joint venture,  syndicate or other  combination which would have a
material adverse effect on the business or financial condition of Originator and
Originator's  Subsidiaries,  taken as a whole; or (iii) make any material change
in the nature of the business of Originator or Originator's Subsidiaries.

         p) Insurance.  Seller will, and shall cause the Servicer to, obtain and
maintain  insurance with responsible  companies in such amounts and against such
risks as are  customarily  carried  by  business  entities  engaged  in  similar
businesses   similarly  situated,   and  will  furnish  Buyer  on  request  full
information as to all such insurance, and provide within fifteen (15) days after
receipt of such  request the  certificates  or other  documents  evidencing  the
renewal of each such policy.

         q) Affiliate  Transaction.  Neither Seller nor  Originator  will at any
time, directly or indirectly,  sell, lease or otherwise transfer any property or
assets to, or otherwise acquire any property or assets from, or otherwise engage
in any transactions  with, any of their Affiliates  unless the terms thereof are
no less favorable to Seller or Originator, as applicable,  than those that could
be obtained at the time of such transaction in an arm's length  transaction with
a Person who is not such an Affiliate.

         r) Change of Fiscal Year.  Neither  Seller nor  Originator  will at any
time, directly or indirectly, except upon ninety (90) days' prior written notice
to Buyer,  change the date on which Seller's or Originator's  fiscal year begins
from Seller's or Originator's current fiscal year beginning date.

         s) Reserved.

         t) Commitment  Fee.  Seller shall pay to Buyer the Commitment Fee on or
prior to the Effective Date.

         u) Delivery of Servicing  Rights.  With respect to the Servicing Rights
of each Loan,  Seller  shall  deliver such  Servicing  Rights to the designee of
Buyer,  within 45 days of a Purchase Date, unless otherwise stated in writing by
Buyer;  provided  that  on  each  Repurchase  Date  that  is  subject  to a  new
Transaction,   such  delivery  requirement  is  deemed  restated  for  such  new
Transaction (and the immediately  preceding delivery requirement is deemed to be
rescinded) in the absence of  directions  to the contrary from Buyer,  and a new
45-day period is deemed to commence as of such Repurchase Date; provided further
that,  unless  there  occurs an Event of Default or Servicer  Termination  Event
under any of the Program Documents, Buyer shall extend such delivery requirement
for so long as the related Loans are subject to a  Transaction.  Notwithstanding
the foregoing,  unless there occurs an Event of Default or Servicer  Termination
Event under any of the Program  Documents,  Seller may (by  notifying  Buyer and
Custodian)  appoint any Person to act as Servicer  under the Custody  Agreement;
provided  that  such  Person  assumes  all of the  obligations  of the  Servicer
hereunder and under the Custody  Agreement,  including the obligation to deliver
the Servicing Rights to the designee of Buyer as set forth in the first sentence
of this clause (u);  provided,  further,  that if such Person is not a Qualified
Servicer  and Seller  does not replace  such  Person  with a Qualified  Servicer
within  three (3) Business  Days of such  Person's  appointment,  Buyer shall be
entitled to replace such Person as Servicer in its sole discretion. The Seller's
transfer of the Servicing  Rights under this Section shall be in accordance with
customary standards in the industry.

         v) Exit  Fee.  With  respect  to each  Purchased  Asset,  on the  first
Repurchase  Date  on  which  such  Purchased  Asset  is  not  subject  to a  new
Transaction and is not subject to a  securitization  with respect to which Buyer
(i) is  acting  as lead  underwriter  or (ii) has  been  engaged  as an  advisor
pursuant  to a written  engagement  letter,  Seller  shall  remit or cause to be
remitted  to Buyer,  in addition to the  Repurchase  Price with  respect to such
Purchased Asset, the applicable Exit Fee in immediately available funds.

14.      REPURCHASE DATE PAYMENTS/COLLECTIONS

         On each  Repurchase  Date,  Seller  shall  remit or  shall  cause to be
remitted to Buyer the Repurchase Price.

15.      REPURCHASE OF PROGRAM ASSETS; CHANGE OF LAW

         a) Upon  discovery  by Seller or  Originator  of a breach of any of the
representations and warranties set forth in Appendix A to the Custody Agreement,
Seller or Originator shall give prompt written notice thereof to Buyer. Upon any
such discovery by Buyer,  Buyer will notify Seller.  It is understood and agreed
that the  representations  and warranties set forth in Appendix A to the Custody
Agreement shall survive delivery of the respective Custodian's Loan Files to the
Custodian  and shall  inure to the  benefit  of Buyer.  The fact that  Buyer has
conducted  or has  failed to  conduct  any  partial or  complete  due  diligence
investigation  in  connection  with its  purchase  of any Loan  shall not affect
Buyer's right to demand repurchase as provided under this Agreement.  Originator
shall within five (5) Business Days of the earlier of Originator's  discovery or
Originator's  receiving notice, with respect to any Loan, of (i) any breach of a
representation  or warranty  contained in Appendix A to the Custody Agreement or
(ii) any failure to deliver any of the items required to be delivered as part of
the Custodian's Loan File within the time period required for delivery  pursuant
to the Custody  Agreement,  promptly cure such breach or delivery failure in all
material  respects.  If within  five (5)  Business  Days  after the  earlier  of
Originator's  discovery  of such  breach or  delivery  failure  or  Originator's
receiving  notice thereof such breach or delivery  failure has not been remedied
by Originator,  Originator  shall promptly upon receipt of written  instructions
from  Buyer  either (i)  purchase  such Loan at a  purchase  price  equal to the
Repurchase  Price with respect to such Loan by depositing such Repurchase  Price
in the Collection  Account,  or (ii) transfer  comparable  Substitute  Assets to
Buyer, as provided in Section 16 hereof.

         b) If Buyer  determines that the introduction of, any change in, or the
interpretation  or administration of any requirement of law has made it unlawful
or commercially  impracticable to engage in any Transactions with a Pricing Rate
based on LIBOR,  then Seller (i) shall,  upon its receipt of notice of such fact
and demand from Buyer (with a copy of such notice to Custodian),  repurchase the
Program Assets subject to the  Transaction on the next  succeeding  Business Day
and, at Seller's election,  concurrently enter into a new Transaction with Buyer
with a Pricing  Rate  based on the Prime  Rate plus the  margin set forth in the
Side Letter as part of the Pricing Rate and (ii) may elect,  by giving notice to
Buyer and Custodian, that all new Transactions shall have Pricing Rates based on
the Prime Rate plus such margin.

         c) If Buyer  determines in its sole  discretion  that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on Buyer's  capital or on the capital of any  Affiliate  of Buyer as a
consequence  of such  Change  in Law on this  Agreement,  then from time to time
Seller will  compensate  Buyer or Buyer's  Affiliate,  as  applicable,  for such
reduced rate of return  suffered as a consequence  of such Change in Law.  Buyer
shall provide Seller with prompt notice as to any Change in Law. Notwithstanding
any other  provisions in this Agreement,  in the event of any such Change in Law
Seller  will have the  right to  terminate  all  Transactions  then  outstanding
without any prepayment penalty as of a date selected by Seller, which date shall
be prior to the then applicable  Repurchase Date and which date shall thereafter
for all purposes hereof be deemed to be the Repurchase Date.

16.      SUBSTITUTION

         a) Seller  may,  subject to  agreement  with and  acceptance  by Buyer,
substitute other assets which are  substantially  the same as the Program Assets
(the "Substitute Assets) for any Program Assets. Such substitution shall be made
by transfer to Buyer of such other  Substitute  Assets and transfer to Seller of
such Program Assets.  After substitution,  the Substitute Assets shall be deemed
to be Program Assets.

         b) In the case of any  Transaction  for  which the  Repurchase  Date is
other than the Business Day  immediately  following  the Purchase  Date and with
respect  to  which  Seller  does  not have  any  existing  right  to  substitute
Substitute Assets for the Purchased Assets, Seller shall have the right, subject
to the proviso to this  sentence,  upon notice to Buyer,  which  notice shall be
given  at or prior to 10 a.m.  (New  York  City  time) on the  second  preceding
Business  Day,  to  substitute  Substitute  Assets  for  any  Purchased  Assets;
provided,  however,  that  Buyer  may  elect,  by the close of  business  on the
Business Day  following  which such notice is  received,  or by the close of the
next  Business Day if notice is given after 10 a.m. (New York City time) on such
day, not to accept such substitution. In the event such substitution is accepted
by Buyer, such substitution  shall be made by Seller's transfer to Buyer of such
Substitute Assets and Buyer's transfer to Seller of such Purchased  Assets,  and
after such  substitution,  the Substitute Assets shall be deemed to be Purchased
Assets. In the event Buyer elects not to accept such  substitution,  Buyer shall
offer Seller the right to terminate the Transaction.

         c) In the event Seller  exercises  its right to substitute or terminate
under subsection (b), Seller shall be obligated to pay to Buyer, by the close of
the  Business Day of such  substitution,  as the case may be, an amount equal to
(A) Buyer's  actual cost in bona fide third party  transactions  (including  all
fees,  expenses and commissions) of (i) entering into replacement  transactions;
(ii) entering into or terminating hedge  transactions;  and/or (iii) terminating
transactions or substituting  securities in like transactions with third parties
in connection with or as a result of such  substitution or termination,  and (B)
to the extent Buyer determines not to enter into replacement  transactions,  the
Breakage  Costs  incurred  by Buyer  directly  arising  or  resulting  from such
substitution or termination.

17.      REPURCHASE TRANSACTIONS

         Buyer may, in its sole election, engage in repurchase transactions with
the  Program  Assets or  otherwise  pledge,  hypothecate,  assign,  transfer  or
otherwise  convey the Program Assets with a counterparty of Buyer's  choice,  in
all cases subject to Buyer's  obligation to reconvey the Program Assets (and not
substitutes  therefor) on the  Repurchase  Date. In the event Buyer engages in a
repurchase  transaction  with any of the Program Assets or otherwise  pledges or
hypothecates any of the Program Assets,  Buyer shall have the right to assign to
Buyer's  counterparty  any of the  applicable  representations  or warranties in
Appendix A to the Custody Agreement and the remedies for breach thereof, as they
relate to the Program Assets that are subject to such repurchase transaction.

18.      EVENTS OF DEFAULT

         With  respect  to  any  Transactions  covered  by or  related  to  this
Agreement,  the  occurrence of any of the following  events shall  constitute an
"Event of Default":

         a)  Seller  fails to  transfer  the  Purchased  Assets  to Buyer on the
applicable  Purchase  Date  (provided  Buyer has tendered  the related  Purchase
Price);

         b)  Seller  either  fails to  repurchase  the  Purchased  Assets on the
applicable  Repurchase Date or fails to perform its obligations under Section 6;

         c) either Seller, Originator or Servicer shall fail to perform, observe
or comply with any other material term,  covenant or agreement  contained in the
Program  Documents  (other than  Appendix A to the Custody  Agreement)  and such
failure is not cured  within the time period  expressly  provided or, if no such
cure period is  provided,  within ten (10)  Business  Days of the earlier of (i)
such party's receipt of written notice from Buyer or Custodian of such breach or
(ii) the date on which such party  obtains  actual  notice or  knowledge  of the
facts giving rise to such breach;

         d) any  representation or warranty made by Seller or Originator (or any
of Seller's or Originator's  officers) in the Program  Documents or in any other
document  (other than the  representations  or  warranties  in Appendix A to the
Custody  Agreement)  shall have been incorrect or untrue in any material respect
when made or repeated or deemed to have been made or repeated;

         e) Seller,  Originator, or any of Seller's or Originator's Subsidiaries
shall fail to pay any of  Seller's,  Originator's  or Seller's  or  Originator's
Subsidiaries' Indebtedness, or any interest or premium thereon when due (whether
by  scheduled  maturity,   requirement  prepayment,   acceleration,   demand  or
otherwise),  or  shall  fail  to make  any  payment  when  due  under  Seller's,
Originator's  or Seller's or  Originator's  Subsidiaries'  Guarantee  of another
person's  Indebtedness  for borrowed  money,  and such failure shall entitle any
related counterparty to declare any such Indebtedness or Guarantee to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;

         f)   a   custodian,   receiver,   conservator,   liquidator,   trustee,
sequestrator  or similar  official for Seller,  Originator or any of Seller's or
Originator's  Subsidiaries,  or  of  any  of  Seller's,  Originator's  or  their
respective Property (as a debtor or creditor protection procedure), is appointed
or takes possession of such property;  or Seller,  Originator or any of Seller's
or Originator's  Subsidiaries  generally fails to pay Seller's,  Originator's or
Seller's  or  Originator's  Subsidiaries'  debts as they  become due; or Seller,
Originator  or any of  Seller's  or  Originator's  Subsidiaries  is  adjudicated
bankrupt  or  insolvent;  or an order for  relief is entered  under the  Federal
Bankruptcy  Code,  or  any  successor  or  similar  applicable  statute,  or any
administrative  insolvency scheme, against Seller, Originator or any of Seller's
or Originator's  Subsidiaries;  or any of Seller's,  Originator's or Seller's or
Originator's  Subsidiaries'  Property is sequestered by court or  administrative
order; or a petition is filed against  Seller,  Originator or any of Seller's or
Originator's  Subsidiaries  under any bankruptcy,  reorganization,  arrangement,
insolvency,  readjustment  of  debt,  dissolution,  moratorium,  delinquency  or
liquidation  law of any  jurisdiction,  whether now or  subsequently  in effect;
provided that, if any event  described in this subsection (f) is not voluntarily
caused or consented  to by Seller  Originator  or an  applicable  Subsidiary,  a
30-day cure period shall be applicable to stay or discharge such event;

         g) Seller,  Originator or any of Seller's or Originator's  Subsidiaries
files a voluntary petition in bankruptcy seeks relief under any provision of any
bankruptcy,  reorganization,  moratorium, delinquency,  arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction whether
now or subsequently in effect; or consents to the filing of any petition against
it under any such law; or consents to the appointment of or taking possession by
a custodian, receiver, conservator, trustee, liquidator, sequestrator or similar
official for Seller, Originator or any of Seller's or Originator's Subsidiaries,
or of all or any part of  Selle's,  Originator's  or Seller's  or  Originator's
Subsidiaries'  Property;  or makes an  assignment  for the  benefit  of  Seller,
Originator or Seller's or Originator's Subsidiaries' creditors;

         h) any final,  nonappealable judgment or order for the payment of money
in excess of  $1,000,000  (which is not  insured)  is rendered  against  Seller,
Originator  or  any  of  Seller's  or  Originator's   Subsidiaries  and  remains
undischarged  or unsatisfied  after the passage of 30 days following the date on
which it is entered;

         i) any Governmental Authority or any person, agency or entity acting or
purporting to act under  governmental  authority  shall have taken any action to
condemn,  seize or  appropriate,  or to assume custody or control of, all or any
substantial  part of the  Property of Seller,  Originator  or any of Seller's or
Originator's  Subsidiaries,  or shall  have  taken any  action to  displace  the
management of Seller, Originator or any of Seller's or Originator's Subsidiaries
or to curtail its authority in the conduct of the business of Seller, Originator
or any of  Seller's  or  Originator's  Subsidiaries,  or takes any action in the
nature of  enforcement  to remove,  limit or  restrict  the  approval of Seller,
Originator or any of Seller's or Originator's  Subsidiaries as an issuer,  buyer
or a  seller/servicer  of Loans or securities  backed  thereby,  and such action
provided for in this  subsection (i) shall not have been  discontinued or stayed
within 30 days;

         j) Seller,  Originator or any of Seller's or Originator's  Subsidiaries
shall default under,  or fail to perform as requested  under, or shall otherwise
breach the material terms of any instrument,  agreement or contract  relating to
Indebtedness, and such default, failure or breach shall entitle any counterparty
to  declare  such  Indebtedness  to be due and  payable  prior  to the  maturity
thereof;

         k) in the good faith  judgment  of Buyer any  Material  Adverse  Change
shall have  occurred  with respect to Seller,  Originator  or any of Seller's or
Originator's Subsidiaries taken as a whole;

         l) Seller,  Originator  or Servicer  shall admit its  inability  to, or
intention not to, perform any of Seller's, Originator's or Servicer's respective
material Obligations;

         m) Seller or Originator dissolves,  merges or consolidates with another
entity unless Seller or Originator,  as applicable,  is the surviving  party, or
sells,  transfers,  or otherwise  disposes of a material  portion of Seller's or
Originator's  (as  applicable)  business  or assets or  unless  Buyer's  written
consent is given;

         n) this Agreement  shall for any reason cease to create a valid,  first
priority security  interest or ownership  interest upon transfer in any material
portion of the Program Assets or Collateral purported to be covered hereby;

         o) either Seller's or Originator's  audited annual financial statements
or the notes thereto or other  opinions or  conclusions  stated therein shall be
qualified  or limited by reference  to the status of Seller or  Originator  as a
"going concern" or a reference of similar import;

         p) a Change in Control of Originator  shall have occurred which has not
been approved by Buyer;

         q) (A) the Adjusted  Tangible Net Worth of  Originator is less than (1)
$28,000,000 prior to January 1, 2002 and $30,000,000  thereafter;  (B) the ratio
of  Non-Warehouse  Debt of the  Originator to the GAAP  shareholder's  equity of
Originator  exceeds 2:1,  where  "Non-Warehouse  Debt" means,  on any date,  all
liabilities for funded debt (borrowed money), hedging liabilities and repurchase
obligations  under repurchase  agreements,  less the sum of (1) the value on the
Originator's  balance sheet of all cash and acceptable short term investments in
excess  of  $5,000,000,  plus (2) 95% of the value on the  Originator's  balance
sheet of  mortgage  loans held for sale,  mortgage  note  receivables,  land and
buildings,  construction in process, real estate held for sale and investment in
direct  financing  leases;  (C) the  Originator  does not hold (1) an average of
$3,000,000 of unrestricted cash for the trailing four week period as of any date
of determination  and (2) $1,000,000 of unrestricted  cash at all times; (D) the
Originator's  GAAP  pre-tax   net-income   (excluding  the  effects  related  to
impairment of good will,  Cash Flow Hedges,  and all other hedging  arrangements
with respect to the Purchased  Assets (other than Net Lease Loans) to the extent
that such effects with respect to the other hedging  arrangements  do not exceed
$2,000,000 per quarter) is less than (1) $1,000,000 for the period  beginning on
July 1, 2001 and ending on March 31, 2002 or (2) $1,000,000 per quarter for each
quarter thereafter;  (E) the aggregate outstanding Repurchase Price of all Loans
is in excess of $100,000,000  and the weighted average  Borrower/Guarantor  FCCR
for such Loans,  excluding  Construction,  Rehab,  CNL Retained  and  Delinquent
Loans,  is less than 1.35x;  or (F) the Liquidity  Facility is not in full force
and effect in accordance with its terms;  provided,  however,  that if the Buyer
terminates  the  liquidity  facility  with CNL APF  under  the  Promissory  Note
(Liquidity  Facility),  dated as of October 9, 2001,  between  the Buyer and CNL
APF, for any reason other than an uncured Event of Default (as defined  therein)
by CNL APF, the failure by the  Originator  to maintain the  Liquidity  Facility
shall not be an Event of Default hereunder;  provided,  further, that if (1) the
Originator fails to maintain the Liquidity Facility for any reason other than an
uncured Event of Default (as defined  therein) by the Originator  thereunder and
(2) in Buyer's  reasonable  discretion,  the Originator enters into a comparable
replacement  liquidity  facility with a  financially-capable  third party within
sixty (60) days of the Liquidity Facility becoming unavailable, the Originator's
failure to maintain the  Liquidity  Facility for such sixty day period shall not
be an Event of Default hereunder.  Notwithstanding  the foregoing proviso,  such
sixty  day  period  shall  in no way  limit,  waive  or  alter  the  Seller  and
Originator's  obligations and liabilities  with respect to, without  limitation,
any  agreement,  covenant,  representation,  Repurchase  Price,  Margin Call, or
indemnity in connection with the terms of the Program  Documents,  or otherwise,
during such sixty day period.

         r) any material amendment is made to the Investment Policy Manual which
was not previously approved in writing by Buyer; and

         s) any  default  or  event  of  default,  however  defined,  under,  or
termination of the Strategic Alliance Agreement, the Subordinated Debt Agreement
or the Partnership Agreement.

         Notwithstanding the foregoing,  Seller and Originator shall be entitled
to (A) a 60-day  cure period  from the  earlier of (i) such  party's  receipt of
written  notice from Buyer or  Custodian of a default or breach or (ii) the date
on which such party obtains  actual notice or knowledge of the facts giving rise
to a default or breach for any  technical,  minor or  unintentional  defaults or
breaches  of  covenant  under a Program  Document  if such  default or breach is
solely of a non-monetary nature and (B) a 10-day cure period from the earlier of
(i) such party's  receipt of written notice from Buyer or Custodian of a default
or  breach  or (ii)  the date on which  such  party  obtains  actual  notice  or
knowledge  of the facts  giving  rise to a default or breach for any  default or
breach that relates to any financial or  operational  report that is required to
be  delivered  to Buyer and  relates to the  ability to  evaluate  the  business
performance of Originator,  Seller,  any of their material  affiliates or any of
their material assets (each, a "Report");  provided,  however,  that in no event
shall the term  non-monetary  be deemed to denote or include an obligation  that
relates to either a payment obligation or any Report;  provided,  further, that,
to the extent that the applicable  Program Document  contains any cure, grace or
other  similar  period with respect to any default or breach  referenced in this
paragraph,  Seller and  Originator  shall be entitled  to elect  whether to give
effect to the provisions of this paragraph or to give effect to such  applicable
provisions of such Program  Document with respect to any such default or breach.
provisions of such Program Document with respect to any such default or breach.

19.      REMEDIES

         Upon the occurrence of an Event of Default, Buyer, at its option (which
option shall be deemed to have been exercised immediately upon the occurrence of
an Event of Default pursuant to Section 18(f) or (g) hereof),  shall have any or
all of the following rights and remedies, which may be exercised by Buyer:

         a) The Repurchase Date for each  Transaction  hereunder shall be deemed
immediately to occur.

         b) Seller's obligations hereunder to repurchase all Purchased Assets at
the Repurchase Price therefor on the Repurchase Date in such Transactions  shall
thereupon  become  immediately  due and  payable;  all  Income  paid  after such
exercise  or deemed  exercise  shall be  retained  by Buyer and  applied  to the
aggregate  Repurchase  Prices and any other amounts  owing by Seller  hereunder;
Seller and Originator shall immediately deliver to Buyer or its designee any and
all original papers,  records and files relating to the Purchased Assets subject
to such Transaction then in Seller's and Originator's possession and/or control;
and all right,  title and interest in and  entitlement to such Purchased  Assets
and Servicing Rights thereon shall be deemed transferred to Buyer.

         Buyer may (A) sell, on or following the Business Day following the date
on which the Repurchase  Price became due and payable  pursuant to Section 19(b)
without  notice or demand of any kind,  at a public or private  sale and at such
price or prices as Buyer may  reasonably  deem  satisfactory  any or all Program
Assets or (B) in its sole discretion  elect, in lieu of selling all or a portion
of such Program  Assets,  to give Seller  credit for such  Program  Assets in an
amount equal to the Market  Value of the Program  Assets  against the  aggregate
unpaid  Repurchase  Price and any other amounts owing by Seller  hereunder.  The
proceeds of any  disposition  of Program  Assets  shall be applied  first to the
reasonable  costs and  expenses  incurred  by Buyer in  connection  with or as a
result of an Event of Default;  second to Breakage Costs,  costs of cover and/or
related hedging  transactions;  third to the aggregate  Repurchase  Prices;  and
fourth to all other Obligations.

         The parties  recognize  that it may not be possible to purchase or sell
all of the Program Assets on a particular Business Day, or in a transaction with
the same  purchaser,  or in the same manner  because the market for such Program
Assets  may not be  liquid.  In view of the nature of the  Program  Assets,  the
parties agree that  liquidation  of a Transaction  or the  underlying  Purchased
Assets does not require a public  purchase or sale and that a good faith private
purchase or sale shall be deemed to have been made in a commercially  reasonable
manner.  Accordingly,  Buyer may elect the time and  manner of  liquidating  any
Program Asset and nothing contained herein shall obligate Buyer to liquidate any
Program  Asset on the  occurrence  of an Event of  Default or to  liquidate  all
Program  Assets in the same manner or on the same  Business Day or  constitute a
waiver  of any right or remedy of  Buyer.  Notwithstanding  the  foregoing,  the
parties' to this Agreement agree that the Transactions have been entered into in
consideration of and in reliance upon the fact that all  Transactions  hereunder
constitute  a  single  business  and   contractual   obligation  and  that  each
Transaction has been entered into in consideration of the other Transactions.

         In  addition  to its rights  hereunder,  Buyer  shall have the right to
proceed  against any of Seller's assets which may be in the possession of Buyer,
any of Buyer's Affiliates or its designee  (including the Custodian),  including
the right to liquidate  such assets and to set-off the proceeds  against  monies
owed by Seller to Buyer pursuant to this Agreement.  Buyer may set off cash, the
proceeds of the  liquidation  of the  Program  Assets and  Additional  Purchased
Assets,  any other  Collateral or its proceeds and all other sums or obligations
owed by Buyer to Seller hereunder against all of Seller's  Obligations to Buyer,
whether under this Agreement, under a Transaction,  or under any other agreement
between the parties, or otherwise, whether or not such Obligations are then due,
without prejudice to Buyer's right to recover any deficiency.

         Buyer may direct all Persons  servicing the Program Assets to take such
action with respect to the Program Assets as Buyer determines appropriate.

         Seller  shall be liable to Buyer for the amount of all  expenses  (plus
interest  thereon at a rate equal to the Default  Rate),  and Breakage Costs and
all costs and  expenses  incurred  within  30 days of the  Event of  Default  in
connection with hedging or covering transactions related to the Program Assets.

         Each of Seller and Originator  shall cause all sums received by it with
respect to the Program  Assets to be  deposited  with  Custodian  (or such other
Person as Buyer may direct) after receipt thereof.

         Buyer shall  without  regard to the  adequacy of the  security  for the
Obligations,  be entitled to the  appointment  of a receiver by any court having
jurisdiction,  without  notice,  to take  possession  of and  protect,  collect,
manage,  liquidate,  and sell the Program Assets and any other Collateral or any
portion thereof, collect the payments due with respect to the Program Assets and
any other  Collateral  or any portion  thereof,  and do  anything  that Buyer is
authorized  hereunder to do. Seller shall pay all costs and expenses incurred by
Buyer in connection with the appointment and activities of such receiver.


         Buyer may  enforce  its rights and  remedies  hereunder  without  prior
judicial  process or hearing,  and Seller hereby  expressly waive, to the extent
permitted  by law, any right Seller  might  otherwise  have to require  Buyer to
enforce  its rights by  judicial  process.  Seller  also  waives,  to the extent
permitted by law, any defense Seller might  otherwise  have to the  Obligations,
arising  from use of  nonjudicial  process,  enforcement  and sale of all or any
portion  of the  Program  Assets  and any  other  Collateral  or from any  other
election of remedies. Seller recognizes that nonjudicial remedies are consistent
with the usages of the trade, are responsive to commercial necessity and are the
result of a bargain at arm's length.

         In  addition  to all the  rights  and  remedies  specifically  provided
herein,  Buyer shall have all other rights and remedies  provided by  applicable
federal,  state,  foreign, and local laws, whether existing at law, in equity or
by statute.

         Upon the occurrence of an Event of Default, Buyer shall have, except as
otherwise expressly provided in this Agreement, the right to exercise any of its
rights and/or remedies without presentment, demand, protest or further notice of
any kind  other  than as  expressly  set forth  herein,  all of which are hereby
expressly waived by Seller.

         Seller  hereby  authorizes  Buyer,  at Seller's  expense,  to file such
financing  statement  or  statements  relating  to the  Program  Assets  and the
Collateral  without Seller's  signature  thereon as Buyer at its option may deem
appropriate, and appoints Buyer as Seller's attorney-in-fact to execute any such
financing statement or statements in Seller's name and to perform all other acts
which Buyer deems  appropriate  to perfect and  continue  the lien and  security
interest  granted  hereby and to protect,  preserve and realize upon the Program
Assets and the Collateral,  including,  but not limited to, the right to endorse
notes,  complete blanks in documents and execute assignments on behalf of Seller
as its attorney-in-fact.  This power of attorney is coupled with an interest and
is irrevocable without Buyer's consent.

20.      DELAY NOT WAIVER; REMEDIES ARE CUMULATIVE

         No  failure  on  the  part  of  Buyer  to  exercise,  and no  delay  in
exercising,  any  right,  power or remedy  hereunder  shall  operate as a waiver
thereof,  nor shall any single or partial exercise by Buyer of any right,  power
or remedy  hereunder  preclude  any other or  further  exercise  thereof  or the
exercise of any other right,  power or remedy.  All rights and remedies of Buyer
provided for herein are  cumulative  and in addition to any and all other rights
and remedies  provided by law, the Program  Documents and the other  instruments
and  agreements  contemplated  hereby and thereby,  and are not  conditional  or
contingent on any attempt by Buyer to exercise any of its rights under any other
related  document.  Buyer may  exercise at any time after the  occurrence  of an
Event of Default one or more remedies,  as it so desires,  and may thereafter at
any time and from time to time exercise any other remedy or remedies.

21.      USE OF EMPLOYEE PLAN ASSETS

         No assets of an employee  benefit plan subject to any  provision of the
Employee  Retirement  Income Security Act of 1974, as amended ("ERISA") shall be
used by either party hereto in a Transaction.

22.      INDEMNITY

         a)  Seller  agrees to pay on demand  (i) all  reasonable  out-of-pocket
costs and  expenses  of Buyer in  connection  with the  preparation,  execution,
delivery,  modification  and  amendment of this  Agreement  (including,  without
limitation,  (A) all  collateral  review  and UCC  search  and  filing  fees and
expenses  and (B) the  reasonable  fees and  expenses  of counsel for Buyer with
respect  thereto,   with  respect  to  advising  Buyer  as  to  its  rights  and
responsibilities,  or the  perfection,  protection or  preservation of rights or
interests,  under this Agreement,  with respect to  negotiations  with Seller or
with other  creditors  of Seller or any of its  Subsidiaries  arising out of any
Default or any events or circumstances  that may give rise to a Default and with
respect to presenting claims in or otherwise  participating in or monitoring any
bankruptcy,  insolvency or other similar proceeding  involving creditors' rights
generally and any proceeding  ancillary thereto) and (ii) all costs and expenses
of Buyer in connection with the  enforcement of this  Agreement,  whether in any
action,  suit  or  litigation,  any  bankruptcy,  insolvency  or  other  similar
proceeding affecting creditors' rights generally (including, without limitation,
the  reasonable  fees and  expenses  of counsel  for  Buyer)  whether or not the
transactions contemplated hereby are consummated.

         b) Seller agrees to indemnify  and hold harmless  Buyer and each of its
respective  Affiliates  and their  officers,  directors,  employees,  agents and
advisors  (each,  an  "Indemnified  Party") from and against (and will reimburse
each  Indemnified  Party as the same is incurred)  any and all claims,  damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded  against
any  Indemnified  Party, in each case arising out of or in connection with or by
reason of (including,  without limitation, in connection with any investigation,
litigation or other proceeding (whether or not such Indemnified Party is a party
thereto)  relating  to,  resulting  from or  arising  out of any of the  Program
Documents  and  all  other   documents   related   thereto,   any  breach  of  a
representation  or warranty of Seller or Originator or Seller's or  Originator's
officer in this Agreement or any other Program  Document,  and all actions taken
pursuant  thereto)  (i) the  Transactions,  the  actual or  proposed  use of the
proceeds  of the  Transactions,  this  Agreement  or  any  of  the  transactions
contemplated thereby, including, without limitation, any acquisition or proposed
acquisition or (ii) the actual or alleged presence of hazardous materials on any
Property or any environmental action relating in any way to any Property, except
to the extent  such  claim,  damage,  loss,  liability  or expense is found in a
final,  non-appealable  judgment by a court of  competent  jurisdiction  to have
resulted from such Indemnified Party's gross negligence or willful misconduct or
is the result of a claim made by Seller or  Originator  against the  Indemnified
Party,  and such Seller or Originator is ultimately the successful  party in any
resulting litigation or arbitration.  Seller also agrees not to assert any claim
against Buyer or any of its  Affiliates,  or any of their  respective  officers,
directors,  employees,  attorneys and agents,  on any theory of  liability,  for
special, indirect, consequential or punitive damages arising out of or otherwise
relating to the  Facilities,  the actual or proposed  use of the proceeds of the
Transactions,  this Agreement or any of the transactions  contemplated  thereby.
THE FOREGOING  INDEMNITY AND AGREEMENT NOT TO ASSERT CLAIMS  EXPRESSLY  APPLIES,
WITHOUT  LIMITATION,  TO THE  NEGLIGENCE  (BUT NOT GROSS  NEGLIGENCE  OR WILLFUL
MISCONDUCT) OF THE INDEMNIFIED PARTIES.

         c) Without limitation on the provisions of Section 4, if any payment of
the Repurchase Price of any Transaction is made by Seller other than on the then
scheduled  Repurchase  Date  thereto  as a  result  of an  acceleration  of  the
Repurchase  Date pursuant to Section 19 or for any other  reason,  Seller shall,
except as otherwise provided in Sections 15(c) and 24, upon demand by Buyer, pay
to Buyer any Breakage Costs incurred as of a result of such payment.

         d) If Seller fails to pay when due any costs, expenses or other amounts
payable by it under this Agreement,  including,  without limitation,  reasonable
fees and expenses of counsel and indemnities,  such amount may be paid on behalf
of Seller by Buyer, in its sole discretion.

         e) Without  prejudice to the survival of any other  agreement of Seller
hereunder,  the agreements and  obligations of Seller  contained in this Section
shall survive the payment in full of the Repurchase  Price and all other amounts
payable  hereunder  and  delivery of the Program  Assets by Buyer  against  full
payment therefor.

23.      WAIVER OF REDEMPTION AND DEFICIENCY RIGHTS

         Seller hereby expressly waives, to the fullest extent permitted by law,
every  statute of  limitation  on a deficiency  judgment,  any  reduction in the
proceeds  of any  Program  Assets  as a result  of  restrictions  upon  Buyer or
Custodian  contained in the Program Documents or any other instrument  delivered
in connection  therewith,  and any right that it may have to direct the order in
which  any of the  Program  Assets  shall  be  disposed  of in the  event of any
disposition pursuant hereto.

24.      REIMBURSEMENT

         All sums  reasonably  expended by Buyer in connection with the exercise
of any  right  or  remedy  provided  for  herein  shall be and  remain  Seller's
obligation.  Seller  agrees to pay,  with  interest at the  Default  Rate to the
extent that an Event of Default has  occurred,  the  reasonable  out-  of-pocket
expenses and reasonable  attorneys'  fees incurred by Buyer and/or  Custodian in
connection  with the  enforcement  of the Program  Documents,  the taking of any
action,  including  legal  action,  required or  permitted  to be taken by Buyer
(without  duplication  to Buyer) and/or  Custodian  pursuant  thereto,  any "due
diligence"  or loan  agent  reviews  conducted  by Buyer or on its behalf or any
refinancing or restructuring  in the nature of a "workout".  If Buyer determines
that, due to the introduction of, any change in, or the compliance by Buyer with
(i) any eurocurrency  reserve requirement or (ii) the interpretation of any law,
regulation  or  any  guideline  or  request  from  any  central  bank  or  other
Governmental  Authority (whether or not having the force of law), there shall be
an  increase  in the cost to Buyer in  engaging  in the  present  or any  future
Transactions, then Seller agrees to pay to Buyer, from time to time, upon demand
by Buyer (with a copy to  Custodian)  the actual cost of  additional  amounts as
specified by Buyer to compensate Buyer for such increased costs. Notwithstanding
any other  provisions in this Agreement,  in the event of any such change in the
eurocurrency reserve requirement or the interpretation of any law, regulation or
any guideline or request from any central bank or other Governmental  Authority,
Seller will have the right to terminate all Transactions  then outstanding as of
a date  selected  by  Seller,  which  date  shall  be  prior  to the  applicable
Repurchase  Date and which date shall  thereafter  for all purposes  hereof,  be
deemed to be the  Repurchase  Date.  In addition,  Buyer shall  promptly  notify
Seller if any events in clause (i) or (ii) of this Section 24 occur.

25.      FURTHER ASSURANCES


         Seller and  Originator  agree to do such further acts and things and to
execute  and  deliver to Buyer  such  additional  assignments,  acknowledgments,
agreements,  powers and instruments as are reasonably required by Buyer to carry
into effect the intent and purposes of this Agreement,  to perfect the interests
of Buyer in the Program  Assets or to better  assure and confirm  unto Buyer its
rights, powers and remedies hereunder.

26.      ENTIRE AGREEMENT; PRODUCT OF NEGOTIATION

         This Agreement  supersedes  and  integrates all previous  negotiations,
contracts,  agreements and understandings between the parties relating to a sale
and repurchase of Program Assets and Additional  Purchased  Assets thereto,  and
it, together with the other Program Documents, and the other documents delivered
pursuant hereto or thereto,  contains the entire final agreement of the parties.
No prior negotiation,  agreement, understanding or prior contract shall have any
validity hereafter.

27.      TERMINATION

         This Agreement  shall remain in effect until the earlier of (i) October
8, 2002,  provided that such date may be extended,  in Buyer's sole  discretion,
upon  written  request  of the Seller  delivered  to Buyer not less than 90 days
prior to such date,  or (ii) at Buyer's  option,  the  occurrence of an Event of
Default (such date, the "Termination Date").  However, no such termination shall
affect  Seller's   outstanding   obligations  to  Buyer  at  the  time  of  such
termination.  Seller's obligations to indemnify Buyer pursuant to this Agreement
shall survive the  termination  hereof.  Failure of Buyer to respond to Seller's
request  for an  extension  pursuant  to  clause  (i)  above  shall be  deemed a
rejection of such request.

         Neither Seller nor Originator shall have any obligation to pay any exit
or termination  fees in connection with the termination of this Agreement or the
repurchase of any Program Assets, except as expressly set forth herein.

28.      ASSIGNMENT

         The Program Documents are not assignable by Seller. Buyer may from time
to time  assign  all or a portion  of its  rights  and  obligations  under  this
Agreement and the Program Documents;  provided,  however,  Buyer must obtain the
consent of Seller for such  assignment,  which consent shall not be unreasonably
withheld;  and provided further that Buyer shall maintain,  for review by Seller
upon  written  request,  a  register  of  assignees  and a copy  of an  executed
assignment and acceptance by Buyer and assignee  ("Assignment and  Acceptance"),
specifying  the percentage or portion of such rights and  obligations  assigned.
Upon such  assignment,  (a) such  assignee  shall be a party  hereto and to each
Program  Document  to the extent of the  percentage  or portion set forth in the
Assignment  and  Acceptance,  and shall  succeed  to the  applicable  rights and
obligations  of Buyer  hereunder,  and (b) Buyer shall,  to the extent that such
rights and obligations have been so assigned by it to another Person approved by
Seller  (such  approval  not to be  unreasonably  withheld)  which  assumes  the
obligations  of Buyer,  be  released  from its  obligations  hereunder  accruing
thereafter  and under the  Program  Documents.  Unless  otherwise  stated in the
Assignment and Acceptance,  Seller shall continue to take directions solely from
Buyer unless otherwise notified by Buyer in writing. Buyer may distribute to any
prospective  assignee  any document or other  information  delivered to Buyer by
Seller.  Notwithstanding  any  assignment by Buyer  pursuant to this Section 28,
Buyer shall remain liable as to the Transactions.

29.      AMENDMENTS, ETC.

         No  amendment  or waiver of any  provision  of this  Agreement  nor any
consent to any  failure to comply  herewith or  therewith  shall in any event be
effective  unless the same shall be in writing and signed by Seller,  Originator
and Buyer, and then such amendment, waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.

30.      SEVERABILITY

         If any provision of Program  Document is declared  invalid by any court
of competent jurisdiction,  such invalidity shall not affect any other provision
of the Program  Documents,  and each Program  Document  shall be enforced to the
fullest extent permitted by law.

31.      BINDING EFFECT; GOVERNING LAW

         This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective  successors and assigns,  except that Seller may not
assign or transfer any of its rights or obligations  under this Agreement or any
other  Program  Document  without  the prior  written  consent  of  Buyer.  THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAW OF THE
STATE OF NEW YORK,  WITHOUT  GIVING  EFFECT TO THE  CONFLICT OF LAWS  PRINCIPLES
THEREOF.

32.      CONSENT TO JURISDICTION

         SELLER HEREBY WAIVES TRIAL BY JURY. SELLER HEREBY IRREVOCABLY  CONSENTS
TO THE  NON-EXCLUSIVE  JURISDICTION OF ANY COURT OF THE STATE OF NEW YORK, OR IN
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK,  ARISING
OUT OF OR RELATING TO THE PROGRAM DOCUMENTS IN ANY ACTION OR PROCEEDING.  SELLER
HEREBY  SUBMITS TO, AND WAIVES ANY OBJECTION  SELLER MAY HAVE TO,  NON-EXCLUSIVE
PERSONAL  JURISDICTION  AND VENUE IN THE COURTS OF THE STATE OF NEW YORK AND THE
UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, WITH RESPECT
TO ANY DISPUTES ARISING OUT OF OR RELATING TO THE PROGRAM DOCUMENTS.


33.      SINGLE AGREEMENT

         Seller,  Originator  and  Buyer  acknowledge  that,  and  have  entered
hereinto and will enter into each Transaction  hereunder in consideration of and
in reliance upon the fact that, all Transactions  hereunder  constitute a single
business and contractual  relationship  and have been made in  consideration  of
each other. Accordingly,  Seller, Originator and Buyer each agree (i) to perform
all of its  obligations  in respect of each  Transaction  hereunder,  and that a
default in the performance of any such obligations shall constitute a default by
it in respect of all Transactions hereunder, and (ii) that payments,  deliveries
and other transfers made by any of them in respect of any  Transaction  shall be
deemed to have been made in  consideration  of  payments,  deliveries  and other
transfer in respect of any other Transaction  hereunder,  and the obligations to
make any such payments,  deliveries and other  transfers may be applied  against
each other and netted.

34.      INTENT

         Seller  and Buyer  recognize  that each  Transaction  is a  "repurchase
agreement"  as that term is  defined  in  Section  101 of Title 11 of the United
States Code,  as amended  ("USC")  (except  insofar as the Loans subject to such
Transaction  or the  term of  such  Transaction  would  render  such  definition
inapplicable),  and a  "securities  contract" as that term is defined in Section
741 of  Title  11 of the  USC  (except  insofar  as the  Loans  subject  to such
Transaction  or the  term of  such  Transaction  would  render  such  definition
inapplicable).

         It is  understood  that Buye's  right to liquidate  the Program  Assets
delivered to it in connection with the Transactions hereunder or to exercise any
other remedies pursuant to Section 19 hereof is a contractual right to liquidate
such Transaction as described in Sections 555 and 559 of Title 11 of the USC.

35.      NOTICES AND OTHER COMMUNICATIONS

         Except as provided  herein,  any notice  required or  permitted by this
Agreement  shall be in writing and shall be effective and deemed  delivered only
when  received  by the  party to which it is  sent;  provided,  however,  that a
facsimile  transmission  shall be deemed to be received when transmitted so long
as the  transmitting  machine has provided an electronic  confirmation  (without
error message) of such transmission. Any such notice shall be sent to a party at
the address or facsimile transmission number set forth below:

if to Seller:

                  CNL Financial VII, LP
                  103 Foulk Road, Suite 204
                  Wilmington, Delaware 19830
                  Attention:        Treasurer
                  Telephone:        (302) 656-1950
                  Facsimile:        (302) 652-8667

if to Originator:

                  CNL Franchise Network, LP
                  450 South Orange Avenue
                  Orlando, Florida 32801
                  Attention:        Treasurer
                  Telephone:        (407) 540-2000
                  Facsimile:        (407) 422-2933

                  with a copy to the same address:
                  Attention:        Steve Shackelford, Chief Financial Officer
                  Telephone:        (407) 540-2100
                  Facsimile:        (407) 540-2102

if to Buyer or Agent:

                  Bank of America, N.A.
                  901 Main Street, 66th Floor
                  Dallas, Texas 75202
                  Attention:        Ms. Carolyn M. Warren
                  Telephone:        (214) 209-0994
                  Facsimile:        (214) 209-0338

                  or, for Transaction Notices and related documents:
                  Attention:        Ms. Deborah Furr
                  Telephone:        (214) 209-1527
                  Facsimile:        (214) 209-2710

as such address or number may be changed by like notice.

36.      CONFIDENTIALITY

         This Agreement and its terms,  provisions,  supplements and amendments,
and notices  hereunder,  are proprietary to Buyer and Agent and shall be held by
Seller (and Seller  shall cause  Servicer to hold it) in strict  confidence  and
shall not be  disclosed  to any third party  without the consent of Buyer except
for (i) disclosure to Seller's direct and indirect parent companies,  attorneys,
agents or  accountants,  provided that such  attorneys or  accountants  likewise
agree to be bound by this covenant of confidentiality or (ii) upon prior written
notice to Buyer,  disclosure  required by law,  rule,  regulation  or order of a
court or other  regulatory body or (iii) to the extent necessary in dealing with
obligors or tenants in connection with Program Assets or (iv) with prior written
notice to Buyer, to any approved Hedge  Counterparty to the extent  necessary to
obtain any Hedge Instrument hereunder or (v) with prior written notice to Buyer,
any  required  Securities  and  Exchange  Commission  or state  securities'  law
disclosures or filings.

37.      HEDGE INSTRUMENTS

         a) Each Hedge Instrument  shall expressly  provide that in the event of
the repurchase or other removal of a Loan from the terms of this Agreement,  the
related or allocated  portion of the related  Hedge  Instrument as determined by
Buyer  (the  "Related Hedge")  shall  either be  liquidated  or  assigned  to a
qualified successor hedge counterparty, as Buyer deems appropriate.

         b) Any Hedge Instrument that provides for any payment obligation on the
part of Seller  must (i)  contain a  non-petition  covenant  as to Seller,  (ii)
absent a default under such Hedge Instrument,  limit payment dates thereunder to
Repurchase  Dates, and (iii) contain a provision  limiting any cash payments due
from Seller on any day under such Hedge  Instrument,  prior to the occurrence of
an Event of  Default,  solely  to funds  available  therefor  in the  Collection
Account on Repurchase Dates pursuant to the Custody Agreement and, following the
occurrence of an Event of Default, to Income or liquidation  proceeds in respect
of the related Purchased Assets; provided,  however, that the Hedge Counterparty
shall not be entitled  to, and shall  agree not to assert,  a lien on any of the
Purchased Assets.

         c) Each Hedge Instrument must (i) provide for the direct payment of any
amounts  thereunder  to the  Collection  Account,  (ii)  contain  or  permit  an
assignment  of  all  of  Seller's  or  Originator's  rights  (but  none  of  its
obligations)  under such Hedge  Instrument to Buyer and shall include an express
consent of the Hedge Counterparty to such assignment,  (iii) provide that in the
event of the occurrence of an Event of Default, such Hedge Instrument may either
be liquidated or assigned to a qualified  successor hedge  counterparty upon the
direction of Buyer, (iv) prohibit the Hedge  Counterparty from  "setting-off" or
"netting"  other  obligations  of Seller or its  Affiliates  against  such Hedge
Counterparty's  payment  obligations   thereunder,   provided  that  such  Hedge
Instrument may permit such Hedge Counterparty to net its payment  obligations to
Seller against Seller's payment obligations under any Hedge Instrument that also
constitutes a Purchased Asset, (v) provide that the Related Hedge(s) will either
be liquidated or assigned to a qualified  successor hedge  counterparty upon the
removal  of the  related  Loans  from the  terms of this  Agreement,  (vi)  have
economic  terms that are fixed and not subject to  alteration  after the date of
assumption  or  execution  of each  Related  Hedge and (vii) be the subject of a
Securities Account Control Agreement or other assignment  instrument  acceptable
to Buyer and the Hedge Counterparty.


         d) To the extent (i) the Buyer is the owner (or  otherwise  entitled to
the economic  benefit) of the  Purchased  Assets and is in control of the Income
from such  Purchased  assets  and (ii) such  Income is no longer  subject to the
priorities set forth in Section 4.01 of the Custody Agreement, Buyer shall cause
such Income to be applied,  as a first  priority,  to the payment of amounts due
(as of the date Buyer obtains possession or control of such Income) to the Hedge
Counterparty in respect of the Related Hedges. In the event Buyer liquidates the
Purchased Assets  following an Event of Default,  Buyer shall cause the proceeds
of such  liquidation  to be  applied,  as a first  priority,  to the  payment of
amounts  due to the Hedge  Counterparty  as a result of the  termination  of the
Related Hedges by Buyer prior to or in connection with such liquidation.  Except
as expressly set forth in this Section 37(d) or as otherwise expressly agreed by
Buyer, each Hedge Instrument shall be without recourse to Buyer or the Purchased
Assets.  Upon  application  of the  Income  or  liquidation  proceeds  from  the
Purchased  Assets  to  payment  of  amounts  then  due and  owing  to the  Hedge
Counterparty  under the Related  Hedges,  the Hedge  Counterparty  shall have no
further claim to the portion of such Income or  liquidation  proceeds  remaining
after such payment. The Hedge Counterparty shall be a third party beneficiary of
this  Agreement  and  the  Custody  Agreement  to the  extent  of its  right  to
distributions in respect of Purchased Assets in accordance herewith.

<PAGE>


38.      Initial Sub-limit Waiver

In  connection  with the  execution  of this  Agreement,  the Side  Letter,  the
Originator  Guaranty,  the CNL APF Guaranty and the related reduction of certain
of the  limitations  on  various  asset-types  described  in the  definition  of
"Eligible  Asset" as set forth in the Second  Amended and Restated  Side Letter,
dated as of June 8, 2001 (the "Second Side  Letter"),  among Seller,  Originator
and Buyer,  the parties hereto  acknowledge that the aggregate amount of certain
of the  Existing  Loans will  exceed such  limitations  as set forth in the Side
Letter.  Buyer hereby waives any breach of such  limitations  in the Side Letter
solely for the period  commencing on the  Effective  Date and ending on December
14, 2001 (the "Waiver").  The Waiver shall not be applied in any manner so as to
allow Seller to exceed the various  limitations  set forth in the Side Letter if
such  limitations  are not breached on the Effective Date. The Waiver shall only
apply to Existing Loans and shall  terminate on December 11, 2001, at which time
Seller  hereby  agrees  to  comply  with all  limitations  set forth in the Side
Letter. The Waiver shall not apply to any breaches of the limitations  described
in the  definition  of  "Eligible  Assets"  set forth in the  Second  Letter and
existing as of the Effective Date.

                                              [Signature Page Follows]

<PAGE>

     IN WITNESS WHEREOF, Seller, Originator and Buyer have caused their names to
be  signed  to this  Agreement  by  their  respective  officers  thereunto  duly
authorized as of the date first above written.

                       CNL FINANCIAL VII, LP, as Seller

                       By: CNL Financial VII, Inc., as its general partner


                       By:____________________________________
                       Name:
                       Title:


                       CNL FRANCHISE NETWORK, LP, as Originator

                       By:  CNL  Franchise  Network  GP  Corp.,  as its  general
                            partner


                       By:____________________________________
                       Name:
                       Title:


                       BANK OF AMERICA, N.A., as Buyer
                       and Agent, as applicable


                       By:____________________________________
                       Name:
                       Title:
<PAGE>

[TPW: NY05:10000306.8]  17557-00054  10/18/01 01:24PM
                     THIRD AMENDED AND RESTATED SIDE LETTER


                                                    Dated as of October 11, 2001

CNL Financial VII, LP
103 Foulk Road, Suite 204
Wilmington, Delaware 19803

CNL Franchise Network, LP
450 South Orange Avenue
Orlando, Florida 32801

Bank of America, N.A.
901 Main Street, 66th Floor
Dallas, Texas 75202

Ladies and Gentlemen:

          Reference is hereby made to, and this third  amended and restated side
letter is hereby incorporated by reference into, the Amended and Restated Master
Repurchase  Agreement,  dated as of October  11,  2001 (the  "Master  Repurchase
Agreement"),  among  CNL  Financial  VII,  LP,  as seller  (the  "Seller"),  CNL
Franchise  Network,  LP, as originator (the  "Originator")  and Bank of America,
N.A., as buyer (the "Buyer").  Any capitalized  term used but not defined herein
shall have the meaning assigned to such term in the Master Repurchase Agreement.

          Section 1. Definitions.

          The following terms  referenced in Section 2 of the Master  Repurchase
Agreement shall have the meanings set forth below:

          "Buyer"s   Margin   Percentage"   shall  mean,  with  respect  to  any
Transaction,  a  percentage  agreed to by Buyer  and  Seller as set forth in the
related  Confirmation,  or, in the  absence of any such  agreement  (A) prior to
January 1,  2002,  the  weighted  average of the  following  percentages  by the
greater of the outstanding principal balance and the Market Value of the related
Loans:

          (1) in the case of Construction Loans, 105.263%,

          (2) in the case of Late-CO Loans, 111.11%,

          (3) in the case of Net Lease  Loans and  Mortgage  Loans  (other  than
     Non-Securitizable Loans), 103.093%,

          (4) in the case of Delinquent  Loans and Defaulted  Loans, the greater
     of 133.33% of the outstanding  principal  balance and 111.11% of the Market
     Value of such Loans,

          (5) in the case of 60+ Delinquent Loans, the greater of 200% of the
   outstanding principal balance and 111.11% of the Market Value of such Loans,

          (6) in the case of CNL Retained  Loans,  the  percentage  set forth in
     Exhibit F of the  Master  Repurchase  Agreement  with  respect  to each CNL
     Retained Loan,  which percentage shall only be applied against the original
     principal balance of the related CNL Retained Loan,

          (7) in the case of ARM Loans, 111.11%,

          (8) in the case of Low FCCR Loans, 105.263%,

          (9) in the case of Non-Documented Rehab Loans, 250.00%,

          (10) in the case of Documented Rehab Loans, 181.818%,

          (11) in the case of Performing  Rehab Loans (and any other Rehab Loans
     approved by the Buyer in its sole Discretion), 133.33%, and

          (12) in the  case of  1031  Loans,  (A)  105.263%  of the  outstanding
     principal  balance with respect to 1031 Loans that are  Construction  Loans
     and have been  Program  Assets  for less than 12 months and 1031 Loans that
     are not  Construction  Loans and have been  Program  Assets for less than 8
     months and (B) 105.263% of the greater of the outstanding principal balance
     and the Market Value with respect to 1031 Loans that are Construction Loans
     and have been Program  Assets for 12 months or more and 1031 Loans that are
     not  Construction  Loans and have been Program Assets for 8 months or more,
     and

and (B) on or after  January  1, 2002,  the  weighted  average of the  following
percentages by the greater of the outstanding  principal  balance and the Market
Value of the related Loans, unless otherwise noted:

          (1) in the case of Construction Loans, 105.263%,

          (2) in the case of Late-CO Loans, 111.11%,

          (3) in the case of Net Lease  Loans and 1031  Loans,  the  greater  of
     111.11% of the  Market  Value and  103.093%  of the  outstanding  principal
     balance of the related Loans,

          (4) in the case of Purchased  Assets other than Net Lease Loans,  1031
     Loans and ARM Loans, 105.263%,

          (5) in the case of Delinquent  Loans and Defaulted  Loans, the greater
     of 133.33% of the outstanding  principal  balance and 111.11% of the Market
     Value of such Loans,

          (6) in the case of 60+  Delinquent  Loans,  the greater of 200% of the
     outstanding  principal  balance  and  111.11% of the  Market  Value of such
     Loans,

          (7) in the case of CNL Retained  Loans,  the  percentage  set forth in
     Exhibit F of the  Master  Repurchase  Agreement  with  respect  to each CNL
     Retained Loan,  which percentage shall only be applied against the original
     principal balance of the related CNL Retained Loan,

          (8) in the case of ARM Loans, 117.647%,

          (9) in the case of Low FCCR  Loans  that are Net  Lease  Loans or 1031
     Loans,  the  greater of 111.111%  of the Market  Value and  103.093% of the
     outstanding principal balance of the related Loans,

          (10) in the case of Low FCCR Loans that are Mortgage Loans, 105.263%,

          (11) in the case of Non-Documented Rehab Loans, 250.00%,

          (12) in the case of Documented Rehab Loans, 181.818%, and

          (13) in the case of Performing  Rehab Loans (and any other Rehab Loans
     approved by the Buyer in its sole Discretion), 133.33%.

          "Commitment Fee" shall mean $487,500.

          "Eligible Asset" shall mean each Loan meeting the  representations and
warranties  set forth on Appendix A to the Custody  Agreement  and for which the
aggregate  outstanding  Repurchase  Price  for  such  Loan  as of  any  date  of
determination,  together with the aggregate outstanding Repurchase Price for all
other Loans then subject to Transactions, shall not exceed an amount equal to:

          (1) 100% of the Maximum  Aggregate  Purchase Price with respect to the
     aggregate amount of Loans consisting of Tier I Loans and 50% of the Maximum
     Aggregate  Purchase  Price with respect to the  aggregate  amount of Tier I
     Loans  secured by  Mortgaged  Property  used in the  operation  of the same
     Concept,

          (2) 100% of the Maximum  Aggregate  Purchase Price with respect to the
     aggregate  amount  of  Loans  consisting  of Tier II  Loans  and 30% of the
     Maximum  Aggregate  Purchase Price with respect to the aggregate  amount of
     Tier II Loans  secured by Mortgaged  Property  used in the operation of the
     same Concept,

          (3) 50% of the Maximum  Aggregate  Purchase  Price with respect to the
     aggregate  amount  of Loans  consisting  of Tier III  Loans  and 15% of the
     Maximum  Aggregate  Purchase Price with respect to the aggregate  amount of
     Tier III Loans  secured by Mortgaged  Property used in the operation of the
     same Concept,

          (4) 30% of the Maximum  Aggregate  Purchase  Price with respect to the
     aggregate  amount  of  Loans  consisting  of Tier IV  Loans  and 10% of the
     Maximum  Aggregate  Purchase Price with respect to the aggregate  amount of
     Tier IV Loans  secured by Mortgaged  Property  used in the operation of the
     same Concept,

          (5) 15% of the Maximum  Aggregate  Purchase  Price with respect to the
     aggregate amount of Loans to the same Borrower Group,

          (6) 40% of the Maximum  Aggregate  Purchase  Price with respect to the
     aggregate amount of Loans to the four (4) Borrower Groups  representing the
     greatest portion of the Program Assets,

          (7) 25% of the Maximum  Aggregate  Purchase  Price with respect to the
     aggregate amount of Loans secured by Collateral in the same U.S. state,

          (8) $100,000,000  with respect to the aggregate amount of Construction
     Loans,

          (9) zero percent  (0%) of the Maximum  Aggregate  Purchase  Price with
     respect  to  the  aggregate  amount  of  Program  Assets  as to  which  any
     representation  or warranty with respect to any such Program Asset has been
     materially breached, as determined by Buyer,

          (10) the lesser of (A) thirty  percent (30%) of the Maximum  Aggregate
     Purchase  Price and (B) forty percent  (40%) of the  aggregate  outstanding
     principal balance of all Mortgage Loans constituting  Program Assets,  with
     respect to the aggregate amount of Mortgage Loans secured by Space Leases,

          (11) 5% of the Maximum  Aggregate  Purchase  Price with respect to the
     aggregate  amount of Delinquent  Loans,  60+ Delinquent Loans and Defaulted
     Loans (other than Rehab Loans),

          (12) $5 million  with respect to the  aggregate  amount of Rehab Loans
     secured by Space Leases,

          (13) zero percent (0%) of the Maximum  Aggregate  Purchase  Price with
     respect to the aggregate  amount of 90+ Delinquent Loans that are not Rehab
     Loans,

          (14) 50 percent  (50%) of the Maximum  Aggregate  Purchase  Price with
     respect to the aggregate amount of Wet Funded Loans, (1)

          (15) zero percent (0%) of the Maximum  Aggregate  Purchase  Price with
     respect to the  aggregate  amount of  Construction  Loans that are  Program
     Assets in excess of twenty four (24) months,

          (16) zero percent (0%) of the Maximum  Aggregate  Purchase  Price with
     respect to the aggregate  amount of ARM Loans that are Program Assets after
     March 31, 2002,

          (17) zero percent (0%) of the Maximum  Aggregate  Purchase  Price with
     respect to the  aggregate  amount of Loans  (other than  Existing  Mortgage
     Loans) that are Program Assets in excess of eighteen (18) months,

          (18) with  respect to the  aggregate  amount of  Mortgage  Loans,  ARM
     Loans,  Delinquent and Defaulted Loans that are Mortgage  Loans,  and Rehab
     Loans that are Mortgage Loans, (A) $210,000,000 prior to April 1, 2002, and
     (B) $125,000,000  thereafter;  provided,  however, that with respect to any
     Mortgage Loan, ARM Loan,  Delinquent and Defaulted  Loans that are Mortgage
     Loans, and Rehab Loans that are Mortgage Loans not subject to a Transaction
     as of the Effective  Date,  such Loan shall not be an Eligible Asset if the
     Buyer  has not  approved,  in its  sole  discretion,  the  takeout  or exit
     strategy for such Loan,

          (19) with respect to the aggregate amount of 1031 Loans,  zero percent
     (0%) of the Maximum Aggregate Purchase Price if Section 1031 of the Code is
     repealed,  replaced, amended or interpreted in any way that, in the Buyer's
     sole  discretion,  may have a material  adverse  effect on the tax benefits
     available  pursuant  to such  section or on the  market  for 1031  exchange
     property,

          (20) with respect to the aggregate  amount of Net Lease Loans and 1031
     Loans on and after  January  1,  2002,  zero  percent  (0%) of the  Maximum
     Aggregate Purchase Price with respect to the Net Lease Loans and 1031 Loans
     that are not (A)(1)  Tier I or Tier II Loans  with a minimum  lease rate of
     9.0% (or such other rate as the Buyer may  approve in its sole  discretion)
     or (2) in the  Buyer's  sole  discretion,  Tier III or Tier IV Loans with a
     minimum  lease rate of 9.5% (or such other rate as the Buyer may approve in
     its sole  discretion),  and (B) secured by  Mortgaged  Property  capable of
     being exchanged for "like kind" property, as defined in Section 1031 of the
     Code, in the 1031 tax-free exchange market,

          (21) the lesser of (A) $25,000,000  and (B) twenty-five  percent (25%)
     of the aggregate outstanding Purchase Price of Net Lease Loans with respect
     to the aggregate  amount of 1031 Loans that are Program Assets in excess of
     twelve (12) months,

          (22) with respect to the aggregate amount of Low FCCR Loans (excluding
     Rehab Loans),  (A) $70,000,000 prior to March 31, 2002, and (B) $50,000,000
     thereafter,

          (23) zero percent (0%) of the Maximum  Aggregate  Purchase  Price with
     respect to the aggregate amount of Construction Loans with respect to which
     a  certificate  of occupancy has not been issued on or before the date that
     is twelve (12) months after the earlier of the date of the related Note and
     the date such Loan becomes a Program Asset,

          (24)  unless  otherwise  approved  in writing by the Buyer in its sole
     discretion, zero percent (0%) of the Maximum Aggregate Rehab Purchase Price
     with respect to the aggregate amount of Non-Documented  Rehab Loans subject
     to Transactions for more than six months,

          (25)  unless  otherwise  approved  in writing by the Buyer in its sole
     discretion, zero percent (0%) of the Maximum Aggregate Rehab Purchase Price
     with respect to the aggregate  amount of Documented  Rehab Loans subject to
     Transactions for more than one year,

          (26) zero percent (0%) of the Maximum  Aggregate  Rehab Purchase Price
     with  respect to the  aggregate  amount of Rehab Loans that fail to perform
     pursuant to the related  workout,  modification or bankruptcy plan and such
     failure is not cured within thirty days,

          (27) zero percent (0%) of the Maximum  Aggregate  Rehab Purchase Price
     with respect to the aggregate amount of Rehab Loans for which the Buyer has
     not been provided  with an Appraisal  within thirty days of such Rehab Loan
     first becoming subject to a Transaction, and

          (28) zero percent (0%) of the Maximum  Aggregate  Purchase  Price with
     respect to the  aggregate  amount of  Existing  Mortgage  Loans that remain
     subject to Transactions after October 13, 2002.

          "Exit Fee" shall mean a fee in an amount  equal to the  product of (A)
the outstanding  principal  balance of the related Purchased Asset multiplied by
(B) the applicable  percentage set forth in the definition of Purchase Price for
such Purchased Asset (which, if more than one percentage is set forth,  shall be
the largest percentage) multiplied by (C):

          (i) with  respect  to any Net  Lease  Loan or 1031 Loan  subject  to a
     Transaction under the Master Repurchase Agreement as of the Effective Date,
     (A) 25 basis points (0.25%) prior to March 31, 2002 and (B) 75 basis points
     (0.75%) thereafter,

          (ii) with respect to any  Purchased  Asset other than a Net Lease Loan
     or 1031 Loan subject to a Transaction under the Master Repurchase Agreement
     as of the  Effective  Date,  (A) zero basis points (0%) prior to January 1,
     2002 and (B) 75 basis points (0.75%) thereafter; and

          (iii) with respect to any Purchased  Asset that was first purchased by
     the Buyer under the Master  Repurchase  Agreement on or after the Effective
     Date, 75 basis points (0.75%).

          "Purchase  Price" shall mean the price at which  Purchased  Assets are
transferred by Seller to Buyer in a Transaction,  which shall (unless  otherwise
agreed) be equal to:

          (1)  in the case of Construction  Loans,  95% of the lesser of (A) the
               Market  Value  of  the  related  Purchased  Assets  and  (B)  the
               outstanding principal balance of the related Purchased Assets,

          (2)  in the case of Late-CO Loans, 90% of the lesser of (A) the Market
               Value of the  related  Purchased  Assets and (B) the  outstanding
               principal balance of the related Purchased Assets,

          (3)  in the case of Net Lease  Loans and  Mortgage  Loans  (other than
               Non-Securitizable  Loans)  prior to January  1, 2002,  97% of the
               lesser of (A) the Market  Value of the related  Purchased  Assets
               and  (B)  the  outstanding   principal  balance  of  the  related
               Purchased Assets,

          (4)  in the  case of Net  Lease  Loans  and 1031  Loans  on and  after
               January 1, 2002, the lesser of (A) 90% of the Market Value of the
               related Purchased Assets and (B) 97% of the outstanding principal
               balance of the related Purchased Assets,

          (5)  in the case of Purchased Assets other than Net Lease Loans,  1031
               Loans and ARM Loans,  on and after January 1, 2002, the lesser of
               (A) the Market Value of the related  Purchased Assets and (B) 95%
               of the  outstanding  principal  balance of the related  Purchased
               Assets,

          (6)  in the case of Delinquent  Loans and Defaulted  Loans (other than
               Rehab  Loans),  the lesser of (A) 90% of the Market  Value of the
               related Purchased Assets and (B) 75% of the outstanding principal
               balance of the related Purchased Assets,

          (7)  in the case of 60+ Delinquent Loans (other than Rehab Loans), the
               lesser of (A) 90% of the Market  Value of the  related  Purchased
               Assets and (B) 50% of the  outstanding  principal  balance of the
               related Purchased Assets,

          (8)  in the  case of CNL  Retained  Loans,  the  amount  set  forth in
               Exhibit F of the Master Repurchase Agreement with respect to each
               CNL Retained Loan,

          (9)  in the case of ARM Loans,  (A) prior to  January 1, 2002,  90% of
               the  lesser  of (1) the  Market  Value of the  related  Purchased
               Assets and (2) the outstanding  principal  balance of the related
               Purchased  Assets,  and (B) as of  January  1,  2002,  85% of the
               outstanding principal balance of the related Purchased Assets,

          (10) in the case of 1031 Loans  prior to  January 1, 2002,  (A) 95% of
               the outstanding principal balance of the related Purchased Assets
               with  respect to (I) 1031 Loans that are  Construction  Loans and
               have been  Program  Assets  for less than 12 months and (II) 1031
               Loans  that are not  Construction  Loans  and have  been  Program
               Assets for less than 8 months or (B) 95% of the lesser of (I) the
               Market  Value  of the  related  Purchased  Assets  and  (II)  the
               outstanding  principal  balance of the related  Purchased  Assets
               with  respect to (a) 1031 Loans that are  Construction  Loans and
               have been Program Assets for 12 months or more and (b) 1031 Loans
               that are not Construction Loan and have been Program Assets for 8
               months or more,

          (11) in the  case of Low FCCR  Loans  that are Net  Lease  Loans,  the
               lesser of (A) 90% of the Market  Value of the  related  Purchased
               Assets and (B) 97% of the  outstanding  principal  balance of the
               related Purchased Assets,

          (12) in the case of Low FCCR Loans that are Mortgage Loans, 95% of the
               lesser of (A) the Market  Value of the related  Purchased  Assets
               and  (B)  the  outstanding   principal  balance  of  the  related
               Purchased Assets,

          (13) in the case of  Non-Documented  Rehab Loans, 40% of the lesser of
               (A) the Market Value of the related  Purchased Assets and (B) the
               outstanding principal balance of the related Purchased Assets,

          (14) in the case of Documented  Rehab Loans,  55% of the lesser of (A)
               the  Market  Value of the  related  Purchased  Assets and (B) the
               outstanding  principal  balance of the related  Purchased Assets,
               and

          (15) in the case of  Performing  Rehab Loans (and any other Rehab Loan
               approved by the Buyer in its sole Discretion),  75% of the lesser
               of (A) the Market Value of the related  Purchased  Assets and (B)
               the  outstanding  principal  balance  of  the  related  Purchased
               Assets.

          "Pricing Rate" means:

          (i) with respect to each Purchased  Asset that is not a Rehab Loan, an
     amount equal to LIBOR plus:

              (A) with  respect  to Net  Lease  Loans and 1031  Loans,  90 basis
         points (0.90%),

              (B) with respect to ARM Loans,  (1) 90 basis points  (0.90%) prior
         to January 1, 2002 and (2) 200 basis points (2.00%) thereafter,

              (C) with respect to Low FCCR Loans and 60+ Delinquent  Loans,  200
         basis points (2.00%),


              (D) with respect to all other Purchased  Assets that are not Rehab
         Loans,  Net Lease Loans,  1031 Loans,  ARM Loans, Low FCCR Loans or 60+
         Delinquent  Loans, (1) 90 basis points (0.90%) prior to January 1, 2002
         and (2) 125 basis points (1.25%) thereafter, and

         (ii) with  respect to Rehab  Loans,  an amount  equal to LIBOR plus 400
     basis points (4.00%).

         Section 2. Counterparts.

         This  side  letter  may be  executed  simultaneously  in any  number of
counterparts.  Each counterpart shall be deemed to be an original,  and all such
counterparts shall constitute one and the same instrument.

<PAGE>

         IN WITNESS  WHEREOF,  Seller,  Originator  and Buyer have caused  their
names to be signed hereto by their respective officers thereunto duly authorized
on the date first above written.

                                CNL FINANCIAL VII, LP

                                By:  CNL Financial VII, Inc., as general partner


                                By:____________________________
                                Name:
                                Title:


                                CNL FRANCHISE NETWORK, LP

                                By:  CNL Franchise Network GP Corp., as
                                general partner

                                By:____________________________
                                Name:
                                Title:


                                BANK OF AMERICA, N.A.


                                By:____________________________
                                Name:
                                Title:
<PAGE>
Subsidiaries of the Registrant

CNL American Properties Fund, Inc.
CNL Franchise Network Corp.
CNL Financial GP Holding Corp.
CNL Franchise Network GP Corp.
CNL Franchise Network LP Corp.
CNL Financial Services GP Corp.
CNL Funding 2001-A, Inc.
CNL Financial VII, Inc.
CNL Funding 98-1, Inc.
CNL Funding 99-1, Inc.
CNL Franchise Network, LP
CNL Financial VII, LP
CNL Funding 2001-A, LP
CNL Financial LP Holding, LP
CNL RP Services, LLC
CNLinet, LLC
CNL Advisory Services, LLC
CNL Financial Services, LP
CNL Funding 2001-4, Inc.
CNL Funding 2002-A, Inc.
CNL Funding 2001-4, LP
CNL Funding 2002-A, LP
CNL Financial VIII, Inc.
CNL Financial VIII, LP
CNL Funding 98-1, LP
CNL Funding 99-A, LP
CNL Restaurant Property Services, Inc.
CNL Restaurant Investors Properties, Inc.
CNL Restaurant Investors, LLC
CNL Investors Properties, LLC
CNL Restaurant Properties, Inc.
CNL/MSC Indiana Joint Venture
CNL/Corral South Joint Venture
CNL Fund Advisors, Inc.
CNL Restaurant Development, Inc.
CNL APF LP Corp.
CNL APF GP Corp.
CNL Restaurant Net Lease GP Holding Corp.
CNL/MSC Joint Venture No. 752
CNL/MSC Joint Venture No. 779
CNL/MSC Joint Venture No. 857
CNL/MSC Joint Venture No. 182
CNL/MSC Joint Venture No. 1005
CNL/MSC Joint Venture No. 740
CNL APF Partners, LP
CNL/Lee Vista Joint Venture
CNL/Chevys Annapolis Joint Venture
CNL Restaurant Net Lease Holdings, LP
CNL Restaurant Bond Holdings, Inc.
CNL Funding 2000-A, Inc.
CNL Funding 2000-A, LP
CNL Restaurant Bond Holdings, LP
CNL Restaurants XVIII, Inc.
CNL Net Lease Funding 2001, Inc.
CNL Net Lease Funding 2001, LP

<PAGE>


























                                    EXHIBITS




<PAGE>


                                  EXHIBIT INDEX


         Exhibit Number

                  2.1      Agreement  and  Plan  of  Merger,  by and  among  the
                           Registrant, CFA Acquisition Corp., CNL Fund Advisors,
                           Inc.  and CNL  Group,  Inc.,  dated  March  11,  1999
                           (included  as  Exhibit  10.38  to  the   Registrant's
                           Registration Statement No. 333-74329 on Form S-4 (the
                           "Form  S-4") as  originally  filed  and  incorporated
                           herein by reference).

                  2.2      Agreement  and  Plan  of  Merger,  by and  among  the
                           Registrant,  CFC Acquisition  Corp.,  CFS Acquisition
                           Corp., CNL Financial  Corp., CNL Financial  Services,
                           Inc., CNL Group,  Inc., Five Arrows Realty Securities
                           L.L.C.,  Robert A. Bourne,  Curtis B.  McWilliams and
                           Brian  Fluck,  dated  March  11,  1999  (included  as
                           Exhibit 10.39 to the Form S-4 as originally filed and
                           incorporated herein by reference).

                  3.1      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated  Articles  of   Incorporation,   as  amended
                           (included  as Exhibit  3.1 to the  Registrant's  Form
                           10-Q  for  the  quarter   ended  June  30,  1999  and
                           incorporated herein by reference).

                  3.3      CNL  American   Properties  Fund,  Inc.  Amended  and
                           Restated  Bylaws  (included  as  Exhibit  3.2  to the
                           Registrant's  Registration Statement No. 333-37657 on
                           Form S-11 and incorporated herein by reference).

                  3.3      CNL American Properties Fund, Inc. Second Amended and
                           Restated  Articles  of  Incorporation   (included  as
                           Exhibit  3.3 to the  Registrant's  Form  10-Q for the
                           quarter ended June 30, 2000 and  incorporated  herein
                           by reference).

                  4.1      Form of Stock Certificate (included as Exhibit 4.5 to
                           the Registrant's  Registration Statement No. 33-78790
                           on Form S-11 and incorporated herein by reference).

                  10.1     Form of  Indemnification  Agreement dated as of April
                           18, 1995, between the Registrant and each of James M.
                           Seneff,  Jr., Robert A. Bourne, G. Richard Hostetter,
                           J. Joseph Kruse, Richard C. Huseman,  John T. Walker,
                           Jeanne A. Wall,  Lynn E. Rose and Edgar J. McDougall,
                           dated as of January 27, 1997,  between the Registrant
                           and Steven D.  Shackelford,  dated as of February 18,
                           1998,   between   the   Registrant   and   Curtis  B.
                           McWilliams,  and  dated  as  of  September  1,  1999,
                           between the  Registrant and each of Howard J. Singer,
                           John L. Farren,  Timothy J. Neville,  Michael I. Wood
                           and Barry L. Goff  (included  as Exhibit  10.9 to the
                           Registrant's  Registration Statement No. 333-15411 on
                           Form S-11 and incorporated herein by reference).

                  10.2     Amended and Restated Agreement of Limited Partnership
                           of CNL APF Partners, LP (included as Exhibit 10.50 to
                           Amendment  No.  2 to the  Form  S-4 and  incorporated
                           herein by reference).

                  10.3     Amended and  Restated  Credit  Agreement by and among
                           CNL  APF  Partners,   LP,  Registrant,   First  Union
                           National  Bank,  First Union Capital  Markets  Group,
                           Banc of America  Securities LLC,  NationsBank,  N.A.,
                           The  Chase   Manhattan   Bank  and  other   financial
                           institutions, dated June 9, 1999 (included as Exhibit
                           10.51  to  Amendment  No.  1  to  the  Form  S-4  and
                           incorporated herein by reference).

                  10.4     First   Amendment  to  Amended  and  Restated  Credit
                           Agreement  dated as of December  31, 1999 between CNL
                           APF Partners,  LP and First Union  National  Bank, as
                           Agent  (included as Exhibit 10.4 to the  Registrant's
                           Form 10-K for the year ended  December  31,  1999 and
                           incorporated herein by reference).

                  10.5     Franchise  Receivable Funding and servicing Agreement
                           dated  as  of  October  14,  1999   between  CNL  APF
                           Partners,   LP  and   Neptune   Funding   Corporation
                           (included  as Exhibit 10.5 to the  Registrant's  Form
                           10-K  for  the  year  ended  December  31,  1999  and
                           incorporated herein by reference).

                  10.6     Interim  Wholesale  Mortgage  Warehouse  and Security
                           Agreement dated as of September 18, 1998, and Amended
                           Agreement dated as of August 30, 1999 between CNL APF
                           Partners,   LP  and  Prudential   Securities   Credit
                           Corporation   (included   as  Exhibit   10.6  to  the
                           Registrant's  Form 10-K for the year  ended  December
                           31, 1999 and incorporated herein by reference).

                  10.7     1999 Performance  Incentive Plan (included as Exhibit
                           10.1  to  Amendment   No.  1  to  the  Form  S-4  and
                           incorporated herein by reference).

                  10.8     Registration   Rights  Agreement  by  and  among  the
                           Registrant,  Robert A. Bourne,  Curtis B. McWilliams,
                           John T. Walker,  Howard Singer, Steven D. Shackelford
                           and CNL  Group,  Inc.,  dated  as of March  11,  1999
                           (included as Exhibit  10.40 to Amendment No. 1 to the
                           Form S-4 and incorporated herein by reference).

                  10.9     Registration   Rights  Agreement  by  and  among  the
                           Registrant,  Five Arrows  Realty  Securities  L.L.C.,
                           James M. Seneff,  Jr.,  Robert A.  Bourne,  Curtis B.
                           McWilliams and CNL Group, Inc., dated as of March 11,
                           1999 (included as Exhibit 10.41 to Amendment No. 1 to
                           the Form S-4 and incorporated herein by reference).

                  10.10    Employment   Agreement  by  and  between   Curtis  B.
                           McWilliams and the  Registrant,  dated  September 15,
                           1999 (included as Exhibit 10.42 to Amendment No. 2 to
                           the Form S-4 and incorporated herein by reference).

                  10.11    Employment   Agreement  by  and  between   Steven  D.
                           Shackelford and the  Registrant,  dated September 15,
                           1999 (included as Exhibit 10.43 to Amendment No. 2 to
                           the Form S-4 and incorporated herein by reference).

                  10.12    Employment  Agreement  by and between  John T. Walker
                           and  the   Registrant,   dated   September  15,  1999
                           (included as Exhibit  10.44 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.13    Employment  Agreement by and between Howard J. Singer
                           and  the   Registrant,   dated   September  15,  1999
                           (included as Exhibit  10.45 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.14    Employment Agreement by and between Barry L. Goff and
                           the Registrant, dated September 15, 1999 (included as
                           Exhibit  10.46 to Amendment No. 2 to the Form S-4 and
                           incorporated herein by reference).

                  10.15    Employment  Agreement by and between Robert W. Chapin
                           and  the   Registrant,   dated   September  15,  1999
                           (included as Exhibit  10.47 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.16    Employment   Agreement  by  and  between  Timothy  J.
                           Neville and the Registrant,  dated September 15, 1999
                           (included as Exhibit  10.48 to Amendment No. 2 to the
                           Form S-4 and incorporated herein by reference).

                  10.17    Holdback  Agreement by and among the  Registrant  and
                           Stockholders,  dated  August 31,  1999  (included  as
                           Exhibit  10.56 to Amendment No. 2 to the Form S-4 and
                           incorporated herein by reference).

                  10.18    Amended  and   Restated   Credit  and   Reimbursement
                           Agreement by and among CNL APF Partners,  LP, CNL APF
                           LP Corp., CNL APF GP Corp., Bank of America, N.A. and
                           Bank of America  Securities LLC, dated as of June 15,
                           2000  (included as Exhibit 10.18 to the  Registrant's
                           Form 10-Q for the quarter ended June 30, 2000).

                  10.19    Employment  Agreement by and between Michael Wood and
                           the  Registrant,  dated August 31, 1999  (included as
                           Exhibit 10.19 to the  Registrant's  Form 10-Q for the
                           quarter ended March 31, 2001).

                  10.20    Employment  Agreement by and between Brent Heaton and
                           the Registrant, dated September 29, 1999 (included as
                           Exhibit 10.20 to the  Registrant's  Form 10-Q for the
                           quarter ended March 31, 2001).

                  10.21    Addendum to Employment Agreement dated as of November
                           1, 1999, between the Registrant and Curtis McWilliams
                           (included as Exhibit 10.21 to the  Registrant's  Form
                           10-Q for the  quarter  ended  March  31,  2001).  The
                           following   persons   have  signed  a   substantially
                           identical   Addendum  relating  to  their  respective
                           employment   agreements;   Steve  Shackelford  (dated
                           November 1, 1999),  John  Walker  (dated  November 3,
                           1999), Barry Goff (dated November 1, 1999), and Brent
                           Heaton (dated November 3, 1999).

                  10.22    Addendum to Employment Agreement dated as of November
                           1, 1999,  between the  Registrant  and Robert  Chapin
                           (included as Exhibit 10.22 to the  Registrant's  Form
                           10-Q for the  quarter  ended  March  31,  2001).  The
                           following   persons   have  signed  a   substantially
                           identical   Addendum  relating  to  their  respective
                           employment agreements:  Howard Singer (dated November
                           1, 1999),  Michael Wood (dated  November 8, 1999) and
                           Timothy Neville (dated November 24, 1999).

                  10.23    Second  Addendum to Employment  Agreement dated as of
                           June 16,  2000,  between  the  Registrant  and Curtis
                           McWilliams   (included   as  Exhibit   10.23  to  the
                           Registrant's  Form 10-Q for the  quarter  ended March
                           31,  2001).  The  following  persons  have  signed  a
                           substantially  identical Second Addendum  relating to
                           their respective employment agreements: Howard Singer
                           (dated June 19, 2000),  Robert Chapin (dated June 20,
                           2000) and Brent Heaton (dated October 30, 2000).

                  10.24    Second  Addendum to Employment  Agreement dated as of
                           August 20,  2000,  between the  Registrant  and Barry
                           Goff  (included as Exhibit 10.24 to the  Registrant's
                           Form 10-Q for the quarter ended March 31, 2001).

                  10.25    Second  Addendum to Employment  Agreement dated as of
                           September 1, 2000,  between the  Registrant and Steve
                           Shackelford   (included  as  Exhibit   10.25  to  the
                           Registrant's  Form 10-Q for the  quarter  ended March
                           31, 2001).

                  10.26    Second  Addendum to Employment  Agreement dated as of
                           2000,  between the  Registrant  and  Timothy  Neville
                           (included as Exhibit 10.26 to the  Registrant's  Form
                           10-Q for the quarter ended March 31, 2001).

                  10.27    Second  Addendum to Employment  Agreement dated as of
                           October 24, 2000,  between the Registrant and Michael
                           Wood  (included as Exhibit 10.27 to the  Registrant's
                           Form 10-Q for the quarter ended March 31, 2001).

                  10.28    Second  Addendum to Employment  Agreement dated as of
                           October 25,  2000,  between the  Registrant  and John
                           Walker (included as Exhibit 10.28 to the Registrant's
                           Form 10-Q for the quarter ended March 31, 2001).

                  10.29    Amended and Restated Master Purchase  Agreement dated
                           as of October 11, 2001, among Bank of America,  N.A.,
                           CNL Financial VII, LP and CNL Franchise  Network,  LP
                           (filed herewith).

                  10.30    Third  Amended and  Restated  Side Letter dated as of
                           October 11, 2001,  among Bank of America,  N.A.,  CNL
                           Financial  VII,  LP and  CNL  Franchise  Network,  LP
                           (filed herewith).

                  21       Subsidiaries of the Registrant (filed herewith).