Document:

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                                                                    Exhibit 10.2

                               ADVISORY AGREEMENT

     THIS ADVISORY AGREEMENT (this "Agreement"), dated as of, ____________ 2007,
is entered into between Shopoff Properties Trust, Inc., a Maryland corporation
(the "Company"), Shopoff Partners, L.P., a Delaware limited partnership (the
"Operating Partnership"), and Shopoff Advisors, L.P., a Delaware limited
partnership (the "Advisor").

                              W I T N E S S E T H:

     WHEREAS, the Company has filed a registration statement with the U. S.
Securities and Exchange Commission relating to its proposed offering of shares
of its common stock, par value $.01 per share ("Common Stock"), to the public
(the "Offering");

     WHEREAS, the Company intends to qualify as a REIT (as defined below), and
to invest, directly and indirectly, in investments in accordance with investment
guidelines adopted by its Board of Directors (the "Board") and Sections 856
through 860 of the Code (as defined below);

     WHEREAS, the Company and the Operating Partnership desire to avail
themselves of the experience, sources of information, advice and assistance of,
and certain facilities available to, the Advisor and to have the Advisor
undertake the duties and responsibilities hereinafter set forth on behalf of,
and subject to the supervision of, the Board, all as provided herein; and

     WHEREAS, the Advisor is willing to undertake to render such services,
subject to the supervision of the Board, on the terms and conditions hereinafter
set forth.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements contained herein, the parties hereto agree as follows:

     1.   Definitions. As used in this Agreement, the following terms have the
definitions hereinafter indicated:

     Acquisition Expenses means any and all expenses incurred by the Company,
the Advisor, the Operating Partnership, or any Affiliate thereof in connection
with the sourcing, selection, evaluation and acquisition of, and investment in,
any Real Estate Asset, whether or not acquired or made, including but not
limited to legal fees and expenses, travel and communications expenses, cost of
appraisals, nonrefundable option payments on Real Estate Assets not acquired,
accounting fees and expenses, title insurance, and other closing and
miscellaneous expenses related to the selection and acquisition of Real Estate
Assets.

     Acquisition Fee means any and all fees and commissions, exclusive of
Acquisition Expenses, paid by any Person to any other Person (including any fees
or commissions paid by or to any Affiliate of the Company or the Advisor) in
connection with the making or investing in mortgage loans or the purchase,
development or construction of any property or other Real Estate Asset,
including, without limitation, real estate commissions, selection fees.

     Advisor means Shopoff Advisors, L.P., a Delaware limited partnership, any
successor advisor to the Company, or any person or entity to which Shopoff
Advisors, L.P. or any successor advisor subcontracts substantially all of its
functions.

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                               TABLE OF CONTENTS

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1.   DEFINITIONS............................................................................................    1

2.   APPOINTMENT............................................................................................    9

3.   AUTHORITY OF THE ADVISOR...............................................................................    9

     (a)  General...........................................................................................    9

     (b)  Powers of the Advisor.............................................................................    9

     (c)  Approval by Directors.............................................................................    9

     (d)  Modification or Revocation of Authority of Advisor................................................    9

4.   DUTIES AND AUTHORITY OF THE ADVISOR....................................................................   10

     (a)  Organizational and Offering Services..............................................................   10

     (b)  Real Estate Asset Acquisition and Disposition, Asset Management and Operational Services..........   10

5.   BANK ACCOUNTS..........................................................................................   15

6.   RECORDS; ACCESS........................................................................................   15

7.   LIMITATIONS ON ACTIVITIES..............................................................................   15

8.   RELATIONSHIP WITH DIRECTORS............................................................................   15

9.   FEES...................................................................................................   16

     (a)  Acquisition and Advisory Fees.....................................................................   16

     (b)  Asset Management Fee..............................................................................   16

     (c)  Disposition Fee...................................................................................   16

     (d)  Subordinated Participation in Net Sale Proceeds...................................................   16

     (e)  Subordinated Incentive Fee Due Upon Listing.......................................................   17

     (f)  Debt Financing Fee................................................................................   17

     (g)  Subordinated Performance Fee Due Upon Termination.................................................   17

     (h)  Changes to Fee Structure..........................................................................   17

10.  EXPENSES...............................................................................................   17

     (a)  Reimbursable Expenses.............................................................................   17

     (b)  Other Services....................................................................................   19

     (c)  Timing of and Limitations on Reimbursements.......................................................   19

11.  OTHER ACTIVITIES OF THE ADVISOR........................................................................   20

     (a)  General...........................................................................................   20
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                               TABLE OF CONTENTS
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12.  RELATIONSHIP OF ADVISOR AND COMPANY....................................................................   20

13.  REPRESENTATIONS AND WARRANTIES.........................................................................   20

     (a)  Of the Company....................................................................................   21

     (b)  Of the Advisor....................................................................................   21

14.  TERM; TERMINATION OF AGREEMENT.........................................................................   22

15.  TERMINATION............................................................................................   22

     (a)  Termination by Either Party.......................................................................   22

     (b)  Termination by the Advisor........................................................................   22

16.  PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION.....................................................   22

17.  ASSIGNMENT TO AN AFFILIATE.............................................................................   23

18.  INDEMNIFICATION BY THE COMPANY.........................................................................   23

19.  INDEMNIFICATION BY ADVISOR.............................................................................   24

20.  ADVISOR'S LIABILITY....................................................................................   24

21.  NOTICES................................................................................................   24

22.  MODIFICATION...........................................................................................   25

23.  SEVERABILITY...........................................................................................   25

24.  CONSTRUCTION...........................................................................................   25

25.  ENTIRE AGREEMENT.......................................................................................   25

26.  INDULGENCES, NOT WAIVERS...............................................................................   25

27.  GENDER.................................................................................................   26

28.  TITLES NOT TO AFFECT INTERPRETATION....................................................................   26

29.  EXECUTION IN COUNTERPARTS..............................................................................   26
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     Affiliate or Affiliated means, (A) any Person directly or indirectly
owning, controlling, or holding, with power to vote, ten percent or more of the
outstanding voting securities of such other Person, (B) any ten percent or more
of whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with the power to vote, by such other Person, (C) any
Person, directly or indirectly, controlling, controlled by, or under common
control with such other Person, (D) any executive officer, director, trustee,
general partner or manager of such other person, or (E) any legal entity for
which such Person acts as an executive officer, director, trustee, general
partner or manager.

     Appraised Value means value according to an appraisal made by an
Independent Appraiser.

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

     Asset Management Fee means the fee paid to the Advisor for directing or
performing the day-to-day business affairs of the Company in the amount
established pursuant to Section 9(b).

     Board of Directors or Board means the individuals holding such office, as
of any particular time, under the Charter of the Company, whether they be the
Directors named therein or additional or successor Directors.

     Broker-Dealer means Shopoff Securities, Inc., an Affiliate of the Advisor,
or such other Person or entity selected by the Board to act as the broker-dealer
for the Offering. Shopoff Securities, Inc. is a member of the National
Association of Securities Dealers.

     Bylaws means the Bylaws of the Company, as the same may be amended from
time to time.

     Charter means the charter of the Company, including the Articles of
Incorporation and all Articles of Amendment, Articles Supplementary and other
modifications thereto as filed with the SDAT.

     Code means the Internal Revenue Code of 1986, as amended from time to time,
or any successor statute thereto. Reference to any provision of the Code shall
mean such provision as in effect from time to time, as the same may be amended,
and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.

     Common Stock means the Common Stock as defined in the Recitals to this
Agreement.

     Company means Shopoff Properties Trust, Inc., a corporation organized under
the laws of the State of Maryland.

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     Competitive Real Estate Commission means a real estate or brokerage
commission paid for the purchase or sale of a Real Estate Asset that is
reasonable, customary and competitive in light of the size, type and location of
the Real Estate Asset.

     Construction Fee means a fee or other remuneration for acting as general
contractor and/or construction manager to construct improvements, supervise and
coordinate projects or to provide major repairs or rehabilitation for a Real
Estate Asset.

     Contract Price means the amount actually paid for a Real Estate Asset or
allocated to the purchase, development, construction or improvement of a Real
Estate Asset, exclusive of Acquisition Fees and Acquisition Expenses.

     Development Fee means a fee for the packaging of a Real Estate Asset,
including negotiating and approving plans, and undertaking to assist in
obtaining zoning and necessary variances and financing for the specific Real
Estate Asset, either initially or at a later date.

     Director means an individual who is a member of the Board of Directors.

     Disposition Fee means the Disposition Fee as defined in Section 9(c) of
this Agreement.

     Dividends means any dividends or other distributions of money or other
property paid by the Company to the Stockholders, including dividends that may
constitute a return of capital for federal income tax purposes.

     Excess Expense Guidelines means the Excess Expense Guidelines as defined in
Section 10(c)(iii) of this Agreement.

     Excess Market Value means the amount by which (i) the Market Value, plus
the total of all Dividends paid to Stockholders from the Company's inception
until the date that Market Value is determined, exceeds (ii) an amount equal to
100% of the Invested Capital, plus a 10% cumulative, non-compounded per annum
return on the Invested Capital from the date of investment through the date
Market Value is determined.

     Excess Net Appraised Value means the amount by which the Net Appraised
Value exceeds the sum of 100% of Invested Capital, plus an amount equal to a 10%
cumulative, non-compounded per annum return on Invested Capital, calculated on a
weighted average daily basis, less all prior Dividends.

     Expense Year means the Expense Year as defined in Section 10(c)(iii)
hereof.

     GAAP means generally accepted accounting principles consistently applied as
used in the United States of America.

     Gross Proceeds means the aggregate purchase price of all Common Stock sold
for the account of the Company.

     Independent Appraiser means a person or entity, with no material current or
prior business or personal relationship with the Advisor or the Directors, who
is engaged to a

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substantial extent in the business of rendering opinions regarding the value of
assets of the type intended to be acquired by the Company through the Operating
Partnership, and who is a qualified appraiser of real estate as determined by
the Board. Membership in a nationally recognized appraisal society such as the
American Institute of Real Estate Appraisers or the Society of Real Estate
Appraisers shall be conclusive evidence of such qualification.

     Independent Director means a Director of the Company who is not, and within
the last two years has not been, directly or indirectly associated with the
Sponsor or Advisor by virtue of (i) ownership of an interest in the Sponsor,
Advisor or its Affiliates, (ii) employment by the Sponsor, Advisor or any of
their Affiliates, (iii) service as an officer or director of the Sponsor,
Advisor or any of their Affiliates, (iv) performance of services, other than as
a Director, for the Company, (v) service as a director or trustee of more than
three real estate investment trusts organized by the Sponsor or advised by the
Advisor, or (vi) maintenance of a material business or professional relationship
with the Sponsor, Advisor or any of their Affiliates. A business or professional
relationship is considered material if the gross revenue derived by the Director
from the Advisor and Affiliates exceeds five percent of either the Director's
annual gross revenue derived from all sources during either of the last two
years, or the Director's net worth on a fair market value basis. An indirect
relationship shall include circumstances in which a Director's spouse, parents,
children, siblings, mothers- or fathers-in-law, sons- or daughters-in-law or
brothers- or sisters-in-law are or have been associated with the Sponsor,
Advisor, any of their Affiliates or the Company.

     Invested Capital means, with respect to the Stockholders, as of any
relevant date, an amount equal to the excess of (i) the aggregate amount of cash
contributed or deemed contributed by the Company to the Operating Partnership
from the gross proceeds of the issuance by the Company of Common Stock to the
Stockholders, over (ii) the cumulative Dividends made by the Operating
Partnership to the Company as of such date and distributed to the Stockholders.

     Joint Venture means any joint venture, limited liability company or other
Affiliate of the Company (other than the Operating Partnership and the
Subsidiary Limited Liability Companies).

     Listed means approved for trading on the NYSE, AMEX, Nasdaq or an
over-the-counter market, any successor to such entities or on any national
securities exchange that has listing standards that the U. S. Securities and
Exchange Commission determines by rule are substantially similar to the listing
standards of the NYSE, AMEX or Nasdaq. The term "Listing" shall have the
correlative meaning.

     Market Value means the market value of the outstanding stock of the
Company, measured by taking the average closing price or average of the bid and
asked price, as the case may be, during the consecutive 30-day period commencing
twelve (12) months following Listing and ending eighteen (18) months following
Listing during which the average closing price or average of the bid and asked
price of the stock is the highest.

     Nasdaq means The Nasdaq Stock Market.

     NASAA means the North American Securities Administrators Association, Inc.

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     NASAA REIT Guidelines means the Statement of Policy Regarding Real Estate
Investment Trusts published by the North American Securities Administrators
Association.

     Net Appraised Value means the Appraised Value of the Company's assets at
the Termination Date, less amounts of all indebtedness secured by the Real
Estate Assets.

     Net Income means for any period, the total revenues applicable to such
period, less the total expenses applicable to such period excluding additions to
reserves for depreciation, bad debts or other similar non-cash reserves;
provided, however, Net Income for purposes of calculating total allowable
Operating Expenses shall exclude the gain from the sale of the Company's assets.

     Net Sale Proceeds means in the case of a transaction described in clause
(A) of the definition of Sale, the net proceeds of any such transaction less the
amount of all real estate commissions and closing costs paid by the Operating
Partnership. In the case of a transaction described in clause (B) of such
definition, Net Sale Proceeds means the net proceeds of any such transaction
less the amount of any legal and other selling expenses incurred by the
Operating Partnership in connection with such transaction. In the case of a
transaction described in clause (C) of such definition, Net Sale Proceeds means
the net proceeds of any such transaction actually distributed to the Operating
Partnership from the Joint Venture less any expenses incurred by the Operating
Partnership in connection with such transaction. In the case of a transaction or
series of transactions described in clause (D) of the definition of Sale, Net
Sale Proceeds means the net proceeds of any such transaction less the amount of
all commissions and closing costs paid by the Operating Partnership. In the case
of a transaction described in clause (E) of such definition, Net Sale Proceeds
means the net proceeds of any such transaction less the amount of all selling
costs and other expenses incurred by the Operating Partnership in connection
with such transaction. Net Sale Proceeds shall also include, in the case of any
lease of a Real Estate Asset consisting of a building only, any amounts from
received tenants, borrowers or lessees that the Company determines, in its
discretion, to be economically equivalent to the proceeds of a Sale. Net Sale
Proceeds shall not include any amounts used to repay outstanding indebtedness
secured by the asset disposed of in the sale.

     NYSE means the New York Stock Exchange.

     Market Value means the market value of the outstanding Common Stock,
measured by taking the average closing price or average of bid and asked price,
as the case may be, during the consecutive 30-day period commencing twelve (12)
months following Listing and ending eighteen (18) months following Listing,
during which the average closing price or average of bid and asked price of the
Common Stock is the highest.

     Offering means the Offering defined in the Recitals to this Agreement.

     Operating Expenses means all direct and indirect costs and expenses
incurred by the Company, the Operating Partnership, the Advisor, or any of their
respective Affiliates, as determined under GAAP, which in any way are related to
the operation of the Company or to Company business, including advisory fees,
but excluding (i) the expenses of raising capital such as Organizational and
Offering Expenses, legal, audit, accounting, underwriting, brokerage,

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listing, registration, and other fees, printing and other such expenses and
taxes incurred in connection with the issuance, distribution, transfer,
registration and Listing of the Common Stock, (ii) interest payments, (iii)
taxes, (iv) non-cash expenditures such as depreciation, amortization and bad
debt reserves, (v) Acquisition Fees and Acquisition Expenses, (vi) real estate
commissions on the Sale of property, and other expenses connected with the
acquisition and ownership of real estate interests, mortgage loans, or other
property (such as the costs of foreclosure, insurance premiums, legal services,
maintenance, repair, and improvement of property) and (vii) any incentive fees
which may be paid in compliance with the NASAA REIT Guidelines. The definition
of "Operating Expenses" set forth above is intended to encompass only those
expenses which are required to be treated as Operating Expenses under the NASAA
REIT guidelines. As a result, and notwithstanding the definition set forth
above, any expense of the Company which is not an Operating Expense under the
NASAA REIT Guidelines shall not be treated as an Operating Expense for purposes
hereof.

     Operating Partnership means Shopoff Partners, L.P. , or any successor
thereof, which is the partnership through which the Company may own Real Estate
Assets. References herein to the Company's assets refers to the Real Estate
Assets held by the Operating Partnership.

     Operating Partnership Agreement means the limited partnership agreement of
the Operating Partnership, as amended and restated from time to time.

     Organizational and Offering Expenses means any and all costs and expenses,
other than selling commissions and fees, incurred by the Company, the Advisor or
any Affiliate of either in connection with and in preparing the Company for
registration of and subsequently offering and distributing its Common Stock to
the public, which may include but are not limited to legal, accounting and
escrow fees, expenses for printing, engraving, amending, supplementing and
mailing, distribution costs, compensation to employees while engaged in
registering, telephone costs, all advertising and marketing expenses, charges of
transfer agents, registrars, trustees, escrow holders, depositories, experts,
and fees, expenses and taxes related to the filing, registration and
qualification of the sale of the securities under federal and state laws,
including accountants' and attorneys' fees and other accountable offering
expenses. Organization and Offering Expenses may include, but are not limited
to: (i) amounts to reimburse the Advisor for all marketing related costs and
expenses such as compensation to and direct expenses of the Advisor's employees
or employees of the Advisor's Affiliates in connection with registering and
marketing the Common Stock; (ii) direct expenses of the employees of the
Broker-Dealer while preparing for the offering and marketing of the Common
Stock; (iii) travel and entertainment expenses related to the offering and
marketing of the Common Stock; (iv) facilities and technology costs and other
costs and expenses associated with the offering and to facilitate the marketing
of the Common Stock including web site design and management.

     Person means any natural person, partnership, corporation, association,
trust, limited liability company, or other legal entity.

     Prospectus means any document, notice, or other communication satisfying
the standards set forth in Section 10 of the Securities Act, and contained in a
currently effective registration statement filed by the Company with, and
declared effective by, the U. S. Securities and

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Exchange Commission, or if no registration statement is currently effective,
then the Prospectus contained in the most recently effective registration
statement.

     Real Estate Assets means unimproved and improved real property and Real
Estate Related Investments or any direct and/or indirect interest therein
(including, without limitation, fee or leasehold interests, options, leases,
partnership and joint venture interests, equity and debt securities of entities
that own real property, first or second mortgages on real property, mezzanine
loans directly or indirectly secured by real property, and other contractual
rights in real estate).

     Real Estate Related Investments means mortgage loans secured by, or
preferred equity investments in entities that own, real property (including
first or second mortgages on real property and mezzanine loans directly or
indirectly secured by real property).

     REIT means a corporation, trust or association which is engaged in
investing in equity interests in real estate (including fee ownership and
leasehold interests and interests in limited liability companies, limited
liability companies, partnerships and joint ventures holding real estate) or in
loans secured by mortgages on real estate or both and that qualifies as a real
estate investment trust under the REIT Provisions of the Code.

     REIT Provisions of the Code means Sections 856 through 860 of the Code and
any successor or other provisions of the Code relating to real estate investment
trusts (including provisions as to the attribution of ownership of beneficial
interests therein) and the regulations promulgated thereunder.

     Sale or Sales means any transaction or series of transactions whereby: (A)
the Operating Partnership sells, grants, transfers, conveys or relinquishes its
ownership of any Real Estate Asset or portion thereof, including the lease of
any Real Estate Asset consisting of the building only, and including any event
with respect to any Real Estate Asset which gives rise to a significant amount
of insurance proceeds (to the extent such insurance proceeds are not used to
repair the damage for which the insurance proceeds were paid) or condemnation
awards; (B) the Operating Partnership sells, grants, transfers, conveys or
relinquishes its ownership of all or substantially all of the interest of the
Operating Partnership in any Joint Venture in which it is a co-venturer or
partner; (C) any Joint Venture in which the Operating Partnership is a
co-venturer or partner sells, grants, transfers, conveys or relinquishes its
ownership of any Real Estate Asset or portion thereof, including any event with
respect to any Real Estate Asset which gives rise to insurance claims or
condemnation awards; (D) the Operating Partnership sells or otherwise disposes
of its interests in the Subsidiary Limited Liability Companies; or (E) the
Operating Partnership sells or otherwise disposes of or distributes all of its
assets in liquidation of the Operating Partnership.

     SDAT means the State Department of Assessments and Taxation of the State of
Maryland.

     Securities Act means the Securities Act of 1933, as amended.

          (a) Sponsor means any Person directly or indirectly instrumental in
organizing, wholly or in part, the Company or any Person who will control,
manage or

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participate in the management of the Company, and any Affiliate of such Person.
Not included is any Person whose only relationship with the Company is as that
of an independent property manager of the Company's assets and whose only
compensation is as such. Sponsor does not include wholly independent third
parties such as attorneys, accountants and underwriters whose only compensation
is for professional services.

     Stockholders means the registered holders of the Company's Common Stock.

     Subordinated Incentive Fee Due Upon Listing means the fee payable to the
Advisor under certain circumstances if the Common Stock is listed on a national
securities exchange, or traded on an over-the-counter market, in an amount equal
to 50% of the Excess Market Value if Stockholders have received cumulative
Dividends equal to 100% of the Invested Capital plus a 10% cumulative,
non-compounded per annum return on the Invested Capital, calculated on an
aggregate weighted average daily basis. The Company shall have the option to pay
such fee in the form of cash, Common Stock, a promissory note or any combination
of the foregoing. The form of payment shall be as approved by the Board of
Directors. In the event the Advisor Subordinated Incentive Fee Due Upon Listing
is paid to the Advisor, thereafter, the Advisor will not be entitled to receive
any payments of Subordinated Performance Fee Upon Termination or Subordinated
Participation in Net Sale Proceeds.

     Subordinated Performance Fee Due Upon Termination means, upon termination
of this Agreement, a performance fee equal to 50% of the Excess Market Value or
50% of the Excess Net Appraised Value, whichever is greater, if Stockholders
have received cumulative Dividends equal to 100% of the Invested Capital plus a
10% cumulative, non-compounded per annum return on the Invested Capital,
calculated on an aggregate weighted average daily basis.

     Subordinated Participation in Net Sale Proceeds means a fee equal to 50% of
the balance of Net Sale Proceeds, if any, remaining after Stockholders have
received cumulative Dividends equal to 100% of the Invested Capital, plus an
amount equal to a 10% cumulative, non-compounded per annum return on the
Invested Capital, calculated on an aggregate weighted average daily basis.

     Subsidiary Limited Liability Companies means the limited liability
companies formed from time to time by the Operating Partnership for the purpose
of holding title to one or more Real Estate Assets.

     Termination Date means the date of termination of this Agreement.

     2.   Appointment. The Company, through the powers vested in the Board of
Directors, including a majority of all Independent Directors, hereby appoints
the Advisor to serve as its advisor and asset manager on the terms and
conditions set forth in this Agreement, and the Advisor hereby accepts such
appointment.

     3.   Authority of the Advisor.

          (a)  General. All rights and powers to manage and control the
day-to-day business and affairs of the Company shall be vested in the Advisor.
The Advisor shall have the power to delegate all or any part of its rights and
powers to manage and control the business and

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affairs of the Company to such officers, employees, Affiliates, agents and
representatives of the Advisor or the Company as it may from time to time deem
appropriate. Any authority delegated by the Advisor to any other Person shall be
subject to the limitations on the rights and powers of the Advisor specifically
set forth in this Agreement and the Charter.

          (b)  Powers of the Advisor. Subject to the express limitations set
forth in this Agreement and subject to the supervision of the Board, the power
to direct the management, operation and policies of the Company shall be vested
in the Advisor, which shall have the power by itself and shall be authorized and
empowered on behalf and in the name of the Company to carry out any and all of
the objectives and purposes of the Company and to perform all acts and enter
into and perform all contracts and other undertakings that it may in its sole
discretion deem necessary, advisable or incidental thereto to perform its
obligations under this Agreement.

          (c)  Approval by Directors. Notwithstanding the foregoing, any
investment in Real Estate Assets, including any acquisition of a Real Estate
Asset by the Company or any investment by the Company in a Joint Venture,
limited liability company, limited partnership or similar entity owning real
properties, will require the prior approval of the Board of Directors and the
Independent Directors. The Advisor will deliver to the Board of Directors all
documents required by it to properly evaluate the proposed investment.

          (d)  Modification or Revocation of Authority of Advisor. The Board
may, at any time upon the giving of notice to the Advisor, modify or revoke the
authority or approvals set forth in Sections 3 and 4, provided however, that
such modification or revocation shall be effective upon receipt by the Advisor
and shall not be applicable to investment transactions to which the Advisor has
committed the Company prior to the date of receipt by the Advisor of such
notification. For such previously committed investment transactions, the Advisor
shall have the full rights and authorizations under Section 3 and 4 as are
necessary to complete the previously committed investment transactions.

     4.   Duties and Authority of the Advisor.

          (a)  Organizational and Offering Services. The Advisor shall manage
and supervise:

               (i) development of the Offering, including the determination of
the specific terms of the Common Stock to be offered by the Company;

               (ii) the organization of the Company, preparation of all Offering
and related documents, and obtaining of all required regulatory approvals of
such documents;

               (iii) coordination of the due diligence process of the
Broker-Dealer and its review of the Prospectus and other Offering and Company
documents;

               (iv) preparation and approval of all marketing materials
contemplated to be used by the Broker-Dealer or others in the Offering;

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               (v) along with the Broker-Dealer, negotiation and coordination
with the escrow agent for the receipt, collection, processing and acceptance of
subscription agreements, and other administrative support functions;

               (vi) creation and implementation of various technology and
electronic communications related to the Offering; and

               (vii) all other services related to organization of the Company
or the Offering, whether performed and incurred by the Advisor or its
Affiliates.

          (b)  Real Estate Asset Acquisition and Disposition, Asset Management
and Operational Services. The Advisor undertakes to use commercially reasonable
efforts to:

               (i) (1) present to the Company potential investment opportunities
to provide a continuing and suitable investment program consistent with the
investment objectives and policies of the Company as determined and adopted in
the Charter, and (2) to manage, administer, promote, maintain, and improve, when
applicable, the Real Estate Assets on an overall portfolio basis in a diligent
manner. The services of the Advisor are to be of scope and quality not less than
those generally performed by professional asset managers of other similar
property portfolios. The Advisor shall make available the full benefit of the
judgment, experience and advice of the members of the Advisor's organization and
staff with respect to the duties it will perform under this Agreement. The
Advisor shall also obtain the services of developers, contractors, property
managers and leasing agents, which may include the Advisor or its Affiliates, to
manage, promote, and lease the Real Estate Assets. To facilitate the Advisor's
performance of these undertakings, but subject to the restrictions included in
Sections 3 and 7 and to the continuing and exclusive authority of the Board over
the management of the Company and the Operating Partnership, the Company hereby
delegates to the Advisor the authority to, and the Advisor hereby agrees to,
either directly or by engaging an Affiliate of the Advisor or an unrelated third
party;

               (ii) manage, and perform and supervise the various administrative
functions reasonably necessary for the management of the day-to-day operations
of the Company;

               (iii) subject to the provisions of Section 3(c) and 4 hereof, (A)
locate, analyze and select potential investments in Real Estate Assets, (B)
structure and negotiate the terms and conditions of transactions pursuant to
which investment in Real Estate Assets will be made, (C) perform due diligence
on prospective investments and summarize the results of such work, (D) make
investments in Real Estate Assets on behalf of the Company or the Operating
Partnership in compliance with the investment objectives and policies of the
Company, (E) if necessary, arrange for financing and refinancing and make other
changes in the asset or capital structure of Real Estate Assets, (F) dispose of,
reinvest or distribute the proceeds from the sale of, or otherwise deal with the
investments in, Real Estate Assets; (G) obtain all entitlements for the Real
Estate Assets, (H) enter into construction contracts and other contracts for the
development of Real Estate Assets, (I) enter into leases and service contracts
for Real Estate Assets, including oversight of Affiliated companies that perform
property management services for the Company, if any, (J) oversee non-affiliated
property managers and other non-affiliated

                                       10
<PAGE>

Persons who perform services for the Company, and (K) to the extent necessary,
perform all other operational functions for the development, maintenance, and
administration of Real Estate Assets;

               (iv) consult with the officers and the Board of Directors of the
Company and assist the Board of Directors in the formulation and implementation
of the Company's financial policies, and, as necessary, furnish the Board of
Directors with advice and recommendations with respect to the making of
investments consistent with the investment objectives and policies of the
Company and in connection with borrowings proposed to be undertaken by the
Company, if any;

               (v) provide the Board of Directors with periodic reports
regarding prospective investments which include recommendations and supporting
documentation required by them to properly evaluate the proposed investment;

               (vi) obtain the prior approval of the Board of Directors
(including a majority of all Independent Directors) for any and all investments
in Real Estate Assets (as well as any financing acquired by the Company or the
Operating Partnership in connection with such investment);

               (vii) notify the Board of all proposed material transactions
before they are completed;

               (viii) serve as the Company's investment and financial advisor
and provide the Board with relevant market research and economic and statistical
data in connection with the Company's assets and investment objectives and
policies;

               (ix) obtain reports (which may be prepared by unrelated third
parties, the Advisor, or its Affiliates), where appropriate, concerning the
value of investments or contemplated investments of the Company in Real Estate
Assets;

               (x) formulate and oversee the implementation of strategies for
the administration, promotion, management, operation, maintenance, improvement,
financing and refinancing, marketing, leasing, and disposition of Real Estate
Assets on an overall portfolio basis;

               (xi) monitor applicable markets and obtain reports (which may be
prepared by unrelated third parties, the Advisor or Affiliates) where
appropriate, concerning the values of existing or prospective investments of the
Company and monitor and evaluate the performance of the investments of the
Company;

               (xii) conduct periodic on-site property visits to some or all (as
the Advisor deems reasonably necessary) of the Real Estate Assets to inspect the
physical condition of the Real Estate Assets and to evaluate the performance of
the related property managers and leasing agents of their duties;

                                       11
<PAGE>

               (xiii) oversee the performance by the property managers of their
duties, including collection and proper deposits of rental payments and payment
of Real Estate Asset expenses and maintenance;

               (xiv) review, analyze and comment upon the operating budgets,
capital budgets and leasing plans prepared and submitted by any property
managers and leasing agents and aggregate these property budgets into the
Company's overall budget and financial reports;

               (xv) review and analyze on-going financial information pertaining
to each Real Estate Asset and the overall portfolio of Real Estate Assets;

               (xvi) deliver to the Board or maintain on behalf of the Company
copies of all appraisals obtained in connection with the investments in Real
Estate Assets;

               (xvii) obtain and maintain, with respect to any Real Estate Asset
and to the extent available, title insurance or other assurance of title and
customary fire, casualty and public liability insurance;

               (xviii) consult with the officers and Directors and assist the
Directors in evaluating and obtaining adequate insurance coverage based upon
risk management determinations;

               (xix) perform and supervise the various management and
operational functions related to the Company's investments in Real Estate
Assets;

               (xx) coordinate and manage relationships between the Company and
any Joint Venture partners;

               (xxi) undertake and perform all services or other activities
necessary and proper to carry out the investment objectives of the Company;

               (xxii) as reasonably necessary, act, or obtain the services of
others to act, as attorney-in-fact or agent of the Company in making, acquiring
and disposing of investments, disbursing, and collecting the funds, paying the
debts and fulfilling the obligations of the Company and handling, prosecuting
and settling any claims of the Company, including foreclosing and otherwise
enforcing mortgage and other liens and security interests securing investments;

               (xxiii) assist in negotiations on behalf of the Company with
investment banking firms and other institutions or investors for public or
private sales of securities or for other financing on behalf of the Company, but
in no event in such a way that the Advisor shall be acting as a broker, dealer,
underwriter or investment advisor in securities of or for the Company;

               (xxiv) negotiate on behalf of the Company with banks or lenders
for loans to be made to the Company if necessary, and negotiate on behalf of the
Company with investment banking firms and broker-dealers or negotiate private
sales of securities or obtain loans for the Company if necessary, but in no
event in such a way so that the Advisor shall be acting as broker-dealer or
underwriter; and provided, further, that any fees and costs payable to

                                       12
<PAGE>

third parties incurred by the Advisor in connection with the foregoing shall be
the responsibility of the Company;

               (xxv) provide the Company with all necessary cash management
services;

               (xxvi) upon request of the Board of Directors, invest and
reinvest any money of the Company;

               (xxvii) perform all reporting, record keeping, internal controls
and similar matters in a manner to allow the Company to comply with applicable
law, including the Sarbanes-Oxley Act of 2002, as applicable;

               (xxviii) from time to time, or at any time reasonably requested
by the Board, provide information or make reports to the Board related to its
performance of services to the Company under this Agreement;

               (xxix) coordinate with the Company's independent accountants and
auditors the preparation and delivery to the Board of Directors of a report not
less than annually concerning the Advisor's compliance with certain material
aspects of this Agreement and as otherwise requested by the Board of Directors;

               (xxx) provide the officers and Directors with timely updates
related to the overall regulatory environment affecting the Company, as well as
managing compliance with such matters, including but not limited to compliance
with the Sarbanes-Oxley Act of 2002;

               (xxxi) consult with the Board of Directors relating to the
corporate governance structure and appropriate policies and procedures related
thereto;

               (xxxii) supervise the preparation on behalf of the Company of all
reports and returns required by the U. S. Securities and Exchange Commission,
Internal Revenue Service and other state or federal governmental agencies;

               (xxxiii) maintain and preserve the books and records of the
Company and maintain the accounting and other record-keeping functions at the
Real Estate Asset, Company, and Operating Partnership levels;

               (xxxiv) undertake communications with Stockholders in accordance
with applicable law and the Charter, provided, however, that Affiliates of the
Advisor have no obligations to the Company other than as expressly stated
herein, and the Advisor and its Affiliates have no obligations to present to the
Company any specific investment opportunity except as set forth in the Charter
and described in the Prospectus;

               (xxxv) manage communications with Stockholders, including
answering phone calls, preparing and sending written and electronic reports and
other communications;

               (xxxvi) establish technology infrastructure to assist in
providing Stockholder support and service;

                                       13
<PAGE>

               (xxxvii) appoint and supervise the Company's transfer agent in
the maintenance of a stock ledger reflecting a record of the Stockholders and
their ownership of Common Stock;

               (xxxviii) manage and coordinate with the transfer agent the
periodic dividend process and the payments to Stockholders;

               (xxxix) investigate, select, and, on behalf of the Company,
engage and conduct business with such Persons as the Advisor deems necessary to
the proper performance of its obligations hereunder, including but not limited
to consultants, accountants, lenders, technical advisors, attorneys, brokers,
underwriters, corporate fiduciaries, escrow agents, depositaries, custodians,
agents for collection, insurers, insurance agents, banks, builders, developers,
construction companies, property owners, mortgagors, and any and all agents for
any of the foregoing, including Affiliates of the Advisor, and Persons acting in
any other capacity deemed by the Advisor necessary or desirable for the
performance of any of the foregoing services, including but not limited to
entering into contracts in the name of the Company with any of the foregoing;
and

               (xl) do all things necessary to assure its ability to render the
services described in this Agreement. The Advisor has a fiduciary responsibility
to the Company and to the Stockholders in carrying out its duties under this
Agreement. In providing advice and services hereunder, the Advisor shall not (i)
engage in any activity which would require it to be registered as an "Investment
Advisor," as that term is defined in the Investment Advisors Act of 1940 or in
any state securities law or (ii) cause the Company to make such investments as
would cause the Company to become an "Investment Company," as that term is
defined in the Investment Company Act of 1940.

     5.   Bank Accounts. The Advisor may establish and maintain one or more bank
accounts in its own name for the account of the Company or in the name of the
Company and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company,
under such terms and conditions as the Board may approve, provided that no funds
shall be commingled with the funds of the Advisor; and the Advisor shall from
time to time render appropriate accountings of such collections and payments to
the Board and to the auditors of the Company.

     6.   Records; Access. The Advisor shall maintain appropriate records of all
its activities hereunder and make such records available for inspection by the
Board and by counsel, auditors and authorized agents of the Company, at any time
or from time to time during normal business hours. The Advisor, in the conduct
of its responsibilities to the Company, shall maintain adequate and separate
books and records for the Company's operations in accordance with United States
GAAP, which shall be supported by sufficient documentation to ascertain that
such books and records are properly and accurately recorded. Such books and
records shall be the property of the Company. Such books and records shall
include all information necessary to calculate and audit the fees or
reimbursements paid under this Agreement. The Advisor shall utilize procedures
to attempt to ensure such control over accounting and financial transactions as
is reasonably required to protect the Company's assets from theft, error or
fraudulent activity. All financial statements that the Advisor delivers to the
Company shall be prepared on an accrual

                                       14
<PAGE>

basis in accordance with GAAP, except for special financial reports which by
their nature require a deviation from GAAP. The Advisor shall maintain necessary
liaison with the Company's independent accountants and shall provide such
accountants with such reports and other information as the Company shall
request. The Advisor shall at all reasonable times have access to the books and
records of the Company.

     7.   Limitations on Activities. Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect the
status of the Company as a REIT, (b) subject the Company to regulation under the
Investment Company Act of 1940, as amended, (c) violate any law, rule,
regulation or statement of policy of any governmental body or agency having
jurisdiction over the Company, its Common Stock or its other securities, or (d)
violate the Charter or Bylaws, except if such action shall be ordered by the
Board, in which case the Advisor shall notify promptly the Board of the
Advisor's judgment of the potential impact of such action and shall refrain from
taking such action until it receives further clarification or instructions from
the Board. In such event the Advisor shall have no liability for acting in
accordance with the specific instructions of the Board so given. Notwithstanding
the foregoing, the Advisor, its directors, officers, employees and stockholders,
and stockholders, directors and officers of the Advisor's Affiliates shall not
be liable to the Company or to the Board or Stockholders for any act or omission
by the Advisor, its directors, officers or employees, or stockholders, directors
or officers of the Advisor's Affiliates except as provided in this Agreement.

     8.   Relationship With Directors. Subject to Section 7 of this Agreement
and to restrictions set forth in the Charter or deemed advisable with respect to
the qualification of the Company as a REIT, directors, officers and employees of
the Advisor or an Affiliate of the Advisor or any corporate parents of an
Affiliate, or directors, officers or stockholders of any director, officer or
corporate parent of an Affiliate may serve as a Director and as officers of the
Company, except that no officer or employee of the Advisor or its Affiliates who
also is a Director or officer of the Company shall receive any compensation from
the Company for serving as a Director or officer other than reasonable
reimbursement for travel and related expenses incurred in attending meetings of
the Directors.

     9.   Fees.

          (a)  Acquisition and Advisory Fees. Subject to the following sentence,
the Company shall pay to the Advisor, as compensation for services rendered by
the Advisor in connection with the investigation, selection and acquisition (by
purchase, investment or exchange) of Real Estate Assets, a fee in an amount
equal to 3% of, (i) with respect to any Real Estate Asset acquired by the
Company directly or indirectly other than a Real Estate Related Investment, the
Contract Price of the underlying property, and (ii) with respect to any Real
Estate Related Investment acquired by the Company directly or indirectly, the
Appraised Value of the underlying property.

          (b)  Debt Financing Fee. The Company shall pay the Advisor 1% of the
amount available under any loan or line of credit made available to the Company
upon the Company's receipt of the proceeds from such loan or line of credit.

                                       15
<PAGE>

          (c)  Asset Management Fee. On the last day of each month, the Company
shall pay the Advisor an "Asset Management Fee" in an amount equal to
one-twelfth of 2% of (i) the aggregate assets value for operating assets and
(ii) the total Contract Price plus capitalized entitlement and project related
costs for Real Estate Assets held for less than or equal to one year by us,
directly or indirectly, as of the last day of the preceding month other than a
Real Estate-Related Investment and (iii) the Appraised Value as determined from
time to time for Real Estate Assets held for greater than one year by us,
directly or indirectly, as of the last day of the preceding month other than a
Real Estate-Related Investment and (iv) the Appraised Value of the underlying
property, for any Real Estate-Related Investment held by, us directly or
indirectly, as of the last day of the preceding month, in the case of subsection
(iv) not to exceed one-twelfth of 2% of the funds advanced by us for the
purchase of the Real Estate-Related Investment.

          (d)  Disposition Fee. If the Advisor or an Affiliate provides a
substantial amount of the services (as determined by a majority of the
Directors, including a majority of the Independent Directors), the Advisor shall
receive at the closing a Disposition Fee equal to, (1) in the case of the sale
of any Real Estate Asset, other than Real Estate-Related Investments, the lesser
of: (a) one-half of the Competitive Real Estate Commission paid up to 3% of the
Contract Price or, if none is paid, the amount that customarily would be paid,
or (b) 3% of the Contract Price of each Real Estate Asset sold, and (2) in the
case of the sale of any Real Estate-Related Investments, 3% of the sales price
of such Real Estate-Related Investments. Any Disposition Fee payable under this
section may be paid in addition to real estate commissions paid to
non-Affiliates, provided that the total real estate commissions (including such
Disposition Fee) paid to all Persons by the Company for each Real Estate Asset,
upon disposition thereof, shall not exceed an amount equal to the lesser of (i)
6% of the aggregate Contract Price of each Real Estate Asset or (ii) the
Competitive Real Estate Commission for each Real Estate Asset. The Company will
pay the Disposition Fees for a property at the time the property is sold.

          (e)  Subordinated Participation in Net Sale Proceeds. The Subordinated
Participation in Net Sale Proceeds shall be payable to the Advisor at the time
or times that the Company determines that the Subordinated Participation in Net
Sale Proceeds has been earned by the Advisor.

          (f)  Subordinated Incentive Fee Due Upon Listing. Upon Listing, the
Advisor shall be entitled to the Subordinated Incentive Fee Upon Listing. The
Subordinated Incentive Fee Due Upon Listing shall be payable to the Advisor
during the thirty (30) day period following twelve (12) months after Listing.
The Company shall have the option to pay such fee in the form of cash, Common
Stock, a promissory note with interest accrued as of the date of Listing, or any
combination of the foregoing, as determined by the Board of Directors. In the
event the Subordinated Incentive Fee Due Upon Listing is paid to the Advisor
following Listing, the Advisor will not be entitled to receive any payments of
Subordinated Performance Fee Upon Termination or Subordinated Participation in
Net Sale Proceeds following receipt of the Subordinated Incentive Fee Due Upon
Listing.

          (g)  Subordinated Performance Fee Due Upon Termination. Upon
termination of this Agreement, the Advisor shall be entitled to the Subordinated
Performance Fee Due Upon Termination as set forth in Section 16(a)(ii) of this
Agreement.

                                       16
<PAGE>

          (h)  Changes to Fee Structure. In the event of Listing, the Company
and the Advisor shall negotiate in good faith to establish a fee structure
appropriate for a perpetual-life entity. A majority of the Independent Directors
must approve the new fee structure negotiated with the Advisor. In negotiating a
new fee structure, the Independent Directors shall consider all of the factors
they deem relevant, including, but not limited to: (i) the amount of the
advisory fee in relation to the asset value, composition and profitability of
the Company's portfolio; (ii) the success of the Advisor in generating
opportunities that meet the investment objectives of the Company; (iii) the
rates charged to other REITs and to investors other than REITs by advisors
performing the same or similar services; (iv) additional revenues realized by
the Advisor and its Affiliates through their relationship with the Company,
including loan administration, underwriting or broker commissions, servicing,
engineering, inspection and other fees, whether paid by the REIT or by others
with whom the REIT does business; (v) the quality and extent of service and
advice furnished by the Advisor; (vi) the performance of the investment
portfolio of the REIT, including income, conversion or appreciation of capital,
and number and frequency of problem investments; and (vii) the quality of the
Real Estate Asset portfolio of the Company in relationship to the investments
generated by the Advisor for its own account. The new fee structure can be no
more favorable to the Advisor than the current fee structure.

     10.  Expenses.

          (a)  Reimbursable Expenses. In addition to the compensation paid to
the Advisor pursuant to Section 9 hereof, the Company shall pay directly or
reimburse the Advisor for all of the expenses paid or incurred by the Advisor
(to the extent not reimbursable by another party, such as the Broker-Dealer or
the Sponsor) in connection with the services it provides to the Company pursuant
to this Agreement, including, but not limited to:

               (i) the Organization and Offering Expenses; provided, however,
that within 60 days after the end of the month in which an Offering terminates,
the Advisor shall reimburse the Company for any Organization and Offering
Expenses reimbursement received by the Advisor pursuant to this Section 10 to
the extent that such reimbursement of expenses associated with the Offering
exceeds 10.5% of the Gross Proceeds (including all reimbursements paid to other
Affiliates of the Company). The Advisor shall be responsible for the payment of
all such Organization and Offering Expenses in excess of 10.5% of the Gross
Proceeds;

               (ii) subject to Section 9(a), all Acquisition Expenses incurred
in connection with the investigation, selection and acquisition of a Real Estate
Asset in an amount equal to up to 0.5% of (A) for any Real Estate Asset acquired
by the Fund directly or through a Joint Venture, other than a Real Estate
Related Investment, the Contract Price of the underlying property, and (B) for
any Real Estate Related Investment acquired by the Fund directly or indirectly,
the Appraised Value of the underlying property, in the case of this subsection
(B), not to exceed 1.0% of the funds advanced by the Fund for the acquisition of
the Real Estate Asset; the actual out-of-pocket cost of goods and services used
by the Company and obtained from entities not affiliated with the Advisor
including brokerage and other fees paid in connection with the purchase,
operation and sale of Real Estate Assets;

               (iii) interest and other costs for borrowed money, including
discounts, points and other similar fees;

                                       17
<PAGE>

               (iv) taxes and assessments on income or Real Estate Asset and
taxes as an expense of doing business and any taxes otherwise imposed on the
Company, the Operating Partnership, its business or income;

               (v) costs associated with insurance required in connection with
the business of the Company, the Operating Partnership, or by the Board;

               (vi) expenses of managing and operating Real Estate Assets owned
by the Company through the Operating Partnership, whether payable to an
Affiliate of the Company or a non-affiliated Person;

               (vii) all expenses in connection with payments to Directors and
meetings of the Directors and Stockholders;

               (viii) expenses associated with Listing or with the issuance and
distribution of securities other than the Common Stock issued in the Offering,
such as fees, advertising expenses, taxes, legal and accounting fees, listing
and registration fees;

               (ix) expenses connected with payments of Dividends in cash or
otherwise made or caused to be made by the Company to the Stockholders;

               (x) expenses of organizing, converting, modifying, merging,
liquidating or dissolving the Company or of amending the Charter or the Bylaws;

               (xi) expenses of maintaining communications with Stockholders,
including the cost of preparation, printing, and mailing annual reports and
other Stockholder reports, proxy statements and other reports required by
governmental entities;

               (xii) audit, accounting and legal fees, and other fees for
professional services relating to the operations of the Company and the
Operating Partnership and all such fees incurred at the request, or on behalf
of, the Independent Directors or any committee of the Board of Directors;

               (xiii) out-of-pocket expenses of maintaining communications with
Shareholders, including the cost of preparation, printing, and mailing annual
reports and other Shareholder reports, proxy statements and other reports
required by governmental entities;

                                       18
<PAGE>

               (xiv) out-of-pocket costs for the Company and the Operating
Partnership to comply with all applicable laws, regulation and ordinances; and

               (xv) all other out-of-pocket costs necessary for the operation
of the Company and the Operating Partnership and its Real Estate Assets incurred
by the Advisor in performing its duties hereunder. The Company shall also
reimburse the Advisor or Affiliates of the Advisor for all direct and indirect
costs and expenses incurred on behalf of the Company prior to the execution of
this Agreement. In the event the Company does not raise $19,000,000 in its
Offering, the Advisor will not be reimbursed for Organizational and Offering
Expenses. The total of all Acquisition Fees and Acquisition Expenses paid by the
Company in connection with the purchase of a Real Estate Asset by the Company
shall be reasonable, and shall in no event exceed an amount equal to 6% of the
Contract Price, or in the case of a mortgage loan, 6% of the funds advanced;
provided, however, that a majority of the Directors (including the majority of
the Independent Directors) not otherwise interested in the transaction may
approve fees and expenses in excess of these limits if they determine the
transaction to be commercially competitive, fair and reasonable to the Company.

     (b)  Other Services. Should the Directors request that the Advisor or any
director, officer or employee thereof render services for the Company other than
set forth in Section 4, such services shall be separately compensated at such
rates and in such amounts as are agreed by the Advisor and a majority of the
Independent Directors, subject to the limitations contained in the Charter, and
shall not be deemed to be services pursuant to the terms of this Agreement.

     (c)  Timing of and Limitations on Reimbursements.

          (i) Expenses incurred by the Advisor on behalf of the Company and
payable pursuant to this Section 10 shall be reimbursed no less frequently than
monthly to the Advisor. The Advisor shall prepare a statement documenting the
expenses of the Company and the Operating Partnership during each quarter, and
shall deliver such statement to the Company within 45 days after the end of each
quarter. Subject to the Excess Expense Guidelines, the Company may advance funds
to the Advisor for expenses the Advisor anticipates will be incurred by the
Advisor within the current month and any such advances shall be deducted from
the amounts reimbursed by the Company to the Advisor.

          (ii) Notwithstanding anything else in this Section 10 to the contrary,
the expenses enumerated in this Section 10 shall not become reimbursable to the
Advisor unless and until the Company has raised $19,000,000 in the Offering.

          (iii) The Company shall not reimburse the Advisor at the end of any
fiscal quarter Operating Expenses that, in the four consecutive fiscal quarters
then ended (the "Expense Year") exceed (the "Excess Amount") the greater of 2%
of Average Invested Assets or 25% of Net Income (the "Excess Expense
Guidelines") for such year unless a majority of the Independent Directors
determines that such excess was justified, based on unusual and nonrecurring
factors which they deem sufficient. If a majority of the Independent Directors
does not approve such excess as being so justified, any Excess Amount paid to
the Advisor during a fiscal quarter shall be repaid to the Company. If a
majority of the Independent Directors

                                       19
<PAGE>

determines such excess was justified, then within 60 days after the end of any
fiscal quarter of the Company for which total reimbursed Operating Expenses for
the Expense Year exceed the Excess Expense Guidelines, the Advisor, at the
direction of the a majority of the Independent Directors, shall send to the
stockholders a written disclosure of such fact, together with an explanation of
the factors the a majority of the Independent Directors considered in
determining that such excess expenses were justified. The Company will ensure
that such determination will be reflected in the minutes of the meetings of the
Board of Directors. All figures used in the foregoing computation shall be
determined in accordance with GAAP.

     11.  Other Activities of the Advisor.

          (a)  General. The Advisor shall not render advice to other Persons
(including other REITs) nor manage other programs advised, sponsored or
organized by the Advisor or its Affiliates. The Advisor shall report to the
Board the existence of any condition or circumstance, existing or anticipated,
of which it has knowledge, which creates or could create a conflict of interest
between the Advisor's obligations to the Company and its obligations to or its
interest in any other partnership, corporation, firm, individual, trust or
association.

          (b)  Nothing contained herein shall limit or restrict the right of any
director, officer, employee, or stockholder of the Advisor or its Affiliates to
engage in any other business or to render services of any kind to any other
partnership, corporation, firm, individual, trust or association.

     12.  Relationship of Advisor and Company. The Company and the Advisor are
not partners or joint venturers with each other, and nothing in this Agreement
shall be construed to make them such partners or joint venturers or impose any
liability as such on either of them.

     13.  Representations and Warranties.

          (a)  Of the Company. To induce the Advisor to enter into this
Agreement, the Company hereby represents and warrants that:

               (i) The Company is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Maryland with all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to carry out the transactions contemplated by this
Agreement.

               (ii) The Company's execution, delivery and performance of this
Agreement has been duly authorized by the Board of Directors including a
majority of all Independent Directors of the Company. This Agreement constitutes
the valid and binding obligation of the Company, enforceable against the Company
in accordance with its terms. The Company's execution and delivery of this
Agreement and its fulfillment of and compliance with the respective terms hereof
do not and will not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, (iii) result in
the creation of any lien, security interest, charge or encumbrance upon the
assets of the Company pursuant to, (iv) give any third party the right to
modify, terminate or accelerate any obligation under, (v) result in a violation
of or (vi) require any authorization, consent, approval, exception or other
action by or notice to any court or administrative or governmental body pursuant
to, the Charter or Bylaws or

                                       20
<PAGE>

any law, statute, rule or regulation to which the Company is subject, or any
agreement, instrument, order, judgment or decree by which the Company is bound,
in any such case in a manner that would have a material adverse effect on the
ability of the Company to perform any of its obligations under this Agreement.

          (b)  Of the Advisor. To induce the Company to enter into this
Agreement, the Advisor represents and warrants that:

               (i) The Advisor is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of California
with all requisite corporate power and authority and all material licenses,
permits and authorizations necessary to carry out the transactions contemplated
by this Agreement.

               (ii) The Advisor's execution, delivery and performance of this
Agreement has been duly authorized by its general partner. This Agreement
constitutes a valid and binding obligation of the Advisor, enforceable against
the Advisor in accordance with its terms. The Advisor's execution and delivery
of this Agreement and its fulfillment of and compliance with the respective
terms hereof do not and will not (i) conflict with or result in a breach of the
terms, conditions or provisions of, (ii) constitute a default under, (iii)
result in the creation of any lien, security interest, charge or encumbrance
upon the Advisor's assets pursuant to, (iv) give any third party the right to
modify, terminate or accelerate any obligation under,

               (iii) result in a violation of or (vi) require any authorization,
consent, approval, exemption or other action by or notice to any court or
administrative or governmental body pursuant to, the Advisor's articles of
incorporation or bylaws, or any law, statute, rule or regulation to which the
Advisor is subject, or any agreement, instrument, order, judgment or decree by
which the Advisor is bound, in any such case in a manner that would have a
material adverse effect on the ability of the Advisor to perform any of its
obligations under this Agreement.

               (iv) The Advisor has received copies of the Charter, the Bylaws,
and the Registration Statement and of the Operating Partnership's limited
partnership agreement and is familiar with the terms thereof, including without
limitation the investment limitations included therein. The Advisor warrants
that it will use reasonable care to avoid any act or omission that would
conflict with the terms of the Charter, the Bylaws, the Registration Statement,
or the Operating Partnership's limited partnership agreement in the absence of
the express direction of a majority of the Independent Directors.

     14.  Term; Termination of Agreement. This Agreement shall continue in force
until the first anniversary of the date hereof, subject to an unlimited number
of successive one-year renewals upon mutual consent of the parties. The Company,
acting through the Board, will evaluate the performance of the Advisor annually
before renewing the Agreement, and each such renewal shall be for a term of no
more than one year.

     15.  Termination.

          (a)  Termination by Either Party. This Agreement may be terminated
upon 60 days written notice without cause or penalty, by either party (by a
majority of the Independent

                                       21
<PAGE>

Directors or a majority of the board of directors of the Advisor or its managing
member, as the case may be).

          (b)  Termination by the Advisor. This Agreement may be terminated
immediately by the Advisor in the event of (i) the bankruptcy of the Company or
commencement of any bankruptcy or similar insolvency proceedings of the Company,
or (ii) any material breach of this Agreement by the Company not cured by the
Company within 30 days after written notice thereof.

     16.  Payments to and Duties of Advisor upon Termination. Payments to the
Advisor pursuant to this Section 16 shall be subject to the Excess Expenses
Guidelines to the extent applicable.

          (a)  After the Termination Date, the Advisor shall not be entitled to
compensation for further services hereunder except it shall be entitled to
receive from the Company within 30 days after the effective date of such
termination the following:

               (i)  all unpaid reimbursable expenses and all earned but unpaid
fees payable to the Advisor prior to termination of this Agreement; and

               (ii) the Subordinated Performance Fee Due Upon Termination,
provided that no Subordinated Performance Fee Due Upon Termination will be paid
if the Company has paid or is obligated to pay the Subordinated Incentive Fee
Due Upon Listing.

          (b)  In the event this Agreement expires without the consent of the
Advisor, or is terminated for any reason other than by the Advisor pursuant to
Section 15, the Company shall, at the election of the Advisor or any of its
Affiliates and at any time (and from time to time) after the effective date of
such expiration or termination, purchase all or a portion of the partnership
interests held by the Advisor and its Affiliates in the Operating Partnership,
subject to Board approval and applicable law. The purchase price shall be paid
in cash or, at the election of the seller, Common Stock, and shall be payable
within 120 days after the Advisor or its Affiliates (as applicable) gives the
Company written notice of its desire to sell all or a portion of the partnership
interests of the Operating Partnership held by such Person to the Company. The
Company agrees to keep a sufficient number of authorized but unissued shares of
Common Stock available for issuance pursuant to this Section 16(b) and shall
issue shares of Common Stock as may be required hereunder. The purchase price of
the partnership interests in the Operating Partnership sold to the Company
pursuant to this Section 16(b) shall be (i) in the event the seller elects to
receive cash, the amount the seller would receive under a redemption of such
interests under the Operating Partnership Agreement assuming the Company paid
cash for such redemption, or (ii) in the event the seller elects to receive
Common Stock, the amount of Common Stock the seller would receive under a
redemption of such interests under the Operating Partnership Agreement assuming
the Company paid Common Stock for such redemption.

          (c)  The Advisor shall promptly upon termination:

                                       22
<PAGE>

               (i) pay over to the Company all money collected and held for the
account of the Company pursuant to this Agreement, after deducting any accrued
compensation and reimbursement for its expenses to which it is then entitled;

               (ii) deliver to the Board a full accounting, including a
statement showing all payments collected by it and a statement of all money held
by it, covering the period following the date of the last accounting furnished
to the Board;

               (iii) deliver to the Board all assets, including Real Estate
Assets, and documents of the Company then in the custody of the Advisor; and

               (iv) cooperate with the Company to provide an orderly management
transition.

     17.  Assignment to an Affiliate. This Agreement may be assigned by the
Advisor to an Affiliate with the approval of a majority of the Independent
Directors. The Advisor may assign any rights to receive fees or other payments
under this Agreement without obtaining the approval of the Directors. This
Agreement shall not be assigned by the Company without the consent of the
Advisor, except in the case of an assignment by the Company to a corporation or
other organization which is a successor to all of the assets, rights and
obligations of the Company, in which case such successor organization shall be
bound hereunder and by the terms of said assignment in the same manner as the
Company is bound by this Agreement.

     18.  Indemnification by the Company. The Company shall indemnify and hold
harmless the Advisor and its Affiliates, including their respective officers,
directors, partners and employees, from all liability, claims, damages or losses
arising in the performance of their duties hereunder, and related expenses,
including reasonable attorneys' fees, to the extent such liability, claims,
damages or losses and related expenses are not fully reimbursed by insurance,
subject to any limitations imposed by the laws of the State of Maryland or the
Charter. Notwithstanding the foregoing, the Advisor shall not be entitled to
indemnification or be held harmless pursuant to this Section 19 for any activity
which the Advisor shall be required to indemnify or hold harmless the Company
pursuant to Section 19. Any indemnification of the Advisor may be made only out
of the net assets of the Company, including insurance proceeds, and not from
Stockholders.

     19.  Indemnification by Advisor. The Advisor shall indemnify and hold
harmless the Company from contract or other liability, claims, damages, taxes or
losses and related expenses including attorneys' fees, to the extent that such
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor's bad faith,
fraud, willful misfeasance, misconduct, or reckless disregard of its duties, but
Advisor shall not be held responsible for any action of the Directors in
declining to follow any advice or recommendation given by the Advisor.

     20.  Advisor's Liability.

          (a)  Notwithstanding any other provisions of this Agreement, in no
event shall the Company make any claim against the Advisor, or its Affiliates,
on account of any good faith interpretation by Advisor of the provisions of this
Agreement (even if such interpretation is later

                                       23
<PAGE>

determined to be legally incorrect) or any alleged errors in judgment made in
good faith and in accordance with this Agreement in connection with the
operations of the Company hereunder by the Advisor or the performance of any
advisory or technical services provided by or arranged by the Advisor. The
provisions of this Section 20(a) shall not be deemed to release the Advisor from
liability for its gross negligence or reckless disregard of its duties.

          (b)  The Company shall not object to any expenditures made by the
Advisor in good faith in the course of its performance of its obligations under
this Agreement or in settlement of any claim arising out of the operation of the
Company unless such expenditure is specifically prohibited by this Agreement or
the Charter. The provisions of this Section 20(b) shall not be deemed to release
the Advisor from liability for its gross negligence or reckless disregard of its
duties.

          (c)  In no event will either party be liable for damages based on loss
of income, profit or savings or indirect, incidental, consequential, exemplary,
punitive or special damages of the other party or person, including third
parties, even if such party has been advised of the possibility of such damages
in advance, and all such damages are expressly disclaimed. In no event will the
Advisor's aggregate liability under this Agreement ever exceed the total amount
of fees it actually receives from the Company pursuant to Section 9.

     21.  Notices. Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is required by the Charter,
the Bylaws, or accepted by the party to whom it is given, and shall be given by
being delivered by hand or by overnight mail or other overnight delivery service
to the addresses set forth herein:

To the Board and to the Company:              Shopoff Properties Trust, Inc.
                                              8951 Research Drive
                                              Irvine, California  92618
                                              Attention:  William A. Shopoff

To the Advisor:                               Shopoff Advisors, L.P.
                                              8951 Research Drive
                                              Irvine, California  92618
                                              Attention:  William A. Shopoff

To the Operating Partnership                  Shopoff Partners, L.P.
                                              8951 Research Drive
                                              Irvine, California  92618
                                              Attention: William A. Shopoff

Either party may at any time give notice in writing to the other party of a
change in its address for the purposes of this Section 21.

     22.  Modification. This Agreement shall not be changed, modified,
terminated, or discharged, in whole or in part, except by an instrument in
writing signed by both parties hereto, or their respective successors or
assignees.

                                       24
<PAGE>

     23.  Severability. The provisions of this Agreement are independent of and
severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

     24.  Construction. The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of California.

     25.  Entire Agreement. This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof. The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof. This Agreement may not be modified or
amended other than by an agreement in writing.

     26.  Indulgences, Not Waivers. Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.

     27.  Gender. Words used herein regardless of the number and gender
specifically used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or neuter, as the
context requires.

     28.  Titles Not to Affect Interpretation. The titles of paragraphs and
subparagraphs contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

     29.  Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when the counterparts hereof, taken together, bear the signatures of all
of the parties reflected hereon as the signatories.

                                       25
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.

SHOPOFF PROPERTIES TRUST, INC.

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

SHOPOFF ADVISORS, L.P.

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

SHOPOFF PARTNERS, L.P.

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

                                       26Form of Redeemable Warrant - December 2001

    THE
      WARRANT REPRESENTED BY THIS CERTIFICATE AND THE SHARES ISSUABLE UPON EXERCISE
      HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (THE "ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY
      INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
      TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
      EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR (2) THE
      COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY,
      THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR TRANSFERRED
      IN
      ANY MANNER CONTEMPLATED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
      ACT OR APPLICABLE STATE SECURITIES LAWS.

    

    SYMBOLLON
      PHARMACEUTICALS, INC.

    

    Redeemable
      Warrant for the Purchase of Shares of Class A Common
      Stock,

    par
      value $.001 per share

    

    This
      Warrant Expires on December 29, 2011

    

    No.
      ___          
      ______
      Shares

    

    This
      is
      to verify that, FOR VALUE RECEIVED, ___________, with an address at
      ______________________, or its registered permitted
      assigns (hereinafter referred to as the "Holder")
      is
      entitled to purchase, subject to the terms and conditions hereof, from
Symbollon
      Pharmaceuticals, Inc.,
      a
      Delaware corporation (the "Company"),
      __________ (_______) shares of the Class A Common Stock of the Company, par
      value $.001 per share (the "Common
      Stock"),
      at
      any time from December 29, 2006 (the “Initial
      Date”)
      and
      ending (except as otherwise provided in paragraph 5(b) hereof) at 5:00 p.m.
      Eastern Standard Time on December 29, 2011 (the "Termination
      Date"),
      at an
      exercise price per share of $1.20, as the same may hereafter be adjusted in
      accordance with the terms hereof (as the same may be adjusted, the "Exercise
      Price").
      The
      number of shares of Common Stock purchasable upon exercise of this Warrant
      (the
      "Warrant")
      shall
      be subject to adjustment from time to time upon the occurrence of certain events
      as set forth below. The shares of Common Stock issuable or issued upon exercise
      of this Warrant, as adjusted from time to time, are sometimes referred to
      hereinafter as "Exercise
      Shares."

    

    This
      Warrant is one of the warrants (collectively, including any warrants issued
      upon
      the exercise or transfer of any such warrants in whole or in part, the
“Warrants”) issued pursuant to an offering (the “Offering”) by the Company of up
      to 937,500 Units, each consisting of four shares of Common Stock and three
      Warrants, pursuant to a Confidential Private Placement Memorandum, dated
      November 7, 2006, as it may be amended or supplemented. As used herein the
      term
“this Warrant” shall mean and include this Warrant and any Warrant or Warrants
      hereafter issued as a consequence of the exercise or transfer of this Warrant
      in
      whole or in part.

    

    
      
        1

      

      
        
        

        
          

        

      

      
        
        

      

    

    1. Exercise
      of Warrant; Issuance of Exercise Shares.

    

    (a) Exercise
      of Warrants.
      This
      Warrant may be exercised in whole at any time or in part from time to time
      on or
      after the Initial Date until and including the Termination Date, upon surrender
      of this Warrant on any Business Day, as hereinafter defined, to the Company
      at
      its principal office, presently located at the address of the Company set forth
      in Section 10 hereof (or such other principal office of the Company, if any,
      as
      shall theretofore have been designated by the Company by written notice to
      the
      Holder), together with: (i) a completed and duly executed Notice of Warrant
      Exercise in the form set forth in Exhibit
      A
      hereto
      and made a part hereof (an "Exercise
      Notice")
      and
      (ii) payment in full of the Exercise Price for the number of Exercise Shares
      set
      forth in the Exercise Notice, in lawful money of the United States of America,
      by certified check or bank cashier's check made payable to the order of the
      Company, or by wire transfer of immediately available funds to an account
      designated by the Company. For purposes of this Warrant, the term "Business
      Day"
      shall
      be understood to mean any day upon which commercial banks in Middlesex County,
      Massachusetts are not required or authorized by law to be closed. Upon such
      surrender of this Warrant and related Exercise Notice and payment of the
      Exercise Price as aforesaid, the Company shall issue and cause to be delivered
      with all reasonable dispatch to or upon the written order of the Holder and
      in
      such name or names as the Holder may designate, a certificate or certificates
      for the number of full shares of Common Stock comprising the applicable number
      of Exercise Shares so purchased upon the exercise of this Warrant. Such
      certificate or certificates shall be deemed to have been issued, and any person
      so designated to be named therein shall be deemed to have become a holder of
      record of the Exercise Shares represented thereby, as of the date of surrender
      of this Warrant (accompanied by the related Exercise Notice) and payment in
      full
      of the Exercise Price, as aforesaid, notwithstanding that the certificates
      representing such Exercise Shares shall not actually have been delivered or
      that
      the transfer shall not have been reflected on the stock transfer books of the
      Company. Upon any partial exercise of this Warrant, the Company shall issue
      to
      the Holder a new Warrant in respect of the Exercise Shares as to which this
      Warrant has not been exercised. This Warrant and all rights hereunder shall
      expire on the Termination Date and shall be wholly null and void to the extent
      this Warrant is not exercised prior to 5:00 p.m. Eastern Standard Time on the
      Termination Date.

    

    (b) Exercise
      Shares Fully Paid and Non-Assessable.
      The
      Company agrees and covenants that all Exercise Shares issuable upon the due
      exercise of this Warrant will, upon issuance in accordance with the terms
      hereof, be duly authorized, validly issued, fully paid and non-assessable and
      free and clear of all taxes with respect to the issuance thereof (other than
      taxes which, pursuant to Section 2 hereof, the Company shall not be obligated
      to
      pay) and any liens, charges and security interests created by the
      Company.

    

    (c) Reservation
      of Exercise Shares.
      The
      Company agrees and covenants that at all times prior to the Termination Date
      it
      will have authorized, and hold in reserve, a number of authorized but unissued
      shares of Common Stock as shall from time to time be sufficient to permit the
      issuance of all Exercise Shares issuable upon the full exercise of this
      Warrant.

    

    
      
        2

      

      
        
        

        
          

        

      

      
        
        

      

    

    2. Payment
      of Taxes.
      The
      Company will pay all documentary stamp taxes, if any, attributable to the
      initial issuance of Exercise Shares upon the exercise of this Warrant;
provided,
      however,
      that
      the Company shall not be required to pay any tax which may be payable in respect
      of any transfer involved in the issuance of this Warrant or in respect of any
      certificates for Exercise Shares issued pursuant hereto in a name other than
      that of the Holder upon the exercise of this Warrant, and the Company shall
      not
      be required to issue or deliver such certificates unless or until the person
      or
      persons requesting the issuance thereof shall have paid to the Company the
      amount of such tax or shall have established to the satisfaction of the Company
      that such tax has been paid or is not required to be paid.

    

    3. Limited
      Rights of Holder.
      The
      Holder shall not, by virtue of anything contained in this Warrant or otherwise
      (except upon exercise of this Warrant, with respect to the Exercise Shares
      purchased thereby), be entitled to any right whatsoever, either in law or
      equity, of a stockholder of the Company, including without limitation, the
      right
      to receive dividends or to vote or to consent or to receive notice as a
      stockholder in respect of meetings of stockholders or the election of directors
      of the Company or any other matter.

    

    4. Registration
      of Transfers and Exchanges.
      This
      Warrant shall be transferable, subject to the provisions of Section 8 hereof,
      upon the books of the Company to be maintained by it for that purpose, upon
      surrender of this Warrant to the Company at its principal office accompanied
      by
      a written instrument or instruments of transfer in the form of Exhibit
      B
      hereto
      or in such other form as may be satisfactory to the Company and duly executed
      by
      the Holder or by the duly appointed legal representative thereof or by a duly
      authorized attorney and upon payment of any necessary transfer tax or other
      governmental charge imposed upon such transfer. In all cases of transfer by
      an
      attorney, the original power of attorney, duly approved, or an official copy
      thereof, duly certified, shall be deposited and remain with the Company. In
      case
      of transfer by executors, administrators, guardians or other legal
      representatives, duly authenticated evidence of their authority shall be
      produced, and may be required to be deposited and remain with the Company in
      its
      discretion. Upon any such registration of transfer, a new Warrant shall (subject
      to Section 2 hereof) be issued to the transferee named in such instrument of
      transfer, and the surrendered Warrant shall be cancelled by the
      Company.

    

    5. Adjustment
      of Warrant.
      The
      Exercise Price and the number and kind of securities issuable upon exercise
      of
      this Warrant shall be subject to adjustment from time to time as set forth
      below:

    

    (a) Dividends,
      Subdivisions or Combinations.
      If the
      Company shall at any time (i) pay a dividend or make a distribution on the
      Common Stock in shares of its Common Stock, (ii) subdivide its outstanding
      Common Stock, or (iii) combine its outstanding Common Stock into a smaller
      number of shares, the number of shares of Common Stock which may be purchased
      upon exercise of this Warrant thereafter shall be adjusted so that the number
      of
      shares thereafter purchasable upon exercise of this Warrant shall be equal
      to
      the number of shares which the Holder would have been entitled to receive after
      the happening of such event had this Warrant been exercised immediately prior
      to
      such event. Any adjustment made pursuant to this Paragraph 5(a) shall become
      effective retroactively to the relevant record date in the case of a dividend
      and shall become effective on the relevant effective date, in the case of any
      subdivision or combination. No adjustment hereunder shall be made in respect
      of
      any cash dividends.

    

    
      
        3

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b) Reclassifications,
      Reorganizations and other Transactions.
      In case
      of any reclassification, capital reorganization or other change of outstanding
      Common Stock (other than a subdivision or combination of the outstanding Common
      Stock and other than a change in the par value of the Common Stock), or in
      case
      of any consolidation or merger of the Company with or into another corporation
      (other than a merger with a subsidiary of the Company in which the Company
      is
      the continuing corporation and that does not result in any reclassification,
      capital reorganization or other change of outstanding Common Stock of the class
      issuable upon exercise of this Warrant), or in case of any sale, lease, transfer
      or conveyance to another corporation of the property and assets of the Company
      as an entirety or substantially as an entirety, the Company shall, as a
      condition precedent to such transaction, cause such successor or purchasing
      corporation, as the case may be (or, if the Company is not the surviving or
      acquiring entity, shall use its reasonable efforts to negotiate to cause such
      successor or acquiring corporation), to execute with the Holder an agreement
      granting the Holder the right thereafter, upon payment of the Exercise Price
      in
      effect immediately prior to such action, to receive upon exercise of this
      Warrant the kind and amount of shares and other securities and property which
      the Holder would have owned or would have been entitled to receive after the
      happening of such reclassification, capital reorganization, change,
      consolidation, merger, sale, lease, transfer or conveyance had this Warrant
      been
      exercised immediately prior to such action. Such agreement shall provide for
      adjustments in respect of such shares of stock and other securities and property
      which shall be as nearly equivalent as may be practicable to the adjustments
      provided for in this Section. As to any consolidation or merger, or any
      conveyance or transfer of the assets and properties of the Company substantially
      as an entirety, in which the Company shall not be the surviving or acquiring
      party and in connection with which the Company, despite its reasonable efforts
      to do so, is unable to negotiate the assumption of the obligations represented
      by this Warrant by the surviving or acquiring entity, or any transaction
      pursuant to which the Company shall have disposed of substantially all of its
      assets, or any transaction constituting the voluntary or involuntary
      dissolution, liquidation or winding up of the Company, the right to exercise
      this Warrant shall expire at the close of business on the later of the dates
      specified in the notice of such transaction delivered by the Company to the
      Holder pursuant to Section 6 hereof as the date on which any such consolidation,
      merger, conveyance, transfer, dissolution, liquidation or winding up is expected
      to become effective and the date as of which it is expected that holders of
      record of shares of Common Stock shall be entitled to exchange such shares
      for
      securities or other property, if any, deliverable upon the consolidation,
      merger, conveyance, transfer, dissolution, liquidation or winding up. If this
      Warrant has not been exercised in such cases on or prior to such aforesaid
      date,
      it shall, anything herein to the contrary notwithstanding, become void and
      all
      rights under this Warrant shall cease.

    

    
      
        4

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Corresponding
      Exercise Price Adjustments.
      After
      any adjustment of the number or kind of shares or other securities or property
      issuable upon exercise of this Warrant pursuant to the provisions of this
      Section 5, the Exercise Price shall also be adjusted so that the aggregate
      Exercise Price thereafter payable upon exercise of this Warrant shall be equal
      to the aggregate Exercise Price which would have been payable upon exercise
      of
      this Warrant immediately prior to such adjustment for the purchase of the number
      or kind of shares or other securities or other property issuable upon exercise
      of this Warrant.

    

    (d) Adjustment
      Limitations.
      No
      adjustment in the number of Exercise Shares issuable upon exercise of this
      Warrant, or of the Exercise Price, shall be required to be made unless such
      adjustment would require an increase or decrease of at least five percent (5%);
      provided,
      however,
      that
      any adjustments which by reason of this Paragraph are not required to be made
      shall be carried forward and taken into account in any subsequent adjustment.
      All calculations under this Section 5 shall be made to the nearest cent or
      one-one hundredth of a share, as the case may be, but in no event shall the
      Company be obligated to issue fractional shares upon exercise of this Warrant
      or
      to make any cash payment in lieu thereof, and any fractional shares issuable
      upon the exercise hereof shall be rounded down to the immediately prior whole
      share.

    

    (e) Form
      of Warrant After Adjustments.
      The
      form of this Warrant need not be changed because of any adjustments in the
      Exercise Price or the number or kind of the Exercise Shares, and this Warrant,
      and any warrant thereafter issued in substitution for this Warrant, may continue
      to express the same Exercise Price and number and kind of Exercise Shares as
      are
      stated in this Warrant, as initially issued.

    

    6. Rights
      of Holder.
      Without
      limiting anything contained elsewhere herein, in case at any time:

    

    (a) The
      Company shall declare any dividend upon its Common Stock payable otherwise
      than
      in Common Stock of the Company; or

    

    (b) The
      Company shall offer for subscription to all of the holders of its Common Stock
      any additional shares of stock of any class or any other securities convertible
      into shares of stock or any rights to subscribe thereto; or

    

    (c) There
      shall be any capital reorganization or reclassification of the capital stock
      of
      the Company, or a sale of all or substantially all of the assets of the Company,
      or a consolidation or merger of the Company with another corporation, other
      than
      a merger with a subsidiary in which merger the Company is the continuing
      corporation and which does not result in any reclassification or change of
      the
      then outstanding shares of Common Stock or other capital stock issuable upon
      exercise of this Warrant other than a change in par value (or from par value
      to
      no par value or from no par value to par value); or

    

    (d) 
      There
      shall be a voluntary or involuntary dissolution, liquidation or winding up
      of
      the Company;

    

    
      
        5

      

      
        
        

        
          

        

      

      
        
        

      

    

    then,
      in
      any one or more of said cases, the Company shall cause to be mailed to the
      Holder, at the earliest practicable time (and, in any event, not less than
      10
      days before any record date or other date set for definitive action), written
      notice of the date on which the books of the Company shall close or a record
      shall be taken for such dividend, subscription, reorganization,
      reclassification, consolidation, merger, dissolution, liquidation or winding
      up,
      as the case may be. Such notice shall also set forth such facts as shall
      indicate the effect of such action (to the extent such effect may be known
      at
      the date of such notice) on the Exercise Price and the kind and amount of the
      shares of stock and other securities and property deliverable upon exercise
      of
      this Warrant. Such notice shall also specify the date as of which the holders
      of
      the Common Stock of record shall participate in said dividend or subscription
      rights or shall be entitled to exchange their Common Stock for securities or
      other property deliverable upon such reorganization, reclassification,
      consolidation, merger, dissolution, liquidation or winding up, as the case
      may
      be. Notwithstanding anything in this Section 6 to the contrary, however, it
      is
      agreed that the failure of the Company to give any such notice of a corporate
      action shall not invalidate such corporate action.

    

    7. Registration
      Rights.
      Certain
      registration rights covering the Exercise Shares are set forth in Article IV
      of
      the Subscription Agreement dated December 29, 2006 between the Company and
      the
      Holder (the “Subscription Agreement”).

    

    8. Restrictions
      on Transferability - Restrictive Legend.
      Neither
      this Warrant nor any of the Exercise Shares (nor any interest herein or therein)
      shall be sold, assigned, pledged, encumbered, or otherwise transferred or
      disposed of except in accordance with the provisions of this
      Section:

    

    (a) Restrictions
      on Transfer; Indemnification.
      Neither
      this Warrant nor any Exercise Shares may be offered for sale or sold, or
      otherwise transferred or disposed of, in any transaction which would constitute
      a sale thereof within the meaning of the Securities Act of 1933, as amended
      (the
      "Act"),
      unless (i) such security has been registered for sale under the Act and
      registered or qualified under applicable state securities laws relating to
      the
      offer and sale of securities, or (ii) exemptions from the registration
      requirements of the Act and the registration or qualification requirements
      of
      all such state securities laws are available and the Company shall have received
      an opinion of counsel satisfactory to the Company that the proposed sale or
      other transfer or disposition of such securities may be effected without
      registration under the Act and would not result in any violation of any
      applicable state securities laws relating to the registration or qualification
      of securities for sale. The Holder agrees to indemnify and hold harmless the
      Company against any loss, damage, claim or liability (including, without
      limitation, any legal costs or expenses incurred by the Company) arising from
      the sale, transfer or other disposition of this Warrant or any Exercise Shares
      held by the Holder, or any interest therein, in violation of the provisions
      of
      this Section 8.

    

    (b) Restrictive
      Legends.
      Unless
      and until otherwise permitted by this Section 8 or Section 1.9 of the
      Subscription Agreement, this Warrant, each warrant issued to the Holder pursuant
      hereto or to any transferee or assignee of this Warrant, and each certificate
      representing Exercise Shares issued upon exercise of this Warrant or any warrant
      issued to the Holder pursuant hereto or to any transferee or assignee of this
      Warrant, or to any transferee of the person to whom any Exercise Shares are
      issued, shall bear a legend setting forth the requirements of Paragraph (a)
      of
      this Section 8, together with such other legend or legends as may otherwise
      be
      deemed necessary or appropriate by counsel to the Company.

    

    
      
        6

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Notice
      of Proposed Transfers.
      Prior
      to any transfer, offer to transfer or attempted transfer of this Warrant or
      any
      unregistered Exercise Shares, the holder of such security shall give written
      notice to the Company of such holder's intention to effect such transfer. Each
      such notice (i) shall describe the manner and circumstances of the proposed
      transfer in reasonable detail, and shall contain an undertaking by the person
      giving such notice to furnish such other information as may be required, to
      enable counsel to the Company to make the determinations referred to below,
      and
      (ii) shall designate the counsel for the person giving such notice, such counsel
      to be reasonably satisfactory to the Company. The person giving such notice
      shall submit a copy thereof to the counsel designated in such notice, and the
      following provisions shall apply:

    

    (i) If,
      in
      the opinion of counsel to the Company, the proposed transfer of this Warrant
      or
      Exercise Shares, as appropriate, may be effected without registration of such
      security under the Act or under any applicable state law, the Company shall,
      as
      promptly as practicable, so notify the holder of such security and such holder
      shall thereupon be entitled to transfer such security in accordance with the
      terms of the notice delivered by such holder to the Company. Each certificate
      evidencing the securities thus to be transferred (and each certificate
      evidencing any untransferred balance of the securities evidenced by such
      certificate) shall bear the restrictive legends referred to in Paragraph (b)
      of
      this Section 8, unless in the opinion of counsel to the Company such legends
      are
      not required in order to ensure compliance with the Act.

    

    (ii) If,
      in
      the opinion of counsel to the Company, the proposed transfer of securities
      may
      not be effected without registration under the Act or under any applicable
      state
      law, the Company shall, as promptly as practicable, so notify the holder
      thereof. However, except as referenced in Section 7 hereof, the Company shall
      have no obligation to register such securities under the Act.

    

    The
      holder of the securities giving the notice under this Paragraph (c) shall not
      be
      entitled to transfer any of the securities that are the subject to such notice
      until receipt of notice from the Company under subparagraph (i) of this
      Paragraph (c) or registration of such securities under the Act, and under any
      applicable state law, has become effective.

    

    (d) Removal
      of Legend.
      Pursuant to Section 1.9 of the Subscription Agreement, the Company shall, at
      the
      request of the holder of any Exercise Shares exchange the certificate
      representing such security for a certificate representing the same security
      not
      bearing the restrictive legends required by Paragraph (b) of this Section 8
      if,
      there is an effective registration statement covering such Exercise Shares
      or in
      the opinion of counsel to the Company, such restrictive legends are no longer
      necessary.

    

    
      
        7

      

      
        
        

        
          

        

      

      
        
        

      

    

    9. Redemption
      of the Warrants.

    

    (a) Redemption
      Right.
      On a
      date (the “Redemption Date”) not less than fifteen (15) days from the date
      notice (the “Notice of Redemption”) is given to the Holder, this Warrant may be
      redeemed, at the option of the Company, at a redemption price of $.01 per
      Warrant (the “Redemption Price”), in the event that during a period ending
      within sixty (60) days prior to the date on which the Notice of Redemption
      is
      given, (i) the last reported sales price of the Common Stock over twenty (20)
      successive trading days is equal to or greater than $5.00 (the “Target Price”)
      and (ii) the Class A Common Stock has an average trading volume in excess of
      twenty-five thousand (25,000) shares per day over the same twenty (20)
      successive trading days period of time, subject to adjustment as set forth
      in
      Paragraph 9(e) below. The date fixed for redemption of this Warrant is referred
      to herein as the “Redemption Date”.

    

    (b) Notice
      of Redemption.
      If the
      conditions set forth in Section 9(a) are met, and the Company desires to
      exercise its right to redeem this Warrant, the Company shall mail the Notice
      of
      Redemption to the Holder, first class, postage prepaid, at his address set
      forth
      on the first page hereof (or such other address of the Holder, if any, as shall
      theretofore have been designated by the Holder by written notice to the
      Company). Any notice mailed in the manner provided herein shall be conclusively
      presumed to have been duly given on the date mailed by the Company whether
      or
      not the Holder receives such notice. The Notice of Redemption shall specify
      (i)
      the Redemption Price, (ii) the Redemption Date, (iii) the place where the
      Warrant certificate shall be delivered and the Redemption Price paid and (iv)
      that the right to exercise this Warrant shall terminate at 5:00 p.m. Eastern
      Standard Time on the Business Day immediately preceding the Redemption Date.
      An
      affidavit of the Company’s Secretary or Assistant Secretary that the Notice of
      Redemption has been mailed shall, in the absence of fraud, be prima facie
      evidence of the facts stated therein.

    

    (c) Right
      to Exercise Warrant.
      Any
      right to exercise this Warrant shall terminate at 5:00 p.m. Eastern Standard
      Time on the Business Day immediately preceding the Redemption Date. On and
      after
      the Redemption Date, the Holder shall have no further rights except to receive,
      upon surrender of this Warrant, the Redemption Price.

    

    
      
        8

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) Certificate
      Surrender; Payment of Redemption Price.
      From
      and after the Redemption Price, the Company shall at the place specified in
      the
      Notice of Redemption, upon presentation and surrender to the Company by or
      on
      behalf of the Holder thereof of the Warrant certificate, deliver or cause to
      be
      delivered to or upon the written order of the Holder a sum in cash equal to
      the
      Redemption Price of this Warrant. From and after the Redemption Date and upon
      the deposit or setting aside by the Company of a sum sufficient to redeem this
      Warrant, this Warrant shall expire and become void and all rights hereunder
      and
      under the Warrant certificate, except the right to receive payment of the
      Redemption Price, shall cease.

    

    (e) Target
      Price Adjustment.
      If the
      Exercise Price is adjusted pursuant to Section 5 hereof, then the Target Price
      shall be correspondingly adjusted so that it shall remain at the same multiply
      of the Exercise Price. 

    

    10. Notices.
      All
      notices required or permitted to be given hereunder shall be in writing and
      shall be deemed to have been (a) when received, if delivered in person; (b)
      when
      sent, if sent by electronically confirmed facsimile transmission; or (c) five
      Business (5) Days following the mailing thereof, if mailed by certified first
      class mail, postage prepaid, return receipt request, in any such case as to
      the
      following addresses or facsimile transmission numbers:

    

    If
      to the
      Company, to:

    

    Symbollon
      Pharmaceuticals, Inc.

    37
      Loring
      Drive

    Framingham,
      Massachusetts 01702

    Attention:
      Paul C. Desjourdy, President

    Telephone:
      (508) 620-7676

    Telecopier:
      (508) 620-7111

    

    If
      to the
      Holder, to the address and facsimile transmission number set forth on the first
      page hereof, or in either case to such other address as the party shall have
      furnished in accordance with the Paragraph 9(b) hereof.

    

    10. Supplements
      and Amendments.
      The
      Company may from time to time supplement or amend this Warrant without the
      approval of the Holder in order to cure any ambiguity or to correct or
      supplement any provision contained herein which may be defective or inconsistent
      with any other provision, or to make any other provisions in regard to matters
      or questions herein or arising hereunder which the Company may deem necessary
      or
      desirable and which shall not materially adversely affect the interests of
      the
      Holder hereunder. Otherwise this Warrant may be amended or any of its provisions
      waived only by a written consent or consents executed by the Company and Holders
      of a majority of the then outstanding unexercised Warrants. Any amendment or
      waiver shall be binding upon all existing and future Holders.

    

    11  Lost,
      Stolen or Mutilated Warrants.
      Upon
      receipt of evidence satisfactory to the Company of the loss, theft, destruction
      or mutilation of any Warrant (and upon surrender of any Warrant if mutilated),
      and upon reimbursement of the Company’s reasonable incidental expenses and
      indemnity reasonably satisfactory to the Company, the Company shall execute
      and
      deliver to the Holder thereof a new Warrant of like date, tenor and
      denomination.

    

    12  Successors
      and Assigns.
      This
      Warrant shall inure to the benefit of and be binding on the respective
      successors, permitted assigns and legal representatives of the Holder and the
      Company.

    

    13  Severability.
      If for
      any reason any provision or term of this Warrant is held to be invalid or
      unenforceable, all other valid provisions herein shall remain in full force
      and
      effect and all terms and provisions of this Warrant shall be deemed to be
      severable.

    

    
      
        9

      

      
        
        

        
          

        

      

      
        
        

      

    

    14  Governing
      Law.
      This
      Warrant shall be governed by and construed in accordance with the laws of The
      Commonwealth of Massachusetts without regard to its conflict of laws
      provisions.

    

    15  Headings.
      Section
      and Paragraph headings used herein are included herein for convenience of
      reference only and shall not affect the construction of this Warrant nor
      constitute a part of this Warrant for any other purpose.

    

    IN
      WITNESS WHEREOF,
      the
      Company has caused this Warrant to be duly executed as of the date and year
      first above written.

    

    

    SYMBOLLON
      PHARMACEUTICALS, INC.

    

    

    

    By:_____________________________________

    Paul
      C.
      Desjourdy, President

    

    
      
        
          

          10

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            -

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      A

    

    NOTICE
      OF WARRANT EXERCISE

    

    Pursuant
      to a Warrant issued by Symbollon Pharmaceuticals, Inc., a Delaware corporation
      (the "Company"),
      to
      the undersigned dated as of ___________, 2006, the undersigned hereby
      irrevocably elects to exercise its warrant to the extent of purchasing
      _______________ shares of Class A Common Stock (the "Exercise
      Shares")
      of the
      Company as provided for therein.

    

    The
      undersigned hereby represents and agrees that the Exercise Shares purchased
      pursuant hereto are being purchased for investment and not with a view to the
      distribution or resale thereof, and that the undersigned understands that said
      Exercise Shares have not been registered under the Securities Act of 1933,
      as
      amended.

    

    Payment
      of the full purchase price of the Exercise Shares is enclosed herewith, in
      the
      form of a check made payable to the Company, or has been wired, in the form
      of
      immediately available funds, to an account designated by the
      Company.

    

    The
      undersigned requests that a certificate for the Exercise Shares be issued in
      the
      name of:

    ______________________________

    ______________________________

    
      	 	 	
               

            

    

    (Please
      print name, address and social security number)

    

    and,
      if
      said number of shares shall not be all the number of shares of Common Stock
      purchasable hereunder, that a new Warrant certificate for the balance of the
      number of shares of Common Stock 

    purchasable
      under the Warrant be registered in the name of the undersigned and delivered
      to
      the

    address
      set forth under the undersigned's signature below.

    

    

    Name
      of
      Warrant holder (or registered assignee):
      ________________________________

    (Please
      Print)

    

    Address:________________________________________

    ________________________________________

    ________________________________________

    

    Signature:______________________________________ Date:____________________________

    

    Note:
      The
      above signature must correspond with the name as written upon the face of the
      Warrant in every particular, without alteration or enlargement or any change
      whatever unless this Warrant has been assigned on the records of the
      Company.

    

    
      
        
          

          11

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            -

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    EXHIBIT
      B

    

    

    ASSIGNMENT

    

    

    (To
      be
      signed only upon assignment of Warrant)

    

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto

    ______________________________________________________________________________

    

    ______________________________________________________________________________

    

    (Name
      and
      Address of Assignee Must be Printed or Typewritten)

    

    

    

    the
      within Warrant, hereby irrevocably constituting and appointing
      ____________________ Attorney to transfer said Warrant on the books of the
      Company, with full power of substitution in the premises.

    

    

    Dated:
      _______, ____ __________________________________        Signature
      of Registered Holder

    

    Notice: 
      The
      above signature must correspond with the name as written upon the face of the
      within Warrant certificate in every particular, without alteration or
      enlargement or any change whatever.

     

    12

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