Document:

Exhibit 4.2

STATEMENT
REGARDING RESTRICTIONS ON

TRANSFERABILITY OF SHARES OF COMMON
STOCK

(To
Appear on Stock Certificate or to Be Sent upon Request

and without Charge to Stockholders
Issued Shares without Certificates)

The
shares represented by this certificate are subject to restrictions on
Beneficial Ownership, Constructive Ownership and Transfer for the purpose of
the Corporation’s maintenance of its status as a Real Estate Investment Trust
under the Internal Revenue Code of 1986, as amended (the “Code”). Subject to
certain further restrictions and except as expressly provided in the
Corporation’s charter: (a) no Person may Beneficially Own or Constructively Own
shares of the Corporation’s Common Stock in excess of 9.8% (in value or number
of shares) of the outstanding shares of Common Stock of the Corporation unless
such Person is an Excepted Holder (in which case the Excepted Holder Limit for
such Excepted Holder shall be applicable); (b) no Person may Beneficially Own
or Constructively Own shares of Capital Stock of the Corporation in excess of
9.8% of the value of the total outstanding shares of Capital Stock of the
Corporation, unless such Person is an Excepted Holder (in which case the
Excepted Holder Limit for such Excepted Holder shall be applicable); (c) no
Person may Beneficially Own or Constructively Own Capital Stock that would
result in the Corporation being “closely held” under Section 856(h) of the Code
or otherwise cause the Corporation to fail to qualify as a REIT; and (d) other
than as provided in the Corporation’s charter, no Person may Transfer shares of
Capital Stock if such Transfer would result in the Capital Stock of the
Corporation being owned by fewer than 100 Persons. Any Person who Beneficially
Owns or Constructively Owns or attempts to Beneficially Own or Constructively
Own shares of Capital Stock that causes or will cause a Person to Beneficially
Own or Constructively Own shares of Capital Stock in excess or in violation of
the above limitations must immediately notify the Corporation. If any of the
restrictions on Transfer or ownership are violated, the shares of Capital Stock
represented hereby will be automatically transferred to a Trustee of a Trust
for the benefit of one or more Charitable Beneficiaries. In addition, upon the
occurrence of certain events, attempted Transfers in violation of the
restrictions described above may be void ab initio.

Until
the Common Stock is Listed, to purchase Common Stock, the purchaser must
represent to the Corporation: (i) that such purchaser (or, in the case of sales
to fiduciary accounts, that the beneficiary, fiduciary account or grantor or
donor who directly or indirectly supplies the funds to purchase the shares if
the grantor or donor is the fiduciary) has a minimum annual gross income of
$70,000 and a net worth (excluding home, furnishings and automobiles) of not
less than $70,000; (ii) that such purchaser (or, in the case of sales to
fiduciary accounts, that the beneficiary, fiduciary account or grantor or donor
who directly or indirectly supplies the funds to purchase the shares if the
grantor or donor is the fiduciary) has a net worth (excluding home, furnishings
and automobiles) of not less than $250,000; and/ or (iii) that the purchaser
(or, in the case of sales to fiduciary accounts, that the beneficiary,
fiduciary account or grantor or donor who directly or indirectly supplies the
funds to purchase the shares if the grantor or donor is the fiduciary) meets
the more stringent suitability standards of such person’s jurisdiction as set forth
in the Corporation’s Registration Statement (No. 333-139704) on Form S-11 as
such registration 

statement
has been amended or supplemented as of the date of such issuance. Until the
Common Stock is Listed, each transfer of shares of Common Stock shall comply
with the requirements regarding (i) minimum net worth or income and (ii)
minimum initial and subsequent cash investment amounts as set forth in the
Corporation’s Registration Statement (No. 333-139704) on Form S-11, as such
registration statement has been amended or supplemented as of the date of such
issuance or transfer or any lower applicable state requirements in effect as of
the date of the issuance or transfer.

All
capitalized terms in this legend have the meanings defined in the charter of the
Corporation, as the same may be amended from time to time, a copy of which,
including the restrictions on Transfer and ownership, will be furnished to each
holder of Capital Stock of the Corporation on request and without charge.

Note:
Instead of the foregoing legend, the certificate may state that the Corporation
will furnish to a stockholder on request and without charge a full statement
about certain restrictions on transferability.

 2Exhibit 4.5

ESCROW AGREEMENT

U.S. Bank National Association

633 West Fifth Street, 24th Floor

Los Angeles, CA 90071

Attn:
Claude Acoba, CCTS

	
  

  	
  Re:

  	
   

  	
  CORNERSTONE GROWTH AND INCOME REIT, INC.

  

 

Ladies
and Gentlemen:

Cornerstone
Growth and Income REIT, Inc., a Maryland corporation (the “Company”), will issue in a public offering
(the “Offering”) its common stock
(the “Stock”) pursuant to a
Registration Statement on Form S-11 (the “Registration
Statement”) filed by the Company with the Securities and Exchange
Commission (the “SEC”).  Pacific Cornerstone Capital, Incorporated, a
California corporation (the “Dealer Manager”),
will act as dealer manager for the Offering. The Company is entering into this
agreement with U.S. Bank National Association (the “Escrow Agent”) to set forth the terms on which you, as Escrow
Agent, will hold and disburse the proceeds from subscriptions from the purchase
of Stock in the Offering until such time as: (i) in the case of subscriptions
received from all persons not affiliated with the Company or its advisor,
Cornerstone Leveraged Realty Advisors, LLC (“Non-Affiliates”),
other than from Minnesota and New York Subscribers (as defined below) and
Pennsylvania Subscribers (as defined below), the Company has received
subscriptions for Stock resulting in total minimum capital raised of $1,000,000
(the “Required Capital”); (ii) in
the case of subscriptions received from residents of Minnesota and New York (“Minnesota and New York Subscribers”), the Company has
received subscriptions for Stock from Non-Affiliates resulting in total minimum
capital raised of $2,500,000 (“Minnesota and New York
Required Capital”) and (iii) in the case of subscriptions received
from residents of Pennsylvania (“Pennsylvania
Subscribers”), the Company has received subscriptions for Stock from
Non-Affiliates resulting in total minimum capital raised of $20,000,000 (the “Pennsylvania Required Capital”).

Based
upon your representation and warranty that you are, and at all times during the
term of this agreement will be, deemed a “bank” as that term is defined in
Section 3(a)(6) of the Securities Exchange Act of 1934, as amended, the Company
hereby appoints you as Escrow Agent for purposes of holding the proceeds from
the subscriptions for the Stock, on the terms and conditions hereinafter set
forth:

1.             Until such time as the Company has received
subscriptions for Stock resulting in total minimum capital raised equal to the
Required Capital and such funds are disbursed in accordance with paragraph 3
hereof, persons subscribing to purchase the Stock will be instructed by the
Dealer Manager or any soliciting dealers to remit the purchase price in the
form of checks payable to the order of, “U.S. BANK NATIONAL ASSOCIATION, AS
ESCROW AGENT FOR CORNERSTONE GROWTH AND INCOME REIT, INC.”  Any checks received made payable to a party
other than the Escrow Agent shall be returned to the Dealer Manager or
soliciting dealer, as applicable, who submitted the check.  By the end of the second business day 

after
receipt of any check from the Offering, the Dealer Manager will transmit, or
cause to be transmitted, to you: (a) an electronic file in a compatible format
containing the subscriber’s name, address, tax identification number or social
security number, number of shares purchased and purchase price remitted, (b) a
statement confirming the receipt from such subscriber of a Form W-9 (as defined
below), and (c) the check from such subscriber, for deposit by you into an
interest-bearing deposit account entitled “ESCROW ACCOUNT FOR THE BENEFIT OF
SUBSCRIBERS FOR COMMON STOCK OF CORNERSTONE GROWTH AND INCOME REIT, INC.” (the “Escrow Account”), which deposit shall occur
within one business day after you receive such materials.  Checks received from Minnesota and New York
Subscribers and Pennsylvania Subscribers (as identified as such by the Dealer
Manager) shall be accounted for separately in sub-accounts entitled “ESCROW
ACCOUNT FOR THE BENEFIT OF MINNESOTA AND NEW YORK SUBSCRIBERS FOR COMMON STOCK
OF CORNERSTONE GROWTH AND INCOME REIT, INC.” 
(the “Minnesota and New York Escrow Account”)
and “ESCROW ACCOUNT FOR THE BENEFIT OF PENNSYLVANIA SUBSCRIBERS FOR COMMON
STOCK OF CORNERSTONE GROWTH AND INCOME REIT, INC.” (the “Pennsylvania Escrow Account”) respectively,
until each of the Minnesota and New York Escrow Account and Pennsylvania Escrow
Account has closed pursuant to paragraph 3 hereof.

2.             You agree to promptly process for collection
the checks upon deposit into the Escrow Account, the Minnesota and New York
Escrow Account or the Pennsylvania Escrow Account, as applicable. You will hold
the deposited funds in the Escrow Account, the Minnesota and New York Escrow
Account or the Pennsylvania Escrow Account, as applicable, until such funds are
disbursed in accordance with paragraph 3 hereof.  If any of the checks are returned to you for
nonpayment prior to receipt by you of (i) the Required Capital or, (ii) the
Minnesota and New York Required Capital with respect to subscriptions from
Minnesota and New York Subscribers, or (iii) the Pennsylvania Required Capital
with respect to subscriptions from Pennsylvania Subscribers, you shall promptly
notify the Dealer Manager and the Company in writing of such nonpayment, and
you are authorized to debit the Escrow Account, the Minnesota and New York
Escrow Account or the Pennsylvania Escrow Account, as applicable, in an amount
equal to such return payment (including any interest earned thereon), and to
bill the Company for the returned check fee set forth on Exhibit B.

3.
            (a) (i) Subject to the provisions of
subparagraphs 3(b) - 3(c) below, once collected funds in the Escrow Account are
an amount equal to or greater than the Required Capital, and upon receiving
written instructions from the Company for disbursement of the funds, you shall
disburse to the Company, by check or wire transfer, all funds then in the
Escrow Account, including any interest income earned on subscription proceeds
deposited in the Escrow Account.  For
purposes of this Agreement, the term “collected funds” shall mean all funds
received by the Escrow Agent that have cleared normal banking channels and are
in the form of cash.  Following such
disbursement, the Escrow Account shall close and thereafter you shall forward
directly to the Company any checks received by you from subscribers.

(ii) Regardless of any release of funds from the Escrow Account, the
Dealer Manager shall continue to forward, or cause to be forwarded, to you
checks received from Minnesota and New York Subscribers for deposit into the
Minnesota and New York Escrow Account until such time as the Company notifies
you in writing that total subscription proceeds from Non-Affiliates 

 2
 

(including
the amount then in the Minnesota and New York Escrow Account) equal or exceed
the Minnesota and New York Required Capital. 
Within five days of receiving such notice and instructions from the
Company for the disbursement of the funds, you shall disburse to the Company,
by check or wire transfer, all funds then in the Minnesota and New York Escrow
Account, including any interest income earned on subscription proceeds
deposited in the Minnesota and New York Escrow Account.  Following such disbursement, you shall close
the Minnesota and New York Escrow Account, and thereafter you shall forward
directly to the Company any checks received by you from Minnesota and New York
Subscribers.

(iii) Regardless of any release of funds from the Escrow Account or the
Minnesota and New York Escrow Account, the Dealer Manager shall continue to
forward, or cause to be forwarded, to you checks received from Pennsylvania
Subscribers to you for deposit into the Pennsylvania Escrow Account until such
time as the Company notifies you in writing that total subscription proceeds
from Non-Affiliates (including the amount then in the Pennsylvania Escrow
Account) equal or exceed the Pennsylvania Required Capital. Within five days of
receiving such notice and instructions from the Company for the disbursement of
the funds, you shall disburse to the Company, by check or wire transfer, all
funds then in the Pennsylvania Escrow Account, including any interest income
earned on subscription proceeds deposited in the Pennsylvania Escrow
Account.  Following such disbursement,
you shall close the Pennsylvania Escrow Account, and thereafter you shall forward
directly to the Company any checks received by you from Pennsylvania
Subscribers.

 (b)          (i) The “Expiration Date”
shall be the date that is exactly one year after the SEC grants an effective
order relating to the Registration Statement under Section 8(a) of the
Securities Act of 1933, as amended.  The
Company shall notify you of  the
Expiration Date as soon as possible after it is determined.

(ii) If, at the close of business on the date that is 30 business days
prior to the Expiration Date, you are not in receipt of evidence of
subscriptions and checks for the purchase of Stock providing for total purchase
proceeds from Non-Affiliates that equal or exceed the Required Capital, you
shall promptly so notify the Company and the Dealer Manager. Within one business
day thereafter, the Dealer Manager shall transmit, or cause to be transmitted,
to you an executed IRS Form W-9 (or IRS Form W-8, if applicable), which may be
a substitute executed Form W-9 as contained in the subscription agreement
provided such substitute form is in conformity with all applicable IRS
regulations, (a “Form W-9”) for
each subscriber (unless a Form W-9 for such subscriber has previously been
transmitted to you by the Dealer Manager).

(iii) If, at the close of business on the date that is 6 business days
prior to the Expiration Date, you are not in receipt of evidence of
subscriptions and checks for the purchase of Stock providing for total purchase
proceeds from Non-Affiliates that equal or exceed the Required Capital, you
shall promptly so notify the Company and the Dealer Manager. Within one
business day thereafter, the Dealer Manager shall transmit to you instructions
for allocating among the subscribers any interest income earned on the
subscription proceeds, which amount shall be calculated by the Dealer Manager
in accordance with paragraph 8.

(iv) If, at the close of business on the Expiration Date, you are not
in receipt of evidence of subscriptions accepted on or before such date and
checks dated not later than that date for the 

 3
 

purchase
of Stock providing for total purchase proceeds from Non-Affiliates that equal
or exceed the Required Capital, you shall promptly so notify the Company and
the Dealer Manager.  Promptly following
the Expiration Date, and in any event no later than the next business day after
the Expiration Date, you shall return directly to each subscriber by your check
the collected funds deposited in the Escrow Account, the Minnesota and New York
Escrow Account and the Pennsylvania Escrow Account on behalf of such subscriber
(unless earlier disbursed in accordance with paragraph 3(c) or 3(e) below), or
shall return the checks delivered to you if such checks have not been processed
for collection prior to such time, together with interest in the amounts
instructed by the Dealer Manager pursuant to paragraph 3(b)(iii) for each
subscriber at the address given to you by the Dealer Manager.  In the event a Form W-9 (or IRS Form W-8, if
applicable)  pertaining to
any subscriber has not been received by you from the Dealer Manager, you shall
remit an amount to such subscriber in accordance with the provisions hereof,
withholding twenty-eight percent (28%) of any interest income on subscription
proceeds attributable to such subscriber. 
However, you shall not be required to remit such payments until you have
collected funds represented by such payments.

(c)           Notwithstanding subparagraphs 3(a) and 3(b) above, if you are not in
receipt of evidence of subscriptions accepted on or before the close of
business on such date that is 120 days after the date the Company first accepts
a subscription from a Pennsylvania Subscriber (such period, the “Initial Escrow Period”), and checks dated
not later than that date, for the purchase of Stock providing for total
purchase proceeds from Non-Affiliates that equal or exceed the Pennsylvania
Required Capital, you shall promptly so notify the Company and the Dealer
Manager.  Within one business day
thereafter, the Dealer Manager shall transmit to you (i) instructions for
allocating among the Pennsylvania Subscribers, interest income earned on the
subscription proceeds in the Pennsylvania Escrow Account, which amounts shall
be calculated by the Dealer Manager in accordance with paragraph 8, and (ii) a
Form W-9 for each Pennsylvania Subscriber. 
The Company shall send to each Pennsylvania Subscriber by certified mail
within 10 calendar days after the end of the Initial Escrow Period a
notification in the form of Exhibit A. 
If, pursuant to such notification, a Pennsylvania Subscriber requests
the return of his or her subscription funds within 10 calendar days after
receipt of the notification (the “Request
Period”), you shall promptly refund directly to each Pennsylvania
Subscriber the collected funds deposited in the Pennsylvania Escrow Account on
behalf of such Pennsylvania Subscriber, or shall return the checks delivered,
but not yet processed for collection prior to such time, to the address
provided by the Dealer Manager or the Company, together with interest income in
the amounts instructed by the Dealer Manager. 
Notwithstanding the above, if you have not received a Form W-9 for
such Pennsylvania Subscriber from the Dealer Manager, you shall thereupon remit
an amount to such Pennsylvania Subscriber in accordance with the provisions
hereof, withholding twenty-eight percent (28%) of any interest income earned on
subscription proceeds attributable to such Pennsylvania Subscriber.  However, you shall not be required to remit
such payments until you have collected funds represented by such payments.

(d)           The subscription funds of Pennsylvania Subscribers who do not request
the return of their subscription funds within the Request Period shall remain
in the Pennsylvania Escrow Account for successive 120-day escrow periods (a “Successive Escrow Period”), each commencing automatically upon
the termination of the prior Successive Escrow Period, and the Company and you
shall follow the notification and payment procedure set forth in subparagraph
3(c) above with respect to the Initial Escrow Period for each Successive Escrow
Period until the occurrence 

 4
 

of
the earliest of (i) the close of business on the date that is exactly two years
after the SEC grants an effective order relating to the Registration Statement
under Section 8(a) of the Securities Act of 1933, as amended, (ii) the receipt and
acceptance by the Company of subscriptions for the purchase of Stock with total
purchase proceeds from Non-Affiliates that equal or exceed the Pennsylvania
Required Capital, and the disbursement of the Pennsylvania Escrow Account, on
the terms specified herein, or (iii) all funds held in the Pennsylvania Escrow
Account having been returned to the Pennsylvania Subscribers in accordance with
the provisions hereof.

(e)           If the Company rejects any subscription for which you have already
collected funds, you shall, upon the written request of the Company, promptly
issue a refund check to the rejected subscriber. If the Company rejects any
subscription for which you have not yet collected funds but have submitted the
subscriber’s check for collection, you shall promptly issue a check in the
amount of the subscriber’s check to the rejected subscriber after you have
cleared such funds. If you have not yet submitted a rejected subscriber’s check
for collection, you shall promptly remit the subscriber’s check directly to the
subscriber.

4.             You will provide access to electronic
statements of the account with respect to the Escrow Account, the Minnesota and
New York Escrow Account and the Pennsylvania Escrow Account in accordance with
your practice to the parties listed in paragraph 13.  Upon written request, a party may receive
paper statements in lieu of electronic statements.  You will offer the parties the option of
viewing statements (in PDF Format), account activity, investment holdings and
other reports via the internet using TrustNow Essentials (TNE).  Account information via Trust Online is for
review purposes only, but can be downloaded and/or printed. You will notify
parties at the beginning of each statement cycle that the statement is
available.  Upon the establishment of the
Escrow Account, the Minnesota and New York Escrow Account and the Pennsylvania
Escrow Account, you will send the parties a username, password and instructions
for accessing Trust Online.  Although precaution
has been taken to ensure information is transmitted safely and securely, the
Escrow Agent does not guarantee or warrant the privacy or security of
information on the Internet.

5.             All funds in the Escrow Account, the
Minnesota and New York Escrow Account and the Pennsylvania Escrow Account,
until disbursed to the Company in accordance with paragraph 3 hereof, are to be
held for the benefit of the shareholders of the Company and are not to (i) be
commingled with the monies or become an asset of the Company, or (ii) be
subject to attachment, levy or other encumbrance in any action by a third party
against the Company.

6.             Prior to the disbursement of funds deposited
in the Escrow Account, the Minnesota and New York Escrow Account or the
Pennsylvania Escrow Account, as applicable, in accordance with the provisions
of paragraph 3 hereof, you shall invest all of the funds or “Subscription
Payments” deposited in such accounts in accordance with the “Investment of
Funds” specified below, in compliance with SEC Rule 15c2-4 and you are further
authorized and you agree to reinvest all earnings and interest derived
therefrom in the Investment of Funds specified below.  In the absence of written direction from the
Company, funds deposited in the Escrow Account, the Minnesota and New York
Escrow Account and the Pennsylvania Escrow Account, and any earnings and
interest derived therefrom, shall be deposited in the U.S. Bank National
Association Money Market account. In the event that checks are returned to you
for nonpayment, you are authorized to debit the Escrow Account in accordance
with paragraph 2 hereof.

 5
 

“Investment of Funds” All deposits received
from Subscribers in connection with the Offering, which must be paid by check
or wire only (the “Subscription Payments”)
shall be cleared and held in a separate U.S. Bank FDIC — Insured Money Market
Account.  The Escrow Agent may invest the
subscription payments only in such accounts or investments as the Company may
specify by written notice.  The Company
may only specify investment in (i) bank accounts, (ii) bank money-market
accounts, (iii) short time certificates of deposit issued by a bank or (iv)
short term securities issued or guaranteed by the U.S. Government.

7.             All disbursements from the Escrow Account,
the Minnesota and New York Escrow Account and the Pennsylvania Escrow Account,
except for disbursements under the provisions of paragraph 3 hereof, shall be
made by you only pursuant to this paragraph 7. 
You are authorized to rely upon letter instructions that you receive
from the Company, and, solely with respect to calculations and allocations of
interest income among subscribers, from the Dealer Manager, whether or not such
instructions are correct, true or authentic; provided that, if in your opinion
such letter instructions are unclear, you are authorized to rely upon the legal
counsel to the Company in distributing such funds to the effect that
distribution of the funds is authorized by the letter instructions of the
Company and that distribution of the funds in that manner is authorized by and in
compliance with such letter. For the purposes of this Agreement, you shall not
accept any oral communications from any party. However, you shall not be
required to disburse any funds attributable to checks that have not been
collected, provided that you shall use your best efforts to promptly collect
such funds after receipt of disbursement instructions from the Company in
accordance with this paragraph, and shall disburse such funds in compliance
with the disbursement instructions from the Company.

8.             If the Offering terminates prior to receipt
of the Required Capital or one or more of the Pennsylvania Subscribers elects
to have his or her subscription returned in accordance with paragraph 3,
interest income earned on subscription proceeds deposited in the Escrow Account
(the “Escrow Income”), the
Minnesota and New York Escrow Account (the “Minnesota
and New York Escrow Income”) and the Pennsylvania Escrow Account
(the “Pennsylvania Escrow Income”),
as applicable, shall be calculated by the Dealer Manager in accordance with
this paragraph 8, and shall be remitted to subscribers by you in accordance
with paragraph 3 and without any deductions for escrow expenses. The Dealer
Manager shall calculate each subscriber’s pro rata portion of Escrow Income as
follows: the total amount of Escrow Income (or the Minnesota and New York
Escrow Income or the Pennsylvania Escrow Income, as applicable) shall be
multiplied by a fraction, (i) the numerator of which is determined by
multiplying the number of shares of Stock purchased by said subscriber times
the number of days said subscriber’s proceeds are held in the Escrow Account
(or Minnesota and New York Escrow Account or Pennsylvania Escrow Account, as
applicable) prior to the date of disbursement, and (ii) the denominator of
which is the total of the numerators for all such subscribers in such account.

9.             As compensation for serving as Escrow Agent
hereunder, you shall receive a fee, as set forth on Exhibit B.  Notwithstanding anything contained herein to
the contrary, you shall look to the Company for payment of the fees and
expenses, and you waive all right of offset against the funds held in escrow
pursuant to the terms of this Agreement.

 6
 

10.           In performing any of your duties hereunder, you shall not incur any
liability to anyone for any damages, losses, or expenses, except for your
willful misconduct, breach of trust, or gross negligence. Accordingly, you
shall not incur any such liability with respect to any action taken or omitted
(a) in good faith upon advice of your counsel given with respect to any
questions relating to your duties and responsibilities under this Agreement, or
(b) in reliance upon any instrument, including any written instrument or
instruction provided for in this Agreement, not only as to its due execution
and validity and effectiveness of its provisions but also as to the truth and
accuracy of information contained therein, which you shall in good faith
believe to be genuine, to have been signed or presented by a proper person or
persons and to conform to the provisions of this Agreement.

11.           The Company hereby agrees to indemnify and hold you harmless against
any and all losses, claims, damages, liabilities and expenses, including
reasonable attorneys’ fees and disbursements, that may be imposed on you or
incurred by you in connection with your acceptance of appointment as the Escrow
Agent hereunder, or the performance of your duties hereunder, including any
litigation arising from this Agreement or involving the subject matter hereof,
except where such losses, claims, damages, liabilities and expenses result from
your willful misconduct, breach of trust or gross negligence.

12.           In the event of a dispute between the parties hereto sufficient in your
discretion to justify doing so, you shall be entitled to tender into the
registry or custody of any court of competent jurisdiction all money or
property in your hands under this Agreement, together with such legal pleadings
as you deem appropriate, and thereupon be discharged from all further duties and
liabilities under this Agreement.  In the
event of any uncertainty as to your duties hereunder, you may refuse to act
under the provisions of this Agreement pending order of a court of competent
jurisdiction and you shall have no liability to the Company or to any other
person as a result of such action.  Any
such legal action may be brought in such court as you shall determine to have
jurisdiction thereof.  The filing of any
such legal proceedings shall not deprive you of your compensation earned prior
to such filing.

13.           All notices hereunder shall be made in writing. Any such notices shall
be given by mailing with postage paid and certified or registered or by
personal delivery or by telegraphing or faxing the same (transmission costs
prepaid) to the respective party at the address listed below, and five (5)
business days following the date of such mailing or the actual date of such
personal delivery, telegraphing or faxing shall be the date of the giving of
such notice.

If
to you:

U.S. Bank National Association

633 West Fifth Street, 24th Floor

Los Angeles, CA 90071

Attn: Claude Acoba, CCTS

Telephone: (213) 615-6001

Fax: (213) 615-6199

E-mail:
claude.acoba@usbank.com

 7
 

If
to the Company:

Cornerstone Growth and Income REIT, Inc.

1920 Main Street, Suite 400

Irvine, CA 
92614

Attention: Sharon Kaiser

Telephone: (949) 263-4326

Fax: (949) 250-0592

Email:  skaiser@crefunds.com

with
Copies to:

DLA Piper US LLP

1200 Nineteenth Street, NW

Washington, DC 20036

Attention: 
Neil Miller, Esq.

Telephone: (202) 861-3860

Fax: (202) 689-8461

Email:  neil.miller@dlapiper.com

If
to the Dealer Manager:

Pacific Cornerstone Capital, Incorporated

1920 Main Street

Suite 400

Irvine, CA 
92614

Attention: Terry G. Roussel

Telephone: (949) 852-1007

Fax:
(949) 852-2729

Each
party hereto may, from time to time, change the address to which notices to it
are to be delivered or mailed hereunder by notice in accordance herewith to the
other parties.

14.           This Agreement shall be governed by the laws of the State of California
as to both interpretation and performance without regard to the conflict of
laws rules thereof.

15.
          The provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable only by the parties
hereto and their respective legal representatives, successors and assigns.

16.
          The Company and the Dealer Manager hereby
acknowledge that you are serving as Escrow Agent only for the limited purposes
herein set forth, and hereby agree that they will not represent or imply that
you, by serving as Escrow Agent hereunder or otherwise, have investigated the
desirability or advisability of investment in the Company or have approved,
endorsed or passed upon the merits of the Stock or the Company, nor shall they
use your name in 

 8
 

any
manner whatsoever in connection with the offer or sale of the Stock other than
by acknowledgment that you have agreed to serve as Escrow Agent for the limited
purposes herein set forth.

17.
          This Agreement and any amendment hereto may
be executed by the parties hereto in one or more counterparts, each of which
shall be deemed to be an original.

18.
          Except as otherwise required for subscription
funds received from Minnesota and New York Subscribers and Pennsylvania
Subscribers, in the event that you receive checks after the Required Capital
has been received and the proceeds of the Escrow Account have been distributed
to the Company, you are hereby authorized to deposit such checks within one
business day to any deposit account as directed by the Company. The application
of such funds into a deposit account or forwarding such funds directly to the
Company, in either case as directed by the Company, shall be a full acquittance
to you and you shall not be responsible for the application of such funds
thereafter.

19.
          You shall be bound only by the terms of this
Agreement and shall not be bound by or incur any liability with respect to any
other agreements or understandings between any other parties, whether or not
you have knowledge of any such agreements or understandings.

20.
          The indemnification provisions set forth
herein shall survive the termination of this Agreement.

21.
          Unless otherwise provided in this Agreement,
final termination of this Agreement shall occur on the date that all funds held
in the Escrow Account, Minnesota and New York Escrow Account and the
Pennsylvania Escrow Account are distributed either (a) to the Company or to
subscribers pursuant to paragraph 3 hereof or (b) to a successor escrow agent
upon written instructions from the Company.

22.
          You have no responsibility for accepting,
rejecting or approving subscriptions.

23.
          This Agreement shall not be modified,
revoked, released or terminated unless reduced to writing and signed by all
parties hereto, subject to the following paragraph.

If,
at any time, any attempt is made to modify this Agreement in a manner that
would increase your duties and responsibilities or to modify this Agreement in
any manner that you deem undesirable, or at any other time, you may resign by
providing written notice to the Company, which resignation shall be effective
upon the earlier of (a) the acceptance by a successor escrow agent appointed by
the Company, or (b) 30 days after such written notice has been given, and your
only remaining obligation shall be to perform your duties hereunder in
accordance with the terms of the Agreement.

24.
          You may resign at any time from your
obligations under this Escrow Agreement by providing written notice to the
Company. Such resignation shall be effective on the date specified in such
notice, which shall be not less than 30 days after such written notice has been
given. You shall have no responsibility for the appointment of a successor
escrow agent.

 9
 

25.           You may be removed by the Company by written notice to you effective on
the date specified in such written notice. Your removal as the Escrow Agent
shall not deprive you of compensation earned prior to such removal.

26.           In the event of your removal or resignation as the Escrow Agent, the
Company shall appoint a successor which, upon its acceptance in writing of such
appointment delivered to you and the Company, shall be vested with all the
rights, powers and duties of the Escrow Agent under this Agreement, and you
shall be released and discharged from all further liability in connection with
this Agreement.  If the Company fails to
appoint a successor Escrow Agent within 30 days after your removal or
resignation, you may do one of the following:

(i) take no further action until directed by
the Company; or

(ii)
tender into the registry or custody of any court of competent jurisdiction all
money or property in your hands under this Agreement, together with such legal
pleadings as you deem appropriate.

You
shall transfer, assign and deliver to your successor all of the property then
held by you under this Agreement.  You
may also transfer to the successor escrow agent copies of your records as they
relate to this Agreement as may be requested by the successor escrow agent,
except as to those records that you have or may assert a claim of
privilege.  The successor escrow agent
shall not be liable or responsible for anything done or omitted in the
administration of the escrow accounts pursuant to this Agreement prior to the
date it shall have become Escrow Agent, nor be required to audit or otherwise
inquire into or take any action concerning the acts of any retiring Escrow
Agent.

27.           The obligations of the parties hereto are conditioned upon receipt by
the Dealer Manager of approval from the National Association of Securities
Dealers (the “NASD”) of the Dealer Manager’s Application for Approval of Change
in Ownership, Control, or Business Operations made pursuant to NASD Rule 1017
(such approval, the “NASD Approval”). 
Prior to receipt by the Escrow Agent of written notice of the NASD
Approval, the Escrow Agent shall not be obligated to receive or deposit any
check related to the offering.

[signatures on following page]

 10
 

Agreed
to as of the
             day of
                                ,
2007.

	
  CORNERSTONE GROWTH AND INCOME REIT, INC.,

  	
   

  	
   

  
	
  a Maryland corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Terry G. Roussel

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PACIFIC CORNERSTONE CAPITAL, INCORPORATED,

  	
   

  	
   

  
	
  a Maryland corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Terry G. Roussel

  	
   

  	
   

  
	
  Title:

  	
  President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The terms and conditions contained above are hereby
  accepted and agreed to by:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  U.S. BANK NATIONAL ASSOCIATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:  Authorized Officer

  	
   

  	
   

  
							

 

 11

EXHIBIT A

Form of Notice to Pennsylvania Subscribers

You
have tendered a subscription to purchase shares of common stock of Cornerstone
Growth and Income REIT, Inc. (the “Company”). 
Your subscription is currently being held in escrow.  The guidelines of the Pennsylvania Securities
Commission do not permit the Company to accept subscriptions from Pennsylvania
residents until an aggregate of $20,000,000 of gross offering proceeds have
been received by the Company.  The
Pennsylvania guidelines provide that, until this minimum amount of offering
proceeds is received by the Company, every 120 days during the offering period
Pennsylvania Subscribers may request that their subscription be returned.

If
you wish to continue your subscription in escrow until the Pennsylvania minimum
subscription amount is received, nothing further is required.

If
you wish to terminate your subscription for the Company’s shares of common
stock and have your subscription returned please so indicate below, sign, date,
and return to the Escrow Agent, U.S. Bank National Association, 633 West Fifth
Street, 24th Floor, Los Angeles, CA 90071. Attn: Claude Acoba, CCTS

I
hereby terminate my prior subscription to purchase shares of common stock of
Cornerstone Growth and Income REIT, Inc. and request the return of my
subscription funds. I certify to Cornerstone Growth and Income REIT, Inc. that
I am a resident of Pennsylvania.

	
   

  	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  (please print)

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Please send the
  subscription refund to:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							

 

EXHIBIT B

U.S. Bank National Association

Escrow Agent Fee Schedule

	
  Acceptance Fee (Non-Refundable)

  	
   

  	
  $

  	
  1,500.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Annual administration fee for
  services as escrow agent

  	
   

  	
  $

  	
  4,000.00

  	
   

  

 

Applicable to all
securities transactions, disbursements, returned checks, and 1099s generated
for the Escrow Account.

	
  Incidental Expense

  	
   

  	
  10.0% of miscellaneous expenses

  

 

Applicable to all
miscellaneous expenses, including messenger services, overnight mail,
telephone, stationery, facsimile and postage expenses.

	
  Incidental Expense (includes legal and closing fees)

  	
   

  	
  At Cost

  

 

Fees
shall be deemed fully earned when paid and shall not be subject to offset or
allocation in the event that Escrow Agent acts for less than a full year.

All
fees due to the Escrow Agent will be paid by Cornerstone Growth and Income
REIT, Inc. in accordance with the provisions of Section 9 of the Escrow
Agreement.

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