Form of Strategic Alliance Agreement

STRATEGIC ALLIANCE AGREEMENT


This Strategic Alliance Agreement (this "Agreement") is entered into as of the ____ day of _____________, 2004 (the "Effective Date"), by and between Bull Street Real Estate Investment Trust, Inc., a Maryland corporation ("Bull Street") and Consolidated Mortgage, Inc., a Nevada corporation ("Consolidated Mortgage").


WHEREAS, Consolidated Mortgage is regularly and actively engaged in the business of originating and servicing mortgage loans for the acquisition of, development of, and construction on real estate (collectively, "Mortgage Loans");


WHEREAS, Bull Street is a real estate investment trust that intends to invest in, among other things, Mortgage Loans; and


WHEREAS, Consolidated Mortgage and Bull Street wish to enter into a strategic alliance regarding the origination and servicing of Mortgage Loans by Consolidated Mortgage and the purchasing of Mortgage Loans by Bull Street.


NOW, THEREFORE, in consideration of the foregoing and of the mutual premises hereinafter expressed, the parties hereto do mutually agree as follows:


ARTICLE I. SCOPE OF STRATEGIC ALLIANCE.


A. Consolidated Mortgage shall continue to originate Mortgage Loans in accordance with its historical practices. Commencing as of ________, 2004, on a monthly basis, Bull Street shall provide Consolidated Mortgage with one or more pricing sheets ("Pricing Sheets") in which Bull Street shall provide loan parameters (including loan to value ratio, credit scores and other criteria) applicable to Mortgage Loans and the applicable pricing for such Mortgage Loans. Consolidated Mortgage agrees and acknowledges that as to any and all Mortgage Loans originated by Consolidated Mortgage or its affiliates and serviced by Consolidated Mortgage that are within the parameters set forth in the applicable Pricing Sheets, Bull Street shall have a right of first refusal to purchase such Mortgage Loans as set forth herein.


B. On a regular basis (but no less frequently than monthly), Consolidated Mortgage shall send a written report (a "Mortgage Loan Report") to Bull Street setting forth in reasonable detail all Mortgage Loans within the parameters set forth in the applicable Pricing Sheets. No later than ___ days following its receipt of a Mortgage Loan Report (the "Initial Election Period"), Bull Street shall send written notice to Consolidated Mortgage specifying the Mortgage Loans set forth in the Mortgage Loan Report that Bull Street is interested in purchasing all or a portion thereof (a "Preliminary Purchase Notice"). The Preliminary Purchase Notice shall constitute an offer by Bull Street to purchase the Mortgage Loans set forth therein at the price set forth in the applicable Pricing Sheets and upon the terms set forth herein. If Bull Street fails to deliver a Preliminary Purchase Notice to Consolidated Mortgage prior to the expiration of the Initial Election Period, then Consolidated Mortgage may sell the Mortgage Loans set forth in the applicable Mortgage Loan Report to one or more third parties without regard to this Agreement.


C. No later than two Business Days after its receipt of a Preliminary Purchase Notice (the "Election Period"), Consolidated Mortgage shall elect to sell the Mortgage Loans described in the Preliminary Purchase Notice for the purchase price set forth in the applicable Pricing Sheets (a "Sale Election") or elect to offer the Mortgage Loans to Bull Street at a higher price than set forth in the applicable Pricing Sheets (a "Repricing Election"). Consolidated Mortgage shall make a Sale Election or a Repricing Election by delivery of written notice to Bull Street during the Election Period. If Consolidated Mortgage fails to deliver such written notice to Bull Street prior to the expiration of the Election Period, then Consolidated Mortgage shall be deemed to have made a Sale Election with regard to all of the Mortgage Loans set forth in the Preliminary Purchase Notice. For purposes hereof "Business Day" means any day other than Saturday or Sunday or other day on which national banks in Las Vegas, Nevada are required or permitted by applicable law to close.


D. Bull Street may, by delivery of written notice to Consolidated Mortgage on or before the expiration of two Business Days after receipt by Bull Street of the Repricing Election (the "Repricing Election Period"), elect to purchase all or any portion of the Mortgage Loans originally set forth in the Preliminary Purchase Notice at the price set forth in the Repricing Election. If Bull Street fails to deliver such written notice prior to the expiration of the Repricing Election Period, then Bull Street shall be deemed to have elected not to purchase the Mortgage Loans that are subject to such Repricing Election. As to any Mortgage Loans that are subject to a Repricing Election that Bull Street does not elect to purchase hereunder (collectively, "Market Mortgage Loans"), Consolidated Mortgage may, after expiration of the Repricing Election Period (or, if sooner, receipt of written notice from Bull Street that it shall not purchase such Market Mortgage Loans), market and sell such Market Mortgage Loans to one or more third parties at the price set forth in the applicable Repricing Election; provided, however, that if Consolidated Mortgage proposes to sell any Market Mortgage to any third party purchaser at a price that is less than the price set forth in the applicable Repricing Election (or upon terms more favorable than originally offered to Bull Street), it shall first offer such Market Mortgage Loan to Bull Street again at such reduced price or upon such more favorable terms (each a "Re-Offered Mortgage") by delivery of written notice to Bull Street (a "Re-Offer Notice"). Bull Street shall have two Business Days following its receipt of a Re-Offer Notice (the "Re-Offer Period") to elect to purchase one or more Re-Offered Mortgages by delivery of written notice to Consolidated Mortgage (a "Re-Offer Purchase Notice"). If Bull Street fails to deliver a Re-Offer Purchase Notice prior to the expiration of the Re-Offer Period, then Bull Street shall be deemed to have elected not to purchase such Re-Offered Mortgages as of the last day of the Re-Offer Period. As to any Re-Offered Mortgages that Bull Street does not elect to purchase hereunder, Consolidated Mortgage may, after expiration of the Re-Offer Period (or, if sooner, receipt of written notice from Bull Street that is shall not purchase such Re-Offered Mortgages) sell such Re-Offered Mortgages to one or more third party purchasers at the price set forth in the Re-Offer Notice; provided, that if Consolidated Mortgage proposes to sell any Re-Offered Mortgage to any third party purchaser at a price that is less than the price set forth in the Re-Offer Notice (or upon terms more favorable than originally offered to Bull Street), it shall offer such Re-Offered Mortgage to Bull Street again in accordance with the procedures set forth herein with regard to Re-Offered Mortgages.


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E. Consolidated Mortgage may freely sell, without regard to the provisions of this Agreement, (i) any Mortgage Loans that are not within the parameters set forth in the Pricing Sheets, and (ii) any Mortgage Loans that were set forth in a Mortgage Loan Report that Bull Street did not elect to purchase in a Preliminary Purchase Notice.


F. No later than the Business Day immediately preceding a Closing (as defined below), Consolidated Mortgage shall deliver to Bull Street those due diligence materials, reports and documents relating to the Mortgage Loans to be purchased at such Closing further described in Attachment "C" hereto (the "Specified Materials"). In addition, Consolidated Mortgage shall provide Bull Street with any additional documents and other information that Bull Street may reasonably request with respect to any Mortgage Loans to be purchased by Bull Street hereunder. It shall be a condition to the obligation of Bull Street to purchase any Mortgage Loan at a Closing that Consolidated Mortgage shall have timely provided to Bull Street all of the Specified Materials (and any other documents and other information reasonably requested by Bull Street).


G. Each closing of the purchase of Mortgage Loans by Bull Street hereunder (each a "Closing") shall take place at the principal offices of Bull Street, at the address specified in Article IX hereof, on a Business Day designated by Bull Street no later than seven days after Bull Street elects to purchase such Mortgage Loans. At the Closing, Consolidated Mortgage shall execute and deliver to Bull Street a purchase and sale agreement and, as applicable, an assignment of mortgage (in each case on forms agreed to by Bull Street and Consolidated Mortgage) and any and all additional documents and instruments required to convey good and marketable title to the Mortgage Loans to Bull Street free and clear of any liens, encumbrances or claims (and shall provide Bull Street with customary representations and warranties to such effect as well as adequate assurances that such Mortgage Loans satisfy the applicable parameters set forth in the applicable Pricing Sheets, are valid obligati ...