EXHIBIT 10.69


                JBAK CANTON REALTY, INC., as mortgagor
                                           (Borrower)


                                to


               THE CHASE MANHATTAN BANK, as mortgagee
                                           (Lender)


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

                          MORTGAGE AND
                        SECURITY AGREEMENT
                -----------------------------------



                   Dated:  As of December 30, 1996

                   Location:        J. Baker Corporate Facility
                                    555 Turnpike Street
                                    Canton, Massachusetts 02021

                                    County:          Norfolk

                   PREPARED BY AND UPON
                   RECORDATION RETURN TO:

                   MESSRS. THACHER PROFFITT & WOOD
                   Two World Trade Center
                   New York, New York  10048

                   Attention:       David S. Hall, Esq.

                   File No.:        86000-00376

                   Title No.:







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                  THIS   MORTGAGE  AND   SECURITY   AGREEMENT   (the   "Security
Instrument")  is made as of the  ____  day of  December,  1996,  by JBAK  CANTON
REALTY,  INC.,  a  Massachusetts  corporation,  having  its  principal  place of
business  at 555  Turnpike  Street,  Canton,  Massachusetts  02021 as  mortgagor
("Borrower") to THE CHASE MANHATTAN BANK, a New York banking corporation, having
an  address at 380  Madison  Avenue,  11th  Floor,  New York,  New York 10017 as
mortgagee ("Lender").

                           RECITALS:

                  Borrower by its promissory note of even date herewith given to
Lender is  indebted  to Lender in the  principal  sum of  FIFTEEN  MILLION  FIVE
HUNDRED THOUSAND AND 00/100 DOLLARS  ($15,500,000) in lawful money of the United
States  of  America  (the  note   together   with  all   extensions,   renewals,
modifications,  substitutions  and  amendments  thereof  shall  collectively  be
referred to as the "Note"), with interest from the date thereof at the rates set
forth in the Note,  principal and interest to be payable in accordance  with the
terms and conditions provided in the Note.

                  Borrower desires to secure the payment of the Debt (as defined
in Article 2) and the performance of all of its  obligations  under the Note and
the Other Obligations (as defined in Article ).


                                          Article 1 - GRANTS OF SECURITY

                  Section  1.1   PROPERTY   MORTGAGED.   Borrower   does  hereby
irrevocably mortgage,  grant, bargain, sell, pledge, assign,  warrant,  transfer
and convey to Lender,  and grant a security interest to Lender in, the following
property,  rights,  interests  and estates now owned,  or hereafter  acquired by
Borrower (collectively, the "Property"):

                           (a)      Land.  The real property described in 
                  Exhibit A attached hereto
                  and made a part hereof (the "Land");

                           (b) Additional  Land. All additional  lands,  estates
                  and development  rights hereafter acquired by Borrower for use
                  in connection  with the Land and the  development  of the Land
                  and all additional  lands and estates  therein which may, from
                  time  to  time,  by  supplemental  mortgage  or  otherwise  be
                  expressly   made   subject  to  the  lien  of  this   Security
                  Instrument;

                           (c)      Improvements.  The buildings, structures, 
                  fixtures, additions, enlargements, extensions, modifications,
                  repairs, replacements and improvements now or hereafter
                  erected or located on the Land (the "Improvements");

                           (d) Easements.  All easements,  rights-of-way or use,
                  rights,  strips  and  gores of land,  streets,  ways,  alleys,
                  passages, sewer rights, water, water courses, water rights and
                  powers,  air rights and development  rights,  and all estates,
                  rights, titles, interests, privileges,  liberties, servitudes,
                  tenements,  hereditaments  and  appurtenances  of  any  nature
                  whatsoever, in any way now or hereafter belonging,

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                  relating or  pertaining to the Land and the  Improvements  and
                  the reversion and reversions,  remainder and  remainders,  and
                  all  land  lying  in the bed of any  street,  road or  avenue,
                  opened or proposed,  in front of or adjoining the Land, to the
                  center  line  thereof  and all the  estates,  rights,  titles,
                  interests,  dower and rights of dower,  curtesy  and rights of
                  curtesy,  property,  possession,  claim and demand whatsoever,
                  both at law and in equity,  of Borrower of, in and to the Land
                  and the Improvements  and every part and parcel thereof,  with
                  the appurtenances thereto;

                           (e) Fixtures and Personal  Property.  All  machinery,
                  equipment,  fixtures  (including,  but  not  limited  to,  all
                  heating, air conditioning,  plumbing, lighting, communications
                  and elevator  fixtures)  and other  property of every kind and
                  nature whatsoever owned by Borrower,  or in which Borrower has
                  or shall have an interest,  now or hereafter  located upon the
                  Land and the Improvements,  or appurtenant thereto, and usable
                  in  connection  with  the  present  or  future  operation  and
                  occupancy  of the Land and the  Improvements  and all building
                  equipment,  materials  and  supplies of any nature  whatsoever
                  owned by Borrower,  or in which  Borrower has or shall have an
                  interest,  now or  hereafter  located  upon  the  Land and the
                  Improvements,  or appurtenant thereto, or usable in connection
                  with the present or future operation and occupancy of the Land
                  and the Improvements (collectively,  the "Personal Property"),
                  and the right, title and interest of Borrower in and to any of
                  the  Personal  Property  which may be subject to any  security
                  interests,  as  defined in the  Uniform  Commercial  Code,  as
                  adopted  and  enacted by the state or states  where any of the
                  Property is located (the "Uniform Commercial Code"),  superior
                  in  lien  to the  lien of  this  Security  Instrument  and all
                  proceeds and products of the above;

                           (f) Leases and Rents. All leases, subleases and other
                  agreements  affecting  the use,  enjoyment or occupancy of the
                  Land and/or the Improvements  heretofore or hereafter  entered
                  into and all extensions, amendments and modifications thereto,
                  whether  before or after the filing by or against  Borrower of
                  any petition for relief under 11 U.S.C. ss.101 et seq., as the
                  same may be amended from time to time (the "Bankruptcy  Code")
                  (the "Leases") and all right,  title and interest of Borrower,
                  its successors and assigns therein and thereunder,  including,
                  without limitation, cash or securities deposited thereunder to
                  secure the  performance  by the  lessees of their  obligations
                  thereunder and all rents,  additional rents, revenues,  issues
                  and  profits  (including  all  oil and  gas or  other  mineral
                  royalties  and  bonuses)  from the  Land and the  Improvements
                  whether  paid or  accruing  before or after  the  filing by or
                  against   Borrower  of  any  petition  for  relief  under  the
                  Bankruptcy  Code (the  "Rents") and all proceeds from the sale
                  or other  disposition  of the  Leases and the right to receive
                  and apply the Rents to the payment of the Debt;

                           (g)      Condemnation Awards.  All awards or 
                  payments, including interest thereon, which may heretofore
                  and hereafter be made with respect to the Property, whether 
                  from the exercise of the right of eminent domain (including 
                  but not limited to any transfer made in lieu of or in 
                  anticipation of the exercise of the

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                  right), or for a change of grade, or for any other injury to 
                  or decrease in the value of the Property;

                           (h)      Insurance Proceeds.  All proceeds of and 
                  any unearned premiums on any insurance policies covering the 
                  Property, including, without limitation, the
                  right to receive and apply the proceeds of any insurance, 
                  judgments, or settlements made in lieu thereof, for damage to
                  the Property;

                           (i)      Tax Certiorari.  All refunds, rebates or 
                  credits in connection with a reduction in real estate taxes 
                  and assessments charged against the Property as
                  a result of tax certiorari or any applications or proceedings
                  for reduction;

                           (j)      Conversion.  All proceeds of the conversion,
                  voluntary or involuntary, of any of the foregoing including, 
                  without limitation, proceeds of insurance and condemnation
                  awards, into cash or liquidation claims;

                           (k)      Rights.  The right, in the name and on 
                  behalf of Borrower, to appear in and defend any action or 
                  proceeding brought with respect to the Property and to 
                  commence any action or proceeding to protect the interest of
                  Lender in the Property;

                           (l)   Agreements.    All    agreements,    contracts,
                  certificates,   instruments,  franchises,  permits,  licenses,
                  plans,  specifications  and other documents,  now or hereafter
                  entered into, and all rights  therein and thereto,  respecting
                  or pertaining to the use, occupation, construction, management
                  or  operation  of the  Land  and  any  part  thereof  and  any
                  Improvements or respecting any business or activity  conducted
                  on the Land and any part  thereof  and all  right,  title  and
                  interest  of  Borrower  therein  and  thereunder,   including,
                  without  limitation,  the  right,  upon the  happening  of any
                  default hereunder,  to receive and collect any sums payable to
                  Borrower thereunder;

                           (m)      Trademarks.  All tradenames, trademarks, 
                  servicemarks, logos, copyrights, goodwill, books and records 
                  and all other general intangibles relating to or used in 
                  connection with the operation of the Property; and

                           (n)      Other Rights.  Any and all other rights of 
                  Borrower in and to the items set forth in Subsections 
                 (a) through (m) above.

                  Section 1.2 ASSIGNMENT OF RENTS.  Borrower  hereby  absolutely
and  unconditionally  assigns to Lender Borrower's right,  title and interest in
and to all current and future  Leases and Rents;  it being  intended by Borrower
that this  assignment  constitutes  a present,  absolute  assignment  and not an
assignment for additional security only.  Nevertheless,  subject to the terms of
this  Section  and Section , Lender  grants to  Borrower a revocable  license to
collect  and  receive  the Rents.  Borrower  shall hold the Rents,  or a portion
thereof sufficient to discharge all current sums due on the Debt, for use in the
payment of such sums.


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                  Section 1.3 SECURITY  AGREEMENT.  This Security  Instrument is
both a real property  mortgage and a "security  agreement" within the meaning of
the Uniform  Commercial  Code.  The  Property  includes  both real and  personal
property and all other rights and interests,  whether  tangible or intangible in
nature,  of Borrower in the Property.  By executing and delivering this Security
Instrument,  Borrower  hereby grants to Lender,  as security for the Obligations
(defined in Section ), a security  interest in the Personal Property to the full
extent that the Personal Property may be subject to the Uniform Commercial Code.

                  Section 1.4 PLEDGE OF MONIES HELD.  Borrower hereby pledges to
Lender any and all monies now or hereafter  held by Lender,  including,  without
limitation,  any sums deposited in the Escrow Fund (as defined in Section ), Net
Proceeds  (as  defined  in  Section  4.4) and  condemnation  awards or  payments
described  in Section 3.6, as  additional  security  for the  Obligations  until
expended or applied as provided in this Security Instrument.

                        CONDITIONS TO GRANT

                  TO HAVE AND TO HOLD the above granted and  described  Property
unto and to the use and  benefit of Lender,  and the  successors  and assigns of
Lender, forever;

                  PROVIDED,   HOWEVER,  these  presents  are  upon  the  express
condition  that, if Borrower  shall well and truly pay to Lender the Debt at the
time and in the manner provided in the Note and this Security Instrument,  shall
well and truly  perform  the  Other  Obligations  as set forth in this  Security
Instrument  and shall  well and truly  abide by and  comply  with each and every
covenant and condition set forth herein and in the Note,  these presents and the
estate hereby granted shall cease, terminate and be void.


                    Article 2 - DEBT AND OBLIGATIONS SECURED

                  Section 2.1 DEBT.  This  Security  Instrument  and the grants,
assignments  and transfers made in Article are given for the purpose of securing
the  following,  in such order of priority as Lender may  determine  in its sole
discretion (the "Debt"):

                  (a)      the payment of the indebtedness evidenced by the Note
         in lawful money of the United States of America;

                  (b) the payment of interest,  default  interest,  late charges
         and other sums, as provided in the Note,  this  Security  Instrument or
         the Other Security Documents (defined below);

                  (c)      the payment of the Prepayment Consideration (as
         defined in the Note), if any;

                  (d)      the payment of all other moneys agreed or provided
         to be paid by Borrower in the Note, this Security Instrument or the 
         Other Security Documents;


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                  (e)      the payment of all sums advanced pursuant to this 
         Security Instrument to protect and preserve the Property and the lien 
         and the security interest created hereby;
         and

                  (f) the payment of all sums  advanced  and costs and  expenses
         incurred by Lender in connection with the Debt or any part thereof, any
         renewal,  extension,  or change of or substitution  for the Debt or any
         part  thereof,  or  the  acquisition  or  perfection  of  the  security
         therefor,  whether  made or  incurred  at the  request of  Borrower  or
         Lender.

                  Section 2.2 OTHER  OBLIGATIONS.  This Security  Instrument and
the grants,  assignments  and  transfers  made in Article are also given for the
purpose of securing the following (the "Other Obligations"):

                  (a)      the performance of all other obligations of Borrower
         contained herein;

                  (b) the performance of each  obligation of Borrower  contained
         in any other  agreement  given by Borrower  to Lender  which is for the
         purpose of further  securing the obligations  secured  hereby,  and any
         amendments, modifications and changes thereto; and

                  (c) the performance of each  obligation of Borrower  contained
         in any  renewal,  extension,  amendment,  modification,  consolidation,
         change of, or substitution  or replacement  for, all or any part of the
         Note, this Security Instrument or the Other Security Documents.

                  Section 2.3       DEBT AND OTHER OBLIGATIONS.  Borrower's 
obligations for the payment of the Debt and the performance of the Other 
Obligations shall be referred to collectively below as the "Obligations."

                  Section 2.4 PAYMENTS. Unless payments are made in the required
amount in  immediately  available  funds at the place where the Note is payable,
remittances  in payment of all or any part of the Debt shall not,  regardless of
any receipt or credit  issued  therefor,  constitute  payment until the required
amount is actually  received  by Lender in funds  immediately  available  at the
place where the Note is payable (or any other place as Lender,  in Lender's sole
discretion,  may have  established  by  delivery  of written  notice  thereof to
Borrower) and shall be made and accepted subject to the condition that any check
or draft may be handled for  collection in  accordance  with the practice of the
collecting bank or banks.  Acceptance by Lender of any payment in an amount less
than the amount then due shall be deemed an acceptance on account only,  and the
failure to pay the entire  amount then due shall be and  continue to be an Event
of Default (defined below).



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                                 Article 3 - BORROWER COVENANTS

                  Borrower covenants and agrees that:

                  Section 3.1       PAYMENT OF DEBT.  Borrower will pay the 
Debt at the time and in the manner provided in the Note and in this Security 
Instrument.

                  Section 3.2  INCORPORATION  BY REFERENCE.  All the  covenants,
conditions and  agreements  contained in (a) the Note and (b) all and any of the
documents  other  than the Note or this  Security  Instrument  now or  hereafter
executed by Borrower and/or others and by or in favor of Lender, which wholly or
partially   secure  or  guaranty  payment  of  the  Note  (the  "Other  Security
Documents"),  are hereby  made a part of this  Security  Instrument  to the same
extent and with the same force as if fully set forth herein.

                  Section 3.3       INSURANCE.

                  (a)  Borrower  shall  obtain  and  maintain,  or  cause  to be
         maintained,  insurance for Borrower and the Property providing at least
         the following coverages:

                           (i)   comprehensive   all  risk   insurance   on  the
                  Improvements  and the  Personal  Property  which  is  owned by
                  Borrower,  in each case (A) in an amount  equal to 100% of the
                  "Full  Replacement  Cost," which for purposes of this Security
                  Instrument shall mean actual  replacement  value (exclusive of
                  costs of excavations,  foundations,  underground utilities and
                  footings)  with a waiver of  depreciation;  (B)  containing an
                  agreed amount endorsement with respect to the Improvements and
                  Personal  Property  which is owned by  Borrower,  waiving  all
                  co-insurance  provisions;  (C)  providing for no deductible in
                  excess of $100,000;  and (D) providing coverage for contingent
                  liability from Operation of Building  Laws,  Demolition  Costs
                  and Increased Cost of Construction  Endorsements together with
                  an "Ordinance or Law Coverage" or "Enforcement" endorsement if
                  any of the  Improvements  or the use of the Property  shall at
                  any time constitute legal  non-conforming  structures or uses.
                  The Full Replacement  Cost shall be redetermined  from time to
                  time (but not more  frequently  than once in any  twelve  (12)
                  calendar  months) at the request of Lender by an  appraiser or
                  contractor  designated  and paid by Borrower  and  approved by
                  Lender,  or by an engineer or appraiser in the regular  employ
                  of  the  insurer.   After  the  first  appraisal,   additional
                  appraisals   may  be  based  on   construction   cost  indices
                  customarily  employed in the trade. No omission on the part of
                  Lender  to  request  any  such  ascertainment   shall  relieve
                  Borrower of any of its obligations under this Subsection;

                           (ii) commercial  general liability  insurance against
                  claims for personal injury,  bodily injury,  death or property
                  damage  occurring  upon,  in  or  about  the  Property,   such
                  insurance (A) to be on the so-called  "occurrence" form with a
                  combined  single  limit of not less  than  $2,000,000;  (B) to
                  continue at not less than the aforesaid  limit until  required
                  to be  changed  by Lender  in  writing  by  reason of  changed
                  economic conditions making such protection inadequate; and (C)
                  to

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                  cover  at  least  the  following  hazards:  (1)  premises  and
                  operations;  (2) products and  completed  operations on an "if
                  any"  basis;   (3)   independent   contractors;   (4)  blanket
                  contractual liability for all written and oral contracts;  and
                  (5) contractual  liability covering the indemnities  contained
                  in Article hereof to the extent the same is available;

                           (iii) loss of rents  insurance  (A) with loss payable
                  to Lender;  (B) covering  all risks  required to be covered by
                  the insurance provided for in Subsection (a)(i); and (C) in an
                  amount  equal to 100% of the  projected  gross income from the
                  Property  for a period of twelve  (12)  months.  The amount of
                  such loss of rents insurance shall be determined  prior to the
                  date  hereof and at least once each year  thereafter  based on
                  Borrower's  reasonable  estimate of the gross  income from the
                  Property for the succeeding twelve-month period. All insurance
                  proceeds  payable to Lender pursuant to this Subsection  shall
                  be held by Lender  and  shall be  applied  to the  obligations
                  secured  hereunder from time to time due and payable hereunder
                  and under the Note;  provided,  however,  that nothing  herein
                  contained   shall  be  deemed  to  relieve   Borrower  of  its
                  obligations to pay the  obligations  secured  hereunder on the
                  respective dates of payment provided for in the Note except to
                  the extent such amounts are actually  paid out of the proceeds
                  of such loss of rents insurance;

                           (iv)   at   all   times   during   which   structural
                  construction,  repairs  or  alterations  are  being  made with
                  respect  to  the  Improvements   (A)  owner's   contingent  or
                  protective  liability insurance covering claims not covered by
                  or  under  the  terms or  provisions  of the  above  mentioned
                  commercial  general liability  insurance  policy;  and (B) the
                  insurance  provided  for in  Subsection  (a)(i)  written  in a
                  so-called  builder's risk  completed  value form or equivalent
                  property   insurance   satisfactory   to   Lender   (1)  on  a
                  non-reporting  basis,  (2) against all risks  insured  against
                  pursuant to Subsection  (a)(i),  (3)  including  permission to
                  occupy the Property, and (4) with an agreed amount endorsement
                  waiving co-insurance provisions;

                           (v) workers'  compensation,  subject to the statutory
                  limits of the  state in which the  Property  is  located,  and
                  employer's  liability  insurance  with  a  limit  of at  least
                  $1,000,000  per  accident  and per disease per  employee,  and
                  $1,000,000  for  disease  aggregate  in respect of any work or
                  operations on or about the Property, or in connection with the
                  Property or its operation (if applicable);

                           (vi)    comprehensive boiler and machinery insurance,
                  if applicable, in  amounts as shall be reasonably required by
                  Lender;

                           (vii) if any  portion of the  Improvements  is at any
                  time located in an area identified by the Secretary of Housing
                  and Urban  Development  or any  successor  thereto  as an area
                  having  special flood hazards  pursuant to the National  Flood
                  Insurance Act of 1968,  the Flood  Disaster  Protection Act of
                  1973 or the National  Flood  Insurance  Reform Act of 1994, as
                  each  may  be  amended,  or  any  successor  law  (the  "Flood
                  Insurance Acts"), flood hazard insurance in an amount equal to

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                  the lesser of (A) the principal  balance of the Note,  and (B)
                  the maximum limit of coverage available for the Property under
                  the Flood Insurance Acts;

                           (viii)  earthquake,   sinkhole  and  mine  subsidence
                  insurance,   if  required  by  Lender  in  amounts,  form  and
                  substance satisfactory to Lender,  provided that the insurance
                  pursuant  to  this   Subsection   (viii)  shall  be  on  terms
                  consistent  with the all risk insurance  policy required under
                  Subsection 3.3(a)(i);

                           (ix) such  other  insurance  and in such  amounts  as
                  Lender from time to time may reasonably  request  against such
                  other insurable hazards which at the time are commonly insured
                  against for  property  similar to the  Property  located in or
                  around the region in which the Property is located.

                           (b) All  insurance  provided  for in  Subsection  (a)
         hereof  shall be obtained  under valid and  enforceable  policies  (the
         "Policies" or in the singular,  the "Policy"),  in such forms and, from
         time to time after the date hereof, in such amounts as may from time to
         time be  satisfactory  to  Lender,  issued  by  financially  sound  and
         responsible  insurance companies authorized to do business in the state
         in which the Property is located and approved by Lender.  The insurance
         companies  must have a  general  policy  rating  of A or  better  and a
         financial  class of VI or better by A.M.  Best  Company,  Inc.,  and if
         there are any  Securities  (defined in Section 19.1 below) issued which
         have been  assigned  a rating by a credit  rating  agency  approved  by
         Lender (a "Rating  Agency"),  the insurance company shall have a claims
         paying ability rating by such Rating Agency of not less than one rating
         category  below  the  highest  rating  at  any  time  assigned  to  the
         Securities, but in no event less than BBB by Standard & Poor's Corp. or
         such  comparable  rating by such other Rating Agency (each such insurer
         shall be referred  to below as a  "Qualified  Insurer").  Not less than
         thirty  (30)  days  prior  to the  expiration  dates  of  the  Policies
         theretofore  furnished to Lender pursuant to Subsection (a),  certified
         copies of the Policies marked "premium paid" or accompanied by evidence
         satisfactory  to Lender of payment of the premiums due thereunder  (the
         "Insurance  Premiums"),  shall be  delivered  by  Borrower  to  Lender;
         provided,  however, that in the case of renewal Policies,  Borrower may
         furnish  Lender with  binders  therefor to be followed by the  original
         Policies when issued.

                           (c)  Borrower  shall not obtain (i) any  umbrella  or
         blanket  liability or casualty Policy unless, in each case, such Policy
         is  approved in advance in writing by Lender and  Lender's  interest is
         included  therein as  provided  in this  Security  Instrument  and such
         Policy is issued by a Qualified  Insurer,  or (ii)  separate  insurance
         concurrent  in form or  contributing  in the  event of loss  with  that
         required  in  Subsection  (a)  to be  furnished  by,  or  which  may be
         reasonably required to be furnished by, Borrower. In the event Borrower
         obtains separate insurance or an umbrella or a blanket Policy, Borrower
         shall  notify  Lender of the same and shall cause  certified  copies of
         each Policy to be delivered as required in Subsection  (a). Any blanket
         insurance Policy shall specifically allocate to the Property the amount
         of coverage  from time to time required  hereunder and shall  otherwise
         provide the same  protection as would a separate  Policy  insuring only
         the Property in  compliance  with the  provisions  of  Subsection  (a).
         Notwithstanding  Lender's approval of any umbrella or blanket liability
         or casualty Policy

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         hereunder,  Lender reserves the right, in its reasonable discretion, to
         require  Borrower to obtain a separate  Policy in compliance  with this
         Section 3.3.

                  (d) All Policies of insurance  provided for or contemplated by
         Subsection (a), except for the Policy referenced in Subsection  (a)(v),
         shall name Lender and Borrower as the insured or additional insured, as
         their  respective  interests  may  appear,  and in the case of property
         damage,  boiler and  machinery,  and flood  insurance,  shall contain a
         standard non-contributing mortgagee clause in favor of Lender providing
         that the loss thereunder shall be payable to Lender.

                  (e)      All Policies of insurance provided for in Subsection
         (a) shall contain clauses or endorsements to the effect that:

                           (i) no act  or  negligence  of  Borrower,  or  anyone
                  acting for Borrower, or of any tenant under any Lease or other
                  occupant,  or failure  to comply  with the  provisions  of any
                  Policy which might  otherwise  result in a  forfeiture  of the
                  insurance  or any part  thereof,  shall in any way  affect the
                  validity or  enforceability of the insurance insofar as Lender
                  is concerned;

                           (ii)  the  Policy  shall  not be  materially  changed
                  (other  than to increase  the  coverage  provided  thereby) or
                  cancelled  without at least 30 days' written  notice to Lender
                  and any other party named therein as an insured; and

                           (iii) each  Policy  shall  provide  that the  issuers
                  thereof shall give written  notice to Lender if the Policy has
                  not been renewed thirty (30) days prior to its expiration; and

                           (iv)     Lender shall not be liable for any Insurance
                  Premiums thereon or subject to any assessments thereunder.

                           (f) If requested by Lender, Borrower shall furnish to
         Lender,  on or  before  thirty  (30)  days  after  the close of each of
         Borrower's  fiscal years,  a statement  certified by Borrower or a duly
         authorized  officer of Borrower of the amounts of insurance  maintained
         in compliance  herewith,  of the risks covered by such insurance and of
         the insurance  company or companies  which carry such insurance and, if
         requested by Lender,  verification of the adequacy of such insurance by
         an independent insurance broker or appraiser acceptable to Lender.

                           (g) If at any  time  Lender  is  not  in  receipt  of
         written evidence that all insurance required hereunder is in full force
         and effect,  Lender shall have the right, without notice to Borrower to
         take such action as Lender  deems  necessary to protect its interest in
         the  Property,  including,  without  limitation,  the obtaining of such
         insurance  coverage as Lender in its sole discretion deems appropriate,
         and all expenses  incurred by Lender in connection  with such action or
         in obtaining  such  insurance and keeping it in effect shall be paid by
         Borrower  to Lender upon demand and until paid shall be secured by this
         Security  Instrument and shall bear interest in accordance with Section
         10.3 hereof.

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                           (h) If the Property shall be damaged or destroyed, in
         whole or in part, by fire or other casualty, Borrower shall give prompt
         notice of such  damage  to  Lender  and  shall  promptly  commence  and
         diligently  prosecute the  completion of the repair and  restoration of
         the Property as nearly as possible to the condition the Property was in
         immediately prior to such fire or other casualty, with such alterations
         as may be approved  by Lender  (the  "Restoration")  and  otherwise  in
         accordance with Section of this Security Instrument. Borrower shall pay
         all costs of such Restoration  whether or not such costs are covered by
         insurance.

                  Section 3.4       PAYMENT OF TAXES, ETC.

                  (a) Borrower shall promptly pay or cause to be paid all taxes,
         assessments,  water rates, sewer rents, governmental  impositions,  and
         other charges,  including without  limitation vault charges and license
         fees for the use of vaults,  chutes and  similar  areas  adjoining  the
         Land,  now or  hereafter  levied or  assessed  or imposed  against  the
         Property  or  any  part  thereof  (the  "Taxes"),   all  ground  rents,
         maintenance  charges and similar  charges,  now or hereafter  levied or
         assessed or imposed  against  the  Property  or any part  thereof  (the
         "Other Charges"),  and all charges for utility services provided to the
         Property  as same  become due and  payable.  Borrower  will  deliver to
         Lender,   promptly   upon   Lender's   request,   evidence   reasonably
         satisfactory  to Lender  that the  Taxes,  Other  Charges  and  utility
         service charges have been so paid or are not then delinquent.  Borrower
         shall not suffer and shall promptly cause to be paid and discharged any
         lien or  charge  whatsoever  which  may be or  become a lien or  charge
         against the Property.  Except to the extent sums  sufficient to pay all
         Taxes and Other Charges have been  deposited  with Lender in accordance
         with the terms of this Security  Instrument,  Borrower shall furnish to
         Lender paid  receipts  for the  payment of the Taxes and Other  Charges
         prior to the date the same shall become delinquent.

                  (b) After prior written notice to Lender, Borrower, at its own
         expense,   may  contest  by  appropriate  legal  proceeding,   promptly
         initiated  and  conducted  in good  faith and with due  diligence,  the
         amount or  validity  or  application  in whole or in part of any of the
         Taxes,  provided  that (i) no  Event of  Default  has  occurred  and is
         continuing under the Note, this Security Instrument or any of the Other
         Security  Documents,  (ii)  Borrower  is  permitted  to do so under the
         provisions of any other mortgage,  deed of trust or deed to secure debt
         affecting  the  Property,  (iii)  such  proceeding  shall  suspend  the
         collection of the Taxes from Borrower and from the Property or Borrower
         shall have paid all of the Taxes under  protest,  (iv) such  proceeding
         shall be  permitted  under  and be  conducted  in  accordance  with the
         provisions  of any other  instrument  to which  Borrower is subject and
         shall not constitute a default thereunder, (v) neither the Property nor
         any part  thereof or interest  therein will be in danger of being sold,
         forfeited,  terminated,  cancelled or lost,  (vi)  Borrower  shall have
         deposited with Lender  adequate  reserves for the payment of the Taxes,
         together with all interest and penalties  thereon,  unless Borrower has
         paid all of the Taxes  under  protest,  and (vii)  Borrower  shall have
         furnished the security as may be required in the proceeding,  or as may
         be  requested by Lender to insure the payment of any  contested  Taxes,
         together with all interest and penalties thereon.


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<PAGE>



                  Section 3.5 ESCROW FUND.  In addition to the initial  deposits
with respect to Taxes and, if applicable, Insurance Premiums made by Borrower to
Lender on the date hereof to be held by Lender in escrow,  Borrower shall pay or
cause  to be  paid  to  Lender  on the  first  day of each  calendar  month  (a)
one-twelfth of an amount which would be sufficient to pay the Taxes payable,  or
estimated by Lender to be payable,  during the next  ensuing  twelve (12) months
and (b) at the option of Lender,  if the liability or casualty Policy maintained
by Borrower  covering the Property shall not  constitute an approved  blanket or
umbrella  Policy pursuant to Subsection  3.3(c) hereof,  or Lender shall require
Borrower to obtain a separate  Policy  pursuant  to  Subsection  3.3(c)  hereof,
one-twelfth of an amount which would be sufficient to pay the Insurance Premiums
due for the renewal of the coverage afforded by the Policies upon the expiration
thereof (the amounts in (a) and (b) above shall be called the "Escrow Fund"). In
the event  Lender  shall  elect to  collect  payments  in escrow  for  Insurance
Premiums,  Borrower  shall pay to Lender an initial  deposit to be determined by
Lender, in its sole discretion, to increase the amounts in the Escrow Fund to an
amount which,  together  with  anticipated  monthly  escrow  payments,  shall be
sufficient to pay all Insurance  Premiums and Taxes as they become due. Borrower
agrees to notify Lender immediately of any changes to the amounts, schedules and
instructions for payment of any Taxes and Insurance  Premiums of which it has or
obtains  knowledge  and  authorizes  Lender or its agent to obtain the bills for
Taxes and Other Charges  directly from the  appropriate  taxing  authority.  The
Escrow Fund and the payments of interest or principal or both,  payable pursuant
to the Note shall be added  together  and shall be paid as an  aggregate  sum by
Borrower  to Lender.  Lender will apply the Escrow Fund to payments of Taxes and
Insurance Premiums required to be made by Borrower pursuant to Sections and
 hereof. If the amount of the Escrow Fund shall exceed the amounts due for Taxes
and Insurance  Premiums  pursuant to Sections and hereof,  Lender shall,  in its
discretion,  return any excess to Borrower or credit such excess  against future
payments to be made to the Escrow Fund.  In allocating  such excess,  Lender may
deal  with the  person  shown on the  records  of  Lender to be the owner of the
Property. If the Escrow Fund is not sufficient to pay the items set forth in (a)
and (b) above,  Borrower  shall promptly pay to Lender,  upon demand,  an amount
which Lender shall estimate as sufficient to make up the deficiency.  The Escrow
Fund shall not  constitute a trust fund and may be commingled  with other monies
held by Lender.  No  earnings or interest on the Escrow Fund shall be payable to
Borrower.

                  Section 3.6 CONDEMNATION.  Borrower shall promptly give Lender
notice of the actual or threatened  commencement of any  condemnation or eminent
domain  proceeding  and shall  deliver  to Lender  copies of any and all  papers
served in connection with such  proceedings.  Notwithstanding  any taking by any
public or quasi-public  authority through eminent domain or otherwise (including
but not  limited  to any  transfer  made in  lieu of or in  anticipation  of the
exercise of such taking),  Borrower  shall  continue to pay the Debt at the time
and in the manner  provided  for its  payment  in the Note and in this  Security
Instrument and the Debt shall not be reduced until any award or payment therefor
shall have been actually received and applied by Lender,  after the deduction of
expenses of collection,  to the reduction or discharge of the Debt. Lender shall
not be limited to the interest paid on the award by the condemning authority but
shall be  entitled  to receive  out of the award  interest  at the rate or rates
provided  herein or in the Note. If the Property or any portion thereof is taken
by the power of eminent domain,  Borrower shall promptly commence and diligently
prosecute the Restoration of the Property in accordance with Section 4.4 of this
Security  Instrument.  In the  event  Lender is not  required  to  disburse  Net
Proceeds  (defined  below) to Borrower in  accordance  with  Section 4.4 of this
Security

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<PAGE>



Instrument,  Lender may apply any award or payment to the reduction or discharge
of the Debt  whether  or not  then due and  payable.  If the  Property  is sold,
through foreclosure or otherwise, prior to the receipt by Lender of the award or
payment,  Lender shall have the right,  whether or not a deficiency  judgment on
the Note shall have been sought,  recovered  or denied,  to receive the award or
payment, or a portion thereof sufficient to pay the Debt.

                  Section 3.7       LEASES AND RENTS.

                  (a) All  renewals  of Leases  and all  proposed  Leases  shall
         provide for rental rates and terms  comparable to existing local market
         rates and terms and shall be arms-length  transactions  with bona fide,
         independent  third party tenants.  All proposed  Leases and renewals of
         existing   Leases  (other  than   residential   Leases  relating  to  a
         residential  multifamily  property)  shall  be  subject  to  the  prior
         approval of Lender and its counsel, at Borrower's  expense.  All Leases
         shall provide that they are subordinate to this Security Instrument and
         that the lessee agrees to attorn to Lender.  Borrower (i) shall observe
         and  perform  all the  obligations  imposed  upon the lessor  under the
         Leases  and shall not do or permit to be done  anything  to impair  the
         value  of any of the  Leases  as  security  for the  Debt;  (ii)  shall
         promptly send copies to Lender of all notices of default which Borrower
         shall send or receive thereunder; (iii) shall enforce all of the terms,
         covenants and  conditions  contained in the Leases upon the part of the
         lessee  thereunder  to be observed or performed,  short of  termination
         thereof;  provided  however,  with respect to  multifamily  residential
         property,  a  residential  Lease  may be  terminated  in the event of a
         default by the tenant  thereunder;  (iv) shall not  collect  any of the
         Rents more than one (1) month in  advance;  (v) shall not  execute  any
         other  assignment of the lessor's  interest in any of the Leases or the
         Rents;  (vi) shall not alter,  modify or change the terms of any Leases
         without the prior written consent of Lender, or cancel or terminate any
         Leases or accept a surrender thereof or convey or transfer or suffer or
         permit a conveyance or transfer of the Land or of any interest  therein
         so as to effect a merger of the estates and rights of or a  termination
         or diminution of the  obligations of, lessees  thereunder;  (vii) shall
         not alter, modify or change the terms of any guaranty, letter of credit
         or other  credit  support with respect to any of the Leases (the "Lease
         Guaranty") or cancel or terminate such Lease Guaranty without the prior
         written  consent  of  Lender;  and  (viii)  shall  not  consent  to any
         assignment  of or subletting  under any Leases not in  accordance  with
         their terms, without the prior written consent of Lender.

                  (b)      Intentionally Omitted

                  (c) Upon the occurrence of an Event of Default,  to the extent
         permitted by law,  Borrower shall promptly  deposit with Lender any and
         all monies representing security deposits under the Leases,  whether or
         not Borrower actually  received such monies (the "Security  Deposits").
         Lender shall hold the Security Deposits in accordance with the terms of
         the respective  Lease, and shall only release the Security  Deposits in
         order to return a  tenant's  Security  Deposit  to such  tenant if such
         tenant is  entitled  to the return of the  Security  Deposit  under the
         terms of the Lease and is not otherwise in default under the Lease.  To
         the extent  required by Applicable Laws (defined  below),  Lender shall
         hold the Security  Deposits in an interest  bearing account selected by
         Lender in its sole discretion.  In the event Lender is not permitted by
         law to hold the Security

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<PAGE>



         Deposits,  Borrower shall deposit the Security Deposits into an account
         with a federally insured institution as approved by Lender.

                  (d) Notwithstanding anything to the contrary contained in this
         Section 3.7,  Lender shall  consent to a one-time  assignment  or other
         transfer of the tenant's  interest in the J.Baker  Lease (as defined in
         Section  5.10)  provided  J. Baker,  Inc.  continues  to  guaranty  the
         tenant's  obligations under said lease.  Notwithstanding the foregoing,
         Lender agrees to release JBI, Inc. from further  liability under the J.
         Baker Lease and to allow J. Baker, Inc. to terminate its Lease Guaranty
         in connection  with such a transfer  provided that (a) Lender  receives
         thirty  (30) days  prior  written  notice of such  termination,  (b) no
         default has occurred and is continuing under this Security  Instrument,
         the Note or the Other Security  Documents and (c) upon the satisfaction
         (in the sole  determination  of  Lender) of such  conditions  as may be
         reasonably  imposed  by  Lender,  which may  include,  but shall not be
         limited to, the following matters:

                  A.       Tenant's proposed transferee ("Tenant's Transferee")
                           shall have a credit rating from Standard's & Poor's
                           Corp. or Moody's or such comparable
                           Rating Agency (a) if Lender has not released the 
                           balance of the reserve amount held pursuant to that 
                           certain Tenant Credit Reserve and Security
                           Agreement dated the date hereof, by and between 
                           Borrower and Lender (the "Additional Reserve") 
                           pursuant to the terms thereof, equal to or
                           greater than that of J. Baker, Inc. as of the date 
                           hereof and at the time of said transfer or (b) if 
                           Lender has released the balance of the Additional
                           Reserve pursuant to the terms thereof, of not less
                           than an investment grade credit rating from Standard
                           & Poor's Corp. or Moody's or such comparable Rating
                           Agency;

                  B.       Borrower shall pay to Lender a processing fee of 
                           $4,000 upon request for approval of such termination
                           and a fee equal to 1% of the outstanding
                           principal balance of the Loan upon approval of the 
                           release of JBI, Inc. from further liability under the
                           J. Baker Lease and the termination of the
                           Lease Guaranty;

                  C.       Borrower shall pay any and all out-of-pocket costs 
                           incurred in connection with the termination 
                           (including, without limitation, Lender's reasonable
                           counsel fees and disbursements);

                  D.       Tenant's Transferee shall, as of the date of such 
                           transfer, have an aggregate net worth and liquidity
                           of not less than that of J. Baker, Inc. as of
                           the date hereof and as of the date of the transfer;

                  E.       Tenant's Transferee must not have been a party to any
                           bankruptcy proceeding, voluntary or involuntary, made
                           an assignment for the benefit of creditors or taken
                           advantage of any insolvency act, or any act for the
                           benefit of debtors within seven (7) years prior to 
                           the date of the transfer;


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<PAGE>



                  F.       Tenant's Transferee shall assume all of the
                           obligations of the tenant under
                           the J. Baker Lease;

                  G.       There shall be no material litigation pending against
                           Tenant's Transferee that is not acceptable to Lender;
                            and

                  H.       Tenant's Transferee shall not have defaulted under 
                           its or their obligations with respect to any other 
                           indebtedness beyond any applicable grace period.

                  Section 3.8 MAINTENANCE OF PROPERTY.  Borrower shall cause the
Property  to be  maintained  in a  good  and  safe  condition  and  repair.  The
Improvements  and the  Personal  Property  shall not be removed,  demolished  or
materially  altered  (except for normal  replacement  of the Personal  Property)
without  the  consent of Lender.  Borrower  shall  promptly  repair,  replace or
rebuild any part of the  Property  which may be destroyed  by any  casualty,  or
become  damaged,  worn or dilapidated or which may be affected by any proceeding
of the character  referred to in Section  hereof and shall  complete and pay for
any structure at any time in the process of  construction or repair on the Land.
Borrower shall not initiate,  join in, acquiesce in, or consent to any change in
any  private  restrictive  covenant,  zoning  law or  other  public  or  private
restriction,  limiting or defining the uses which may be made of the Property or
any part thereof.  If under applicable  zoning  provisions the use of all or any
portion of the Property is or shall become a  nonconforming  use,  Borrower will
not  cause or permit  the  nonconforming  use to be  discontinued  or  abandoned
without the express written consent of Lender.

                  Section  3.9  WASTE.  Borrower  shall not commit or suffer any
waste of the Property or make any change in the use of the  Property  which will
in any way  materially  increase the risk of fire or other hazard arising out of
the operation of the Property,  or take any action that might invalidate or give
cause  for  cancellation  of any  Policy,  or do or  permit  to be done  thereon
anything that may in any way impair the value of the Property or the security of
this Security  Instrument.  Borrower will not, without the prior written consent
of Lender,  permit any drilling or exploration  for or extraction,  removal,  or
production  of any  minerals  from the  surface or the  subsurface  of the Land,
regardless of the depth thereof or the method of mining or extraction thereof.

                  Section 3.10      COMPLIANCE WITH LAWS.

                  (a)  Borrower  shall  promptly  comply with all  existing  and
         future federal, state and local laws, orders, ordinances,  governmental
         rules  and  regulations  or court  orders  affecting  or  which  may be
         interpreted  to affect the  Property,  or the use thereof  ("Applicable
         Laws").

                  (b) Borrower shall from time to time,  upon Lender's  request,
         provide Lender with evidence  satisfactory  to Lender that the Property
         complies with all  Applicable  Laws or is exempt from  compliance  with
         Applicable Laws.

                  (c)  Notwithstanding any provisions set forth herein or in any
         document  regarding  Lender's  approval of alterations of the Property,
         Borrower  shall  not alter  the  Property  in any  manner  which  would
         increase Borrower's responsibilities for compliance

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<PAGE>



         with  Applicable  Laws  without the prior  written  approval of Lender.
         Lender's approval of the plans, specifications, or working drawings for
         alterations of the Property shall create no responsibility or liability
         on behalf of Lender  for their  completeness,  design,  sufficiency  or
         their  compliance  with  Applicable  Laws. The foregoing shall apply to
         tenant  improvements  constructed by Borrower or by any of its tenants.
         Lender may condition any such approval upon receipt of a certificate of
         compliance  with   Applicable  Laws  from  an  independent   architect,
         engineer, or other person acceptable to Lender.

                  (d) Borrower shall give prompt notice to Lender of the receipt
         by Borrower of any notice related to a violation of any Applicable Laws
         and of the  commencement  of any  proceedings or  investigations  which
         relate to compliance with Applicable Laws.

                  Section 3.11      BOOKS AND RECORDS.

                  (a) Borrower and any  Guarantors  (defined in Subsection  (e))
         and  Indemnitor(s)  (defined in  Subsection  (o)),  if any,  shall keep
         adequate  books and  records of account in  accordance  with  generally
         accepted accounting  principles  ("GAAP"),  or in accordance with other
         methods  acceptable  to  Lender  in its sole  discretion,  consistently
         applied and furnish to Lender:

                           (i) monthly  certified rent rolls signed and dated by
                  Borrower,   detailing   the  names  of  all   tenants  of  the
                  Improvements,  the  portion of  Improvements  occupied by each
                  tenant, the base rent and any other charges payable under each
                  Lease and the term of each  Lease,  including  the  expiration
                  date, and any other  information as is reasonably  required by
                  Lender, within twenty (20) days after the end of each calendar
                  month;

                           (ii)  upon   Lender's   written   request   therefor,
                  quarterly operating  statements of the Property,  prepared and
                  certified  by  Borrower  in  the  form   required  by  Lender,
                  detailing the revenues received, the expenses incurred and the
                  net operating income before and after debt service  (principal
                  and interest) and major capital  improvements for that quarter
                  and containing  appropriate year to date  information,  within
                  thirty (30) days after the end of each fiscal quarter;

                           (iii) an annual  operating  statement of the Property
                  detailing  the  total   revenues   received,   total  expenses
                  incurred,  total cost of all capital improvements,  total debt
                  service and total cash flow,  to be prepared and  certified by
                  Borrower  in the form  required  by Lender,  or if required by
                  Lender,  an audited annual  operating  statement  prepared and
                  certified  by  an  independent   certified  public  accountant
                  acceptable  to Lender,  within sixty (60) days after the close
                  of each fiscal year of Borrower;

                           (iv) an  annual  balance  sheet and  profit  and loss
                  statement of Borrower, any Guarantors and any Indemnitor(s) in
                  the form  required by Lender,  prepared  and  certified by the
                  respective Borrower,  Guarantors and/or  Indemnitor(s),  or if
                  required by Lender,  audited financial  statements prepared by
                  an  independent   certified   public   accountant   reasonably
                  acceptable to Lender, within sixty (60) days

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<PAGE>



                  after the close of each fiscal year of Borrower, Guarantors 
                  and Indemnitor(s), as the case may be; and

                           (v) an annual operating budget presented on a monthly
                  basis consistent with the annual operating statement described
                  above for the Property,  including cash flow  projections  for
                  the upcoming year, and all proposed  capital  replacements and
                  improvements  at least fifteen (15) days prior to the start of
                  each fiscal year.

         Notwithstanding the provisions of this Subsection 3.11(a), Lender 
agrees not to require the rent rolls referred to in Subsection 3.11(a)(i) for 
so long as J. Baker, Inc. is the guarantor of the lease of the entire Property.

                  (b)      Upon request from Lender, Borrower, any Guarantor
and any Indemnitor shall furnish in a timely manner to Lender:

                           (i) a property  management  report for the  Property,
                  showing   the  number  of   inquiries   made   and/or   rental
                  applications  received from tenants or prospective tenants and
                  deposits  received  from  tenants  and any  other  information
                  requested by Lender,  in  reasonable  detail and  certified by
                  Borrower (or an officer,  general partner, member or principal
                  of Borrower if Borrower is not an individual) under penalty of
                  perjury to be true and complete,  but no more  frequently than
                  quarterly; and

                           (ii) an accounting  of all security  deposits held in
                  connection  with  any  Lease  of any  part  of  the  Property,
                  including the name and  identification  number of the accounts
                  in which such security deposits are held, the name and address
                  of the financial  institutions in which such security deposits
                  are  held  and  the  name of the  person  to  contact  at such
                  financial  institution,  along with any  authority  or release
                  necessary  for  Lender to obtain  information  regarding  such
                  accounts directly from such financial institutions.

         Notwithstanding the provisions of this Subsection 3.11(b), Lender
agrees not to require the reports referred to in Subsection 3.11(b) for so long
as J. Baker, Inc. is the guarantor of the lease of the entire Property.

                  (c) Borrower,  any Guarantor and any Indemnitor  shall furnish
         Lender with such other additional  financial or management  information
         (including State and Federal tax returns) as may, from time to time, be
         reasonably  required by Lender in form and  substance  satisfactory  to
         Lender.

                  (d) Borrower,  any Guarantor and any Indemnitor  shall furnish
         to Lender and its agents convenient  facilities for the examination and
         audit of any such books and records.

                  Section 3.12      PAYMENT FOR LABOR AND MATERIALS.  Borrower
will promptly pay when due all bills and costs for labor, materials, and 
specifically fabricated materials

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<PAGE>



incurred in  connection  with the  Property and never permit to exist beyond the
due date  thereof in respect of the  Property  or any part  thereof  any lien or
security interest,  even though inferior to the liens and the security interests
hereof,  and in any event never  permit to be created or exist in respect of the
Property or any part thereof any other or additional  lien or security  interest
other than the liens or  security  interests  hereof,  except for the  Permitted
Exceptions (defined below).

                  Section 3.13 PERFORMANCE OF OTHER  AGREEMENTS.  Borrower shall
observe and perform  each and every term to be observed or performed by Borrower
pursuant to the terms of any  agreement  or  recorded  instrument  affecting  or
pertaining  to the  Property,  or given by Borrower to Lender for the purpose of
further securing an obligation secured hereby and any amendments,  modifications
or changes thereto.


                                           Article 4 - SPECIAL COVENANTS

         Borrower covenants and agrees that:

                  Section 4.1 PROPERTY USE. The Property  shall be used only for
a commercial  office  building  and  distribution  center,  and for no other use
without the prior  written  consent of Lender,  which consent may be withheld in
Lender's sole and absolute discretion.

                  Section 4.2       ERISA.

                  (a) It shall not engage in any  transaction  which would cause
         any  obligation,  or  action  taken or to be taken,  hereunder  (or the
         exercise by Lender of any of its rights under the Note,  this  Security
         Instrument and the Other Security  Documents) to be a non-exempt (under
         a statutory or administrative class exemption)  prohibited  transaction
         under the Employee  Retirement  Income Security Act of 1974, as amended
         ("ERISA"); provided, however, that Borrower shall not be deemed to have
         breached  the  representation  in this  Section  4.2(a) if a prohibited
         transaction  occurs  which  would not have  occurred  if all or part of
         Lender's  interest had not been transferred to an employee benefit plan
         (as defined in Section 3(3) of ERISA) or an entity using assets of such
         a plan (as defined in 29 C.F.R. ss.2510.3-101).

                  (b) Borrower further covenants and agrees to deliver to Lender
         such  certifications or other evidence from time to time throughout the
         term of the  Security  Instrument,  as  requested by Lender in its sole
         discretion,  that (i)  Borrower is not an  "employee  benefit  plan" as
         defined in Section 3(3) of ERISA, which is subject to Title I of ERISA,
         or a  "governmental  plan" within the meaning of Section 3(3) of ERISA;
         (ii) Borrower is not subject to state statutes  regulating  investments
         and fiduciary obligations with respect to governmental plans; and (iii)
         one or more of the following circumstances is true:

                           (A)      Equity interests in Borrower are publicly 
         offered securities, within  the meaning of 29 C.F.R. 
         ss. 2510.3-101(b)(2);


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                           (B) Less than 25 percent of each outstanding class of
                  equity  interests  in  Borrower  are  held  by  "benefit  plan
                  investors"    within   the   meaning   of   29   C.F.R.    ss.
                  2510.3-101(f)(2); or

                           (C) Borrower qualifies as an "operating company" or a
                  "real  estate  operating  company"  within  the  meaning of 29
                  C.F.R.  ss.  2510.3-101(c)  or  (e) or an  investment  company
                  registered under The Investment Company Act of 1940.

                  Section 4.3 SINGLE  PURPOSE  ENTITY.  Borrower  covenants  and
agrees that it has not and shall not and agrees that its general partner(s),  if
Borrower is a  partnership,  its  managing  member(s),  if Borrower is a limited
liability company, or its principal  shareholders,  if Borrower is a corporation
(in each case, "Principal"), has not and shall not:

                  (a) with  respect  to  Borrower,  engage  in any  business  or
         activity  other than the  ownership,  operation and  maintenance of the
         Property,  and  activities  incidental  thereto  and  with  respect  to
         Principal,  engage in any business or activity other than the ownership
         of  its  interest  in  Borrower,   and  activities  incidental  thereto
         including the management of the Property;

                  (b) with  respect to  Borrower,  acquire  or own any  material
         assets other than (i) the Property,  and (ii) such incidental  Personal
         Property as may be necessary for the operation of the Property and with
         respect to Principal,  acquire or own any material asset other than its
         interest in Borrower;

                  (c) merge  into or  consolidate  with any  person or entity or
         dissolve,  terminate  or  liquidate  in whole or in part,  transfer  or
         otherwise  dispose of all or substantially  all of its assets or change
         its legal structure, without in each case Lender's consent;

                  (d)  fail  to  preserve  its   existence  as  an  entity  duly
         organized,  validly existing and in good standing (if applicable) under
         the laws of the  jurisdiction  of its  organization  or  formation,  or
         without the prior written consent of Lender,  amend, modify,  terminate
         or fail  to  comply  with  the  provisions  of  Borrower's  Partnership
         Agreement,  Articles  or  Certificate  of  Incorporation,  Articles  of
         Organization or similar organizational  documents,  as the case may be,
         or of  Principal's  Partnership  Agreement,  Articles or Certificate of
         Incorporation,  Articles  of  Organization  or  similar  organizational
         documents, as the case may be, whichever is applicable;

                  (e)      own any subsidiary or make any investment in, any 
         person or entity without the consent of Lender;

                  (f)      commingle its assets with the assets of any of its 
         members, general partners, affiliates, principals or of any other 
         person or entity;

                  (g) with  respect  to  Borrower,  incur any debt,  secured  or
         unsecured,   direct   or   contingent   (including   guaranteeing   any
         obligation),  other  than the Debt,  except for trade  payables  in the
         ordinary  course of its business of owning and  operating the Property,
         provided  that such debt is not  evidenced  by a note and paid when due
         and with respect

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         to Principal, incur any debt secured or unsecured, direct or contingent
         (including guaranteeing any obligations);

                  (h)      become insolvent and fail to pay its debts and 
         liabilities from its assets as the same shall become due;

                  (i) fail to maintain  its  records,  books of account and bank
         accounts  separate  and  apart  from  those  of  the  members,  general
         partners, principals and affiliates of Borrower or of Principal, as the
         case may be, the affiliates of a member,  general  partner or principal
         of Borrower or  Principal,  as the case may be, and any other person or
         entity;

                  (j) enter into any  contract  or  agreement  with any  member,
         general partner, principal or affiliate of Borrower or of Principal, as
         the  case may be,  Guarantor  or  Indemnitor,  or any  member,  general
         partner,   principal  or  affiliate  thereof,  except  upon  terms  and
         conditions that are  intrinsically  fair and  substantially  similar to
         those  that  would be  available  on an  arms-length  basis  with third
         parties other than any member, general partner,  principal or affiliate
         of  Borrower  or of  Principal,  as  the  case  may  be,  Guarantor  or
         Indemnitor,  or any member,  general  partner,  principal  or affiliate
         thereof;

                  (k)      seek the dissolution or winding up in whole, or in 
         part, of Borrower or of Principal, as the case may be;

                  (l) fail to correct any known misunderstandings  regarding the
         separate identity of Borrower, or of Principal,  as the case may be, or
         any member,  general  partner,  principal or  affiliate  thereof or any
         other person;

                  (m)      hold itself out to be responsible for the debts of 
         another person;

                  (n) make any loans or advances to any third  party,  including
         any member, general partner,  principal or affiliate of Borrower, or of
         Principal,  as the  case  may  be,  or  any  member,  general  partner,
         principal or affiliate thereof without Lender's prior written consent;

                  (o)      fail to file its own tax returns (except that Lender 
         acknowledges that Borrower and Principal will file a consolidated tax 
         return with J. Baker, Inc. which shall provide that Borrower, Principal
 and J. Baker, Inc. are separate legal entities);

                  (p) agree to, enter into or consummate any  transaction  which
         would  render  Borrower  or  Principal,  as the case may be,  unable to
         furnish the  certification or other evidence referred to in Section (b)
         hereof;

                  (q) fail  either to hold  itself  out to the public as a legal
         entity  separate  and  distinct  from any other  entity or person or to
         conduct its business solely in its own name in order not (i) to mislead
         others as to the  identity  with which such other party is  transacting
         business,  or (ii) to suggest that Borrower or  Principal,  as the case
         may be, is responsible for the debts of any third party  (including any
         member, general partner,

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<PAGE>



         principal or affiliate of Borrower, or of Principal, as the case may 
         be, or any member, general partner, principal or affiliate thereof);

                  (r)      fail to maintain adequate capital for the normal 
         obligations reasonably  foreseeable in a business of its size and 
         character and in light of its contemplated  business operations;

                  (s) file or  consent  to the  filing of any  petition,  either
         voluntary  or   involuntary,   to  take  advantage  of  any  applicable
         insolvency,  bankruptcy, liquidation or reorganization statute, or make
         an assignment for the benefit of creditors; or

                  (t) share any  common  logo with or hold  itself  out as or be
         considered  as a  department  or division  of (i) any general  partner,
         principal, member or affiliate of Borrower or of Principal, as the case
         may be, (ii) any affiliate of a general partner, principal or member of
         Borrower or of Principal, as the case may be, or (iii) any other person
         or entity.

                  Section 4.4       RESTORATION.  The following provisions shall
apply in connection with the Restoration of the Property:

                  (a) If the Net  Proceeds  (defined  below)  shall be less than
         $75,000 and the costs of completing the Restoration  shall be less than
         $75,000,  the Net Proceeds will be disbursed by Lender to Borrower upon
         receipt,  provided that all of the  conditions  set forth in Subsection
         (b)(i) are met and Borrower delivers to Lender a written undertaking to
         expeditiously   commence  and  to  satisfactorily   complete  with  due
         diligence the Restoration in accordance with the terms of this Security
         Instrument.

                  (b) If the Net  Proceeds  are equal to or greater than $75,000
         or the costs of completing the  Restoration is equal to or greater than
         $75,000,  Lender shall make the Net Proceeds  available for Restoration
         in accordance with the provisions of this Subsection  4.4(b).  The term
         "Net  Proceeds" for purpose of this Section 4.4 shall mean: (i) the net
         amount  of all  insurance  proceeds  received  by  Lender  pursuant  to
         Subsections (a)(i), (iv), (vi) and (vii) of this Security Instrument as
         a  result  of  such  damage  or  destruction,  after  deduction  of its
         reasonable  costs  and  expenses   (including,   but  not  limited  to,
         reasonable   counsel  fees),  if  any,  in  collecting  the  same  (the
         "Insurance  Proceeds"),  or  (ii)  the net  amount  of all  awards  and
         payments  received by Lender  with  respect to a taking  referenced  in
         Section  3.6  of  this  Security  Instrument,  after  deduction  of its
         reasonable costs and expenses (including, but not limited to reasonable
         counsel  fees),   if  any,  in  collecting   the  same   ("Condemnation
         Proceeds"), whichever the case may be, available for the Restoration in
         accordance with the provisions of this Subsection (b).

                         (i)  The  Net  Proceeds  shall  be  made  available  to
                  Borrower  for  the  Restoration  provided  that  each  of  the
                  following conditions are met:


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                                    (A) no Event of Default  shall have occurred
                           and be  continuing  under  the  Note,  this  Security
                           Instrument or any of the Other Security Documents;

                                    (B) (1) in the  event the Net  Proceeds  are
                           Insurance Proceeds,  less than fifty percent (50%) of
                           the total  floor  area of the  Improvements  has been
                           damaged,  destroyed or rendered  unusable as a result
                           of such  fire or other  casualty  or (2) in the event
                           that the Net Proceeds are Condemnation Proceeds, said
                           Condemnation Proceeds do not exceed $200,000;

                                    (C)  Leases  demising  in the  aggregate  at
                           least 50% of the total rentable space in the Property
                           which has been demised  under  executed and delivered
                           Leases in effect as of the date of the  occurrence of
                           such fire or other casualty or taking,  whichever the
                           case may be,  shall  remain in full  force and effect
                           during and after the completion of the Restoration;

                                    (D) Borrower shall commence the  Restoration
                           as soon as  reasonably  practicable  (but in no event
                           later than  thirty  (30) days  after  such  damage or
                           destruction  or  taking,  whichever  the case may be,
                           occurs)  and  shall  diligently  pursue  the  same to
                           satisfactory  completion (Restoration shall be deemed
                           commenced upon the filing of a building permit);

                                    (E)  Lender  shall  be  satisfied  that  any
                           operating   deficits  which  will  be  incurred  with
                           respect to the Property as a result of the occurrence
                           of  any  such  fire  or  other  casualty  or  taking,
                           whichever the case may be, will be covered out of (1)
                           the Net Proceeds, (2) the insurance coverage referred
                           to in Subsection  (a)(iii),  or (3) by other funds of
                           Borrower;

                                    (F) Lender shall be satisfied that, upon the
                           completion  of the  Restoration,  the gross cash flow
                           and  the  net  cash  flow  of the  Property  will  be
                           restored to a level  sufficient to cover all carrying
                           costs  and   operating   expenses  of  the  Property,
                           including,  without  limitation,  debt service on the
                           Note  at  a  coverage  ratio  (after   deducting  all
                           required  reserves  as  required  by Lender  from net
                           operating  income)  of at  least  1.2 to  1.0,  which
                           coverage  ratio shall be  determined by Lender in its
                           sole  and  absolute  discretion  on the  basis of the
                           Applicable Interest Rate (as defined in the Note);

                                    (G)  Lender  shall  be  satisfied  that  the
                           Restoration  will  be  completed  on  or  before  the
                           earliest to occur of (1) six (6) months  prior to the
                           Maturity  Date (as defined in the Note),  (2) six (6)
                           months  after  the  occurrence  of such fire or other
                           casualty,  or taking,  whichever  the case may be, or
                           (3) such  time as may be  required  under  applicable
                           zoning law, ordinance, rule or regulation in order to
                           repair and restore the  Property to the  condition it
                           was in  immediately  prior  to  such  fire  or  other
                           casualty

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                           or to as nearly as possible the condition it was in 
                           immediately prior to such taking, as applicable;

                                    (H)  Borrower  shall  execute and deliver to
                           Lender a  completion  guaranty in form and  substance
                           satisfactory  to Lender and its  counsel  pursuant to
                           the  provisions of which  Borrower  shall guaranty to
                           Lender the  lien-free  completion  by Borrower of the
                           Restoration in accordance with the provisions of this
                           Subsection (b);

                                    (I) the Property  and the use thereof  after
                           the  Restoration  will  be  in  compliance  with  and
                           permitted   under   all   applicable   zoning   laws,
                           ordinances, rules and regulations; and

                                    (J)  the  Restoration   shall  be  done  and
                           completed by Borrower in an expeditious  and diligent
                           fashion  and  in  compliance   with  all   applicable
                           governmental laws, rules and regulations  (including,
                           without limitation, all applicable Environmental Laws
                           (defined below); and

                                    (K)  with   respect   to  a  taking  of  the
                           Property,  such  taking  does not (1)  result  in the
                           violation of any requirement pursuant to the terms of
                           any Leases or (2)  adversely  impact  the  operations
                           and/or  the fair  market  value of the  Property,  as
                           determined by Lender in its sole discretion.

                           (ii) The Net  Proceeds  shall be held by Lender  and,
                  until  disbursed in  accordance  with the  provisions  of this
                  Subsection (b), shall constitute  additional  security for the
                  Obligations. The Net Proceeds shall be disbursed by Lender to,
                  or as  directed  by,  Borrower  from time to time  during  the
                  course  of  the   Restoration,   upon   receipt  of   evidence
                  satisfactory  to Lender that (A) all  materials  installed and
                  work and labor  performed  (except to the extent that they are
                  to  be  paid  for  out  of  the  requested   disbursement)  in
                  connection  with the  Restoration  have been paid for in full,
                  and (B) there  exist no  notices  of  pendency,  stop  orders,
                  mechanic's or  materialman's  liens or notices of intention to
                  file same,  or any other liens or  encumbrances  of any nature
                  whatsoever  on the  Property  arising  out of the  Restoration
                  which have not either been fully bonded to the satisfaction of
                  Lender and  discharged of record or in the  alternative  fully
                  insured  to the  satisfaction  of Lender by the title  company
                  insuring the lien of this Security Instrument.

                           (iii)  All  plans  and  specifications   required  in
                  connection  with the  Restoration  shall be  subject  to prior
                  review  and  acceptance  in all  respects  by Lender and by an
                  independent   consulting  engineer  selected  by  Lender  (the
                  "Restoration  Consultant").  Lender  shall have the use of the
                  plans  and  specifications  and  all  permits,   licenses  and
                  approvals   required  or  obtained  in  connection   with  the
                  Restoration.  The identity of the contractors,  subcontractors
                  and  materialmen  engaged in the  Restoration,  as well as the
                  contracts under which they have been engaged, shall be subject
                  to prior review and  acceptance by Lender and the  Restoration
                  Consultant. All costs and expenses incurred by

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                  Lender in  connection  with making the Net Proceeds  available
                  for the Restoration including, without limitation,  reasonable
                  counsel   fees   and   disbursements   and   the   Restoration
                  Consultant's fees, shall be paid by Borrower.

                           (iv) In no event shall  Lender be  obligated  to make
                  disbursements of the Net Proceeds in excess of an amount equal
                  to the costs  actually  incurred from time to time for work in
                  place  as  part  of  the  Restoration,  as  certified  by  the
                  Restoration Consultant,  minus the Restoration Retainage.  The
                  term  "Restoration  Retainage" as used in this  Subsection (b)
                  shall  mean  an  amount  equal  to 10% of the  costs  actually
                  incurred  for  work in place  as part of the  Restoration,  as
                  certified by the  Restoration  Consultant,  until such time as
                  the  Restoration  Consultant  certifies  to  Lender  that  Net
                  Proceeds  representing  50% of the required  Restoration  have
                  been disbursed.  There shall be no Restoration  Retainage with
                  respect to costs  actually  incurred by  Borrower  for work in
                  place in completing the last 50% of the required  Restoration.
                  The   Restoration   Retainage   shall   in   no   event,   and
                  notwithstanding  anything to the  contrary  set forth above in
                  this  Subsection  (b), be less than the amount  actually  held
                  back  by  Borrower  from   contractors,   subcontractors   and
                  materialmen  engaged  in  the  Restoration.   The  Restoration
                  Retainage   shall  not  be  released  until  the   Restoration
                  Consultant  certifies to Lender that the  Restoration has been
                  completed in accordance with the provisions of this Subsection
                  (b) and that all approvals  necessary for the re-occupancy and
                  use of the Property have been  obtained  from all  appropriate
                  governmental and  quasi-governmental  authorities,  and Lender
                  receives evidence satisfactory to Lender that the costs of the
                  Restoration have been paid in full or will be paid in full out
                  of the Restoration Retainage,  provided,  however, that Lender
                  will release the portion of the  Restoration  Retainage  being
                  held  with  respect  to  any  contractor,   subcontractor   or
                  materialman  engaged  in the  Restoration  as of the date upon
                  which the Restoration  Consultant certifies to Lender that the
                  contractor,  subcontractor  or materialman has  satisfactorily
                  completed   all  work  and  has  supplied  all   materials  in
                  accordance   with   the   provisions   of  the   contractor's,
                  subcontractor's or materialman's contract, and the contractor,
                  subcontractor  or  materialman  delivers  the lien waivers and
                  evidence of payment in full of all sums due to the contractor,
                  subcontractor or materialman as may be reasonably requested by
                  Lender  or by the  title  company  insuring  the  lien of this
                  Security Instrument. If required by Lender, the release of any
                  such portion of the Restoration Retainage shall be approved by
                  the  surety  company,  if any,  which has  issued a payment or
                  performance bond with respect to the contractor, subcontractor
                  or materialman.

                           (v)   Lender   shall   not  be   obligated   to  make
                  disbursements  of the Net Proceeds more  frequently  than once
                  every calendar month.

                           (vi)  If  at  any  time  the  Net   Proceeds  or  the
                  undisbursed  balance  thereof  shall  not,  in the  opinion of
                  Lender,  be sufficient to pay in full the balance of the costs
                  which  are  estimated  by  the  Restoration  Consultant  to be
                  incurred in connection with the completion of the Restoration,
                  Borrower  shall  deposit  the  deficiency  (the "Net  Proceeds
                  Deficiency") with Lender before any further

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                  disbursement  of the  Net  Proceeds  shall  be  made.  The Net
                  Proceeds  Deficiency  deposited  with Lender  shall be held by
                  Lender and shall be disbursed for costs  actually  incurred in
                  connection   with  the  Restoration  on  the  same  conditions
                  applicable to the disbursement of the Net Proceeds,  and until
                  so disbursed  pursuant to this Subsection (b) shall constitute
                  additional security for the Obligations.

                           (vii) The excess, if any, of the Net Proceeds and the
                  remaining  balance,  if any,  of the Net  Proceeds  Deficiency
                  deposited  with  Lender  after  the   Restoration   Consultant
                  certifies to Lender that the Restoration has been completed in
                  accordance with the provisions of this Subsection (b), and the
                  receipt by Lender of evidence  satisfactory to Lender that all
                  costs incurred in connection  with the  Restoration  have been
                  paid in  full,  shall  be  remitted  by  Lender  to  Borrower,
                  provided no Event of Default  shall have occurred and shall be
                  continuing under the Note, this Security  Instrument or any of
                  the Other Security Documents.

                  (c) All Net Proceeds not required (i) to be made available for
         the  Restoration  or (ii) to be  returned  to  Borrower  as excess  Net
         Proceeds pursuant to Subsection (b)(vii) may be retained and applied by
         Lender  toward  the  payment  of the Debt  whether  or not then due and
         payable  in such  order,  priority  and  proportions  as  Lender in its
         discretion shall deem proper or, at the discretion of Lender,  the same
         may be paid,  either in whole or in part, to Borrower for such purposes
         as Lender shall designate,  in its discretion.  If Lender shall receive
         and retain Net Proceeds,  the lien of this Security Instrument shall be
         reduced only by the amount thereof  received and retained by Lender and
         actually applied by Lender in reduction of the Debt.


                 Article 5 - REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender that:

                  Section 5.1 WARRANTY OF TITLE.  Borrower has good title to the
Property and has the right to mortgage,  grant, bargain,  sell, pledge,  assign,
warrant,   transfer  and  convey  the  same  and  that  Borrower   possesses  an
unencumbered  fee simple  absolute estate in the Land and the  Improvements  and
that it owns the Property free and clear of all liens,  encumbrances and charges
whatsoever  except  for those  exceptions  shown in the title  insurance  policy
insuring the lien of this  Security  Instrument  (the  "Permitted  Exceptions").
Borrower shall forever  warrant,  defend and preserve the title and the validity
and priority of the lien of this Security  Instrument and shall forever  warrant
and defend the same to Lender against the claims of all persons whomsoever.

                  Section  5.2   AUTHORITY.   Borrower   (and  the   undersigned
representative of Borrower, if any) has full power, authority and legal right to
execute this Security Instrument, and to mortgage, grant, bargain, sell, pledge,
assign,  warrant,  transfer and convey the Property pursuant to the terms hereof
and to keep  and  observe  all of the  terms  of  this  Security  Instrument  on
Borrower's part to be performed.

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                  Section 5.3 LEGAL STATUS AND  AUTHORITY.  Borrower (a) is duly
organized,  validly existing and in good standing under the laws of its state of
organization or incorporation; (b) is duly qualified to transact business and is
in good  standing  in the State where the  Property is located;  and (c) has all
necessary approvals, governmental and otherwise, and full power and authority to
own the Property and carry on its business as now  conducted  and proposed to be
conducted. Borrower now has and shall continue to have the full right, power and
authority  to operate  and lease the  Property,  to  encumber  the  Property  as
provided  herein and to perform all of the other  obligations to be performed by
Borrower  under the  Note,  this  Security  Instrument  and the  Other  Security
Documents.

                  Section 5.4 VALIDITY OF DOCUMENTS. (a) The execution, delivery
and  performance  of the Note,  this Security  Instrument and the Other Security
Documents  and  the  borrowing   evidenced  by  the  Note  (i)  are  within  the
corporate/partnership/company  power of Borrower;  (ii) have been  authorized by
all  requisite  corporate/partnership/company  action;  (iii) have  received all
necessary  approvals and consents,  corporate,  governmental or otherwise;  (iv)
will not  violate,  conflict  with,  result in a breach of or  constitute  (with
notice or lapse of time,  or both) a default  under any  provision  of law,  any
order or  judgment  of any court or  governmental  authority,  the  articles  of
incorporation,   by-laws,   partnership   or  trust   agreement,   articles   of
organization, operating agreement, or other governing instrument of Borrower, or
any indenture,  agreement or other instrument to which Borrower is a party or by
which it or any of its assets or the  Property  is or may be bound or  affected;
(v) will not  result  in the  creation  or  imposition  of any  lien,  charge or
encumbrance  whatsoever  upon any of its  assets,  except the lien and  security
interest created hereby;  and (vi) will not require any authorization or license
from,  or any  filing  with,  any  governmental  or other body  (except  for the
recordation of this  instrument in  appropriate  land records in the State where
the Property is located and except for Uniform  Commercial Code filings relating
to the  security  interest  created  hereby);  and (b) the Note,  this  Security
Instrument and the Other  Security  Documents  constitute  the legal,  valid and
binding obligations of Borrower.

                  Section  5.5   LITIGATION.   There  is  no  action,   suit  or
proceeding, judicial, administrative or otherwise (including any condemnation or
similar proceeding), pending or, to the best of Borrower's knowledge, threatened
or  contemplated  against,  or  affecting,  Borrower,  a  Guarantor,  if any, an
Indemnitor, if any, or the Property.

                  Section 5.6       STATUS OF PROPERTY.

                  (a) No  portion  of the  Improvements  is  located  in an area
         identified  by the  Secretary of Housing and Urban  Development  or any
         successor  thereto as an area having special flood hazards  pursuant to
         the Flood  Insurance  Acts or, if any  portion of the  Improvements  is
         located  within such area,  Borrower has obtained and will maintain the
         insurance prescribed in Section hereof.

                  (b) Borrower has obtained all necessary certificates, licenses
         and other  approvals,  governmental  and  otherwise,  necessary for the
         operation  of the  Property  and the  conduct of its  business  and all
         required  zoning,  building  code,  land use,  environmental  and other
         similar permits or approvals, all of which are in full force and

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         effect as of the date hereof and not subject to revocation, suspension,
         forfeiture or modification.

                  (c) To the best of Borrower's  knowledge after due inquiry and
         investigation,  the Property and the present and  contemplated  use and
         occupancy  thereof are in full  compliance  with all applicable  zoning
         ordinances,  building codes, land use and environmental  laws and other
         similar laws.

                  (d) The Property is served by all  utilities  required for the
         current or contemplated use thereof. All utility service is provided by
         public utilities and the Property has accepted or is equipped to accept
         such utility service.

                  (e) All public roads and streets  necessary for service of and
         access to the Property for the current or contemplated use thereof have
         been completed,  are serviceable and all-weather and are physically and
         legally open for use by the public.

                  (f)      The Property is served by public water and sewer 
         systems.

                  (g)      The Property is free from damage caused by fire or 
         other casualty.

                  (h) All costs and  expenses  of any and all labor,  materials,
         supplies and equipment  used in the  construction  of the  Improvements
         have been paid in full.

                  (i)  Borrower  has paid in full for,  and is the owner of, all
         furnishings, fixtures and equipment (other than tenants' property) used
         in connection with the operation of the Property, free and clear of any
         and all security interests, liens or encumbrances,  except the lien and
         security interest created hereby.

                  (j) To the best of Borrower's  knowledge after due inquiry and
         investigation,  all liquid and solid waste  disposal,  septic and sewer
         systems  located on the Property are in a good and safe  condition  and
         repair and in compliance with all Applicable Laws.

                  Section  5.7 NO  FOREIGN  PERSON.  Borrower  is not a "foreign
person" within the meaning of Sections  1445(f)(3) of the Internal  Revenue Code
of 1986, as amended and the related Treasury Department  regulations,  including
temporary regulations.

                  Section 5.8  SEPARATE  TAX LOT.  The  Property is assessed for
real  estate tax  purposes as one or more  wholly  independent  tax lot or lots,
separate from any adjoining land or improvements not constituting a part of such
lot or lots,  and no other land or  improvements  is assessed and taxed together
with the Property or any portion thereof.

                  Section 5.9       ERISA COMPLIANCE.

                  (a) As of the  date  hereof  and  throughout  the term of this
         Security  Instrument,  (i) Borrower is not and will not be an "employee
         benefit plan" as defined in Section 3(3) of ERISA,  which is subject to
         Title I of ERISA, and (ii) the assets of Borrower do not

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         and will not constitute "plan assets" of one or more such plans for 
         purposes of Title I of  ERISA; and

                  (b) As of the  date  hereof  and  throughout  the term of this
         Security Instrument (i) Borrower is not and will not be a "governmental
         plan" within the meaning of Section 3(3) of ERISA and (ii) transactions
         by or with  Borrower are not and will not be subject to state  statutes
         applicable  to  Borrower   regulating   investments  of  and  fiduciary
         obligations with respect to governmental plans.

                  Section  5.10  LEASES.  (a)  Borrower is the sole owner of the
entire lessor's interest in the Leases; (b) the Leases are valid and enforceable
and in full force and effect;  (c) all of the Leases are arms-length  agreements
with bona fide, independent third parties (except, however, with respect to that
certain lease dated December 11, 1996 between  Borrower,  as landlord,  and JBI,
Inc.,  as tenant  (the "J.  Baker  Lease"));  (d) no party under any Lease is in
default;  (e) all  Rents  due  have  been  paid in  full;  (f) the  terms of all
alterations,  modifications  and  amendments  to the Leases are reflected in the
certified  occupancy  statement delivered to and approved by Lender; (g) none of
the Rents  reserved in the Leases have been  assigned  or  otherwise  pledged or
hypothecated;  (h) none of the Rents have been  collected  for more than one (1)
month in advance;  (i) the premises demised under the Leases have been completed
and the  tenants  under  the  Leases  have  accepted  the same  and  have  taken
possession  of the same on a  rent-paying  basis;  (j) there exist no offsets or
defenses to the payment of any  portion of the Rents;  (k) no Lease  contains an
option to purchase,  right of first  refusal to purchase,  or any other  similar
provision;  (l) no person or entity has any possessory  interest in, or right to
occupy,  the Property  except  under and pursuant to a Lease;  (m) each Lease is
subordinate  to this  Security  Instrument,  either  pursuant  to its terms or a
recorded  subordination  agreement;  and  (n) no  Lease  has  the  benefit  of a
non-disturbance  agreement  that  would be  considered  unacceptable  to prudent
institutional lenders.

                  Section 5.11 FINANCIAL CONDITION. (a) (i) Borrower is solvent,
and no bankruptcy,  reorganization,  insolvency or similar  proceeding under any
state or federal  law with  respect to  Borrower  has been  initiated,  and (ii)
Borrower  has  received  reasonably  equivalent  value for the  granting of this
Security Instrument.

                  (b)      No petition in bankruptcy has been filed by or 
against Borrower, JBI, Inc. or J. Baker, Inc., or any principal, general partner
or member thereof, in the last seven (7) years, and neither Borrower, JBI, Inc.
nor J. Baker, Inc. or any principal, general partner or member thereof, in the
last seven (7) years has ever made any assignment for the benefit of
creditors or taken advantage of any insolvency act or any act for the benefit 
of debtors.

                  Section 5.12 BUSINESS PURPOSES. The loan evidenced by the Note
secured by the Security Instrument and the Other Security Documents (the "Loan")
is solely for the business purpose of Borrower, and is not for personal, family,
household, or agricultural purposes.

                  Section 5.13      TAXES.  Borrower, any Guarantor and any 
Indemnitor have filed all federal, state, county, municipal, and city income 
and other tax returns required to have been filed by them and have paid all 
taxes and related liabilities which have become due pursuant to such returns or 
pursuant to any assessments received by them.  Neither Borrower, any Guarantor

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nor any Indemnitor  knows of any basis for any additional  assessment in respect
of any such taxes and related liabilities for prior years.

                  Section 5.14      MAILING ADDRESS.  Borrower's mailing 
address, as set forth in the opening paragraph hereof or as changed in 
accordance with the provisions hereof, is true and correct.

                  Section  5.15  NO  CHANGE  IN  FACTS  OR  CIRCUMSTANCES.   All
information  in the  application  for the Loan  submitted  to Lender  (the "Loan
Application") and in all financing statements, rent rolls, reports, certificates
and other  documents  submitted in connection  with the Loan  Application  or in
satisfaction  of the terms  thereof,  are accurate,  complete and correct in all
material  respects.  There has been no adverse  change in any  condition,  fact,
circumstance  or  event  that  would  make  any  such  information   inaccurate,
incomplete or otherwise misleading.

                  Section 5.16 DISCLOSURE.  Borrower has disclosed to Lender all
material facts and has not failed to disclose any material fact that could cause
any representation or warranty made herein to be materially misleading.

                  Section 5.17      THIRD PARTY REPRESENTATIONS.  Each of the 
representations and the warranties made by each Guarantor and Indemnitor herein
or in any Other Security Document(s) is true and correct in all material
respects.

                  Section 5.18      ILLEGAL ACTIVITY.  No portion of the 
Property has been or will be purchased with proceeds of any illegal activity.

                  Section 5.19 CONTRACTS. All contracts,  agreements,  consents,
waivers,  documents and writings of every kind or character at any time to which
Borrower is a party to be delivered to Lender  pursuant to any of the provisions
of this Security  Instrument are valid and enforceable  against Borrower and, to
the best  knowledge  of  Borrower,  are  enforceable  against all other  parties
thereto,  and, to  Borrower's  actual  knowledge,  in all respects are what they
purport to be and, to the best  knowledge  of  Borrower,  to the extent that any
such  writing  shall  impose  any  obligation  or duty on the party  thereto  or
constitute  a waiver of any rights  which any such party might  otherwise  have,
said writing  shall be valid and  enforceable  against said party in  accordance
with  its  terms,  except  as such  enforcement  may be  limited  by  applicable
bankruptcy,  insolvency,  reorganization or similar laws affecting the rights of
creditors generally.


                    Article 6 - OBLIGATIONS AND RELIANCES

                  Section  6.1   RELATIONSHIP   OF  BORROWER  AND  LENDER.   The
relationship  between Borrower and Lender is solely that of debtor and creditor,
and Lender has no fiduciary or other special relationship with Borrower,  and no
term or condition of any of the Note,  this  Security  Instrument  and the Other
Security  Documents  shall be construed so as to deem the  relationship  between
Borrower and Lender to be other than that of debtor and creditor.

                  Section 6.2       NO RELIANCE ON LENDER.  Lender will be 
relying solely upon Borrower's expertise and business plan in connection with 
the ownership and operation of the

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Property.  Borrower is not relying on Lender's expertise, business acumen or
advice in connection with the Property.

                  Section 6.3 NO LENDER  OBLIGATIONS.  (a)  Notwithstanding  the
provisions of Subsections (f) and (l) or Section , Lender is not undertaking the
performance of (i) any  obligations  under the Leases;  or (ii) any  obligations
with  respect  to  such  agreements,   contracts,   certificates,   instruments,
franchises, permits, trademarks, licenses and other documents.

                  (b)  By  accepting  or  approving   anything  required  to  be
observed,  performed  or  fulfilled  or to be given to Lender  pursuant  to this
Security Instrument, the Note or the Other Security Documents, including without
limitation,  any officer's  certificate,  balance sheet, statement of profit and
loss or other  financial  statement,  survey,  appraisal,  or insurance  policy,
Lender  shall not be deemed to have  warranted,  consented  to, or affirmed  the
sufficiency,  the legality or  effectiveness  of same,  and such  acceptance  or
approval  thereof shall not constitute any warranty or affirmation  with respect
thereto by Lender.

                  Section 6.4 RELIANCE.  Borrower  recognizes  and  acknowledges
that in accepting the Note,  this  Security  Instrument  and the Other  Security
Documents,  Lender is expressly and primarily  relying on the truth and accuracy
of  the  warranties  and  representations  set  forth  in  Article  without  any
obligation to investigate the Property and  notwithstanding any investigation of
the Property by Lender;  that such reliance  existed on the part of Lender prior
to the date  hereof;  that the  warranties  and  representations  are a material
inducement to Lender in accepting the Note,  this  Security  Instrument  and the
Other Security Documents;  and that Lender would not be willing to make the Loan
and  accept  this  Security  Instrument  in the  absence of the  warranties  and
representations as set forth in Article 5.


                        Article 7 - FURTHER ASSURANCES

                  Section 7.1 RECORDING OF SECURITY  INSTRUMENT,  ETC.  Borrower
forthwith  upon the  execution  and  delivery of this  Security  Instrument  and
thereafter,  from time to time,  will cause this Security  Instrument and any of
the Other Security  Documents creating a lien or security interest or evidencing
the lien hereof upon the Property and each instrument of further assurance to be
filed,  registered  or  recorded  in such  manner  and in such  places as may be
required by any present or future law in order to publish notice of and fully to
protect and perfect the lien or security  interest hereof upon, and the interest
of Lender in, the Property. Borrower will pay all taxes, filing, registration or
recording  fees,  and  all  expenses  incident  to the  preparation,  execution,
acknowledgment and/or recording of the Note, this Security Instrument, the Other
Security  Documents,  any note or mortgage  supplemental  hereto,  any  security
instrument with respect to the Property and any instrument of further assurance,
and any modification or amendment of the foregoing  documents,  and all federal,
state,  county and municipal  taxes,  duties,  imposts,  assessments and charges
arising out of or in connection with the execution and delivery of this Security
Instrument,  any mortgage  supplemental  hereto,  any security  instrument  with
respect  to the  Property  or any  instrument  of  further  assurance,  and  any
modification or amendment of the foregoing documents, except where prohibited by
law so to do.


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                  Section 7.2 FURTHER ACTS,  ETC.  Borrower will, at the cost of
Borrower,  and without expense to Lender,  do, execute,  acknowledge and deliver
all and every such further acts,  deeds,  conveyances,  mortgages,  assignments,
notices of assignments,  transfers and assurances as Lender shall,  from time to
time,  reasonably  require,  for  the  better  assuring,  conveying,  assigning,
transferring,  and  confirming  unto  Lender  the  property  and  rights  hereby
mortgaged,  granted,  bargained, sold, conveyed,  confirmed,  pledged, assigned,
warranted  and  transferred  or  intended  now or  hereafter  so to be, or which
Borrower may be or may hereafter become bound to convey or assign to Lender,  or
for carrying out the intention or  facilitating  the performance of the terms of
this Security  Instrument or for filing,  registering or recording this Security
Instrument, or for complying with all Applicable Laws. Borrower, on demand, will
execute  and  deliver  and  hereby  authorizes  Lender to execute in the name of
Borrower or without the  signature of Borrower to the extent Lender may lawfully
do so, one or more financing statements, chattel mortgages or other instruments,
to evidence more  effectively  the security  interest of Lender in the Property.
Borrower  grants to Lender an  irrevocable  power of  attorney  coupled  with an
interest for the purpose of  exercising  and  perfecting  any and all rights and
remedies available to Lender at law and in equity,  including without limitation
such rights and remedies available to Lender pursuant to this Section .

          Section 7.3       CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP
                            -------------------------------------------------
LAWS.
----

                  (a) If any law is enacted or adopted or amended after the date
         of this  Security  Instrument  which deducts the Debt from the value of
         the Property for the purpose of taxation or which imposes a tax, either
         directly  or  indirectly,  on the  Debt  or  Lender's  interest  in the
         Property,  Borrower  will  pay the tax,  with  interest  and  penalties
         thereon,  if any. If Lender is advised by counsel chosen by it that the
         payment of tax by  Borrower  would be  unlawful or taxable to Lender or
         unenforceable or provide the basis for a defense of usury,  then Lender
         shall have the option by written  notice of not less than  ninety  (90)
         days to declare the Debt immediately due and payable.

                  (b)  Borrower  will not claim or demand or be  entitled to any
         credit or  credits  on account of the Debt for any part of the Taxes or
         Other Charges assessed against the Property,  or any part thereof,  and
         no deduction shall otherwise be made or claimed from the assessed value
         of the Property,  or any part thereof,  for real estate tax purposes by
         reason of this Security  Instrument or the Debt. If such claim,  credit
         or deduction shall be required by law, Lender shall have the option, by
         written  notice of not less than ninety (90) days,  to declare the Debt
         immediately due and payable.

                  (c) If at any time the  United  States of  America,  any State
         thereof or any  subdivision of any such State shall require  revenue or
         other stamps to be affixed to the Note,  this Security  Instrument,  or
         any of the Other  Security  Documents or impose any other tax or charge
         on the  same,  Borrower  will  pay  for the  same,  with  interest  and
         penalties thereon, if any.


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                  Section 7.4       ESTOPPEL CERTIFICATES.

                  (a) After request by Lender,  Borrower,  within ten (10) days,
         shall furnish  Lender or any proposed  assignee with a statement,  duly
         acknowledged  and  certified,  setting  forth  (i)  the  amount  of the
         original principal amount of the Note, (ii) the unpaid principal amount
         of the Note,  (iii) the rate of interest of the Note, (iv) the terms of
         payment and maturity  date of the Note,  (v) the date  installments  of
         interest  and/or  principal were last paid,  except as provided in such
         statement,  there  are no  defaults  or,  to  the  best  of  Borrower's
         knowledge,  events  which  with the  passage  of time or the  giving of
         notice or both,  would constitute an event of default under the Note or
         the  Security  Instrument,   (vi)  that  the  Note  and  this  Security
         Instrument are valid,  legal and binding  obligations and have not been
         modified or if modified, giving particulars of such modification, (vii)
         whether any offsets or defenses exist against the  obligations  secured
         hereby  and,  if any are  alleged  to  exist,  a  detailed  description
         thereof,  (viii)  that all  Leases  are in full  force and  effect  and
         (provided the Property is not a residential  multifamily property) have
         not been modified (or if modified,  setting  forth all  modifications),
         (ix) the date to which the Rents  thereunder have been paid pursuant to
         the Leases, (x) whether or not, to the best knowledge of Borrower,  any
         of the lessees under the Leases are in default  under the Leases,  and,
         if any of the lessees are in default, setting forth the specific nature
         of all such  defaults,  (xi) the amount of  security  deposits  held by
         Borrower under each Lease and that such amounts are consistent with the
         amounts  required  under each Lease,  and (xii) as to any other matters
         reasonably  requested by Lender and  reasonably  related to the Leases,
         the  obligations   secured  hereby,   the  Property  or  this  Security
         Instrument.

                  (b) Borrower  shall deliver to Lender,  promptly upon request,
         duly  executed  estoppel  certificates  from any one or more lessees as
         required  by Lender  attesting  to such  facts  regarding  the Lease as
         Lender  may   reasonably   require,   including   but  not  limited  to
         attestations  that each  Lease  covered  thereby  is in full  force and
         effect with no defaults  thereunder on the part of any party, that none
         of the Rents  have been paid more than one month in  advance,  and that
         the  lessee  claims no defense  or offset  against  the full and timely
         performance of its obligations under the Lease.

                  (c) Upon any  transfer or proposed  transfer  contemplated  by
         Section hereof, at Lender's request,  Borrower,  any Guarantors and any
         Indemnitor(s)  shall  provide an estoppel  certificate  to the Investor
         (defined  in  Section  ) or any  prospective  Investor  in  such  form,
         substance and detail as Lender,  such Investor or prospective  Investor
         may require.

                  Section 7.5 FLOOD INSURANCE.  After Lender's request, Borrower
shall  deliver   evidence   satisfactory  to  Lender  that  no  portion  of  the
Improvements is situated in a federally  designated  "special flood hazard area"
or if it is, that Borrower has obtained  insurance  meeting the  requirements of
Section 3.3(a)(vii).

                  Section 7.6  SPLITTING OF SECURITY  INSTRUMENT.  This Security
Instrument  and the Note  shall,  at any time until the same shall be fully paid
and satisfied,  at the sole election of Lender,  be split or divided into two or
more notes and two or more security

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instruments,  each of which shall  cover all or a portion of the  Property to be
more particularly described therein. To that end, Borrower, upon written request
of Lender,  shall  execute,  acknowledge  and deliver,  or cause to be executed,
acknowledged  and delivered by the then owner of the Property,  to Lender and/or
its designee or designees  substitute  notes and  security  instruments  in such
principal amounts, aggregating not more than the then unpaid principal amount of
this Security Instrument,  and containing terms,  provisions and clauses similar
to those  contained  herein  and in the  Note,  and  such  other  documents  and
instruments as may be required by Lender.

                  Section  7.7  REPLACEMENT   DOCUMENTS.   Upon  receipt  of  an
affidavit  of an  officer  of  Lender  as to the  loss,  theft,  destruction  or
mutilation  of the Note or any Other  Security  Document  which is not of public
record, and, in the case of any such mutilation, upon surrender and cancellation
of such Note or Other Security Document, Borrower will issue, in lieu thereof, a
replacement  Note or Other  Security  Document,  dated  the  date of such  lost,
stolen,  destroyed  or  mutilated  Note or Other  Security  Document in the same
principal amount thereof and otherwise of like tenor.


                      Article 8 - DUE ON SALE/ENCUMBRANCE

                  Section 8.1 LENDER  RELIANCE.  Lender will rely on  Borrower's
ownership of the Property as a means of maintaining the value of the Property as
security for repayment of the Debt and the performance of the Other Obligations.
Borrower  acknowledges that Lender has a valid interest in maintaining the value
of the Property so as to ensure that,  should Borrower  default in the repayment
of the Debt or the performance of the Other Obligations,  Lender can recover the
Debt by a sale of the Property.

                  Section 8.2 NO SALE/ENCUMBRANCE. Borrower agrees that Borrower
shall not, without the prior written consent of Lender, sell, convey,  mortgage,
grant, bargain,  encumber, pledge, assign, or otherwise transfer the Property or
any  part  thereof  or  permit  the  Property  or any part  thereof  to be sold,
conveyed,  mortgaged,  granted,  bargained,  encumbered,  pledged,  assigned, or
otherwise transferred.

                  Section  8.3  SALE/ENCUMBRANCE  DEFINED.  A sale,  conveyance,
mortgage, grant, bargain,  encumbrance,  pledge,  assignment, or transfer within
the meaning of this  Article 8 shall be deemed to  include,  but not limited to,
(a) an installment  sales agreement wherein Borrower agrees to sell the Property
or any part thereof for a price to be paid in installments;  (b) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy by a space tenant  thereunder or a sale,  assignment or other transfer
of, or the grant of a security interest in, Borrower's right, title and interest
in and  to any  Leases  or any  Rents;  (c)  if  Borrower,  any  Guarantor,  any
Indemnitor,  or any  general  or  limited  partner  or member of  Borrower,  any
Guarantor or any Indemnitor is a corporation, the voluntary or involuntary sale,
conveyance,  transfer or pledge of such corporation's stock (or the stock of any
corporation directly or indirectly  controlling such corporation by operation of
law or otherwise) or the creation or issuance of new stock by which an aggregate
of more  than 10% of such  corporation's  stock  shall be  vested  in a party or
parties who are not now  stockholders;  (d) if  Borrower,  any  Guarantor or any
Indemnitor or any general or limited partner or member of

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Borrower, any Guarantor or any Indemnitor is a limited or general partnership or
joint  venture,  the  change,  removal or  resignation  of a general  partner or
managing  partner or the transfer or pledge of the  partnership  interest of any
general partner or managing partner or any profits or proceeds  relating to such
partnership interest or the voluntary or involuntary sale, conveyance,  transfer
or pledge of limited partnership interests (or the limited partnership interests
of any limited  partnership  directly or  indirectly  controlling  such  limited
partnership by operation of law or otherwise) or the creation or issuance of new
limited  partnership  interests,  by which an aggregate of more than 10% of such
limited partnership  interests are held by parties who are not currently limited
partners; and (e) if Borrower,  any Guarantor,  any Indemnitor or any general or
limited  partner or member of Borrower,  any  Guarantor or any  Indemnitor  is a
limited  liability  company,  the change,  removal or  resignation of a managing
member or the transfer of the membership  interest of any managing member or any
profits or proceeds  relating to such  membership  interest or the  voluntary or
involuntary sale, conveyance, transfer or pledge of membership interests (or the
membership  interests of any limited  liability  company  directly or indirectly
controlling such limited  liability company by operation of law or otherwise) or
the creation or issuance of new membership  interests,  by which an aggregate of
more  than 10% of such  membership  interests  are held by  parties  who are not
currently members.  Notwithstanding the foregoing,  the following transfer shall
not be deemed to be a sale, conveyance,  mortgage, grant, bargain,  encumbrance,
pledge, assignment, or transfer within the meaning of this Article 8: a transfer
by devise or descent or by operation of law upon the death of a member,  partner
or  stockholder  of Borrower,  any  Guarantor or any  Indemnitor  or any general
partner or member thereof.

                  Section 8.4  LENDER'S  RIGHTS.  Lender  reserves  the right to
condition the consent required hereunder upon a modification of the terms hereof
and on assumption of the Note,  this Security  Instrument and the Other Security
Documents as so modified by the proposed  transferee,  payment of a transfer fee
of equal to one  percent  (1%) of the  principal  balance of the Note,  a $4,000
processing  fee, and all of Lender's  expenses  incurred in connection with such
transfer,  the  approval  by a Rating  Agency of the  proposed  transferee,  the
proposed transferee's  continued compliance with the covenants set forth in this
Security Instrument, including, without limitation, the covenants in Section 4.3
hereof,  or  such  other  conditions  as  Lender  shall  determine  in its  sole
discretion to be in the interest of Lender.  All of Lender's  expenses  incurred
and the $4,000 processing fee shall be payable by Borrower whether or not Lender
consents to the transfer. Lender shall not be required to demonstrate any actual
impairment of its security or any increased  risk of default  hereunder in order
to  declare  the  Debt   immediately  due  and  payable  upon  Borrower's  sale,
conveyance,  mortgage,  grant,  bargain,  encumbrance,  pledge,  assignment,  or
transfer of the Property without Lender's consent. This provision shall apply to
every  sale,  conveyance,   mortgage,  grant,  bargain,   encumbrance,   pledge,
assignment,  or transfer of the Property regardless of whether voluntary or not,
or whether  or not  Lender  has  consented  to any  previous  sale,  conveyance,
mortgage, grant, bargain,  encumbrance,  pledge,  assignment, or transfer of the
Property.

                  Section 8.5 ONE-TIME TRANSFER. Notwithstanding anything to the
contrary contained in this Article 8, Lender shall not unreasonably withhold its
consent to a one-time sale,  assignment,  or other transfer of the Property or a
one-time  sale or transfer of Borrower  or  Principal  provided  that (a) Lender
receives thirty (30) days prior written notice of such transfer,  (b) no default
has occurred and is continuing under this Security Instrument, the Note or the

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Other  Security   Documents  and  (c)  upon  the   satisfaction   (in  the  sole
determination  of Lender) of such  conditions  as may be  reasonably  imposed by
Lender, which may include, but shall not be limited to, the following matters:

    A.       Borrower shall pay to Lender a processing fee of $4,000 upon
             request for loan assumption and a transfer fee equal to 1% of the
             outstanding principal balance of the Loan upon transfer approval;

    B.       Borrower shall pay any and all out-of-pocket costs incurred in
             connection with the transfer (including, without limitation,
             Lender's counsel fees and disbursements and all recording fees,
             title insurance premiums and mortgage and intangible taxes);

    C.       The proposed transferee (the "Transferee") and Transferee's
             Principals, as hereinafter defined, must have demonstrated
             expertise as determined by Lender in owning and operating
             properties similar in location, size and operation to the Property.
             The term "Transferee's Principals" shall include Transferee's (I)
             managing members, general partners or principal shareholders and
             (II) such other members, partners or shareholders which shall own
             a 5% or greater interest in Transferee;

    D.      Transferee and Transferee's Principals shall, as of the date of such
            transfer, have an aggregate net worth and liquidity of not less than
            that of J. Baker, Inc. as of the date hereof and as of the date of 
            the transfer;

   E.       Transferee,  Transferee's Principals and all
            other   entities   which  may  be  owned  or
            controlled   directly   or   indirectly   by
            Transferee's Principals ("Related Entities")
            must not have been a party to any bankruptcy
            proceeding,  voluntary or involuntary,  made
            an  assignment  for the benefit of creditors
            or taken advantage of any insolvency act, or
            any act for the  benefit of  debtors  within
            seven  (7)  years  prior  to the date of the
            transfer;

    F.      Transferee   shall   assume   all   of   the
            obligations of Borrower under the Note, this
            Security  Instrument  and the Other Security
            Documents in a manner satisfactory to Lender
            in   all   respects,    including,   without
            limitation,  by entering  into an assumption
            agreement in form and substance satisfactory
            to Lender;

     G.     There shall be no material litigation pending against Transferee,
            Transferee's Principals and Related Entities that is not acceptable
            to Lender;


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     H.     Transferee, Transferee's Principals and Related Entities shall not
            have defaulted under its or their obligations with respect to any
            other indebtedness;

     I.     Transferee and Transferee's Principals must be able to satisfy all
            the covenants set forth in Section 4.3 hereof;

     J.     Transferee shall be approved by such Rating Agencies as selected
            by Lender; and

     K.     Transferee shall deliver an endorsement to the existing title policy
            insuring this Security Instrument as modified by the assumption
            agreement, as a valid first lien on the Property and naming the
            Transferee as owner of the fee estate of the Property, which
            endorsement shall insure that as of the recording of the assumption
            agreement, the Property shall not be subject to any additional
            exceptions or liens other than those contained in the title policy
            issued in connection with this Security Instrument.

                             Article 9 - PREPAYMENT

                  Section 9.1 PREPAYMENT  BEFORE EVENT OF DEFAULT.  The Debt may
be prepaid only in strict  accordance  with the express terms and  conditions of
the Note including the payment of any prepayment consideration.

                  Section 9.2 PREPAYMENT ON CASUALTY OR  CONDEMNATION.  Provided
no Event of Default exists under the Note, this Security Instrument or the Other
Security  Documents,  in the event of any prepayment of the Debt pursuant to the
terms of Sections or hereof during the last  thirty-six (36) months prior to the
Maturity Date, no Prepayment Consideration (defined in the Note) shall be due in
connection  therewith,  but  Borrower  shall  be  responsible  for the  Interest
Shortfall Payment (defined in the Note), if any, and all other amounts due under
the Note, this Security Instrument and the Other Security Documents.

                  Section 9.3  PREPAYMENT  AFTER EVENT OF DEFAULT.  If a Default
Prepayment (defined below) occurs, Borrower shall pay to Lender the entire Debt,
including without limitation, the following amounts:

                  (a) if the Default  Prepayment  occurs  prior to the time when
         prepayment of the principal balance of the Note is permitted, an amount
         equal  to the sum of (i) the  present  value of the  interest  payments
         which would have  accrued on the  principal  balance of the Note (which
         would be outstanding each month assuming scheduled amortization) at the
         Applicable Interest Rate (as defined in the Note) from the date of such
         Default Prepayment to the first day prepayment is permitted pursuant to
         the Note discounted at a rate equal to the Treasury Rate (as defined in
         the Note)  except  that such  Treasury  Rate shall be based on the U.S.
         Treasury  constant  maturity  most nearly  approximating  the date upon
         which prepayment is first permitted  pursuant to the Note, and (ii) the
         Prepayment  Consideration  (defined  in the Note) which would have been
         payable to Lender as of the

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         first day of the sixth  (6th) Loan Year (as  defined in the Note) based
         on the Treasury Rate in effect at the time of such Default  Prepayment;
         and

                  (b) if the Default Prepayment occurs at a time when prepayment
         of the  principal  balance  of the Note is  permitted,  the  Prepayment
         Consideration and the Interest Shortfall Payment (defined in the Note),
         if applicable.

For purposes of this Section 9.3,  the term  "Default  Prepayment"  shall mean a
prepayment of the principal  amount of the Note made after the occurrence of any
Event of Default or an  acceleration  of the  Maturity  Date (as  defined in the
Note) under any  circumstances,  including,  without  limitation,  a  prepayment
occurring in connection with reinstatement of this Security  Instrument provided
by statute under  foreclosure  proceedings  or exercise of a power of sale,  any
statutory right of redemption  exercised by Borrower or any other party having a
statutory  right to redeem or prevent  foreclosure,  any sale in  foreclosure or
under exercise of a power of sale or otherwise.


                      Article 10 - DEFAULT

                  Section 10.1      EVENTS OF DEFAULT.  The occurrence of any 
one or more of the following events shall constitute an "Event of Default":

                  (a)      if any portion of the Debt is not paid prior to the 
tenth (10th) day after the same is due or if the entire Debt is not paid on or 
before the Maturity Date;

                  (b) if any of the Taxes or Other  Charges is not paid when the
         same is due and  payable  except to the extent sums  sufficient  to pay
         such  Taxes  and  Other  Charges  have been  deposited  with  Lender in
         accordance with the terms of this Security Instrument;

                  (c)   if the Policies are not kept in full force and effect, 
         or if the Policies are  not delivered to Lender upon request;

                  (d) if  Borrower  violates  or does not comply with any of the
         provisions  of  Section or  Article  12 within  thirty  (30) days after
         notice from Lender or if Borrower or Principal, as applicable, violates
         or does not comply with any of the provisions of Section 4.3 or Article
         8;

                  (e)  if  any  representation  or  warranty  of  Borrower,  any
         Indemnitor  or any  person  guaranteeing  payment  of the  Debt  or any
         portion  thereof or performance by Borrower of any of the terms of this
         Security  Instrument (a "Guarantor"),  or any member,  general partner,
         principal or beneficial  owner of any of the foregoing,  made herein or
         in the Environmental  Indemnity (defined below) or any guaranty,  or in
         any  certificate,  report,  financial  statement or other instrument or
         document furnished to Lender shall have been false or misleading in any
         material respect when made;

                  (f)      if (i) Borrower or any managing member or general 
         partner of Borrower, or any Guarantor or Indemnitor shall commence any
         case, proceeding or other action (A)

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         under any  existing  or future  law of any  jurisdiction,  domestic  or
         foreign,   relating   to   bankruptcy,   insolvency,    reorganization,
         conservatorship  or relief  of  debtors,  seeking  to have an order for
         relief  entered  with  respect  to it, or seeking  to  adjudicate  it a
         bankrupt  or  insolvent,   or  seeking   reorganization,   arrangement,
         adjustment, winding-up, liquidation,  dissolution, composition or other
         relief with respect to it or its debts, or (B) seeking appointment of a
         receiver, trustee, custodian, conservator or other similar official for
         it or for all or any substantial part of its assets, or the Borrower or
         any managing member or general partner of Borrower, or any Guarantor or
         Indemnitor  shall  make a general  assignment  for the  benefit  of its
         creditors;  or (ii) there shall be  commenced  against  Borrower or any
         managing  member or general  partner of Borrower,  or any  Guarantor or
         Indemnitor any case, proceeding or other action of a nature referred to
         in clause  (i) above  which  (A)  results  in the entry of an order for
         relief  or  any  such   adjudication  or  appointment  or  (B)  remains
         undismissed,  undischarged or unbonded for a period of sixty (60) days;
         or (iii) there shall be commenced  against the Borrower or any managing
         member or general  partner of Borrower,  or any Guarantor or Indemnitor
         any case,  proceeding or other action seeking  issuance of a warrant of
         attachment,  execution, distraint or similar process against all or any
         substantial  part of its assets which results in the entry of any order
         for any such relief which shall not have been vacated,  discharged,  or
         stayed or bonded  pending  appeal within sixty (60) days from the entry
         thereof; or (iv) the Borrower or any managing member or general partner
         of Borrower,  or any Guarantor or  Indemnitor  shall take any action in
         furtherance   of,  or  indicating  its  consent  to,  approval  of,  or
         acquiescence  in,  any of the acts set forth in clause  (i),  (ii),  or
         (iii)  above;  or (v) the  Borrower or any  managing  member or general
         partner of Borrower,  or any  Guarantor or Indemnitor  shall  generally
         not, or shall be unable to, or shall admit in writing its inability to,
         pay its debts as they become due;

                  (g) if Borrower shall be in default under any other  mortgage,
         deed of trust, deed to secure debt or other security agreement covering
         any part of the  Property  whether it be  superior or junior in lien to
         this Security Instrument;

                  (h)  if  the  Property  becomes  subject  to  any  mechanic's,
         materialman's  or other lien  other  than a lien for local real  estate
         taxes  and  assessments  not then due and  payable  and the lien  shall
         remain undischarged of record (by payment,  bonding or otherwise) for a
         period of thirty (30) days;

                  (i) if any federal  tax lien is filed  against  Borrower,  any
         member or general partner of Borrower, any Guarantor, any Indemnitor or
         the Property and same is not  discharged  of record  within thirty (30)
         days after same is filed;

                  (j)      if any condemnation or eminent domain proceeding has 
         been concluded which renders the use or occupancy of the Property 
         economically unfeasible;

                  (k) if (i) Borrower  fails to timely  provide  Lender with the
         written  certification  and evidence  referred to in Section hereof, or
         (ii) Borrower  consummates a transaction which would cause the Security
         Instrument  or  Lender's  exercise  of its rights  under this  Security
         Instrument,  the Note or the Other  Security  Documents to constitute a
         nonexempt  prohibited  transaction under ERISA or result in a violation
         of a state statute

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         regulating governmental plans, subjecting Lender to liability for a 
         violation of ERISA or a state statute;

                  (l) if Borrower shall fail to reimburse Lender on demand, with
         interest  calculated at the Default Rate, for all Insurance Premiums or
         Taxes,  together with interest and penalties  imposed thereon,  paid by
         Lender pursuant to this Security Instrument;

                  (m) if  Borrower  shall fail to deliver to Lender,  within ten
         (10) days after request by Lender, the estoppel  certificates  required
         pursuant to the terms of Subsections (a) and (c);

                  (n) if  Borrower  shall fail to deliver to Lender,  within ten
         (10) days after  request  by  Lender,  the  statements  referred  to in
         Section in accordance with the terms thereof;

                  (o) if any default  occurs  under that  certain  environmental
         indemnity  agreement  dated the date hereof given by Borrower (at times
         hereinafter   referred   to  as   "Indemnitor(s)")   to   Lender   (the
         "Environmental   Indemnity")  and  such  default  continues  after  the
         expiration of applicable notice and grace periods, if any;

                  (p) if any default  occurs  under any  guaranty  or  indemnity
         executed in connection  herewith and such default  continues  after the
         expiration of applicable grace periods, if any; or

                  (q) if for more than ten (10) days after  notice from  Lender,
         Borrower shall continue to be in default under any other term, covenant
         or  condition  of the  Note,  this  Security  Instrument  or the  Other
         Security Documents in the case of any default which can be cured by the
         payment of a sum of money or for thirty  (30) days  after  notice  from
         Lender in the case of any other default,  provided that if such default
         cannot  reasonably  be cured  within  such  thirty  (30) day period and
         Borrower  shall have  commenced to cure such default within such thirty
         (30) day period and thereafter diligently and expeditiously proceeds to
         cure the same,  such  thirty (30) day period  shall be extended  for so
         long as it shall  require  Borrower in the exercise of due diligence to
         cure such default,  it being agreed that no such extension shall be for
         a period in excess of sixty (60) days.

                  Section 10.2 LATE PAYMENT CHARGE.  If any monthly  installment
of  principal  and  interest is not paid prior to the tenth (10th) day after the
date on which it is due,  Borrower  shall  pay to Lender  upon  demand an amount
equal  to the  lesser  of  five  percent  (5%)  of such  unpaid  portion  of the
outstanding  monthly  installment  of  principal  and  interest  then due or the
maximum amount  permitted by applicable  law, to defray the expense  incurred by
Lender in handling and  processing  such  delinquent  payment and to  compensate
Lender for the loss of the use of such delinquent payment, and such amount shall
be secured by this Security Instrument and the Other Security Documents.

                  Section 10.3      DEFAULT INTEREST.  Borrower will pay, from 
the date of an Event of Default through the earlier of the date upon which the 
Event of Default is cured or the date

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upon which the Debt is paid in full, interest on the unpaid principal balance of
the Note at a per annum rate equal to the lesser of (a) five  percent  (5%) plus
the  Applicable  Interest  Rate (as  defined in the Note),  and (b) the  maximum
interest  rate which  Borrower  may by law pay or Lender may charge and  collect
(the "Default Rate").

                        Article 11 - RIGHTS AND REMEDIES

                  Section 11.1  REMEDIES.  Upon the  occurrence  of any Event of
Default,  Borrower  agrees that Lender may take such action,  without  notice or
demand, as it deems advisable to protect and enforce its rights against Borrower
and in and to the  Property,  including,  but  not  limited  to,  the  following
actions,  each of which may be pursued  concurrently or otherwise,  at such time
and in such  order as Lender  may  determine,  in its sole  discretion,  without
impairing or otherwise affecting the other rights and remedies of Lender:

    (a) declare the entire unpaid Debt to be immediately due and payable;

    (b)  institute  proceedings,  judicial or  otherwise,  for the
        complete  foreclosure of this Security  Instrument under any applicable
        provision of law in which case the Property or any interest therein may
        be sold for cash or upon  credit in one or more  parcels  or in several
        interests or portions and in any order or manner;

    (c)  with  or  without  entry,  to the  extent  permitted  and
        pursuant  to the  procedures  provided  by  applicable  law,  institute
        proceedings for the partial foreclosure of this Security Instrument for
        the portion of the Debt then due and payable, subject to the continuing
        lien and security interest of this Security  Instrument for the balance
        of the Debt not then due, unimpaired and without loss of priority;

    (d) sell  for cash or upon  credit  the  Property  or any part
        thereof and all estate,  claim,  demand,  right,  title and interest of
        Borrower therein and rights of redemption thereof, pursuant to power of
        sale or otherwise, at one or more sales, as an entity or in parcels, at
        such time and place,  upon such terms and after such notice  thereof as
        may be required or permitted by law;

    (e)  institute an action, suit or proceeding in equity for the specific
        performance of any covenant, condition or agreement contained herein, 
        in the Note or in the Other Security Documents;

     (f) recover judgment on the Note either before, during or after any
         proceedings for the enforcement of this Security Instrument or the
         Other Security Documents;

     (g)  apply  for  the  appointment  of  a  receiver,   trustee,
         liquidator or conservator  of the Property,  without notice and without
         regard for the adequacy of the security for the Debt and without regard
         for the  solvency of  Borrower,  any  Guarantor,  Indemnitor  or of any
         person, firm or other entity liable for the payment of the Debt;


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                  (h) subject to any  applicable  law,  the  license  granted to
         Borrower  under Section shall  automatically  be revoked and Lender may
         enter into or upon the  Property,  either  personally or by its agents,
         nominees  or  attorneys  and  dispossess  Borrower  and its  agents and
         servants  therefrom,   without  liability  for  trespass,   damages  or
         otherwise  and  exclude  Borrower  and its  agents or  servants  wholly
         therefrom,  and take  possession  of all books,  records  and  accounts
         relating  thereto and Borrower  agrees to surrender  possession  of the
         Property and of such books, records and accounts to Lender upon demand,
         and thereupon Lender may (i) use,  operate,  manage,  control,  insure,
         maintain, repair, restore and otherwise deal with all and every part of
         the  Property  and conduct the  business  thereat;  (ii)  complete  any
         construction  on the  Property in such manner and form as Lender  deems
         advisable; (iii) make alterations,  additions,  renewals,  replacements
         and  improvements  to or on the Property;  (iv) exercise all rights and
         powers of Borrower with respect to the Property, whether in the name of
         Borrower or  otherwise,  including,  without  limitation,  the right to
         make, cancel,  enforce or modify Leases,  obtain and evict tenants, and
         demand,  sue for,  collect and receive  all Rents of the  Property  and
         every part thereof;  (v) require  Borrower to pay monthly in advance to
         Lender,  or any receiver  appointed to collect the Rents,  the fair and
         reasonable  rental value for the use and occupation of such part of the
         Property as may be  occupied  by  Borrower;  (vi)  require  Borrower to
         vacate and  surrender  possession  of the Property to Lender or to such
         receiver  and, in default  thereof,  Borrower may be evicted by summary
         proceedings  or  otherwise;  and  (vii)  apply  the  receipts  from the
         Property  to the  payment  of the Debt,  in such  order,  priority  and
         proportions  as Lender shall deem  appropriate  in its sole  discretion
         after deducting therefrom all expenses (including reasonable attorneys'
         fees)  incurred in  connection  with the aforesaid  operations  and all
         amounts necessary to pay the Taxes, Other Charges,  insurance and other
         expenses  in  connection  with  the  Property,  as  well  as  just  and
         reasonable compensation for the services of Lender, its counsel, agents
         and employees;

                  (i)  exercise  any and all  rights and  remedies  granted to a
         secured  party  upon  default  under  the  Uniform   Commercial   Code,
         including,  without  limiting the generality of the foregoing:  (i) the
         right to take possession of the Personal  Property or any part thereof,
         and to take such other  measures as Lender may deem  necessary  for the
         care,  protection and preservation of the Personal  Property,  and (ii)
         request  Borrower at its expense to assemble the Personal  Property and
         make it available to Lender at a convenient place acceptable to Lender.
         Any notice of sale, disposition or other intended action by Lender with
         respect to the Personal  Property sent to Borrower in  accordance  with
         the  provisions  hereof at least  five (5) days  prior to such  action,
         shall constitute commercially reasonable notice to Borrower;

                  (j) apply any sums then  deposited  in the Escrow Fund and any
         other sums held in escrow or otherwise by Lender in accordance with the
         terms of this Security Instrument or any Other Security Document to the
         payment  of the  following  items  in  any  order  in its  uncontrolled
         discretion:

                        (i)         Taxes and Other Charges;

                       (ii)         Insurance Premiums;

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         (iii)    Interest on the unpaid principal balance of the Note;
 
         (iv)     Amortization of the unpaid principal balance of the Note;

          (v)     All other sums payable  pursuant to the Note,  this
                  Security   Instrument  and  the  Other   Security   Documents,
                  including without limitation  advances made by Lender pursuant
                  to the terms of this Security Instrument;

    (k)  surrender  the  Policies  maintained  pursuant to Article
         hereof,  collect the unearned Insurance Premiums and apply such sums as
         a credit on the Debt in such  priority and  proportion as Lender in its
         discretion  shall deem proper,  and in connection  therewith,  Borrower
         hereby appoints Lender as agent and attorney-in-fact  (which is coupled
         with an interest and is therefore  irrevocable) for Borrower to collect
         such Insurance Premiums;

    (l)  pursue such other remedies as Lender may have under applicable law; or

    (m)  apply  the  undisbursed   balance  of  any  Net  Proceeds
         Deficiency  deposit,  together with interest thereon, to the payment of
         the Debt in such order,  priority and  proportions as Lender shall deem
         to be appropriate in its discretion.

In the event of a sale, by  foreclosure,  power of sale,  or otherwise,  of less
than all of the Property,  this Security Instrument shall continue as a lien and
security  interest  on the  remaining  portion of the  Property  unimpaired  and
without loss of priority.  Notwithstanding the provisions of this Section to the
contrary,  if any  Event  of  Default  as  described  in  clause  (i) or (ii) of
Subsection (f) shall occur,  the entire unpaid Debt shall be  automatically  due
and payable, without any further notice, demand or other action by Lender.

                  Section  11.2  APPLICATION  OF PROCEEDS.  The purchase  money,
proceeds and avails of any disposition of the Property,  or any part thereof, or
any  other  sums  collected  by  Lender  pursuant  to the  Note,  this  Security
Instrument  or the Other  Security  Documents,  may be  applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion
shall deem proper.

                  Section 11.3 RIGHT TO CURE  DEFAULTS.  Upon the  occurrence of
any Event of Default  (unless  such  Event of  Default  shall have been cured by
Borrower and such cure has been accepted by Lender) or if Borrower fails to make
any payment or to do any act as herein  provided,  Lender  may,  but without any
obligation  to do so and  without  notice to or demand on  Borrower  and without
releasing  Borrower from any obligation  hereunder,  make or do the same in such
manner and to such extent as Lender may deem  necessary  to protect the security
hereof.  Lender is authorized to enter upon the Property for such  purposes,  or
appear in, defend,  or bring any action or proceeding to protect its interest in
the Property or to foreclose  this Security  Instrument or collect the Debt, and
the cost and expense thereof (including reasonable attorneys' fees to the extent
permitted by law), with interest as provided in this Section , shall  constitute
a portion of the Debt and shall be due and  payable to Lender upon  demand.  All
such costs and expenses incurred by Lender in remedying such Event of Default or
such failed payment or act or in appearing in,  defending,  or bringing any such
action or proceeding shall

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bear interest at the Default Rate,  for the period after notice from Lender that
such cost or expense  was  incurred  to the date of payment to Lender.  All such
costs and expenses incurred by Lender together with interest thereon  calculated
at the Default  Rate shall be deemed to  constitute a portion of the Debt and be
secured by this Security  Instrument and the Other Security  Documents and shall
be immediately due and payable upon demand by Lender therefor.

                  Section 11.4 ACTIONS AND PROCEEDINGS.  Lender has the right to
appear in and  defend  any  action or  proceeding  brought  with  respect to the
Property  and to bring any  action or  proceeding,  in the name and on behalf of
Borrower, which Lender, in its discretion,  decides should be brought to protect
its interest in the Property.

                  Section  11.5  RECOVERY OF SUMS  REQUIRED  TO BE PAID.  Lender
shall have the right from time to time to take action to recover any sum or sums
which  constitute a part of the Debt as the same become due,  without  regard to
whether or not the balance of the Debt shall be due,  and without  prejudice  to
the right of Lender  thereafter to bring an action of foreclosure,  or any other
action,  for a default or defaults by Borrower existing at the time such earlier
action was commenced.

                  Section 11.6  EXAMINATION  OF BOOKS AND RECORDS.  Lender,  its
agents,  accountants  and attorneys shall have the right to examine the records,
books,  management  and other papers of  Borrower,  Borrower's  principals,  any
tenant under any Lease and any guarantor of any tenant's  obligations  or of any
Guarantor or Indemnitor  which reflect upon their  financial  condition,  at the
Property or at any office  regularly  maintained by Borrower,  its affiliates or
any Guarantor or Indemnitor where the books and records are located.  Lender and
its agents shall have the right to make copies and extracts  from the  foregoing
records and other  papers.  In addition,  Lender,  its agents,  accountants  and
attorneys  shall  have the right to examine  and audit the books and  records of
Borrower, Borrower's principals, any tenant under any Lease and any guarantor of
any tenant's  obligations  or of any Guarantor or  Indemnitor  pertaining to the
income,  expenses and operation of the Property during reasonable business hours
at any office of Borrower, Borrower's principals, any tenant under any Lease and
any guarantor of any tenant's  obligations or any Guarantor or Indemnitor  where
the books and records are located.

                  Section 11.7 OTHER  RIGHTS,  ETC. (a) The failure of Lender to
insist upon strict  performance  of any term hereof  shall not be deemed to be a
waiver of any term of this Security  Instrument.  Borrower shall not be relieved
of  Borrower's  obligations  hereunder by reason of (i) the failure of Lender to
comply with any request of Borrower, any Guarantor or any Indemnitor to take any
action to foreclose  this Security  Instrument  or otherwise  enforce any of the
provisions  hereof  or of the Note or the  Other  Security  Documents,  (ii) the
release, regardless of consideration,  of the whole or any part of the Property,
or of any  person  liable  for the Debt or any  portion  thereof,  or (iii)  any
agreement or  stipulation  by Lender  extending the time of payment or otherwise
modifying or  supplementing  the terms of the Note, this Security  Instrument or
the Other Security Documents.

                  (b) It is  agreed  that  the  risk of loss  or  damage  to the
Property is on  Borrower,  and Lender  shall have no  liability  whatsoever  for
decline in value of the Property,  for failure to maintain the Policies,  or for
failure to determine  whether insurance in force is adequate as to the amount of
risks insured. Possession by Lender shall not be deemed an election of judicial

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relief,  if any such  possession  is requested or obtained,  with respect to any
Property or collateral not in Lender's possession.

                  (c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender,  in its  discretion,
may elect.  Lender may take action to recover the Debt, or any portion  thereof,
or to enforce  any  covenant  hereof  without  prejudice  to the right of Lender
thereafter  to foreclose  this Security  Instrument.  The rights of Lender under
this Security  Instrument  shall be separate,  distinct and  cumulative and none
shall be given effect to the exclusion of the others.  No act of Lender shall be
construed  as an  election  to  proceed  under any one  provision  herein to the
exclusion of any other provision. Lender shall not be limited exclusively to the
rights and  remedies  herein  stated but shall be  entitled  to every  right and
remedy now or hereafter afforded at law or in equity.

                  Section  11.8 RIGHT TO RELEASE  ANY  PORTION OF THE  PROPERTY.
Lender may release any portion of the Property for such  consideration as Lender
may require without,  as to the remainder of the Property,  in any way impairing
or affecting the lien or priority of this Security Instrument,  or improving the
position of any  subordinate  lienholder  with  respect  thereto,  except to the
extent  that the  obligations  hereunder  shall have been  reduced by the actual
monetary  consideration,  if any,  received by Lender for such release,  and may
accept by assignment, pledge or otherwise any other property in place thereof as
Lender  may  require  without  being  accountable  for so  doing  to  any  other
lienholder.  This  Security  Instrument  shall  continue as a lien and  security
interest in the remaining portion of the Property.

                  Section  11.9  VIOLATION  OF LAWS.  If the  Property is not in
compliance with Applicable Laws, Lender may impose additional  requirements upon
Borrower in connection herewith including, without limitation, monetary reserves
or financial equivalents.

                  Section 11.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other  provision of this Security  Instrument,  including but not limited to
Article 15 hereof,  Lender and other  Indemnified  Parties  (defined  in Section
below) are  entitled to enforce  the  obligations  of  Borrower,  Guarantor  and
Indemnitor  contained in Sections , and without first resorting to or exhausting
any security or collateral and without first having  recourse to the Note or any
of the  Property,  through  foreclosure  or  acceptance  of a deed  in  lieu  of
foreclosure or otherwise, and in the event Lender commences a foreclosure action
against the  Property,  Lender is entitled to pursue a deficiency  judgment with
respect to such obligations  against Borrower,  any Guarantor and/or Indemnitor.
The  provisions  of  Sections  ,  and  are  exceptions  to any  non-recourse  or
exculpation  provisions  in the  Note,  this  Security  Instrument  or the Other
Security  Documents,  and  Borrower,  Guarantor  and  Indemnitor  are  fully and
personally  liable  for the  obligations  pursuant  to  Subsections  , and . The
liability of Borrower,  Guarantor and  Indemnitor is not limited to the original
principal  amount of the Note.  Notwithstanding  the  foregoing,  nothing herein
shall  inhibit or prevent  Lender from  foreclosing  pursuant  to this  Security
Instrument  or  exercising  any other rights and remedies  pursuant to the Note,
this   Security   Instrument   and  the  Other   Security   Documents,   whether
simultaneously with foreclosure proceedings or in any other sequence. A separate
action or actions may be brought and prosecuted against Borrower, whether or not
action is brought against any other person or entity or whether or not any other
person or entity is joined in the action or actions.  In addition,  Lender shall
have the right but not the obligation to join and

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participate  in, as a party if it so  elects,  any  administrative  or  judicial
proceedings  or actions  initiated in  connection  with any matter  addressed in
Article or Section .

                  Section 11.11     RIGHT OF ENTRY.  Lender and its agents shall
have the right to enter and inspect the Property at all reasonable times.


                       Article 12 - ENVIRONMENTAL HAZARDS

                  Section 12.1 ENVIRONMENTAL  REPRESENTATIONS AND WARRANTIES. To
the best of Borrower's knowledge after due inquiry and investigation:  (a) there
are no Hazardous Substances (defined below) or underground storage tanks in, on,
or under  the  Property,  except  those  that are  both (i) in  compliance  with
Environmental  Laws (defined below) and with permits issued pursuant thereto and
(ii)  fully  disclosed  to Lender in writing  pursuant  to the  written  reports
resulting from the environmental assessments of the Property delivered to Lender
(the  "Environmental  Report");  (b) there are no past,  present  or  threatened
Releases  (defined  below) of  Hazardous  Substances  in, on,  under or from the
Property except as described in the Environmental Report; (c) there is no threat
of any Release of  Hazardous  Substances  migrating  to the  Property  except as
described  in  the  Environmental  Report;  (d)  there  is no  past  or  present
non-compliance with Environmental Laws, or with permits issued pursuant thereto,
in connection with the Property except as described in the Environmental Report;
(e) except as expressly disclosed in the Environmental Report, Borrower does not
know of, and has not received, any written or oral notice or other communication
from any person or entity  (including but not limited to a governmental  entity)
relating to Hazardous  Substances or Remediation  (defined  below)  thereof,  of
possible  liability of any person or entity pursuant to any  Environmental  Law,
other environmental conditions in connection with the Property, or any actual or
potential  administrative or judicial  proceedings in connection with any of the
foregoing;  and (f) Borrower has  truthfully  and fully  provided to Lender,  in
writing,  any and all  information  relating to conditions in, on, under or from
the Property that is known to Borrower and that is contained in Borrower's files
and  records,  including  but not limited to any reports  relating to  Hazardous
Substances  in,  on,  under or from the  Property  and/or  to the  environmental
condition  of the  Property.  "Environmental  Law" means any  present and future
federal, state and local laws, statutes,  ordinances, rules, regulations and the
like,  as well as common law,  relating  to  protection  of human  health or the
environment,  relating to Hazardous  Substances,  relating to  liability  for or
costs of  Remediation  or  prevention  of Releases of  Hazardous  Substances  or
relating to liability for or costs of other actual or threatened danger to human
health or the environment.  "Environmental Law" includes, but is not limited to,
the following statutes,  as amended,  any successor thereto, and any regulations
promulgated  pursuant  thereto,  and any  state or local  statutes,  ordinances,
rules,  regulations and the like addressing  similar issues:  the  Comprehensive
Environmental  Response,  Compensation and Liability Act; the Emergency Planning
and Community  Right-to-Know Act; the Hazardous  Substances  Transportation Act;
the  Resource  Conservation  and  Recovery  Act  (including  but not  limited to
Subtitle I relating to underground storage tanks); the Solid Waste Disposal Act;
the Clean Water Act;  the Clean Air Act; the Toxic  Substances  Control Act; the
Safe  Drinking  Water Act; the  Occupational  Safety and Health Act; the Federal
Water Pollution Control Act; the Federal Insecticide,  Fungicide and Rodenticide
Act; the Endangered Species Act; the National  Environmental Policy Act; and the
River and Harbors Appropriation Act.  "Environmental Law" also includes,  but is
not limited

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to, any present and future federal, state and local laws, statutes,  ordinances,
rules, regulations and the like, as well as common law: conditioning transfer of
property  upon a  negative  declaration  or  other  approval  of a  governmental
authority of the environmental condition of the property; requiring notification
or  disclosure  of  Releases  of  Hazardous  Substances  or other  environmental
condition  of the  Property to any  governmental  authority  or other  person or
entity,  whether or not in  connection  with transfer of title to or interest in
property;  imposing  conditions or  requirements  in connection  with permits or
other authorization for lawful activity; relating to nuisance, trespass or other
causes of action  related to the  Property;  and  relating  to  wrongful  death,
personal  injury,  or property or other damage in  connection  with any physical
condition or use of the  Property.  "Hazardous  Substances"  include but are not
limited  to any and all  substances  (whether  solid,  liquid  or gas)  defined,
listed,  or otherwise  classified as  pollutants,  hazardous  wastes,  hazardous
substances, hazardous materials, extremely hazardous wastes, or words of similar
meaning or regulatory effect under any present or future  Environmental  Laws or
that may have a negative  impact on human health or the  environment,  including
but  not  limited  to   petroleum   and   petroleum   products,   asbestos   and
asbestos-containing   materials,   polychlorinated   biphenyls,   lead,   radon,
radioactive  materials,  flammables and  explosives.  "Release" of any Hazardous
Substance  includes  but is not  limited  to any  release,  deposit,  discharge,
emission, leaking, spilling, seeping,  migrating,  injecting,  pumping, pouring,
emptying,   escaping,   dumping,   disposing  or  other  movement  of  Hazardous
Substances. "Remediation" includes but is not limited to any response, remedial,
removal, or corrective action, any activity to cleanup, detoxify, decontaminate,
contain or otherwise remediate any Hazardous Substance,  any actions to prevent,
cure or mitigate any Release of any  Hazardous  Substance,  any action to comply
with any  Environmental  Laws or with any permits issued pursuant  thereto,  any
inspection,  investigation,  study, monitoring,  assessment, audit, sampling and
testing,  laboratory or other analysis,  or evaluation relating to any Hazardous
Substances or to anything referred to in Article .

                  Section 12.2 ENVIRONMENTAL  COVENANTS.  Borrower covenants and
agrees  that:  (a) all uses and  operations  on or of the  Property,  whether by
Borrower  or any  other  person  or  entity,  shall  be in  compliance  with all
Environmental  Laws and permits issued pursuant  thereto;  (b) there shall be no
Releases of Hazardous  Substances in, on, under or from the Property;  (c) there
shall be no Hazardous  Substances  in, on, or under the  Property,  except those
that are both (i) in  compliance  with all  Environmental  Laws and with permits
issued  pursuant  thereto and (ii) fully  disclosed  to Lender in  writing;  (d)
Borrower  shall  keep  the  Property  free  and  clear of all  liens  and  other
encumbrances  imposed pursuant to any Environmental  Law, whether due to any act
or  omission  of  Borrower  or any other  person or entity  (the  "Environmental
Liens");  (e)  Borrower  shall,  at  its  sole  cost  and  expense,   fully  and
expeditiously  cooperate in all activities pursuant to Section below,  including
but not limited to providing all relevant  information and making  knowledgeable
persons  available  for  interviews;  (f) Borrower  shall,  at its sole cost and
expense,  perform any  environmental  site assessment or other  investigation of
environmental  conditions  in  connection  with the  Property,  pursuant  to any
reasonable  written  request of Lender  (including  but not limited to sampling,
testing and analysis of soil, water, air, building materials and other materials
and substances whether solid,  liquid or gas), and share with Lender the reports
and other results  thereof,  and Lender and other  Indemnified  Parties shall be
entitled to rely on such reports and other results thereof;  (g) Borrower shall,
at its sole cost and expense,  comply with all  reasonable  written  requests of
Lender to (i) reasonably effectuate  Remediation of any condition (including but
not limited to

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a Release of a Hazardous  Substance)  in, on, under or from the  Property;  (ii)
comply with any  Environmental  Law;  (iii) comply with any  directive  from any
governmental  authority;  and (iv) take any other reasonable action necessary or
appropriate  for  protection  of human health or the  environment;  (h) Borrower
shall not do or allow any  tenant or other  user of the  Property  to do any act
that materially increases the dangers to human health or the environment,  poses
an  unreasonable  risk of harm to any  person or entity  (whether  on or off the
Property),  impairs or may impair the value of the Property,  is contrary to any
requirement  of  any  insurer,   constitutes  a  public  or  private   nuisance,
constitutes  waste, or violates any covenant,  condition,  agreement or easement
applicable to the Property;  and (i) Borrower shall immediately notify Lender in
writing of (A) any  presence  or Releases or  threatened  Releases of  Hazardous
Substances  in, on,  under,  from or  migrating  towards the  Property;  (B) any
non-compliance  with any Environmental  Laws related in any way to the Property;
(C) any actual or  potential  Environmental  Lien;  (D) any required or proposed
Remediation of environmental  conditions  relating to the Property;  and (E) any
written or oral notice or other  communication which Borrower becomes aware from
any source  whatsoever  (including  but not  limited to a  governmental  entity)
relating in any way to Hazardous  Substances or  Remediation  thereof,  possible
liability  of any person or entity  pursuant  to any  Environmental  Law,  other
environmental  conditions  in  connection  with the  Property,  or any actual or
potential  administrative  or judicial  proceedings in connection  with anything
referred to in this Article . Any failure of Borrower to perform its obligations
pursuant to this Section
 shall constitute waste with respect to the Property.

                  Section 12.3 LENDER'S  RIGHTS.  Lender and any other person or
entity  designated by Lender,  including  but not limited to any  receiver,  any
representative of a governmental entity, and any environmental consultant, shall
have the  right,  but not the  obligation,  to enter  upon the  Property  at all
reasonable times to assess any and all aspects of the environmental condition of
the  Property  and  its  use,  including  but  not  limited  to  conducting  any
environmental  assessment  or audit (the scope of which shall be  determined  in
Lender's sole and absolute  discretion) and taking samples of soil,  groundwater
or other  water,  air, or building  materials,  and  conducting  other  invasive
testing. Borrower shall cooperate with and provide access to Lender and any such
person or entity designated by Lender.


                       Article 13 - INDEMNIFICATION

                  Section 13.1 GENERAL  INDEMNIFICATION.  Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified  Parties  from and against any and all  claims,  suits,  liabilities
(including,  without  limitation,  strict  liabilities),  actions,  proceedings,
obligations, debts, damages, losses, costs, expenses, fines, penalties, charges,
fees, expenses, judgments, awards, amounts paid in settlement, punitive damages,
foreseeable and unforeseeable  consequential damages, of whatever kind or nature
(including  but not  limited to  reasonable  attorneys'  fees and other costs of
defense)  (the  "Losses")  imposed  upon or incurred by or asserted  against any
Indemnified  Parties  and  directly or  indirectly  arising out of or in any way
relating to any one or more of the  following:  (a)  ownership of this  Security
Instrument,  the Property or any interest  therein or receipt of any Rents;  (b)
any amendment to, or  restructuring  of, the Debt,  and the Note,  this Security
Instrument,  or any Other Security Documents; (c) any and all lawful action that
may be taken by Lender in connection  with the  enforcement of the provisions of
this Security Instrument or the Note or any of the Other

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Security Documents,  whether or not suit is filed in connection with same, or in
connection  with  Borrower,  any  Guarantor  or  Indemnitor  and/or any  member,
partner,  joint venturer or shareholder  thereof becoming a party to a voluntary
or involuntary  federal or state bankruptcy,  insolvency or similar  proceeding;
(d) any accident, injury to or death of persons or loss of or damage to property
occurring  in, on or about the Property or any part thereof or on the  adjoining
sidewalks,  curbs, adjacent property or adjacent parking areas, streets or ways;
(e) any use,  nonuse  or  condition  in, on or about  the  Property  or any part
thereof or on the  adjoining  sidewalks,  curbs,  adjacent  property or adjacent
parking  areas,  streets or ways;  (f) any  failure on the part of  Borrower  to
perform or be in compliance  with any of the terms of this Security  Instrument;
(g)  performance  of any labor or services or the furnishing of any materials or
other  property in respect of the Property or any part thereof;  (h) the failure
of any person to file timely with the Internal  Revenue Service an accurate Form
1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange  Transactions,  which may be required in  connection  with the Security
Instrument,  or to supply a copy thereof in a timely fashion to the recipient of
the  proceeds  of  the  transaction  in  connection  with  which  this  Security
Instrument is made; (i) any failure of the Property to be in compliance with any
Applicable Laws; (j) the enforcement by any Indemnified  Party of the provisions
of this  Article ; (k) any and all claims and  demands  whatsoever  which may be
asserted against Lender by reason of any alleged  obligations or undertakings on
its part to perform or  discharge  any of the terms,  covenants,  or  agreements
contained in any Lease;  (l) the payment of any commission,  charge or brokerage
fee to anyone  which may be payable in  connection  with the funding of the Loan
evidenced  by the Note  and  secured  by this  Security  Instrument;  or (m) any
misrepresentation  made by Borrower  in this  Security  Instrument  or any Other
Security Document. Any amounts payable to Lender by reason of the application of
this Section shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender until paid.
For purposes of this Article , the term  "Indemnified  Parties" means Lender and
any person or entity who is or will have been involved in the origination of the
Loan, any person or entity who is or will have been involved in the servicing of
the Loan,  any  person or entity in whose name the  encumbrance  created by this
Security Instrument is or will have been recorded,  persons and entities who may
hold or  acquire  or will  have  held a full or  partial  interest  in the  Loan
(including,  but not limited  to,  Investors  or  prospective  Investors  in the
Securities,  as well as custodians,  trustees and other  fiduciaries who hold or
have  held a full or  partial  interest  in the  Loan for the  benefit  of third
parties) as well as the respective directors, officers, shareholders,  partners,
members,   employees,    agents,   servants,    representatives,    contractors,
subcontractors,  affiliates, subsidiaries,  participants, successors and assigns
of any and all of the foregoing  (including  but not limited to any other person
or entity who holds or acquires or will have held a participation  or other full
or partial interest in the Loan or the Property,  whether during the term of the
Loan or as a part of or following a foreclosure of the Loan and  including,  but
not limited to, any successors by merger, consolidation or acquisition of all or
a substantial portion of Lender's assets and business).

                  Section 13.2 MORTGAGE AND/OR  INTANGIBLE TAX.  Borrower shall,
at its sole cost and  expense,  protect,  defend,  indemnify,  release  and hold
harmless the  Indemnified  Parties  from and against any and all Losses  imposed
upon or incurred by or asserted against any Indemnified  Parties and directly or
indirectly arising out of or in any way relating to any tax on the making and/or
recording of this  Security  Instrument,  the Note or any of the Other  Security
Documents.

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                  Section 13.3 ERISA  INDEMNIFICATION.  Borrower  shall,  at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified  Parties  from and  against any and all Losses  (including,  without
limitation,  reasonable attorneys' fees and costs incurred in the investigation,
defense,  and  settlement  of  Losses  incurred  in  correcting  any  prohibited
transaction or in the sale of a prohibited loan, and in obtaining any individual
prohibited  transaction  exemption under ERISA that may be required, in Lender's
sole discretion) that Lender may incur, directly or indirectly, as a result of a
default under Sections or or Subsection (p).

                  Section 13.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the  Indemnified  Parties  from and  against  any and all  Losses  and  costs of
Remediation   (whether  or  not   performed   voluntarily),   engineers'   fees,
environmental  consultants' fees, and costs of investigation  (including but not
limited to  sampling,  testing,  and  analysis  of soil,  water,  air,  building
materials  and other  materials and  substances  whether  solid,  liquid or gas)
imposed upon or incurred by or asserted  against any  Indemnified  Parties,  and
directly or indirectly  arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property;  (b) any past,  present or  threatened  Release of Hazardous
Substances  in, on,  above,  under or from the  Property;  (c) any  activity  by
Borrower,  any person or entity  affiliated with Borrower or any tenant or other
user of the Property in connection with any actual,  proposed or threatened use,
treatment,   storage,   holding,   existence,   disposition  or  other  Release,
generation,   production,   manufacturing,    processing,   refining,   control,
management,  abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous  Substances  at any time located in, under,  on or
above  the  Property;  (d) any  activity  by  Borrower,  any  person  or  entity
affiliated  with  Borrower  or any  tenant  or  other  user of the  Property  in
connection with any actual or proposed  Remediation of any Hazardous  Substances
at any time located in,  under,  on or above the  Property,  whether or not such
Remediation is voluntary or pursuant to court or administrative order, including
but not limited to any removal,  remedial or  corrective  action;  (e) any past,
present or threatened non-compliance or violations of any Environmental Laws (or
permits  issued  pursuant  to any  Environmental  Law) in  connection  with  the
Property  or  operations  thereon,  including  but not limited to any failure by
Borrower,  any person or entity  affiliated with Borrower or any tenant or other
user of the Property to comply with any order of any  governmental  authority in
connection with any Environmental Laws; (f) the imposition,  recording or filing
or the  threatened  imposition,  recording or filing of any  Environmental  Lien
encumbering  the Property;  (g) any  administrative  processes or proceedings or
judicial  proceedings in any way connected with any matter  addressed in Article
and this Section ; (h) any past, present or threatened injury to, destruction of
or loss of natural  resources in any way connected with the Property,  including
but not limited to costs to investigate  and assess such injury,  destruction or
loss;  (i) any acts of Borrower or other users of the Property in arranging  for
disposal or  treatment,  or  arranging  with a  transporter  for  transport  for
disposal or  treatment,  of  Hazardous  Substances  owned or  possessed  by such
Borrower  or other  users,  at any  facility  or  incineration  vessel  owned or
operated by another  person or entity and containing  such or similar  Hazardous
Substances;  (j) any  acts of  Borrower  or  other  users  of the  Property,  in
accepting  any  Hazardous  Substances  for  transport  to disposal or  treatment
facilities,  incineration  vessels or sites  selected  by Borrower or such other
users, from which there is a Release,  or a threatened  Release of any Hazardous
Substance which causes the incurrence of costs for Remediation; (k) any personal
injury, wrongful death, or property

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damage  arising  under  any  statutory  or  common  law or tort  law  theory  in
connection with Hazardous  Materials or any Environmental Law, including but not
limited to damages  assessed for the maintenance of a private or public nuisance
or for the  conducting  of an  abnormally  dangerous  activity  on or  near  the
Property;  and (l) any  misrepresentation or inaccuracy in any representation or
warranty  or  material  breach or  failure  to perform  any  covenants  or other
obligations pursuant to Article .

                  Section  13.5 DUTY TO DEFEND;  ATTORNEYS'  FEES AND OTHER FEES
AND EXPENSES.  Upon written  request by any  Indemnified  Party,  Borrower shall
defend such  Indemnified  Party (if requested by any  Indemnified  Party, in the
name of the Indemnified Party) by attorneys and other professionals  approved by
the Indemnified Parties.  Notwithstanding the foregoing, any Indemnified Parties
may, in their sole and absolute discretion, engage their own attorneys and other
professionals  to defend or  assist  them,  and,  at the  option of  Indemnified
Parties,  their  attorneys  shall  act as  co-counsel  in  connection  with  the
resolution of any claim or  proceeding.  Upon demand,  Borrower shall pay or, in
the sole and absolute  discretion of the  Indemnified  Parties,  reimburse,  the
Indemnified  Parties for the payment of  reasonable  fees and  disbursements  of
attorneys,   engineers,   environmental  consultants,   laboratories  and  other
professionals in connection therewith.


                          Article 14 - WAIVERS

                  Section 14.1 WAIVER OF  COUNTERCLAIM.  Borrower  hereby waives
the  right to  assert a  counterclaim,  other  than a  mandatory  or  compulsory
counterclaim,  in any action or proceeding  brought against it by Lender arising
out of or in any way connected with this Security  Instrument,  the Note, any of
the Other Security Documents, or the Obligations.

                  Section 14.2  MARSHALLING  AND OTHER MATTERS.  Borrower hereby
waives,  to the  extent  permitted  by law,  the  benefit  of all  appraisement,
valuation,  stay, extension,  reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein.  Further,  Borrower hereby
expressly  waives any and all rights of redemption  from sale under any order or
decree of foreclosure of this Security Instrument on behalf of Borrower,  and on
behalf  of each and  every  person  acquiring  any  interest  in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all
persons to the extent permitted by applicable law.

                  Section 14.3 WAIVER OF NOTICE.  Borrower shall not be entitled
to any  notices of any nature  whatsoever  from Lender  except  with  respect to
matters for which this Security  Instrument  specifically and expressly provides
for the  giving of notice by Lender to  Borrower  and  except  with  respect  to
matters for which  Lender is  required by  applicable  law to give  notice,  and
Borrower  hereby  expressly  waives the right to receive  any notice from Lender
with  respect  to any  matter  for  which  this  Security  Instrument  does  not
specifically  and  expressly  provide  for the  giving  of  notice  by Lender to
Borrower.

                  Section 14.4 WAIVER OF STATUTE OF LIMITATIONS. Borrower hereby
expressly  waives and  releases  to the fullest  extent  permitted  by law,  the
pleading  of any statute of  limitations  as a defense to payment of the Debt or
performance of its Other Obligations.

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                  Section 14.5 SOLE DISCRETION OF LENDER.  Wherever  pursuant to
this Security  Instrument (a) Lender  exercises any right given to it to approve
or disapprove,  (b) any arrangement or term is to be satisfactory to Lender,  or
(c) any other decision or determination is to be made by Lender, the decision of
Lender to approve or disapprove,  all decisions that  arrangements  or terms are
satisfactory or not satisfactory and all other decisions and determinations made
by Lender,  shall be in the sole and absolute  discretion of Lender and shall be
final and  conclusive,  except as may be otherwise  expressly  and  specifically
provided herein.

                  Section 14.6      SURVIVAL.  The indemnifications made 
pursuant to Subsections  and and the representations and warranties, covenants,
and other obligations arising under Article , shall continue  indefinitely  in 
full force and effect and shall survive  and  shall  in no  way  be  impaired
by:  any  satisfaction  or  other termination of this Security Instrument, any 
assignment or other transfer of all or any portion of this Security  Instrument
or Lender's interest in the Property (but, in such case, shall benefit both  
Indemnified  Parties and any assignee or transferee), any exercise  of Lender's
rights and  remedies  pursuant  hereto including  but not limited to  
foreclosure  or  acceptance  of a deed in lieu of foreclosure, any exercise of 
any rights and remedies pursuant to the Note or any of the Other  
Security  Documents,  any  transfer  of all or any  portion of the 
Property  (whether by Borrower or by Lender following  foreclosure or acceptance
of a deed in lieu of  foreclosure  or at any other time),  any amendment to this
Security  Instrument,  the Note or the Other Security Documents,  and any act or
omission that might otherwise be construed as a release or discharge of Borrower
from the obligations pursuant hereto.


                  SECTION 14.7      WAIVER OF TRIAL BY JURY.  BORROWER
                                    -----------------------           
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM,
WHETHER IN CONTRACT, TORT OR OTHERWISE, RELATING DIRECTLY OR
INDIRECTLY TO THE LOAN EVIDENCED BY THE NOTE, THE APPLICATION FOR
THE LOAN EVIDENCED BY THE NOTE, THE NOTE, THIS SECURITY
INSTRUMENT OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR
OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS
IN CONNECTION THEREWITH.


                       Article 15 - EXCULPATION

                  Section 15.1 EXCULPATION. Except as otherwise provided, Lender
shall not  enforce  the  liability  and  obligation  of  Borrower to perform and
observe the obligations contained in the Note or this Security Instrument by any
action or proceeding  wherein a money judgment shall be sought against Borrower,
except  that  Lender  may  bring  a  foreclosure  action,  action  for  specific
performance  or other  appropriate  action or  proceeding  to  enable  Lender to
enforce and realize upon this Security Instrument, the Other Security Documents,
and the interest in the Property,  the Rents and any other  collateral  given to
Lender created by this Security  Instrument  and the Other  Security  Documents;
provided,  however,  that any  judgment  in any  action or  proceeding  shall be
enforceable  against  Borrower only to the extent of Borrower's  interest in the
Property,  in the Rents and in any other collateral given to Lender.  Lender, by
accepting  the Note and this  Security  Instrument,  agrees  that it shall  not,
except as otherwise provided in

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Section , sue for, seek or demand any deficiency  judgment  against  Borrower in
any action or proceeding,  under or by reason of or under or in connection  with
the Note, the Other Security Documents or this Security Instrument.

                  Section 15.2 RESERVATION OF CERTAIN RIGHTS.  The provisions of
Section 15.1 shall not (a)  constitute a waiver,  release or  impairment  of any
obligation  evidenced or secured by the Note,  the Other  Security  Documents or
this Security  Instrument;  (b) impair the right of Lender to name Borrower as a
party  defendant in any action or suit for judicial  foreclosure  and sale under
this  Security  Instrument;  (c) affect the  validity or  enforceability  of any
indemnity,  guaranty, master lease or similar instrument made in connection with
the Note, this Security Instrument,  or the Other Security Documents; (d) impair
the right of Lender to obtain  the  appointment  of a  receiver;  (e) impair the
enforcement  of the  Assignment  of Leases  and  Rents  executed  in  connection
herewith;  or (f)  impair  the right of  Lender to  enforce  the  provisions  of
Sections , , and of this Security Instrument.

                  Section 15.3  EXCEPTIONS TO EXCULPATION.  Notwithstanding  the
provisions of this Article to the contrary,  Borrower shall be personally liable
to  Lender  for  the  Losses  it  incurs  due  to:  (i)  fraud  or   intentional
misrepresentation    by   Borrower;    (ii)   Borrower's    misapplication    or
misappropriation  of Rents received by Borrower after the occurrence of an Event
of Default;  (iii) Borrower's  misappropriation  of tenant security  deposits or
Rents collected in advance;  (iv) the misapplication or the  misappropriation of
insurance proceeds or condemnation  awards; (v) Borrower's failure to pay Taxes,
Other  Charges  (except to the extent that sums  sufficient  to pay such amounts
have been deposited in escrow with Lender pursuant to the terms of this Security
Instrument),  charges for labor or  materials  or other  charges that can create
liens on the Property;  (vi) Borrower's failure to return or to reimburse Lender
for all  Personal  Property  taken from the Property by or on behalf of Borrower
and not replaced with  Personal  Property of the same utility and of the same or
greater  value;  (vii)  any act of  actual  waste  or  arson  by  Borrower,  any
principal,  affiliate, member or general partner thereof or by any Indemnitor or
Guarantor;  (viii) any fees or  commissions  paid by Borrower to any  principal,
affiliate,  member or general  partner of Borrower,  Indemnitor  or Guarantor in
violation  of the  terms of the  Note,  this  Security  Instrument  or the Other
Security Documents;  or (ix) Borrower's failure to comply with the provisions of
Sections , , and of this Security Instrument.

                  Section 15.4  RECOURSE.  Notwithstanding  the  foregoing,  the
agreement  of Lender not to pursue  recourse  liability  as set forth in Section
15.1  above  SHALL  BECOME  NULL AND VOID and shall be of no  further  force and
effect after the occurrence of an Event of Default relating to the breach of any
covenant  in the  Note,  this  Security  Instrument  or any  of the  Other  Loan
Documents relating to Borrower's default under Sections (for ten (10) days after
notice  by  Lender),  , or 8.1,  8.2,  8.3 or , or in the  event of  Principal's
default under Section 4.3 of this Security Instrument, or if the Property or any
part thereof  shall become an asset in (i) a voluntary  bankruptcy or insolvency
proceeding,  or (ii) an involuntary bankruptcy or insolvency proceeding which is
not dismissed within ninety (90) days of filing.

                  Section 15.5 BANKRUPTCY CLAIMS. Nothing herein shall be deemed
to be a waiver of any right which Lender may have under Sections 506(a), 506(b),
1111(b) or any other provisions of the U.S.  Bankruptcy Code to file a claim for
the full amount of the Debt secured by this  Security  Instrument  or to require
that all collateral shall continue to secure all of the Debt

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owing to Lender in accordance  with the Note,  this Security  Instrument and the
Other Security Documents.


                       Article 16 - NOTICES

                  Section   16.1   NOTICES.   All   notices  or  other   written
communications  hereunder  shall be deemed to have been properly  given (i) upon
delivery,  if  delivered  in person or by  facsimile  transmission  with receipt
acknowledged by the recipient thereof and confirmed by telephone by sender, (ii)
one (1) Business Day (defined  below) after having been  deposited for overnight
delivery  with any  reputable  overnight  courier  service,  or (iii)  three (3)
Business Days after having been deposited in any post office or mail  depository
regularly  maintained  by the U.S.  Postal  Service  and sent by  registered  or
certified mail, postage prepaid, return receipt requested, addressed as follows:

If to Borrower:                     JBAK Canton Realty, Inc.
                                    555 Turnpike Street
                                    Canton, Massachusetts 02021
                                    Attention: Philip G. Rosenberg
                                    Facsimile No.: (617) 821-0614


With a copy to:                     J. Baker, Inc.
                                    Legal Department
                                    555 Turnpike Street
                                    Canton, Massachusetts 02021
                                    Attention: Barry Barth, Esq.
                                    Facsimile No.: (617) 821-0614

If to Lender:                       The Chase Manhattan Bank
                                    c/o Chase Commercial Mortgage Banking Corp.
                                    Servicing Department
                                    380 Madison Avenue
                                    11th Floor
                                    New York, New York  10017
                                    Attention: Ms. Janice Smith
                                    Facsimile No.: (212) 622-3553

                                            and

                                    The Chase Manhattan Bank
                                    Legal Department
                                    270 Park Avenue
                                    39th Floor
                                    New York, New York  10017
                                    Attention: Ronald A. Wilcox, Esq.
                                    Facsimile No.: (212) 270-2934

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With a copy to:                     Thacher Proffitt & Wood
                                    Two World Trade Center
                                    New York, New York  10048
                                    Attention: Joseph Philip Forte, Esq.
                                    Facsimile No.: (212) 912-7751

or addressed as such party may from time to time  designate by written notice to
the other parties.

                  Either party by notice to the other may  designate  additional
or different addresses for subsequent notices or communications.

                  For purposes of this  Subsection,  "Business Day" shall mean a
day on which  commercial banks are not authorized or required by law to close in
New York, New York.


                      Article 17 - SERVICE OF PROCESS

                  Section 17.1      CONSENT TO SERVICE.

                  (a) Borrower will maintain a place of business or an agent for
         service  of  process in New York,  New York or  Massachusetts  and give
         prompt notice to Lender of the address of such place of business and of
         the name and address of any new agent  appointed by it, as appropriate.
         Borrower  further  agrees  that the failure of its agent for service of
         process to give it notice of any service of process  will not impair or
         affect the validity of such service or of any judgment  based  thereon.
         If, despite the foregoing, there is for any reason no agent for service
         of process of Borrower  available to be served,  and if it at that time
         has no place of business in New York, New York or  Massachusetts,  then
         Borrower  irrevocably  consents to service of process by  registered or
         certified  mail,  postage  prepaid,  to it at its  address  given in or
         pursuant to the first paragraph hereof.

                  (b)  Borrower   initially   and   irrevocably   designates  CT
         Corporation System, with offices on the date hereof at 2 Oliver Street,
         Boston,  Massachusetts  02109, to receive for and on behalf of Borrower
         service of  process  in  Massachusetts  with  respect to this  Security
         Instrument.

                  Section 17.2 SUBMISSION TO  JURISDICTION.  With respect to any
claim or  action  arising  hereunder  or under  the Note or the  Other  Security
Documents,  Borrower (a) irrevocably submits to the nonexclusive jurisdiction of
the courts of the State of New York and the United States District Court located
in the Borough of Manhattan in New York, New York, and appellate courts from any
thereof,  and (b) irrevocably waives any objection which it may have at any time
to the  laying on venue of any  suit,  action or  proceeding  arising  out of or
relating to this  Security  Instrument  brought in any such  court,  irrevocably
waives any claim that any such suit,  action or  proceeding  brought in any such
court has been brought in an inconvenient forum.


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                  Section  17.3  JURISDICTION  NOT  EXCLUSIVE.  Nothing  in this
Security Instrument will be deemed to preclude Lender from bringing an action or
proceeding with respect hereto in any other jurisdiction.


                       Article 18 - APPLICABLE LAW

                  Section 18.1 CHOICE OF LAW. THIS SECURITY  INSTRUMENT SHALL BE
DEEMED TO BE A CONTRACT  ENTERED  INTO  PURSUANT TO THE LAWS OF THE STATE OF NEW
YORK AND SHALL IN ALL RESPECTS BE GOVERNED,  CONSTRUED,  APPLIED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,  PROVIDED HOWEVER,  THAT WITH
RESPECT TO THE CREATION,  PERFECTION,  PRIORITY AND  ENFORCEMENT  OF THE LIEN OF
THIS SECURITY  INSTRUMENT,  AND THE DETERMINATION OF DEFICIENCY  JUDGMENTS,  THE
LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED SHALL APPLY.

                  Section 18.2 USURY LAWS. This Security Instrument and the Note
are subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the Debt at a rate which could subject the holder
of the Note to either civil or criminal liability as a result of being in excess
of the maximum  interest rate which  Borrower is permitted by applicable  law to
contract or agree to pay.  If by the terms of this  Security  Instrument  or the
Note,  Borrower is at any time required or obligated to pay interest on the Debt
at a rate in  excess  of such  maximum  rate,  the rate of  interest  under  the
Security  Instrument and the Note shall be deemed to be  immediately  reduced to
such  maximum rate and the  interest  payable  shall be computed at such maximum
rate and all prior  interest  payments in excess of such  maximum  rate shall be
applied and shall be deemed to have been  payments in reduction of the principal
balance  of the Note.  All sums paid or agreed to be paid to Lender for the use,
forbearance,  or  detention  of the  Debt  shall,  to the  extent  permitted  by
applicable law, be amortized,  prorated,  allocated,  and spread  throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest  on  account of the Debt does not exceed  the  maximum  lawful  rate of
interest  from time to time in effect and  applicable to the Debt for so long as
the Debt is outstanding.

                  Section 18.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights,
powers and remedies  provided in this Security  Instrument may be exercised only
to the  extent  that the  exercise  thereof  does  not  violate  any  applicable
provisions of law and are intended to be limited to the extent necessary so that
they will not render this  Security  Instrument  invalid,  unenforceable  or not
entitled  to be  recorded,  registered  or filed  under  the  provisions  of any
applicable  law.  If any term of this  Security  Instrument  or any  application
thereof  shall be invalid  or  unenforceable,  the  remainder  of this  Security
Instrument and any other application of the term shall not be affected thereby.


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                      Article 19 - SECONDARY MARKET

                  Section 19.1 TRANSFER OF LOAN.  Lender may, at any time, sell,
transfer or assign the Note,  this Security  Instrument  and the Other  Security
Documents,  and any or all  servicing  rights  with  respect  thereto,  or grant
participations  therein or issue  mortgage  pass-through  certificates  or other
securities  evidencing  a  beneficial  interest  in a rated  or  unrated  public
offering or private  placement  (the  "Securities").  Lender may forward to each
purchaser,  transferee,  assignee,  servicer,  participant,  or investor in such
Securities  (collectively,  the  "Investor")  or any Rating  Agency  rating such
Securities and each prospective  Investor,  all documents and information  which
Lender now has or may  hereafter  acquire  relating to the Debt and to Borrower,
any  Guarantor,  any  Indemnitor(s)  and  the  Property,  whether  furnished  by
Borrower,  any Guarantor,  any Indemnitor(s) or otherwise,  as Lender determines
necessary or desirable.  Borrower,  any Guarantor  and any  Indemnitor  agree to
cooperate  with Lender in connection  with any transfer  made or any  Securities
created pursuant to this Section, including, without limitation, the delivery of
an estoppel certificate required in accordance with Subsection 7.4(c) hereof and
such other  documents as may be reasonably  requested by Lender.  Borrower shall
also furnish and Borrower,  any Guarantor and any  Indemnitor  consent to Lender
furnishing to such Investors or such prospective Investors or such Rating Agency
any and all  information  concerning  the  Property,  the Leases,  the financial
condition of Borrower,  any Guarantor and any  Indemnitor as may be requested by
Lender,  any  Investor,  any  prospective  Investor  or  any  Rating  Agency  in
connection with any sale, transfer or participation interest.


                          Article 20 - COSTS

                  Section  20.1  PERFORMANCE  AT  BORROWER'S  EXPENSE.  Borrower
acknowledges  and  confirms  that Lender  shall  impose  certain  administrative
processing and/or commitment fees in connection with (a) the extension, renewal,
modification,  amendment  and  termination  of the  Loan,  (b)  the  release  or
substitution of collateral therefor, (c) obtaining certain consents, waivers and
approvals  with  respect  to the  Property,  or (d) the  review  of any Lease or
proposed   Lease  or  the   preparation   or   review   of  any   subordination,
non-disturbance agreement (the occurrence of any of the above shall be called an
"Event").   Borrower  further   acknowledges  and  confirms  that  it  shall  be
responsible  for the payment of all costs of  reappraisal of the Property or any
part thereof, whether required by law, regulation, Lender or any governmental or
quasi-governmental  authority.  Borrower hereby  acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased
or decreased from time to time),  and any  additional  fees of a similar type or
nature which may be imposed by Lender from time to time,  upon the occurrence of
any Event or otherwise. Wherever it is provided for herein that Borrower pay any
costs and expenses,  such costs and expenses shall  include,  but not be limited
to, all legal fees and disbursements of Lender, whether with respect to retained
firms, the reimbursement for the expenses of in-house staff or otherwise.

                  Section 20.2  ATTORNEY'S  FEES FOR  ENFORCEMENT.  (a) Borrower
shall  pay all  legal  fees  incurred  by  Lender  in  connection  with  (i) the
preparation  of the  Note,  this  Security  Instrument  and the  Other  Security
Documents and (ii) the items set forth in Section above,  and (b) Borrower shall
pay to Lender on demand  any and all  expenses,  including  legal  expenses  and
attorneys'  fees,  incurred or paid by Lender in protecting  its interest in the
Property or

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Personal  Property or in collecting any amount payable hereunder or in enforcing
its rights hereunder with respect to the Property or Personal Property,  whether
or not any legal proceeding is commenced  hereunder or thereunder and whether or
not any  default or Event of  Default  shall have  occurred  and is  continuing,
together  with  interest  thereon  at the  Default  Rate  from the date  paid or
incurred by Lender until such expenses are paid by Borrower.


                       Article 21 - DEFINITIONS

                  Section 21.1 GENERAL  DEFINITIONS.  Unless the context clearly
indicates a contrary intent or unless  otherwise  specifically  provided herein,
words used in this Security  Instrument may be used  interchangeably in singular
or  plural  form and the word  "Borrower"  shall  mean  "each  Borrower  and any
subsequent  owner or owners of the  Property or any part thereof or any interest
therein," the word "Lender" shall mean "Lender and any subsequent  holder of the
Note,"  the  word  "Note"  shall  mean  "the  Note  and any  other  evidence  of
indebtedness  secured by this  Security  Instrument,"  the word  "person"  shall
include an individual,  corporation,  partnership,  limited  liability  company,
trust, unincorporated association,  government,  governmental authority, and any
other entity,  the word "Property" shall include any portion of the Property and
any interest therein, and the phrases "attorneys' fees" and "counsel fees" shall
include any and all attorneys',  paralegal and law clerk fees and disbursements,
including,  but not limited to, fees and  disbursements at the pre-trial,  trial
and appellate  levels  incurred or paid by Lender in protecting  its interest in
the Property, the Leases and the Rents and enforcing its rights hereunder.


                Article 22 - MISCELLANEOUS PROVISIONS

                  Section 22.1 NO ORAL CHANGE. This Security Instrument, and any
provisions  hereof, may not be modified,  amended,  waived,  extended,  changed,
discharged or  terminated  orally or by any act or failure to act on the part of
Borrower  or Lender,  but only by an  agreement  in writing  signed by the party
against whom  enforcement of any  modification,  amendment,  waiver,  extension,
change, discharge or termination is sought.

                  Section 22.2 LIABILITY.  If Borrower consists of more than one
person,  the obligations and liabilities of each such person  hereunder shall be
joint and several.  This Security  Instrument shall be binding upon and inure to
the benefit of Borrower and Lender and their  respective  successors and assigns
forever.

                  Section 22.3 INAPPLICABLE PROVISIONS. If any term, covenant or
condition of the Note or this Security Instrument is held to be invalid, illegal
or unenforceable in any respect,  the Note and this Security Instrument shall be
construed without such provision.

                  Section  22.4  HEADINGS,  ETC.  The  headings  and captions of
various  Sections of this Security  Instrument are for  convenience of reference
only and are not to be construed as defining or limiting,  in any way, the scope
or intent of the provisions hereof.


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                                                      - 56 -

<PAGE>



                  Section 22.5 DUPLICATE ORIGINALS;  COUNTERPARTS. This Security
Instrument  may be  executed  in any  number  of  duplicate  originals  and each
duplicate original shall be deemed to be an original.  This Security  Instrument
may be executed in several  counterparts,  each of which  counterparts  shall be
deemed an original  instrument  and all of which  together  shall  constitute  a
single  Security  Instrument.  The failure of any party  hereto to execute  this
Security  Instrument,  or any  counterpart  hereof,  shall not relieve the other
signatories from their obligations hereunder.

                  Section  22.6  NUMBER AND  GENDER.  Whenever  the  context may
require,  any pronouns  used herein shall include the  corresponding  masculine,
feminine or neuter  forms,  and the singular  form of nouns and  pronouns  shall
include the plural and vice versa.

                  Section 22.7 SUBROGATION. If any or all of the proceeds of the
Note have been used to extinguish,  extend or renew any indebtedness  heretofore
existing against the Property,  then, to the extent of the funds so used, Lender
shall be subrogated to all of the rights,  claims,  liens, titles, and interests
existing against the Property  heretofore held by, or in favor of, the holder of
such indebtedness and such former rights,  claims, liens, titles, and interests,
if any,  are not waived but  rather  are  continued  in full force and effect in
favor of Lender  and are  merged  with the lien and  security  interest  created
herein as cumulative security for the repayment of the Debt, the performance and
discharge  of  Borrower's  obligations  hereunder,  under the Note and the Other
Security Documents and the performance and discharge of the Other Obligations.


             Article 23 - SPECIAL MASSACHUSETTS PROVISIONS

                  Section 23.1 In the event of any  inconsistencies  between the
terms and  conditions  of this Article 23 and the terms and  conditions  of this
Security  Instrument,  the terms and conditions of this Article 23 shall control
and be binding.

                  Section 23.2 The paragraph  following  the word  "RECITALS" is
hereby deleted and the following paragraph is substituted therefor:

                           For  Consideration  Paid, to secure the payment of an
                  indebtedness  in the  principal  sum of FIFTEEN  MILLION  FIVE
                  HUNDRED THOUSAND AND 00/100 DOLLARS ($15,500,000) lawful money
                  of the  United  States of  America,  to be paid with  interest
                  according  to a certain  note  dated the date  hereof  made by
                  Borrower to Lender (the note,  together  with all  extensions,
                  renewals   or   modifications    thereof   being   hereinafter
                  collectively  called  the  "Note"),  Borrower  has  mortgaged,
                  given, granted, bargained, sold, aliened, enfeoffed, conveyed,
                  confirmed,  pledged,  assigned and  hypothecated  and by these
                  presents does mortgage,  give,  grant,  bargain,  sell, alien,
                  enfeoff,  convey, confirm, pledge, assign and hypothecate unto
                  Lender  WITH  MORTGAGE   COVENANTS,   the  Property  (as  more
                  particularly described in Section 1.1 below);


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                                             - 57 -

<PAGE>



                  Section 23.3 The words "with covenants" are hereby added after
the word  "Lender"  contained  in the  second  line of Article  1,  Section  1.1
entitled "Property Mortgaged."

                  Section 23.4 The words "located in the Town of Canton,  County
of Norfolk,  and Commonwealth of  Massachusetts  and" are hereby added after the
words "real property" in Article 1, Section 1.1(a) entitled "Land."

                  Section 23.5              Intentionally Omitted

                  Section  23.6 The words "fire pipe  charges"  are hereby added
following  the words  "governmental  impositions"  in Article 3, Section  3.4(a)
entitled "Payment of Taxes, Etc."

                  Section 23.7 The third  sentence of Article 3, Section  3.7(a)
entitled  "Leases  and  Rents" is  deleted  in its  entirety  and the  following
sentence is substituted therefor:

                           All Leases shall provide that they are subordinate or
                  superior to this Security Instrument as Lender elects and that
                  the Lessee agrees to attorn to the Lender.

                  Section 23.8 The word "right" in the first sentence of Article
5, Section 5.1 entitled  "Warranty of Title" is hereby deleted and the following
words are substituted therefor:

                  full power, authority and right to execute, deliver and 
                  perform its obligations under this Security Instrument and

                  Section  23.9 The  following  words are hereby added after the
words  "environmental  laws"  found in the third line of  Article 5,  Subsection
5.6(c): "subdivision control laws, rent control and condominium control laws."

                  Section 23.10 The following  words are hereby added to the end
of Article 10, Section 10.3 entitled "Default Interest":

                  and (c) Lender  shall  have the  STATUTORY  POWER OF SALE,  as
                  hereinafter  provided.  If the rate  specified in the previous
                  sentence is above the maximum  rate  permitted  by  applicable
                  law, the Default  Rate shall be the maximum rate  permitted by
                  applicable law.

                  Section  23.11 The  following  language is hereby added to the
end of the third  sentence of Article 12,  Section 12.1 entitled  "Environmental
Representations and Warranties":

     M.G.L. c. 21 (Massachusetts Clean Waters Act; Scenic Rivers Act), M.G.L. c.
     21C (Massachusetts Hazardous Waste Management Act), M.G.L. c. 21E
     (Massachusetts Oil and Hazardous Materials Release Prevention and Response
     Act), M.G.L. c. 130 (Massachusetts Coastal Zone Management Act), M.G.L. c.

[NY01:247789.4]  86000-00376  12/23/96 4:57pm
                                                      - 58 -

<PAGE>



     131 (Massachusetts Wetland Protection Act), M.G.L. c. 30 (Massachusetts
     Environmental Policy Act), M.G.L. c. 91 (waterways, licensing), M.G.L. c. 
     111 (air pollution); and in each case all regulations promulgated 
     thereunder.

                  Section 23.12 The word "INTERNAL" is hereby added  immediately
before the word "LAWS"  wherever the word "LAWS"  appears in Article 18, Section
18.1 entitled "CHOICE OF LAW."

                  Section 23.13 The words "including,  without  limitation,  any
subsequent  owner or owners of the equity of  redemption  in the  Property"  are
hereby added  following the words "or any part thereof or any interest  therein"
in  the  first   sentence  of  Article  21,   Section  21.1  entitled   "General
Definitions".

                  Section  23.14   Statutory   Power  of  Sale.   This  Security
Instrument is upon the STATUTORY  CONDITION and upon the further  condition that
all  covenants  and  agreements  of the Security  Instrument  in the Note,  this
Security  Instrument  and  the  Other  Security  Documents,  and  in  all  other
mortgages, debts and obligations of or from Borrower to or for benefit of Lender
shall be kept and fully performed and upon any breach of same, Lender shall have
the STATUTORY POWER OF SALE and any other powers given by statute.





























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                                                      - 59 -

<PAGE>



                  IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed
by Borrower the day and year first above written.


                                           JBAK CANTON REALTY, INC., a
                                           Massachusetts corporation

                                           By:      /s/Alan I. Weinstein
                                           Name: Alan I. Weinstein
                                           Title: President





































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                                                      - 60 -

<PAGE>





                                                 ACKNOWLEDGEMENTS


STATE OF MASSACHUSETTS                               )
                                                     ).ss:
COUNTY OF NORFOLK                                    )

         On  this  27th  day of  December,  1996,  before  me  appeared  Alan I.
Weinstein,  to me personally  known, who being by me duly sworn, did say that he
is the President of JBAK CANTON REALTY, INC., a Massachusetts  corporation,  and
that said  instrument was signed on behalf of said  corporation and said Alan I.
Weinstein  acknowledged  said  instrument  to be the  free  act and deed of said
corporation.



                                            /s/Evelyn S. Clegg
                                            Notary Public

                                            My Commission Expires:
                                            5/24/2002



























[NY01:247789.4]  86000-00376  12/23/96 4:57pm

<PAGE>




                               EXHIBIT A

                         (Description of Land)

                  ALL of that  certain  lot,  piece or parcel of land,  with the
buildings and improvements thereon, situate, lying and being










































[NY01:247789.4]  86000-00376  12/23/96 4:57pm

<PAGE>
                              TABLE OF CONTENTS
<TABLE>
    <S>                                                                                                       <C>
                                                                                                              Page

    Article 1 - GRANTS OF SECURITY............................................................................- 1 -
         Section 1.1           PROPERTY MORTGAGED.............................................................- 1 -
                               ------------------
         Section 1.2           ASSIGNMENT OF RENTS............................................................- 3 -
                               -------------------
         Section 1.3           SECURITY AGREEMENT.............................................................- 4 -
                               ------------------
         Section 1.4           PLEDGE OF MONIES HELD..........................................................- 4 -
                               ---------------------

                                     Article 2 - DEBT AND OBLIGATIONS SECURED.................................- 4 -
         Section 2.1           DEBT...........................................................................- 4 -
                               ----
         Section 2.2           OTHER OBLIGATIONS..............................................................- 5 -
                               -----------------
         Section 2.3           DEBT AND OTHER OBLIGATIONS.....................................................- 5 -
                               --------------------------
         Section 2.4           PAYMENTS.......................................................................- 5 -
                               --------

    Article 3 - BORROWER COVENANTS............................................................................- 6 -
         Section 3.1           PAYMENT OF DEBT................................................................- 6 -
                               ---------------
         Section 3.2           INCORPORATION BY REFERENCE.....................................................- 6 -
                               --------------------------
         Section 3.3           INSURANCE......................................................................- 6 -
                               ---------
         Section 3.4           PAYMENT OF TAXES, ETC.........................................................- 10 -
                               ---------------------
         Section 3.5           ESCROW FUND...................................................................- 11 -
                               -----------
         Section 3.6           CONDEMNATION..................................................................- 11 -
                               ------------
         Section 3.7           LEASES AND RENTS..............................................................- 12 -
                               ----------------
         Section 3.8           MAINTENANCE OF PROPERTY.......................................................- 14 -
                               -----------------------
         Section 3.9           WASTE.........................................................................- 14 -
                               -----
         Section 3.10          COMPLIANCE WITH LAWS..........................................................- 14 -
                               --------------------
         Section 3.11          BOOKS AND RECORDS.............................................................- 15 -
                               -----------------
         Section 3.12          PAYMENT FOR LABOR AND MATERIALS...............................................- 16 -
                               -------------------------------
         Section 3.13          PERFORMANCE OF OTHER AGREEMENTS...............................................- 17 -
                               -------------------------------

    Article 4 - SPECIAL COVENANTS............................................................................- 17 -
         Section 4.1           PROPERTY USE..................................................................- 17 -
                               ------------
         Section 4.2           ERISA.........................................................................- 17 -
                               -----
         Section 4.3           SINGLE PURPOSE ENTITY.........................................................- 18 -
                               ---------------------
         Section 4.4           RESTORATION...................................................................- 20 -
                               -----------

                                    Article 5 - REPRESENTATIONS AND WARRANTIES...............................- 24 -
         Section 5.1           WARRANTY OF TITLE.............................................................- 24 -
                               -----------------
         Section 5.2           AUTHORITY.....................................................................- 24 -
                               ---------
         Section 5.3           LEGAL STATUS AND AUTHORITY....................................................- 24 -
                               --------------------------
         Section 5.4           VALIDITY OF DOCUMENTS.........................................................- 25 -
                               ---------------------
         Section 5.5           LITIGATION....................................................................- 25 -
                               ----------
         Section 5.6           STATUS OF PROPERTY............................................................- 25 -
                               ------------------
         Section 5.7           NO FOREIGN PERSON.............................................................- 26 -
                               -----------------
         Section 5.8           SEPARATE TAX LOT..............................................................- 26 -
                               ----------------
         Section 5.9           ERISA COMPLIANCE..............................................................- 26 -
                               ----------------

                                                  -i-

<PAGE>
         Section 5.10          LEASES........................................................................- 27 -
                               ------
         Section 5.11          FINANCIAL CONDITION...........................................................- 27 -
                               -------------------
         Section 5.12          BUSINESS PURPOSES.............................................................- 27 -
                               -----------------
         Section 5.13          TAXES.........................................................................- 27 -
                               -----
         Section 5.14          MAILING ADDRESS...............................................................- 28 -
                               ---------------
         Section 5.15          NO CHANGE IN FACTS OR CIRCUMSTANCES...........................................- 28 -
                               -----------------------------------
         Section 5.16          DISCLOSURE....................................................................- 28 -
                               ----------
         Section 5.17          THIRD PARTY REPRESENTATIONS...................................................- 28 -
                               ---------------------------
         Section 5.18          ILLEGAL ACTIVITY..............................................................- 28 -
                               ----------------
         Section 5.19          CONTRACTS.....................................................................- 28 -
                               ---------

  Article 6 - OBLIGATIONS AND RELIANCES......................................................................- 28 -
         Section 6.1           RELATIONSHIP OF BORROWER AND LENDER...........................................- 28 -
                               -----------------------------------
         Section 6.2           NO RELIANCE ON LENDER.........................................................- 28 -
                               ---------------------
         Section 6.3           NO LENDER OBLIGATIONS.........................................................- 29 -
                               ---------------------
         Section 6.4           RELIANCE......................................................................- 29 -
                               --------

    Article 7 - FURTHER ASSURANCES...........................................................................- 29 -
         Section 7.1           RECORDING OF SECURITY INSTRUMENT, ETC.........................................- 29 -
                               -------------------------------------
         Section 7.2           FURTHER ACTS, ETC.............................................................- 30 -
                               -----------------
         Section 7.3           CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP
                               -------------------------------------------------
                               LAWS..........................................................................- 30 -
         Section 7.4           ESTOPPEL CERTIFICATES.........................................................- 31 -
                               ---------------------
         Section 7.5           FLOOD INSURANCE...............................................................- 31 -
                               ---------------
         Section 7.6           SPLITTING OF SECURITY INSTRUMENT..............................................- 31 -
                               --------------------------------
         Section 7.7           REPLACEMENT DOCUMENTS.........................................................- 32 -
                               ---------------------

   Article 8 - DUE ON SALE/ENCUMBRANCE.......................................................................- 32 -
         Section 8.1           LENDER RELIANCE...............................................................- 32 -
                               ---------------
         Section 8.2           NO SALE/ENCUMBRANCE...........................................................- 32 -
                               -------------------
         Section 8.3           SALE/ENCUMBRANCE DEFINED......................................................- 32 -
                               ------------------------
         Section 8.4           LENDER'S RIGHTS...............................................................- 33 -
                               ---------------
         Section 8.5           ONE-TIME TRANSFER. ...........................................................- 33 -
                               -----------------

      Article 9 - PREPAYMENT.................................................................................- 35 -
         Section 9.1           PREPAYMENT BEFORE EVENT OF DEFAULT............................................- 35 -
                               ----------------------------------
         Section 9.2           PREPAYMENT ON CASUALTY OR CONDEMNATION........................................- 35 -
                               --------------------------------------
         Section 9.3           PREPAYMENT AFTER EVENT OF DEFAULT.............................................- 35 -
                               ---------------------------------

      Article 10 - DEFAULT...................................................................................- 36 -
         Section 10.1          EVENTS OF DEFAULT.............................................................- 36 -
                               -----------------
         Section 10.2          LATE PAYMENT CHARGE...........................................................- 38 -
                               -------------------
         Section 10.3          DEFAULT INTEREST..............................................................- 38 -
                               ----------------

   Article 11 - RIGHTS AND REMEDIES..........................................................................- 39 -
         Section 11.1          REMEDIES......................................................................- 39 -
                               --------
         Section 11.2          APPLICATION OF PROCEEDS.......................................................- 41 -
                               -----------------------

                                                   -ii-

<PAGE>
         Section 11.3          RIGHT TO CURE DEFAULTS........................................................- 41 -
                               ----------------------
         Section 11.4          ACTIONS AND PROCEEDINGS.......................................................- 42 -
                               -----------------------
         Section 11.5          RECOVERY OF SUMS REQUIRED TO BE PAID..........................................- 42 -
                               ------------------------------------
         Section 11.6          EXAMINATION OF BOOKS AND RECORDS..............................................- 42 -
                               --------------------------------
         Section 11.7          OTHER RIGHTS, ETC.............................................................- 42 -
                               -----------------
         Section 11.8          RIGHT TO RELEASE ANY PORTION OF THE PROPERTY..................................- 43 -
                               --------------------------------------------
         Section 11.9          VIOLATION OF LAWS.............................................................- 43 -
                               -----------------
         Section 11.10         RECOURSE AND CHOICE OF REMEDIES...............................................- 43 -
                               -------------------------------
         Section 11.11         RIGHT OF ENTRY................................................................- 44 -
                               --------------

   Article 12 - ENVIRONMENTAL HAZARDS........................................................................- 44 -
         Section 12.1          ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES..................................- 44 -
                               --------------------------------------------
         Section 12.2          ENVIRONMENTAL COVENANTS.......................................................- 45 -
                               -----------------------
         Section 12.3          LENDER'S RIGHTS...............................................................- 46 -
                               ---------------

    Article 13 - INDEMNIFICATION.............................................................................- 46 -
         Section 13.1          GENERAL INDEMNIFICATION.......................................................- 46 -
                               -----------------------
         Section 13.2          MORTGAGE AND/OR INTANGIBLE TAX................................................- 47 -
                               ------------------------------
         Section 13.3          ERISA INDEMNIFICATION.........................................................- 47 -
                               ---------------------
         Section 13.4          ENVIRONMENTAL INDEMNIFICATION.................................................- 48 -
                               -----------------------------
         Section 13.5          DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
                               --------------------------------------------------
                               EXPENSES......................................................................- 49 -

      Article 14 - WAIVERS...................................................................................- 49 -
         Section 14.1          WAIVER OF COUNTERCLAIM........................................................- 49 -
                               ----------------------
         Section 14.2          MARSHALLING AND OTHER MATTERS.................................................- 49 -
                               -----------------------------
         Section 14.3          WAIVER OF NOTICE..............................................................- 49 -
                               ----------------
         Section 14.4          WAIVER OF STATUTE OF LIMITATIONS..............................................- 49 -
                               --------------------------------
         Section 14.5          SOLE DISCRETION OF LENDER.....................................................- 49 -
                               -------------------------
         Section 14.6          SURVIVAL......................................................................- 50 -
                               --------
         SECTION 14.7          WAIVER OF TRIAL BY JURY.......................................................- 50 -
                               -----------------------

     Article 15 - EXCULPATION................................................................................- 50 -
         Section 15.1          EXCULPATION...................................................................- 50 -
                               -----------
         Section 15.2          RESERVATION OF CERTAIN RIGHTS.................................................- 51 -
                               -----------------------------
         Section 15.3          EXCEPTIONS TO EXCULPATION.....................................................- 51 -
                               -------------------------
         Section 15.4          RECOURSE......................................................................- 51 -
                               --------
         Section 15.5          BANKRUPTCY CLAIMS.............................................................- 51 -
                               -----------------

      Article 16 - NOTICES...................................................................................- 52 -
         Section 16.1          NOTICES.......................................................................- 52 -
                               -------

    Article 17 - SERVICE OF PROCESS..........................................................................- 53 -
         Section 17.1          CONSENT TO SERVICE............................................................- 53 -
                               ------------------
         Section 17.2          SUBMISSION TO JURISDICTION....................................................- 53 -
                               --------------------------
         Section 17.3          JURISDICTION NOT EXCLUSIVE....................................................- 54 -
                               --------------------------

                                                  -iii-

<PAGE>
     Article 18 - APPLICABLE LAW.............................................................................- 54 -
         Section 18.1          CHOICE OF LAW.................................................................- 54 -
                               -------------
         Section 18.2          USURY LAWS....................................................................- 54 -
                               ----------
         Section 18.3          PROVISIONS SUBJECT TO APPLICABLE LAW..........................................- 54 -
                               ------------------------------------

    Article 19 - SECONDARY MARKET............................................................................- 55 -
         Section 19.1          TRANSFER OF LOAN..............................................................- 55 -
                               ----------------

       Article 20 - COSTS....................................................................................- 55 -
         Section 20.1          PERFORMANCE AT BORROWER'S EXPENSE.............................................- 55 -
                               ---------------------------------
         Section 20.2          ATTORNEY'S FEES FOR ENFORCEMENT...............................................- 55 -
                               -------------------------------

     Article 21 - DEFINITIONS................................................................................- 56 -
         Section 21.1          GENERAL DEFINITIONS...........................................................- 56 -
                               -------------------

  Article 22 - MISCELLANEOUS PROVISIONS......................................................................- 56 -
         Section 22.1          NO ORAL CHANGE................................................................- 56 -
                               --------------
         Section 22.2          LIABILITY.....................................................................- 56 -
                               ---------
         Section 22.3          INAPPLICABLE PROVISIONS.......................................................- 56 -
                               -----------------------
         Section 22.4          HEADINGS, ETC.................................................................- 56 -
                               -------------
         Section 22.5          DUPLICATE ORIGINALS; COUNTERPARTS.............................................- 57 -
                               ---------------------------------
         Section 22.6          NUMBER AND GENDER.............................................................- 57 -
                               -----------------
         Section 22.7          SUBROGATION...................................................................- 57 -
                               -----------

      Article 23 - SPECIAL ..................................................................................- 57 -
         Section 23.1........................................................................................- 57 -
         Section 23.2........................................................................................- 57 -
         Section 23.3........................................................................................- 58 -
         Section 23.4........................................................................................- 58 -
         Section 23.5........................................................................................- 58 -
         Section 23.6........................................................................................- 58 -
         Section 23.7........................................................................................- 58 -
         Section 23.8........................................................................................- 58 -
         Section 23.9........................................................................................- 58 -
         Section 23.10.......................................................................................- 58 -
         Section 23.11.......................................................................................- 58 -
         Section 23.12.......................................................................................- 59 -
         Section 23.13.......................................................................................- 59 -
         Section 23.14              Statutory Power of Sale..................................................- 59 -
         DEFINITIONS............................................................................................-v-

</TABLE>
                                 -iv-

<PAGE>




                                DEFINITIONS

         The terms set forth below are defined in the following Sections of this
         Security Instrument:


          (a)      Additional Reserve:  Article 3, Subsection 3.7(d);
                   ------------------
          (b)      Applicable Laws:  Article 3, Subsection 3.10(a);
                   ---------------
          (c)      Attorneys' Fees/Counsel Fees:  Article 21, Section 21.1;
                   ----------------------------
          (d)      Bankruptcy Code:  Article 1, Subsection 1.1(f);
                   ---------------
          (e)      Borrower:  Preamble and Article 21, Section 21.1;
                   --------
          (f)      Business Day:  Article 16, Section 16.1;
                   ------------
          (g)      Condemnation Proceeds:  Article 4, Subsection 4.4(b)(ii);
                   ---------------------
          (h)      Debt:  Article 2, Section 2.1;
                   ----
          (i)      Default Prepayment:  Article 9, Section 9.3;
                   ------------------
          (j)      Default Rate:  Article 10, Section 10.3;
                   ------------
          (k)      Environmental Indemnity:  Article 10, Subsection 10.1(q);
                   -----------------------
          (l)      Environmental Law:  Article 12, Section 12.1;
                   -----------------
          (m)      Environmental Liens:  Article 12, Subsection 12.2(d);
                   -------------------
          (n)      Environmental Report: Article 12, Subsection 12.1(a)
                   --------------------
          (o)      ERISA:  Article 4, Subsection 4.2(a);
                   -----
          (p)      Escrow Fund:  Article 3, Section 3.5;
                   -----------
          (q)      Event:  Article 20, Section 20.1;
                   -----
          (r)      Event of Default:  Article 10, Section 10.1;
                   ----------------
          (s)      Flood Insurance Acts:  Article 3, Subsection 3.3(a)(vii);
                   --------------------
          (t)      Full Replacement Cost:  Article 3, Subsection 3.3(a)(i)(A);
                   ---------------------
          (u)      GAAP:  Article 3, Subsection 3.11(a);
                   ----

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                                                        -v-

<PAGE>



          (v)      Guarantor:  Article 10, Subsection 10.1(e);
                   ---------
          (w)      Hazardous Substances:  Article 12, Section 12.1;
                   --------------------
          (x)      Improvements:  Article 1, Subsection 1.1(c);
                   ------------
          (y)      Indemnified Parties:  Article 13, Section 13.1;
                   -------------------
          (z)      Indemnitor(s):  Article 10, Subsection 10.1(o);
                   -------------
          (aa)     Insurance Premiums:  Article 3, Subsection 3.3(b);
                   ------------------
          (ab)     Insurance Proceeds:  Article 4, Subsection 4.4(b);
                   ------------------
          (ac)     Investor:  Article 19, Section 19.1;
                   --------
          (ad)     J. Baker Lease: Article 5, Section 5.10;
                   --------------
          (ae)     Land:  Article 1, Subsection 1.1(a);
                   ----
          (af)     Lease Guaranty:  Article 3, Subsection 3.7(a);
                   --------------
          (ag)     Leases:  Article 1, Subsection 1.1(f);
                   ------
          (ah)     Lender:  Preamble and Article 21, Section 21.1;
                   ------
          (ai)     Loan:  Article 5, Subsection 5.12;
                   ----
          (aj)     Loan Application:  Article 5, Section 5.15;
                   ----------------
          (ak)     Losses:  Article 13, Section 13.1;
                   ------
          (al)     Net Proceeds:  Article 4, Subsection 4.4(b);
                   ------------
          (am)     Net Proceeds Deficiency:  Article 4, Subsection 4.4(b)(vi);
                   -----------------------
          (an)     Note:  Recitals and Article 21, Section 21.1;
                   ----
          (ao)     Obligations:  Article 2, Section 2.3;
                   -----------
          (ap)     Other Charges:  Article 3, Subsection 3.4(a);
                   -------------
          (aq)     Other Obligations:  Article 2, Section 2.2;
                   -----------------
          (ar)     Other Security Documents:  Article 3, Section 3.2;
                   ------------------------
          (as)     Permitted Exceptions:  Article 5, Section 5.1;
                   --------------------


                                                       -vi-

<PAGE>


         (at)     Person:  Article 21, Section 21.1;
                  ------
         (au)     Personal Property:  Article 1, Subsection 1.1(e);
                   -----------------
         (av)     Policies/Policy:  Article 3, Subsection 3.3(b);
                  ---------------
         (aw)     Property:  Article 1, Section 1.1 and Article 21, Section 
                  ---------
                  21.1;
         (ax)     Qualified Insurer:  Article 3, Subsection 3.3(b);
                  -----------------
         (ay)     Rating Agency:  Article 3, Subsection 3.3(b);
                  -------------
         (az)     Related Entities:  Article 8, Subsection 8.5(c)(E);
                  ----------------
         (ba)     Release:  Article 12, Section 12.1;
                  -------
         (bb)     Remediation:  Article 12, Section 12.1;
                  -----------
         (bc)     Rents:  Article 1, Subsection 1.1(f);
                  -----
         (bd)     Restoration:  Article 3, Subsection 3.3(h);
                  -----------
         (be)     Restoration Consultant:  Article 4, Subsection 4.4(b)(iii);
                  ----------------------
         (bf)     Restoration Retainage:  Article 4, Subsection 4.4(b)(iv);
                  ---------------------
         (bg)     Securities:  Article 19, Section 19.1;
                  ----------
         (bh)     Security Deposits:  Article 3, Subsection 3.7(c);
                  -----------------
         (bi)     Security Instrument:  Preamble;
                  -------------------
         (bj)     Taxes:  Article 3, Subsection 3.4(a);
                  -----
         (bk)     Tenant's Transferee:  Article 3, Subsection 3.7(d);
                  -------------------
         (bl)     Transferee:  Article 8, Subsection 8.5(c)(C);
                  ----------
         (bm)     Transferee's Principals:  Article 8, Subsection 8.5(c)(C);
                  -----------------------
         (bn)     Uniform Commercial Code:  Article 1, Subsection 1.1(e)
                  -----------------------

                                                       -vii-