EXHIBIT 10.4

RETURN TO:

Sidley & Austin
875 Third Avenue
New York, New York 10022
Att:  Robert L. Boyd, Esq.


                       DEED OF TRUST, ASSIGNMENT OF LEASES
                               AND RENTS, SECURITY
                          AGREEMENT AND FIXTURE FILING


         THIS DEED OF TRUST,  ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT
AND FIXTURE FILING (as the same may be amended, restated, extended, supplemented
or otherwise  modified from time to time,  this "Deed of Trust"),  is made as of
the 15th day of December,  2000, LAKEWOOD PROPERTY TRUST, a Maryland real estate
investment  trust,  having its principal  place of business c/o HRPT  Properties
Trust, 400 Centre Street, Newton, Massachusetts 02458-2076 ("Trustor"), in favor
of WILLIAM Z. FAIRBANKS,  JR., having an address c/o  LandAmerica,  7557 Rambler
Road,  Suite  1200,  Dallas,  Texas  75231 (the  "Trustee"),  for the benefit of
MERRILL LYNCH MORTGAGE LENDING,  INC., a Delaware corporation,  having its place
of business at 100 Church Street, 18th Floor, New York, New York 10080 (together
with its  successors and assigns,  the  "Beneficiary").  Capitalized  terms used
herein but not otherwise defined shall have the respective  meanings assigned to
such terms in the Loan Agreement (hereinafter defined).


                              W I T N E S S E T H:

         To secure the payment of a loan (the "Loan") in the original  principal
sum of TWO HUNDRED SIXTY MILLION AND NO/100 DOLLARS ($260,000,000), lawful money
of the United States of America,  being made from Beneficiary to Trustor and the
other  Borrowers  (as  defined on Exhibit B attached  hereto) on the date hereof
pursuant to the terms and  conditions of a certain Loan and Security  Agreement,
dated as of the date  hereof (as  amended or  modified,  the "Loan  Agreement"),
among Trustor,  the other Borrowers and Beneficiary,  which Loan is evidenced by
and is to be paid with interest according to a certain Promissory Note, dated as
of the date hereof (as amended,  modified, renewed or restated and together with
any substitutes or replacements  therefor,  the "Note"), made by Trustor and the
other  Borrowers to Beneficiary  and all other sums due hereunder,  or otherwise
due under the Loan Documents (as defined in the Loan  Agreement)  (the principal
amount of the Loan,  together with  interest  thereon and all sums due hereunder
and  under  the Loan  Agreement,  the Note and the other  Loan  Documents  being
collectively  called  the  "Debt"),  and  all  of  the  agreements,   covenants,
conditions,  warranties,  representations  and other obligations  (other than to
repay the Debt) made or  undertaken  by Trustor or any other person or entity to
Beneficiary  or  others as set forth in the Loan  Documents  (collectively,  the
"Obligations"),  Trustor  hereby  irrevocably  grants,  conveys  and  assigns to



<PAGE>

Trustee,  in trust,  for the benefit of Beneficiary with power of sale and right
of entry and possession,  and with mortgage covenants,  all of Trustor's estate,
right, title and interest, now or hereafter acquired, including any reversion or
remainder interest,  in the real property described on Exhibit A attached hereto
(the   "Premises")   and  the  buildings,   structures,   fixtures,   additions,
enlargements,  extensions, modifications, repairs, replacements and improvements
now or hereafter located thereon (the "Improvements");

         TOGETHER  WITH:  all right,  title,  interest and estate of Trustor now
owned,  or  hereafter  acquired,  in  and  to the  following  property,  rights,
interests  and  estates  (the  Premises,  the  Improvements  together  with  the
following property,  rights,  interests and estates being hereinafter  described
are collectively referred to herein as the "Mortgaged Property"):

         (a) all easements,  rights-of-way,  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, tenements,  hereditaments and appurtenances of
any nature  whatsoever,  in any way  belonging,  relating or  pertaining  to the
Premises 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 Premises,  to the center line thereof
and all the  estates,  rights,  titles,  interests,  dower and  rights of dower,
courtesy  and  rights  of  courtesy,  property,  possession,  claim  and  demand
whatsoever, both at law and in equity, of Trustor of, in and to the Premises and
the  Improvements  and every part and  parcel  thereof,  with the  appurtenances
thereto;

         (b) 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,  whether  tangible or
intangible,  whatsoever owned by Trustor,  or in which Trustor has or shall have
an interest, now or hereafter located upon the Premises and the Improvements, or
appurtenant  thereto,  and  usable  in  connection  with the  present  or future
operation  and occupancy of the Premises and the  Improvements  and all building
equipment,  materials and supplies of any nature whatsoever owned by Trustor, or
in which  Trustor has or shall have an interest,  now or hereafter  located upon
the  Premises  and the  Improvements,  or  appurtenant  thereto,  and  usable in
connection with the present or future operation,  enjoyment and occupancy of the
Premises and the Improvements (hereinafter collectively called the "Equipment"),
including the proceeds of any sale or transfer of the foregoing,  and the right,
title  and  interest  of  Trustor  in and to any of the  Equipment  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  Mortgaged  Property
is located (the "Uniform  Commercial Code") superior in lien to the lien of this
Deed of Trust;

         (c) all  awards or  payments,  including  interest  thereon,  which may
heretofore and hereafter be made with respect to the Mortgaged Property, whether
from the exercise of the right of eminent domain or condemnation (including, but
not limited to, any transfer made in lieu of or in  anticipation of the exercise
of said  rights),  or for a change  of  grade,  or for any  other  injury  to or
decrease in the value of the Mortgaged Property;


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<PAGE>

         (d) all leases,  tenancies,  licenses,  subleases,  assignments  and/or
other rental or occupancy agreements (including, without limitation, any and all
guarantees  of  any of the  foregoing)  heretofore  or  hereafter  entered  into
affecting the use,  enjoyment or occupancy of the Premises and the Improvements,
including  any  extensions,   renewals,   modifications  or  amendments  thereof
(collectively,  the "Leases") and all rents,  rent  equivalents  (including room
revenues,  if applicable),  moneys payable as damages or in lieu of rent or rent
equivalents,  royalties (including, without limitation, all oil and gas or other
mineral  royalties  and  bonuses),  income,  receivables,   receipts,  revenues,
deposits (including, without limitation,  security, utility and other deposits),
accounts,  cash,  issues,  profits,  charges for  services  rendered,  and other
consideration  of  whatever  form or  nature  received  by or paid to or for the
account of or benefit  of  Trustor or its agents or  employees  from any and all
sources arising from or attributable to the Premises and the  Improvements  (the
"Rents"),  together with 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;

         (e) all proceeds of and any unearned premiums on any insurance policies
covering the Mortgaged 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 Mortgaged Property or any part thereof;

         (f) the right,  following  an Event of Default  (as defined in the Loan
Agreement),  in the name and on behalf of  Trustor,  to appear in and defend any
action or  proceeding  brought  with  respect to the  Mortgaged  Property and to
commence any action or proceeding to protect the interest of the  Beneficiary in
the Mortgaged Property or any part thereof;

         (g) all accounts, escrows, reserves,  documents,  instruments,  chattel
paper,  claims,  deposits and general  intangibles,  as the foregoing  terms are
defined  in  the  Uniform  Commercial  Code,  and  all  books,  records,  plans,
specifications,  designs,  drawings,  permits, consents,  licenses,  franchises,
management   agreements,   contracts,   contract  rights   (including,   without
limitation,  any  contract  with any  architect  or  engineer  or with any other
provider  of goods  or  services  for or in  connection  with any  construction,
repair, or other work upon the Mortgaged Property),  approvals, actions, refunds
or real estate taxes and  assessments  (and any other  governmental  impositions
related to the Mortgaged  Property),  and causes of action that now or hereafter
relate  to,  are  derived  from or are used in  connection  with  the  Mortgaged
Property, or the use, operation,  management,  improvement,  alteration, repair,
maintenance,  occupancy or  enjoyment  thereof or the conduct of any business or
activities thereon;

         (h) any and all proceeds and products of any of the  foregoing  and any
and all other security and collateral of any nature whatsoever, now or hereafter
given for the repayment of the Debt and the performance of Trustor's obligations
under the Loan  Documents,  including  (without  limitation) the Impositions and
Insurance Reserve, the Replacement Reserve, the Hazardous Materials  Remediation
Reserve,  the Loss Proceeds Account,  the Deposit Accounts,  the Central Account
and the Sub-Accounts thereof (each as defined in the Cash Management  Agreement,
dated as of the date  hereof  (as  amended  or  modified  the  "Cash  Management
Agreement"),  by and between Trustor,  the other Borrowers,  Beneficiary,  First
Union National Bank and REIT



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<PAGE>

Management & Research, Inc. ("Manager")),  and any other escrows or reserves set
forth in the Loan Documents;

         (i) all accounts  receivable,  contract  rights,  interests,  estate or
other claims, both in law and in equity,  which Trustor now has or may hereafter
acquire in the Mortgaged Property or any part thereof; and

         (j) all rights which  Trustor now has or may hereafter  acquire,  to be
indemnified  and/or held  harmless from any  liability,  loss,  damage,  cost or
expense  (including,  without  limitation,  attorneys'  fees and  disbursements)
relating to the Mortgaged Property or any part thereof.

         TO HAVE AND TO HOLD the above granted and described  Mortgaged Property
unto  and to the  Trustee,  for the  use and  benefit  of  Beneficiary,  and its
successors and assigns forever;

         PROVIDED,  HOWEVER, these presents are upon the express condition that,
if Trustor shall well and truly pay to  Beneficiary  the Debt at the time and in
the manner  provided in the Note and this Deed of Trust and shall well and truly
abide by and comply with each and every  covenant and condition set forth herein
and in the Note in a timely manner, these presents and the estate hereby granted
shall cease, terminate and be void;

         AND Trustor  represents  and warrants to and  covenants and agrees with
Beneficiary as follows:

         1.  Payment of Debt and  Incorporation  of  Covenants,  Conditions  and
Agreements. Trustor shall pay the Debt at the time and in the manner provided in
the Note,  the Loan  Agreement and in this Deed of Trust.  Trustor will duly and
punctually perform all of the covenants,  conditions and agreements contained in
the Note,  the Loan  Agreement,  this Deed of Trust and the other Loan Documents
all of which covenants, conditions and agreements are hereby made a part of this
Deed of Trust to the same  extent  and with the same force as if fully set forth
herein.

         2.  Warranty  of  Title.   Trustor  warrants  that  Trustor  has  good,
marketable,  indefeasible and insurable title to the Mortgaged  Property and has
the right to give,  grant,  bargain,  sell,  alien,  enfeoff,  convey,  confirm,
pledge,  assign and hypothecate the same and that Trustor possesses a fee estate
in the Premises and the  Improvements  and that it owns the  Mortgaged  Property
free and clear of all liens,  encumbrances and charges whatsoever except for the
Permitted  Encumbrances.  Trustor  represents  and  warrants  that  none  of the
Permitted  Encumbrances  will  materially  and  adversely  affect (i)  Trustor's
ability to pay in full in a timely manner its  obligations,  including,  without
limitation,  the  Debt,  (ii)  the  use of the  Mortgaged  Property  for the use
currently being made thereof,  (iii) the operation of the Mortgaged Property, or
(iv) the value of the Mortgaged Property.  Trustor shall forever warrant, defend
and  preserve  such title and the validity and priority of the lien of this Deed
of Trust and shall forever  warrant and defend the same to  Beneficiary  against
the claims of all persons whomsoever.



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<PAGE>

         3. Insurance. (a) Trustor, at its sole cost and expense, shall maintain
or cause to be maintained  insurance with respect to the Mortgaged  Property for
the mutual benefit of Trustor and  Beneficiary as required by Section 5.4 of the
Loan Agreement.

                  (b) If the Mortgaged  Property  shall be damaged or destroyed,
in whole or in part, by fire or other casualty (an "Insured Casualty"),  Trustor
shall give immediate notice thereof to Beneficiary and to the insurance carrier.
Subject  to the terms of the Loan  Agreement,  Trustor  shall  promptly  repair,
replace or rebuild the Mortgaged  Property in accordance  with,  and all amounts
paid  with  respect  to such  Insured  Casualty  under  all  insurance  policies
maintained by Trustor shall be governed by, the terms and  conditions of Section
5.5  of  the  Loan  Agreement.  The  expenses  incurred  by  Beneficiary  in the
adjustment  and  collection of insurance  proceeds shall become part of the Debt
and shall be secured  hereby and shall be reimbursed  by Trustor to  Beneficiary
upon demand.

         4. Payment of Impositions and Other Charges. Subject to Trustor's right
to contest set forth in Section 5.3 (B) of the Loan Agreement and the provisions
of  Section 5 below,  and  pursuant  to the  provisions  of the Cash  Management
Agreement,  Trustor  shall  cause to be paid all  Impositions  now or  hereafter
levied or assessed or imposed against the Mortgaged Property or any part thereof
as the same become due and payable.  Trustor shall  promptly pay for all utility
services  provided  to  the  Mortgaged   Property.   Trustor  shall  furnish  to
Beneficiary or its designee receipts for the payment of the Impositions prior to
the date the same shall become delinquent (provided, however, that Trustor shall
not be required to furnish such receipts for payment of Impositions in the event
that such  Impositions  have  been paid by  Beneficiary  pursuant  to  Section 5
hereof).

         5.  Impositions  and  Insurance  Reserve.  Trustor  shall make  monthly
deposits into the Impositions and Insurance Reserve of amounts sufficient to pay
Impositions and Insurance  Premiums (if and to the extent Insurance Premiums are
required to be escrowed under the Loan  Agreement) in accordance  with the terms
of Section 6.3 of the Loan Agreement and the Cash Management Agreement.

         6.  Condemnation.  (a) Trustor shall promptly give Beneficiary  written
notice of the actual or threatened  commencement of any  condemnation or eminent
domain  proceeding  affecting the Mortgaged  Property or any portion thereof and
shall deliver to  Beneficiary  copies of any and all papers served in connection
with such proceedings.  Subject to the terms of Section 6 (b) below, Beneficiary
is hereby irrevocably appointed as Trustor's  attorney-in-fact,  coupled with an
interest,  with  exclusive  power to  collect,  receive  and retain any award or
payment for said  condemnation  or eminent  domain and to make any compromise or
settlement in connection with such proceeding, subject to the provisions of this
Deed of  Trust.  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),
Trustor  shall  continue to pay the Debt at the time and in the manner  provided
for its payment in the Note, in this Deed of Trust and the other Loan  Documents
and the Debt shall not be reduced until any award or payment therefor shall have
been actually  received  after expenses of collection and applied by Beneficiary
to the discharge of the Debt in accordance with the terms hereof.  In


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<PAGE>

accordance with the terms hereof,  Trustor shall cause the award or payment made
in any condemnation or eminent domain  proceeding,  which is payable to Trustor,
to be paid  directly  to  Beneficiary.  Beneficiary  may apply any such award or
payment to the  reduction  or  discharge of the Debt whether or not then due and
payable;  such application to be made without any Prepayment  Consideration  (as
defined in the Note),  provided  that such  payment is made  within one  hundred
twenty  (120) days  following  the date of receipt  of such  condemnation  award
except that if an Event of Default has  occurred  and is  continuing,  then such
application  shall  be  subject  to the  Prepayment  Consideration  computed  in
accordance  with the Note. If the Mortgaged  Property is sold following an Event
of  Default,  through  foreclosure  or  otherwise,   prior  to  the  receipt  by
Beneficiary of such award or payment,  Beneficiary shall have the right, whether
or not a deficiency  judgment on the Note shall have been  sought,  recovered or
denied, to receive said award or payment, or a portion thereof sufficient to pay
the Debt.

                  (b)  Notwithstanding  the  foregoing,  Beneficiary  shall  not
exercise  the  foregoing  rights and  Trustor  may  prosecute  any  condemnation
proceeding  and settle or  compromise  and collect any claim  involving an award
and/or  claim for damages of not more than the  Restoration  Threshold  provided
that:  (i) no Event of Default  shall have occurred and be  continuing,  (ii) in
Beneficiary's sole good faith judgment, such condemnation or taking does not and
will not materially  restrict access to the Mortgaged Property or otherwise have
a Material  Adverse  Effect,  and the Mortgaged  Property  remaining  after such
condemnation  or taking is capable of being restored to an  economically  viable
whole of the same type which existed prior to the  condemnation  or taking or in
compliance with all applicable  laws, (iii) Trustor applies the proceeds of such
award to any  reconstruction or repair of the Mortgaged  Property necessary as a
result of such  condemnation  or taking,  (iv) Trustor  promptly  commences  and
diligently  prosecutes such reconstruction or repair to completion in accordance
with all applicable laws and (v) at Beneficiary's  request,  such reconstruction
or repair shall be performed  under the  supervision of an architect or engineer
reasonably  acceptable to Beneficiary and the plans and  specifications for such
work shall be subject to Beneficiary's  reasonable approval.  Trustor authorizes
Beneficiary  to apply such  awards,  payments,  proceeds or  damages,  after the
deduction of  Beneficiary's  reasonable  expenses  incurred in the collection of
such amounts, at Beneficiary's option, to restoration or repair of the Mortgaged
Property or to payment of the sums secured by this Deed of Trust, whether or not
then due, in the order determined by Beneficiary,  with the balance,  if any, to
Trustor.  In the event that Beneficiary  shall apply any such awards,  payments,
proceeds or damages to the indebtedness secured hereby pursuant to the foregoing
sentence,  no Prepayment  Consideration or other  prepayment  premium or penalty
shall be due and payable under the Note in connection therewith.  Subject to the
provisions  of clauses (i) through (v) of this Section 6(b),  Beneficiary  shall
not exercise  Beneficiary's option to apply such awards or damages to payment of
the sums secured by this Deed of Trust  provided that each of the conditions (as
applicable)  to the release of insurance  proceeds for  restoration or repair of
the  Mortgaged  Property  under  Section  5.5 of the Loan  Agreement  have  been
satisfied with respect to such condemnation  awards or damages.  Any application
of  proceeds  to  principal  shall not  extend or  postpone  the due date of the
monthly  installments  due  hereunder,  under  the Note or under any of the Loan
Documents or change the amount of such  installments.  Trustor agrees to execute
such further evidence of assignment of any awards,  proceeds,  damages or claims
arising  in  connection  with such  condemnation  or taking as  Beneficiary  may
reasonably require.




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<PAGE>

         7. Maintenance of Mortgaged Property. Trustor shall cause the Mortgaged
Property to be operated and  maintained in a good and safe  condition and repair
and in keeping with the  condition  and repair of  properties  of a similar use,
value, age, nature and construction.  Trustor shall not use, maintain or operate
the  Mortgaged  Property  in any manner  which  constitutes  a public or private
nuisance or which makes void, voidable, or cancelable,  or increases the premium
of, any insurance then in force with respect  thereto.  The Improvements and the
Equipment shall not be removed, or demolished and no Material  Alterations shall
be made thereto (except for normal  replacement or disposal of the Equipment and
except as  otherwise  expressly  permitted  in the Loan  Agreement ) without the
consent  of  Beneficiary,  which  consent  shall not be  unreasonably  withheld,
delayed or conditioned.  Trustor shall promptly comply in all material  respects
with all laws, orders and ordinances  affecting the Mortgaged  Property,  or the
use thereof.

         8. Use of Mortgaged  Property.  Trustor  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  Mortgaged  Property  or any part  thereof,  nor shall
Trustor  initiate,  join in,  acquiesce  in, or consent to any zoning  change or
zoning matter  affecting the Mortgaged  Property,  which in any of the foregoing
cases could  reasonably be expected to result in a Material  Adverse Effect.  If
under  applicable  zoning  provisions  the  use of all  or  any  portion  of the
Mortgaged  Property is or shall  become a  nonconforming  use,  Trustor will not
cause or permit such  nonconforming  use to be discontinued or abandoned without
the  express  written  consent  of  Beneficiary,  which  consent  shall  not  be
unreasonably withheld.  Trustor shall not permit or suffer to occur any waste on
or to the  Mortgaged  Property or to any portion  thereof and shall not take any
steps whatsoever to convert the Mortgaged Property, or any portion thereof, to a
condominium  or  cooperative  form of  management.  Trustor  will not install or
permit  to be  installed  on  the  Premises  any  underground  storage  tank  or
above-ground storage tank in violation of the Environmental Laws.

         9.  Transfer or  Encumbrance  of the  Mortgaged  Property.  (a) Trustor
acknowledges  that  Beneficiary has examined and relied on the  creditworthiness
and  experience  of  Trustor  in owning  and  operating  properties  such as the
Mortgaged  Property  in  agreeing to make the Loan,  and that  Beneficiary  will
continue to rely on Trustor's  ownership of the Mortgaged Property as a means of
maintaining the value of the Mortgaged Property as security for repayment of the
Debt. Except as expressly permitted under this Deed of Trust, the Loan Agreement
or under the other Loan Documents, Trustor shall not cause or suffer to occur or
exist, directly or indirectly, voluntarily or involuntarily, by operation of law
or otherwise, any sale, transfer,  mortgage,  pledge, lien or encumbrance (other
than Permitted Encumbrances) (collectively,  "Transfers") of (i) all or any part
of the  Mortgaged  Property  or any  interest  therein,  or (ii) any  direct  or
indirect  beneficial  ownership  interest  (in  whole or in  part)  in  Trustor,
irrespective  of the number of tiers of  ownership,  without  the prior  written
consent of Beneficiary.

                  (b)  Notwithstanding  the foregoing,  Trustor may, without the
consent  of  Beneficiary,  (i) make  immaterial  transfers  of  portions  of the
Mortgaged  Property to any federal,  state or local  government or any political
subdivision thereof (collectively, "Governmental Authorities") for dedication or
public  use  (subject  to the  provisions  of  Section 6 hereof)  and (ii)


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<PAGE>

grant easements, restrictions,  covenants, reservations and rights of way in the
ordinary  course of  business  for  access,  water and sewer  lines,  telephone,
cellular, cable, internet and telegraph lines, electric lines or other utilities
or for other similar purposes,  provided that no such transfer or conveyance set
forth in the  foregoing  clauses  (i) and (ii)  shall  have a  Material  Adverse
Effect; provided, however, that Trustor shall give Beneficiary at least ten (10)
days' prior written notice of any such transfer or conveyance describing same in
reasonable detail and certifying that such transfer or conveyance  satisfies the
foregoing conditions.

                  (c)  The  occurrence  of any  Transfer  in  violation  of this
Section 9 shall constitute an Event of Default hereunder,  whereupon Beneficiary
at its option,  without being required to demonstrate  any actual  impairment of
its security or any increased  risk of default  hereunder,  may declare the Debt
immediately due and payable.

                  (d)  Beneficiary's  consent to any  Transfer of the  Mortgaged
Property  or any  interest  in  Trustor  shall  not be  deemed to be a waiver of
Beneficiary's  right to require such consent to any future  occurrence  of same.
Any attempted or purported  Transfer of the Mortgaged  Property or of any direct
or indirect  interest in Trustor,  if made in  contravention  of this Section 9,
shall be null and void and of no force and effect.

         10. Taxes on Security; Documentary Stamps; Intangibles Tax. (a) Trustor
shall pay all taxes, charges,  filing,  registration and recording fees, excises
and levies  payable  with  respect to the Note,  this Deed of Trust or the liens
created or secured by the Loan Documents, other than income, franchise and doing
business  taxes  imposed on  Beneficiary.  If there shall be enacted any law (i)
deducting the Loan from the value of the  Mortgaged  Property for the purpose of
taxation,  (ii) affecting any lien on the Mortgaged Property,  or (iii) changing
existing laws of taxation of mortgages, deeds of trust, security deeds, or debts
secured by real  property,  or changing the manner of collecting any such taxes,
Trustor  shall  promptly pay to  Beneficiary,  on demand,  all taxes,  costs and
charges for which Beneficiary is or may be liable as a result thereof;  however,
if such payment would be  prohibited  by law or would render the Loan  usurious,
then instead of  collecting  such payment,  Beneficiary  may declare all amounts
owing under the Loan Documents to be immediately due and payable.  No Prepayment
Consideration shall be imposed on any such payment.

                  (b) 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 or this Deed of Trust,  or impose any other tax
or  charge  on the  same,  Trustor  will pay for the  same,  with  interest  and
penalties  thereon,  if any. Trustor hereby agrees that, in the event that it is
determined that additional documentary stamp tax or intangible tax is due hereon
or any  deed of  trust  or  promissory  note  executed  in  connection  herewith
(including,  without  limitation,  the Note),  Trustor shall  indemnify and hold
harmless  Beneficiary for all such documentary  stamp tax and/or intangible tax,
including  all  penalties  and  interest   assessed  or  charged  in  connection
therewith.  Trustor  shall pay same within ten (10) days after demand of payment
from  Beneficiary  and the payment of such sums shall be secured by this Deed of
Trust and such sums shall bear  interest at the Default  Rate (as defined in the
Note) from and after the eleventh (11th) day after demand until paid in full.



                                       8
<PAGE>

                  (c) Trustor shall hold harmless and indemnify Beneficiary, its
successors  and  assigns,  against  any  liability  incurred  by  reason  of the
imposition of any tax on the making and recording of this Deed of Trust.

         11. No Credits on Account of the Debt. Trustor will not claim or demand
or be  entitled  to any credit or credits on account of the Debt for any part of
the Impositions  assessed against the Mortgaged  Property,  or any part thereof,
and no deduction  shall  otherwise be made or claimed from the assessed value of
the Mortgaged  Property,  or any part  thereof,  for real estate tax purposes by
reason of this Deed of Trust or the Debt.  In the event  such  claim,  credit or
deduction  shall be  required  by law,  Beneficiary  shall have the  option,  by
written  notice  of not  less  than  ninety  (90)  days,  to  declare  the  Debt
immediately due and payable. No Prepayment Consideration shall be imposed on any
such payment.

         12. Performance of Other Agreements.  Trustor shall duly and punctually
observe and perform each and every  material  term,  provision,  condition,  and
covenant  to be observed or  performed  by Trustor  pursuant to the terms of any
agreement or recorded  instrument  (including  all  instruments  comprising  the
Permitted  Encumbrances)  affecting or pertaining to the Mortgaged Property, and
will not suffer or permit any default or event of default  (after  giving effect
to any applicable  notice  requirements  and cure periods) to exist under any of
the foregoing.

         13. Further Acts; Secondary Market  Transactions.  (a) Trustor will, at
its sole cost and expense,  and without  expense to  Beneficiary,  do,  execute,
acknowledge  and deliver all and every such further  acts,  deeds,  conveyances,
mortgages, assignments, notices of assignment, Uniform Commercial Code financing
statements or continuation  statements,  transfers and assurances as Beneficiary
shall,  from  time  to  time,  reasonably  require,  for  the  better  assuring,
conveying, assigning, transferring, and confirming unto Beneficiary the property
and  rights  hereby  given,  granted,  bargained,  sold,  alienated,  enfeoffed,
conveyed,  confirmed,  pledged,  assigned  and  hypothecated  or intended now or
hereafter  so to be, or which  Trustor may be or may  hereafter  become bound to
convey  or  assign  to  Beneficiary,  or  for  carrying  out  the  intention  or
facilitating  the  performance of the terms of this Deed of Trust or for filing,
registering or recording this Deed of Trust.  Trustor,  on demand,  will execute
and deliver and, upon  Trustor's  failure to do so within five (5) Business Days
after Beneficiary's request therefor,  hereby authorizes  Beneficiary to execute
in the name of  Trustor  or  without  the  signature  of  Trustor  to the extent
Beneficiary  may  lawfully  do so,  one or more  financing  statements,  chattel
mortgages  or other  instruments,  to evidence  more  effectively  the  security
interest of  Beneficiary  in the Mortgaged  Property.  Upon  foreclosure  or the
appointment of a receiver, Trustor will, at its sole cost and expense, cooperate
fully and  completely  to effect the  assignment  or  transfer  of any  license,
permit, agreement or any other right necessary or useful to the operation of the
Mortgaged  Property.  Trustor  grants to  Beneficiary  an  irrevocable  power of
attorney  coupled with an interest for the purpose of exercising  and perfecting
any and all rights and remedies  available to  Beneficiary at law and in equity,
including, without limitation, such rights and remedies available to Beneficiary
pursuant to this Section.

                  (b) Subject to the terms and  conditions set forth in the Loan
Agreement,  Beneficiary  shall have the right to engage in one or more Secondary
Market Transactions and, in



                                       9
<PAGE>

connection  therewith,  Beneficiary may transfer its obligations under this Deed
of Trust,  the Note,  the Loan  Agreement and under the other Loan Documents (or
may transfer the portion thereof corresponding to the transferred portion of the
Obligations),  and thereafter  Beneficiary  shall be relieved of any obligations
hereunder  and under the other  Loan  Documents  arising  after the date of said
transfer with respect to the transferred interest.

         14. Recording of Deed of Trust, Etc. Upon the execution and delivery of
this Deed of Trust and  thereafter,  from time to time,  Trustor will cause this
Deed of Trust, and any security  instrument creating a lien or security interest
or evidencing the lien hereof upon the Mortgaged 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 the lien or security  interest  hereof upon,  and
the interest of  Beneficiary  in, the Mortgaged  Property.  Trustor will pay all
filing,  registration  or  recording  fees,  and all  expenses  incident  to the
preparation,  execution and  acknowledgment  of this Deed of Trust,  any deed of
trust supplemental hereto, any security instrument with respect to the Mortgaged
Property and any instrument of further assurance, 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 Deed of Trust, any deed of
trust supplemental hereto, any security instrument with respect to the Mortgaged
Property or any instrument of further assurance,  except where prohibited by law
so to do.

         15.  Reporting  Requirements.  Trustor  agrees to give prompt notice to
Beneficiary  of the  insolvency  or  bankruptcy  filing of Trustor or the death,
insolvency or bankruptcy filing of any Guarantor.

         16. Intentionally Deleted.

         17.  Remedies.  Upon the  occurrence  and during the  continuance of an
Event of Default,  Beneficiary may, at Beneficiary's  option,  and by or through
Trustee,  by  Beneficiary  itself,  or  otherwise,  do any  one or  more  of the
following:

                  (a) Right to  Perform  Trustor's  Covenants.  If  Trustor  has
failed to keep or perform  any  covenant  whatsoever  contained  in this Deed of
Trust or the other Loan Documents,  Beneficiary  may, but shall not be obligated
to do so, perform or attempt to perform said  covenant;  and any payment made or
expense  incurred  in the  performance  or  attempted  performance  of any  such
covenant,  together with any sum expended by  Beneficiary  that is chargeable to
Trustor or subject to reimbursement  by Trustor under the Loan Documents,  shall
be and become a part of the Debt, and Trustor  promises,  upon demand, to pay to
Beneficiary,  at the place where the Note is payable, all sums so incurred, paid
or expended by Beneficiary,  with interest from the date when paid,  incurred or
expended by Beneficiary at the Default Rate (as defined in the Note).

                  (b) Right of Entry.  Beneficiary  may,  prior or subsequent to
the  institution  of any  foreclosure  proceedings,  enter  upon  the  Mortgaged
Property,  or any part thereof,  and take exclusive  possession of the Mortgaged
Property  and of all  books,  records,  and  accounts  relating  thereto  and to
exercise without  interference from Trustor any and all rights which Trustor has


                                       10
<PAGE>

with  respect  to  the  management,   possession,   operation,   protection,  or
preservation of the Mortgaged Property, including, without limitation, the right
to rent the same for the  account of Trustor  and to deduct  from such Rents all
costs,  expenses, and liabilities of every character incurred by the Beneficiary
in collecting such Rents and in managing, operating, maintaining, protecting, or
preserving  the  Mortgaged  Property and to apply the remainder of such Rents on
the Debt in such manner as Beneficiary may elect. All such costs,  expenses, and
liabilities  incurred by Beneficiary  in collecting  such Rents and in managing,
operating, maintaining, protecting, or preserving the Mortgaged Property, if not
paid out of Rents as hereinabove provided,  shall constitute a demand obligation
owing by Trustor and shall bear interest from the date of expenditure until paid
at the Default Rate as specified  in the Note,  all of which shall  constitute a
portion of the Debt. If  Beneficiary  elects to enter the Mortgaged  Property as
provided  for  herein,  Beneficiary  may  invoke any and all legal  remedies  to
dispossess  Trustor,  including  specifically  one or more  actions for forcible
entry and detainer,  trespass to try title, and restitution.  In connection with
any action taken by the  Beneficiary  pursuant to this  subsection,  Beneficiary
shall not be liable for any loss sustained by Trustor resulting from any failure
to let the Mortgaged  Property,  or any part  thereof,  or from any other act or
omission of the Beneficiary in managing the Mortgaged  Property unless such loss
is caused by the willful  misconduct  or gross  negligence of  Beneficiary,  its
agents,  employees or officers, nor shall Beneficiary be obligated to perform or
discharge  any  obligation,  duty,  or liability  under any Lease or under or by
reason hereof or the exercise of rights or remedies hereunder. Trustor shall and
does hereby agree to indemnify, defend and hold harmless the Indemnified Parties
(as defined in Section 23 below) from and against, any and all liability, claim,
demand, loss, damage, cost or expense (including, without limitation, reasonable
attorneys' fees and disbursements) which may or might be suffered or incurred by
any  Indemnified  Party under any such Lease or under or by reason hereof or the
exercise  of  rights  or  remedies  hereunder,  or  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 such Lease as and to the extent
provided  under Section 23 below.  Nothing in this  subsection  shall impose any
duty, obligation,  or responsibility upon any Indemnified Party for the control,
care,  management,  leasing,  or repair of the Mortgaged  Property,  nor for the
carrying out of any of the terms and  conditions  of any such Lease prior to the
transfer  of  title  to the  Mortgaged  Property  to any  Indemnified  Party  by
foreclosure,  deed-in-lieu  thereof,  exercise  of power  of sale or  otherwise,
Trustor  hereby  assents to,  ratifies,  and confirms any and all actions of the
Beneficiary with respect to the Mortgaged Property taken under this subsection.

                  (c) Right to Accelerate.  Beneficiary  may,  without notice or
demand,  declare  the  entire  unpaid  balance of the Debt  immediately  due and
payable.

                  (d) Foreclosure. Beneficiary may, by and through Trustee, sell
or offer for sale the Mortgaged Property in such portions,  order and parcels as
Beneficiary  may  determine,  with or without  having first taken  possession of
same, to the highest  bidder for cash at public  auction in accordance  with the
requirements  of Section 51.002 of the Texas  Property Code.  Such sale shall be
made at the courthouse of the county in which the Mortgaged  Property (or any of
that  portion  thereof  to be sold) is  located,  whether  the parts or  parcels
thereof,  if any,  in  different  counties  are  contiguous  or not, in the area
designated by the county commissioners for foreclosure sales (or, if no area has
been designated,  at the location at the courthouse designated


                                       11
<PAGE>

by  Beneficiary  by or through  Trustee in a written  notice of the  foreclosure
sale) on the first Tuesday of a month. All notices of and advertisements for the
sale,  as well as the  foreclosure  sale itself,  shall be given or performed in
accordance with the requirements of Section 51.002 of the Texas Property Code.

                  (e) Rights Pertaining to Sales. Subject to the requirements of
applicable law and except as otherwise provided herein, the following provisions
shall apply to any sale or sales of all or any portion of the Mortgaged Property
under or by virtue of Subsection (d) above, whether made under the power of sale
herein  granted or by virtue of judicial  proceedings or of a judgment or decree
of foreclosure and sale:

                           (i) Trustee or Beneficiary  may conduct any number of
                  sales  from time to time.  The  power of sale set forth  above
                  shall not be exhausted by any one or more such sales as to any
                  part of the Mortgaged Property which shall not have been sold,
                  nor by any sale  which is not  completed  or is  defective  in
                  Beneficiary's  opinion, until the Debt shall have been paid in
                  full.

                           (ii) Any sale may be postponed or adjourned by public
                  announcement  at the time and place appointed for such sale or
                  for such postponed or adjourned sale without further notice.

                           (iii)  After each sale,  Trustee,  Beneficiary  or an
                  officer  of any court  empowered  to do so shall  execute  and
                  deliver to the purchaser or purchasers at such sale a good and
                  sufficient  instrument  or  instruments  granting,  conveying,
                  assigning and  transferring  all right,  title and interest of
                  Trustor  in and to the  property  and  rights  sold and  shall
                  receive the  proceeds of said sale or sales and apply the same
                  as  specified  in the  Loan  Agreement.  Each of  Trustee  and
                  Beneficiary   is  hereby   appointed   the  true  and   lawful
                  attorney-in-fact of Trustor,  which appointment is irrevocable
                  and  shall  be  deemed  to be  coupled  with an  interest,  in
                  Trustor's name and stead,  to make all necessary  conveyances,
                  assignments,  transfers  and  deliveries  of the  property and
                  rights so sold,  Trustor  hereby  ratifying and confirming all
                  that said  attorney or such  substitute or  substitutes  shall
                  lawfully  do by  virtue  thereof.  Nevertheless,  Trustor,  if
                  requested by Beneficiary or Trustee,  shall ratify and confirm
                  any  such  sale  or  sales  by  executing  and  delivering  to
                  Beneficiary,  Trustee or such purchaser or purchasers all such
                  instruments as may be advisable, in Beneficiary's or Trustee's
                  judgment,  for  the  purposes  as may be  designated  in  such
                  request.

                           (iv) Any and all statements of fact or other recitals
                  made  in any  of the  instruments  referred  to in  Subsection
                  (e)(iii)  above  given  by  Beneficiary   shall  be  taken  as
                  conclusive  and binding  against all persons as to evidence of
                  the truth of the facts so stated and recited.

                           (v) Any such sale or sales  shall  operate  to divest
                  all of the estate,  right, title,  interest,  claim and demand
                  whatsoever,  whether at law or in equity, of Trustor in and to
                  the  properties  and rights so sold,  and shall be a perpetual
                  bar


                                       12
<PAGE>

                  both  at law and in  equity  against  Trustor  and any and all
                  persons  claiming  or who may  claim  the  same,  or any  part
                  thereof or any interest therein,  by, through or under Trustor
                  to the fullest extent permitted by applicable law.

                           (vi) Upon any such sale or sales, Beneficiary may bid
                  for and acquire the Mortgaged  Property and, in lieu of paying
                  cash therefor, may make a settlement for the purchase price by
                  crediting  against  the  Debt  the  amount  of  the  bid  made
                  therefor,  after deducting therefrom the expenses of the sale,
                  the  cost of any  enforcement  proceeding  hereunder,  and any
                  other sums which  Beneficiary  or  Trustee  is  authorized  to
                  deduct  under the terms  hereof,  to the extent  necessary  to
                  satisfy such bid.

                           (vii) Upon any such sale,  it shall not be  necessary
                  for  Beneficiary or any public officer acting under  execution
                  or order of court to have  present  or  constructively  in its
                  possession any of the Mortgaged Property.

                  (f) Beneficiary's Judicial Remedies.  Beneficiary,  or Trustee
upon written request of Beneficiary,  may proceed by suit or suits, at law or in
equity,  to enforce the payment of the Debt to foreclose  the liens and security
interests  of this  Deed of Trust as  against  all or any part of the  Mortgaged
Property,  and to have all or any part of the Mortgaged  Property sold under the
judgment or decree of a court of  competent  jurisdiction.  This remedy shall be
cumulative of any other nonjudicial  remedies available to the Beneficiary under
this Deed of Trust or the other  Loan  Documents.  Proceeding  with a request or
receiving  a  judgment  for  legal  relief  shall  not be or be  deemed to be an
election of remedies or bar any available nonjudicial remedy of the Beneficiary.

                  (g)   Beneficiary's   Right  to   Appointment   of   Receiver.
Beneficiary,  as a matter of right and (i) without regard to the  sufficiency of
the  security  for  repayment  of the Debt and without  notice to Trustor,  (ii)
without  any  showing of  insolvency,  fraud,  or  mismanagement  on the part of
Trustor,  (iii) without the necessity of filing any judicial or other proceeding
other than the proceeding for appointment of a receiver, and (iv) without regard
to  the  then  value  of  the  Mortgaged  Property,  shall  be  entitled  to the
appointment of a receiver or receivers for the protection,  possession, control,
management  and  operation  of  the  Mortgaged   Property,   including  (without
limitation),  the power to collect the Rents, enforce this Deed of Trust and, in
case of a sale and  deficiency,  during the full statutory  period of redemption
(if any),  whether  there be a redemption  or not, as well as during any further
times when  Trustor,  except for the  intervention  of such  receiver,  would be
entitled to collection of such Rents. Trustor hereby irrevocably consents to the
appointment of a receiver or receivers.  Any receiver  appointed pursuant to the
provisions  of this  subsection  shall  have the  usual  powers  and  duties  of
receivers in such matters.

                  (h)  Beneficiary's  Uniform  Commercial  Code  Remedies.   The
Beneficiary may exercise its rights of enforcement under the Uniform  Commercial
Code in effect in the state in which the Mortgaged Property is located.

                  (i) Other Rights.  Beneficiary (i) may surrender the insurance
policies maintained pursuant to the Loan Agreement or any part thereof, and upon
receipt of the proceeds



                                       13
<PAGE>

shall apply the  unearned  Insurance  Premiums as a credit on the Debt,  and, in
connection   therewith,   Trustor  hereby  appoints  Beneficiary  as  agent  and
attorney-in-fact   (which  is  coupled   with  an  interest   and  is  therefore
irrevocable) for Trustor to collect such Insurance Premiums;  (ii) may apply the
Impositions  and Insurance  Reserve  and/or any other  Reserves held pursuant to
this Deed of Trust or the other  Loan  Documents,  and any other  funds  held by
Beneficiary  toward  payment of the Debt;  and (iii) shall have and may exercise
any and all other rights and remedies  which  Beneficiary  may have at law or in
equity, or by virtue of any of the Loan Documents, or otherwise.

                  (j)  Discontinuance  of Remedies.  If  Beneficiary  shall have
proceeded  to invoke any right,  remedy,  or recourse  permitted  under the Loan
Documents  and shall  thereafter  elect to  discontinue  or abandon same for any
reason,  Beneficiary  shall  have the  unqualified  right so to do and,  in such
event,  Trustor and Beneficiary shall be restored to their former positions with
respect to the Debt, the Loan  Documents,  the Mortgaged  Property or otherwise,
and the rights, remedies,  recourses and powers of Beneficiary shall continue as
if same had never been invoked.

                  (k) Remedies Cumulative.  All rights,  remedies, and recourses
of  Beneficiary  granted  in the Note,  this  Deed of Trust  and the other  Loan
Documents,  any other pledge of  collateral,  or  otherwise  available at law or
equity: (i) shall be cumulative;  (ii) may be pursued separately,  successively,
or concurrently against Trustor,  the Mortgaged Property,  or any one or more of
them,  at such time and in such order as  Beneficiary  may determine in its sole
discretion; (iii) may be exercised as often as occasion therefor shall arise, it
being  agreed by Trustor  that the  exercise or failure to exercise  any of same
shall in no event be  construed  as a waiver or release  thereof or of any other
right, remedy, or recourse; (iv) shall be nonexclusive of any other right, power
or remedy which  Beneficiary may have against  Trustor  pursuant to this Deed of
Trust, the Loan Agreement or the other Loan Documents, or otherwise available at
law or in equity;  (v) shall not be conditioned upon  Beneficiary  exercising or
pursuing any remedy in relation to the Mortgaged  Property  prior to Beneficiary
bringing suit to recover the Debt; and (vi) in the event  Beneficiary  elects to
bring  suit on the  Debt  and  obtains  a  judgment  against  Trustor  prior  to
exercising  any remedies in relation to the  Mortgaged  Property,  all liens and
security  interests,  including the lien of this Deed of Trust,  shall remain in
full force and effect and may be exercised thereafter at Beneficiary's option.

                  (l) Election of Remedies.  Beneficiary may release, regardless
of  consideration,  any  part  of  the  Mortgaged  Property  without,  as to the
remainder, in any way impairing, affecting, subordinating, or releasing the lien
or  security  interests  evidenced  by this  Deed of  Trust  or the  other  Loan
Documents or affecting the  obligations of Trustor or any other party to pay the
Debt. For payment of the Debt, Beneficiary may resort to any collateral securing
the payment of the Debt in such order and manner as  Beneficiary  may elect.  No
collateral taken by Beneficiary shall in any manner impair or affect the lien or
security  interests  given  pursuant to the Loan  Documents,  and all collateral
shall be taken, considered, and held as cumulative.

                  (m) Bankruptcy  Acknowledgment.  If the Mortgaged  Property or
any portion thereof or any interest  therein becomes  property of any bankruptcy
estate or subject to any state


                                       14
<PAGE>

or federal insolvency proceeding, or in the event of the filing of any voluntary
or involuntary  petition under the  Bankruptcy  Code by or against  Trustor then
Beneficiary shall immediately  become entitled,  in addition to all other relief
to which  Beneficiary may be entitled under this Deed of Trust, to obtain (i) an
order from any bankruptcy court or other  appropriate  court granting  immediate
relief from the automatic stay pursuant to ss. 362 of the Bankruptcy  Code so as
to permit  Beneficiary  to pursue  its rights and  remedies  against  Trustor as
provided  under  this  Deed of  Trust  and all  other  rights  and  remedies  of
Beneficiary at law and in equity under  applicable  state law, and (ii) an order
from any bankruptcy court prohibiting  Trustor's use of all "cash collateral" as
defined  under ss.  363 of the  Bankruptcy  Code.  Trustor  shall not  assert or
request any other party to assert,  that the automatic stay under ss. 362 of the
Bankruptcy Code operate or be interpreted to stay, interdict,  condition, reduce
or inhibit the ability of  Beneficiary to enforce any rights it has by virtue of
this Deed of Trust,  or any other rights that  Beneficiary  has,  whether now or
hereafter acquired,  against any guarantor of the Debt. Trustor shall not seek a
supplemental stay or any other relief, whether injunctive or otherwise, pursuant
to ss.  105 of the  Bankruptcy  Code or any  other  provision  therein  to stay,
interdict,  condition,  reduce or inhibit the ability of  Beneficiary to enforce
any rights it has by virtue of this Deed of Trust  against any  guarantor of the
Debt.  Any  bankruptcy  petition or other  action  taken by the Trustor to stay,
condition,  or inhibit  Beneficiary  from  exercising  its  remedies  are hereby
admitted  by  Trustor  to be in  bad  faith  and  Trustor  further  admits  that
Beneficiary would have just cause for relief from the automatic stay in order to
take such actions authorized under state law.

                  (n)  Application  of  Proceeds.  The  proceeds  from any sale,
lease, or other disposition made pursuant to this Deed of Trust, or the proceeds
from the  surrender of any  insurance  policies  pursuant  hereto,  or any Rents
collected by  Beneficiary  from the Mortgaged  Property or the  Impositions  and
Insurance Reserve or other Reserves under the Cash Management  Agreement or sums
received  pursuant  to  Section 6  hereof,  or  proceeds  from  insurance  which
Beneficiary  elects to apply to the Debt pursuant to Section 3 hereof,  shall be
applied by  Beneficiary to the Debt in such order,  priority and  proportions as
Beneficiary in its sole discretion shall determine.

                  (o) Cross-Collateralization.  The mortgages and deeds of trust
(other than this Deed of Trust)  listed on Exhibit B attached  hereto and made a
part hereof,  as any of same may be amended,  modified or supplemented from time
to time, are collectively  referred to for purposes of this Section 17(o) as the
"Other  Mortgages."  This  Deed of  Trust,  as it may be  amended,  modified  or
supplemented  from  time  to  time,  together  with  the  Other  Mortgages,  are
collectively  referred to for purposes of this Section 17(o) as the "Mortgages."
The  Obligations  are  secured by,  among other  things,  the  Mortgages,  which
encumber real and personal  property in the States of California,  Pennsylvania,
Texas and the District of Columbia,  as more  particularly  described in each of
the  Mortgages.  The  Obligations  may be  accelerated  as  provided in the Loan
Documents.  Upon  the  occurrence  and  during  the  continuance  of an Event of
Default,  Beneficiary  may,  at  its  option,  accelerate  the  Obligations  and
foreclose  upon any one or more of the Mortgages or resort to any one or more of
its other rights and remedies  under any or all of the  Mortgages  and the other
Loan  Documents.  Except  as  otherwise  provided  herein,  all of the  real and
personal  property  conveyed and/or  mortgaged by the Mortgages are security for
the Obligations without allocation of any one or more of the parcels or portions
thereof to any



                                       15
<PAGE>

portion of the  Obligations.  Beneficiary  may  allocate  the  proceeds  that it
receives upon the exercise of its rights and remedies, including foreclosure, to
payment of the  Obligations as Beneficiary in its sole  discretion may determine
to be advisable  pursuant to the terms of the Loan  Documents.  Beneficiary  may
proceed,  at the same or different  times, to foreclose the Mortgages or any one
or more of them, by any  proceedings  appropriate  in the state where any of the
real property encumbered by one or more of the Mortgages lies, including private
sale if  permitted,  and no  event of  enforcement  taking  place in any  state,
including  without  limiting  the  generality  of  the  foregoing,  any  pending
foreclosure,  judgment  or  decree  of  foreclosure,   foreclosure  sale,  rents
received, possession taken, deficiency judgment or decrees, or judgment taken on
the  Obligations,  shall in any way stay,  preclude  or bar  enforcement  of the
Mortgages or any of them in any other state,  and  Beneficiary may pursue any or
all of its remedies to the maximum  extent  permitted by applicable law pursuant
to the terms of the Loan Documents  until all of the  Obligations  and all other
obligations  now or hereafter  secured by any or all of the Mortgages  have been
paid or discharged in full.  Additionally,  and without  limitation of any other
provision  of this Deed of Trust,  if this Deed of Trust is  foreclosed  and the
Mortgaged  Property is sold (or any part  thereof)  pursuant to  foreclosure  or
other  proceedings,  and if the proceeds of such sale (after application of such
proceeds as provided in this Deed of Trust and the other Loan Documents) are not
sufficient  to pay the total sum of the  Obligations  then  outstanding  and any
other amounts provided for by applicable law (the "Balance Owed"),  then, to the
extent permitted by law, the Obligations shall not be satisfied to the extent of
the Balance Owed, but such Obligations  shall continue in existence and continue
to be evidenced and secured by the Loan Documents and the Mortgages.  Subject to
the  requirements of applicable law, if Beneficiary  shall acquire the Mortgaged
Property as a result of any foreclosure or other sale (whether by bidding all or
any portion of the Obligations or otherwise),  the proceeds of such sale, to the
extent  permitted by law,  shall not be deemed to include (and Trustor shall not
be entitled to any benefit or credit on account of)  proceeds of any  subsequent
sale of the Mortgaged  Property by Beneficiary.  Without limitation of any other
provision hereof,  Trustor further agrees that if any of the Other Mortgages are
foreclosed  and  sale  is  made  of any of the  property  subject  to any  Other
Mortgages,  and if the proceeds of such sale (after application of such proceeds
as provided for herein and after  deducting  all accrued and general and special
taxes and  assessments)  are not sufficient to pay the Obligations and any other
amounts  provided for by applicable  law, then, to the extent  permitted by law,
the  Obligations  then  outstanding  shall not be satisfied to the extent of the
Balance Owed, but such  Obligations  shall continue in existence and continue to
be  evidenced  and  secured by the Loan  Documents  and the  Mortgages  existing
immediately  prior to any such  foreclosure,  except such  Mortgages  foreclosed
upon. No release of personal  liability of any Person  whatsoever and no release
of any portion of the property  now or  hereafter  subject to the lien of any of
the  Mortgages  shall  have  any  effect  whatsoever  by  way of  impairment  or
disturbance  of the  lien or  priority  of any  other  of the  Mortgages  or the
unreleased  properties  encumbered  by  any  of the  Mortgages,  to  the  extent
permitted by law. Any foreclosure or other appropriate  remedy brought in any of
the  states  aforesaid  may be  brought  and  prosecuted  as to any  part of the
security,  wherever  located,  without  regard  to  the  fact  that  foreclosure
proceedings or other remedies have or have not been instituted  elsewhere on any
other  property  subject to the lien of the Mortgages.  Neither  Trustor nor any
Person claiming by, through or under Trustor shall have any right to marshal the
assets,  all such rights  being  hereby  expressly  waived as to Trustor and all
Persons claiming by, through or under Trustor,  including,  without  limitation,



                                       16
<PAGE>

junior  lienors.  Each of Trustor and all endorsers,  guarantors and sureties of
the Obligations,  hereby waives any and all rights arising because of payment or
performance  by  Trustor of any  Obligations  (a)  against  any Person by way of
subrogation of the rights of Beneficiary or (b) against any Person  obligated to
pay or  perform  the  Obligations  or other  obligations  secured  by the  Other
Mortgages by way of contribution, reimbursement or otherwise.

         18. Security Agreement. This Deed of Trust is both a real property deed
of trust and a "security agreement" within the meaning of the Uniform Commercial
Code. The Mortgaged  Property  includes both real and personal  property and all
other rights and interests, whether tangible or intangible in nature, of Trustor
in the  Mortgaged  Property.  Trustor by executing and  delivering  this Deed of
Trust has granted and hereby grants to Beneficiary,  as security for the Debt, a
security  interest  in the  Mortgaged  Property  to the  full  extent  that  the
Mortgaged  Property may be subject to the Uniform  Commercial Code (said portion
of the Mortgaged Property so subject to the Uniform Commercial Code being called
in this  Section 18 the  "Collateral").  Trustor  hereby  agrees to execute  and
deliver  to  Beneficiary,  in form  and  substance  reasonably  satisfactory  to
Beneficiary,   such  financing   statements  and  such  further   assurances  as
Beneficiary  may from time to time  reasonably  consider  necessary  to  create,
perfect, and preserve  Beneficiary's security interest herein granted. This Deed
of Trust  shall also  constitute  a "fixture  filing"  for the  purposes  of the
Uniform  Commercial  Code as to all or any part of the Mortgaged  Property which
now or  hereafter  constitute  "fixtures"  under the  Uniform  Commercial  Code.
Information concerning the security interest herein granted may be obtained from
the parties at the addresses of the parties set forth in the first  paragraph of
this Deed of Trust. If an Event of Default shall occur, Beneficiary, in addition
to any other rights and remedies which it may have,  shall have and may exercise
immediately  and without  demand,  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,  the right to take  possession of the
Collateral or any part thereof,  and to take such other  measures as Beneficiary
may deem necessary for the care,  protection and preservation of the Collateral.
Upon request or demand of Beneficiary, Trustor shall at its expense assemble the
Collateral and make it available to Beneficiary at a convenient place acceptable
to Beneficiary. Trustor shall pay to Beneficiary on demand any and all expenses,
including legal expenses and attorneys' fees, incurred or paid by Beneficiary in
protecting the interest in the Collateral and in enforcing the rights  hereunder
with  respect  to the  Collateral.  Any  notice  of sale,  disposition  or other
intended action by Beneficiary with respect to the Collateral sent to Trustor in
accordance  with the  provisions  hereof  at least  five (5) days  prior to such
action, shall constitute commercially reasonable notice to Trustor. The proceeds
of any  disposition of the  Collateral,  or any part thereof,  may be applied by
Beneficiary  to the  payment of the Debt in such  priority  and  proportions  as
Beneficiary in its discretion  shall deem proper.  In the event of any change in
name,  identity  or  structure  of  any  Trustor,   such  Trustor  shall  notify
Beneficiary thereof and promptly after Beneficiary's request shall execute, file
and record such Uniform  Commercial  Code forms as are necessary to maintain the
priority of Beneficiary's lien upon and security interest in the Collateral, and
shall pay all  expenses  and fees in  connection  with the filing and  recording
thereof.  If  Beneficiary  shall  require the filing or recording of  additional
Uniform  Commercial  Code  forms  or  continuation  statements,  Trustor  shall,
promptly after request,  execute,  file and record such Uniform  Commercial Code
forms or continuation statements as Beneficiary shall deem necessary,  and shall
pay all expenses and fees in connection


                                       17
<PAGE>

with the filing and recording thereof, it being understood and agreed,  however,
that no such additional documents shall increase Trustor's obligations under the
Note,  this  Deed  of  Trust  and  the  other  Loan  Documents.  Trustor  hereby
irrevocably  appoints  Beneficiary  as its  attorney-in-fact,  coupled  with  an
interest  upon  Trustor's  failure to do so within five (5) Business  Days after
request by Beneficiary, to file with the appropriate public office on its behalf
any  financing  or other  statements  signed only by  Beneficiary,  as Trustor's
attorney-in-fact,  in  connection  with the  Collateral  covered by this Deed of
Trust.  Notwithstanding  the  foregoing,  Trustor shall appear and defend in any
action or proceeding which affects or purports to affect the Mortgaged  Property
and any interest or right therein,  whether such proceeding affects title or any
other rights in the Mortgaged  Property (and in conjunction  therewith,  Trustor
shall fully  cooperate with  Beneficiary in the event  Beneficiary is a party to
such action or proceeding).

         19.  Actions  and  Proceedings.  Upon the  occurrence  and  during  the
continuance of an Event of Default,  Beneficiary  has the right to appear in and
defend any action or proceeding  brought with respect to the Mortgaged  Property
and to bring any  action or  proceeding,  in the name and on behalf of  Trustor,
which Beneficiary,  in its discretion,  decides should be brought to protect its
interest  in the  Mortgaged  Property.  Beneficiary  shall,  at its  option,  be
subrogated  to the  lien of any  deed of  trust  or  other  security  instrument
discharged  in whole or in part by the  Debt,  and any such  subrogation  rights
shall constitute additional security for the payment of the Debt.

         20.  Waiver  of  Setoff  and  Counterclaim,   Marshalling,  Statute  of
Limitations, Automatic or Supplemental Stay, Etc. (a) All amounts due under this
Deed of Trust,  the Note and the other Loan Documents  shall be payable  without
setoff,  counterclaim  or any deduction  whatsoever.  Trustor  hereby waives the
right to assert a setoff,  counterclaim or deduction in any action or proceeding
in which Beneficiary is a participant, or arising out of or in any way connected
with this Deed of Trust, the Note, any of the other Loan Documents, or the Debt.

                  (b) Trustor hereby expressly, irrevocably, and unconditionally
waives and  releases,  to the  extent  permitted  by law (i) the  benefit of all
appraisement,  valuation, stay, extension, reinstatement and redemption laws now
or hereafter in force and all rights of  marshalling,  sale in the inverse order
of  alienation,  or any other right to direct in any manner the order or sale of
any of the  Mortgaged  Property  in the  event  of  any  sale  hereunder  of the
Mortgaged Property or any part thereof or any interest therein; (ii) any and all
rights of redemption  from sale under any order or decree of foreclosure of this
Deed of Trust on behalf  of  Trustor,  and on  behalf  of each and every  person
acquiring any interest in or title to the Mortgaged  Property  subsequent to the
date of this Deed of Trust and on behalf of all persons to the extent  permitted
by applicable law; and (iii) all benefits that might accrue to Trustor by virtue
of any present or future law exempting the Mortgaged  Property from  attachment,
levy or sale on execution or providing for any appraisement,  valuation, stay of
execution,  exemption from civil process,  redemption,  or extension of time for
payment.  Beneficiary shall not be under any obligation to marshal any assets in
favor of any Person or against or in payment of any or all of the Obligations.



                                       18
<PAGE>

                  (c) To the extent  permitted by applicable law,  Beneficiary's
rights hereunder shall continue even to the extent that a suit for collection of
the Debt, or part thereof, is barred by a statute of limitations. Trustor 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.

         21.  Recovery of Sums Required to Be Paid.  Beneficiary  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  Beneficiary  thereafter  to bring an  action  of  foreclosure,  or any other
action,  for a default or defaults by Trustor  existing at the time such earlier
action was commenced.

         22. Handicapped  Access. (a) Trustor agrees that the Mortgaged Property
shall at all times comply in all material respects with applicable  requirements
of the Americans with Disabilities Act of 1990, the Fair Housing  Amendments Act
of 1988, all state and local laws and ordinances  related to handicapped  access
and all  rules,  regulations,  and orders  issued  pursuant  thereto  including,
without limitation, the Americans with Disabilities Act Accessibility Guidelines
for Buildings and Facilities (collectively "Access Laws").

                  (b) Trustor agrees to give prompt notice to Beneficiary of the
receipt by Trustor of any complaints related to violation of any Access Laws and
of the  commencement  of any  proceedings  or  investigations  which  relate  to
compliance  with  applicable  Access  Laws  but  only to the  extent  that  such
complaints, proceedings or investigations, if adversely determined, could have a
Material Adverse Effect.

         23.  Indemnification;  Limitation  of  Liability.  In  addition  to the
payment  of  expenses  as  required  elsewhere  herein  and  in the  other  Loan
Documents,  Trustor agrees to indemnify,  defend,  protect, pay and hold Trustee
and Beneficiary,  and each of their successors and assigns  (including,  without
limitation,  the trustee and/or the trust under any trust agreement  executed in
connection  with any  Securitization  backed in whole or in part by the Loan and
any other person  which may  hereafter be the holder of the Note or any interest
therein),  and  the  officers,  directors,   stockholders,   partners,  members,
employees,  agents and Affiliates of Trustee and Beneficiary and such successors
and assigns (collectively,  the "Indemnified Parties") harmless from and against
any and all liabilities,  obligations,  claims,  damages,  penalties,  causes of
action, costs and expenses (including without limitation  reasonable  attorneys'
fees and expenses)  (collectively,  the "Indemnified  Claims"),  imposed upon or
incurred by or asserted  against any  Indemnified  Party by reason of any of the
following  (to  the  extent  that  insurance  proceeds  paid  to the  applicable
Indemnified Party on account of the following shall be inadequate: (i) ownership
of the Deed of Trust, the Mortgaged  Property or any interest therein or receipt
of any  rents;  (ii) any  accident,  injury to or death of persons or loss of or
damage to property  occurring in, on or about the Mortgaged Property or any part
thereof or on the  adjoining  sidewalks,  curbs,  adjacent  property or adjacent
parking  areas,  streets or ways;  (iii) any use,  nonuse or condition in, on or
about the Mortgaged Property or any part thereof or on the adjoining  sidewalks,
curbs,  adjacent  property  or adjacent  parking  areas,  streets or ways;  (iv)
performance of any labor or services or the furnishing of any materials or other
property  in respect of the  Mortgaged  Property  or any part


                                       19
<PAGE>

thereof;  (v) any failure of the Premises or the Improvements to comply with any
applicable law, statute, code, ordinance,  rule or regulation;  (vi) any default
by  Trustor  under  this Deed of Trust,  the Loan  Agreement  or any other  Loan
Documents;  (vii) any actions taken by any Indemnified  Party in the enforcement
of this Deed of Trust and the other  Loan  Documents  in  accordance  with their
respective terms (viii) any failure to act on the part of any Indemnified  Party
hereunder;  (ix) the payment or nonpayment of any brokerage  commissions  to any
party  in  connection  with the  transaction  contemplated  hereby;  and (x) the
failure of Trustor 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 this
Agreement,  or to supply a copy thereof in a timely  fashion to the recipient of
the proceeds of the transaction in connection with which this Agreement is made.
WITHOUT  LIMITATION,  IT IS THE INTENTION OF TRUSTOR AND TRUSTOR AGREES THAT THE
FOREGOING  INDEMNITIES  SHALL  APPLY  TO EACH OF THE  INDEMNIFIED  PARTIES  WITH
RESPECT TO  LIABILITIES,  OBLIGATIONS,  CLAIMS,  DAMAGES,  PENALTIES,  CAUSES OF
ACTION, COSTS AND EXPENSES (INCLUDING WITHOUT LIMITATION,  REASONABLE ATTORNEYS'
FEES AND EXPENSES) WHICH IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE OF
ANY SUCH  (AND/OR ANY OTHER) OF THE  INDEMNIFIED  PARTIES.  Notwithstanding  the
foregoing,  Trustor shall not be liable for any  Indemnified  Claims arising (A)
from the gross negligence or willful  misconduct of any Indemnified Party or (B)
under clauses (i) - (v) above to the extent the facts,  events or  circumstances
giving rise to such Indemnified  Claim arise after the date that any Indemnified
Party  takes  title  to the  Mortgaged  Property  by  foreclosure,  deed-in-lieu
thereof, the exercise of any power of sale or otherwise.  Any amounts payable to
an Indemnified  Party 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 such Indemnified Party until paid.

         24. Notices.  Any notice,  demand,  statement,  request or consent made
hereunder  shall be in  writing,  addressed  to the  intended  recipient  at its
address set forth in the Loan  Agreement,  and shall be made and deemed given in
accordance with the terms of the Loan Agreement.

         25.  Authority.  (a) Trustor  (and the  undersigned  representative  of
Trustor,  if any) has full power,  authority  and right to execute,  deliver and
perform  its  obligations  pursuant to this Deed of Trust,  and to give,  grant,
bargain, sell, alien, enfeoff, convey, confirm, warrant, pledge, hypothecate and
assign  the  Mortgaged  Property  pursuant  to the terms  hereof and to keep and
observe  all of the  terms  of  this  Deed  of  Trust  on  Trustor's  part to be
performed;  and (b)  Trustor  represents  and  warrants  that  Trustor  is not a
"foreign  person"  within  the  meaning of Section  1445(f)(3)  of the  Internal
Revenue  Code  of  1986,  as  amended  and  the  related   Treasury   Department
regulations.

         26.  Waiver of Notice.  Trustor shall not be entitled to any notices of
any nature whatsoever from Beneficiary  except with respect to matters for which
this Deed of Trust  specifically and expressly provides for the giving of notice
by  Beneficiary  to  Trustor  and  except  with  respect  to  matters  for which
Beneficiary  is required by applicable  law to give notice,  and Trustor  hereby
expressly  waives the right to receive any notice from  Beneficiary with respect
to



                                       20
<PAGE>

any matter for which this Deed of Trust does not  specifically  and expressly
provide for the giving of notice by Beneficiary to Trustor.

         27.  Remedies of Trustor.  In the event that a claim or adjudication is
made that Beneficiary has acted  unreasonably or unreasonably  delayed acting in
any case  where by law or under the Note,  this Deed of Trust or the other  Loan
Documents, it has an obligation to act reasonably or promptly, Beneficiary shall
not be liable for any monetary damages,  and Trustor's remedies shall be limited
to injunctive relief or declaratory judgment.

         28. Sole Discretion of Beneficiary.  Whenever  pursuant to this Deed of
Trust or the other Loan Documents,  Beneficiary  exercises any right given to it
to  consent,  approve  or  disapprove,  or  any  arrangement  or  term  is to be
satisfactory to Beneficiary,  the decision of Beneficiary to consent, approve or
disapprove,  or to decide that  arrangements  or terms are  satisfactory  or not
satisfactory  shall be in the sole  discretion of Beneficiary and shall be final
and conclusive,  except as may be otherwise expressly and specifically  provided
herein.  Notwithstanding  anything to the contrary contained herein, it shall be
understood and agreed that any such consent,  approval,  or  disapproval  may be
conditioned,  among other things, upon Beneficiary obtaining confirmation by the
Rating  Agencies  that the  action  or other  matter  subject  to  Beneficiary's
consent,  approval,  or disapproval shall not adversely affect the rating of any
securities  issued or to be  issued  in  connection  with any  Secondary  Market
Transaction,  notwithstanding that such condition may not be expressly set forth
in the  provision  or  provisions  of the  Loan  Documents  which  require  that
Beneficiary's consent be obtained.

         29.  Non-Waiver.  The  failure of  Beneficiary  to insist  upon  strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Deed of Trust.  Trustor  shall not be  relieved  of  Trustor's  obligations
hereunder by reason of (a) the failure of Beneficiary to comply with any request
of Trustor or Guarantor  to take any action to  foreclose  this Deed of Trust or
otherwise  enforce  any of the  provisions  hereof or of the Note or other  Loan
Documents,  (b) the release,  regardless of  consideration,  of the whole or any
part of the  Mortgaged  Property,  or of any  person  liable for the Debt or any
portion  thereof,  or (c) any agreement or stipulation by Beneficiary  extending
the time of payment or  otherwise  modifying or  supplementing  the terms of the
Note, this Deed of Trust,  or the other Loan  Documents.  Beneficiary may resort
for the payment of the Debt to any other  security held by  Beneficiary  in such
order and manner as Beneficiary,  in its discretion,  may elect. Beneficiary may
take  action to recover  the Debt,  or any  portion  thereof,  or to enforce any
covenant  hereof  without  prejudice to the right of  Beneficiary  thereafter to
foreclosure  this Deed of Trust.  The rights and remedies of  Beneficiary  under
this Deed of Trust shall be separate,  distinct and cumulative and none shall be
given effect to the  exclusion  of the others.  No act of  Beneficiary  shall be
construed  as an  election  to  proceed  under any one  provision  herein to the
exclusion of any other provision.  Beneficiary 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.

         30.  Liability.  If  Trustor  consists  of more  than one  person,  the
obligations  and  liabilities of each such person  hereunder  shall be joint and
several. Subject to the provisions hereof requiring Beneficiary's consent to any
transfer of the Mortgaged Property, this Deed of

                                       21
<PAGE>

Trust shall be binding upon and inure to the benefit of Trustor and  Beneficiary
and their respective successors and assigns forever.

         31. Inapplicable Provisions. If any term, covenant or condition of this
Deed of Trust is held to be invalid,  illegal or  unenforceable  in any respect,
this Deed of Trust shall be construed without such provision.

         32.  Headings,  Etc. The  headings and captions of various  Sections of
this  Deed of Trust  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.

         33.  Counterparts.  This Deed of Trust may be executed in any number of
counterparts  each of which shall be deemed to be an  original  but all of which
when taken together shall constitute one agreement.

         34. Definitions. Unless the context clearly indicates a contrary intent
or unless otherwise  specifically  provided  herein,  words used in this Deed of
Trust  may be used  interchangeably  in  singular  or  plural  form and the word
"Trustor"  shall mean "each  Trustor and any  subsequent  owner or owners of the
Mortgaged  Property  or any part  thereof  or any  interest  therein,"  the word
"Beneficiary"  shall mean  "Beneficiary and any subsequent  holder of the Note,"
the word  "Debt"  shall mean "the Note and any other  evidence  of  indebtedness
secured by this Deed of Trust," the word "person"  shall include an  individual,
corporation,   partnership,   trust,  unincorporated  association,   government,
governmental authority, and any other entity, and the words "Mortgaged Property"
shall include any portion of the Mortgaged Property and any interest therein and
the words "attorneys' fees" shall include any and all attorneys' fees, paralegal
and law clerk fees, including, but not limited to, fees at the pre-trial,  trial
and appellate  levels incurred or paid by Beneficiary in protecting its interest
in the Mortgaged  Property and  Collateral  and enforcing its rights  hereunder.
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.

         35.  Homestead.  Trustor  hereby waives and renounces all homestead and
exemption  rights provided by the constitution and the laws of the United States
and of any state,  in and to the Premises as against the collection of the Debt,
or any part hereof.

         36. Assignments. Beneficiary shall have the right to assign or transfer
its  rights  under  this  Deed of Trust  and the other  Loan  Documents  without
limitation,  including,  without limitation, the right to assign or transfer its
rights to a servicing agent. Any assignee or transferee shall be entitled to all
the benefits  afforded  Beneficiary  under this Deed of Trust and the other Loan
Documents.  Beneficiary  agrees  to  provide  Trustor  with  notice  of any such
assignment,  and in no event shall Trustor's monetary obligations  hereunder and
under the other  Loan  Documents  be  increased  as a result of such  assignment
(except  in  accordance  with  Section  10.2 of the Loan  Agreement);  provided,
however,  that  Trustor's  consent shall not be required in connection  with any
such  assignment  and no delay or failure by  Beneficiary to provide such notice
shall limit the effectiveness of such assignment.



                                       22
<PAGE>

         37.   Survival   of    Obligations;    Survival   of   Warranties   and
Representations. Each and all of the covenants, obligations, representations and
warranties  of Trustor  shall  survive the  execution  and  delivery of the Loan
Documents  and the  transfer  or  assignment  of this Deed of Trust  (including,
without  limitation,  any transfer of the Deed of Trust by Beneficiary of any of
its rights,  title and interest in and to the  Mortgaged  Property to any party,
whether or not affiliated with Beneficiary).

         38.  Covenants  Running  with  the  Land.  All  covenants,  conditions,
warranties,  representations  and other  obligations  contained  in this Deed of
Trust and the other Loan  Documents are intended by Trustor and  Beneficiary  to
be, and shall be construed as,  covenants  running with the  Mortgaged  Property
until the lien of this Deed of Trust has been fully released by Beneficiary.

         39. Governing Law;  Jurisdiction.  THIS DEED OF TRUST WAS NEGOTIATED IN
THE STATE OF NEW YORK AND WAS MADE BY TRUSTOR AND ACCEPTED BY BENEFICIARY IN THE
STATE OF NEW YORK, AND THE PROCEEDS OF THE NOTE WERE DISBURSED FROM THE STATE OF
NEW YORK,  WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL  RELATIONSHIP  TO THE
PARTIES  AND TO THE  UNDERLYING  TRANSACTION,  AND  IN ALL  RESPECTS  INCLUDING,
WITHOUT  LIMITING THE  GENERALITY  OF THE  FOREGOING,  MATTERS OF  CONSTRUCTION,
VALIDITY  AND  PERFORMANCE.  THIS  DEED OF  TRUST  AND THE  OBLIGATIONS  ARISING
HEREUNDER  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW
YORK AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL
TIMES THE PROVISIONS FOR THE CREATION,  PERFECTION AND  ENFORCEMENT OF THE LIENS
AND SECURITY  INTERESTS CREATED PURSUANT TO THIS DEED OF TRUST SHALL BE GOVERNED
BY THE LAWS OF THE STATE WHERE THE MORTGAGED PROPERTY IS LOCATED.

         40.  Time of  Essence.  Time is of the  essence as to all of the terms,
covenants and condition of this Deed of Trust and the other Loan Documents.

         41. No Third-Party Beneficiaries.  The provisions of this Deed of Trust
and the other Loan Documents are for the benefit of Trustor and  Beneficiary and
shall not inure to the benefit of any third party  (other than any  successor or
assignee of  Beneficiary or permitted  assignee of Trustor).  This Deed of Trust
and the other Loan  Documents  shall not be  construed  as creating  any rights,
claims  or  causes  of  action  against  Beneficiary  or any  of  its  officers,
directors,  agents  or  employees  in  favor of any  party  other  than  Trustor
including but not limited to any claims to any sums held in the  Impositions and
Insurance Reserve or any other Reserve.

         42.  Relationship  of Parties.  The  relationship  of  Beneficiary  and
Trustor is solely that of debtor and creditor,  and Beneficiary has no fiduciary
or other special  relationship with the Trustor, and no term or condition of any
of the Loan  Documents  shall be  construed  to be other than that of debtor and
creditor.  Trustor  represents and acknowledges  that neither the Loan

                                       23
<PAGE>

Documents nor any course of dealing  between the parties creates any partnership
or joint venture between  Trustor and Beneficiary or any other person,  nor does
it provide  for any shared  appreciation  rights or other  equity  participation
interest.

         43.  Successors  and Assigns.  This Deed of Trust shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and  assigns,  except  that  Trustor  may not assign  its rights or  obligations
hereunder except as expressly provided in Section 9 hereof or as permitted under
the Loan Agreement.

         44. Investigations. Any and all representations,  warranties, covenants
and agreements made in this Deed of Trust (and/or in other Loan Documents) shall
survive any investigation or inspection made by or on behalf of Beneficiary.

         45.  Assignment  of Leases  and Rents.  (a)  Trustor  acknowledges  and
confirms that it has executed and  delivered to  Beneficiary  the  Assignment of
Leases intending that such instrument create a present,  absolute  assignment to
Beneficiary of the Leases and Rents.  Without limiting the intended  benefits or
the remedies provided under the Assignment of Leases,  Trustor hereby assigns to
Beneficiary,  as further security for the Debt and the  Obligations,  the Leases
and Rents.  While any Event of Default exists,  Beneficiary shall be entitled to
exercise any or all of the remedies  provided in the Assignment of Leases and in
Section 17 hereof, including,  without limitation,  the right to have a receiver
appointed. If any conflict or inconsistency exists between the Assignment of the
Leases and this Deed of Trust and the absolute  assignment of the Leases and the
Rents in the  Assignment of Leases,  the terms of the Assignment of Leases shall
control.

                  (b) So  long  as any  part of the  Debt  and  the  Obligations
secured hereby remain unpaid and undischarged,  the fee and leasehold estates to
the Mortgaged  Property shall not merge, but shall remain separate and distinct,
notwithstanding  the union of such estates either in Trustor,  Beneficiary,  any
lessee or any third party by purchase or otherwise.

         46. Waiver of Right to Trial by Jury.  EACH OF BENEFICIARY  AND TRUSTOR
HEREBY  AGREES  NOT TO ELECT A TRIAL BY JURY OF ANY  ISSUE  TRIABLE  OF RIGHT BY
JURY,  AND WAIVES  ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT  THAT ANY SUCH
RIGHT  SHALL NOW OR  HEREAFTER  EXIST  WITH  REGARD TO THIS DEED OF TRUST OR THE
OTHER LOAN  DOCUMENTS,  OR ANY CLAIM,  COUNTERCLAIM  OR OTHER ACTION  ARISING IN
CONNECTION  THEREWITH.  THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY
AND VOLUNTARILY BY EACH OF TRUSTOR AND BENEFICIARY, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY  EACH  INSTANCE  AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE ACCRUE.  BENEFICIARY IS HEREBY AUTHORIZED TO FILE A COPY OF
THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY TRUSTOR.

         47.  Expenses and Attorneys'  Fees.  Trustor agrees to promptly pay all
reasonable fees,  costs and expenses  incurred by Beneficiary in connection with
any matters  contemplated  by or arising out of this Deed of Trust and the other
Loan  Documents,  including,  without  limitation,  reasonable  fees,  costs and
expenses (including  reasonable  attorneys' fees and fees of other

                                       24
<PAGE>

professionals  retained by  Beneficiary)  incurred in any action to enforce this
Deed of Trust or the other Loan  Documents  or to collect any  payments due from
Trustor  under  this  Deed of  Trust,  the Note or any other  Loan  Document  or
incurred in  connection  with any  refinancing  or  restructuring  of the credit
arrangements  provided  under this Deed of Trust  incurred in connection  with a
"workout" or in connection  with any insolvency or bankruptcy  proceedings  with
respect to Trustor,  and all such fees,  costs and expenses shall be part of the
Obligations, payable on demand.

         48.  Amendments and Waivers.  Except as otherwise  provided herein,  no
amendment, modification,  termination or waiver of any provision of this Deed of
Trust,  the  Note or any  other  Loan  Document,  or  consent  to any  departure
therefrom,  shall in any event be effective  unless the same shall be in writing
and signed by  Beneficiary  and any other party to be charged.  Each  amendment,
modification,  termination  or waiver  shall be  effective  only in the specific
instance  and for the specific  purpose for which it was given.  No notice to or
demand on  Trustor  in any case  shall  entitle  Trustor to any other or further
notice or demand in similar or other circumstances.

         49. Servicer.  Beneficiary  shall have the right at any time throughout
the term of the Loan to designate or appoint one or more  Servicers  (as defined
in the Loan  Agreement)  to  administer  this Deed of Trust  and the other  Loan
Documents,  and to change or replace any Servicer.  All of Beneficiary's  rights
under this Deed of Trust and the Loan  Documents  may be  exercised  by any such
Servicer  designated by Beneficiary.  Any such Servicer shall be entitled to the
benefit of all obligations of Trustor in favor of Beneficiary.

         50. Intentionally Deleted.

         51.  Trustee.  Trustee  may  resign  by the  giving  of  notice of such
resignation in writing or verbally to Beneficiary. If Trustee shall die, resign,
or become  disqualified  from acting in the execution of this trust,  or if, for
any reason, Beneficiary shall prefer to appoint a substitute trustee or multiple
substitute  trustees,  or successive  substitute trustees or successive multiple
substitute trustees, to act instead of the aforenamed Trustee, Beneficiary shall
have full power to appoint a  substitute  trustee  (or, if  preferred,  multiple
substitute trustees) in succession who shall succeed (and if multiple substitute
trustees are appointed, each of such multiple substitute trustees shall succeed)
to all the estates, rights, powers, and duties of the aforenamed Trustee so long
as any such appointment is in compliance with the requirements of Section 51.002
of the Texas Property Code.  Such  appointment may be executed by any authorized
agent  of  Beneficiary,  and if  such  Beneficiary  be a  corporation  and  such
appointment be executed in its behalf by any officer of such  corporation,  such
appointment  shall be  conclusively  presumed to be executed with  authority and
shall be valid  and  sufficient  without  proof of any  action  by the  board of
directors or any superior  officer of the  corporation.  Trustor hereby ratifies
and confirms any and all acts which the aforenamed  Trustee, or his successor or
successors  in this  trust,  shall do  lawfully  by virtue  hereof.  If multiple
substitute  Trustees are appointed,  each of such multiple  substitute  Trustees
shall be empowered  and  authorized  to act alone  without the  necessity of the
joinder  of the other  multiple  substitute  trustees,  whenever  any  action or
undertaking  of such  substitute  trustees is  requested  or  required  under or
pursuant  to this  Deed of Trust  or  applicable


                                       25
<PAGE>

law. Any substitute  Trustee appointed  pursuant to any of the provisions hereof
shall, without any further act, deed, or conveyance,  become vested with all the
estates, properties, rights, powers, and trusts of its or his predecessor in the
rights hereunder with like effect as if originally named as Trustee herein;  but
nevertheless,  upon the  written  request of  Beneficiary  or of the  substitute
Trustee,  the Trustee  ceasing to act shall  execute and deliver any  instrument
transferring to such substitute Trustee,  upon the trusts herein expressed,  all
the estates, properties, rights, powers, and trusts of the Trustee so ceasing to
act, and shall duly assign,  transfer and deliver any of the property and moneys
held by such Trustee to the  substitute  Trustee so  appointed in the  Trustee's
place.  No fees or expenses  shall be payable to Trustee,  except in  connection
with  a  foreclosure  of  the  Mortgaged  Property  or any  part  thereof  or in
connection with the release of the Mortgaged  Property following payment in full
of the Debt.

         52.  Limitation on Recourse.  The obligations of Trustor  hereunder are
subject to  limitations  on  recourse  as  provided  in Article  XII of the Loan
Agreement.

         53.  Satisfaction of Deed of Trust. Upon payment of the Debt in full or
upon  satisfaction  of the conditions to release of the Mortgaged  Property from
the Lien hereof pursuant to a partial defeasance in accordance with the terms of
the Note and Section 11.4 of the Loan Agreement,  Beneficiary, at Trustor's sole
cost and upon  Trustor's  request,  shall  execute  and  deliver  to  Trustor  a
satisfaction  or reconveyance of this Deed of Trust,  duly  acknowledged  and in
recordable  form,  UCC-3  financing  statements  terminating any UCC-1 financing
statements  filed by Beneficiary  relating to the Mortgaged  Property,  and such
other  documents  or  instruments  as may be required to release the Lien of the
Loan Documents from the Mortgaged Property.



                                       26
<PAGE>

         54.  Non-liability of Trustees.  The Declaration of Trust of Trustor, a
copy of which is duly filed with the Department of  Assessments  and Taxation of
the State of Maryland,  provides that the name of Trustor refers to the trustees
under such Declaration of Trust  collectively as trustees,  but not individually
or personally, and that no trustee, officer,  shareholder,  employee or agent of
Trustor shall be held to any personal liability,  jointly or severally,  for any
obligation  of, or claim  against,  Trustor.  Except as otherwise  expressly set
forth in the Loan  Agreement,  all persons dealing with Trustor in any way shall
look only to the assets of Trustor for the payment of any sum or the performance
of any obligation hereunder.

                            [SIGNATURE PAGE FOLLOWS]


                                       27
<PAGE>

         IN WITNESS WHEREOF,  Trustor has executed this instrument as of the day
and year first above written.



  WITNESS:                             TRUSTOR:

                                       LAKEWOOD PROPERTY TRUST,
                                       a Maryland real estate investment trust



                                       By:    /s/ John A. Mannix
                                       Name:  John A. Mannix
                                       Title: President



<PAGE>



STATE OF NEW YORK                 ss.
                                  ss.
COUNTY OF NEW YORK                ss.

         This instrument was acknowledged  before me on the 13th day of December
, 2000 by John A. Mannix,  President of Lakewood Property Trust, a Maryland real
estate investment trust, on behalf of such real estate investment trust.



                                           /s/ Mary Caliendo
                                  Notary Public in and for the State of New York
         (SEAL)                            Mary Caliendo
                                  Printed or Typed Name of Notary Public
                                  My Commission Expires:     June 5, 2001



<PAGE>



                                    EXHIBIT B

                                    Mortgages

1.       Open-End Leasehold Mortgage,  Assignment of Leases and Rents,  Security
         Agreement and Fixture Filing dated of even date herewith,  made by 1600
         Market Street Property Trust, a Maryland real estate  investment  trust
         ("1600 Market  Street"),  in favor of Merrill Lynch  Mortgage  Lending,
         Inc.

2.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture  Filing  dated  of even  date  herewith,  made  by  Bridgepoint
         Property   Trust,   a   Maryland   real   estate    investment    trust
         ("Bridgepoint"), in favor of Merrill Lynch Mortgage Lending, Inc.

3.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith,  made by Lakewood  Property
         Trust, a Maryland real estate investment trust  ("Lakewood"),  in favor
         of Merrill Lynch Mortgage Lending, Inc.

4.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith,  made by Herald Square LLC,
         a Delaware limited  liability  company ("Herald  Square"),  in favor of
         Merrill Lynch Mortgage Lending, Inc.

5.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture Filing dated of even date herewith, made by Indiana Avenue LLC,
         a Delaware limited liability company  ("Indiana  Avenue"),  in favor of
         Merrill Lynch Mortgage Lending, Inc.

6.       Deed of Trust,  Assignment of Leases and Rents,  Security Agreement and
         Fixture  Filing dated of even date  herewith,  made by Cedars LA LLC, a
         Delaware limited  liability  company ("Cedars LA"), in favor of Merrill
         Lynch Mortgage Lending, Inc.


* 1600 Market Street,  Bridgepoint,  Lakewood, Herald Square, Indiana Avenue and
Cedars LA shall be collectively referred to herein as the "Borrowers".









<PAGE>



                                Omitted Exhibits

         The  following  exhibit to the Deed of Trust,  Assignment of Leases and
Rents, Security Agreement and Fixture Filing has been omitted:

Exhibit Letter                                       Exhibit Title

A                                                    Premises

         The Registrant agrees to furnish supplementally a copy of the foregoing
omitted exhibit to the Securities and Exchange Commission upon request.