EXHIBIT 10.8

                                               This instrument is intended
                                               to be recorded in Philadelphia
                                               County, Pennsylvania

RETURN TO:

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


                          OPEN-END LEASEHOLD MORTGAGE,
                              ASSIGNMENT OF LEASES
                               AND RENTS, SECURITY
                          AGREEMENT AND FIXTURE FILING

         THIS  OPEN-END  LEASEHOLD  MORTGAGE,  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
"Mortgage"), is made as of the 15th day of December, 2000, by 1600 MARKET STREET
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 ("Mortgagor"),  to and 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 "Mortgagee").  Capitalized terms used herein but not
otherwise  defined shall have the respective  meanings assigned to such terms in
the Loan Agreement (hereinafter defined).

         This  Mortgage  is  an  open-end  mortgage  as  set  forth  in  42  Pa.
C.S.A.ss.8143 and secures future advances.

                              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  Mortgagee to  Mortgagor  and
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 Mortgagor,  the other Borrowers and Mortgagee,  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 Mortgagor and the
other Borrowers to Mortgagee and all other sums due hereunder,  or otherwise due
under the Loan  Documents  (as  defined in the


<PAGE>

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 Mortgagor or
any  other  person or  entity  to  Mortgagee  or others as set forth in the Loan
Documents  (collectively,  the "Obligations"),  Mortgagor has mortgaged,  given,
granted, bargained, sold, alienated,  enfeoffed,  conveyed,  confirmed, pledged,
assigned,  and hypothecated  and by these presents does hereby  mortgage,  give,
grant,  bargain,  sell, alien,  enfeoff,  convey,  confirm,  pledge,  assign and
hypothecate  unto  Mortgagee all of  Mortgagor's  leasehold  interest in, to and
under the Ground  Lease (as  hereinafter  defined)  covering  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 Mortgagor now
owned,  or  hereafter  acquired,  in  and  to the  following  property,  rights,
interests and estates (the Ground Lease, 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 Mortgagor
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 Mortgagor, or in which Mortgagor 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
Mortgagor, or in which Mortgagor 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 Mortgagor in and to any of the
Equipment  which may be subject  to any  security  interests,  as defined in the
Uniform Commercial Code, as adopted

                                       2
<PAGE>

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
Mortgage;

               (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;

               (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 Mortgagor  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, in the name and on
behalf of Mortgagor,  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 Mortgagee 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;

                                       3
<PAGE>

               (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 Mortgagor'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 Mortgagor,  Mortgagee, First Union
National Bank, and REIT 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  Mortgagor  now has or may
hereafter acquire in the Mortgaged Property or any part thereof; and

               (j) all rights which Mortgagor 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 use and benefit of Mortgagee,  and the successors and assigns of
Mortgagee, forever;

         PROVIDED,  HOWEVER, these presents are upon the express condition that,
if Mortgagor  shall well and truly pay to Mortgagee  the Debt at the time and in
the manner provided in the Note and this Mortgage 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 Mortgagor  represents and warrants to and covenants and agrees with
Mortgagee as follows:

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

         2. Warranty of Title.  Mortgagor  warrants  that  Mortgagor has a good,
marketable and insurable  leasehold  interest in the Mortgaged  Property and has
the right to mortgage,  give,  grant,  bargain,  sell, alien,  enfeoff,  convey,
confirm,  pledge, assign and hypothecate the same and that Mortgagor possesses a
leasehold  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.  Mortgagor  represents  and
warrants that none of the

                                       4
<PAGE>

Permitted  Encumbrances  will  materially and adversely  affect (i)  Mortgagor'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.  Mortgagor  shall  forever  warrant,
defend and preserve such title and the validity and priority of the lien of this
Mortgage and shall forever warrant and defend the same to Mortgagee  against the
claims of all persons whomsoever.

         3.  Insurance.  (a)  Mortgagor,  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  Mortgagor  and  Mortgagee  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"),  Mortgagor
shall give immediate  notice thereof to Mortgagee and to the insurance  carrier.
Subject to the terms of the Loan  Agreement,  Mortgagor  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  Mortgagor  shall be  governed  by, the terms and  conditions  of
Section 5.5 of the Loan  Agreement.  The  expenses  incurred by Mortgagee in the
adjustment  and  collection of insurance  proceeds shall become part of the Debt
and shall be secured  hereby and shall be  reimbursed  by Mortgagor to Mortgagee
upon demand.

         4. Payment of  Impositions  and Other  Charges.  Subject to Mortgagor'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,  Mortgagor  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.  Mortgagor  shall  promptly pay
for all utility  services  provided to the Mortgaged  Property.  Mortgagor shall
furnish to Mortgagee or its designee receipts for the payment of the Impositions
prior to the date the same shall  become  delinquent  (provided,  however,  that
Mortgagor  shall not be  required  to  furnish  such  receipts  for  payment  of
Impositions  in the event  that  such  Impositions  have been paid by  Mortgagee
pursuant to Section 5 hereof).

         5.  Impositions  and Insurance  Reserve.  Mortgagor  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) Mortgagor shall promptly give Mortgagee  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 Mortgagee  copies of any and all papers  served in  connection
with such proceedings.  Subject to the terms of Section 6(b) below, Mortgagee is
hereby irrevocably  appointed as Mortgagor'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

                                       5
<PAGE>

with  such   proceeding,   subject   to  the   provisions   of  this   Mortgage.
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),  Mortgagor  shall
continue to pay the Debt at the time and in the manner  provided for its payment
in the Note,  in this  Mortgage 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 Mortgagee to the discharge
of the Debt in accordance  with the terms hereof.  In accordance  with the terms
hereof,  Mortgagor shall cause the award or payment made in any  condemnation or
eminent domain proceeding, which is payable to Mortgagor, to be paid directly to
Mortgagee.  Mortgagee  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 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 Mortgagee of such award or payment, Mortgagee
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,  Mortgagee shall not exercise
the foregoing rights and Mortgagor 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 Mortgagee'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 and in compliance  with all
applicable  laws,  (iii)  Mortgagor  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)  Mortgagor  promptly  commences  and  diligently
prosecutes  such  reconstruction  or repair to completion in accordance with all
applicable laws and (v) at Mortgagee's  request,  such  reconstruction or repair
shall be performed under the supervision of an architect or engineer  reasonably
acceptable to Mortgagee and the plans and  specifications for such work shall be
subject to Mortgagee's  reasonable  approval.  Mortgagor authorizes Mortgagee to
apply such  awards,  payments,  proceeds  or  damages,  after the  deduction  of
Mortgagee's  reasonable  expenses incurred in the collection of such amounts, at
Mortgagee's  option,  to restoration  or repair of the Mortgaged  Property or to
payment of the sums  secured by this  Mortgage,  whether or not then due, in the
order determined by Mortgagee,  with the balance,  if any, to Mortgagor.  In the
event that Mortgagee 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),  Mortgagee  shall not  exercise
Mortgagee's  option to apply  such  awards or  damages  to  payment  of the sums
secured by this Mortgage provided that each of the conditions

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<PAGE>

(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. Mortgagor agrees to execute
such further evidence of assignment of any awards,  proceeds,  damages or claims
arising  in  connection  with  such  condemnation  or taking  as  Mortgagee  may
reasonably require.

         7.  Maintenance  of  Mortgaged  Property.  Mortgagor  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.  Mortgagor  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  Mortgagee,  which consent shall not be
unreasonably withheld,  delayed or conditioned.  Mortgagor 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.  Mortgagor 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
Mortgagor  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,  Mortgagor will not
cause or permit such  nonconforming  use to be discontinued or abandoned without
the  express  written   consent  of  Mortgagee,   which  consent  shall  not  be
unreasonably  withheld.  Mortgagor 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.  Mortgagor 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) Mortgagor
acknowledges that Mortgagee has examined and relied on the  creditworthiness and
experience of Mortgagor in owning and operating properties such as the Mortgaged
Property in agreeing to make the Loan,  and that Mortgagee will continue to rely
on Mortgagor'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 Mortgage,  the Loan Agreement or under the other
Loan Documents,  Mortgagor 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)

                                       7
<PAGE>

(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 Mortgagor, irrespective of the number of tiers
of ownership, without the prior written consent of Mortgagee.

               (b)  Notwithstanding  the foregoing,  Mortgagor may,  without the
consent of Mortgagee, (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)  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  Mortgagor  shall give  Mortgagee  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  Mortgagee  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) Mortgagee's consent to any Transfer of the Mortgaged Property
or any interest in Mortgagor  shall not be deemed to be a waiver of  Mortgagee'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 Mortgagor, 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)
Mortgagor shall pay all taxes, charges, filing, registration and recording fees,
excises and levies payable with respect to the Note,  this Mortgage or the liens
created or secured by the Loan Documents, other than income, franchise and doing
business  taxes  imposed on  Mortgagee.  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,
Mortgagor  shall  promptly pay to  Mortgagee,  on demand,  all taxes,  costs and
charges for which Mortgagee 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,  Mortgagee  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  Mortgage,  or impose any other tax or
charge on the same, Mortgagor will pay for the same,

                                       8
<PAGE>

with interest and penalties  thereon,  if any.  Mortgagor hereby agrees that, in
the  event  that it is  determined  that  additional  documentary  stamp  tax or
intangible  tax is due hereon or any  mortgage or  promissory  note  executed in
connection herewith (including,  without limitation,  the Note), Mortgagor shall
indemnify and hold harmless  Mortgagee for all such documentary stamp tax and/or
intangible  tax,  including all  penalties  and interest  assessed or charged in
connection therewith. Mortgagor shall pay same within ten (10) days after demand
of payment from  Mortgagee and the payment of such sums shall be secured by this
Mortgage  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.

               (c) Mortgagor  shall hold harmless and indemnify  Mortgagee,  its
successors  and  assigns,  against  any  liability  incurred  by  reason  of the
imposition of any tax on the making and recording of this Mortgage.

         11. No  Credits on  Account  of the Debt.  Mortgagor  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 Mortgage or the Debt. In the event such claim, credit
or  deduction  shall be required  by law,  Mortgagee  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.   Mortgagor  shall  duly  and
punctually  observe  and  perform  each  and  every  material  term,  provision,
condition, and covenant to be observed or performed by Mortgagor 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) Mortgagor will, at
its sole cost and  expense,  and  without  expense to  Mortgagee,  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 Mortgagee
shall,  from  time  to  time,  reasonably  require,  for  the  better  assuring,
conveying,  assigning,  transferring, and confirming unto Mortgagee the property
and  rights  hereby  mortgaged,  given,  granted,  bargained,  sold,  alienated,
enfeoffed,  conveyed,  confirmed, pledged, assigned and hypothecated or intended
now or hereafter so to be, or which  Mortgagor  may be or may  hereafter  become
bound to convey or assign to  Mortgagee,  or for carrying  out the  intention or
facilitating  the  performance  of the  terms of this  Mortgage  or for  filing,
registering or recording this Mortgage.  Mortgagor,  on demand, will execute and
deliver and,  upon  Mortgagor's  failure to do so within five (5) Business  Days
after Mortgagee's  request therefor,  hereby authorizes  Mortgagee to execute in
the name of  Mortgagor  or without  the  signature  of  Mortgagor  to the extent
Mortgagee  may  lawfully  do  so,  one or  more  financing  statements,  chattel
mortgages  or other  instruments,  to evidence  more  effectively  the  security
interest  of  Mortgagee

                                       9
<PAGE>

in the Mortgaged  Property.  Upon  foreclosure or the appointment of a receiver,
Mortgagor 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.  Mortgagor
grants to Mortgagee an  irrevocable  power of attorney  coupled with an interest
for the purpose of  exercising  and  perfecting  any and all rights and remedies
available to Mortgagee at law and in equity, including, without limitation, such
rights and remedies available to Mortgagee pursuant to this Section.

               (b)  Subject  to the terms and  conditions  set forth in the Loan
Agreement,  Mortgagee  shall  have the right to engage in one or more  Secondary
Market  Transactions  and, in connection  therewith,  Mortgagee may transfer its
obligations  under this  Mortgage,  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  Mortgagee  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 Mortgage, Etc. Upon the execution and delivery of this
Mortgage and thereafter,  from time to time, Mortgagor will cause this Mortgage,
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  Mortgagee  in,  the  Mortgaged  Property.  Mortgagor  will  pay all  filing,
registration  or recording fees, and all expenses  incident to the  preparation,
execution and acknowledgment of this Mortgage, any mortgage 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  Mortgage,  any mortgage  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.  Mortgagor agrees to give prompt notice to
Mortgagee  of the  insolvency  or  bankruptcy  filing of Mortgagor 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,  Mortgagee may, at Mortgagee's option, by Mortgagee itself, or
otherwise, do any one or more of the following:

               (a) Right to Perform  Mortgagor's  Covenants.  If  Mortgagor  has
failed to keep or perform any covenant whatsoever  contained in this Mortgage or
the other Loan  Documents,  Mortgagee  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 Mortgagee  that is chargeable to Mortgagor or

                                       10
<PAGE>

subject to  reimbursement  by Mortgagor under the Loan  Documents,  shall be and
become a part of the  Debt,  and  Mortgagor  promises,  upon  demand,  to pay to
Mortgagee, at the place where the Note is payable, all sums so incurred, paid or
expended  by  Mortgagee,  with  interest  from the date when paid,  incurred  or
expended by Mortgagee at the Default Rate (as defined in the Note).

               (b) Right of Entry.  Mortgagee  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 Mortgagor any and all rights which Mortgagor has 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 Mortgagor and to deduct from such Rents all costs,  expenses,
and liabilities of every character  incurred by the Mortgagee 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  Mortgagee  may  elect.  All such  costs,  expenses,  and  liabilities
incurred by  Mortgagee  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
Mortgagor 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 Mortgagee elects to enter the Mortgaged Property as provided for
herein, Mortgagee may invoke any and all legal remedies to dispossess Mortgagor,
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 Mortgagee pursuant to this subsection, Mortgagee shall not be liable for any
loss  sustained by  Mortgagor  resulting  from any failure to let the  Mortgaged
Property,  or any  part  thereof,  or from  any  other  act or  omission  of the
Mortgagee in managing the Mortgaged  Property  unless such loss is caused by the
willful  misconduct or gross negligence of Mortgagee,  its agents,  employees or
officers,  nor  shall  Mortgagee  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.  Mortgagor  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.
Mortgagor hereby assents to,  ratifies,  and confirms any and all actions of the
Mortgagee with respect to the Mortgaged Property taken under this subsection.

                                       11
<PAGE>

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

               (d)  Foreclosure-Power  of Sale.  Mortgagee may from time to time
institute  a  proceeding  or   proceedings,   judicial,   or   nonjudicial,   by
advertisement  or  otherwise,  for the complete or partial  foreclosure  of this
Mortgage or the complete or partial  sale of the  Mortgaged  Property  under the
power  of sale  contained  herein  or under  any  applicable  provision  of law.
Mortgagee  may  sell the  Mortgaged  Property,  and all  estate,  right,  title,
interest,  claim and demand of Mortgagor  therein,  and all rights of redemption
thereof, at one or more sales, as an entirety or in parcels,  with such elements
of real and/or personal property, and at such time and place and upon such terms
as it may deem  expedient,  or as may be required by applicable  law, and in the
event of a sale, by foreclosure or otherwise,  of less than all of the Mortgaged
Property,  this Mortgage shall  continue as a lien and security  interest on the
remaining portion of the Mortgaged Property.

               (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)  Mortgagee  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  Mortgagee'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, Mortgagee 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 Mortgagor 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.  Mortgagee is hereby  appointed  the true and
                  lawful  attorney-in-fact  of Mortgagor,  which  appointment is
                  irrevocable  and  shall  be  deemed  to  be  coupled  with  an
                  interest, in Mortgagor's name and stead, to make all necessary
                  conveyances,  assignments,  transfers  and  deliveries  of the
                  property and rights so sold,  Mortgagor  hereby  ratifying and
                  confirming  all  that  said  attorney  or such  substitute  or
                  substitutes shall lawfully do by virtue thereof. Nevertheless,
                  Mortgagor, if requested by Mortgagee, shall ratify and confirm
                  any  such  sale  or  sales  by  executing  and  delivering  to
                  Mortgagee or such purchaser or

                                       12
<PAGE>

                  purchasers  all  such  instruments  as  may be  advisable,  in
                  Mortgagee'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 Mortgagee 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 Mortgagor in and
                  to the properties and rights so sold, and shall be a perpetual
                  bar both at law and in equity  against  Mortgagor  and any and
                  all persons  claiming  or who may claim the same,  or any part
                  thereof  or  any  interest  therein,   by,  through  or  under
                  Mortgagor to the fullest extent permitted by applicable law.

                           (vi) Upon any such sale or sales,  Mortgagee  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  Mortgagee 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 Mortgagee 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) Mortgagee's Judicial Remedies.  Mortgagee 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 Mortgage 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
Mortgagee  under this Mortgage 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
Mortgagee.

               (g) Mortgagee's Right to Appointment of Receiver. Mortgagee, as a
matter of right and (i) without  regard to the  sufficiency  of the security for
repayment of the Debt and without notice to Mortgagor,  (ii) without any showing
of insolvency,  fraud, or mismanagement on the part of Mortgagor,  (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  Mortgage  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
Mortgagor,  except for the

                                       13
<PAGE>

intervention  of such  receiver,  would be entitled to collection of such Rents.
Mortgagor  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) Mortgagee's  Uniform Commercial Code Remedies.  Mortgagee 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.  Mortgagee  (i) may  surrender  the  insurance
policies maintained pursuant to the Loan Agreement or any part thereof, and upon
receipt of the proceeds shall apply the unearned  Insurance Premiums as a credit
on the Debt, and, in connection  therewith,  Mortgagor hereby appoints Mortgagee
as  agent  and  attorney-in-fact  (which  is  coupled  with an  interest  and is
therefore  irrevocable) for Mortgagor to collect such Insurance  Premiums;  (ii)
may apply the Impositions  and Insurance  Reserve and/or any other Reserves held
pursuant to this Mortgage or the other Loan Documents,  and any other funds held
by Mortgagee  toward  payment of the Debt; and (iii) shall have and may exercise
any and all other  rights and  remedies  which  Mortgagee  may have at law or in
equity, or by virtue of any of the Loan Documents, or otherwise.

               (j) Discontinuance of Remedies. If Mortgagee 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,  Mortgagee
shall have the  unqualified  right so to do and,  in such event,  Mortgagor  and
Mortgagee 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 Mortgagee shall continue as if same had never
been invoked.

               (k) Remedies Cumulative.  All rights,  remedies, and recourses of
Mortgagee  granted in the Note, this Mortgage 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 Mortgagor,  the Mortgaged Property,  or any one or more of them, at such
time and in such order as Mortgagee may determine in its sole discretion;  (iii)
may be exercised as often as occasion  therefor shall arise,  it being agreed by
Mortgagor 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
Mortgagee  may  have  against  Mortgagor  pursuant  to this  Mortgage,  the Loan
Agreement  or the other Loan  Documents,  or  otherwise  available  at law or in
equity;  (v) shall not be conditioned upon Mortgagee  exercising or pursuing any
remedy in relation to the Mortgaged Property prior to Mortgagee bringing suit to
recover the Debt;  and (vi) in the event  Mortgagee  elects to bring suit on the
Debt and obtains a judgment  against  Mortgagor prior to exercising any remedies
in  relation  to the  Mortgaged  Property,  all  liens and  security  interests,
including the lien of this  Mortgage,  shall remain in full force and effect and
may be exercised thereafter at Mortgagee's option.

                                       14
<PAGE>

               (l) Election of Remedies.  Mortgagee  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  Mortgage or the other Loan  Documents or
affecting the  obligations  of Mortgagor or any other party to pay the Debt. For
payment of the Debt, Mortgagee may resort to any collateral securing the payment
of the Debt in such order and manner as Mortgagee may elect. No collateral taken
by Mortgagee 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 or federal insolvency proceeding, or in the event
of the filing of any voluntary or involuntary petition under the Bankruptcy Code
by or against  Mortgagor then Mortgagee shall  immediately  become entitled,  in
addition  to all other  relief to which  Mortgagee  may be  entitled  under this
Mortgage,  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  Mortgagee to pursue its rights and remedies
against  Mortgagor  as provided  under this  Mortgage  and all other  rights and
remedies of Mortgagee at law and in equity under  applicable state law, and (ii)
an order from the  Bankruptcy  Court  prohibiting  Mortgagor's  use of all "cash
collateral" as defined under ss. 363 of the Bankruptcy Code. Mortgagor 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  Mortgagee to enforce any rights it
has by virtue of this Mortgage,  or any other rights that Mortgagee has, whether
now or hereafter  acquired,  against any guarantor of the Debt.  Mortgagor 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
Mortgagee  to enforce any rights it has by virtue of this  Mortgage  against any
guarantor  of the Debt.  Any  bankruptcy  petition or other  action taken by the
Mortgagor to stay, condition,  or inhibit Mortgagee from exercising its remedies
are hereby admitted by Mortgagor to be in bad faith and Mortgagor further admits
that Mortgagee 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 Mortgage,  or the proceeds from the
surrender of any insurance  policies  pursuant hereto, or any Rents collected by
Mortgagee 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 Mortgagee elects to apply
to the Debt  pursuant to Section 3 hereof,  shall be applied by Mortgagee to the
Debt in such order, priority and proportions as Mortgagee in its sole discretion
shall determine.

               (o)  Cross-Collateralization.  The  mortgages  and deeds of trust
(other than this Mortgage)  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 Mortgage, as it may be amended, modified

                                       15
<PAGE>

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,  Mortgagee 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 portion of the  Obligations.  Mortgagee may allocate the proceeds
that it  receives  upon the  exercise  of its  rights  and  remedies,  including
foreclosure,  to payment of the  Obligations as Mortgagee in its sole discretion
may  determine  to be  advisable  pursuant  to the terms of the Loan  Documents.
Mortgagee  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 Mortgagee 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  Mortgage,  if this Mortgage is  foreclosed  and the Mortgaged
Property  (or any  part  thereof)  is sold  pursuant  to  foreclosure  or  other
proceedings,  and if the  proceeds  of  such  sale  (after  application  of such
proceeds as  provided in this  Mortgage  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 Mortgagee  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 Mortgagor shall not
be entitled to any benefit or credit on account of)  proceeds of any  subsequent
sale of the  Mortgaged  Property by Mortgagee.  Without  limitation of any other
provision  hereof,  Mortgagor  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

                                       16
<PAGE>

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  Mortgagor nor any
Person  claiming by, through or under  Mortgagor shall have any right to marshal
the assets,  all such rights being hereby  expressly  waived as to Mortgagor and
all  Persons  claiming  by,  through  or  under  Mortgagor,  including,  without
limitation, junior lienors. Each of Mortgagor and all endorsers,  guarantors and
sureties of the Obligations, hereby waives any and all rights arising because of
payment or performance by Mortgagor of any Obligations (a) against any Person by
way of  subrogation  of the  rights  of  Mortgagee  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.

               (p) Confession of Judgment.

                              (i)  MORTGAGEE   MAY  HAVE  JUDGMENT   ENTERED  BY
               CONFESSION PURSUANT TO ANY POWER TO CONFESS JUDGMENT CONTAINED IN
               THIS MORTGAGE OR IN ANY OF THE LOAN DOCUMENTS.

                              (ii) MORTGAGOR HEREBY  AUTHORIZES AND EMPOWERS ANY
               ATTORNEY  OR  ATTORNEYS  OF  ANY  COURT  OF THE  COMMONWEALTH  OF
               PENNSYLVANIA  TO  APPEAR  FOR  MORTGAGOR  AND,  AS  ATTORNEY  FOR
               MORTGAGOR,  TO CONFESS  JUDGMENT IN EJECTMENT  AGAINST  MORTGAGOR
               (AND, AT THE ELECTION OF SAID ATTORNEY OR ATTORNEYS,  AGAINST ANY
               PERSON CLAIMING UNDER,  BY OR THROUGH  MORTGAGOR,  SUBJECT TO THE
               RIGHTS  OF  TENANTS  UNDER  LEASES  EXISTING  ON THE DATE  HEREOF
               (PROVIDED THAT SUCH LEASES ARE EXPRESSLY  IDENTIFIED AS PERMITTED
               ENCUMBRANCES) OR SUBSEQUENTLY ENTERED INTO WITH MORTGAGEE'S PRIOR
               WRITTEN   CONSENT,   AND  FURTHER   SUBJECT  TO   NON-DISTURBANCE
               AGREEMENTS ENTERED INTO BETWEEN MORTGAGEE AND ANY SUCH TENANT) IN
               FAVOR OF MORTGAGEE FOR THE  POSSESSION OF THE MORTGAGED  PROPERTY
               OF MORTGAGOR  OR, AT THE ELECTION OF SAID  ATTORNEY OR ATTORNEYS,
               ANY PORTION OR PORTIONS OF SUCH MORTGAGED PROPERTY. THE FOREGOING
               AUTHORITY  TO  CONFESS  JUDGMENT  IS  GRANTED   INDEPENDENTLY  BY
               MORTGAGOR,  AND SHALL BE EXERCISABLE  AGAINST MORTGAGOR,  AND THE
               EXERCISE AGAINST MORTGAGOR SHALL NOT EXHAUST THE EXERCISE THEREOF
               AGAINST  MORTGAGOR,  BUT SHALL CONTINUE UNTIL  MORTGAGEE

                                       17
<PAGE>

               IS FULLY AND FINALLY  VESTED  WITH  POSSESSION  OF THE  MORTGAGED
               PROPERTY.  MORTGAGOR  EXPRESSLY  AGREES THAT ANY JUDGMENT ENTERED
               AGAINST IT PURSUANT  TO THE  FOREGOING  AUTHORITY  SHALL BE FINAL
               WITH RESPECT TO MORTGAGOR AND RELEASES TO  MORTGAGEE,  AND TO ANY
               ATTORNEY APPEARING FOR MORTGAGEE,  ALL ERRORS IN SAID PROCEEDINGS
               AND ALL  LIABILITY  THEREFOR.  UPON  CONFESSION  OF  JUDGMENT  IN
               EJECTMENT  PURSUANT  TO  THE  FOREGOING  AUTHORITY,   A  WRIT  OF
               POSSESSION (OR LIKE WRIT  APPROPRIATE  UNDER THEN APPLICABLE LAW)
               MAY ISSUE FORTHWITH WITHOUT ANY PRIOR PROCEEDINGS AND MAY INCLUDE
               THE COSTS OF MORTGAGEE.  JUDGMENT MAY BE ENTERED  PURSUANT TO THE
               FOREGOING  AUTHORITY  ON THE  BASIS  OF  ANY  AFFIDAVIT  MADE  ON
               MORTGAGEE'S BEHALF AND SETTING FORTH THE RELEVANT FACTS, AND IF A
               TRUE  COPY OF THIS  MORTGAGE  IS  FILED  IN ANY  ACTION  FOR SUCH
               JUDGMENT,  IT SHALL NOT BE NECESSARY TO FILE THE ORIGINAL OF THIS
               MORTGAGE.  MORTGAGEE MAY CONFESS  JUDGMENT IN EJECTMENT BEFORE OR
               AFTER: (A) THE INSTITUTION OF FORECLOSURE  PROCEEDINGS UNDER THIS
               MORTGAGE,  (B) THE ENTRY OF JUDGMENT  HEREUNDER OR UNDER ANY NOTE
               OR OTHER LOAN DOCUMENT,  OR (C) A SHERIFF'S SALE OF THE MORTGAGED
               PROPERTY.

         18. Security Agreement.  This Mortgage is both a real property mortgage
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 Mortgagor in
the Mortgaged Property.  Mortgagor by executing and delivering this Mortgage has
granted and hereby  grants to  Mortgagee,  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").  Mortgagor  hereby  agrees to  execute  and
deliver  to  Mortgagee,   in  form  and  substance  reasonably  satisfactory  to
Mortgagee,  such financing  statements and such further  assurances as Mortgagee
may from time to time  reasonably  consider  necessary to create,  perfect,  and
preserve Mortgagee's security interest herein granted.  This Mortgage 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 Mortgage.  If
an Event of Default shall occur,  Mortgagee, 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 Mortgagee may deem necessary for the
care,  protection and preservation of the Collateral.  Upon request or demand of


                                       18
<PAGE>

Mortgagee,  Mortgagor  shall at its expense  assemble the Collateral and make it
available to Mortgagee at a convenient place acceptable to Mortgagee.  Mortgagor
shall pay to Mortgagee on demand any and all expenses,  including legal expenses
and attorneys' fees, incurred or paid by Mortgagee 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
Mortgagee  with respect to the Collateral  sent to Mortgagor in accordance  with
the  provisions  hereof  at  least  five (5) days  prior to such  action,  shall
constitute  commercially  reasonable  notice to  Mortgagor.  The proceeds of any
disposition of the Collateral,  or any part thereof, may be applied by Mortgagee
to the payment of the Debt in such priority and  proportions as Mortgagee in its
discretion  shall deem proper.  In the event of any change in name,  identity or
structure of any Mortgagor,  such Mortgagor shall notify  Mortgagee  thereof and
promptly after Mortgagee's  request shall execute,  file and record such Uniform
Commercial  Code forms as are necessary to maintain the priority of  Mortgagee'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 Mortgagee shall
require the filing or recording of additional  Uniform  Commercial Code forms or
continuation statements,  Mortgagor shall, promptly after request, execute, file
and record such Uniform  Commercial  Code forms or  continuation  statements  as
Mortgagee  shall  deem  necessary,  and  shall  pay  all  expenses  and  fees in
connection  with the filing  and  recording  thereof,  it being  understood  and
agreed,  however,  that no such additional  documents shall increase Mortgagor's
obligations  under  the  Note,  this  Mortgage  and the  other  Loan  Documents.
Mortgagor hereby irrevocably appoints Mortgagee as its attorney-in-fact, coupled
with an interest upon Mortgagor's failure to do so within five (5) Business Days
after request by Mortgagee,  to file with the  appropriate  public office on its
behalf  any  financing  or  other  statements  signed  only  by  Mortgagee,   as
Mortgagor's attorney-in-fact,  in connection with the Collateral covered by this
Mortgage.  Notwithstanding  the foregoing,  Mortgagor 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, Mortgagor shall fully cooperate with Mortgagee in the event Mortgagee
is a party to such action or proceeding).

         19.  Actions  and  Proceedings.  Upon the  occurrence  and  during  the
continuance  of an Event of  Default,  Mortgagee  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 Mortgagor,
which  Mortgagee,  in its  discretion,  decides should be brought to protect its
interest  in  the  Mortgaged  Property.  Mortgagee  shall,  at  its  option,  be
subrogated to the lien of any mortgage 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
Mortgage, the Note and the other Loan Documents shall be payable without setoff,
counterclaim or any deduction  whatsoever.  Mortgagor hereby waives the right to
assert a setoff,  counterclaim or deduction in any action or proceeding in which
Mortgagee is a participant,  or arising out of or in any way connected with this
Mortgage, the Note, any of the other Loan Documents, or the Debt.

                                       19
<PAGE>

               (b) Mortgagor 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
Mortgage  on  behalf  of  Mortgagor,  and on  behalf  of each and  every  person
acquiring any interest in or title to the Mortgaged  Property  subsequent to the
date of this  Mortgage  and on behalf of all persons to the extent  permitted by
applicable  law; and (iii) all benefits that might accrue to Mortgagor 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.  Mortgagee  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.

               (c) To the extent permitted by applicable law, Mortgagee'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.  Mortgagor 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.  Mortgagee  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 Mortgagee thereafter to bring an action of foreclosure,  or any other action,
for a default or defaults by Mortgagor  existing at the time such earlier action
was commenced.

         22.  Handicapped  Access.  (a)  Mortgagor  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)  Mortgagor  agrees to give prompt  notice to Mortgagee of the
receipt by Mortgagor 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,  Mortgagor  agrees  to  indemnify,  defend,  protect,  pay  and  hold
Mortgagee,  its  successors  and assigns  (including,  without  limitation,  the
trustee and/or the trust under any trust  agreement  executed in connection with
any

                                       20
<PAGE>

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 Mortgagee  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 Mortgage,
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  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  Mortgagor  under  this
Mortgage,  the Loan  Agreement  or any other Loan  Documents;  (vii) any actions
taken by any Indemnified Party in the enforcement of this Mortgage 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 Mortgagor 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. Notwithstanding
the foregoing,  Mortgagor 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.  All  notices  to  Mortgagee
pursuant to 42 Pa. C.S.A.ss. 8143 shall be given as follows:

                  c/o Merrill Lynch & Co.
                  100 Church Street
                  18th Floor
                  New York, New York 10080
                  Attn:  Andrea Balkan

                                       21
<PAGE>

                  With a copy to:

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

         25.  Authority.  (a) Mortgagor (and the undersigned  representative  of
Mortgagor,  if any) has full power, authority and right to execute,  deliver and
perform its obligations pursuant to this Mortgage, and to mortgage, 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 Mortgage on  Mortgagor's  part to be performed;
and (b)  Mortgagor  represents  and  warrants  that  Mortgagor 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. Mortgagor shall not be entitled to any notices of
any nature  whatsoever  from Mortgagee  except with respect to matters for which
this Mortgage  specifically  and expressly  provides for the giving of notice by
Mortgagee to Mortgagor and except with respect to matters for which Mortgagee is
required by applicable law to give notice, and Mortgagor hereby expressly waives
the right to receive any notice from  Mortgagee  with  respect to any matter for
which this Mortgage does not specifically  and expressly  provide for the giving
of notice by Mortgagee to Mortgagor.

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

         28. Sole Discretion of Mortgagee. Whenever pursuant to this Mortgage or
the other Loan Documents,  Mortgagee exercises any right given to it to consent,
approve or  disapprove,  or any  arrangement  or term is to be  satisfactory  to
Mortgagee,  the decision of Mortgagee to consent,  approve or disapprove,  or to
decide that arrangements or terms are satisfactory or not satisfactory  shall be
in the sole discretion of Mortgagee 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 Mortgagee  obtaining  confirmation by the Rating Agencies that the
action or other matter subject to Mortgagee'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 Mortgagee's consent be obtained.

                                       22
<PAGE>

         29.  Non-Waiver.  The  failure  of  Mortgagee  to  insist  upon  strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this  Mortgage.  Mortgagor  shall not be  relieved  of  Mortgagor's  obligations
hereunder  by reason of (a) the failure of  Mortgagee to comply with any request
of  Mortgagor or  Guarantor  to take any action to  foreclose  this  Mortgage 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 Mortgagee extending the
time of payment or otherwise  modifying or supplementing  the terms of the Note,
this Mortgage, or the other Loan Documents. Mortgagee may resort for the payment
of the Debt to any other  security held by Mortgagee in such order and manner as
Mortgagee,  in its discretion,  may elect.  Mortgagee may take action to recover
the Debt,  or any portion  thereof,  or to enforce any covenant  hereof  without
prejudice to the right of Mortgagee thereafter to foreclosure this Mortgage. The
rights and remedies of Mortgagee under this Mortgage shall be separate, distinct
and cumulative and none shall be given effect to the exclusion of the others. No
act of  Mortgagee  shall be  construed  as an election to proceed  under any one
provision herein to the exclusion of any other provision. Mortgagee 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  Mortgagor  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  Mortgagee's consent to any
transfer of the  Mortgaged  Property,  this  Mortgage  shall be binding upon and
inure to the benefit of Mortgagor and Mortgagee and their respective  successors
and assigns forever.

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

         32.  Headings,  Etc. The  headings and captions of various  Sections of
this Mortgage 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  Mortgage  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 Mortgage
may be used  interchangeably in singular or plural form and the word "Mortgagor"
shall mean "each  Mortgagor and any subsequent  owner or owners of the Mortgaged
Property or any part  thereof or any  interest  therein,"  the word  "Mortgagee"
shall mean  "Mortgagee and any  subsequent  holder of the Note," the word "Debt"
shall  mean "the Note and any other  evidence  of  indebtedness  secured by this
Mortgage,"  the  word  "person"   shall  include  an  individual,   corporation,
partnership,   trust,  unincorporated  association,   government,   governmental
authority,  and any

                                       23
<PAGE>

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 reasonable  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 Mortgagee 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.  Mortgagor 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.  Mortgagee shall have the right to assign or transfer
its rights under this Mortgage 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  Mortgagee  under this Mortgage and the other Loan Documents.
Mortgagee agrees to provide Mortgagor with notice of any such assignment, and in
no event shall Mortgagor'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 Mortgagor's
consent  shall not be required in  connection  with any such  assignment  and no
delay  or  failure  by   Mortgagee  to  provide  such  notice  shall  limit  the
effectiveness of such assignment.

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

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

         39.  Governing Law;  Jurisdiction.  THIS MORTGAGE WAS NEGOTIATED IN THE
STATE OF NEW YORK AND WAS MADE BY  MORTGAGOR  AND  ACCEPTED BY  MORTGAGEE 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 MORTGAGE AND THE OBLIGATIONS

                                       24
<PAGE>

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 MORTGAGE 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 Mortgage and the other Loan Documents.

         41. No Third-Party  Beneficiaries.  The provisions of this Mortgage and
the other Loan  Documents  are for the benefit of Mortgagor  and  Mortgagee  and
shall not inure to the benefit of any third party  (other than any  successor or
assignee of Mortgagee or permitted assignee of Mortgagor). This Mortgage and the
other Loan  Documents  shall not be construed as creating any rights,  claims or
causes of action against Mortgagee or any of its officers,  directors, agents or
employees in favor of any party other than  Mortgagor  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  Mortgagee  and
Mortgagor is solely that of debtor and creditor,  and Mortgagee has no fiduciary
or other special  relationship  with the Mortgagor,  and no term or condition of
any of the Loan Documents shall be construed to be other than that of debtor and
creditor.  Mortgagor represents and acknowledges that neither the Loan Documents
nor any course of dealing  between the parties  creates any partnership or joint
venture between Mortgagor and Mortgagee or any other person, nor does it provide
for any shared appreciation rights or other equity participation interest.

         43.  Successors  and Assigns.  This Mortgage  shall be binding upon and
inure to the benefit of the parties hereto and their  respective  successors and
assigns,  except  that  Mortgagor  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 Mortgage  (and/or in other Loan  Documents)  shall
survive any investigation or inspection made by or on behalf of Mortgagee.

         45.  Assignment  of Leases and Rents.  (a) Mortgagor  acknowledges  and
confirms  that it has executed and  delivered to  Mortgagee  the  Assignment  of
Leases intending that such instrument create a present,  absolute  assignment to
Mortgagee of the Leases and Rents. Without limiting the intended benefits or the
remedies  provided under the Assignment of Leases,  Mortgagor  hereby assigns to
Mortgagee, as further security for the Debt and the Obligations,  the Leases and
Rents.  While  any Event of  Default  exists,  Mortgagee  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 Mortgage and the absolute assignment of the

                                       25
<PAGE>

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 Mortgagor,  Mortgagee,  any
lessee or any third party by purchase or otherwise.

         46.  Waiver of Right to Trial by Jury.  EACH OF MORTGAGOR AND MORTGAGEE
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  MORTGAGE 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 MORTGAGOR  AND  MORTGAGEE,  AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY  EACH  INSTANCE  AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY
JURY WOULD OTHERWISE  ACCRUE.  MORTGAGEE IS HEREBY  AUTHORIZED TO FILE A COPY OF
THIS  SECTION  IN ANY  PROCEEDING  AS  CONCLUSIVE  EVIDENCE  OF THIS  WAIVER  BY
MORTGAGOR.

         47. Expenses and Attorneys' Fees.  Mortgagor agrees to promptly pay all
reasonable fees, costs and expenses incurred by Mortgagee in connection with any
matters  contemplated  by or  arising  out of this  Mortgage  and the other Loan
Documents,  including,  without limitation,  reasonable fees, costs and expenses
(including reasonable  attorneys' fees and fees of other professionals  retained
by Mortgagee)  incurred in any action to enforce this Mortgage or the other Loan
Documents or to collect any payments due from Mortgagor under this Mortgage, the
Note or any other Loan Document or incurred in connection  with any  refinancing
or  restructuring  of the  credit  arrangements  provided  under  this  Mortgage
incurred in connection  with a "workout" or in connection with any insolvency or
bankruptcy  proceedings with respect to Mortgagor,  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
Mortgage,  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  Mortgagee  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 Mortgagor in any case shall entitle  Mortgagor to any other or further
notice or demand in similar or other circumstances.

         49. Servicer. Mortgagee 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 Mortgage and the other Loan  Documents,
and to change or replace any  Servicer.  All of  Mortgagee's  rights  under this
Mortgage and the other Loan  Documents  may be  exercised

                                       26
<PAGE>

by any  such  Servicer  designated  by  Mortgagee.  Any such  Servicer  shall be
entitled to the benefit of all obligations of Mortgagor in favor of Mortgagee.

         50. Special State Provisions.  This Mortgage is an "OPEN-END  MORTGAGE"
as set forth in 42 Pa.  C.S.A.  ss. 8143,  and this  Mortgage is given to secure
Mortgagor's and the other  Borrowers'  obligations  under, or in respect of, the
Loan Documents, up to the principal amount of $260,000,000, and shall secure not
only  obligations  with respect to  presently  existing  indebtedness  under the
foregoing documents and agreements,  but also any and all other indebtedness now
owing or  which  may  hereafter  be owing by  Mortgagor  to  Mortgagee,  however
incurred, whether interest, discount or otherwise, and whether the same shall be
deferred,  accrued or capitalized,  including  future advances and  re-advances,
pursuant to this Mortgage and the other Loan Documents, advances for the payment
of taxes and assessments and municipal claims,  maintenance  charges,  insurance
premiums,  costs  incurred for the  protection of the Mortgaged  Property or the
lien of this  Mortgage,  expenses  incurred by Mortgagee by reason of default by
Mortgagor under this Mortgage,  or for any other  permissible  purpose,  whether
such  advances  are  obligatory  or to be made at the  option of  Mortgagee,  or
otherwise,  to the same extent as if such future  advances were made on the date
of the execution of this  Mortgage.  The lien of this Mortgage shall be valid as
to all indebtedness secured hereby,  including future advances, from the time of
its  filing  for  record in the  recorder's  office  of the  county in which the
Mortgaged  Property is located;  and the lien of all present and future advances
shall relate back to the date of this Mortgage. This Mortgage is intended to and
shall be valid and have priority  over all  subsequent  liens and  encumbrances,
including statutory liens,  excepting solely taxes and assessments levied on the
real estate,  to the extent of the maximum amount secured hereby,  and Permitted
Encumbrances existing on the date hereof.

         All notices to be given to Mortgagee  pursuant to 42 Pa.  C.S.A.ss.8143
shall be given as set forth in Section 24 of this Mortgage.

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

         52. Satisfaction of Mortgage.  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, Mortgagee, at Mortgagor's sole cost
and  upon  Mortgagor's  request,  shall  execute  and  deliver  to  Mortgagor  a
satisfaction or reconveyance of Mortgage,  duly  acknowledged  and in recordable
form,  UCC-3 financing  statements  terminating  any UCC-1 financing  statements
filed by Mortgagee 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.

         53. Ground Lease.

               (a) As used  herein,  the term  "Ground  Lease"  shall  mean that
certain Ground Lease dated as of December __, 2000 between HUB Properties Trust,
a Maryland real estate investment trust, as ground lessor (the "Ground Lessor"),
and  Mortgagor,  as the ground  lessee,  which  relates to the  Premises and the
Improvements  and  any  modifications,   amendments,

                                       27
<PAGE>

extensions, renewals and restatements thereof that hereafter may be executed and
approved in writing in advance by Mortgagee.

               (b)  Representations  and  Warranties   Regarding  Ground  Lease.
Mortgagor represents and warrants in favor of Mortgagee as follows:

                           (i) The Ground Lease contains the entire agreement of
                  Ground  Lessor  and  Mortgagor  pertaining  to  the  Mortgaged
                  Property. Mortgagor has no estate, right, or interest in or to
                  the Mortgaged Property except under and pursuant to the Ground
                  Lease.  No  modifications  or amendments  have occurred to the
                  Ground Lease,  and no such  modifications  or  amendments  are
                  contemplated.  Ground Lessor and Mortgagor  have no agreements
                  pertaining to any real property or improvements other than the
                  agreements set forth in the Ground Lease.

                           (ii) To the knowledge of Mortgagor,  Ground Lessor is
                  the  exclusive  fee simple  owner of the  Mortgaged  Property,
                  subject   only  to  the   Ground   Lease  and  the   Permitted
                  Encumbrances,  and  Ground  Lessor  is the  sole  owner of the
                  lessor's interest in the Ground Lease.

                           (iii) The Ground  Lease is in full force and  effect.
                  All conditions and  contingencies to the  effectiveness of the
                  Ground Lease and the  commencement of the regular term thereof
                  (the  "Ground  Lease  Term") have been  satisfied.  The Ground
                  Lease Term has  commenced,  is in effect,  and is scheduled to
                  expire on October 31, 2030. There are no options to extend the
                  Ground  Lease Term  except  for two (2)  options to extend the
                  Term each for a period of 29 years,  11  months.  There are no
                  rights  to  terminate  the  Ground  Lease  other  than  Ground
                  Lessor's   right  to   terminate   by  reason  of  default  or
                  condemnation,  in each  case as  expressly  set  forth  in the
                  Ground Lease.  Mortgagor has no right to purchase any interest
                  in the Mortgaged Property.

                           (iv) No  breach  or  default  or event  that with the
                  giving of notice or passage of time would  constitute a breach
                  or  default  of or under the  Ground  Lease (a  "Ground  Lease
                  Default")  exists  or  has  occurred  (A)  as  to  Mortgagor's
                  obligations  under the Ground  Lease,  nor (B) to  Mortgagor's
                  knowledge,  as to Ground Lessor's obligations under the Ground
                  Lease.  Mortgagor has not received any notice,  communication,
                  or  information  that a Ground  Lease  Default has occurred or
                  exists,  or that Ground  Lessor or any third party alleges the
                  same to have occurred or exist.

                           (v) Mortgagor is the exclusive  owner of the lessee's
                  interest under and pursuant to the Ground Lease. Mortgagor has
                  not assigned,  transferred, or encumbered its interest in, to,
                  or under  the  Ground  Lease,  except  in  favor of  Mortgagee
                  pursuant to this  Mortgage and the other Loan  Documents,  and
                  also  except  for  subleases  as to  which  Mortgagor  is  the
                  sublessor.

               (c)  Grant  of  After-Acquired  Interest.  As  security  for  all
obligations  secured by this  Mortgage,  Mortgagor  hereby  irrevocably  grants,
conveys,  transfers  and assigns to  Mortgagee,  with power of sale and right of
entry and  possession,  all right,  title,  and interest in and to the Mortgaged
Property that may hereafter be acquired by Mortgagor.  Without limitation of the
foregoing,  if Mortgagor should acquire the fee estate in the Mortgaged Property
or in any

                                       28
<PAGE>

land or  improvements  comprising  the same,  or should  acquire any interest or
estate in the Mortgaged  Property or any component  thereof that  Mortgagor does
not presently hold, then this Mortgage shall encumber and constitute a lien upon
any and all of such  interest or estate,  without  further act or  instrument by
Mortgagor or any third party.  Mortgagor  immediately  shall notify Mortgagee of
any such  acquisition.  Upon request of Mortgagee and without cost or expense to
Mortgagee,  Mortgagor  will  execute,  acknowledge  and deliver all such further
instruments  and  assurances as Mortgagee  shall  reasonably  require to ratify,
confirm, or perfect Mortgagee's lien on any right, title,  interest or estate in
or to the Mortgaged Property acquired at any time hereafter.

               (d)   Non-Merger.   No  merger  shall  occur  by  reason  of  any
acquisition by Mortgagor of any additional right,  title,  interest or estate in
or to the Mortgaged Property or any component thereof. Without limitation of the
foregoing,  unless Mortgagee shall otherwise expressly consent in writing, which
consent may be withheld by Mortgagee in its sole and  absolute  discretion,  the
leasehold  estate under the Ground Lease and any other interest or estate in the
Mortgaged  Property  shall  not  merge  but shall  always  remain  separate  and
distinct,  notwithstanding  any common ownership of the leasehold estate and any
other interest or estate.

               (e) No  Modification.  Mortgagor  shall  not  cause,  join in, or
suffer to occur any actual or purported modification,  amendment,  surrender, or
termination of the Ground Lease,  and Mortgagor  shall have no right or power to
modify,  amend,  terminate,  or surrender the Ground Lease, in each case without
the prior  written  consent of  Mortgagee,  which  consent  may be  withheld  by
Mortgagee  in its sole and  absolute  discretion.  Any  attempted  or  purported
modification,  amendment,  surrender or  termination of the Ground Lease without
Mortgagee's  prior  written  consent  shall  be null and void and of no force or
effect.

               (f) Performance of Ground Lease. Mortgagor shall fully perform as
and  when  due  each  and all of its  obligations  under  the  Ground  Lease  in
accordance with the terms of the Ground Lease,  and shall not cause or suffer to
occur any breach or default in any of such obligations. Mortgagor shall keep and
maintain the Ground Lease in full force and effect.  If Mortgagor  shall receive
forbearance  from  Ground  Lessor or  otherwise  shall be excused  from full and
timely  performance of any of its obligations  under the Ground Lease,  the same
shall not postpone,  excuse,  diminish,  or otherwise  affect the obligations of
Mortgagor under this Section 53. Mortgagor shall exercise any option to renew or
extend the Ground Lease and give written  confirmation  thereof to Lender within
thirty (30) days after such option becomes exercisable.

               Notwithstanding  that certain of  Mortgagor's  obligations  under
this Mortgage may be similar or identical to certain of Mortgagor's  obligations
under the Ground Lease, all of Mortgagor's  obligations  under this Mortgage are
and shall be separate from and in addition to its  obligations  under the Ground
Lease.

               If Mortgagor  shall have or receive  notice or  information  that
compliance with any of Mortgagor's obligations under either this Mortgage or the
Ground Lease may  constitute or give rise to a breach or default under the other
of them,  then Mortgagor  immediately  shall notify  Mortgagee in writing of the
same. If Mortgagee  shall have or receive any such notice or  information,  then

                                       29
<PAGE>

Mortgagee  may (but shall not be  obligated  to) give  written  instructions  to
Mortgagor, in which case Mortgagor shall comply with such instructions.

               (g) Notice of  Default.  If  Mortgagor  shall have or receive any
notice or information that any Ground Lease Default has occurred, then Mortgagor
immediately  shall notify Mortgagee in writing of the same and immediately shall
deliver to  Mortgagee a true and  complete  copy of each such  notice.  Further,
Mortgagor  immediately shall provide such documents and information as Mortgagee
shall request concerning the Ground Lease Default.

               (h) Mortgagee's  Right to Cure. If any Ground Lease Default shall
occur,  or if Mortgagee  reasonably  believes  that a Ground  Lease  Default has
occurred,  or if Ground Lessor  asserts that a Ground Lease Default has occurred
(whether or not Mortgagor  questions or denies such  assertion),  then Mortgagee
may (but  shall  not be  obligated  to) take any  action  that  Mortgagee  deems
necessary or  desirable,  including,  without  limitation,  (i)  performance  or
attempted performance of any of Mortgagor's  obligations under the Ground Lease,
(ii) curing or attempting to cure any actual or purported  Ground Lease Default,
(iii)  mitigating or attempting to mitigate any damages or  consequences  of the
same,  and  (iv)  entry  upon  the  Mortgaged  Property  for  any or all of such
purposes. Upon Mortgagee's request, Mortgagor shall submit satisfactory evidence
of payment or  performance  of any of its  obligations  under the Ground  Lease.
Mortgagee  may pay and  expend  such  sums of  money  as  Mortgagee  in its sole
discretion  deems  necessary or desirable  for any such  purpose,  and Mortgagor
shall pay to Mortgagee immediately upon demand all such sums so paid or expended
by Mortgagee, together with interest thereon from the date of expenditure at the
Default Rate (as defined in the Note).

               (i) Intentionally Omitted.

               (j)  Acquisition of New  Interests.  If the Ground Lease shall be
rejected, canceled, or terminated, and if Mortgagee or its nominee thereafter or
in connection therewith shall acquire any right, title, interest or estate in or
to the Mortgaged Property (which may include without limitation any new lease of
the Mortgaged Property) then Mortgagor shall have no right,  title,  interest or
estate in or to such new  lease,  or the  leasehold  estate  created by such new
lease,  or any other  interest  of  Mortgagee  or its  nominee in the  Mortgaged
Property.

               (k) Legal  Action.  Mortgagor  shall not  commence  any action or
proceeding  against  Ground  Lessor or affecting or  potentially  affecting  the
Ground Lease or Mortgagor's or Mortgagee's  interest  therein  without the prior
written  consent of  Mortgagee,  which  Mortgagee  may  withhold in its sole and
absolute discretion.  Mortgagor shall notify Mortgagee immediately if any action
or  proceeding  shall be  commenced  between  Ground  Lessor and  Mortgagor,  or
affecting  or   potentially   affecting  the  Ground  Lease  or  Mortgagor's  or
Mortgagee's interest therein (including,  without limitation, any case commenced
by or against Ground Lessor under the Bankruptcy Code). Mortgagee shall have the
option,  exercisable  upon notice from  Mortgagee to  Mortgagor,  to conduct and
control  any such  action or  proceeding  with  counsel of  Mortgagee's  choice.
Mortgagee may proceed in its own name or in the name of Mortgagor in such action
or proceeding,  and Mortgagor shall  cooperate with  Mortgagee,  comply with the
instructions  of  Mortgagee  (which  may  include  withdrawal  or  exclusion  of
Mortgagor  from such

                                       30
<PAGE>

action or proceeding), and execute any and all powers, authorizations,  consents
or other documents reasonably required by Mortgagee in connection therewith.

               (l) Estoppel  Certificate.  Mortgagor shall obtain and deliver to
Mortgagee  within  twenty  (20) days  after  written  request by  Mortgagee,  an
estoppel  certificate from Ground Lessor setting forth (i) the identities of the
original  lessor and lessee under the Ground Lease and each of their  respective
successors,  (ii) that the Ground Lease has not been modified or, if it has been
modified,  the date of each  modification  (together  with  copies  of each such
modification),  (iii) the rent payable under the Ground Lease, (iv) the dates to
which all rent and other  charges  have been  paid,  (v)  whether  there are any
alleged  Ground Lease  Defaults and, if so,  setting forth the nature thereof in
reasonable  detail,  and (vi) such other  matters as  Mortgagee  may  reasonably
request.

               (m) No  Assignment.  Notwithstanding  anything  to  the  contrary
contained herein, this Mortgage shall not constitute an assignment of the Ground
Lease, and Mortgagee shall have no liability or obligation  thereunder by reason
of its acceptance of this Mortgage.

               (n) Bankruptcy.

                           (i) If Ground  Lessor  shall  reject the Ground Lease
                  under or pursuant to Section 365 of Title 11 of the Bankruptcy
                  Code,  Mortgagor  shall not elect to treat the Ground Lease as
                  terminated  but shall  elect to remain  in  possession  of the
                  Mortgaged  Property and the leasehold  estate under the Ground
                  Lease.  The lien of this Mortgage does and shall  encumber and
                  attach to all of  Mortgagor's  rights and remedies at any time
                  arising  under or pursuant  to Section  365 of the  Bankruptcy
                  Code, including without limitation,  all of Mortgagor's rights
                  to remain in  possession  of the  Mortgaged  Property  and the
                  leasehold estate.

                           (ii)  Mortgagor  acknowledges  and agrees that in any
                  case  commenced by or against  Mortgagor  under the Bankruptcy
                  Code,  Mortgagee  by reason of the  liens and  rights  granted
                  under  this  Mortgage  and the  Loan  Documents  shall  have a
                  substantial  and  material   interest  in  the  treatment  and
                  preservation of Mortgagor's  rights and obligations  under the
                  Ground Lease, and that Mortgagor shall, in any such bankruptcy
                  case, provide to Mortgagee  immediate and continuous  adequate
                  protection of such  interests.  Mortgagor and Mortgagee  agree
                  that such  adequate  protection  shall  include  but shall not
                  necessarily be limited to the following:

                                    A. Mortgagee  shall be deemed a party to the
                  Ground Lease (but shall not have any  obligations  thereunder)
                  for purposes of Section 365 of the Bankruptcy  Code, and shall
                  have  standing  to appear  and act as a party in  interest  in
                  relation to any matter arising out of or related to the Ground
                  Lease or the Mortgaged Property.

                                    B.  Mortgagor  shall  serve  Mortgagee  with
                  copies of all notices,  pleadings and other documents relating
                  to or affecting  the Ground Lease or the

                                       31
<PAGE>

                  Mortgaged Property. Any notice, pleading or document served by
                  Mortgagor on any other party in the  bankruptcy  case shall be
                  contemporaneously  served by Mortgagor on  Mortgagee,  and any
                  notice,  pleading  or  document  served  upon or  received  by
                  Mortgagor from any other party in the bankruptcy case shall be
                  served by Mortgagor on Mortgagee  immediately  upon receipt by
                  Mortgagor.

                                    C.  Upon  written   request  of   Mortgagee,
                  Mortgagor  shall assume the Ground Lease,  and shall take such
                  steps as are necessary to preserve Mortgagor's right to assume
                  the  Ground  Lease,  including  without  limitation  obtaining
                  extensions  of time to assume or reject the Ground Lease under
                  Subsection  365(d) of the Bankruptcy  Code to the extent it is
                  applicable.

                                    D. If  Mortgagor  or Ground  Lessor seeks to
                  reject  the  Ground  Lease or have  the  Ground  Lease  deemed
                  rejected,   then  prior  to  the  hearing  on  such  rejection
                  Mortgagee shall be given no less than twenty (20) days' notice
                  and  opportunity  to  elect in lieu of  rejection  to have the
                  Ground Lease  assumed and assigned to a nominee of  Mortgagee.
                  If  Mortgagee  shall so elect to assume  and assign the Ground
                  Lease, then Mortgagor shall continue any request to reject the
                  Ground  Lease  until after the motion to assume and assign has
                  been heard.  If Mortgagee shall not elect to assume and assign
                  the Ground Lease, then Mortgagee may obtain in connection with
                  the rejection of the Ground Lease a determination  that Ground
                  Lessor,  at Mortgagee's  option,  shall (1) agree to terminate
                  the Ground Lease and enter into a new lease with  Mortgagee on
                  the same terms and  conditions  as the Ground  Lease,  for the
                  remaining  term of the Ground  Lease,  or (2) treat the Ground
                  Lease as  breached  and provide  Mortgagee  with the rights to
                  cure defaults  under the Ground Lease and to assume the rights
                  and benefits of the Ground Lease.

               Mortgagor shall join with and support any request by Mortgagee to
grant and  approve  the  foregoing  as  necessary  for  adequate  protection  of
Mortgagee's  interests.   Notwithstanding  the  foregoing,  Mortgagee  may  seek
additional   terms  and   conditions,   including  such  economic  and  monetary
protections as it deems appropriate to adequately protect its interests, and any
request  for  such  additional  terms or  conditions  shall  not  delay or limit
Mortgagee's  right to receive the specific  elements of adequate  protection set
forth herein.

               Mortgagor  hereby  appoints  Mortgagee as its attorney in fact to
act on behalf of Mortgagor in connection with all matters relating to or arising
out of the assumption or rejection of the Ground Lease, in which the other party
to the lease is a debtor in a case  under the  Bankruptcy  Code.  This  grant of
power of attorney is present,  unconditional,  irrevocable,  durable and coupled
with an interest.

         Where  reference  is made to any code  section or other  law,  the same
shall  include  any  successor  statute  or  provisions  of law to the  same  or
substantially the same effect.

                                       32
<PAGE>

               (o) Predecessors,  Successors.  Where reference herein is made to
the rights or  obligations of Mortgagor or Ground Lessor under the Ground Lease,
the same shall  include  the  rights and  obligations  of their  successors  and
assigns.

         54. Non-liability of Trustees. The Declaration of Trust of Mortgagor, a
copy of which is duly filed with the Department of  Assessments  and Taxation of
the  State  of  Maryland,  provides  that the name of  Mortgagor  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  Mortgagor  shall be held to any  personal  liability,  jointly  or
severally,  for any  obligation  of,  or claim  against,  Mortgagor.  Except  as
otherwise  expressly  provided in the Loan  Agreement,  all persons dealing with
Mortgagor in any way shall look only to the assets of Mortgagor  for the payment
of any sum or the performance of any obligation hereunder.


                            [SIGNATURE PAGE FOLLOWS]

                                       33
<PAGE>

         IN WITNESS  WHEREOF,  and intending to be legally bound,  Mortgagor has
executed this instrument as of the day and year first above written.



         WITNESS:                       MORTGAGOR:

                                        1600 MARKET STREET PROPERTY TRUST,
                                        a Maryland real estate investment trust



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



CERTIFICATION OF MORTGAGEE'S ADDRESS:

The undersigned certifies that a current business address of Mortgagee as of the
date of this Mortgage is:

                  c/o Merrill Lynch & Co.
                  100 Church Street
                  18th Floor
                  New York, New York 10080



MERRILL LYNCH MORTGAGE LENDING, INC.



By:  /s/ Andrea Balkam
    Name:  Andrea Balkam
    Title:    Vice President



<PAGE>



STATE OF NEW YORK                   )
SS
COUNTY OF  NEW YORK                 )

On  this,  the 14th day of  December,  2000,  before  me,  a notary  public  the
undersigned  officer,  personally  appeared  John  A.  Mannix  who  acknowledged
himself/herself  to be the President of 1600 Market  Street  Property  Trust,  a
Maryland  real estate  investment  trust,  and that he/she as such officer being
authorized to do so, executed the foregoing  instrument for the purposes therein
contained  by  signing  the  name  of  such  real  estate  investment  trust  by
himself/herself in such capacity.

In Witness Whereof, I hereunto set my hand and official seal.

                                         /s/ Mary Caliendo
                                        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 Open-End Leasehold Mortgage, Assignemnt 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.