EXHIBIT 10.15

                          PROMISSORY NOTE
    
    
    
    $20,900,000                                                    
    
    Loan Nos.: 6-102-104                           January 30, 1998
               6-102-291
               6-102-324
    
    
          FOR VALUE RECEIVED, the undersigned, BEDFORD PROPERTY INVESTORS,
    INC., a Maryland corporation ("Maker"), having an address at 270
    Lafayette Circle, Lafayette, California 94549, PROMISES TO PAY TO THE
    ORDER OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Prudential"), a
    New Jersey corporation authorized to do business in the State of
    California (Prudential and its successors and assigns who become
    holders of this Amended and Restated Promissory Note (the "Note") are
    hereinafter collectively referred to as "Holder"), by electronic funds
    transfer to Prudential at Bank of New York, located in New York, New
    York, ABA Routing Number 021-000-018, Account No. 890-0304-766,
    referencing Loan Nos. 6-102-104, 6-102-291 and 6-102-234, or at such
    other place as Holder, may from time to time designate, the principal
    sum of Twenty Million Nine Hundred Thousand Dollars ($20,900,000),
    together with interest on the amount advanced from the date funds are
    first disbursed hereunder until paid at a rate per annum equal to the
    Interest Rate (as hereinafter defined).  For the first payment due
    under the Loan or any additional advance hereunder, interest shall be
    calculated on the basis of a 365-day year and the actual number of
    days in each month.  Thereafter, interest shall be calculated on the
    basis of a 360-day year and 30-day month; except with respect to
    partial months in which case interest shall be calculated on the basis
    of the actual number of days in the year and the actual number of days
    elapsed in the period during which it accrues, in accordance with the
    terms and conditions set forth below.
    
          1.   Definitions.  For the purpose of this Note, the following terms
    shall have the meanings set forth below; certain other terms are
    defined where they appear in this Note:
    
               (a)  "Deeds of Trust" means, collectively, that certain
    (i) Deed of Trust, Security Agreement and Fixture Filing with
    Assignment of Leases, Rents and Agreements (Dupont Industrial Center,
    Ontario), dated as of March 20, 1996, executed by Maker as "Trustor"
    to the benefit of Prudential as "Beneficiary" and recorded in the
    Official Records of San Bernardino County, California, (ii) Deed of
    Trust, Security Agreement and Fixture Filing with Assignment of
    Leases, Rents and Agreements (Tustin Business Park), dated as of
    March 20, 1996, executed by Maker as "Trustor" to the benefit of
    Prudential as "Beneficiary" and recorded in the Official Records of
    Orange County, California, (iii) Deed of Trust, Security Agreement and
    Fixture Filing with Assignment of Leases, Rents and Agreements
    (Woodlands II), dated as of March 20, 1996, executed by Maker as
    "Trustor" to the benefit of Prudential as "Beneficiary" and recorded
    in the Official Records of Salt Lake County, Utah, (iv) Deed of Trust,
    Security Agreement and Fixture Filing with Assignment of Leases, Rents
    and Agreements (Milpitas Town Center), dated as of May 24, 1996,
    executed by Maker as "Trustor" to the benefit of Prudential as
    "Beneficiary" and recorded in the Official Records of Santa Clara
    County, California, (v) Deed of Trust, Security Agreement and Fixture
    Filing with Assignment of Leases, Rents and Agreements (Nevada), dated
    as of May 9, 1997, executed by Maker as "Trustor" to the benefit of
    Prudential as "Beneficiary" and recorded in the Official Records of
    Washoe County, Nevada, (vi) Deed of Trust, Security Agreement and
    Fixture Filing with Assignment of Leases, Rents and Agreements dated
    as of even date herewith, executed by Maker as "Trustor" to the
    benefit of Prudential as "Beneficiary" and recorded in the Official
    Records of Maricopa County, Arizona (the "Arizona Deed of Trust"),
    (vii) Deed of Trust, Security Agreement and Fixture Filing with
    Assignment of Leases, Rents and Agreements dated as of even date
    herewith, executed by Maker as "Trustor" to the benefit of Prudential
    as "Beneficiary" and recorded in the Official Records of Alameda
    County, California  (the "Fremont Deed of Trust"), and (viii) Deed of
    Trust, Security Agreement and Fixture Filing with Assignment of
    Leases, Rents and Agreements dated as of even date herewith, executed
    by Maker as "Trustor" to the benefit of Prudential as "Beneficiary"
    and recorded in the Official Records of San Mateo County, California
    (the "South San Francisco Deed of Trust"), in each case as the same
    have been modified, if at all, by those certain First Modifications of
    Deed of Trust and Other Loan Documents dated as of May 24, 1996, those
    certain First Modification of Deed of Trust and Other Loan Documents
    or Second Modifications of Deed of Trust and Other Loan Documents
    dated as of May 9, 1997 and those certain First Modification of Deed
    of Trust and Other Loan Documents, Second Modifications of Deed of
    Trust and other Loan Documents or Third Modifications of Deed of Trust
    and Other Loan Documents dated as of even date herewith.
    
               B.   "Discount Rate" means the interest rate, which when
    compounded monthly, is equivalent to the Treasury Rate, when
    compounded semi-annually.
    
               C.   "Interest Rate" means a rate of interest per annum of
    six and ninety-one hundredths percent (6.91%).
    
               D.   "Loan Documents" means this Note, the Deeds of Trust,
    and all other documents, with the exception of each of the eight (8)
    documents entitled "Hazardous Substances Remediation and
    Indemnification Agreement" each executed by Maker in favor of Holder
    with respect to the land secured by the Deeds of Trust (collectively,
    the "Remediation and Indemnification Agreements") now or hereafter
    governing, securing or executed in connection with the indebtedness
    evidenced by this Note or any portion of such indebtedness.
    
               E.   "Loan" means the loan evidenced by this Note.
    
               F.   "Maturity Date" means July 31, 2006.
    
               G.   "Prepayment Amount" means the amount of the Principal
    Balance prepaid on a Prepayment Date.
    
               H.   "Prepayment Date" means any date, prior to the
    Maturity Date, upon which all or any portion of the Principal Balance
    is prepaid.
    
               I.   "Prepayment Premium" shall have the meaning set forth
    in Paragraph 6(a) hereof.
    
               J.   "Present Value of the Loan" means the present value,
    discounting from the Prepayment Date at the Discount Rate, of all
    payments of principal and interest which would have been payable on
    the Prepayment Amount from the Prepayment Date through and including
    the Maturity Date.
    
               K.   "Principal Balance" means the outstanding principal
    balance of this Note from time to time outstanding.
    
               L.   "Secondary Interest Rate" means a rate of interest
    equal to the greater of (i) eighteen percent (18%) per annum, or
    (ii) a per annum rate equal to five percent (5%) over the prime rate
    (for corporate loans at large United States money center commercial
    banks) published in the Wall Street Journal on the first business day
    of each month in which such default occurs or continues.
    
               M.   "Treasury Rate" means the interest rate, conclusively
    determined by Holder on the Prepayment Date equal to the semi-annual
    yield on the Treasury Constant Maturity Series with maturity equal to
    the remaining weighted average life of the Loan for the week prior to
    the Prepayment Date, as reported in Federal Reserve Statistical
    Release H.15 - Selected Interest Rates ("Release H.15").  The rate
    will be determined by linear interpolation between the yields reported
    in Release H.15, if necessary.  In the event Release H.15 is no longer
    published, Holder shall select a comparable publication to determine
    the Treasury Rate.
    
          2    Payments.
    
               A.   Commencing on the fifteenth (15th) day of March, 1998
    and continuing on the fifteenth (15th) day of each calendar month
    thereafter through and including the fifteenth (15th) day of July,
    2006, monthly installments of principal and interest in the amount of
    $146,519.08 shall be due and payable, with the entire unpaid Principal
    Balance plus accrued interest and other amounts payable under the Loan
    Documents being due and payable on the Maturity Date.
    
               B.   In addition, on February 15, 1998 Maker shall pay to
    Holder an amount equal to all accrued interest, at the Interest Rate,
    on the Principal Balance for the period from the date of first
    disbursement of funds under the Loan through and including February
    14, 1998.
    
          3    Treatment of Payments.  All payments due under this Note or
    the Loan Documents shall be paid by Maker in lawful money of the
    United States of America on the date such payment is due.  All such
    payments shall be made without deduction for any present or future
    taxes, levies, imposts, deductions, charges or withholdings (including
    U.S., state or local income taxes), which amounts shall be paid by
    Maker.  Payments from Maker to Holder under this Note shall be applied
    first to the payment of any expense reimbursements under the Loan
    Documents, any Per Diem Late Charges or Late Charges (each as
    hereinafter defined) and any Prepayment Premium due thereon, in such
    order as Holder shall determine, then to accrued and unpaid interest,
    with the remainder to be applied to the Principal Balance.
    
          4    Per Diem Late Charges, Late Charges and Secondary Interest.
    
               A.   If Maker fails timely to pay any sum due and payable
    under this Note on or before the date due, a late charge equal to
    Three Hundred Dollars ($300) per day (the "Per Diem Late Charge")
    shall be assessed for each day that such payment is not paid from and
    including the first day following the date such payment was due to and
    including the date upon which such payment is made; provided, however,
    that notwithstanding the foregoing, if such payment, together with all
    accrued Per Diem Late Charges, is not made on or before the fifteenth
    (15th) day following the date due, a late charge equal to four
    cents ($.04) for each dollar ($1.00) of each such late payment (the
    "Late Charge") shall be immediately due and payable.  The Late Charge
    shall be in lieu of the Per Diem Late Charges that shall have accrued
    during the immediately preceding fifteen (15) day period.  Maker
    acknowledges and agrees that its failure to make timely payments will
    result in Holder incurring additional expense in servicing the Loan,
    and that it is extremely difficult and impractical to ascertain the
    extent of such damages and that the Per Diem Late Charges and the Late
    Charge represent fair and reasonable estimates, considering all of the
    circumstances existing on the date of the execution of this Note, of
    the costs that Holder will incur by reason of such late payment. 
    Holder agrees to comply with Section 2954.5 of the California Civil
    Code with respect to the giving of notice prior to imposing a Per Diem
    Late Charge or Late Charge, as such Section or any successor Section
    may now or hereafter be in effect.  Acceptance of any Per Diem Late
    Charge or Late Charge shall not constitute a waiver of the default
    with respect to the late payment, and shall not prevent Holder from
    exercising any of the other rights or remedies available hereunder or
    at law or in equity.
    
               B.   Maker further acknowledges and agrees that during the
    time that any payment of principal, interest or other amount due under
    this Note shall be delinquent, Holder will incur additional costs and
    expenses attributable to its loss of use of money due to and to the
    adverse impact on Holder's ability to meet its other obligations and
    avail itself of other opportunities.  Maker agrees that it is
    extremely difficult and impractical to ascertain the extent of such
    expenses, and Maker therefore agrees that interest at the Secondary
    Interest Rate shall accrue on any delinquent payments of principal,
    interest or other amounts due under this Note or any Loan Document
    from the date such payments were due and for so long as non-payment
    continues, regardless of whether or not there has been an acceleration
    of the maturity of the indebtedness evidenced by this Note.
    
          5    Event of Default and Secondary Interest.
    
               A.   The occurrence of an "Event of Default" under any Loan
    Document shall constitute an Event of Default under this Note.  Upon
    the occurrence of an Event of Default (including without limitation
    the failure of the Maker to observe the provisions of Paragraph 4.2 of
    each of the Deeds of Trust), Holder, at its option may cause the
    Principal Balance together with all unpaid accrued interest, any
    Prepayment Premium (as hereinafter defined) and any other sums
    evidenced or secured by this Note or any Loan Document, to be
    immediately due and payable, without further presentment, demand,
    protest or notice of any kind, by so notifying Maker in writing
    ("Acceleration Notice").
    
               B.   Maker agrees that from and after the delivery of an
    Acceleration Notice pursuant to Paragraph 5(a) hereof, interest at the
    Secondary Interest Rate shall accrue on the Principal Balance and all
    unpaid accrued interest and other sums evidenced or secured by this
    Note or any Loan Documents.
    
          6    Prepayment.
    
               A.   If for any reason the Principal Balance or any portion
    thereof is prepaid (whether by operation of law, acceleration or
    otherwise) on a date prior to the Maturity Date, Maker shall pay to
    Holder as liquidated damages, immediately upon demand, together with
    the related principal prepayment and any unpaid accrued interest, a
    prepayment charge (the "Prepayment Premium") equal to the greater of:
    
                    (1)  the product of (x) one percent (1%) of the
                         Prepayment Amount multiplied by (y) a fraction,
                         the numerator of which is the number of full
                         months remaining until the Maturity Date as of
                         the Prepayment Date and the denominator of which
                         is the number of full months comprising the term
                         of the Loan; or
    
                    (2)  the Present Value of the Loan less the sum of
                         (x) the Prepayment Amount, and (y) unpaid accrued
                         interest, if any.
    
               B.   Maker shall have the right voluntarily to prepay all
    or any portion of the Principal Balance, together with accrued
    interest thereon, provided that Maker gives Holder not less than
    thirty (30) days prior written notice of its intention to prepay, and
    delivers to Holder, on or before the Prepayment Date, the Prepayment
    Premium as calculated above, together with the Prepayment Amount and
    all accrued interest and other sums due under the Loan Documents.
    
               C.   Maker agrees that such Prepayment Premium represents
    the reasonable estimate of Holder and Maker of a fair average
    compensation for the loss that may be sustained by Holder due to the
    payment of any of the Principal Balance prior to the Maturity Date;
    and by initialing this provision in the space provided below, Maker
    hereby declares that Holder's agreement to enter into this transaction
    on the terms set forth in this Note and in the other Loan Documents
    constitutes adequate and valuable consideration, given individual
    weight by Maker for this agreement.  Such Prepayment Premium shall be
    paid without prejudice to the right of Holder to collect any other
    amount provided to be paid hereunder.  Holder shall not be obligated
    to actually reinvest the Prepayment Amount in any Treasury obligations
    as a condition to receiving the Prepayment Premium.
    
                                     INITIALS OF MAKER:  /s/ S. W.
    
               D.   Notwithstanding anything to the contrary contained in
    this Paragraph 6, Maker shall have a right to prepay in full the
    entire outstanding balance due under this Note on or after June 30,
    2006 without payment of the Prepayment Premium.
    
          7    Security.  This Note is secured, among other security, by
    the Deeds of Trust and the other Loan Documents, which contain
    provisions for the acceleration of the maturity of this Note upon the
    occurrence of certain described events.
    
          8    Holder's Rights; No Waiver by Holder.  The rights, powers
    and remedies of Holder under this Note shall be in addition to all
    rights, powers and remedies given to Holder under the Loan Documents
    and any other agreement or document securing or evidencing the
    indebtedness evidenced hereby or by virtue of any statute or rule of
    law, including, but not limited to, the Arizona Uniform Commercial
    Code, the California Uniform Commercial Code, the Nevada Uniform
    Commercial Code and the Utah Uniform Commercial Code.  All such
    rights, powers and remedies shall be cumulative and may be exercised
    successively or concurrently in Holder's sole discretion without
    impairing Holder's security interest, rights or available remedies. 
    Any forbearance, failure or delay by Holder in exercising any right,
    power or remedy shall not preclude further exercise thereof, and every
    right, power or remedy of Holder shall continue in full force and
    effect until such right, power or remedy is specifically waived in a
    writing executed by Holder.  Maker waives any right to require the
    Beneficiary (as defined in each of the Deeds of Trust) to proceed
    against any person or to pursue any remedy in Holder's power.
    
          9    Maker's Waivers.
    
               A.   Maker and any endorsers of this Note, and each of
    them, hereby waive diligence, demand, presentment for payment, notice
    of non-payment, protest and notice of protest, and specifically
    consent to and waive notice of any renewals or extensions of this
    Note, whether made to or in favor of Maker or any person or persons. 
    Maker and any endorsers of this Note expressly waive all right to the
    benefit of any statute of limitations and any moratorium,
    reinstatement, marshalling, forbearance, extension, redemption, or
    appraisement now or hereafter provided by the Constitution or the laws
    of the United States or of any state thereof, as a defense to any
    demand against Maker or any such endorsers, to the fullest extent
    permitted by law.
    
               B.   Maker hereby waives any right to trial by jury with
    respect to any action or proceeding brought by Maker, Holder or any
    other person relating to (i) the indebtedness evidenced by this Note,
    or (ii) the Loan Documents.  Maker hereby agrees that this Note
    constitutes a written consent to waiver of trial by jury pursuant to
    the provisions of California Code of Civil Procedure Section 631 and
    Maker does hereby constitute and appoint Holder its true and lawful
    attorney-in-fact, which appointment is coupled with an interest, and
    Maker does hereby authorize and empower Holder, in the name, place and
    stead of Maker, to file this Note with the clerk or judge of any court
    of competent jurisdiction as statutory written consent to waiver of
    trial by jury.
    
               C.   Maker hereby expressly waives any right it may have
    under California Civil Code Section 2954.10 to prepay this Note, in
    whole or in part, without prepayment charge, upon acceleration of the
    Maturity Date of this Note, and agrees that if for any reason, a
    prepayment of any or all of this Note is made, whether voluntarily or
    upon or following any acceleration of the Maturity Date of this Note
    by the Holder, then Maker shall pay, concurrently therewith, a
    Prepayment Premium calculated pursuant to Paragraph 6 hereof.  By
    initialling this provision in the space provided below, Maker hereby
    declares that Holder's agreement to make the Loan at the Interest Rate
    and for the term set forth in this Note constitutes adequate
    consideration, given individual weight by Maker, for this waiver and
    agreement.
    
                                       INITIALS OF MAKER:  /s/ S. W.
    
          10   Transfers by Holder.  This Note or any interest in this Note
    and the Loan Documents may be hypothecated, transferred or assigned by
    Holder without the prior consent of Maker.
    
          11   Amendment.  This Note may be amended or modified only by an
    instrument in writing which by its express terms refers to this Note
    and which is duly executed by the party sought to be bound thereby.
    
          12   Successors and Assigns.  This Note shall be binding upon and
    inure to the benefit of the parties hereto and their respective heirs,
    executors, administrators, personal representatives, successors and
    permitted assigns.
    
          13   Governing Law.  This Note shall be governed by and construed
    in accordance with the laws of the State of California.
    
          14   Authority.  Each individual executing this Note on behalf of
    a partnership, corporation or other entity states that he or she is
    duly authorized to execute and deliver this Note on behalf of said
    entity, in accordance with duly and regularly adopted existing
    authority and, if necessary, resolution of the governing body of such
    organization, and that this Note is binding upon said entity in
    accordance with its terms.
    
          15   Time.  Time is of the essence with respect to each and every
    term and provision of this Note.
    
          16   Usury.  Notwithstanding any provision herein, the total
    liability for payments in the nature of interest shall not exceed the
    applicable limits imposed by any applicable state or federal interest
    rate laws.  If any payments in the nature of interest, additional
    interest, and other charges made hereunder are held to be in excess of
    the applicable limits imposed by any applicable state or federal laws,
    it is agreed that any such amount held to be in excess shall be
    considered payment of principal and the indebtedness evidenced thereby
    shall be reduced by such amount in the inverse order of maturity so
    that the total liability for payments in the nature of interest,
    additional interest and other charges shall not exceed the applicable
    limits imposed by any applicable state or federal interest rate laws
    in compliance with the desires of Holder and Maker.
    
          17   Notices.  All notices, consents and other communications
    required or permitted by this Note shall be in writing and shall be
    given in the manner set forth in the Deeds of Trust.
    
          18   Attorneys' Fees.  The undersigned agrees to pay all costs,
    including reasonable attorneys' fees and expenses, incurred by Holder
    in enforcing payment or collection of this Note or the terms of any
    Loan Document, whether or not suit is filed.
    
          19   Limitation on Personal Liabilities.
    
               A.   Except as expressly set forth in Paragraphs 19(b), (c)
    and/or (d) below, the recourse of Holder with respect to the
    obligations evidenced by this Note shall be solely to the Property
    (which for the purposes of this Note shall mean, collectively, the
    properties defined as the "Property" in each of the Deeds of Trust).
    
               B.   Notwithstanding anything to the contrary contained in
    this Note or in any Loan Document, nothing shall be deemed in any way
    to impair, limit or prejudice the rights of Holder:
    
          (i)       in foreclosure proceedings or in any ancil-
                    lary proceedings brought to facilitate Hol-
                    der's foreclosure on the Property or any
                    portion thereof;
    
         (ii)       to recover from Maker damages or costs
                    (including without limitation reasonable
                    attorneys' fees) incurred by Holder as a
                    result of waste to the Property by Maker;
    
        (iii)       to recover from Maker any condemnation or
                    insurance proceeds attributable to the
                    Property which were not paid to Holder or
                    used to restore the Property in accordance
                    with the terms of the Deeds of Trust;
    
         (iv)       to recover from Maker any rents, profits,
                    security deposits, advances, rebates,
                    prepaid rents or other similar sums
                    attributable to the Property collected by
                    or for Maker following an Event of Default
                    and not properly applied to the reasonable
                    fixed and operating expenses of the
                    Property, including payments of the Loan;
    
          (v)       to pursue the personal liability of Maker
                    under the provisions of paragraph 9.26 of
                    each of the Deeds of Trust, including any
                    indemnification provisions under said
                    paragraph;
    
         (vi)       to exercise any other specific rights or
                    remedies afforded Holder under any
                    provisions of the Loan Documents or at law
                    or in equity (or to recover under any
                    guarantee given in connection with the
                    Loan);
    
        (vii)       to recover from Maker the amount of any
                    unpaid taxes, assessments, and/or utility
                    charges affecting the Property and to
                    collect from Maker any sums expended by
                    Holder in fulfilling the obligations of
                    Maker, as lessor, under any leases
                    affecting the Property, which obligations
                    accrued prior to Holder's (or Holder's
                    nominee's) acquisition of title to the
                    Property; provided, however, that the cost
                    of any obligations of Maker as lessor under
                    any such leases which have been expressly
                    approved by Holder shall not be a recourse
                    liability of Maker;
    
       (viii)       to pursue any personal liability of Maker
                    under the Remediation and Indemnification
                    Agreements (as defined in the Deeds of
                    Trust);
    
         (ix)       to recover from Maker damages or costs
                    incurred by Holder as a result of any non-
                    willful misrepresentation by Maker in
                    connection with the Property, the Loan
                    Documents or the Loan Applications, or any
                    other aspect of the Loan; and/or
    
          (x)       to recover from Maker damages or costs
                    incurred by Holder as a result of Maker's
                    failure to obtain and maintain in effect
                    all the insurance required in the Loan
                    Documents.
    
               C.   The agreement contained in this Paragraph 19 to limit
    the personal liability of Maker shall become null and void and of no
    further force or effect in the event:
    
          (i)       that the Property or any part thereof or
                    any interest therein shall be further
                    encumbered by a voluntary lien securing any
                    obligation upon which Maker shall be
                    personally liable for repayment;
    
         (ii)       of any breach or violation of paragraph 4.2
                    of any of the Deeds of Trust;
    
        (iii)       of any intentional fraud or willful and
                    material misrepresentation by Maker in
                    connection with the Property, the Loan
                    Documents or the Loan Applications; 
    
         (iv)       that the Property or any part thereof shall
                    become an asset a voluntary bankruptcy or
                    insolvency proceeding or (ii) an
                    involuntary bankruptcy or insolvency
                    proceeding which is not dismissed within
                    ninety (90) days of filing; provided
                    however, that this clause shall not apply
                    if an involuntary bankruptcy is filed by
                    Holder or if notwithstanding any such
                    proceeding Maker maintains a senior long
                    term unsecured debt rating of "BBB-" from
                    Standard & Poor's Rating Group ("S&P") and
                    another rating at least equivalent to S&P's
                    rating of "BBB-" from one other nationally
                    recognized agency; or
    
          (v)       any property encumbered by the Deeds of
                    Trust is determined to be "environmentally
                    impaired" as such term is defined in
                    Section 40.503 of the Nevada Revised
                    Statutes, Section 726.5 of the California
                    Code of Civil Procedure, Section 78-37-1.5
                    of the Utah Code Annotated or any other
                    similar statute, law or provision
                    applicable to any Property; provided,
                    however, that Holder's recovery hereunder
                    due to such environmental impairment shall
                    be limited to the Allocable Loan Amount(s)
                    (as defined in the Deeds of Trust)
                    attributable to such Property(ies) which is
                    so environmentally impaired.
    
               D.   The agreement contained in this Paragraph 19 to limit
    the personal liability of Maker shall become null and void and of no
    further force or effect in the event of the execution, modification,
    amendment and/or termination of any leases for the occupancy of space
    in any portion of the Property which remains encumbered by any of the
    Deeds of Trust, without Holder's prior written approval if such
    approval is required under the terms of the Loan Documents (such
    leases being hereinafter referred to as "Unapproved Leases"), such
    that the net rentable area covered by Unapproved Leases exceeds twenty
    percent (20%), in the aggregate, of the total net rentable area of all
    of the Property which remains encumbered by the Deeds of Trust.<PAGE>
        
    IN WITNESS WHEREOF, Maker and Holder have caused this Promissory
    Note to be executed and delivered effective as of the date first
    written above.
    
    "MAKER":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/ Scott R. Whitney
    
          Scott R. Whitney
          Senior Vice President
                
    
    
    
    
    
                    
    
    
      [11128.AGRE]H61142
<PAGE>
  
                                                                           
                                              RECORDING REQUESTED BY
    AND WHEN RECORDED MAIL TO:
    
    Steefel, Levitt & Weiss
    One Embarcadero Center, 30th Floor
    San Francisco, California  94111
    
          Attention:  James F. Eastman, Esq.
    
    
    
    
                                                                   
    
    
              
    
    
    
             DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
         FILING WITH ASSIGNMENT OF LEASES, RENTS AND AGREEMENTS
                               (Arizona)
    
    
          THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
    FILING WITH ASSIGNMENT OF LEASES, RENTS AND AGREEMENTS (this "Deed of
    Trust") dated as of January 30, 1998 is made by BEDFORD PROPERTY
    INVESTORS, INC., a Maryland corporation, having offices at 270
    Lafayette Circle, Lafayette, California 94549 ("Trustor"), First
    American Title Insurance Company, having offices at 1850 Mount Diablo
    Boulevard, Suite 300, Walnut Creek, California  94596 ("Trustee"), and
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation,
    having offices at Four Embarcadero Center, Suite 2700, San Francisco,
    California 94111 ("Beneficiary").
    
    
                              WITNESSETH:
    
    
          Trustor HEREBY IRREVOCABLY GRANTS, TRANSFERS AND
    ASSIGNS TO Trustee, IN TRUST, WITH POWER OF SALE, all of Trustor's
    right, title and interest now owned or hereafter acquired in and to
    the following property, together with the Personalty (as hereinafter
    defined), all of which is hereinafter collectively defined as the
    "Property":  (i) that certain real property (the "Land") located in
    the County of Maricopa, State of Arizona, and more particularly
    described in Exhibit A attached hereto and incorporated herein by this
    reference; (ii) all Improvements (as hereinafter defined) and all
    appurtenances, easements, rights and privileges thereof, including all
    minerals, oil, gas and other hydrocarbon substances thereon or
    therein, air rights, water rights and development rights, and any land
    lying in the streets, roads or avenues adjoining the Land or any part
    thereof; (iii) all Fixtures (as hereinafter defined), whether now or
    hereafter installed, being hereby declared to be for all purposes of
    this Deed of Trust a part of the Land; and (iv) the rents, issues and
    profits of or from the Land, Improvements and Fixtures.
    
    FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary
    may determine:  (i) payment of the Indebtedness (as hereinafter
    defined), and (ii) payment (with interest as provided) and performance
    by Trustor of the Obligations (as hereinafter defined). 
    Notwithstanding the foregoing, or any other term contained herein or
    in the Loan Documents, none of Trustor's obligations under or pursuant
    to the Remediation and Indemnification Agreements (as hereinafter
    defined) shall be secured by the lien of this Deed of Trust.
    
    
                                ARTICLE 20
    
                              Definitions
    
    
            As used in this Deed of Trust the following terms
    shall have the following meanings; other terms are defined where they
    appear in this Deed of Trust:
    
    Allocable Loan Amount:  (i) For the property encumbered by the Ontario
    Deed of Trust, $8,000,000 less the product of (x) all payments of
    principal made under the Multistate Note (other than payments made
    pursuant to Paragraph 9.36(3) of any of the Combined Deeds of Trust)
    multiplied by (y) a fraction, the numerator of which is 8,000,000, and
    the denominator of which is 25,000,000; (ii) for the property
    encumbered by the Tustin Deed of Trust, $7,000,000 less the product of
    (x) all payments of principal made under the Multistate Note (other
    than payments made pursuant to Paragraph 9.36(3) of any of the
    Combined Deeds of Trust) multiplied by (y) a fraction, the numerator
    of which is $7,000,000, and the denominator of which is 25,000,000;
    (iii) for the property encumbered by the Woodlands Deed of Trust,
    $5,200,000 less the product of (x) all payments of principal made
    under the Multistate Note (other than payments made pursuant to
    Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied by
    (y) a fraction, the numerator of which is 5,200,000, and the
    denominator of which is 25,000,000; (iv) for the property encumbered
    by the Milpitas Deed of Trust, $4,800,000 less the product of (x) all
    payments of principal made under the Multistate Note (other than
    payments made pursuant to Paragraph 9.36(3) of any of the Combined
    Deeds of Trust) multiplied by (y) a fraction, the numerator of which
    is 4,800,000, and the denominator of which is 25,000,000; (v) for the
    property encumbered by the Nevada Deed of Trust, $8,913,730.85 less
    all payments of principal made under the Nevada Note; (vi) for the
    property encumbered by this Deed of Trust, $7,200,000 less the product
    of (x) all payments of principal made under the Arizona/California
    Note (other than payments made pursuant to Paragraph 9.36(3) of any of
    the Combined Deeds of Trust) multiplied by (y) a fraction, the
    numerator of which is 7,200,000, and the denominator of which is
    20,900,000; (vii) for the properties encumbered by the South San
    Francisco Deed of Trust, $6,500,000 less the product of (x) all
    payments of principal made under the Arizona/California Note (other
    than payments made pursuant to Paragraph 9.36(3) of any of the
    Combined Deeds of Trust) multiplied by (y) a fraction, the numerator
    of which is 6,500,000, and the denominator of which is 20,900,000; and
    (viii) for the property encumbered by the Fremont Deed of Trust,
    $7,200,000 less the product of (x) all payments of principal made
    under the Arizona/California Note (other than payments made pursuant
    to Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied
    by (y) a fraction, the numerator of which is 7,200,000, and the
    denominator of which is 20,900,000.
    
    Application:  Collectively, the Application dated December 5, 1995,
    executed by Trustor (referred to as "Borrower" therein), which
    Application includes the exhibits attached thereto, the Application
    dated January 5, 1996, executed by Trustor (referred to as "Borrower"
    therein), which Application includes the exhibits attached thereto,
    the Application executed by Trustor (referred to as "Borrower"
    therein) on April 13, 1996, which Application includes the exhibits
    attached thereto, and the Application executed by Trustor (referred to
    as "Borrower" therein) on October 31, 1997, which Application includes
    the exhibits attached thereto.
    
    Closing Date:  The date this Deed of Trust is recorded in the Official
    Records of Maricopa County, Arizona.
    
    Combined Debt Service Coverage:  The ratio, as determined by
    Beneficiary, of (a) Net Operating Income for the preceding twelve-
    month period for the Remaining Properties, to (b) the sum of (i) the
    annual debt service payments (including principal and interest) for
    the preceding twelve-month period on the portion of the Loan
    consisting of the aggregate of the Allocable Loan Amounts for the
    Remaining Properties, and (ii) the annual debt service payments
    (including principal and interest) on all other indebtedness secured
    or which will be secured by a lien on all or part of the Remaining
    Properties for the preceding twelve-month period.  For purposes of
    calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory notes or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Combined Deeds of Trust:  Collectively, this Deed of Trust, the
    Ontario Deed of Trust, the Tustin Deed of Trust, the Milpitas Deed of
    Trust, the Woodlands Deed of Trust, the Nevada Deed of Trust, the
    Fremont Deed of Trust, and the South San Francisco Deed of Trust.
    
    Combined Loan to Value Ratio:  The ratio, as determined by
    Beneficiary, of (i) the aggregate principal balance, together with all
    accrued but unpaid interest, of all encumbrances against the Remaining
    Properties, to (ii) the fair market value of the Remaining Properties,
    as determined by Beneficiary.
    
    Combined Properties:  Collectively, the Property, the property
    encumbered by the Ontario Deed of Trust, the property encumbered by
    the Tustin Deed of Trust, the property encumbered by the Milpitas Deed
    of Trust, the property encumbered by the Woodlands Deed of Trust, the
    property encumbered by the Nevada Deed of Trust, the property
    encumbered by the Fremont Deed of Trust, and the properties encumbered
    by the South San Francisco Deed of Trust.
    
    Event of Default:  As defined in Paragraph 6.1 hereof.
    
    Fixtures:  All fixtures located upon or within the Improvements or now
    or hereafter installed in, or used in connection with any of the
    Improvements, including boilers, furnaces, pipes, plumbing, elevators,
    cleaning and sprinkler systems, fire extinguishing apparatus and
    equipment, water tanks, heating, ventilating, air conditioning and air
    cooling equipment, whether or not permanently affixed to the Land or
    the Improvements.
    
    Fremont Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of even date herewith, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Alameda County,
    California, as amended from time to time.
    
    Future Combined Debt Service Coverage:  The ratio, as determined by
    Beneficiary, of (a) Net Operating Income for the immediately upcoming
    twelve-month period for the Remaining Properties (based on reasonable
    assumptions determined by Beneficiary), to (b) the sum of (i) the
    annual debt service payments (including principal and interest) for
    the same twelve-month period on the portion of the Loan consisting of
    the aggregate of the Allocable Loan Amounts for the Remaining
    Properties, and (ii) the annual debt service payments (including
    principal and interest) on all other indebtedness secured or which
    will be secured by a lien on all or part of the Remaining Properties
    for the same twelve-month period.  For purposes of calculating annual
    debt service, amortization of the aggregate principal indebtedness
    over a thirty (30) year period (or such lesser period if the
    applicable promissory notes or other loan documents in the case of
    loans other than the Loan provide otherwise) is assumed to apply
    during the entire term of the Loan.
    
    Future Individual Debt Service Coverage:  For each of the Combined
    Properties, the ratio, as determined by Beneficiary, of (a) Net
    Operating Income for such Combined Property for the next upcoming
    twelve-month period (based on reasonable assumptions determined by
    Beneficiary), to (b) the sum of (i) the annual debt service payments
    (including principal and interest) on the portion of the Loan
    consisting of the Allocable Loan Amount for such Combined Property for
    the same twelve-month period, and (ii) the annual debt service
    payments (including principal and interest) on all other indebtedness
    secured or which will be secured by a lien on all or part of such
    Combined Property for the same twelve-month period.  For purposes of
    calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory note or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Impositions:  All real estate and personal property and other taxes
    and assessments, water and sewer rates and charges levied or assessed
    upon or with respect to the Property, and all other governmental
    charges and any interest or costs or penalties with respect thereto,
    ground rent and charges for any easement or agreement maintained for
    the benefit of the Property, general and special, ordinary and
    extraordinary, foreseen or unforeseen, of any kind and nature
    whatsoever that at any time prior to or after the execution of the
    Loan Documents may be assessed, levied, imposed, or become a lien upon
    the Property or the rent or income received therefrom, or any use or
    occupancy thereof; and any and all other charges, expenses, payments,
    claims, mechanics' or material suppliers' liens or assessments of any
    nature, if any, which are or may become a lien upon the Property or
    the rent or income received therefrom.
    
    Impound Account:  The account that Trustor may be required to maintain
    pursuant to Paragraph 3.4 hereof for the deposit of amounts required
    to pay Impositions and insurance premiums.
    
    Improvements:  All buildings and other improvements and appurtenances
    located on the Land, including surface improvements, such as parking
    areas and landscaping structures and all improvements, additions and
    replacements thereof, and other buildings and improvements, at any
    time hereafter constructed or placed upon the Land.
    
    Indebtedness:  The principal of and all other amounts, payments and
    premiums due under the Note (and each and every of them) and any
    extensions or renewals thereof (including extensions or renewals at a
    different rate of interest, whether or not evidenced by a new or
    additional promissory note or notes), and all other indebtedness of
    Trustor to Beneficiary and additional advances under, evidenced by
    and/or secured by the Loan Documents, plus interest on all such
    amounts.
    
    Individual Debt Service Coverage:  For each of the Combined
    Properties, the ratio, as determined by Beneficiary, of (a) Net
    Operating Income for such Combined Property for the preceding twelve-
    month period, to (b) the sum of (i) the annual debt service payments
    (including principal and interest) on the portion of the Loan
    consisting of the Allocable Loan Amount for such Combined Property for
    the preceding twelve-month period, and (ii) the annual debt service
    payments (including principal and interest) on all other indebtedness
    secured or which will be secured by a lien on all or part of such
    Combined Property for the preceding twelve-month period.  For purposes
    of calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory note or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Individual Loan to Value Ratio:  For each individual Combined
    Property, the ratio, as determined by Beneficiary, of (i) the
    aggregate principal balance, together with all accrued but unpaid
    interest, of the Allocable Loan Amount for such Combined Property and
    all other encumbrances (other than the Loan) against such Combined
    Property, to (ii) the fair market value of such Combined Property, as
    determined by Beneficiary.
    
    Inventory:  The personal property Inventory attached hereto as Exhibit
    C.
    
    Laws and Restrictions:  All federal, state, regional, county, local
    and other laws, regulations, orders, codes, ordinances, rules,
    statutes and policies, restrictive covenants and other title
    encumbrances, permits and approvals, Leases and other rental
    agreements, relating to the development, occupancy, ownership,
    management, use, and/or operation of the Property or otherwise
    affecting all or any part of the Property or Trustor.
    
    Leases:  Any and all leasehold interests, including subleases and
    tenancies following attornment, now or hereafter affecting or covering
    any part of the Property.
    
    Loan:  The loans from Beneficiary to Trustor evidenced by the Note.
    
    Loan Documents:  The Note, the Application, the Owner's Affidavit,
    this Deed of Trust, the Ontario Deed of Trust, the Tustin Deed of
    Trust, the Milpitas Deed of Trust, the Woodlands Deed of Trust, that
    certain Note Assignment and Assumption Agreement dated as of May 9,
    1997 relating to the Nevada Note, the Nevada Deed of Trust, the
    Fremont Deed of Trust, the South San Francisco Deed of Trust, each of
    the Assignments of Agreements, each of the Assignments of Lessor's
    Interest in Leases, the Post-Closing Agreement, and all other
    documents, with the exception of the Remediation and Indemnification
    Agreements, evidencing, securing or relating to the Loan, the payment
    of the Indebtedness or the performance of the Obligations.
    
    Loan Parties:  Trustor.
    
    Material Adverse Change:  Any material and adverse change in (i) the
    financial condition of any of the Loan Parties, or (ii) the condition
    or operation of the Property.
    
    Milpitas Deed of Trust:  That certain Deed of Trust, Security
    Agreement and Fixture Filing with Assignment of Leases, Rents and
    Agreements dated as of May 24, 1996, executed by Trustor for the
    benefit of Beneficiary, recorded in the Official Records of Santa
    Clara County, California, as amended by that certain First
    Modification of Deed of Trust and Other Loan Documents dated as of May
    9, 1997, as further amended by that certain Second Modification of
    Deed of Trust and Other Loan Documents dated as of even date herewith,
    as further amended from time to time.
    
    Net Operating Income:  For any period, gross income from operations of
    the Remaining Properties, for the purposes of determining Combined
    Debt Service Coverage or Future Combined Debt Service Coverage, or
    from operations of an individual Combined Property, for the purposes
    of determining the Individual Debt Service Coverage or Future
    Individual Debt Service Coverage for such Combined Property, in either
    case, derived from arm's length, market rate rents from leases with
    unaffiliated third parties in possession of the leased premises and
    paying rent on a current basis, service fees or charges, and addi-
    
    tional rent resulting from operating expense, common area maintenance,
    utilities and tax escalation pass through provisions (excluding
    capital gains income derived from the sale of assets and other items
    of income which Beneficiary reasonably determines are unlikely to
    occur in any subsequent period), less operating expenses (such as
    cleaning, utilities, administrative, landscaping, security and common
    area maintenance expenses, common area association fees, repairs and
    maintenance and less fixed expenses (such as insurance, real estate
    and other taxes), which expenses shall be related to the property
    producing such gross income, shall be for services from arm's length
    third party transactions or equivalent to the same, and shall exclude
    all expenses for capital improvements and replacements, debt service
    and depreciation or amortization of capital expenditures and other
    similar noncash items.  Operating expenses shall include not less than
    4.0% of gross income for the property encumbered by the Woodlands Deed
    of Trust and not less than 3.5% of gross income for each of the other
    Combined Properties and shall include reserves for replacements of not
    less than $31,000 for the Property encumbered by the Tustin Deed of
    Trust and not less than $23,000 for each of the other Combined
    Properties.  Real estate taxes shall be calculated based upon the
    greater of (i) the current tax bill plus the next subsequent year's
    escalations as permitted under applicable law, or (ii) the estimated
    market value of such Combined Properties (as determined by
    Beneficiary) at the time of any reconveyance described in
    Paragraph 9.36 of this Deed of Trust multiplied by the then current
    tax rate.  Gross income shall not be anticipated for any greater
    period than that approved by generally accepted accounting principles,
    nor shall operating expenses be prepaid.
    
    Nevada Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of May 9, 1997, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Washoe County Nevada,
    as amended by that certain First Modification of Deed of Trust and
    Other Loan Documents dated as of even date herewith, as further
    amended from time to time.
    
    Note:  Collectively (i) that certain Amended and Restated Promissory
    Note dated May 24, 1996 (and deemed made as of, and relating back to,
    March 20, 1996), executed by Trustor in the original principal amount
    of Twenty-Five Million and No/100 Dollars ($25,000,000.00), payable to
    Beneficiary or its order, and all modifications, renewals or
    extensions thereof (the "Multistate Note"), (ii) that certain Amended
    and Restated Promissory Note dated as of May 9, 1997 executed by
    Trustor in the original principal amount of Eight Million Nine Hundred
    Thirteen Thousand Seven Hundred Thirty and 85/100 Dollars
    ($8,913,730.85), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Nevada Note"), and
    (iii) that certain Promissory Note dated as of even date herewith
    executed by Trustor in the original principal amount of Twenty Million
    Nine Hundred Thousand Dollars ($20,900,000), payable to Beneficiary or
    its order, and all modifications, renewals or extensions thereof (the
    "Arizona/California Note").
    
    Obligations:  Any and all of the covenants, promises and other
    obligations (including, without limitation, the Indebtedness) made or
    owing by Trustor to or due to Beneficiary under and/or as set forth in
    the Loan Documents and all of the material covenants, promises and
    other obligations made or owing by Trustor to each and every other
    Person relating to the Property.
    
    Ontario Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of San Bernardino
    County, California, as amended by that certain First Modification of
    Deed of Trust and Other Loan Documents dated as of May 24, 1996, as
    further amended by that certain Second Modification of Deed of Trust
    and Other Loan Documents dated as of May 9, 1997, as further amended
    by that certain Third Modification of Deed of Trust and Other Loan
    Documents dated as of even date herewith, as further amended from time
    to time.
    
    Owner's Affidavit:  That certain Owner's Affidavit dated as of even
    date herewith, executed by Trustor in favor of Beneficiary.
    
    Permitted Exceptions:  All of those matters described on Exhibit B
    attached hereto.
    
    Person:  Any natural person, corporation, firm, association,
    government, governmental agency or any other entity, whether acting in
    an individual, fiduciary or other capacity.
    
    Personalty:  Trustor's right, title and interest in all personal
    property (other than Fixtures) now or hereafter located in, upon or
    about or collected or used in connection with the Property, together
    with all present and future attachments, accessions, replacements,
    substitutions and additions thereto or therefor, and the cash and
    noncash proceeds thereof, including all property listed in the
    Inventory, the Impound Account, all goods, documents, instruments and
    chattel paper, all drawings, plans and specifications, all causes of
    action and recoveries now or hereafter existing for any loss or
    diminution in value of the Property, all licenses, governmental
    authorizations or permits pertaining to the Property or the
    development, ownership, management or operation thereof, all
    trademarks, service marks, designs, logos, trade names, names or
    similar identifications pertaining to the Property, and all accounts,
    contract rights and general intangibles (including, without
    limitation, any insurance proceeds and condemnation awards or
    compensation) arising out of or incident to the ownership, development
    or operation of the Property owned by or in which Trustor has an
    interest including, without limitation, all personal property
    described in the UCC-1 Financing Statement executed by Trustor of even
    date herewith, which is incorporated herein by this reference, and all
    furniture, furnishings, equipment, machinery, construction materials
    and supplies, leasehold interests in personal property and the Leases. 
    Notwithstanding the foregoing, Personalty shall not include any
    proprietary computer software developed by Trustor for the
    interpretation, manipulation or presentation of the information
    comprising the books and records of Trustor.
    
    Post-Closing Agreement:  That certain Post-Closing Actions Agreement
    dated as of even date herewith, executed by Trustor in favor of
    Beneficiary.
    
    Property:  As defined in the above granting paragraph of this Deed of
    Trust.
    
    Receiver:  Any trustee, receiver, custodian, fiscal agent, liquidator
    or similar officer.
    
    Remaining Properties:  Collectively, each of the Combined Properties
    which remain encumbered by any of the Combined Deeds of Trust
    following the requested reconveyance of this Deed of Trust pursuant to
    Paragraph 9.36 of this Deed of Trust and following the prior or
    concurrent reconveyance of any of the other Combined Deeds of Trust
    pursuant to Paragraph 9.36 of any of the other Combined Deeds of
    Trust.
    
    Remediation and Indemnification Agreements:  Collectively, (i) the
    Hazardous Substances Remediation and Indemnification Agreement dated
    as of May 24, 1996 executed by Trustor in favor of Beneficiary in
    connection with the property encumbered by the Milpitas Deed of Trust,
    (ii) the Hazardous Substances Remediation and Indemnification
    Agreement dated as of March 20, 1996, executed by Trustor in favor of
    Beneficiary in connection with the property encumbered by the Ontario
    Deed of Trust, (iii) the Hazardous Substances Remediation and
    Indemnification Agreement dated as of March 20, 1996, executed by
    Trustor in favor of Beneficiary in connection with the property
    encumbered by the Tustin Deed of Trust, (iv) the Hazardous Substances
    Remediation and Indemnification Agreement dated as of March 20, 1996,
    executed by Trustor in favor of Beneficiary in connection with the
    property encumbered by the Woodlands Deed of Trust, (v) the Hazardous
    Substances Remediation and Indemnification Agreement dated as of May
    9, 1997 executed by Trustor in favor of Beneficiary in connection with
    the property encumbered by the Nevada Deed of Trust, (vi) the
    Hazardous Substances Remediation and Indemnification Agreement dated
    as of even date herewith executed by Trustor in favor of Beneficiary
    in connection with the property encumbered by the Fremont Deed of
    Trust, (vii) the Hazardous Substances Remediation and Indemnification
    Agreement dated as of even date herewith executed by Trustor in favor
    of Beneficiary in connection with the property encumbered by the South
    San Francisco Deed of Trust, and (viii) the Hazardous Substances
    Remediation and Indemnification Agreement dated as of even date
    herewith executed by Trustor in favor of Beneficiary in connection
    with the Property.
    
    Rents:  All rents, royalties, revenues, issues, profits, proceeds and
    other income from the Property.
    
    Secondary Interest Rate:  As defined in the Note.
    
    South San Francisco Deed of Trust:  That certain Deed of Trust dated
    as of this date herewith, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of San Mateo County,
    California as amended from time to time.
    
    Tustin Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Orange County,
    California, as amended by that certain First Modification of Deed of
    Trust and Other Loan Documents dated as of May 24, 1996, as further by
    that certain Second Modification of Deed of Trust and Other Loan
    Documents dated as of May 9, 1997, as further amended by that certain
    Third Modification of Deed of Trust and Other Loan Documents dated as
    of even date herewith, as further amended from time to time.
    
    Woodlands Deed of Trust:  That certain Deed of Trust, Security
    Agreement and Fixture Filing with Assignment of Leases, Rents and
    Agreements dated as of March 20, 1996, executed by Trustor for the
    benefit of Beneficiary, recorded in the Official Records of Salt Lake
    County, Utah, as amended by that certain First Modification of Deed of
    Trust and Other Loan Documents dated as of May 24, 1996, as further by
    that certain Second Modification of Deed of Trust and Other Loan
    Documents dated as of May 9, 1997, as further amended by that certain
    Third Modification of Deed of Trust and Other Loan Documents dated as
    of even date herewith, as further amended from time to time.
    
    
    
                               ARTICLE 21
    
                     Representations and Warranties
    
    
          Trustor hereby represents and warrants to Beneficiary
    and Trustee that as of the date of this Deed of Trust and as of the
    date of any subsequent disbursement pursuant to the Loan Documents:
    
          21.1  Title, Authorization and Organization.  Trustor
    (i) is the lawful owner of the Property and holds good and marketable
    title to the Property free and clear of all defects, liens,
    encumbrances, easements, exceptions and assessments, except the
    Permitted Exceptions; (ii) has good, right and lawful authority to
    grant the Property as provided in and by this Deed of Trust; (iii) has
    the requisite power and authority to own, develop and operate the
    Property; (iv) is duly organized, validly existing and in good
    standing under the laws of the State of its organization and is duly
    qualified to do business in the State in which the Land is located;
    and (v) is in compliance with all Laws and Restrictions applicable to
    it.
    
          21.2  Validity of Loan Documents.  The execution,
    delivery and performance by Trustor of the Loan Documents and the
    borrowings evidenced by the Note are within the power of Trustor, have
    been authorized by all requisite corporate or partnership authority
    and will not violate any Laws and Restrictions or any agreement or
    other instrument.  Each of the Loan Documents when executed and
    delivered to Beneficiary, will constitute a legal, valid and binding
    obligation of Trustor enforceable in accordance with its terms.
    
          21.3  Financial Statements.  All financial statements
    and data that have been given to Beneficiary with respect to the
    Property or any Loan Party are true, accurate, complete and correct
    and except as expressly noted to the contrary therein, have been
    prepared in accordance with generally accepted accounting principles
    consistently applied throughout the periods covered thereby.  There
    has been no Material Adverse Change since the date of the most recent
    financial statement given to Beneficiary.
    
          21.4  Other Information.  All reports, papers, data
    and information given to Beneficiary with respect to Loan Parties and
    the Property are accurate, correct and complete.
    
          21.5  Litigation.  There is not now pending against or
    affecting any Loan Party or the Property, nor to the best of Trustor's
    knowledge is there threatened any action, suit or proceeding at law or
    in equity or by or before any administrative agency that, if adversely
    determined, would materially impair or affect (i) the financial
    condition or operations of such Loan Party, or (ii) the condition, use
    or operation of the Property.
    
          21.6  Additional Representations and Warranties. 
    (i) The Property is not used principally or primarily for agricultural
    or grazing purposes; (ii) each Loan Party has filed all federal,
    state, county and municipal income tax returns required to have been
    filed by it and has paid all taxes that have become due pursuant to
    such returns or pursuant to any assessments received by it (and no
    Loan Party knows of any basis for any additional assessment against it
    in respect of such taxes); (iii) all costs for labor and materials for
    the construction of the Improvements have been paid in full other than
    ongoing work for leasehold improvements under Leases approved in
    writing by Beneficiary; (iv) Trustor is not aware of any assessment
    for public improvements which is pending and which could become a lien
    upon the Property; (v) no event has occurred which with the giving of
    notice or the passage of time, or both, would constitute an Event of
    Default under any of the Loan Documents; (vi) Trustor is not a party
    to any agreement or instrument materially and adversely affecting its
    present or proposed business conducted on the Property or the Property
    itself, financial or otherwise; (vii) Trustor is not in default in the
    performance, observance or fulfillment of any of the material
    obligations, covenants or conditions set forth in any such agreement
    or instrument to which it is a party to the extent that the same would
    have a material and adverse effect on the Property or Trustor's
    ability to timely perform its Obligations under the Loan Documents;
    (viii) all Fixtures are permanently affixed to the Improvements and
    Trustor has not executed any financing statement or security
    agreements covering the Fixtures, or any of them, and the costs of all
    Fixtures due as of the date hereof have been paid; (ix) neither the
    Property, nor any part thereof, has sustained, incurred or suffered
    any material damage or destruction; and (x) subject to the Permitted
    Exceptions, the Personalty is owned by Trustor, free and clear of any
    liens, encumbrances, mortgages, security interests, claims and rights
    of others.
    
          21.7  Compliance with Laws.  The Property and the
    proposed and actual use thereof comply with all Laws and Restrictions
    and the Laws and Restrictions contain no unsatisfied conditions
    necessary for the actual use of the Property as it is currently used. 
    Trustor has received no notices of violations of any Laws and
    Restrictions.
    
          21.8  Bankruptcy.  No petition in bankruptcy, petition
    or answer seeking assignment for the benefit of creditors or
    appointment of a Receiver with respect to Trustor has occurred or is
    contemplated, and no reorganization, arrangement, liquidation or
    dissolution or similar relief under the Federal Bankruptcy laws or any
    state laws have been instituted by or against Trustor, and none is
    contemplated.
    
    
                               ARTICLE 22
    
                         Affirmative Covenants
    
    
          Trustor hereby covenants and agrees as follows:
    
          22.1  Obligations of Trustor.  Trustor will (i) timely
    perform, or cause to be timely performed, all the Obligations;
    (ii) maintain and preserve the lien of this Deed of Trust; and
    (iii) forever warrant and defend its grant made herein against any and
    all claims and demands whatsoever.
    
          22.2  Insurance.
    
            A.       Trustor, at its sole cost and expense,
    will keep and maintain for the mutual benefit of Trustor and
    Beneficiary, the following policies of insurance:
    
              (1)    Insurance against loss or damage to the
    Property by fire and other risks covered by insurance commonly known
    as the broad form of extended coverage, including losses sustained by
    reason of riot and civil commotion, vandalism, malicious mischief,
    burglary, theft and mysterious disappearance, flood (if the Property
    is located in a HUD designated special flood hazard area) and against
    such other risks or hazards as Beneficiary from time to time
    reasonably may designate, in an amount equal to one hundred
    percent (100%) of the then "full replacement cost" of the
    Improvements, the Fixtures and the Personalty, without deduction for
    physical depreciation.
    
              (2)    Rental income insurance against loss of
    income in an amount not less than twelve (12) months rental and taxes
    and other operating expense reimbursements or payments at then-current
    income levels.
    
              (3)    Commercial General Liability insurance
    including broad form property damage, contractual liability and
    personal injury or death coverage, with a combined single limit of at
    least $5,000,000.
    
              (4)    "Builders Risk" insurance, during any
    material construction, repair, replacement, renovation or alteration
    of the Improvements, in such amounts as are reasonably approved by
    Beneficiary.
    
              (5)    If applicable, boiler and machinery
    insurance covering boilers and other pressure vessels, the air
    conditioning system, high pressure piping and other machinery and
    equipment required for the operation of the Property.
    
              (6)    Such other insurance, and in such amounts,
    as may from time to time be reasonably required by Beneficiary (but
    excluding earthquake insurance, unless earthquake insurance is
    required pursuant to the terms of any of the Leases).
    
            B.       Trustor shall provide Beneficiary with
    satisfactory evidence of compliance with applicable requirements for
    Worker's Compensation insurance and of employee automobile coverage.
    
            C.       All policies of insurance required by this
    Deed of Trust (i) shall be satisfactory in form and substance to
    Beneficiary and written with companies satisfactory to Beneficiary,
    (ii) shall name Beneficiary as an additional insured as its interests
    may appear, (iii) shall contain a Standard Lender's Loss Payable
    endorsement and other non-contributory standard mortgagee protection
    clauses acceptable to Beneficiary, and at Beneficiary's option, a
    waiver of subrogation rights by the insurer, (iv) shall contain an
    agreement by the insurer that such policy shall not be amended or
    canceled without at least thirty (30) days' prior written notice to
    Beneficiary, (v) shall be in the full replacement cost of the Improve-
    
    ments, without deduction for physical depreciation and (vi) shall
    contain such other provisions as Beneficiary deems reasonably
    necessary or desirable to protect its interests.  Any policies
    containing a coinsurance clause shall include a replacement cost
    endorsement adequate to ensure that the coinsurance clause is rendered
    inoperative.
    
            D.       In the event a blanket policy is submitted
    to satisfy Trustor's responsibilities under this Paragraph 3.2, in
    addition to such other requirements set forth herein, Trustor shall
    deliver to Beneficiary a certificate from such insurer indicating that
    Beneficiary is an insured under such policy and designating the amount
    of such insurance applicable to the Property.
    
            E.       Trustor shall furnish evidence,
    satisfactory to Beneficiary, that (i) all insurance requirements
    (including, without limitation, provisions for waivers of subrogation)
    set forth in the Leases or any other agreements affecting the Property
    shall have been satisfied by each party thereto, and (ii) Trustor's
    insurance coverage is sufficient (assuming the total destruction of
    the Property) to permit Trustor to rebuild the Improvements (including
    basic tenant improvements) and to replace the Fixtures and Personalty
    in such manner as to enable the Property to be operable and rentable
    as it is currently rented and operated, and no tenant shall have the
    right to terminate its lease of any portion of the Property as a
    result of the failure of Trustor to rebuild above-standard tenant
    improvements.
    
            F.       Self-insurance (other than the applicable
    deductibles approved by Beneficiary) shall not be employed to satisfy
    the requirements of this Paragraph 3.2.
    
            G.       All of Trustor's right, title and interest
    in and to all policies of property insurance and any unearned premiums
    paid thereon are hereby assigned (to the fullest extent assignable) to
    Beneficiary who shall have the right, but not the obligation, to
    assign the same to any purchaser of the Property at any foreclosure
    sale.
    
            H.       Not less than thirty (30) days prior to
    the expiration dates of any policy previously furnished pursuant to
    this Paragraph 3.2, Trustor shall provide Beneficiary with duplicate
    originals or certified copies of the renewal policies together with
    evidence satisfactory to Beneficiary of Trustor's payment of the
    applicable premiums.
    
          22.3  Maintenance, Waste and Repair.  Trustor will
    (i) maintain the Property in good order and condition, (ii) promptly
    make all necessary structural and non-structural repairs to the
    Property, (iii) not diminish or materially alter the Improvements, nor
    erect any new buildings, structures or building additions on the
    Property, without the prior written consent of Beneficiary, and
    (iv) not permit any waste of the Property or make any change in the
    use thereof, nor do or permit to be done thereon anything, that may in
    any way impair the security of this Deed of Trust.
    
          22.4  Impositions; Impounds.  Trustor will pay when
    due all Impositions.  Upon an Event of Default, Trustor will pay
    monthly to Beneficiary an amount equal to one-twelfth (1/12th) of the
    annual cost of Impositions together with an amount equal to the
    estimated next hazard and other required insurance premiums.  These
    funds will be held by Beneficiary (and may be commingled with other
    funds of Beneficiary) without interest and will be released to Trustor
    for payment of Impositions and insurance premiums, or directly applied
    to such costs by Beneficiary, as Beneficiary may elect.
    
          22.5  Compliance with Law.  Trustor will promptly and
    faithfully comply with all present and future Laws and Restrictions.
    
          22.6  Books and Records.  Trustor, without expense to
    Beneficiary, will maintain full and complete books of account and
    other records reflecting the results of the operations of the Property
    in accordance with generally accepted accounting principles
    consistently applied, and will furnish or cause to be furnished to
    Beneficiary such financial information concerning the condition of the
    Loan Parties and the Property as Beneficiary shall reasonably request. 
    The following information will be furnished without request:
    
            A.       As soon as available, and in any event
    within thirty (30) days after the close of each fiscal quarter of each
    fiscal year of Trustor, a statement of revenues and expenses relating
    to the rentals and operations of the Property for the applicable
    fiscal quarter just ended, certified by Trustor;
    
            B.       As soon as available, and in any event
    within ninety (90) days after the end of each fiscal year of Trustor,
    an annual operating statement for the Property certified by an
    independent certified public accountant acceptable to Beneficiary and
    a rent roll in the form delivered to Beneficiary in connection with
    the closing of the Loan certified by Trustor reflecting all the
    existing Leases; and
    
            C.       As soon as available, and in any event
    within ninety (90) days after the end of Trustor's fiscal year, a
    balance sheet of Trustor, certified in a manner acceptable to
    Beneficiary.
    
          After the occurrence of an Event of Default, or in the
    event Trustor fails to deliver an annual operating statement for the
    Property certified by an independent certified public accountant
    acceptable to Beneficiary within the time frame set forth in
    Paragraph 3.6.B, above, Beneficiary shall have the right, at all
    reasonable times and upon reasonable notice, to audit the books of
    account and records of any Loan Party, all of which shall be made
    available at Trustor's office during reasonable business hours to
    Beneficiary and Beneficiary's representatives for such purpose, from
    time to time.  If such audit discloses a variance of three per-
    
    cent (3%) or more in income or expenses, the cost of such audit shall
    be paid by Trustor.
    
          22.7  Further Assurances.  Trustor, at any time upon
    the reasonable request of Beneficiary, will at Trustor's expense
    execute, acknowledge and deliver all such additional papers and
    instruments (including, without limitation, a declaration of no
    setoff) and all such further acts and things as may be reasonably
    necessary to carry out the purposes of the Loan Documents and to
    subject to the liens thereof any property intended by the terms
    thereof to be covered thereby and any renewals, additions,
    substitutions or replacements thereto.
    
          22.8  Indemnity and Attorneys' Fees.  Trustor will
    indemnify, defend, protect and hold Beneficiary harmless from any and
    all liability, loss, claims, damage, cost or expense (including,
    without limitation, reasonable attorneys' fees) that Beneficiary may
    or might incur hereunder, or in connection with the making or
    administering of the Loan, the enforcement of any of Beneficiary's
    rights or remedies hereunder or under the other Loan Documents, any
    action taken by Beneficiary hereunder or thereunder, whether or not
    suit is filed, or by reason or in defense of any and all claims and
    demands whatsoever that may be asserted against Beneficiary arising
    out of the Property, or any part thereof or interest therein, or as to
    which it becomes necessary to defend or uphold the lien of this Deed
    of Trust or other Loan Documents.  Should Beneficiary incur any such
    liability, loss, claim, damage, cost or expense, the amount thereof
    with interest thereon at the Secondary Interest Rate shall be payable
    by Trustor immediately without demand, shall be secured by this Deed
    of Trust, and shall be part of the Indebtedness.
    
          22.9  Litigation.  Trustor will promptly give notice
    in writing to Beneficiary of any litigation which may reasonably be
    expected to result in a Material Adverse Change.
    
          22.10  Inspection of Property.  Trustor hereby grants
    to Beneficiary, its agents, employees, consultants and contractors,
    the right to enter upon the Property for the purpose of making any and
    all inspections, reports, tests (including, without limitation, soils
    borings, ground water testing, wells and/or soils analysis), inquiries
    and reviews as Beneficiary (in its sole and absolute discretion) may
    deem necessary to assess the then current condition of the Property;
    provided, however, that Beneficiary shall not conduct any such tests
    (including, without limitation, soil borings, ground water testing,
    wells and/or soils analysis) (i) unless Beneficiary becomes aware of,
    or reasonably suspects, an environmental event on or near the Property
    which could have a material adverse effect on any portion of the
    Property and Trustor refuses or fails to conduct such tests in a
    manner reasonably requested by Beneficiary, or (ii) until after the
    occurrence of an Event of Default under any of the Loan documents or
    the Remediation and Indemnification Agreements.  Beneficiary shall
    provide Trustor with one (1) business day's notice of such entry;
    provided, however, that, subject to the preceding sentence, Trustor's
    consent shall not be required for such entry or for the performance of
    such tests.  All costs, fees and expenses (including those of Benefi-
    
    ciary's legal counsel and consultants) incurred by Beneficiary with
    respect to such inspections, reports, tests, inquiries and reviews
    shall be paid by Trustor to Beneficiary upon demand, shall accrue
    interest at the Secondary Interest Rate until paid, and shall be
    secured by this Deed of Trust.  Beneficiary shall make reasonable
    efforts in the exercise of its entry, inspection, and other rights
    under this Paragraph to avoid interference with the business
    operations of any tenant or licensee occupying space at the Property
    pursuant to Leases permitted by the Loan Documents, and, so long as no
    Event of Default has occurred, shall cooperate with Trustor in setting
    the time for such entry, inspections and tests.
    
          22.11  Contest.  Notwithstanding the provisions of
    Paragraphs 3.4 and 3.5 hereof, Trustor may, at its expense, contest
    the validity or application of any Impositions or Laws and
    Restrictions by appropriate legal proceedings promptly initiated and
    conducted in good faith and with due diligence, provided that
    (i) Beneficiary is reasonably satisfied that neither the Property nor
    any part thereof or interest therein will be in danger of being sold,
    forfeited, or lost as a result of such contest, and (ii) Trustor shall
    have posted a bond or furnished such other security as may be
    reasonably required from time to time by Beneficiary.
    
          22.12  Tax Receipts.  Trustor will deliver to
    Beneficiary, within seven (7) days after the demand made therefor,
    bills showing the payment to the extent then due of all taxes,
    assessments (including, without limitation, those payable in periodic
    installments), and any Imposition that may have become a lien upon the
    Property or any part thereof.
    
          22.13  Additional Information.  Trustor will furnish
    to Beneficiary, within seven (7) days after written request therefor,
    any and all information that Beneficiary may reasonably request
    concerning the Property or the performance by Trustor of the
    Obligations.
    
          22.14  Prepayment.  Trustor may prepay the Loan only
    on the terms and conditions set forth in the Note and Trustor shall
    pay Beneficiary prepayment charges in respect of any prepayment,
    whether voluntary or involuntary, as required by and on the terms and
    conditions set forth in the Note.
    
          22.15  FIRPTA Affidavit.  In the event of any transfer
    by Trustor of its rights hereunder or of any interest in the Property
    otherwise permitted under this Deed of Trust, such transferee shall,
    as an additional condition to such transfer, under penalty of perjury,
    execute and deliver to Beneficiary an affidavit concerning the non-
    foreign status of such transferee substantially in the form required
    to be delivered by Trustor in connection with the funding of the Loan. 
    Nothing in this Paragraph 3.15 shall be deemed a modification or
    waiver of any other provision of any of the Loan Documents limiting,
    prohibiting or otherwise relating to any transfer of any interest in
    the Property or Trustor.
    
          22.16  Tax Service Contract.  Throughout the term of
    the Loan, at Trustor's sole expense, Beneficiary shall be furnished
    tax service contracts issued by a tax reporting agency satisfactory to
    Beneficiary.
    
          22.17  Reimbursement.  Any amount paid by Beneficiary
    for any tax, stamp tax, assessment, water rate, sewer rate, insurance
    premium, repair, rent charge, debt, claim, inspection or lien having
    priority over this Deed of Trust or to in any way protect the security
    for the Loan, shall (i) bear interest at the Secondary Interest Rate
    from the date of payment by Beneficiary, (ii) constitute additional
    indebtedness secured by this Deed of Trust, prior to any right, title
    or interest in or claim upon the Property attaching or accruing
    subsequent to the lien of this Deed of Trust, (iii) be secured by this
    Deed of Trust, and (iv) be payable by Trustor to Beneficiary upon
    demand.
    
          22.18  Plans and Specifications.  Trustor agrees to
    keep at its offices at the Property, and to make available to
    Beneficiary during normal business hours, "As-Built Plans and
    Specifications", or, if unavailable, the final set of plans and
    specifications from which the Improvements were constructed
    ("As-Builts"), certified by a licensed architect or licensed
    contractor as true, correct and complete As-Builts for the
    Improvements.
    
    
                               ARTICLE 23
    
                           Negative Covenants
    
    
            Trustor hereby covenants and agrees as follows:
    
          23.1  Restrictive Uses.  Trustor will not initiate,
    join in, or consent to any change in the current use of the Property
    or in any zoning ordinance, private restrictive covenant, assessment
    proceedings or other public or private restrictions limiting or
    restricting the uses that may be made of the Property or any part
    thereof without the prior written consent of Beneficiary.
    
          23.2  Due on Sale or Encumbrance.
    
            A.       Except as expressly otherwise provided in
    this Paragraph 4.2, in the event that Trustor, without the prior
    written consent of Beneficiary (which consent may be withheld for any
    reason or for no reason or given upon such terms and conditions as
    Beneficiary deems necessary or appropriate, all within Beneficiary's
    absolute discretion), shall sell, convey, assign, transfer, alienate
    or otherwise dispose of or be divested of its title to, or, shall
    mortgage, convey security title to, or otherwise encumber or cause to
    be encumbered, the Property or any part thereof or any interest
    therein in any manner or way, whether voluntary or involuntary, or in
    the event of (a) any merger, consolidation or dissolution involving,
    or the sale or transfer of all or substantially all of the assets of,
    Trustor or any general partner of Trustor, (b) the transfer (at one
    time or over any period of time) of ten percent (10%) or more of the
    voting stock of (i) a corporate Trustor or (ii) any corporate general
    partner of Trustor, (c) the transfer of any general partnership
    interest in Trustor or in any partnership which is a direct or
    indirect general partner of Trustor, or (d) the conversion of any such
    general partnership interest to a limited partnership interest, then
    the entire balance of the Indebtedness, plus the Prepayment Premium
    (as defined in the Note), shall become immediately due and payable at
    the option of Beneficiary.  Trustor hereby covenants not to
    participate in, cause or permit any of the foregoing actions or events
    described in this Paragraph 4.2 without Beneficiary's prior written
    consent.  Consent to one such transfer by Beneficiary shall not be
    deemed a waiver of the right to require such consent to further or
    future transfers.  Any such transferee shall, as a condition of the
    effectiveness of any consent or waiver by Beneficiary hereunder, as a
    covenant of Trustor and such transferee, and in form and substance
    required by Beneficiary, assume all obligations under the Loan
    Documents and the assumption shall not, however, release Trustor, or
    any maker or guarantor of the Note, from any liability thereunder. 
    This provision shall not apply to transfers of title or interest under
    any will or testament or applicable law of descent.
    
            B.       Notwithstanding the foregoing, the
    provisions of this Paragraph 4.2 shall not apply to (i) the sale of
    stock on any recognized public stock exchange in the ordinary course
    of business, (ii) any merger or consolidation of Trustor where the
    surviving company has a Debt Ratio (as defined below) which does not
    exceed the Debt Ratio of Trustor as of the Closing Date, as shown by
    evidence reasonably satisfactory to Beneficiary, and (iii) a public
    tender offer by a Person unaffiliated with Trustor to purchase the
    stock of Trustor.  Notwithstanding anything to the contrary contained
    herein, unless a change in the ownership of Trustor is the result of
    one or more of the acts described in the immediately preceding
    sentence (in which case the prior consent of Beneficiary is not
    required), Beneficiary's prior written consent shall be required in
    the event of a change in the ownership of Trustor (in a single
    transaction or cumulative transactions) such that in excess of 50% of
    Trustor's stock is owned or controlled by a sole shareholder or an
    affiliated group of shareholders ("Sale").  Notwithstanding the
    foregoing, a Sale shall specifically exclude:  (a) the conversion
    ("Conversion") to common stock shares of some or all of the Series A
    convertible preferred stock of Trustor outstanding as of the Closing
    Date (the "Preferred Stock"), (b) any initial sale ("Initial Sale") of
    any of the Preferred Stock to a Person unaffiliated with Trustor which
    occurs either prior to and/or subsequent to any Conversion, and
    (c) any sale of any of the Preferred Stock subsequent to an Initial
    Sale of such Preferred Stock to a Person unaffiliated with Trustor
    which previously acquired some or all of the Preferred Stock in an
    Initial Sale.  As used herein, "Debt Ratio" means the ratio of all
    indebtedness of Trustor and its subsidiaries to the sum of all assets
    of Trustor and it subsidiaries, before depreciation and less the sum
    of any intangible assets. 
    
          23.3  Replacement of Fixtures and Personalty.  Trustor
    will not permit any of the Fixtures or Personalty to be removed at any
    time from the Property without the prior written consent of
    Beneficiary unless actually replaced by articles of equal suitability
    and value owned by Trustor free and clear of any lien or security
    interest.
    
          23.4  No Cooperative or Condominium.  Trustor shall
    not operate the Property or permit the Property to be operated, as a
    cooperative or condominium building or buildings in which the tenants
    or occupants participate in the ownership, control, or management of
    the Property or any part thereof, as tenant stockholders or otherwise.
    
          23.5  Partnership Agreement.  Trustor, if a
    partnership, will not terminate, alter, modify or amend or permit the
    termination, alteration, modification or amendment of its Partnership
    Agreement without Beneficiary's prior written consent.
    
          23.6  Community Facilities District.  Without
    obtaining the prior written consent of Beneficiary, Trustor shall not
    consent to, or vote in favor of, the inclusion of all or any part of
    the Property in any Community Facilities District formed pursuant to
    the Community Facilities District Act, A.R.S. Section 48-701, et seq.,
    as amended from time to time.  Trustor shall immediately give notice
    to Beneficiary of any notification or advice that Trustor may receive
    from any municipality or other third party of any intent or proposal
    to include all or any part of the Property in a Community Facilities
    District.  Beneficiary shall have the right to file a written
    objection to the inclusion of all or any part of the Property in a
    Community Facilities District, either in its own name or in the name
    of Trustor, and to appear at, and participate in, any hearing with
    respect to the formation of any such district.
      <PAGE>
                             ARTICLE 24
    
                      Casualties and Condemnation
    
    
          24.1  Insurance and Condemnation Proceeds.
    
            A.       Trustor will notify Beneficiary in writing
    promptly after loss or damage caused by fire or other casualty to all
    or any part of the Property resulting in damage in excess of $25,000
    per occurrence, and prior to the making of any repairs thereto. 
    Trustor will furnish to Beneficiary within sixty (60) days after such
    loss or damage (a) preliminary plans and specifications for the repair
    and reconstruction of the Property (the "Preliminary Plans and
    Specifications"); and (b) evidence satisfactory to Beneficiary (i) of
    the cost of repair or reconstruction in accordance with the
    Preliminary Plans and Specifications, (ii) that sufficient funds are
    available and/or committed for the benefit of Beneficiary, including
    insurance proceeds, funds provided by the Trustor, payment and
    performance bond, or otherwise, to complete such repair or
    reconstruction, and (iii) that such repair or reconstruction may be
    completed in accordance with all applicable Laws and Restrictions
    within the time frame described in Paragraph 5.1.C.(v) hereof and that
    all necessary permits and approvals have been or will be obtained. 
    Trustor hereby unconditionally and irrevocably waives all rights of a
    property owner under applicable law providing for the allocation of
    condemnation proceeds between a property owner and a lien holder.
    
            B.       In the event of any insured loss in excess
    of Two Hundred Fifty Thousand Dollars ($250,000) or in the event an
    Event of Default, or an event which with the giving of notice or the
    passing of time or both constitutes an Event of Default, shall have
    occurred and be continuing, all insurance proceeds on account of any
    damage to the Property shall be payable to, and deposited with,
    Beneficiary.  Beneficiary, at its sole option, may (i) apply such
    insurance proceeds in payment of the Indebtedness or in satisfaction
    of any other Obligation in such order as Beneficiary may determine,
    (ii) use such insurance proceeds to repair or reconstruct the
    Improvements, (iii) release such insurance proceeds to Trustor for
    repair or reconstruction of the Improvements in accordance with the
    procedures described in Paragraph 5.1.E hereof, or (iv) divide such
    proceeds in any manner among any such application, use or release.  No
    such application, use or release shall, however, extend or postpone
    the due date of any installments under the Note or change the amount
    of such installments or cure or waive any Event of Default or notice
    of Event of Default under the Loan Documents or invalidate any act
    done pursuant to such notice.
    
            C.       Notwithstanding the provisions of Para-
    
    graph 5.1.B hereof, if all or any part of the Property is damaged or
    destroyed or less than all of the Property is taken by any public or
    quasi-public authority through condemnation, eminent domain, deed in
    lieu thereof, or otherwise, Beneficiary shall make the net amount of
    all insurance proceeds and condemnation awards received by Beneficiary
    after deduction of Beneficiary's reasonable costs and expenses, if
    any, in collection of the same and costs associated with Beneficiary's
    review of the Preliminary Plans and Specifications and other costs
    associated with disbursement of such proceeds (the "Net Proceeds")
    available for the repair and reconstruction of the Property (or so
    much thereof as was not condemned) pursuant to the procedures
    described in Paragraph 5.1.E hereof, provided that (i) no Event of
    Default or event which, with the giving of notice or the passage of
    time, or both, would constitute an Event of Default, shall have
    occurred and shall be continuing, (ii) Trustor has complied with the
    provisions of Paragraph 5.1.A hereof and Beneficiary has approved the
    Preliminary Plans and Specifications, (iii) Trustor shall proceed with
    the reconstruction of the Property as nearly as possible to the
    condition it was in immediately prior to the occurrence of such
    casualty or taking (the "Occurrence") and in accordance with the Plans
    and Specifications as promptly as is practicable after the Occurrence,
    but in no event later than four (4) months after the Occurrence,
    (iv) Beneficiary shall be satisfied that such reconstruction can be
    completed no later than twelve (12) months after the Occurrence and at
    least twelve (12) months before the maturity of the Loan,
    (v) Beneficiary shall be satisfied that the reconstruction can be
    completed at a cost which does not exceed the Net Proceeds, or, in the
    event the cost of such restoration exceeds the Net Proceeds, Trustor
    shall have satisfied the requirements set forth in Para-
    
    graph 5.1.F(i) hereof or Paragraph 5.1.F(ii) hereof, (vi) Beneficiary
    shall be satisfied that Trustor (whether with rental loss insurance
    proceeds or otherwise) will continue to be able to timely pay all
    payments as they become due on the Indebtedness during such period of
    repair and reconstruction, (vii) Trustor shall cause such
    reconstruction to be completed with due diligence as promptly as
    possible after commencement, but in no event later than twelve
    (12) months after the Occurrence and at least twelve (12) months
    before the maturity of the Loan, (viii) Beneficiary determines that
    repair or reconstruction is economically feasible and that the
    Property can physically and legally be restored to at least its value
    as of the Closing Date, (ix) Trustor shall have entered into a guaran-
    
    teed maximum price general construction contract acceptable in all
    respects to Beneficiary for completion of the repair or
    reconstruction, which contract must include provision for a retainage
    of not less than ten percent (10%) until full completion of the repair
    or reconstruction, and (x) the insurer does not deny liability to any
    named insured.
    
            D.       Beneficiary shall be entitled to settle
    and adjust all insurance claims, and Beneficiary may deduct and retain
    from the proceeds of any insurance the amount of all expenses incurred
    by Beneficiary in connection with any settlement or adjustment. 
    Notwithstanding the foregoing, so long as no Event of Default or event
    which, with the giving of notice or the passage of time or both, would
    constitute an Event of Default shall have occurred and be continuing,
    Trustor may settle directly with the insurer any insurance claims
    involving an amount less than Two Hundred Fifty Thousand Dollars
    ($250,000) so long as (i) Trustor applies all insurance proceeds to
    reconstruction of the Property, (ii) Trustor promptly and diligently
    pursues the repairs to completion, and (iii) Trustor follows the
    provisions of Paragraph 5.1.A hereof.
    
            E.       The Net Proceeds and any additional funds
    deposited by Trustor with Beneficiary shall constitute additional
    security for the Loan.  Trustor shall execute, deliver, file and/or
    record, at its own expense, such documents and instruments as
    Beneficiary deems necessary or advisable to grant to Beneficiary a
    perfected, first priority security interest in the Net Proceeds and
    such additional funds.  Provided that Trustor is otherwise entitled to
    receive the Net Proceeds pursuant to the terms and provisions of this
    Deed of Trust, Beneficiary or, at Beneficiary's option, a disbursing
    agent (the "Disbursing Agent") selected by Beneficiary (whose fees and
    expenses shall be paid by Trustor), shall pay the Net Proceeds to
    Trustor from time to time during the course of the restoration,
    subject to the following terms and conditions:
    
              (1)    The work shall be administered and
    overseen by an architect or engineer approved by Beneficiary (the
    "Architect").  Complete copies of the plans and specifications for the
    work (the "Plans and Specifications"), approved by all governmental
    authorities whose approval is required, and bearing the signed
    approval thereof by the Architect and accompanied by the Architect's
    signed estimate, bearing the Architect's seal, of the entire cost of
    completing the work, shall be delivered to Beneficiary;
    
              (2)    Each request for payment shall be made
    upon seven (7) day's prior written notice to Beneficiary or the
    Disbursing Agent and shall be accompanied by a certificate to be made
    by the Architect stating that (i) all of the work completed has been
    done in compliance with the Plans and Specifications, as approved by
    Beneficiary, (ii) the sum requested is justly required to reimburse
    Trustor for payments by Trustor to, or is justly due to, the
    contractor, subcontractors, materialmen, laborers, engineers,
    architects or other persons rendering services and materials for the
    work (giving a brief description of such services and materials) and,
    when added to all sums previously paid out by Beneficiary or the
    Disbursing Agent, does not exceed the value of the work done to the
    date of such certificate, and (iii) the amount of such proceeds
    remaining with Beneficiary are sufficient on completion of the work to
    pay for the same in full (giving in such reasonable detail as
    Beneficiary may require an estimate of the cost of such completion);
    
              (3)    Each request shall be accompanied by
    waivers of lien satisfactory to Beneficiary and the Disbursing Agent
    covering that part of the work for which payment or reimbursement is
    being requested and, if required by Beneficiary or the Disbursing
    Agent, by a search prepared by a title company satisfactory to
    Beneficiary or the Disbursing Agent, that there has not been filed
    with respect to the Property any mechanics', materialmen's or other
    liens;
    
              (4)    The request for any payment after the work
    has been completed shall be accompanied by a copy of any certificate
    or certificates required by any Laws and Restrictions for legal
    occupancy of the Improvements;
    
              (5)    Trustor shall deliver to Beneficiary or
    the Disbursing Agent certified or photostatic copies of all permits
    and approvals required by any Laws and Restrictions in connection with
    the commencement and conduct of the work; and
    
              (6)    Trustor shall deliver to Beneficiary or
    the Disbursing Agent a surety bond for and/or guaranty of the payment
    for and completion of the work, which bond or guaranty shall be in
    form and substance satisfactory to Beneficiary and in an amount no
    less than the Architect's estimate of the entire cost of completing
    the work.
    
            F.       Notwithstanding anything to the contrary
    contained herein or in any of the insurance policies, all proceeds
    paid to Trustor under such policies shall immediately be delivered to
    Beneficiary.  If the Net Proceeds exceed the costs of completion of
    the restoration of the Property, such excess proceeds shall belong and
    be retained by and/or paid over to Beneficiary to be applied against
    the Indebtedness.  If at any time the Net Proceeds shall not, in
    Beneficiary's opinion, be sufficient to pay in full the balance of the
    costs which will be incurred in connection with the repair and
    reconstruction of the Property and all payments as they come due on
    the Indebtedness and all other obligations which are or may be secured
    by a lien on the Property during the reconstruction period, Trustor
    shall, prior to receiving any further disbursement, either
    (i) complete, using its own funds and not borrowed funds, such portion
    of the reconstruction as shall be sufficient to render the Net
    Proceeds sufficient to complete the reconstruction, or (ii) deposit
    the deficiency with Beneficiary before any further disbursement of the
    Net Proceeds shall be made, which deficiency deposit shall be held by
    Beneficiary in an interest bearing special account and shall be
    disbursed on the same conditions applicable to the Net Proceeds. 
    Beneficiary shall remit to Trustor the balance, if any, of any such
    deficiency deposit remaining after completion of the reconstruction.
    
          24.2  Additional Provisions Relating to Condemnation. 
    Trustor, immediately upon obtaining knowledge of the commencement of
    any proceedings for the condemnation of the entire Property or any
    material part thereof, will notify Trustee and the Beneficiary of the
    pendency of such proceedings.  Trustee and Beneficiary may participate
    in any such proceedings and Trustor from time to time will deliver to
    Beneficiary all instruments requested by Beneficiary to permit such
    participation.  In the event of such condemnation proceedings, the
    award or compensation payable is hereby assigned to and shall be paid
    to Beneficiary.  Beneficiary shall be under no obligation to question
    the amount of any such award or compensation and may accept the same
    in the amount in which the same shall be paid.  In any such
    condemnation proceedings Beneficiary may be represented by counsel
    selected by Beneficiary, the cost of such counsel to be borne by
    Trustor.  The proceeds of any award or compensation so received shall,
    subject to Paragraph 5.1.C hereof as it relates to condemnation, and
    at the option of Beneficiary, either be applied to the prepayment of
    the Indebtedness or be paid over to the Trustor for restoration of the
    Improvements in accordance with the provisions of Paragraph 5.1.E
    hereof.  Trustor hereby unconditionally and irrevocably waives all
    rights of a property owner under applicable Arizona law providing for
    the allocation of condemnation proceeds between a property owner and a
    lien holder.
          
                               ARTICLE 25
    
             Events of Default and Remedies of Beneficiary
    
    
          25.1  Events of Default.
    
            A.       If one or more of the following events
    shall have occurred and be continuing:
    
              (1)    Trustor shall fail to pay when due any
    part of the Indebtedness;
    
              (2)    Trustor shall fail to timely observe,
    perform or discharge any Obligation contained in any of the Loan
    Documents, any agreement relating to the Property or any other loan
    documents with respect to the Property on its part to be performed or
    observed, other than as described in Paragraphs 6.1.A(1), (3), (4),
    (5), (6), (7) and (8), and any such failure shall remain unremedied
    for thirty (30) days or such lesser period as may be otherwise
    specified in the applicable Loan Document (the "Grace Period") after
    notice to Trustor of the occurrence of such failure; provided,
    however, that the Grace Period may be extended to ninety (90) days if: 
    (a) Beneficiary determines in good faith that (i) such default cannot
    be cured within the Grace Period but can be cured within ninety
    (90) days, (ii) no lien or security interest created by the Loan
    Documents shall be impaired prior to the completion of such cure, and
    (iii) Beneficiary's immediate exercise of any remedies provided
    hereunder or by law is not necessary for the protection or
    preservation of the Property or Beneficiary's security interest
    therein, and (b) Trustor shall immediately commence and diligently
    pursue the cure of such default;
    
              (3)    Trustor, as lessor or sublessor, as the
    case may be, shall assign the rents or income of the Property or any
    part thereof (other than to Beneficiary) without first obtaining the
    written consent of Beneficiary;
    
              (4)    Any representation or warranty made by
    Trustor in, under or pursuant to the Loan Documents was false or
    misleading in any material respect as of the date on which such
    representation or warranty was made or deemed remade, and Trustor does
    not cause to be taken and completed within thirty (30) days following
    notice of such breach any and all action required to cause such
    representation or warranty to be true and correct in all respects as
    originally made;
    
              (5)    (i) Any claim or lien shall be filed
    against the Property or any part thereof, whether or not such lien
    shall be prior to this Deed of Trust, which shall be maintained for a
    period of thirty (30) days without discharge, satisfaction or adequate
    bonding in accordance with the terms of this Deed of Trust; (ii) the
    existence of any interest in the Property other than the Permitted
    Exceptions, those of Trustor, Trustee, Beneficiary and any tenants in
    the Property; or (iii) the sale, hypothecation, conveyance or other
    disposition of the Property without the prior written consent of
    Beneficiary except as the result of the condemnation of a non-material
    part of the Property as set forth in Paragraph 5.1 above or as
    otherwise expressly permitted under the Loan Documents; 
    
              (6)    Any of the Loan Documents, at any time
    after their respective execution and delivery and for any reason,
    other than an act or omission of Beneficiary, shall cease to be in
    full force and effect or be declared null and void, or shall cease to
    constitute valid and subsisting liens and/or valid and perfected
    security interests in and to the Property, or Trustor shall contest or
    deny in writing that it has any further liability or obligation under
    any of the Loan Documents;
    
              (7)    The failure of Trustor to observe the
    provisions of Paragraph 4.2 hereof; and/or
    
              (8)    An "Event of Default" occurs under any one
    or more of the Woodlands Deed of Trust, the Milpitas Deed of Trust,
    the Ontario Deed of Trust, the Tustin Deed of Trust, the Fremont Deed
    of Trust, the Nevada Deed of Trust and/or the South San Francisco Deed
    of Trust.
    
          THEN and in any such event Beneficiary may, by written
    notice delivered to Trustor, which notice specifically states the
    occurrence of an Event of Default, declare Trustor to be in default. 
    Upon the occurrence of such event and the giving of such notice, the
    same shall constitute an event of default (an "Event of Default").
    
            B.       It shall constitute an Event of Default
    hereunder without the requirement of any notice if one or more of the
    following events shall have occurred and be continuing:
    
              (1)    (i) The entry of an order for relief under
    Title 11 of the United States Code as to Trustor, any general partner
    of Trustor, any parent company of such partner, or any owner of the
    Property or any interest therein or the adjudication of Trustor, any
    general partner of Trustor, or any owner of the Property as insolvent
    or bankrupt pursuant to the provisions of any state insolvency or
    bankruptcy act; (ii) the commencement by Trustor, any general partner
    of Trustor, or any parent company of such partner of any case,
    proceeding or other action seeking any reorganization, arrangement,
    composition, adjustment, liquidation, dissolution or similar relief
    for itself under any present or future statute, law or regulation
    relating to bankruptcy, insolvency, reorganization or other relief for
    debtors; (iii) consent to, acquiescence in or attempt to secure the
    appointment of any Receiver of all or any substantial part of its
    properties or of the Property by Trustor, any general partner of
    Trustor, any parent company of such partner, or any owner of the
    Property or any interest therein; (iv) Trustor, any general partner of
    Trustor, or any parent company of such partner shall generally not pay
    its debts as they become due or shall admit in writing its inability
    to pay its debts or shall make a general assignment for the benefit of
    creditors; or (v) Trustor, any general partner of Trustor, or any
    parent company of such partner shall take any action to authorize any
    of the acts set forth above; or
    
              (2)    Any case, proceeding or other action
    against Trustor, any general partner of Trustor, any parent company of
    such partner, or any owner of Property or any interest therein shall
    be commenced seeking to have an order for relief entered against such
    party as a debtor or seeking any reorganization, arrangement,
    composition, adjustment, liquidation, dissolution or similar relief
    for itself under any present or future statute, law or regulation
    relating to bankruptcy, insolvency, reorganization or other relief for
    debtors, or seeking the appointment of any Receiver for Trustor, any
    general partner thereof, or any parent company of such partner or for
    all or any substantial part of its property or the Property, and such
    case, proceeding or other action remains undismissed for an aggregate
    of sixty (60) days (whether or not consecutive) or Trustor or general
    partner or parent company during the period of its ownership fails to
    proceed diligently during such sixty (60) day period to have such
    proceeding or other action dismissed.
    
            C.       Upon the occurrence of any Event of
    Default, Beneficiary may at any time declare all of the Indebtedness
    to be due and payable and the same shall thereupon become immediately
    due and payable, together with any prepayment fee due in accordance
    with the terms of the Note, without any further presentment, demand,
    protest or notice of any kind.  Beneficiary may in its sole
    discretion, also do any of the following:
    
              (1)    in person, by agent, or by a Receiver, and
    without regard to the adequacy of security, the solvency of Trustor or
    the condition of the Property, enter upon and take possession of the
    Property, or any part thereof, in its own name or in the name of
    Trustee and do any acts which Beneficiary deems necessary to preserve
    the value, marketability or rentability of the Property; sue for or
    otherwise collect the rents, issues and profits therefrom, including
    those past due and unpaid, and apply the same, less cost and expenses
    of operation and collection, including, without limitation, reasonable
    attorneys' fees, against the Indebtedness, all in such order as
    Beneficiary may determine.  The entering upon and taking possession of
    said property, the collection of such rents, issues and profits and
    the application thereof as aforesaid shall not cure or waive any
    default or notice of default hereunder or invalidate any act done
    pursuant to such notice;
    
              (2)    commence an action to foreclose this Deed
    of Trust in the manner provided under this Deed of Trust or by law;
    
              (3)    with respect to any Personalty, proceed as
    to both the real and personal property in accordance with
    Beneficiary's rights and remedies in respect of the Land, or proceed
    to sell said Personalty separately and without regard to the Land in
    accordance with Beneficiary's rights and remedies as to personal
    property; and/or
    
              (4)    deliver to Trustee a written declaration
    of default and demand for sale, and a written notice of default and
    election to cause the Property to be sold, which notice Trustee or
    Beneficiary shall cause to be duly filed for record.
    
          25.2  Power of Sale.
    
            A.       Should Beneficiary elect to foreclose by
    exercise of the power of sale herein contained, Beneficiary shall also
    deposit with Trustee this Deed of Trust and the Note and such receipts
    and evidence of expenditures made and secured hereby as Trustee may
    require, and notice of default having been given as then required by
    law, and after lapse of such time as may then be required by law,
    after recordation of such notice of default, Trustee, without demand
    on Trustor, shall, after notice of sale having been given as required
    by law, sell the Property at the time and place of sale fixed by it in
    said notice of sale, either as a whole or in separate parcels as
    Beneficiary shall determine, and in such order as Beneficiary may
    determine, at public auction to the highest bidder.  Beneficiary may,
    in its sole discretion, designate the order in which the Property
    shall be offered for sale or sold through a single sale or through two
    or more successive sales, or in any other manner Beneficiary deems to
    be in its best interest.  If Beneficiary elects more than one sale or
    other disposition of the Property, Beneficiary may at its option cause
    the same to be conducted simultaneously or successively, on the same
    day or at such different days or times and in such order as
    Beneficiary may deem to be in its best interest, and no such sale
    shall terminate or otherwise affect the lien of this Deed of Trust on
    any part of the Property not then sold until all Indebtedness secured
    hereby has been fully paid.  If Beneficiary elects to dispose of the
    Property though more than one sale, Trustor shall pay the costs and
    expenses of each such sale of its interest in the Property and of any
    proceedings where the same may be made.  Trustee may postpone sale of
    all or any part of the Property by public announcement at such time
    and place of sale, and from time to time thereafter may postpone such
    sale by public announcement at the time fixed by the preceding
    postponement, and without further notice make such sale at the time
    fixed by the last postponement; or Trustee may, in its discretion,
    give a new notice of sale.  Beneficiary may rescind any such notice of
    default at any time before Trustee's sale by executing a notice of
    rescission and recording the same.  The recordation of such notice
    shall constitute a cancellation of any prior declaration of default
    and demand for sale and of any acceleration of maturity of Indebted-
    
    ness affected by any prior declaration or notice of default.  The
    exercise by Beneficiary of the right of rescission shall not
    constitute a waiver of any default then existing or subsequently
    occurring, or impair the right of Beneficiary to execute other
    declarations of default and demand for sale, or notices of default and
    of election to cause the Property to be sold, nor otherwise affect the
    Note or this Deed of Trust, or any of the rights, obligations or
    remedies of Beneficiary or Trustee hereunder or thereunder.  After
    sale Trustee shall deliver to such purchaser its deed conveying the
    property so sold, but without any covenant or warranty, express or
    implied.  The recitals in such deed of any matters or facts shall be
    conclusive proof of the truthfulness thereof.  Any Person, including,
    without limitation, Trustor, Trustee or Beneficiary, may purchase at
    such sale.  If allowed by law, Beneficiary, if it is the purchaser,
    may turn in the Note at the amount owing therein toward payment of the
    purchase price (or for endorsement of the purchase price as a payment
    on the Note if the amount owing thereon exceeds the purchase price). 
    Trustor hereby expressly waives any right of redemption after sale
    that Trustor may have at the time of sale or that may apply to the
    sale.  Trustor hereby expressly waives all rights of marshalling with
    respect to each of the Combined Properties that Trustor may have in
    the event of foreclosure hereunder or under any of the other Combined
    Deeds of Trust.
    
            B.       Trustee, upon such sale, shall make
    (without any covenant or warranty, express or implied), execute and
    after due payment made, deliver to the purchaser, its heirs or
    assigns, a deed or other record of interest, as the case may be, in
    and to the property so sold that shall convey to the purchaser all the
    title and interest of Trustor in the Property (or part thereof sold),
    and shall apply the proceeds of such sale in payment, first, of the
    expenses of such sale together with the reasonable expenses of the
    trust, including, without limitation, attorneys' fees, that shall
    become due upon any default made by Trustor, and also such sums, if
    any, as Trustee or Beneficiary shall have paid for procuring a search
    of the title to the Property, or any part thereof, subsequent to the
    execution of this Deed of Trust; and in payment, second, of the
    Indebtedness then remaining unpaid, and the amount of all other monies
    with interest thereon agreed or provided to be paid by Trustor; and
    the balance or surplus of such proceeds of sale Trustee shall pay to
    Trustor, its successors or assigns as their interest may appear.
    
            C.       The purchaser at the Trustee sale shall be
    entitled to immediate possession of the Property as against Trustee or
    any other persons in possession and shall have the right to summary
    proceedings to obtain possession provided in Title 12, Chapter 8,
    Article 4, Arizona Revised Statutes, or otherwise, together with costs
    and reasonable attorneys fees.  Each provision of applicable law
    relating to this Deed of Trust is and shall remain applicable to the
    respective rights and obligations of Trustor, Beneficiary and Trustee
    and no term or provision hereof shall limit or restrict such rights or
    obligations.  The omission of any express provision restating the
    applicable law herein shall not constitute or render the same
    inapplicable or waive the same.  All provisions of law relating to
    this Deed of Trust are incorporated by reference herein.  To the
    extent permitted by law, an action may be maintained by Beneficiary to
    recover a deficiency judgment for any balance due hereunder.  In lieu
    of sale pursuant to the power of sale conferred hereby, this Deed of
    Trust may be foreclosed in the same manner provided by law for the
    foreclosure of mortgages on real property and Beneficiary shall have
    all rights and remedies available to it pursuant to such laws.
    
    
            D.       Acknowledgement of Due Process.  TRUSTOR
    UPON EXECUTION AND DELIVERY OF THIS DEED OF TRUST WAS INFORMED THAT
    CERTAIN PARAGRAPHS HEREOF GRANT A POWER OF SALE AND PROVIDE FOR
    SUMMARY FORECLOSURE PROCEEDING AT THE ELECTION OF BENEFICIARY UPON AN
    EVENT OF DEFAULT.  AS A CONDITION PRECEDENT TO OBTAINING THE LOAN AND
    IN CONSIDERATION THEREOF, TRUSTOR SPECIFICALLY ACKNOWLEDGES THAT SUCH
    PROCEEDING MAY NOT GRANT THE RIGHT TO NOTICE AND OPPORTUNITY TO BE
    HEARD IN ANY JUDICIAL PROCEEDING IN A COURT HAVING JURISDICTION OF THE
    PARTIES AND THE SUBJECT MATTERS PRIOR TO THE COMMENCEMENT OF SUCH
    PROCEEDINGS AND OF THE POWER OF SALE HEREIN GRANTED.  TRUSTOR
    REPRESENTS AND WARRANTS THAT IT IS AN ENTITY SOPHISTICATED IN THE
    FINANCING OF COMMERCIAL PROPERTIES OF THE NATURE CONSTITUTING THE
    PROPERTY AND HAS BEEN FULLY REPRESENTED BY COUNSEL IN THIS MATTER AND
    HAS BEEN ADVISED OF THE TERMS AND CONDITIONS OF THIS DEED OF TRUST AND
    THE SPECIFIC PROVISIONS OF THIS DEED OF TRUST AS DESCRIBED ABOVE.
    
    
            E.       In any case in which, under the provisions
    of this Deed of Trust, Beneficiary has a right to institute a
    trustee's sale or foreclosure proceedings, whether before or after the
    whole Indebtedness is declared to be immediately due as aforesaid, or
    whether before or after the institution of legal proceedings to
    foreclose the lien hereof or before or after sale thereunder,
    forthwith upon demand of Beneficiary, Trustor shall surrender to
    Beneficiary and Beneficiary shall be entitled to take actual
    possession of the Property or any part thereof personally, or by its
    agents or attorneys, as for condition broken, and Beneficiary in its
    discretion may, with or without force and with or without process of
    law, enter upon and take and maintain possession of all or any part of
    the Property, together with all documents, books, records, papers and
    accounts of Trustor or then owners of the Property relating thereto,
    and may exclude Trustor, its agents or servants, wholly therefrom and
    may, as attorney-in-fact or agent of Trustor, or in its own name as
    Beneficiary and under the powers herein granted, hold, operate, manage
    and control the Property and conduct the business, if any, thereof,
    either personally or by its agents, and with full power to use such
    measures, legal or equitable, as in its discretion or in the
    discretion of its successors or assigns may be deemed proper or
    necessary to enforce the payment of security of the avails, rents,
    issues and profits of the Property, including actions for the recovery
    of rent, actions in forcible detainer and actions in distress for
    rent, if an available remedy, hereby granting full power and authority
    to exercise each and every of the rights, privileges and powers herein
    granted at any and all times hereafter, without notice to Trustor, and
    with full power to cancel or terminate any lease or sublease for any
    cause or on any ground which would entitle Trustor to cancel the same,
    to elect to disaffirm any lease or sublease made subsequent to this
    Deed of Trust or subordinated to the lien hereof, to make all
    necessary or proper repairs, betterments and improvements to the
    Property as to it may seem judicious, insure and reinsure the same and
    all risks incidental to Beneficiary's possession, operation and
    management thereof and to receive all of such avails, rents, issues
    and profits.  Beneficiary shall not be obligated to perform or
    discharge, nor does it hereby undertake to perform or discharge, any
    obligation, duty or liability under any leases and Trustor shall and
    does hereby agree to indemnify and hold Beneficiary harmless of and
    from any and all liability, loss or damage which it may or might incur
    under said leases or under or by reason of the assignment thereof and
    of and from any and all claims and demands whatsoever which may be
    asserted against it by reason of any alleged obligations or
    undertakings on its part to perform or discharge any of the terms,
    covenants or agreements contained in said leases.  Should Beneficiary
    incur any such liability, loss or damage under said leases or under or
    by reason of the assignment thereof, or in the defense of any claims
    or demands, the amount thereof, including costs, expenses and
    reasonable attorneys' fees shall be secured hereby, and Trustor shall
    reimburse Beneficiary therefor immediately upon demand.  Trustor shall
    have no obligation to indemnify Beneficiary as to any claim or demand
    arising from the gross negligence or willful misconduct of Beneficiary
    or any employee, agent, representative or contractor of Beneficiary.
    
            F.       Beneficiary, in the exercise of the rights
    and powers hereinabove conferred upon it by Paragraphs 6.2.E and 8.1
    hereof, shall have full power to use and apply the avails, rents,
    issues and profits of the Property to the payment of or on account of
    the following, in such order as Beneficiary may determine:
    
            (1)      to the payment of the reasonable operating
            expenses of said Property, including cost of
            management and leasing thereof (which shall include
            reasonable compensation to  Beneficiary's agent or
            agents, if management be delegated to an agent or
            agents, and shall also include lease commissions and
            other compensation and expenses of seeking and
            procuring tenants and entering into leases),
            established claims for damages, if any, and premiums
            on insurance hereinabove authorized;
    
            (2)      to the payment of taxes and special
            assessments now due or which may hereafter become
            due on said Property;
    
            (3)      to the payment of all repairs, decorating,
            renewals, replacements, alterations, additions,
            betterments and improvements reasonably necessary
            for the continued operation of said Property,
            including the cost from time to time of installing
            or replacing refrigeration and gas or electric
            heating therein, and of placing said property in
            such condition as will, in the judgment of
            Beneficiary, make it readily rentable;
    
            (4)      to the payment of any Indebtedness or any
            deficiency which may result from any foreclosure
            sale; and
    
            (5)      the remainder to be paid to Trustor or as
            may be required by law.
    
    
          25.3  Proof of Default.  In the event of a sale of the
    Property, or any part thereof, and the execution of a deed therefor,
    the recital therein of default, and of recording notice of default and
    election of sale, and of the elapsing of the required time (if any)
    between the foregoing recording and the following notice, and of the
    giving of notice of sale, and of a demand by Beneficiary, or its
    successors or assigns, that such sale should be made, shall be
    conclusive proof of such default, recording, election, elapsing of
    time, and of the due giving of such notice, and that the sale was
    regularly and validly made on due and proper demand by Beneficiary,
    its successors or assigns.  Any such deed or deeds with such recitals
    therein shall be effective and conclusive against Trustor, its
    successors and assigns, and all other Persons.  The receipt for the
    purchase money recited or contained in any deed executed to the
    purchaser as aforesaid shall be sufficient to discharge such purchaser
    from all obligations to see to the proper application of the purchase
    money.
    
          25.4  Protection of Security.  If an Event of Default
    shall have occurred and be continuing, then Beneficiary or Trustee,
    but without obligation so to do and without notice to or demand upon
    Trustor and without releasing Trustor from any obligations or defaults
    hereunder, may:  (i) perform any act in such manner and to such extent
    as either may deem necessary to protect the security hereof,
    Beneficiary and Trustee being authorized to enter upon the Property
    for such purpose; (ii) appear in and defend any action or proceeding
    purporting to affect, in any manner whatsoever, the obligations or the
    Indebtedness, the security hereof or the rights or powers of
    Beneficiary or Trustee; (iii) pay, purchase or compromise any
    encumbrance, charge or lien that in the judgment of Beneficiary or
    Trustee is prior or superior hereto; and (iv) in exercising any such
    powers, pay necessary expenses, employ counsel and pay reasonable
    attorneys' fees.  Trustor agrees that all sums expended by Trustee or
    Beneficiary pursuant to this paragraph, together with interest at the
    Secondary Interest Rate from the date of expenditure by Beneficiary,
    shall be added to the principal amount of the Indebtedness secured by
    the Loan Documents and this Deed of Trust and shall be payable by
    Trustor to Beneficiary upon demand.
    
          25.5  Receiver.  If an Event of Default shall have
    occurred and be continuing, Beneficiary, as a matter of strict right
    and without notice to Trustor or anyone claiming under Trustor, and
    without regard to the then value of the Property, shall have the right
    to apply ex parte to any court having jurisdiction to appoint a
    Receiver to enter upon and take possession of the Property, and
    Trustor hereby waives notice of any application therefor, provided a
    hearing to confirm such appointment with notice to Trustor is set
    within the time required by law.  Any such Receiver shall have all the
    powers and duties of Receivers in like or similar cases and all the
    powers and duties of Beneficiary in case of entry as provided in this
    Deed of Trust, and shall continue as such and exercise all such powers
    until the date of confirmation of sale, unless such receivership is
    sooner terminated.  Beneficiary's right to a Receiver as set forth in
    this Paragraph 6.5, shall be absolute and unconditional once an Event
    of Default occurs and said Receiver may be obtained in any judicial
    foreclosure, suit for specific performance or in any other law suit to
    enforce this Deed of Trust in any manner or in any other independent
    and/or separate action brought by Beneficiary regardless of whether
    Beneficiary seeks any relief in such action other than the appointment
    of a receiver and in that respect, Trustor waivers any express or
    implied requirement under common law or A.R.S. Section 12.1241 that a
    receiver may be appointed only ancillary to other judicial or non-
    judicial relief.  This right is created by this Deed of Trust and is a
    contractual right between the parties and is cumulative of and shall
    not affect in any way the right of Beneficiary given by law for the
    appointment of a Receiver.  It is agreed that time is of the essence
    in the performance of this Deed of Trust.
    
          25.6  Remedies Cumulative.  All remedies of
    Beneficiary provided for herein are cumulative and shall be in
    addition to any and all other rights and remedies provided in the
    other Loan Documents or by law, including, without limitation, any
    right of offset.  The exercise of any right or remedy by Beneficiary
    hereunder shall not in any way constitute a cure or waiver of default
    hereunder or under the Loan Documents, or invalidate any act done
    pursuant to any notice of default, or prejudice Beneficiary in the
    exercise of any of its rights hereunder or under the Loan Documents. 
    The entering upon or taking possession of the Property, collections of
    the Rents and Proceeds and the application thereof as permitted in
    this Deed of trust shall not cure or waive any Event of Default or
    notice of Trustee's sale or invalidate any act done pursuant to such
    notice.  Beneficiary shall have all of the rights provided for in
    Arizona Revised Statutes Sections 33-702B and 33-807, or otherwise.
    
          25.7  Curing of Defaults.  If Trustor shall at any
    time fail to perform or comply with any of the terms, covenants and
    conditions required on Trustor's part to be performed and complied
    with under this Deed of Trust, any of the other Loan Documents or any
    other agreement that, under the terms of this Deed of Trust, Trustor
    is required to perform, then Beneficiary, and without waiving or
    releasing Trustor from any of the Obligations, may, in its sole
    discretion:
    
                                      (i)  
        make any payments thereunder payable by Trustor and
    take out, pay for and maintain any of the insurance policies provided
    for therein; and/or
    
                                     (ii)  
        after the expiration of any applicable grace period
    and subject to Trustor's rights to contest certain obligations
    specifically granted hereby, perform any such other acts thereunder on
    the part of Trustor to be performed and enter upon the Property for
    such purpose.
    
    All sums so paid out of Beneficiary's own funds and all reasonable
    costs and expenses incurred and paid by Beneficiary in connection with
    the performance of any such act, together with interest on unpaid
    balances thereof at the Secondary Interest Rate from the respective
    dates of Beneficiary's making of each such payment, shall be added to
    the principal of the Indebtedness, shall be secured by the Loan
    Documents and by the lien of this Deed of Trust, prior to any right,
    title or interest in or claim upon the Property attaching or accruing
    subsequent to the lien of this Deed of Trust, and shall be payable by
    Trustor to Beneficiary on demand.
    
                                      
                               ARTICLE 26
    
                 Security Agreement and Fixture Filing
    
    
          26.1  Grant of Security Interest.  Trustor hereby
    grants to Beneficiary a security interest in and to all Trustor's
    right, title and interest now owned or hereafter acquired in and to
    the Personalty and the Fixtures (collectively, the "Collateral"), to
    secure the payment and performance of the Obligations.
    
          26.2  Remedies.  This Deed of Trust constitutes a
    security agreement with respect to the Collateral in which Beneficiary
    is hereby granted a security interest.  In addition to the rights and
    remedies provided under this Deed of Trust, Beneficiary shall have all
    of the rights and remedies of a secured party under the Arizona
    Uniform Commercial Code (the "Commercial Code") as well as all other
    rights and remedies available at law or in equity.  Trustor hereby
    agrees to execute and deliver on demand and irrevocably constitutes
    and appoints Beneficiary the attorney-in-fact of Trustor to, at
    Trustor's expense, execute, deliver and, if appropriate, to file with
    the appropriate filing officer or office such security agreements,
    financing statements, continuation statements or other instruments as
    Beneficiary may request or require in order to impose, perfect or
    continue the perfection of the lien or security interest created
    hereby.  Upon the occurrence of any Event of Default, Beneficiary
    shall have (i) the right to cause any of the Collateral which is
    personal property to be sold at any one or more public or private
    sales as permitted by applicable law and to apply the proceeds thereof
    to the Indebtedness or any other monetary obligation of Trustor to
    Beneficiary, and (ii) the right to apply to the Indebtedness or any
    other monetary obligation of Trustor to Beneficiary, any Collateral
    which is cash, negotiable documents or chattel paper.  Any such
    disposition may be conducted by an employee or agent of Beneficiary or
    Trustee.  Any Person, including, without limitation, both Trustor and
    Beneficiary, shall be eligible to purchase any part or all of such
    Personalty at any such disposition.
    
          26.3  Expenses.  Expenses of retaking, holding,
    preparing for sale, selling or the like pertaining to the Collateral
    shall be borne by Trustor and shall include Beneficiary's and
    Trustee's reasonable attorneys' fees and legal expenses.  Trustor,
    upon demand of Beneficiary shall assemble the Collateral and make it
    available to Beneficiary at the Property, a place which is hereby
    deemed to be reasonably convenient to Beneficiary and Trustor. 
    Beneficiary shall give Trustor at least ten (10) days' prior written
    notice of the time and place of any public sale or other disposition
    of the Collateral or of the time after which any private sale or any
    other intended disposition is to be made.  Any such notice sent to
    Trustor in the manner provided for the mailing of notices herein is
    hereby deemed to be reasonable notice to Trustor.
    
          26.4  Fixture Filing.  This Deed of Trust covers
    certain goods which are or are to become fixtures related to the Land
    and constitutes a financing statement, filed as a fixture filing in
    the official records of the county recorder of the county in which the
    Property is located, executed by Trustor as debtor in favor of
    Beneficiary as secured party.  For purposes of the Commercial Code the
    following information is supplied:
    
            (a)      Name and Address of Debtor:
    
                     Bedford Property Investors, Inc.
                     270 Lafayette Circle
                     Lafayette, California  94549
                     Attention:  Mr. Scott Whitney
    
            (b)      Name and Address of Record Owner of Real
    Estate:
    
                     Bedford Property Investors, Inc.
                     270 Lafayette Circle
                     Lafayette, California  94549
                     Attention:  Mr. Scott Whitney
    
    
            (c)      Description of Real Estate:
    
                     See Exhibit A attached hereto.
    
            (d)      Name and Address of Secured Party:
    
                     The Prudential Insurance Company of
    America
                     Four Embarcadero Center, Suite 2700
                     San Francisco, California  94111
                     Attention:  Regional Counsel
          
    This Deed of Trust covers certain goods which are or are to become
    fixtures related to the Land and constitutes a fixture filing with
    respect to such goods executed by Trustor as debtor in favor of
    Beneficiary as secured party.
    
          26.5  Waivers.  Trustor waives (a) any right to
    require Beneficiary to (i) proceed against any Person, (ii) proceed
    against or exhaust any Collateral or (iii) pursue any other remedy in
    its power; and (b) any defense arising by reason of any disability or
    other defense of Trustor or any other Person, or by reason of the
    cessation from any cause whatsoever of the liability of Trustor or any
    other Person.  Until the Indebtedness shall have been paid in full,
    Trustor shall not have any right to subrogation, and Trustor waives
    any right to enforce any remedy which Beneficiary now has or may
    hereafter have against Trustor or against any other Person and waives
    any benefit of and any right to participate in any Collateral or
    security whatsoever now or hereafter held by Beneficiary.
    
    
                               ARTICLE 27
    
                          Assignment of Rents
    
    
          27.1  Assignment of Rents.  Trustor absolutely and
    unconditionally assigns and transfers the Rents to Beneficiary,
    whether now due, past due or to become due, and gives to and confers
    upon Beneficiary the right, power and authority to collect such Rents,
    and apply the same to the Indebtedness.  Trustor irrevocably appoints
    Beneficiary its agent to, at any time, demand, receive and enforce
    payment, to give receipts, releases and satisfactions, and to sue,
    either in the name of Trustor or in the name of Beneficiary, for all
    such Rents.  Neither the foregoing assignment of Rents to Beneficiary
    nor the exercise by Beneficiary of any of its rights or remedies under
    this Deed of Trust shall be deemed to make Beneficiary a "mortgagee-
    in-possession" or otherwise responsible or liable in any manner with
    respect to the Property or the use, occupancy, enjoyment or operation
    of all or any part thereof, unless and until Beneficiary, in person or
    by its own agent, assumes actual possession thereof, nor shall
    appointment of a Receiver for the Property by any court at the request
    of Beneficiary or by agreement with Trustor or the entering into
    possession of the Property or any part thereof by such Receiver be
    deemed to make Beneficiary a "mortgagee-in-possession" or otherwise
    responsible or liable in any manner with respect to the Property or
    the use, occupancy, enjoyment or operation of all or any part thereof.
    
          27.2  Collection of Rents.  Notwithstanding anything
    to the contrary contained herein or in the Note, so long as no Event
    of Default shall occur, Trustor shall have a license, revocable upon
    the occurrence of an Event of Default or, if an Event of Default shall
    have occurred, so long as such Event of Default shall not have been
    waived by Beneficiary, to collect all Rents, and to first apply same
    to the Indebtedness as and when due and thereafter to retain, use and
    enjoy the same and to otherwise exercise all rights with respect
    thereto, subject to the terms hereof.  Upon the occurrence of an Event
    of Default, Beneficiary shall have the right, on written notice to
    Trustor, to terminate and revoke the license heretofore granted to
    Trustor and shall have the complete right and authority then or
    thereafter to exercise and enforce any and all of its rights and
    remedies provided herein or by law or at equity.
    
    
                               ARTICLE 28
    
                             Miscellaneous
    
    
          28.1  Successor Trustee.  Beneficiary may remove
    Trustee or any successor trustee at any time or times and appoint a
    successor trustee by recording a written substitution in the county
    where the Property is located, or in any other manner permitted by
    law.
    
          28.2  Change of Law.  In the event of the passage,
    after the date of this Deed of Trust, of any law deducting from the
    value of the Property, for the purposes of taxation, any lien thereon,
    or changing in any way the laws now in force for the taxation of
    mortgages, deeds of trust, or debts secured by mortgage or deed of
    trust (other than laws imposing taxes on income), or the manner of the
    collection of any such taxes so as to materially affect the
    anticipated yield of Beneficiary as holder of the Note and/or Benefi-
    
    ciary under this Deed of Trust, the Indebtedness plus any applicable
    prepayment charges shall become due and payable at the option of
    Beneficiary exercised by thirty (30) days' notice to Trustor unless
    Trustor, within such thirty (30) day period shall, if permitted by
    law, assume the payment of any tax or other charge so imposed upon
    Beneficiary for the period remaining until full payment by Trustor of
    the Indebtedness.
    
          28.3  No Waiver.  No waiver by Beneficiary of any
    default or breach by Trustor hereunder shall be implied from any
    omission by Beneficiary to take action on account of such default if
    such default persists or is repeated, and no express waiver shall
    affect any default other than the default expressly referenced in the
    waiver and such waiver shall be operative only for the time and to the
    extent therein stated.  Waivers of any covenant, term or condition
    contained herein shall not be construed as a waiver of any subsequent
    breach of the same covenant, term or condition.  The consent or
    approval by Beneficiary to or of any act by Trustor requiring further
    consent or approval shall not be deemed to waive or render unnecessary
    the consent or approval to or of any subsequent similar act.
    
          28.4  Abandonment.  Subject to such chattel mortgages,
    security agreements or other liens on title as may exist thereon with
    the consent of Beneficiary, or any provided for herein, any and all
    Personalty that upon foreclosure of the Property is owned by Trustor
    and is used in connection with the operation of the Property shall be
    deemed at the option of Beneficiary to have become on such date a part
    of the Property and abandoned to Beneficiary in its then condition.
    
          28.5  Notices.  All notices, demands, requests,
    consents, statements, satisfactions, waivers, designations, refusals,
    confirmation or denials that may be required or otherwise provided for
    or contemplated under the terms of this Deed of Trust shall be in
    writing, and shall be deemed to have been properly given (i) upon
    delivery, if delivered in person or by facsimile transmission with
    receipt acknowledged, (ii) one business day after having been
    deposited for overnight delivery with Federal Express or another
    comparable overnight courier service, or (iii) three business days
    after having been deposited in any post office or mail depository
    regularly maintained by the U.S. Postal Service and sent by registered
    or certified mail, postage prepaid, addressed as follows:
    
          If to Trustor:
    
            Bedford Property Investors, Inc.
            270 Lafayette Circle
            Lafayette, California  94549
            Attention:  Mr. Scott Whitney
    
          If to Trustee:
    
            First American Title Insurance Company
            1850 Mount Diablo Boulevard, Suite 300
            Walnut Creek, California  94596 
    
          If to Beneficiary:
    
            The Prudential Insurance Company of America
            Four Embarcadero Center
            Suite 2700
            San Francisco, California  94111
            Attention:  Regional Counsel
            Loan No. 6 102 104
    
            with a copy to:
    
            The Prudential Insurance Company of America
            One Ravinia Drive, Suite 1400
            Atlanta, Georgia  30346
            Attention:  Vice President, Loan Servicing
            Loan No. 6 102 104
    
    or addressed to each respective party at such other address as such
    party may from time to time designate by written notice to the other
    parties given in the manner aforesaid.
    
          28.6  Severability.  If any term, provision, covenant
    or condition hereof or any application thereof should be held by a
    court of competent jurisdiction to be invalid, void or unenforceable,
    in whole or in part, all terms, provisions, covenants and conditions
    hereof and all applications thereof not held invalid, void or
    unenforceable shall continue in full force and effect and shall in no
    way be affected, impaired or invalidated thereby.
    
          28.7  Joinder of Foreclosure.  Should Beneficiary hold
    any other or additional security for the payment of the Indebtedness
    or performance of the Obligations, its sale or foreclosure, upon any
    default in such payment or performance, in the sole discretion of
    Beneficiary, may be prior to, subsequent to, or joined or otherwise
    contemporaneous with any sale or foreclosure hereunder.  In addition
    to the rights herein specifically conferred, Beneficiary, at any time
    and from time to time, may exercise any right or remedy now or
    hereafter given by law to beneficiaries under deeds of trust
    generally, or to the holders of any obligations of the kind hereby
    secured.
    
          28.8  Governing Law.  The parties expressly agree that
    this Deed of Trust (including, without limitation, all questions
    regarding permissible rates of interest) shall be governed by and
    construed in accordance with the laws of the state in which the Land
    is located.
    
          28.9  Subordination.  At the option of Beneficiary,
    this Deed of Trust shall become subject and subordinate in whole or in
    part (but not with respect to priority of entitlement to any insurance
    proceeds, damages, awards, or compensation resulting from damage to
    the Property or condemnation or exercise of power of eminent domain),
    to any and all contracts of sale and/or any and all Leases upon the
    execution by Beneficiary and recording thereof in the Official Records
    of the County in which the Land is located of a unilateral declaration
    to that effect.  Beneficiary may require the issuance of such title
    insurance endorsements to the Title Policy in connection with any such
    subordination as Beneficiary, in its reasonable judgment, shall
    determine are appropriate, and Trustor shall be obligated to pay any
    cost or expense incurred in connection with the issuance thereof.
    
          28.10  Future Advances.   Upon the request of Trustor
    or its permitted successors in ownership of the Property, Beneficiary
    may hereafter, at its option, at any time before full payment of the
    Indebtedness, make future advances to Trustor or said successors, and
    the same, with interest and late charges, shall be secured by this
    Deed of Trust; provided, however, that the amount of principal secured
    by this Deed of Trust and remaining unpaid, shall not at the time of
    and including any such advance exceed the original principal sum
    secured hereby; and provided further that if Beneficiary, at its
    option, shall make a future advance or advances as aforesaid, Trustor
    or said successors in ownership agree to execute and deliver to
    Beneficiary (i) a note  to evidence the same, payable on or before the
    maturity of the Indebtedness secured hereby and bearing such other
    terms as Beneficiary shall require, and (ii) satisfactory evidence
    that after such advance this Deed of Trust will secure such advance
    and continue to constitute a valid first mortgage lien on the Property
    subject only to the Permitted Exceptions.
    
          28.11  Waiver of Statute of Limitations and Rights to
    Trial by Jury.  The pleading of any statute of limitations as a
    defense to any and all obligations secured by this Deed of Trust and
    the right to a jury trial in any action under or relating to the Loan
    Documents is hereby waived, to the fullest extent allowed by law.
    
          28.12  Entire Agreement.  The Loan Documents and the
    Remediation and Indemnification Agreements set forth the entire
    understanding between Trustor and Beneficiary relative to the Loan and
    the same shall not be amended except by a written instrument duly
    executed by each of Trustor and Beneficiary.  Any and all previous
    representations, warranties, agreements and understandings between or
    among the parties regarding the subject matter of the Loan or the Loan
    Documents, whether written or oral, are superseded by this Deed of
    Trust and the other Loan Documents.  The foregoing notwithstanding,
    the terms and the conditions of the Application shall survive the
    funding of the Loan but in the event of any conflict between the
    provisions of the Application and any of the other Loan Documents or
    the Remediation and Indemnification Agreements, except as otherwise
    specifically provided herein, the terms of such other Loan Documents
    and the Remediation and Indemnification Agreements shall control.
    
          28.13  References to Foreclosure.  References in this
    Deed of Trust to "foreclosure" and related phrases shall be deemed
    references to the appropriate procedure in connection with Trustee's
    private power of sale as well as any judicial foreclosure proceeding
    or a conveyance in lieu of foreclosure.
    
          28.14  Rights of Beneficiary and Trustee.  At any time
    or from time to time, without liability therefor and without notice,
    and without releasing or otherwise affecting the liability of any
    person for payment of any Indebtedness (i) Beneficiary at its sole
    discretion and only in writing may extend the time for, or release any
    Person now or hereafter liable for, payment of any or all such
    Indebtedness, or accept or release additional security therefor, or
    subordinate the lien or charge hereof, or (ii) Trustee upon written
    request of Beneficiary and presentation of the Note, any additional
    notes secured by this Deed of Trust and this Deed of Trust for
    endorsement may reconvey any part of the Property, consent to the
    making of any map or plat thereof, join in granting any easement
    thereon, or join in any such agreement of extension or subordination. 
    Upon written request of Beneficiary and surrender of the Note, any
    additional notes secured by this Deed of Trust and this Deed of Trust
    to the Trustee for cancellation, and upon payment to Trustee of its
    fees and expenses, Trustee shall reconvey without warranty the
    remaining Property.  The recitals in any reconveyance shall be
    conclusive proof of the truthfulness thereof and the grantee in any
    reconveyance may be described as "the person or persons legally
    entitled thereto."
    
          28.15  Copies.  Trustor will promptly give to
    Beneficiary copies of all (i) notices of violation relating to the
    Property that Trustor receives from any governmental agency or author-
    
    ity, and (ii) notices of default that Trustor shall give or receive
    under any agreement that Trustor covenants to perform hereunder,
    including, without limitation, notices of default relating to the
    Property that Trustor receives under any agreement relating to the
    borrowing of money by Trustor or from any Person.
    
          28.16  No Merger.  So long as any of the Indebtedness
    shall remain unpaid or Trustor shall have any further obligation under
    the Loan Documents, unless Beneficiary shall otherwise consent in
    writing, the fee estate of Trustor in the Property or any part thereof
    shall not merge, by operation of law or otherwise, with any leasehold
    or other estate in the Property or any part thereof, but shall always
    be kept separate and distinct therefrom, notwithstanding the union of
    said fee estate and such leasehold or other estate in Trustor or any
    other Person.
    
          28.17  Right of Entry.  In addition to the rights
    granted to Beneficiary under Paragraph 3.10 hereof, Beneficiary may
    enter at any reasonable time upon any part of the Property for the
    purpose of performing any of the acts Beneficiary is authorized to
    perform under the terms of this Deed of Trust or of any of the other
    Loan Documents.  Trustor agrees to cooperate with Beneficiary to
    facilitate such entry.
    
          28.18  Performance by Trustor.  Trustor will
    faithfully perform each and every Obligation to be performed by
    Trustor under any lien or encumbrance, including, without limitation,
    mortgages, deeds of trust, leases, declarations or covenants,
    conditions and/or restrictions and other agreements which affect the
    Property.  If Trustor fails to do so, Beneficiary, without demand or
    notice, may do any or all things necessary to perform the Obligations
    of Trustor under the pertinent instrument.
    
          28.19  Personalty Security Instruments.  Trustor
    covenants and agrees that if Beneficiary at any time holds additional
    security for any obligations secured hereby, it may enforce the terms
    thereof or otherwise realize upon the same, at its option, either
    before or concurrently herewith or after a sale is made hereunder, and
    may apply the proceeds upon the Indebtedness secured hereby without
    affecting the status of or waiving any right to exhaust all or any
    other security, including the security hereunder, and without waiving
    any breach or default or any right or power whether exercised
    hereunder, and without waiving any breach or default or any right or
    power whether exercised hereunder or contained herein or in any such
    other security.
    
          28.20  Suits to Protect Property.  Trustor covenants
    and agrees to appear in and defend any action or proceeding purporting
    to affect the security of the Deed of Trust, or of any additional or
    other security for the Obligations, the interest of Beneficiary or the
    rights, powers and duties of Trustee hereunder; and to pay all costs
    and expenses, including, without limitation, costs of evidence of
    title and reasonable attorneys' fees, in any action or proceeding in
    which Beneficiary and/or Trustee may appear or be made a party,
    including, without limitation, foreclosure or other proceedings
    commenced by those claiming a right to any part of the Property in any
    action to partition or condemn all or part of the Property, whether or
    not pursued to final judgment, and in any exercise of the power of
    sale contained herein, whether or not the sale is actually
    consummated.  Trustee agrees that in any such action or proceeding in
    which Beneficiary is made a party, Beneficiary may at its option
    defend such action, and all costs of such defense, including all court
    costs and reasonable attorneys' fees, shall be borne and paid by
    Trustor.
    
          28.21  Junior Liens.  Trustor represents and warrants
    that as of the date hereof there are no encumbrances to secure debt
    junior to this Deed of Trust and covenants that there are to be none
    as of the date when this Deed of Trust becomes of record.
    
          28.22  Charges for Statements.  Trustor agrees to pay
    Beneficiary's charge, up to the maximum amount permitted by law, for
    any statement regarding the obligations secured by this Deed of Trust
    requested by Trustor or on its behalf.
    
          28.23  Usury.  In the event that Beneficiary
    determines that any charge, fee or interest paid or agreed to be paid
    in connection with the Loan may, under the applicable usury laws,
    cause the interest rate on the Loan to exceed the maximum permitted by
    law, then such charges, fees or interest shall be reduced and any
    amounts actually paid in excess of the maximum interest permitted by
    such laws shall be applied by Beneficiary to reduce the outstanding
    principal balance of the Loan.  The parties intend that Trustor shall
    not be required to pay, and Beneficiary shall not be entitled to
    collect, interest in excess of the maximum legal rate permitted under
    the applicable usury laws.
    
          28.24  Publicity.  Trustor hereby agrees that
    Beneficiary, at its expense, may publicize the financing of the
    Property.  Beneficiary shall endeavor to notify Trustor of its intent
    to publicize the financing; provided, however, that Beneficiary's
    failure to so notify Trustor shall not constitute a breach by
    Beneficiary under the Loan Documents.
    
          28.25  Information Reporting Under IRC
    Section 6045(e).  Any information returns or certifications that must
    be filed with the Internal Revenue Service and/or provided to other
    parties, pursuant to Internal Revenue Code Section 6045(e) shall be
    prepared, filed by and sent to the appropriate parties by Trustor.  To
    the extent permitted by law, Beneficiary shall have no responsibility
    to perform such services; provided however, upon demand Trustor shall
    reimburse Beneficiary for any costs incurred by Beneficiary in doing
    so and shall also pay such fee as Beneficiary may reasonably and
    lawfully request.  Beneficiary shall, where requested by Trustor,
    promptly supply Trustor with all information pertaining to Beneficiary
    reasonably required by Trustor to prepare and file any such return or
    certification.  Trustor shall indemnify Beneficiary and defend,
    protect and hold Beneficiary harmless from and against all loss, cost,
    damage and expense (including, without limitation, attorneys' fees and
    costs incurred in the investigation, defense and settlement of claims)
    that Beneficiary may incur, directly or indirectly, as a result of or
    in connection with the assertion against Beneficiary of any claim
    relating to the failure of Trustor to comply with its obligations
    under this Paragraph.
    
          28.26  ERISA.
    
              A.  Trustor understands and acknowledges that on
    the Closing Date, the source of funds from which Beneficiary extends
    the Loan is its general account, which is subject to the claims of its
    general creditors under state law.  Beneficiary (i) represents and
    warrants that either (a) it is not funding the Loan with Plan Assets
    (as described below) or (b) if Beneficiary is funding the Loan with
    Plan Assets, such funding satisfies the provisions of Prohibited
    Transaction Class Exemption 95-60 and (ii) covenants that either
    clause (a) or (b) immediately above will be true throughout the term
    of the Loan.
    
              B.  Trustor represents and warrants to Beneficiary
    that, as of the date of this Deed of Trust and throughout the term of
    the Loan, (i) Trustor is not an "employee benefit plan" as defined in
    Section 3(3) of the Employee Retirement Income Security Act of 1974,
    as amended ("ERISA"), which is subject to Title I of ERISA, and (ii)
    the assets of Trustor do not constitute "plan assets" of one or more
    such plans within the meaning of 29 C.F.R. Section 2510.3-101 ("Plan
    Assets").
    
              C.  Trustor represents and warrants to Beneficiary
    that, as of the date of this Deed of Trust and throughout the term of
    the Loan, (i) Trustor is not a "governmental plan" within the meaning
    of Section 3(32) of ERISA, and (ii) transactions by or with Trustor
    are not subject to state statutes regulating investments of and
    fiduciary obligations with respect to governmental plans.
    
              D.  Trustor covenants and agrees to deliver to
    Beneficiary such certifications or other evidence on the Closing Date
    and from time to time throughout the term of the Loan, as requested by
    Beneficiary in its sole discretion, that (i) Trustor is not an
    "employee benefit plan" or a "governmental plan"; and (ii) Trustor is
    not subject to state statutes regulating investments and fiduciary
    obligations with respect to governmental plans; and (iii) one or more
    of the following circumstances is true:
    
                     (1)  Equity interests in Trustor are
    publicly offered securities, within the meaning of 29 C.F.R. Section
    2510.3-101(b)(2);
    
                     (2)  Less than twenty-five percent (25%)
    of all equity interests in Trustor are held by "benefit plan
    investors" within the meaning of 29 C.F.R Section 2510.3-101(f)(2); or
    
                     (3)  Trustor qualifies as an "operating
    company" or a "real estate operating company" within the meaning of 29
    C.F.R. Section 2510.3-101(c) or (e).
              
              E.  Any of the following shall constitute an Event
    of Default entitling Beneficiary to exercise any and all remedies to
    which it may be entitled under the Loan Documents:  (i) the failure of
    any representation or warranty made by Trustor under this Paragraph
    9.26 to be true and correct in all material respects, (ii) the failure
    of Trustor to comply in all material respects with the obligation to
    provide Beneficiary with the written certifications and evidence
    referred to above, or (iii) assuming compliance by Beneficiary with
    the representations, warranties and covenants in Paragraph 9.26.A
    above, the consummation by Trustor of a transaction which would cause
    the Loan or any exercise of Beneficiary's rights under the Loan
    Documents to constitute a non-exempt prohibited transaction under
    ERISA or a material violation of a state statute regulating
    governmental plans, subjecting Beneficiary to liability for violation
    of ERISA or such state statute, provided, that Trustor shall have
    thirty (30) days after its receipt of notice of default from
    Beneficiary within which to commence the cure of such default and,
    with respect to defaults under clause (i) immediately above, Trustor
    shall have an additional ninety (90) days thereafter within which to
    effect such cure provided it shall have commenced its efforts to cure
    within such thirty (30) day period and shall thereafter diligently and
    in good faith continuously prosecute such cure to completion.  Failure
    by Trustor to cure any such default within the applicable time period
    set forth above shall constitute an Event of Default.
    
              F.  Trustor hereby indemnifies, defends and holds
    Beneficiary harmless from and against all loss, cost, damage and
    expense (including, without limitation, attorneys' fees and costs
    incurred in the investigation, defense and settlement of claims and
    losses incurred in correcting any prohibited transaction or in the
    sale of a prohibited loan, and in obtaining any individual prohibited
    transaction exemption under ERISA that may be required) that
    Beneficiary may incur as a direct result of an Event of Default under
    clause (E) above, assuming compliance by Beneficiary with the
    representations, warranties and covenants set forth in Paragraph
    9.26.A above.  This indemnity shall survive any termination,
    satisfaction or foreclosure of this Deed of Trust and shall not be
    subject to the limitation on personal liability described in Paragraph
    19 of the Note.
    
              G.  Anything in the Application, Paragraph 4.2 or
    elsewhere in this Deed of Trust or the Loan Documents to the contrary
    notwithstanding, no sale, assignment or transfer of any direct or
    indirect interest in Trustor shall be permitted which would negate
    Trustor's representations in this Paragraph 9.26 or cause this Deed of
    Trust (or any exercise of Beneficiary's rights under the Loan
    Documents) to constitute a violation of any provision of ERISA or of
    any applicable state statute regulating a governmental plan, assuming
    compliance by Beneficiary with the representations, warranties and
    covenants set forth in Paragraph 9.26.A above.
    
              H.  Anything in the Application, Paragraph 4.2
    elsewhere in this Deed of Trust or the Loan Documents to the contrary
    notwithstanding, no direct or indirect transfer of the Property or any
    interest therein including, without limitation, a junior lien or
    leasehold interest, shall be permitted which would cause this Deed of
    Trust (or any exercise of Beneficiary's rights under the Loan
    Documents) to constitute a violation of ERISA or any applicable state
    statute regulating a governmental plan, assuming compliance by
    Beneficiary with the representations, warranties and covenants set
    forth in Paragraph 9.26.A above.
    
              I.  Anything in the Application, this Deed of
    Trust or the Loan Documents to the contrary notwithstanding, no less
    than fifteen (15) before consummation of any permitted transfer of
    title to the Property or of an interest in Trustor, or of any direct
    or indirect right, title or interest in either of them, or of the
    placing of any lien or encumbrance on the Property, Borrower shall
    obtain from the proposed transferee or lienholder a representation to
    Beneficiary in form and substance satisfactory to Beneficiary that the
    provisions of Paragraph 9.26.D above will be true after the transfer,
    or in the case of a lien or encumbrance, would remain true following
    any foreclosure or conveyance in lieu thereof, and further provided
    that any proposed lienholder agrees that any direct or indirect
    transfer of its lien or any interest therein will be governed by this
    section.
    
          28.27  Defense and Indemnity Rights.  Whenever, under
    any Loan Document, Trustor is obligated to indemnify and/or defend
    Beneficiary, or Trustor is obligated to defend or prosecute any action
    or proceeding, then Beneficiary shall have the right of counsel of
    Beneficiary's choice reasonably exercised, and all costs and expenses
    incurred by Beneficiary in connection with such participation
    (including, without limitation, reasonable attorneys' fees) shall be
    reimbursed by Trustor to Beneficiary immediately upon demand.  In
    addition, Beneficiary shall have the right to approve any counsel
    retained by Trustor in connection with the prosecution or defense of
    any such action or proceeding by Trustor.  Trustor shall give notice
    to Beneficiary of the initiation of all proceedings prosecuted or
    required to be defended by Trustor, or which are subject to Trustor's
    indemnity obligations, under this Deed of Trust, promptly after the
    receipt by Trustor of notice of the existence of any such proceeding,
    but in no event later than five (5) days thereafter.  All costs or
    expenses required to be reimbursed by Trustor to Beneficiary hereunder
    shall, if not paid when due as herein specified, bear interest at the
    Secondary Interest Rate.  As used herein, "proceeding" shall include
    litigation (whether by way of complaint, answer, cross-complaint,
    counter claim or third party claim), arbitration and administrative
    hearings or proceedings.
    
          28.28  Destruction of Note.  Trustor shall, if the
    Note is mutilated or destroyed by any cause whatsoever, or otherwise
    lost or stolen and regardless of whether due to the act or neglect of
    Beneficiary or Trustee, execute and deliver to Beneficiary in
    substitution therefor a duplicate promissory note containing the same
    terms and conditions as the Note, within ten (10) days after
    Beneficiary notifies Trustor of any such mutilation, destruction, loss
    or theft of the Note.  Any new promissory note executed and delivered
    hereunder shall be in full substitution for the Note, shall not
    constitute any new or additional indebtedness of Trustor to
    Beneficiary, shall constitute solely a substitute evidence of the
    indebtedness evidenced by the original Note, and shall not affect in
    any manner the priority of this Deed of Trust, or any other document
    or instrument executed in connection with or evidencing or securing
    the Indebtedness under the Note.  Failure or delay by Beneficiary to
    notify Trustor hereunder shall not affect in any manner Trustor's lia-
    
    bility for the Indebtedness under the Note or Trustor's obligation to
    execute a new promissory note hereunder; and Trustor's failure to
    execute a new promissory note on Beneficiary's request hereunder shall
    likewise not affect Trustor's liability for the indebtedness under the
    Note.
    
          28.29  Trustor, Beneficiary and Trustee Defined.  As
    used in this Deed of Trust, "Trustor" includes the original signators
    of this Deed of Trust as Trustor, and its successors and assigns; the
    term "Beneficiary" means the Beneficiary named herein or any future
    owner or holder, including pledgee and participants, of any note,
    notes or instrument secured hereby, or any participation therein; and
    "Trustee" includes the original Trustee under this Deed of Trust and
    its successors and assigns.
    
          28.30  Rules of Construction.  When the identity of
    the parties or other circumstances make appropriate, the masculine
    gender shall include the feminine and/or neuter, and the singular
    number shall include the plural.  Specific enumeration of rights,
    powers and remedies of Trustee and Beneficiary and of acts which they
    may do and of acts Trustor must do or not do shall not exclude or
    limit the general.  The headings of each Article and Paragraph are for
    information and convenience and do not limit or construe the contents
    of any provision hereof.  The provisions of this Deed of Trust, all
    other Loan Documents and the Remediation and Indemnification
    Agreements shall be construed as a whole according to their common
    meaning, not strictly for or against any party and consistent with the
    provisions herein contained, in order to achieve the objectives and
    purposes of such documents.  Each party and its counsel has reviewed
    and revised the Loan Documents and the Remediation and Indemnification
    Agreements and agree that the normal rule of construction to the
    effect that any ambiguities to be resolved against the drafting party
    shall not be employed in the interpretation of such document.  The use
    in this Deed of Trust, all other Loan Documents and the Remediation
    and Indemnification Agreements of the words "including," "such as," or
    words of similar import, when following any general term, statement or
    matter shall not be construed to limit such statement, term or matter
    to the specific items or matters, whether or not language of non-
    limitation such as "without limitation" or "but not limited to," or
    words of similar import, are used with reference thereto, but rather
    shall be deemed to refer to all other items or matters that could
    reasonably fall within the broadest possible scope of such statement,
    term or matter.
    
          28.31  Information to Third Persons.  If, at any time,
    Beneficiary desires to sell or transfer, or grant a participation
    interest in, all or any portion of, or any interest in, the Note, this
    Deed of Trust or any other Loan Document to any Person, Trustor and
    each Loan Party shall furnish in a timely manner any and all financial
    information concerning the Property and Leases, and concerning
    Trustor's or such Loan Party's financial condition, requested by
    Beneficiary or such person in connection with any such sale or
    transfer.
    
          28.32  Commingling of Funds.  Any and all sums
    collected or retained by Beneficiary hereunder (including insurance
    and condemnation proceeds and any amounts paid by Trustor to
    Beneficiary under Paragraph 3.4 hereof), shall not be deemed to be
    held in trust, and Beneficiary may commingle any and all such funds or
    proceeds with its general assets and shall not be liable for the
    payment of any interest or other return thereon, except to the extent
    expressly provided herein or otherwise required by law.
    
          28.33  Standards of Discretion.  Nothing contained in
    this Deed of Trust, the Note, or any other Loan Documents, shall limit
    the right of Beneficiary to exercise its good faith business judgment,
    or act, in a subjective manner with respect to any matter as to which
    it has specifically been granted such right or the right to act in its
    sole discretion or sole judgment hereunder or thereunder, whether
    "objectively" reasonable under the circumstances.  Any such exercise
    shall not be deemed inconsistent with any covenant of good faith and
    fair dealing otherwise implied by law to be a part of this Deed of
    Trust; and the parties intend by the foregoing to set forth and affirm
    their entire understanding with respect to the terms, covenants and
    conditions and standards pursuant to which their rights, duties and
    obligations are to be judged, their performance measured, and the
    parameters within which Beneficiary's discretion may be exercised
    hereunder and under the other Loan Documents; provided, however, that
    the foregoing shall not limit Beneficiary's obligation to act
    reasonably under the circumstances where any provision of the Loan
    Documents provides for the reasonable consent or approval of
    Beneficiary.
    
          28.34  Certain Standards on Efforts of Trustor. 
    Whenever in this Deed of Trust, or any other Loan Document, the phrase
    "cause to be" is used in conjunction with any of Trustor's
    Obligations, such phrase shall be deemed to include the use by Trustor
    of best efforts and all due diligence to cause the applicable act,
    event or circumstance to occur or be performed or taken, and such
    efforts and due diligence shall encompass the initiation of litigation
    or other proceedings in order to enforce or bring about the happening
    of the applicable act or matter.
    
          28.35  Certain Obligations Unsecured.  Notwithstanding
    anything to the contrary set forth herein or any of the Loan
    Documents, this Deed of Trust shall not secure the following
    obligations (the "Unsecured Obligations"):  (i) any obligations
    evidenced by or arising under the Remediation and Indemnification
    Agreements, and (ii) any other obligations in this Deed of Trust or in
    any of the other Loan Documents to the extent that such other
    obligations relate specifically to the presence on the Property of
    Hazardous Materials (as defined in the Remediation and Indemnification
    Agreements) and are the same or have the same effect as any of the
    obligations evidenced by or arising under the Remediation and
    Indemnification Agreements.  Any breach or default with respect to the
    Unsecured Obligations shall constitute an Event of Default hereunder,
    notwithstanding the fact that such Unsecured Obligations are not
    secured by this Deed of Trust.  Nothing in this section shall, in
    itself, impair or limit Beneficiary's right to obtain a judgment in
    accordance with applicable law after foreclosure for any deficiency in
    recovery of all obligations that are secured by this Deed of Trust
    following foreclosure.
    
          28.36  Partial Release.  Beneficiary agrees to
    release, at any time after May 31, 1998, the Property from the lien of
    this Deed of Trust upon the satisfaction of the following conditions
    at the time of reconveyance:
    
              (1)    No Event of Default shall have occurred
          and no event which, with the passage of time or the
          giving on notice, or both, would constitute an Event
          of Default shall have occurred either at the time of
          Beneficiary's receipt of the Trustor's written request
          for a reconveyance or as of the date of such
          reconveyance;
    
              (2)    Not more than a total of three (3) of the
          Combined Deeds of Trust (including, without
          limitation, this Deed of Trust) shall have been
          previously reconveyed or shall be reconveyed hereby or
          concurrently herewith (and in no event shall Trustor
          be entitled to more than three (3) total releases of
          any or all of the Combined Properties hereunder and/or
          under the Combined Deeds of Trust);
    
              (3)    Trustor shall pay to Beneficiary, prior to
          or concurrently with the reconveyance of this Deed of
          Trust, the Allocable Loan Amount for the Property
          along with the prepayment premium allocable to such
          Allocable Loan Amount as determined pursuant to the
          applicable Note;
    
              (4)    Beneficiary shall have been provided
          satisfactory evidence that the reconveyance of this
          Deed of Trust does not violate the provisions of any
          declaration of covenants, conditions and restrictions,
          reciprocal easement agreement, Lease or other
          agreement affecting the Property or any portion
          thereof;
    
              (5)    The Remaining Properties shall have:  (i)
          after the first reconveyance, both a Combined Debt
          Service Coverage and a Future Combined Debt Service
          Coverage of not less than 1.80 and a Combined Loan to
          Value Ratio of not more than 65%, (ii) after the
          second reconveyance, both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 1.90 and a Combined Loan to Value
          Ratio of not more than 60%, and (iii) after the third
          and final reconveyance both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 2.00 and a Combined Loan to Value
          Ratio of not more than 55%;
    
              (6)    Each of the individual Remaining
          Properties shall have both an Individual Debt Service
          Coverage and a Future Individual Debt Service Coverage
          of not less than 1.00 and an Individual Loan to Value
          Ratio of not more than 75%;
    
              (7)    Beneficiary shall have received a
          commitment that the title company insuring the liens
          of the Milpitas Deed of Trust, the Ontario Deed of
          Trust, the Tustin Deed of Trust, the Woodlands Deed of
          Trust, the Nevada Deed of Trust, the Fremont Deed of
          Trust, and the South San Francisco Deed of Trust will
          issue such title endorsements as Beneficiary deems
          necessary or desirable for attachment to the
          applicable title policies, including without
          limitation, CLTA Endorsement Nos. 110.5, 111, and
          111.1;
    
              (8)    Trustor shall pay to Beneficiary all
          escrow, closing and recording costs, the cost of
          preparing and delivering any reconveyance
          documentation, including legal fees and costs, the
          cost of any title insurance endorsements that
          Beneficiary may require, recording fees, any sums then
          due and payable under the Loan Documents and a non-
          refundable $25,000 processing fee, which fee shall be
          paid at the time of notice of the requested
          reconveyance;
    
              (9)    Trustor shall have provided Beneficiary
          with forty-five (45) days prior written notice of the
          requested reconveyance; and
    
              (10)   Such other terms and conditions as
          Beneficiary shall reasonably require.
    
          Notwithstanding the foregoing, in the event that the
    Debt Service Coverage and the Loan to Value Ratio tests set forth in
    Paragraphs 9.36(5) and 9.36(6), above, cannot be satisfied because of
    the value of, or the net cash flow from, the applicable Combined
    Properties, Trustor may, at its option, satisfy such tests by making a
    principal prepayment (the "Excess Principal Payment") on the Loan in
    an amount sufficient to satisfy such tests so long as Trustor also
    pays to Beneficiary any prepayment premium relating to such principal
    prepayment, as determined by the applicable Note.  Upon receipt of the
    Excess Principal Payment, Beneficiary shall apply such amount to
    reduce the outstanding Loan and may apply such amount to any one or
    more of the Multistate Note, the Nevada Note and/or the
    Arizona/California Note (in such order or priority as to satisfy such
    tests, as determined by Beneficiary), and shall allocate the Excess
    Principal Payment to the applicable Allocable Loan Amount in
    proportion to each such Allocable Loan Amount's share of the
    outstanding principal balance of the Note to which such amount is
    applied, and, the monthly payments due under such applicable Note
    shall be adjusted, as of the date of the release of this Deed of Trust
    pursuant to this Paragraph 9.36, to reflect the Excess Principal
    Payment applied to such applicable Note, such adjustment to be based
    on the applicable interest rate under such Note and an amortization
    schedule equal to 300 months minus the number of months that have
    elapsed since May 31, 1998.
    
          28.37      Limitation on Personal Liabilities. 
    Trustor's liability (i) under the Multistate Note is subject to the
    terms and conditions set forth in Paragraph 19 of the Multistate Note;
    (ii) under the Nevada Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
    
          28.38      Waiver of Appraisement, Homestead,
    Marshaling.  Trustor waives to the full extent lawfully allowed the
    benefit of any homestead, evaluation, stay and extension or exemption
    laws or any so called "moratorium laws" now or hereinafter in force
    and waives any rights available with respect to marshaling of assets
    so as to require the separate sales of any portion of the Property, or
    as to require Beneficiary to exhaust its remedies against a specific
    portion of Property before proceeding against the other and does
    hereby expressly consent to and authorize the sale of the Property or
    any part thereof as a single unit or parcel or as separate parcels. 
    Trustor further waives to the full extent lawfully allowed the benefit
    of all laws now existing or that hereafter may be enacted providing
    for (i) any appraisement before sale of any portion of the Property,
    commonly known as "Appraisement Laws," including, without limitation,
    a hearing to determine fair market value pursuant to A.R.S. Sections
    12-1566, 33-814, 33-725 and/or 33-727, and (ii) the benefit of all
    laws that may be hereafter enacted in any way extending the time of
    the enforcement of the collection of the Indebtedness or commonly
    known as "Stay Laws".
    
          28.39      Business Loan Representation.  Trustor
    represents and warrants to Beneficiary that the Loan evidenced by the
    Note is a business loan transacted solely for the purpose of carrying
    on the business of Trustor and the Property does not constitute the
      homestead of Trustor.<PAGE>
  
          IN WITNESS WHEREOF, Trustor has caused this Deed of
    Trust to be executed as of the day and year first above written.
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/ Scott R. Whitney
    
          Scott R. Whitney, Senior Vice President  
          [Printed Name and Title]
    
    
    
    
      [11128.AGRE]H61606
<PAGE>
    State of California)
                                )    ss.
    County of                   Contra Costa        )
    
    
    
    On February 2, 1998, before me, Colette M. Pennington, a
    notary public, personally appeared
    Scott R. Whitney  
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/ Colette M. Pennington          
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  
                                                                           
                                              RECORDING REQUESTED BY
    AND WHEN RECORDED MAIL TO:
    
    Steefel, Levitt & Weiss
    One Embarcadero Center, 30th Floor
    San Francisco, California  94111
    
          Attention:  James F. Eastman, Esq.
    
    
    
    
                                                                   
    
    
              
    
    
    
             DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
         FILING WITH ASSIGNMENT OF LEASES, RENTS AND AGREEMENTS
                               (Fremont)
    
    
          THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
    FILING WITH ASSIGNMENT OF LEASES, RENTS AND AGREEMENTS (this "Deed of
    Trust") dated as of January 30, 1998 is made by BEDFORD PROPERTY
    INVESTORS, INC., a Maryland corporation, having offices at 270
    Lafayette Circle, Lafayette, California 94549 ("Trustor"), First
    American Title Insurance Company, having offices at 1850 Mount Diablo
    Boulevard, Suite 300, Walnut Creek, California  94596 ("Trustee"), and
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation,
    having offices at Four Embarcadero Center, Suite 2700, San Francisco,
    California 94111 ("Beneficiary").
    
    
                              WITNESSETH:
    
    
          Trustor HEREBY IRREVOCABLY GRANTS, TRANSFERS AND
    ASSIGNS TO Trustee, IN TRUST, WITH POWER OF SALE, all of Trustor's
    right, title and interest now owned or hereafter acquired in and to
    the following property, together with the Personalty (as hereinafter
    defined), all of which is hereinafter collectively defined as the
    "Property":  (i) that certain real property (the "Land") located in
    the County of Alameda, State of California, and more particularly
    described in Exhibit A attached hereto and incorporated herein by this
    reference; (ii) all Improvements (as hereinafter defined) and all
    appurtenances, easements, rights and privileges thereof, including all
    minerals, oil, gas and other hydrocarbon substances thereon or
    therein, air rights, water rights and development rights, and any land
    lying in the streets, roads or avenues adjoining the Land or any part
    thereof; (iii) all Fixtures (as hereinafter defined), whether now or
    hereafter installed, being hereby declared to be for all purposes of
    this Deed of Trust a part of the Land; and (iv) the rents, issues and
    profits of or from the Land, Improvements and Fixtures.
    
    FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary
    may determine:  (i) payment of the Indebtedness (as hereinafter
    defined), and (ii) payment (with interest as provided) and performance
    by Trustor of the Obligations (as hereinafter defined). 
    Notwithstanding the foregoing, or any other term contained herein or
    in the Loan Documents, none of Trustor's obligations under or pursuant
    to the Remediation and Indemnification Agreements (as hereinafter
    defined) shall be secured by the lien of this Deed of Trust.
    
    
                                ARTICLE 
    29
    
                              Definitions
    
    
            As used in this Deed of Trust the following terms
    shall have the following meanings; other terms are defined where they
    appear in this Deed of Trust:
    
    Allocable Loan Amount:  (i) For the property encumbered by the Ontario
    Deed of Trust, $8,000,000 less the product of (x) all payments of
    principal made under the Multistate Note (other than payments made
    pursuant to Paragraph 9.36(3) of any of the Combined Deeds of Trust)
    multiplied by (y) a fraction, the numerator of which is 8,000,000, and
    the denominator of which is 25,000,000; (ii) for the property
    encumbered by the Tustin Deed of Trust, $7,000,000 less the product of
    (x) all payments of principal made under the Multistate Note (other
    than payments made pursuant to Paragraph 9.36(3) of any of the
    Combined Deeds of Trust) multiplied by (y) a fraction, the numerator
    of which is $7,000,000, and the denominator of which is 25,000,000;
    (iii) for the property encumbered by the Woodlands Deed of Trust,
    $5,200,000 less the product of (x) all payments of principal made
    under the Multistate Note (other than payments made pursuant to
    Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied by
    (y) a fraction, the numerator of which is 5,200,000, and the
    denominator of which is 25,000,000; (iv) for the property encumbered
    by the Milpitas Deed of Trust, $4,800,000 less the product of (x) all
    payments of principal made under the Multistate Note (other than
    payments made pursuant to Paragraph 9.36(3) of any of the Combined
    Deeds of Trust) multiplied by (y) a fraction, the numerator of which
    is 4,800,000, and the denominator of which is 25,000,000; (v) for the
    property encumbered by the Nevada Deed of Trust, $8,913,730.85 less
    all payments of principal made under the Nevada Note; (vi) for the
    property encumbered by the Arizona Deed of Trust, $7,200,000 less the
    product of (x) all payments of principal made under the
    Arizona/California Note (other than payments made pursuant to
    Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied by
    (y) a fraction, the numerator of which is 7,200,000, and the
    denominator of which is 20,900,000; (vii) for the properties
    encumbered by the South San Francisco Deed of Trust, $6,500,000 less
    the product of (x) all payments of principal made under the
    Arizona/California Note (other than payments made pursuant to
    Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied by
    (y) a fraction, the numerator of which is 6,500,000, and the
    denominator of which is 20,900,000; and (viii) for the property
    encumbered by this Deed of Trust, $7,200,000 less the product of (x)
    all payments of principal made under the Arizona/California Note
    (other than payments made pursuant to Paragraph 9.36(3) of any of the
    Combined Deeds of Trust) multiplied by (y) a fraction, the numerator
    of which is 7,200,000, and the denominator of which is 20,900,000.
    
    Application:  Collectively, the Application dated December 5, 1995,
    executed by Trustor (referred to as "Borrower" therein), which
    Application includes the exhibits attached thereto, the Application
    dated January 5, 1996, executed by Trustor (referred to as "Borrower"
    therein), which Application includes the exhibits attached thereto,
    the Application executed by Trustor (referred to as "Borrower"
    therein) on April 13, 1996, which Application includes the exhibits
    attached thereto, and the Application executed by Trustor (referred to
    as "Borrower" therein) on October 31, 1997, which Application includes
    the exhibits attached thereto.
    
    Arizona Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of even date herewith, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Maricopa County,
    Arizona, as amended from time to time.
    
    Closing Date:  The date this Deed of Trust is recorded in the Official
    Records of Alameda County, California.
    
    Combined Debt Service Coverage:  The ratio, as determined by
    Beneficiary, of (a) Net Operating Income for the preceding twelve-
    month period for the Remaining Properties, to (b) the sum of (i) the
    annual debt service payments (including principal and interest) for
    the preceding twelve-month period on the portion of the Loan
    consisting of the aggregate of the Allocable Loan Amounts for the
    Remaining Properties, and (ii) the annual debt service payments
    (including principal and interest) on all other indebtedness secured
    or which will be secured by a lien on all or part of the Remaining
    Properties for the preceding twelve-month period.  For purposes of
    calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory notes or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Combined Deeds of Trust:  Collectively, this Deed of Trust, the
    Ontario Deed of Trust, the Tustin Deed of Trust, the Milpitas Deed of
    Trust, the Woodlands Deed of Trust, the Nevada Deed of Trust, the
    Arizona Deed of Trust, and the South San Francisco Deed of Trust.
    
    Combined Loan to Value Ratio:  The ratio, as determined by
    Beneficiary, of (i) the aggregate principal balance, together with all
    accrued but unpaid interest, of all encumbrances against the Remaining
    Properties, to (ii) the fair market value of the Remaining Properties,
    as determined by Beneficiary.
    
    Combined Properties:  Collectively, the Property, the property
    encumbered by the Ontario Deed of Trust, the property encumbered by
    the Tustin Deed of Trust, the property encumbered by the Milpitas Deed
    of Trust, the property encumbered by the Woodlands Deed of Trust, the
    property encumbered by the Nevada Deed of Trust, the property
    encumbered by the Arizona Deed of Trust, and the properties encumbered
    by the South San Francisco Deed of Trust.
    
    Event of Default:  As defined in Paragraph 6.1 hereof.
    
    Fixtures:  All fixtures located upon or within the Improvements or now
    or hereafter installed in, or used in connection with any of the
    Improvements, including boilers, furnaces, pipes, plumbing, elevators,
    cleaning and sprinkler systems, fire extinguishing apparatus and
    equipment, water tanks, heating, ventilating, air conditioning and air
    cooling equipment, whether or not permanently affixed to the Land or
    the Improvements.
    
    Future Combined Debt Service Coverage:  The ratio, as determined by
    Beneficiary, of (a) Net Operating Income for the immediately upcoming
    twelve-month period for the Remaining Properties (based on reasonable
    assumptions determined by Beneficiary), to (b) the sum of (i) the
    annual debt service payments (including principal and interest) for
    the same twelve-month period on the portion of the Loan consisting of
    the aggregate of the Allocable Loan Amounts for the Remaining
    Properties, and (ii) the annual debt service payments (including
    principal and interest) on all other indebtedness secured or which
    will be secured by a lien on all or part of the Remaining Properties
    for the same twelve-month period.  For purposes of calculating annual
    debt service, amortization of the aggregate principal indebtedness
    over a thirty (30) year period (or such lesser period if the
    applicable promissory notes or other loan documents in the case of
    loans other than the Loan provide otherwise) is assumed to apply
    during the entire term of the Loan.
    
    Future Individual Debt Service Coverage:  For each of the Combined
    Properties, the ratio, as determined by Beneficiary, of (a) Net
    Operating Income for such Combined Property for the next upcoming
    twelve-month period (based on reasonable assumptions determined by
    Beneficiary), to (b) the sum of (i) the annual debt service payments
    (including principal and interest) on the portion of the Loan
    consisting of the Allocable Loan Amount for such Combined Property for
    the same twelve-month period, and (ii) the annual debt service
    payments (including principal and interest) on all other indebtedness
    secured or which will be secured by a lien on all or part of such
    Combined Property for the same twelve-month period.  For purposes of
    calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory note or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Impositions:  All real estate and personal property and other taxes
    and assessments, water and sewer rates and charges levied or assessed
    upon or with respect to the Property, and all other governmental
    charges and any interest or costs or penalties with respect thereto,
    ground rent and charges for any easement or agreement maintained for
    the benefit of the Property, general and special, ordinary and
    extraordinary, foreseen or unforeseen, of any kind and nature
    whatsoever that at any time prior to or after the execution of the
    Loan Documents may be assessed, levied, imposed, or become a lien upon
    the Property or the rent or income received therefrom, or any use or
    occupancy thereof; and any and all other charges, expenses, payments,
    claims, mechanics' or material suppliers' liens or assessments of any
    nature, if any, which are or may become a lien upon the Property or
    the rent or income received therefrom.
    
    Impound Account:  The account that Trustor may be required to maintain
    pursuant to Paragraph 3.4 hereof for the deposit of amounts required
    to pay Impositions and insurance premiums.
    
    Improvements:  All buildings and other improvements and appurtenances
    located on the Land, including surface improvements, such as parking
    areas and landscaping structures and all improvements, additions and
    replacements thereof, and other buildings and improvements, at any
    time hereafter constructed or placed upon the Land.
    
    Indebtedness:  The principal of and all other amounts, payments and
    premiums due under the Note (and each and every of them) and any
    extensions or renewals thereof (including extensions or renewals at a
    different rate of interest, whether or not evidenced by a new or
    additional promissory note or notes), and all other indebtedness of
    Trustor to Beneficiary and additional advances under, evidenced by
    and/or secured by the Loan Documents, plus interest on all such
    amounts.
    
    Individual Debt Service Coverage:  For each of the Combined
    Properties, the ratio, as determined by Beneficiary, of (a) Net
    Operating Income for such Combined Property for the preceding twelve-
    month period, to (b) the sum of (i) the annual debt service payments
    (including principal and interest) on the portion of the Loan
    consisting of the Allocable Loan Amount for such Combined Property for
    the preceding twelve-month period, and (ii) the annual debt service
    payments (including principal and interest) on all other indebtedness
    secured or which will be secured by a lien on all or part of such
    Combined Property for the preceding twelve-month period.  For purposes
    of calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory note or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Individual Loan to Value Ratio:  For each individual Combined
    Property, the ratio, as determined by Beneficiary, of (i) the
    aggregate principal balance, together with all accrued but unpaid
    interest, of the Allocable Loan Amount for such Combined Property and
    all other encumbrances (other than the Loan) against such Combined
    Property, to (ii) the fair market value of such Combined Property, as
    determined by Beneficiary.
    
    Inventory:  The personal property Inventory attached hereto as Exhibit
    C.
    
    Laws and Restrictions:  All federal, state, regional, county, local
    and other laws, regulations, orders, codes, ordinances, rules,
    statutes and policies, restrictive covenants and other title
    encumbrances, permits and approvals, Leases and other rental
    agreements, relating to the development, occupancy, ownership,
    management, use, and/or operation of the Property or otherwise
    affecting all or any part of the Property or Trustor.
    
    Leases:  Any and all leasehold interests, including subleases and
    tenancies following attornment, now or hereafter affecting or covering
    any part of the Property.
    
    Loan:  The loans from Beneficiary to Trustor evidenced by the Note.
    
    Loan Documents:  The Note, the Application, the Owner's Affidavit,
    this Deed of Trust, the Ontario Deed of Trust, the Tustin Deed of
    Trust, the Milpitas Deed of Trust, the Woodlands Deed of Trust, that
    certain Note Assignment and Assumption Agreement dated as of May 9,
    1997 relating to the Nevada Note, the Nevada Deed of Trust, the
    Arizona Deed of Trust, the South San Francisco Deed of Trust, each of
    the Assignments of Agreements, each of the Assignments of Lessor's
    Interest in Leases, the Post-Closing Agreement, and all other
    documents, with the exception of the Remediation and Indemnification
    Agreements, evidencing, securing or relating to the Loan, the payment
    of the Indebtedness or the performance of the Obligations.
    
    Loan Parties:  Trustor.
    
    Material Adverse Change:  Any material and adverse change in (i) the
    financial condition of any of the Loan Parties, or (ii) the condition
    or operation of the Property.
    
    Milpitas Deed of Trust:  That certain Deed of Trust, Security
    Agreement and Fixture Filing with Assignment of Leases, Rents and
    Agreements dated as of May 24, 1996, executed by Trustor for the
    benefit of Beneficiary, recorded in the Official Records of Santa
    Clara County, California, as amended by that certain First
    Modification of Deed of Trust and Other Loan Documents dated as of May
    9, 1997, as further amended by that certain Second Modification of
    Deed of Trust and Other Loan Documents dated as of even date herewith,
    as further amended from time to time.
    
    Net Operating Income:  For any period, gross income from operations of
    the Remaining Properties, for the purposes of determining Combined
    Debt Service Coverage or Future Combined Debt Service Coverage, or
    from operations of an individual Combined Property, for the purposes
    of determining the Individual Debt Service Coverage or Future
    Individual Debt Service Coverage for such Combined Property, in either
    case, derived from arm's length, market rate rents from leases with
    unaffiliated third parties in possession of the leased premises and
    paying rent on a current basis, service fees or charges, and addi-
    
    tional rent resulting from operating expense, common area maintenance,
    utilities and tax escalation pass through provisions (excluding
    capital gains income derived from the sale of assets and other items
    of income which Beneficiary reasonably determines are unlikely to
    occur in any subsequent period), less operating expenses (such as
    cleaning, utilities, administrative, landscaping, security and common
    area maintenance expenses, common area association fees, repairs and
    maintenance and less fixed expenses (such as insurance, real estate
    and other taxes), which expenses shall be related to the property
    producing such gross income, shall be for services from arm's length
    third party transactions or equivalent to the same, and shall exclude
    all expenses for capital improvements and replacements, debt service
    and depreciation or amortization of capital expenditures and other
    similar noncash items.  Operating expenses shall include not less than
    4.0% of gross income for the property encumbered by the Woodlands Deed
    of Trust and not less than 3.5% of gross income for each of the other
    Combined Properties and shall include reserves for replacements of not
    less than $31,000 for the Property encumbered by the Tustin Deed of
    Trust and not less than $23,000 for each of the other Combined
    Properties.  Real estate taxes shall be calculated based upon the
    greater of (i) the current tax bill plus the next subsequent year's
    escalations as permitted under applicable law, or (ii) the estimated
    market value of such Combined Properties (as determined by
    Beneficiary) at the time of any reconveyance described in
    Paragraph 9.36 of this Deed of Trust multiplied by the then current
    tax rate.  Gross income shall not be anticipated for any greater
    period than that approved by generally accepted accounting principles,
    nor shall operating expenses be prepaid.
    
    Nevada Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of May 9, 1997, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Washoe County Nevada,
    as amended by that certain First Modification of Deed of Trust and
    Other Loan Documents dated as of even date herewith, as further
    amended from time to time.
    
    Note:  Collectively (i) that certain Amended and Restated Promissory
    Note dated May 24, 1996 (and deemed made as of, and relating back to,
    March 20, 1996), executed by Trustor in the original principal amount
    of Twenty-Five Million and No/100 Dollars ($25,000,000.00), payable to
    Beneficiary or its order, and all modifications, renewals or
    extensions thereof (the "Multistate Note"), (ii) that certain Amended
    and Restated Promissory Note dated as of May 9, 1997 executed by
    Trustor in the original principal amount of Eight Million Nine Hundred
    Thirteen Thousand Seven Hundred Thirty and 85/100 Dollars
    ($8,913,730.85), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Nevada Note"), and
    (iii) that certain Promissory Note dated as of even date herewith
    executed by Trustor in the original principal amount of Twenty Million
    Nine Hundred Thousand Dollars ($20,900,000), payable to Beneficiary or
    its order, and all modifications, renewals or extensions thereof (the
    "Arizona/California Note").
    
    Obligations:  Any and all of the covenants, promises and other
    obligations (including, without limitation, the Indebtedness) made or
    owing by Trustor to or due to Beneficiary under and/or as set forth in
    the Loan Documents and all of the material covenants, promises and
    other obligations made or owing by Trustor to each and every other
    Person relating to the Property.
    
    Ontario Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of San Bernardino
    County, California, as amended by that certain First Modification of
    Deed of Trust and Other Loan Documents dated as of May 24, 1996, as
    further amended by that certain Second Modification of Deed of Trust
    and Other Loan Documents dated as of May 9, 1997, as further amended
    by that certain Third Modification of Deed of Trust and Other Loan
    Documents dated as of even date herewith, as further amended from time
    to time.
    
    Owner's Affidavit:  That certain Owner's Affidavit dated as of even
    date herewith, executed by Trustor in favor of Beneficiary.
    
    Permitted Exceptions:  All of those matters described on Exhibit B
    attached hereto.
    
    Person:  Any natural person, corporation, firm, association,
    government, governmental agency or any other entity, whether acting in
    an individual, fiduciary or other capacity.
    
    Personalty:  Trustor's right, title and interest in all personal
    property (other than Fixtures) now or hereafter located in, upon or
    about or collected or used in connection with the Property, together
    with all present and future attachments, accessions, replacements,
    substitutions and additions thereto or therefor, and the cash and
    noncash proceeds thereof, including all property listed in the
    Inventory, the Impound Account, all goods, documents, instruments and
    chattel paper, all drawings, plans and specifications, all causes of
    action and recoveries now or hereafter existing for any loss or
    diminution in value of the Property, all licenses, governmental
    authorizations or permits pertaining to the Property or the
    development, ownership, management or operation thereof, all
    trademarks, service marks, designs, logos, trade names, names or
    similar identifications pertaining to the Property, and all accounts,
    contract rights and general intangibles (including, without
    limitation, any insurance proceeds and condemnation awards or
    compensation) arising out of or incident to the ownership, development
    or operation of the Property owned by or in which Trustor has an
    interest including, without limitation, all personal property
    described in the UCC-1 Financing Statement executed by Trustor of even
    date herewith, which is incorporated herein by this reference, and all
    furniture, furnishings, equipment, machinery, construction materials
    and supplies, leasehold interests in personal property and the Leases. 
    Notwithstanding the foregoing, Personalty shall not include any
    proprietary computer software developed by Trustor for the
    interpretation, manipulation or presentation of the information
    comprising the books and records of Trustor.
    
    Post-Closing Agreement:  That certain Post-Closing Actions Agreement
    dated as of even date herewith, executed by Trustor in favor of
    Beneficiary.
    
    Property:  As defined in the above granting paragraph of this Deed of
    Trust.
    
    Receiver:  Any trustee, receiver, custodian, fiscal agent, liquidator
    or similar officer.
    
    Remaining Properties:  Collectively, each of the Combined Properties
    which remain encumbered by any of the Combined Deeds of Trust
    following the requested reconveyance of this Deed of Trust pursuant to
    Paragraph 9.36 of this Deed of Trust and following the prior or
    concurrent reconveyance of any of the other Combined Deeds of Trust
    pursuant to Paragraph 9.36 of any of the other Combined Deeds of
    Trust.
    
    Remediation and Indemnification Agreements:  Collectively, (i) the
    Hazardous Substances Remediation and Indemnification Agreement dated
    as of May 24, 1996 executed by Trustor in favor of Beneficiary in
    connection with the property encumbered by the Milpitas Deed of Trust,
    (ii) the Hazardous Substances Remediation and Indemnification
    Agreement dated as of March 20, 1996, executed by Trustor in favor of
    Beneficiary in connection with the property encumbered by the Ontario
    Deed of Trust, (iii) the Hazardous Substances Remediation and
    Indemnification Agreement dated as of March 20, 1996, executed by
    Trustor in favor of Beneficiary in connection with the property
    encumbered by the Tustin Deed of Trust, (iv) the Hazardous Substances
    Remediation and Indemnification Agreement dated as of March 20, 1996,
    executed by Trustor in favor of Beneficiary in connection with the
    property encumbered by the Woodlands Deed of Trust, (v) the Hazardous
    Substances Remediation and Indemnification Agreement dated as of May
    9, 1997 executed by Trustor in favor of Beneficiary in connection with
    the property encumbered by the Nevada Deed of Trust, (vi) the
    Hazardous Substances Remediation and Indemnification Agreement dated
    as of even date herewith executed by Trustor in favor of Beneficiary
    in connection with the property encumbered by the Arizona Deed of
    Trust, (vii) the Hazardous Substances Remediation and Indemnification
    Agreement dated as of even date herewith executed by Trustor in favor
    of Beneficiary in connection with the property encumbered by the South
    San Francisco Deed of Trust, and (viii) the Hazardous Substances
    Remediation and Indemnification Agreement dated as of even date
    herewith executed by Trustor in favor of Beneficiary in connection
    with the Property.
    
    Rents:  All rents, royalties, revenues, issues, profits, proceeds and
    other income from the Property.
    
    Secondary Interest Rate:  As defined in the Note.
    
    South San Francisco Deed of Trust:  That certain Deed of Trust dated
    as of this date herewith, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of San Mateo County,
    California as amended from time to time.
    
    Tustin Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Orange County,
    California, as amended by that certain First Modification of Deed of
    Trust and Other Loan Documents dated as of May 24, 1996, as further by
    that certain Second Modification of Deed of Trust and Other Loan
    Documents dated as of May 9, 1997, as further amended by that certain
    Third Modification of Deed of Trust and Other Loan Documents dated as
    of even date herewith, as further amended from time to time.
    
    Woodlands Deed of Trust:  That certain Deed of Trust, Security
    Agreement and Fixture Filing with Assignment of Leases, Rents and
    Agreements dated as of March 20, 1996, executed by Trustor for the
    benefit of Beneficiary, recorded in the Official Records of Salt Lake
    County, Utah, as amended by that certain First Modification of Deed of
    Trust and Other Loan Documents dated as of May 24, 1996, as further by
    that certain Second Modification of Deed of Trust and Other Loan
    Documents dated as of May 9, 1997, as further amended by that certain
    Third Modification of Deed of Trust and Other Loan Documents dated as
    of even date herewith, as further amended from time to time.
    
    
    
                               ARTICLE 30
    
                     Representations and Warranties
    
    
          Trustor hereby represents and warrants to Beneficiary
    and Trustee that as of the date of this Deed of Trust and as of the
    date of any subsequent disbursement pursuant to the Loan Documents:
    
          30.1  Title, Authorization and Organization.  Trustor
    (i) is the lawful owner of the Property and holds good and marketable
    title to the Property free and clear of all defects, liens,
    encumbrances, easements, exceptions and assessments, except the
    Permitted Exceptions; (ii) has good, right and lawful authority to
    grant the Property as provided in and by this Deed of Trust; (iii) has
    the requisite power and authority to own, develop and operate the
    Property; (iv) is duly organized, validly existing and in good
    standing under the laws of the State of its organization and is duly
    qualified to do business in the State in which the Land is located;
    and (v) is in compliance with all Laws and Restrictions applicable to
    it.
    
          30.2  Validity of Loan Documents.  The execution,
    delivery and performance by Trustor of the Loan Documents and the
    borrowings evidenced by the Note are within the power of Trustor, have
    been authorized by all requisite corporate or partnership authority
    and will not violate any Laws and Restrictions or any agreement or
    other instrument.  Each of the Loan Documents when executed and
    delivered to Beneficiary, will constitute a legal, valid and binding
    obligation of Trustor enforceable in accordance with its terms.
    
          30.3  Financial Statements.  All financial statements
    and data that have been given to Beneficiary with respect to the
    Property or any Loan Party are true, accurate, complete and correct
    and except as expressly noted to the contrary therein, have been
    prepared in accordance with generally accepted accounting principles
    consistently applied throughout the periods covered thereby.  There
    has been no Material Adverse Change since the date of the most recent
    financial statement given to Beneficiary.
    
          30.4  Other Information.  All reports, papers, data
    and information given to Beneficiary with respect to Loan Parties and
    the Property are accurate, correct and complete.
    
          30.5  Litigation.  There is not now pending against or
    affecting any Loan Party or the Property, nor to the best of Trustor's
    knowledge is there threatened any action, suit or proceeding at law or
    in equity or by or before any administrative agency that, if adversely
    determined, would materially impair or affect (i) the financial
    condition or operations of such Loan Party, or (ii) the condition, use
    or operation of the Property.
    
          30.6  Additional Representations and Warranties. 
    (i) The Property is not used principally or primarily for agricultural
    or grazing purposes; (ii) each Loan Party has filed all federal,
    state, county and municipal income tax returns required to have been
    filed by it and has paid all taxes that have become due pursuant to
    such returns or pursuant to any assessments received by it (and no
    Loan Party knows of any basis for any additional assessment against it
    in respect of such taxes); (iii) all costs for labor and materials for
    the construction of the Improvements have been paid in full other than
    ongoing work for leasehold improvements under Leases approved in
    writing by Beneficiary; (iv) Trustor is not aware of any assessment
    for public improvements which is pending and which could become a lien
    upon the Property; (v) no event has occurred which with the giving of
    notice or the passage of time, or both, would constitute an Event of
    Default under any of the Loan Documents; (vi) Trustor is not a party
    to any agreement or instrument materially and adversely affecting its
    present or proposed business conducted on the Property or the Property
    itself, financial or otherwise; (vii) Trustor is not in default in the
    performance, observance or fulfillment of any of the material
    obligations, covenants or conditions set forth in any such agreement
    or instrument to which it is a party to the extent that the same would
    have a material and adverse effect on the Property or Trustor's
    ability to timely perform its Obligations under the Loan Documents;
    (viii) all Fixtures are permanently affixed to the Improvements and
    Trustor has not executed any financing statement or security
    agreements covering the Fixtures, or any of them, and the costs of all
    Fixtures due as of the date hereof have been paid; (ix) neither the
    Property, nor any part thereof, has sustained, incurred or suffered
    any material damage or destruction; and (x) subject to the Permitted
    Exceptions, the Personalty is owned by Trustor, free and clear of any
    liens, encumbrances, mortgages, security interests, claims and rights
    of others.
    
          30.7  Compliance with Laws.  The Property and the
    proposed and actual use thereof comply with all Laws and Restrictions
    and the Laws and Restrictions contain no unsatisfied conditions
    necessary for the actual use of the Property as it is currently used. 
    Trustor has received no notices of violations of any Laws and
    Restrictions.
    
          30.8  Bankruptcy.  No petition in bankruptcy, petition
    or answer seeking assignment for the benefit of creditors or
    appointment of a Receiver with respect to Trustor has occurred or is
    contemplated, and no reorganization, arrangement, liquidation or
    dissolution or similar relief under the Federal Bankruptcy laws or any
    state laws have been instituted by or against Trustor, and none is
    contemplated.
    
    
                               ARTICLE 31
    
                         Affirmative Covenants
    
    
          Trustor hereby covenants and agrees as follows:
    
          31.1  Obligations of Trustor.  Trustor will (i) timely
    perform, or cause to be timely performed, all the Obligations;
    (ii) maintain and preserve the lien of this Deed of Trust; and
    (iii) forever warrant and defend its grant made herein against any and
    all claims and demands whatsoever.
    
          31.2  Insurance.
    
            A.       Trustor, at its sole cost and expense,
    will keep and maintain for the mutual benefit of Trustor and
    Beneficiary, the following policies of insurance:
    
              (1)    Insurance against loss or damage to the
    Property by fire and other risks covered by insurance commonly known
    as the broad form of extended coverage, including losses sustained by
    reason of riot and civil commotion, vandalism, malicious mischief,
    burglary, theft and mysterious disappearance, flood (if the Property
    is located in a HUD designated special flood hazard area) and against
    such other risks or hazards as Beneficiary from time to time
    reasonably may designate, in an amount equal to one hundred
    percent (100%) of the then "full replacement cost" of the
    Improvements, the Fixtures and the Personalty, without deduction for
    physical depreciation.
    
              (2)    Rental income insurance against loss of
    income in an amount not less than twelve (12) months rental and taxes
    and other operating expense reimbursements or payments at then-current
    income levels.
    
              (3)    Commercial General Liability insurance
    including broad form property damage, contractual liability and
    personal injury or death coverage, with a combined single limit of at
    least $5,000,000.
    
              (4)    "Builders Risk" insurance, during any
    material construction, repair, replacement, renovation or alteration
    of the Improvements, in such amounts as are reasonably approved by
    Beneficiary.
    
              (5)    If applicable, boiler and machinery
    insurance covering boilers and other pressure vessels, the air
    conditioning system, high pressure piping and other machinery and
    equipment required for the operation of the Property.
    
              (6)    Such other insurance, and in such amounts,
    as may from time to time be reasonably required by Beneficiary (but
    excluding earthquake insurance, unless earthquake insurance is
    required pursuant to the terms of any of the Leases).
    
            B.       Trustor shall provide Beneficiary with
    satisfactory evidence of compliance with applicable requirements for
    Worker's Compensation insurance and of employee automobile coverage.
    
            C.       All policies of insurance required by this
    Deed of Trust (i) shall be satisfactory in form and substance to
    Beneficiary and written with companies satisfactory to Beneficiary,
    (ii) shall name Beneficiary as an additional insured as its interests
    may appear, (iii) shall contain a Standard Lender's Loss Payable
    endorsement and other non-contributory standard mortgagee protection
    clauses acceptable to Beneficiary, and at Beneficiary's option, a
    waiver of subrogation rights by the insurer, (iv) shall contain an
    agreement by the insurer that such policy shall not be amended or
    canceled without at least thirty (30) days' prior written notice to
    Beneficiary, (v) shall be in the full replacement cost of the Improve-
    
    ments, without deduction for physical depreciation and (vi) shall
    contain such other provisions as Beneficiary deems reasonably
    necessary or desirable to protect its interests.  Any policies
    containing a coinsurance clause shall include a replacement cost
    endorsement adequate to ensure that the coinsurance clause is rendered
    inoperative.
    
            D.       In the event a blanket policy is submitted
    to satisfy Trustor's responsibilities under this Paragraph 3.2, in
    addition to such other requirements set forth herein, Trustor shall
    deliver to Beneficiary a certificate from such insurer indicating that
    Beneficiary is an insured under such policy and designating the amount
    of such insurance applicable to the Property.
    
            E.       Trustor shall furnish evidence,
    satisfactory to Beneficiary, that (i) all insurance requirements
    (including, without limitation, provisions for waivers of subrogation)
    set forth in the Leases or any other agreements affecting the Property
    shall have been satisfied by each party thereto, and (ii) Trustor's
    insurance coverage is sufficient (assuming the total destruction of
    the Property) to permit Trustor to rebuild the Improvements (including
    basic tenant improvements) and to replace the Fixtures and Personalty
    in such manner as to enable the Property to be operable and rentable
    as it is currently rented and operated, and no tenant shall have the
    right to terminate its lease of any portion of the Property as a
    result of the failure of Trustor to rebuild above-standard tenant
    improvements.
    
            F.       Self-insurance (other than the applicable
    deductibles approved by Beneficiary) shall not be employed to satisfy
    the requirements of this Paragraph 3.2.
    
            G.       All of Trustor's right, title and interest
    in and to all policies of property insurance and any unearned premiums
    paid thereon are hereby assigned (to the fullest extent assignable) to
    Beneficiary who shall have the right, but not the obligation, to
    assign the same to any purchaser of the Property at any foreclosure
    sale.
    
            H.       Not less than thirty (30) days prior to
    the expiration dates of any policy previously furnished pursuant to
    this Paragraph 3.2, Trustor shall provide Beneficiary with duplicate
    originals or certified copies of the renewal policies together with
    evidence satisfactory to Beneficiary of Trustor's payment of the
    applicable premiums.
    
          31.3  Maintenance, Waste and Repair.  Trustor will
    (i) maintain the Property in good order and condition, (ii) promptly
    make all necessary structural and non-structural repairs to the
    Property, (iii) not diminish or materially alter the Improvements, nor
    erect any new buildings, structures or building additions on the
    Property, without the prior written consent of Beneficiary, and
    (iv) not permit any waste of the Property or make any change in the
    use thereof, nor do or permit to be done thereon anything, that may in
    any way impair the security of this Deed of Trust.
    
          31.4  Impositions; Impounds.  Trustor will pay when
    due all Impositions.  Upon an Event of Default, Trustor will pay
    monthly to Beneficiary an amount equal to one-twelfth (1/12th) of the
    annual cost of Impositions together with an amount equal to the
    estimated next hazard and other required insurance premiums.  These
    funds will be held by Beneficiary (and may be commingled with other
    funds of Beneficiary) without interest and will be released to Trustor
    for payment of Impositions and insurance premiums, or directly applied
    to such costs by Beneficiary, as Beneficiary may elect.
    
          31.5  Compliance with Law.  Trustor will promptly and
    faithfully comply with all present and future Laws and Restrictions.
    
          31.6  Books and Records.  Trustor, without expense to
    Beneficiary, will maintain full and complete books of account and
    other records reflecting the results of the operations of the Property
    in accordance with generally accepted accounting principles
    consistently applied, and will furnish or cause to be furnished to
    Beneficiary such financial information concerning the condition of the
    Loan Parties and the Property as Beneficiary shall reasonably request. 
    The following information will be furnished without request:
    
            A.       As soon as available, and in any event
    within thirty (30) days after the close of each fiscal quarter of each
    fiscal year of Trustor, a statement of revenues and expenses relating
    to the rentals and operations of the Property for the applicable
    fiscal quarter just ended, certified by Trustor;
    
            B.       As soon as available, and in any event
    within ninety (90) days after the end of each fiscal year of Trustor,
    an annual operating statement for the Property certified by an
    independent certified public accountant acceptable to Beneficiary and
    a rent roll in the form delivered to Beneficiary in connection with
    the closing of the Loan certified by Trustor reflecting all the
    existing Leases; and
    
            C.       As soon as available, and in any event
    within ninety (90) days after the end of Trustor's fiscal year, a
    balance sheet of Trustor, certified in a manner acceptable to
    Beneficiary.
    
          After the occurrence of an Event of Default, or in the
    event Trustor fails to deliver an annual operating statement for the
    Property certified by an independent certified public accountant
    acceptable to Beneficiary within the time frame set forth in
    Paragraph 3.6.B, above, Beneficiary shall have the right, at all
    reasonable times and upon reasonable notice, to audit the books of
    account and records of any Loan Party, all of which shall be made
    available at Trustor's office during reasonable business hours to
    Beneficiary and Beneficiary's representatives for such purpose, from
    time to time.  If such audit discloses a variance of three per-
    
    cent (3%) or more in income or expenses, the cost of such audit shall
    be paid by Trustor.
    
          31.7  Further Assurances.  Trustor, at any time upon
    the reasonable request of Beneficiary, will at Trustor's expense
    execute, acknowledge and deliver all such additional papers and
    instruments (including, without limitation, a declaration of no
    setoff) and all such further acts and things as may be reasonably
    necessary to carry out the purposes of the Loan Documents and to
    subject to the liens thereof any property intended by the terms
    thereof to be covered thereby and any renewals, additions,
    substitutions or replacements thereto.
    
          31.8  Indemnity and Attorneys' Fees.  Trustor will
    indemnify, defend, protect and hold Beneficiary harmless from any and
    all liability, loss, claims, damage, cost or expense (including,
    without limitation, reasonable attorneys' fees) that Beneficiary may
    or might incur hereunder, or in connection with the making or
    administering of the Loan, the enforcement of any of Beneficiary's
    rights or remedies hereunder or under the other Loan Documents, any
    action taken by Beneficiary hereunder or thereunder, whether or not
    suit is filed, or by reason or in defense of any and all claims and
    demands whatsoever that may be asserted against Beneficiary arising
    out of the Property, or any part thereof or interest therein, or as to
    which it becomes necessary to defend or uphold the lien of this Deed
    of Trust or other Loan Documents.  Should Beneficiary incur any such
    liability, loss, claim, damage, cost or expense, the amount thereof
    with interest thereon at the Secondary Interest Rate shall be payable
    by Trustor immediately without demand, shall be secured by this Deed
    of Trust, and shall be part of the Indebtedness.
    
          31.9  Litigation.  Trustor will promptly give notice
    in writing to Beneficiary of any litigation which may reasonably be
    expected to result in a Material Adverse Change.
    
          31.10  Inspection of Property.  Trustor hereby grants
    to Beneficiary, its agents, employees, consultants and contractors,
    the right to enter upon the Property for the purpose of making any and
    all inspections, reports, tests (including, without limitation, soils
    borings, ground water testing, wells and/or soils analysis), inquiries
    and reviews as Beneficiary (in its sole and absolute discretion) may
    deem necessary to assess the then current condition of the Property;
    provided, however, that Beneficiary shall not conduct any such tests
    (including, without limitation, soil borings, ground water testing,
    wells and/or soils analysis) (i) unless Beneficiary becomes aware of,
    or reasonably suspects, an environmental event on or near the Property
    which could have a material adverse effect on any portion of the
    Property and Trustor refuses or fails to conduct such tests in a
    manner reasonably requested by Beneficiary, or (ii) until after the
    occurrence of an Event of Default under any of the Loan documents or
    the Remediation and Indemnification Agreements.  Beneficiary shall
    provide Trustor with one (1) business day's notice of such entry;
    provided, however, that, subject to the preceding sentence, Trustor's
    consent shall not be required for such entry or for the performance of
    such tests.  All costs, fees and expenses (including those of Benefi-
    
    ciary's legal counsel and consultants) incurred by Beneficiary with
    respect to such inspections, reports, tests, inquiries and reviews
    shall be paid by Trustor to Beneficiary upon demand, shall accrue
    interest at the Secondary Interest Rate until paid, and shall be
    secured by this Deed of Trust.  Beneficiary shall make reasonable
    efforts in the exercise of its entry, inspection, and other rights
    under this Paragraph to avoid interference with the business
    operations of any tenant or licensee occupying space at the Property
    pursuant to Leases permitted by the Loan Documents, and, so long as no
    Event of Default has occurred, shall cooperate with Trustor in setting
    the time for such entry, inspections and tests.
    
          31.11  Contest.  Notwithstanding the provisions of
    Paragraphs 3.4 and 3.5 hereof, Trustor may, at its expense, contest
    the validity or application of any Impositions or Laws and
    Restrictions by appropriate legal proceedings promptly initiated and
    conducted in good faith and with due diligence, provided that
    (i) Beneficiary is reasonably satisfied that neither the Property nor
    any part thereof or interest therein will be in danger of being sold,
    forfeited, or lost as a result of such contest, and (ii) Trustor shall
    have posted a bond or furnished such other security as may be
    reasonably required from time to time by Beneficiary.
    
          31.12  Tax Receipts.  Trustor will deliver to
    Beneficiary, within seven (7) days after the demand made therefor,
    bills showing the payment to the extent then due of all taxes,
    assessments (including, without limitation, those payable in periodic
    installments), and any Imposition that may have become a lien upon the
    Property or any part thereof.
    
          31.13  Additional Information.  Trustor will furnish
    to Beneficiary, within seven (7) days after written request therefor,
    any and all information that Beneficiary may reasonably request
    concerning the Property or the performance by Trustor of the
    Obligations.
    
          31.14  Prepayment.  Trustor may prepay the Loan only
    on the terms and conditions set forth in the Note and Trustor shall
    pay Beneficiary prepayment charges in respect of any prepayment,
    whether voluntary or involuntary, as required by and on the terms and
    conditions set forth in the Note.
    
          31.15  FIRPTA Affidavit.  In the event of any transfer
    by Trustor of its rights hereunder or of any interest in the Property
    otherwise permitted under this Deed of Trust, such transferee shall,
    as an additional condition to such transfer, under penalty of perjury,
    execute and deliver to Beneficiary an affidavit concerning the non-
    foreign status of such transferee substantially in the form required
    to be delivered by Trustor in connection with the funding of the Loan. 
    Nothing in this Paragraph 3.15 shall be deemed a modification or
    waiver of any other provision of any of the Loan Documents limiting,
    prohibiting or otherwise relating to any transfer of any interest in
    the Property or Trustor.
    
          31.16  Tax Service Contract.  Throughout the term of
    the Loan, at Trustor's sole expense, Beneficiary shall be furnished
    tax service contracts issued by a tax reporting agency satisfactory to
    Beneficiary.
    
          31.17  Reimbursement.  Any amount paid by Beneficiary
    for any tax, stamp tax, assessment, water rate, sewer rate, insurance
    premium, repair, rent charge, debt, claim, inspection or lien having
    priority over this Deed of Trust or to in any way protect the security
    for the Loan, shall (i) bear interest at the Secondary Interest Rate
    from the date of payment by Beneficiary, (ii) constitute additional
    indebtedness secured by this Deed of Trust, prior to any right, title
    or interest in or claim upon the Property attaching or accruing
    subsequent to the lien of this Deed of Trust, (iii) be secured by this
    Deed of Trust, and (iv) be payable by Trustor to Beneficiary upon
    demand.
    
          31.18  Plans and Specifications.  Trustor agrees to
    keep at its offices at the Property, and to make available to
    Beneficiary during normal business hours, "As-Built Plans and
    Specifications", or, if unavailable, the final set of plans and
    specifications from which the Improvements were constructed
    ("As-Builts"), certified by a licensed architect or licensed
    contractor as true, correct and complete As-Builts for the
    Improvements.
    
    
                               ARTICLE 32
    
                           Negative Covenants
    
    
            Trustor hereby covenants and agrees as follows:
    
          32.1  Restrictive Uses.  Trustor will not initiate,
    join in, or consent to any change in the current use of the Property
    or in any zoning ordinance, private restrictive covenant, assessment
    proceedings or other public or private restrictions limiting or
    restricting the uses that may be made of the Property or any part
    thereof without the prior written consent of Beneficiary.
    
          32.2  Due on Sale or Encumbrance.
    
            A.       Except as expressly otherwise provided in
    this Paragraph 4.2, in the event that Trustor, without the prior
    written consent of Beneficiary (which consent may be withheld for any
    reason or for no reason or given upon such terms and conditions as
    Beneficiary deems necessary or appropriate, all within Beneficiary's
    absolute discretion), shall sell, convey, assign, transfer, alienate
    or otherwise dispose of or be divested of its title to, or, shall
    mortgage, convey security title to, or otherwise encumber or cause to
    be encumbered, the Property or any part thereof or any interest
    therein in any manner or way, whether voluntary or involuntary, or in
    the event of (a) any merger, consolidation or dissolution involving,
    or the sale or transfer of all or substantially all of the assets of,
    Trustor or any general partner of Trustor, (b) the transfer (at one
    time or over any period of time) of ten percent (10%) or more of the
    voting stock of (i) a corporate Trustor or (ii) any corporate general
    partner of Trustor, (c) the transfer of any general partnership
    interest in Trustor or in any partnership which is a direct or
    indirect general partner of Trustor, or (d) the conversion of any such
    general partnership interest to a limited partnership interest, then
    the entire balance of the Indebtedness, plus the Prepayment Premium
    (as defined in the Note), shall become immediately due and payable at
    the option of Beneficiary.  Trustor hereby covenants not to
    participate in, cause or permit any of the foregoing actions or events
    described in this Paragraph 4.2 without Beneficiary's prior written
    consent.  Consent to one such transfer by Beneficiary shall not be
    deemed a waiver of the right to require such consent to further or
    future transfers.  Any such transferee shall, as a condition of the
    effectiveness of any consent or waiver by Beneficiary hereunder, as a
    covenant of Trustor and such transferee, and in form and substance
    required by Beneficiary, assume all obligations under the Loan
    Documents and the assumption shall not, however, release Trustor, or
    any maker or guarantor of the Note, from any liability thereunder. 
    This provision shall not apply to transfers of title or interest under
    any will or testament or applicable law of descent.
    
            B.       Notwithstanding the foregoing, the
    provisions of this Paragraph 4.2 shall not apply to (i) the sale of
    stock on any recognized public stock exchange in the ordinary course
    of business, (ii) any merger or consolidation of Trustor where the
    surviving company has a Debt Ratio (as defined below) which does not
    exceed the Debt Ratio of Trustor as of the Closing Date, as shown by
    evidence reasonably satisfactory to Beneficiary, and (iii) a public
    tender offer by a Person unaffiliated with Trustor to purchase the
    stock of Trustor.  Notwithstanding anything to the contrary contained
    herein, unless a change in the ownership of Trustor is the result of
    one or more of the acts described in the immediately preceding
    sentence (in which case the prior consent of Beneficiary is not
    required), Beneficiary's prior written consent shall be required in
    the event of a change in the ownership of Trustor (in a single
    transaction or cumulative transactions) such that in excess of 50% of
    Trustor's stock is owned or controlled by a sole shareholder or an
    affiliated group of shareholders ("Sale").  Notwithstanding the
    foregoing, a Sale shall specifically exclude:  (a) the conversion
    ("Conversion") to common stock shares of some or all of the Series A
    convertible preferred stock of Trustor outstanding as of the Closing
    Date (the "Preferred Stock"), (b) any initial sale ("Initial Sale") of
    any of the Preferred Stock to a Person unaffiliated with Trustor which
    occurs either prior to and/or subsequent to any Conversion, and
    (c) any sale of any of the Preferred Stock subsequent to an Initial
    Sale of such Preferred Stock to a Person unaffiliated with Trustor
    which previously acquired some or all of the Preferred Stock in an
    Initial Sale.  As used herein, "Debt Ratio" means the ratio of all
    indebtedness of Trustor and its subsidiaries to the sum of all assets
    of Trustor and it subsidiaries, before depreciation and less the sum
    of any intangible assets. 
    
          32.3  Replacement of Fixtures and Personalty.  Trustor
    will not permit any of the Fixtures or Personalty to be removed at any
    time from the Property without the prior written consent of
    Beneficiary unless actually replaced by articles of equal suitability
    and value owned by Trustor free and clear of any lien or security
    interest.
    
          32.4  No Cooperative or Condominium.  Trustor shall
    not operate the Property or permit the Property to be operated, as a
    cooperative or condominium building or buildings in which the tenants
    or occupants participate in the ownership, control, or management of
    the Property or any part thereof, as tenant stockholders or otherwise.
    
          32.5  Partnership Agreement.  Trustor, if a
    partnership, will not terminate, alter, modify or amend or permit the
    termination, alteration, modification or amendment of its Partnership
    Agreement without Beneficiary's prior written consent.
    
    
                               ARTICLE 33
    
                      Casualties and Condemnation
    
    
          33.1  Insurance and Condemnation Proceeds.
    
            A.       Trustor will notify Beneficiary in writing
    promptly after loss or damage caused by fire or other casualty to all
    or any part of the Property resulting in damage in excess of $25,000
    per occurrence, and prior to the making of any repairs thereto. 
    Trustor will furnish to Beneficiary within sixty (60) days after such
    loss or damage (a) preliminary plans and specifications for the repair
    and reconstruction of the Property (the "Preliminary Plans and
    Specifications"); and (b) evidence satisfactory to Beneficiary (i) of
    the cost of repair or reconstruction in accordance with the
    Preliminary Plans and Specifications, (ii) that sufficient funds are
    available and/or committed for the benefit of Beneficiary, including
    insurance proceeds, funds provided by the Trustor, payment and
    performance bond, or otherwise, to complete such repair or
    reconstruction, and (iii) that such repair or reconstruction may be
    completed in accordance with all applicable Laws and Restrictions
    within the time frame described in Paragraph 5.1.C.(v) hereof and that
    all necessary permits and approvals have been or will be obtained. 
    Trustor hereby unconditionally and irrevocably waives all rights of a
    property owner under applicable law providing for the allocation of
    condemnation proceeds between a property owner and a lien holder.
    
            B.       In the event of any insured loss in excess
    of Two Hundred Fifty Thousand Dollars ($250,000) or in the event an
    Event of Default, or an event which with the giving of notice or the
    passing of time or both constitutes an Event of Default, shall have
    occurred and be continuing, all insurance proceeds on account of any
    damage to the Property shall be payable to, and deposited with,
    Beneficiary.  Beneficiary, at its sole option, may (i) apply such
    insurance proceeds in payment of the Indebtedness or in satisfaction
    of any other Obligation in such order as Beneficiary may determine,
    (ii) use such insurance proceeds to repair or reconstruct the
    Improvements, (iii) release such insurance proceeds to Trustor for
    repair or reconstruction of the Improvements in accordance with the
    procedures described in Paragraph 5.1.E hereof, or (iv) divide such
    proceeds in any manner among any such application, use or release.  No
    such application, use or release shall, however, extend or postpone
    the due date of any installments under the Note or change the amount
    of such installments or cure or waive any Event of Default or notice
    of Event of Default under the Loan Documents or invalidate any act
    done pursuant to such notice.
    
            C.       Notwithstanding the provisions of Para-
    
    graph 5.1.B hereof, if all or any part of the Property is damaged or
    destroyed or less than all of the Property is taken by any public or
    quasi-public authority through condemnation, eminent domain, deed in
    lieu thereof, or otherwise, Beneficiary shall make the net amount of
    all insurance proceeds and condemnation awards received by Beneficiary
    after deduction of Beneficiary's reasonable costs and expenses, if
    any, in collection of the same and costs associated with Beneficiary's
    review of the Preliminary Plans and Specifications and other costs
    associated with disbursement of such proceeds (the "Net Proceeds")
    available for the repair and reconstruction of the Property (or so
    much thereof as was not condemned) pursuant to the procedures
    described in Paragraph 5.1.E hereof, provided that (i) no Event of
    Default or event which, with the giving of notice or the passage of
    time, or both, would constitute an Event of Default, shall have
    occurred and shall be continuing, (ii) Trustor has complied with the
    provisions of Paragraph 5.1.A hereof and Beneficiary has approved the
    Preliminary Plans and Specifications, (iii) Trustor shall proceed with
    the reconstruction of the Property as nearly as possible to the
    condition it was in immediately prior to the occurrence of such
    casualty or taking (the "Occurrence") and in accordance with the Plans
    and Specifications as promptly as is practicable after the Occurrence,
    but in no event later than four (4) months after the Occurrence,
    (iv) Beneficiary shall be satisfied that such reconstruction can be
    completed no later than twelve (12) months after the Occurrence and at
    least twelve (12) months before the maturity of the Loan,
    (v) Beneficiary shall be satisfied that the reconstruction can be
    completed at a cost which does not exceed the Net Proceeds, or, in the
    event the cost of such restoration exceeds the Net Proceeds, Trustor
    shall have satisfied the requirements set forth in Para-
    
    graph 5.1.F(i) hereof or Paragraph 5.1.F(ii) hereof, (vi) Beneficiary
    shall be satisfied that Trustor (whether with rental loss insurance
    proceeds or otherwise) will continue to be able to timely pay all
    payments as they become due on the Indebtedness during such period of
    repair and reconstruction, (vii) Trustor shall cause such
    reconstruction to be completed with due diligence as promptly as
    possible after commencement, but in no event later than twelve
    (12) months after the Occurrence and at least twelve (12) months
    before the maturity of the Loan, (viii) Beneficiary determines that
    repair or reconstruction is economically feasible and that the
    Property can physically and legally be restored to at least its value
    as of the Closing Date, (ix) Trustor shall have entered into a guaran-
    
    teed maximum price general construction contract acceptable in all
    respects to Beneficiary for completion of the repair or
    reconstruction, which contract must include provision for a retainage
    of not less than ten percent (10%) until full completion of the repair
    or reconstruction, and (x) the insurer does not deny liability to any
    named insured.
    
            D.       Beneficiary shall be entitled to settle
    and adjust all insurance claims, and Beneficiary may deduct and retain
    from the proceeds of any insurance the amount of all expenses incurred
    by Beneficiary in connection with any settlement or adjustment. 
    Notwithstanding the foregoing, so long as no Event of Default or event
    which, with the giving of notice or the passage of time or both, would
    constitute an Event of Default shall have occurred and be continuing,
    Trustor may settle directly with the insurer any insurance claims
    involving an amount less than Two Hundred Fifty Thousand Dollars
    ($250,000) so long as (i) Trustor applies all insurance proceeds to
    reconstruction of the Property, (ii) Trustor promptly and diligently
    pursues the repairs to completion, and (iii) Trustor follows the
    provisions of Paragraph 5.1.A hereof.
    
            E.       The Net Proceeds and any additional funds
    deposited by Trustor with Beneficiary shall constitute additional
    security for the Loan.  Trustor shall execute, deliver, file and/or
    record, at its own expense, such documents and instruments as
    Beneficiary deems necessary or advisable to grant to Beneficiary a
    perfected, first priority security interest in the Net Proceeds and
    such additional funds.  Provided that Trustor is otherwise entitled to
    receive the Net Proceeds pursuant to the terms and provisions of this
    Deed of Trust, Beneficiary or, at Beneficiary's option, a disbursing
    agent (the "Disbursing Agent") selected by Beneficiary (whose fees and
    expenses shall be paid by Trustor), shall pay the Net Proceeds to
    Trustor from time to time during the course of the restoration,
    subject to the following terms and conditions:
    
              (1)    The work shall be administered and
    overseen by an architect or engineer approved by Beneficiary (the
    "Architect").  Complete copies of the plans and specifications for the
    work (the "Plans and Specifications"), approved by all governmental
    authorities whose approval is required, and bearing the signed
    approval thereof by the Architect and accompanied by the Architect's
    signed estimate, bearing the Architect's seal, of the entire cost of
    completing the work, shall be delivered to Beneficiary;
    
              (2)    Each request for payment shall be made
    upon seven (7) day's prior written notice to Beneficiary or the
    Disbursing Agent and shall be accompanied by a certificate to be made
    by the Architect stating that (i) all of the work completed has been
    done in compliance with the Plans and Specifications, as approved by
    Beneficiary, (ii) the sum requested is justly required to reimburse
    Trustor for payments by Trustor to, or is justly due to, the
    contractor, subcontractors, materialmen, laborers, engineers,
    architects or other persons rendering services and materials for the
    work (giving a brief description of such services and materials) and,
    when added to all sums previously paid out by Beneficiary or the
    Disbursing Agent, does not exceed the value of the work done to the
    date of such certificate, and (iii) the amount of such proceeds
    remaining with Beneficiary are sufficient on completion of the work to
    pay for the same in full (giving in such reasonable detail as
    Beneficiary may require an estimate of the cost of such completion);
    
              (3)    Each request shall be accompanied by
    waivers of lien satisfactory to Beneficiary and the Disbursing Agent
    covering that part of the work for which payment or reimbursement is
    being requested and, if required by Beneficiary or the Disbursing
    Agent, by a search prepared by a title company satisfactory to
    Beneficiary or the Disbursing Agent, that there has not been filed
    with respect to the Property any mechanics', materialmen's or other
    liens;
    
              (4)    The request for any payment after the work
    has been completed shall be accompanied by a copy of any certificate
    or certificates required by any Laws and Restrictions for legal
    occupancy of the Improvements;
    
              (5)    Trustor shall deliver to Beneficiary or
    the Disbursing Agent certified or photostatic copies of all permits
    and approvals required by any Laws and Restrictions in connection with
    the commencement and conduct of the work; and
    
              (6)    Trustor shall deliver to Beneficiary or
    the Disbursing Agent a surety bond for and/or guaranty of the payment
    for and completion of the work, which bond or guaranty shall be in
    form and substance satisfactory to Beneficiary and in an amount no
    less than the Architect's estimate of the entire cost of completing
    the work.
    
            F.       Notwithstanding anything to the contrary
    contained herein or in any of the insurance policies, all proceeds
    paid to Trustor under such policies shall immediately be delivered to
    Beneficiary.  If the Net Proceeds exceed the costs of completion of
    the restoration of the Property, such excess proceeds shall belong and
    be retained by and/or paid over to Beneficiary to be applied against
    the Indebtedness.  If at any time the Net Proceeds shall not, in
    Beneficiary's opinion, be sufficient to pay in full the balance of the
    costs which will be incurred in connection with the repair and
    reconstruction of the Property and all payments as they come due on
    the Indebtedness and all other obligations which are or may be secured
    by a lien on the Property during the reconstruction period, Trustor
    shall, prior to receiving any further disbursement, either
    (i) complete, using its own funds and not borrowed funds, such portion
    of the reconstruction as shall be sufficient to render the Net
    Proceeds sufficient to complete the reconstruction, or (ii) deposit
    the deficiency with Beneficiary before any further disbursement of the
    Net Proceeds shall be made, which deficiency deposit shall be held by
    Beneficiary in an interest bearing special account and shall be
    disbursed on the same conditions applicable to the Net Proceeds. 
    Beneficiary shall remit to Trustor the balance, if any, of any such
    deficiency deposit remaining after completion of the reconstruction.
    
          33.2  Additional Provisions Relating to Condemnation. 
    Trustor, immediately upon obtaining knowledge of the commencement of
    any proceedings for the condemnation of the entire Property or any
    material part thereof, will notify Trustee and the Beneficiary of the
    pendency of such proceedings.  Trustee and Beneficiary may participate
    in any such proceedings and Trustor from time to time will deliver to
    Beneficiary all instruments requested by Beneficiary to permit such
    participation.  In the event of such condemnation proceedings, the
    award or compensation payable is hereby assigned to and shall be paid
    to Beneficiary.  Beneficiary shall be under no obligation to question
    the amount of any such award or compensation and may accept the same
    in the amount in which the same shall be paid.  In any such
    condemnation proceedings Beneficiary may be represented by counsel
    selected by Beneficiary, the cost of such counsel to be borne by
    Trustor.  The proceeds of any award or compensation so received shall,
    subject to Paragraph 5.1.C hereof as it relates to condemnation, and
    at the option of Beneficiary, either be applied to the prepayment of
    the Indebtedness or be paid over to the Trustor for restoration of the
    Improvements in accordance with the provisions of Paragraph 5.1.E
    hereof.  Trustor hereby unconditionally and irrevocably waives all
    rights of a property owner under Section 1265.225(a) of the California
    Code of Civil Procedure or any successor statute.
          
                               ARTICLE 34
    
             Events of Default and Remedies of Beneficiary
    
    
          34.1  Events of Default.
    
            A.       If one or more of the following events
    shall have occurred and be continuing:
    
              (1)    Trustor shall fail to pay when due any
    part of the Indebtedness;
    
              (2)    Trustor shall fail to timely observe,
    perform or discharge any Obligation contained in any of the Loan
    Documents, any agreement relating to the Property or any other loan
    documents with respect to the Property on its part to be performed or
    observed, other than as described in Paragraphs 6.1.A(1), (3), (4),
    (5), (6), (7) and (8), and any such failure shall remain unremedied
    for thirty (30) days or such lesser period as may be otherwise
    specified in the applicable Loan Document (the "Grace Period") after
    notice to Trustor of the occurrence of such failure; provided,
    however, that the Grace Period may be extended to ninety (90) days if: 
    (a) Beneficiary determines in good faith that (i) such default cannot
    be cured within the Grace Period but can be cured within ninety
    (90) days, (ii) no lien or security interest created by the Loan
    Documents shall be impaired prior to the completion of such cure, and
    (iii) Beneficiary's immediate exercise of any remedies provided
    hereunder or by law is not necessary for the protection or
    preservation of the Property or Beneficiary's security interest
    therein, and (b) Trustor shall immediately commence and diligently
    pursue the cure of such default;
    
              (3)    Trustor, as lessor or sublessor, as the
    case may be, shall assign the rents or income of the Property or any
    part thereof (other than to Beneficiary) without first obtaining the
    written consent of Beneficiary;
    
              (4)    Any representation or warranty made by
    Trustor in, under or pursuant to the Loan Documents was false or
    misleading in any material respect as of the date on which such
    representation or warranty was made or deemed remade, and Trustor does
    not cause to be taken and completed within thirty (30) days following
    notice of such breach any and all action required to cause such
    representation or warranty to be true and correct in all respects as
    originally made;
    
              (5)    (i) Any claim or lien shall be filed
    against the Property or any part thereof, whether or not such lien
    shall be prior to this Deed of Trust, which shall be maintained for a
    period of thirty (30) days without discharge, satisfaction or adequate
    bonding in accordance with the terms of this Deed of Trust; (ii) the
    existence of any interest in the Property other than the Permitted
    Exceptions, those of Trustor, Trustee, Beneficiary and any tenants in
    the Property; or (iii) the sale, hypothecation, conveyance or other
    disposition of the Property without the prior written consent of
    Beneficiary except as the result of the condemnation of a non-material
    part of the Property as set forth in Paragraph 5.1 above or as
    otherwise expressly permitted under the Loan Documents; 
    
              (6)    Any of the Loan Documents, at any time
    after their respective execution and delivery and for any reason,
    other than an act or omission of Beneficiary, shall cease to be in
    full force and effect or be declared null and void, or shall cease to
    constitute valid and subsisting liens and/or valid and perfected
    security interests in and to the Property, or Trustor shall contest or
    deny in writing that it has any further liability or obligation under
    any of the Loan Documents;
    
              (7)    The failure of Trustor to observe the
    provisions of Paragraph 4.2 hereof; and/or
    
              (8)    An "Event of Default" occurs under any one
    or more of the Woodlands Deed of Trust, the Milpitas Deed of Trust,
    the Ontario Deed of Trust, the Tustin Deed of Trust, the Nevada Deed
    of Trust, the Arizona Deed of Trust and/or the South San Francisco
    Deed of Trust.
    
          THEN and in any such event Beneficiary may, by written
    notice delivered to Trustor, which notice specifically states the
    occurrence of an Event of Default, declare Trustor to be in default. 
    Upon the occurrence of such event and the giving of such notice, the
    same shall constitute an event of default (an "Event of Default").
    
            B.       It shall constitute an Event of Default
    hereunder without the requirement of any notice if one or more of the
    following events shall have occurred and be continuing:
    
              (1)    (i) The entry of an order for relief under
    Title 11 of the United States Code as to Trustor, any general partner
    of Trustor, any parent company of such partner, or any owner of the
    Property or any interest therein or the adjudication of Trustor, any
    general partner of Trustor, or any owner of the Property as insolvent
    or bankrupt pursuant to the provisions of any state insolvency or
    bankruptcy act; (ii) the commencement by Trustor, any general partner
    of Trustor, or any parent company of such partner of any case,
    proceeding or other action seeking any reorganization, arrangement,
    composition, adjustment, liquidation, dissolution or similar relief
    for itself under any present or future statute, law or regulation
    relating to bankruptcy, insolvency, reorganization or other relief for
    debtors; (iii) consent to, acquiescence in or attempt to secure the
    appointment of any Receiver of all or any substantial part of its
    properties or of the Property by Trustor, any general partner of
    Trustor, any parent company of such partner, or any owner of the
    Property or any interest therein; (iv) Trustor, any general partner of
    Trustor, or any parent company of such partner shall generally not pay
    its debts as they become due or shall admit in writing its inability
    to pay its debts or shall make a general assignment for the benefit of
    creditors; or (v) Trustor, any general partner of Trustor, or any
    parent company of such partner shall take any action to authorize any
    of the acts set forth above; or
    
              (2)    Any case, proceeding or other action
    against Trustor, any general partner of Trustor, any parent company of
    such partner, or any owner of Property or any interest therein shall
    be commenced seeking to have an order for relief entered against such
    party as a debtor or seeking any reorganization, arrangement,
    composition, adjustment, liquidation, dissolution or similar relief
    for itself under any present or future statute, law or regulation
    relating to bankruptcy, insolvency, reorganization or other relief for
    debtors, or seeking the appointment of any Receiver for Trustor, any
    general partner thereof, or any parent company of such partner or for
    all or any substantial part of its property or the Property, and such
    case, proceeding or other action remains undismissed for an aggregate
    of sixty (60) days (whether or not consecutive) or Trustor or general
    partner or parent company during the period of its ownership fails to
    proceed diligently during such sixty (60) day period to have such
    proceeding or other action dismissed.
    
            C.       Upon the occurrence of any Event of
    Default, Beneficiary may at any time declare all of the Indebtedness
    to be due and payable and the same shall thereupon become immediately
    due and payable, together with any prepayment fee due in accordance
    with the terms of the Note, without any further presentment, demand,
    protest or notice of any kind.  Beneficiary may in its sole
    discretion, also do any of the following:
    
              (1)    in person, by agent, or by a Receiver, and
    without regard to the adequacy of security, the solvency of Trustor or
    the condition of the Property, enter upon and take possession of the
    Property, or any part thereof, in its own name or in the name of
    Trustee and do any acts which Beneficiary deems necessary to preserve
    the value, marketability or rentability of the Property; sue for or
    otherwise collect the rents, issues and profits therefrom, including
    those past due and unpaid, and apply the same, less cost and expenses
    of operation and collection, including, without limitation, reasonable
    attorneys' fees, against the Indebtedness, all in such order as
    Beneficiary may determine.  The entering upon and taking possession of
    said property, the collection of such rents, issues and profits and
    the application thereof as aforesaid shall not cure or waive any
    default or notice of default hereunder or invalidate any act done
    pursuant to such notice;
    
              (2)    commence an action to foreclose this Deed
    of Trust in the manner provided under this Deed of Trust or by law;
    
              (3)    with respect to any Personalty, proceed as
    to both the real and personal property in accordance with
    Beneficiary's rights and remedies in respect of the Land, or proceed
    to sell said Personalty separately and without regard to the Land in
    accordance with Beneficiary's rights and remedies as to personal
    property; and/or
    
              (4)    deliver to Trustee a written declaration
    of default and demand for sale, and a written notice of default and
    election to cause the Property to be sold, which notice Trustee or
    Beneficiary shall cause to be duly filed for record.
    
          34.2  Power of Sale.
    
            A.       Should Beneficiary elect to foreclose by
    exercise of the power of sale herein contained, Beneficiary shall also
    deposit with Trustee this Deed of Trust and the Note and such receipts
    and evidence of expenditures made and secured hereby as Trustee may
    require, and notice of default having been given as then required by
    law, and after lapse of such time as may then be required by law,
    after recordation of such notice of default, Trustee, without demand
    on Trustor, shall, after notice of sale having been given as required
    by law, sell the Property at the time and place of sale fixed by it in
    said notice of sale, either as a whole or in separate parcels as
    Beneficiary shall determine, and in such order as Beneficiary may
    determine, at public auction to the highest bidder.  Beneficiary may,
    in its sole discretion, designate the order in which the Property
    shall be offered for sale or sold through a single sale or through two
    or more successive sales, or in any other manner Beneficiary deems to
    be in its best interest.  If Beneficiary elects more than one sale or
    other disposition of the Property, Beneficiary may at its option cause
    the same to be conducted simultaneously or successively, on the same
    day or at such different days or times and in such order as
    Beneficiary may deem to be in its best interest, and no such sale
    shall terminate or otherwise affect the lien of this Deed of Trust on
    any part of the Property not then sold until all Indebtedness secured
    hereby has been fully paid.  If Beneficiary elects to dispose of the
    Property though more than one sale, Trustor shall pay the costs and
    expenses of each such sale of its interest in the Property and of any
    proceedings where the same may be made.  Trustee may postpone sale of
    all or any part of the Property by public announcement at such time
    and place of sale, and from time to time thereafter may postpone such
    sale by public announcement at the time fixed by the preceding
    postponement, and without further notice make such sale at the time
    fixed by the last postponement; or Trustee may, in its discretion,
    give a new notice of sale.  Beneficiary may rescind any such notice of
    default at any time before Trustee's sale by executing a notice of
    rescission and recording the same.  The recordation of such notice
    shall constitute a cancellation of any prior declaration of default
    and demand for sale and of any acceleration of maturity of Indebted-
    
    ness affected by any prior declaration or notice of default.  The
    exercise by Beneficiary of the right of rescission shall not
    constitute a waiver of any default then existing or subsequently
    occurring, or impair the right of Beneficiary to execute other
    declarations of default and demand for sale, or notices of default and
    of election to cause the Property to be sold, nor otherwise affect the
    Note or this Deed of Trust, or any of the rights, obligations or
    remedies of Beneficiary or Trustee hereunder or thereunder.  After
    sale Trustee shall deliver to such purchaser its deed conveying the
    property so sold, but without any covenant or warranty, express or
    implied.  The recitals in such deed of any matters or facts shall be
    conclusive proof of the truthfulness thereof.  Any Person, including,
    without limitation, Trustor, Trustee or Beneficiary, may purchase at
    such sale.  If allowed by law, Beneficiary, if it is the purchaser,
    may turn in the Note at the amount owing therein toward payment of the
    purchase price (or for endorsement of the purchase price as a payment
    on the Note if the amount owing thereon exceeds the purchase price). 
    Trustor hereby expressly waives any right of redemption after sale
    that Trustor may have at the time of sale or that may apply to the
    sale.  Trustor hereby expressly waives all rights of marshalling with
    respect to each of the Combined Properties that Trustor may have in
    the event of foreclosure hereunder or under any of the other Combined
    Deeds of Trust.
    
            B.       Trustee, upon such sale, shall make
    (without any covenant or warranty, express or implied), execute and
    after due payment made, deliver to the purchaser, its heirs or
    assigns, a deed or other record of interest, as the case may be, in
    and to the property so sold that shall convey to the purchaser all the
    title and interest of Trustor in the Property (or part thereof sold),
    and shall apply the proceeds of such sale in payment, first, of the
    expenses of such sale together with the reasonable expenses of the
    trust, including, without limitation, attorneys' fees, that shall
    become due upon any default made by Trustor, and also such sums, if
    any, as Trustee or Beneficiary shall have paid for procuring a search
    of the title to the Property, or any part thereof, subsequent to the
    execution of this Deed of Trust; and in payment, second, of the
    Indebtedness then remaining unpaid, and the amount of all other monies
    with interest thereon agreed or provided to be paid by Trustor; and
    the balance or surplus of such proceeds of sale Trustee shall pay to
    Trustor, its successors or assigns as their interest may appear.
    
          34.3  Proof of Default.  In the event of a sale of the
    Property, or any part thereof, and the execution of a deed therefor,
    the recital therein of default, and of recording notice of default and
    election of sale, and of the elapsing of the required time (if any)
    between the foregoing recording and the following notice, and of the
    giving of notice of sale, and of a demand by Beneficiary, or its
    successors or assigns, that such sale should be made, shall be
    conclusive proof of such default, recording, election, elapsing of
    time, and of the due giving of such notice, and that the sale was
    regularly and validly made on due and proper demand by Beneficiary,
    its successors or assigns.  Any such deed or deeds with such recitals
    therein shall be effective and conclusive against Trustor, its
    successors and assigns, and all other Persons.  The receipt for the
    purchase money recited or contained in any deed executed to the
    purchaser as aforesaid shall be sufficient to discharge such purchaser
    from all obligations to see to the proper application of the purchase
    money.
    
          34.4  Protection of Security.  If an Event of Default
    shall have occurred and be continuing, then Beneficiary or Trustee,
    but without obligation so to do and without notice to or demand upon
    Trustor and without releasing Trustor from any obligations or defaults
    hereunder, may:  (i) perform any act in such manner and to such extent
    as either may deem necessary to protect the security hereof,
    Beneficiary and Trustee being authorized to enter upon the Property
    for such purpose; (ii) appear in and defend any action or proceeding
    purporting to affect, in any manner whatsoever, the obligations or the
    Indebtedness, the security hereof or the rights or powers of
    Beneficiary or Trustee; (iii) pay, purchase or compromise any
    encumbrance, charge or lien that in the judgment of Beneficiary or
    Trustee is prior or superior hereto; and (iv) in exercising any such
    powers, pay necessary expenses, employ counsel and pay reasonable
    attorneys' fees.  Trustor agrees that all sums expended by Trustee or
    Beneficiary pursuant to this paragraph, together with interest at the
    Secondary Interest Rate from the date of expenditure by Beneficiary,
    shall be added to the principal amount of the Indebtedness secured by
    the Loan Documents and this Deed of Trust and shall be payable by
    Trustor to Beneficiary upon demand.
    
          34.5  Receiver.  If an Event of Default shall have
    occurred and be continuing, Beneficiary, as a matter of strict right
    and without notice to Trustor or anyone claiming under Trustor, and
    without regard to the then value of the Property, shall have the right
    to apply ex parte to any court having jurisdiction to appoint a
    Receiver to enter upon and take possession of the Property, and
    Trustor hereby waives notice of any application therefor, provided a
    hearing to confirm such appointment with notice to Trustor is set
    within the time required by law.  Any such Receiver shall have all the
    powers and duties of Receivers in like or similar cases and all the
    powers and duties of Beneficiary in case of entry as provided in this
    Deed of Trust, and shall continue as such and exercise all such powers
    until the date of confirmation of sale, unless such receivership is
    sooner terminated.
    
          34.6  Remedies Cumulative.  All remedies of
    Beneficiary provided for herein are cumulative and shall be in
    addition to any and all other rights and remedies provided in the
    other Loan Documents or by law, including, without limitation, any
    right of offset.  The exercise of any right or remedy by Beneficiary
    hereunder shall not in any way constitute a cure or waiver of default
    hereunder or under the Loan Documents, or invalidate any act done
    pursuant to any notice of default, or prejudice Beneficiary in the
    exercise of any of its rights hereunder or under the Loan Documents.
    
          34.7  Curing of Defaults.  If Trustor shall at any
    time fail to perform or comply with any of the terms, covenants and
    conditions required on Trustor's part to be performed and complied
    with under this Deed of Trust, any of the other Loan Documents or any
    other agreement that, under the terms of this Deed of Trust, Trustor
    is required to perform, then Beneficiary, and without waiving or
    releasing Trustor from any of the Obligations, may, in its sole
    discretion:
    
                                      (i)  
        make any payments thereunder payable by Trustor and
    take out, pay for and maintain any of the insurance policies provided
    for therein; and/or
    
                                     (ii)  
        after the expiration of any applicable grace period
    and subject to Trustor's rights to contest certain obligations
    specifically granted hereby, perform any such other acts thereunder on
    the part of Trustor to be performed and enter upon the Property for
    such purpose.
    
    All sums so paid out of Beneficiary's own funds and all reasonable
    costs and expenses incurred and paid by Beneficiary in connection with
    the performance of any such act, together with interest on unpaid
    balances thereof at the Secondary Interest Rate from the respective
    dates of Beneficiary's making of each such payment, shall be added to
    the principal of the Indebtedness, shall be secured by the Loan
    Documents and by the lien of this Deed of Trust, prior to any right,
    title or interest in or claim upon the Property attaching or accruing
    subsequent to the lien of this Deed of Trust, and shall be payable by
    Trustor to Beneficiary on demand.
    
    
    
                                      
                               ARTICLE 35
    
                 Security Agreement and Fixture Filing
    
    
          35.1  Grant of Security Interest.  Trustor hereby
    grants to Beneficiary a security interest in and to all Trustor's
    right, title and interest now owned or hereafter acquired in and to
    the Personalty and the Fixtures (collectively, the "Collateral"), to
    secure the payment and performance of the Obligations.
    
          35.2  Remedies.  This Deed of Trust constitutes a
    security agreement with respect to the Collateral in which Beneficiary
    is hereby granted a security interest.  In addition to the rights and
    remedies provided under this Deed of Trust, Beneficiary shall have all
    of the rights and remedies of a secured party under the California
    Uniform Commercial Code as well as all other rights and remedies
    available at law or in equity.  Trustor hereby agrees to execute and
    deliver on demand and irrevocably constitutes and appoints Beneficiary
    the attorney-in-fact of Trustor to, at Trustor's expense, execute,
    deliver and, if appropriate, to file with the appropriate filing
    officer or office such security agreements, financing statements, con-
    
    tinuation statements or other instruments as Beneficiary may request
    or require in order to impose, perfect or continue the perfection of
    the lien or security interest created hereby.  Upon the occurrence of
    any Event of Default, Beneficiary shall have (i) the right to cause
    any of the Collateral which is personal property to be sold at any one
    or more public or private sales as permitted by applicable law and to
    apply the proceeds thereof to the Indebtedness or any other monetary
    obligation of Trustor to Beneficiary, and (ii) the right to apply to
    the Indebtedness or any other monetary obligation of Trustor to
    Beneficiary, any Collateral which is cash, negotiable documents or
    chattel paper.  Any such disposition may be conducted by an employee
    or agent of Beneficiary or Trustee.  Any Person, including, without
    limitation, both Trustor and Beneficiary, shall be eligible to
    purchase any part or all of such Personalty at any such disposition.
    
          35.3  Expenses.  Expenses of retaking, holding,
    preparing for sale, selling or the like pertaining to the Collateral
    shall be borne by Trustor and shall include Beneficiary's and
    Trustee's reasonable attorneys' fees and legal expenses.  Trustor,
    upon demand of Beneficiary shall assemble the Collateral and make it
    available to Beneficiary at the Property, a place which is hereby
    deemed to be reasonably convenient to Beneficiary and Trustor. 
    Beneficiary shall give Trustor at least ten (10) days' prior written
    notice of the time and place of any public sale or other disposition
    of the Collateral or of the time after which any private sale or any
    other intended disposition is to be made.  Any such notice sent to
    Trustor in the manner provided for the mailing of notices herein is
    hereby deemed to be reasonable notice to Trustor.
    
          35.4  Fixture Filing.  This Deed of Trust covers
    certain goods which are or are to become fixtures related to the Land
    and constitutes a fixture filing with respect to such goods executed
    by Trustor as debtor in favor of Beneficiary as secured party.
    
          35.5  Waivers.  Trustor waives (a) any right to
    require Beneficiary to (i) proceed against any Person, (ii) proceed
    against or exhaust any Collateral or (iii) pursue any other remedy in
    its power; and (b) any defense arising by reason of any disability or
    other defense of Trustor or any other Person, or by reason of the
    cessation from any cause whatsoever of the liability of Trustor or any
    other Person.  Until the Indebtedness shall have been paid in full,
    Trustor shall not have any right to subrogation, and Trustor waives
    any right to enforce any remedy which Beneficiary now has or may
    hereafter have against Trustor or against any other Person and waives
    any benefit of and any right to participate in any Collateral or
    security whatsoever now or hereafter held by Beneficiary.
    
    
                               ARTICLE 36
    
                          Assignment of Rents
    
    
          36.1  Assignment of Rents.  Trustor absolutely and
    unconditionally assigns and transfers the Rents to Beneficiary,
    whether now due, past due or to become due, and gives to and confers
    upon Beneficiary the right, power and authority to collect such Rents,
    and apply the same to the Indebtedness.  Trustor irrevocably appoints
    Beneficiary its agent to, at any time, demand, receive and enforce
    payment, to give receipts, releases and satisfactions, and to sue,
    either in the name of Trustor or in the name of Beneficiary, for all
    such Rents.  Neither the foregoing assignment of Rents to Beneficiary
    nor the exercise by Beneficiary of any of its rights or remedies under
    this Deed of Trust shall be deemed to make Beneficiary a "mortgagee-
    in-possession" or otherwise responsible or liable in any manner with
    respect to the Property or the use, occupancy, enjoyment or operation
    of all or any part thereof, unless and until Beneficiary, in person or
    by its own agent, assumes actual possession thereof, nor shall
    appointment of a Receiver for the Property by any court at the request
    of Beneficiary or by agreement with Trustor or the entering into
    possession of the Property or any part thereof by such Receiver be
    deemed to make Beneficiary a "mortgagee-in-possession" or otherwise
    responsible or liable in any manner with respect to the Property or
    the use, occupancy, enjoyment or operation of all or any part thereof.
    
          36.2  Collection of Rents.  Notwithstanding anything
    to the contrary contained herein or in the Note, so long as no Event
    of Default shall occur, Trustor shall have a license, revocable upon
    the occurrence of an Event of Default or, if an Event of Default shall
    have occurred, so long as such Event of Default shall not have been
    waived by Beneficiary, to collect all Rents, and to first apply same
    to the Indebtedness as and when due and thereafter to retain, use and
    enjoy the same and to otherwise exercise all rights with respect
    thereto, subject to the terms hereof.  Upon the occurrence of an Event
    of Default, Beneficiary shall have the right, on written notice to
    Trustor, to terminate and revoke the license heretofore granted to
    Trustor and shall have the complete right and authority then or
    thereafter to exercise and enforce any and all of its rights and
    remedies provided herein or by law or at equity.
    
    
                               ARTICLE 37
    
                             Miscellaneous
    
    
          37.1  Successor Trustee.  Beneficiary may remove
    Trustee or any successor trustee at any time or times and appoint a
    successor trustee by recording a written substitution in the county
    where the Property is located, or in any other manner permitted by
    law.
    
          37.2  Change of Law.  In the event of the passage,
    after the date of this Deed of Trust, of any law deducting from the
    value of the Property, for the purposes of taxation, any lien thereon,
    or changing in any way the laws now in force for the taxation of
    mortgages, deeds of trust, or debts secured by mortgage or deed of
    trust (other than laws imposing taxes on income), or the manner of the
    collection of any such taxes so as to materially affect the
    anticipated yield of Beneficiary as holder of the Note and/or Benefi-
    
    ciary under this Deed of Trust, the Indebtedness plus any applicable
    prepayment charges shall become due and payable at the option of
    Beneficiary exercised by thirty (30) days' notice to Trustor unless
    Trustor, within such thirty (30) day period shall, if permitted by
    law, assume the payment of any tax or other charge so imposed upon
    Beneficiary for the period remaining until full payment by Trustor of
    the Indebtedness.
    
          37.3  No Waiver.  No waiver by Beneficiary of any
    default or breach by Trustor hereunder shall be implied from any
    omission by Beneficiary to take action on account of such default if
    such default persists or is repeated, and no express waiver shall
    affect any default other than the default expressly referenced in the
    waiver and such waiver shall be operative only for the time and to the
    extent therein stated.  Waivers of any covenant, term or condition
    contained herein shall not be construed as a waiver of any subsequent
    breach of the same covenant, term or condition.  The consent or
    approval by Beneficiary to or of any act by Trustor requiring further
    consent or approval shall not be deemed to waive or render unnecessary
    the consent or approval to or of any subsequent similar act.
    
          37.4  Abandonment.  Subject to such chattel mortgages,
    security agreements or other liens on title as may exist thereon with
    the consent of Beneficiary, or any provided for herein, any and all
    Personalty that upon foreclosure of the Property is owned by Trustor
    and is used in connection with the operation of the Property shall be
    deemed at the option of Beneficiary to have become on such date a part
    of the Property and abandoned to Beneficiary in its then condition.
    
          37.5  Notices.  All notices, demands, requests,
    consents, statements, satisfactions, waivers, designations, refusals,
    confirmation or denials that may be required or otherwise provided for
    or contemplated under the terms of this Deed of Trust shall be in
    writing, and shall be deemed to have been properly given (i) upon
    delivery, if delivered in person or by facsimile transmission with
    receipt acknowledged, (ii) one business day after having been
    deposited for overnight delivery with Federal Express or another
    comparable overnight courier service, or (iii) three business days
    after having been deposited in any post office or mail depository
    regularly maintained by the U.S. Postal Service and sent by registered
    or certified mail, postage prepaid, addressed as follows:
    
          If to Trustor:
    
            Bedford Property Investors, Inc.
            270 Lafayette Circle
            Lafayette, California  94549
            Attention:  Mr. Scott Whitney
    
          If to Trustee:
    
            First American Title Insurance Company
            1850 Mount Diablo Boulevard, Suite 300
            Walnut Creek, California  94596 
    
          If to Beneficiary:
    
            The Prudential Insurance Company of America
            Four Embarcadero Center
            Suite 2700
            San Francisco, California  94111
            Attention:  Regional Counsel
            Loan No. 6 101 085
    
            with a copy to:
    
            The Prudential Insurance Company of America
            One Ravinia Drive, Suite 1400
            Atlanta, Georgia  30346
            Attention:  Vice President, Loan Servicing
            Loan No. 6 101 085
    
    or addressed to each respective party at such other address as such
    party may from time to time designate by written notice to the other
    parties given in the manner aforesaid.
    
          37.6  Severability.  If any term, provision, covenant
    or condition hereof or any application thereof should be held by a
    court of competent jurisdiction to be invalid, void or unenforceable,
    in whole or in part, all terms, provisions, covenants and conditions
    hereof and all applications thereof not held invalid, void or
    unenforceable shall continue in full force and effect and shall in no
    way be affected, impaired or invalidated thereby.
    
          37.7  Joinder of Foreclosure.  Should Beneficiary hold
    any other or additional security for the payment of the Indebtedness
    or performance of the Obligations, its sale or foreclosure, upon any
    default in such payment or performance, in the sole discretion of
    Beneficiary, may be prior to, subsequent to, or joined or otherwise
    contemporaneous with any sale or foreclosure hereunder.  In addition
    to the rights herein specifically conferred, Beneficiary, at any time
    and from time to time, may exercise any right or remedy now or
    hereafter given by law to beneficiaries under deeds of trust
    generally, or to the holders of any obligations of the kind hereby
    secured.
    
          37.8  Governing Law.  The parties expressly agree that
    this Deed of Trust (including, without limitation, all questions
    regarding permissible rates of interest) shall be governed by and
    construed in accordance with the laws of the state in which the Land
    is located.
    
          37.9  Subordination.  At the option of Beneficiary,
    this Deed of Trust shall become subject and subordinate in whole or in
    part (but not with respect to priority of entitlement to any insurance
    proceeds, damages, awards, or compensation resulting from damage to
    the Property or condemnation or exercise of power of eminent domain),
    to any and all contracts of sale and/or any and all Leases upon the
    execution by Beneficiary and recording thereof in the Official Records
    of the County in which the Land is located of a unilateral declaration
    to that effect.  Beneficiary may require the issuance of such title
    insurance endorsements to the Title Policy in connection with any such
    subordination as Beneficiary, in its reasonable judgment, shall
    determine are appropriate, and Trustor shall be obligated to pay any
    cost or expense incurred in connection with the issuance thereof.
    
          37.10  Future Advances.   Upon the request of Trustor
    or its permitted successors in ownership of the Property, Beneficiary
    may hereafter, at its option, at any time before full payment of the
    Indebtedness, make future advances to Trustor or said successors, and
    the same, with interest and late charges, shall be secured by this
    Deed of Trust; provided, however, that the amount of principal secured
    by this Deed of Trust and remaining unpaid, shall not at the time of
    and including any such advance exceed the original principal sum
    secured hereby; and provided further that if Beneficiary, at its
    option, shall make a future advance or advances as aforesaid, Trustor
    or said successors in ownership agree to execute and deliver to
    Beneficiary (i) a note  to evidence the same, payable on or before the
    maturity of the Indebtedness secured hereby and bearing such other
    terms as Beneficiary shall require, and (ii) satisfactory evidence
    that after such advance this Deed of Trust will secure such advance
    and continue to constitute a valid first mortgage lien on the Property
    subject only to the Permitted Exceptions.
    
          37.11  Waiver of Statute of Limitations and Rights to
    Trial by Jury.  The pleading of any statute of limitations as a
    defense to any and all obligations secured by this Deed of Trust and
    the right to a jury trial in any action under or relating to the Loan
    Documents is hereby waived, to the fullest extent allowed by law.
    
          37.12  Entire Agreement.  The Loan Documents and the
    Remediation and Indemnification Agreements set forth the entire
    understanding between Trustor and Beneficiary relative to the Loan and
    the same shall not be amended except by a written instrument duly
    executed by each of Trustor and Beneficiary.  Any and all previous
    representations, warranties, agreements and understandings between or
    among the parties regarding the subject matter of the Loan or the Loan
    Documents, whether written or oral, are superseded by this Deed of
    Trust and the other Loan Documents.  The foregoing notwithstanding,
    the terms and the conditions of the Application shall survive the
    funding of the Loan but in the event of any conflict between the
    provisions of the Application and any of the other Loan Documents or
    the Remediation and Indemnification Agreements, except as otherwise
    specifically provided herein, the terms of such other Loan Documents
    and the Remediation and Indemnification Agreements shall control.
    
          37.13  References to Foreclosure.  References in this
    Deed of Trust to "foreclosure" and related phrases shall be deemed
    references to the appropriate procedure in connection with Trustee's
    private power of sale as well as any judicial foreclosure proceeding
    or a conveyance in lieu of foreclosure.
    
          37.14  Rights of Beneficiary and Trustee.  At any time
    or from time to time, without liability therefor and without notice,
    and without releasing or otherwise affecting the liability of any
    person for payment of any Indebtedness (i) Beneficiary at its sole
    discretion and only in writing may extend the time for, or release any
    Person now or hereafter liable for, payment of any or all such
    Indebtedness, or accept or release additional security therefor, or
    subordinate the lien or charge hereof, or (ii) Trustee upon written
    request of Beneficiary and presentation of the Note, any additional
    notes secured by this Deed of Trust and this Deed of Trust for
    endorsement may reconvey any part of the Property, consent to the
    making of any map or plat thereof, join in granting any easement
    thereon, or join in any such agreement of extension or subordination. 
    Upon written request of Beneficiary and surrender of the Note, any
    additional notes secured by this Deed of Trust and this Deed of Trust
    to the Trustee for cancellation, and upon payment to Trustee of its
    fees and expenses, Trustee shall reconvey without warranty the
    remaining Property.  The recitals in any reconveyance shall be
    conclusive proof of the truthfulness thereof and the grantee in any
    reconveyance may be described as "the person or persons legally
    entitled thereto."
    
          37.15  Copies.  Trustor will promptly give to
    Beneficiary copies of all (i) notices of violation relating to the
    Property that Trustor receives from any governmental agency or author-
    
    ity, and (ii) notices of default that Trustor shall give or receive
    under any agreement that Trustor covenants to perform hereunder,
    including, without limitation, notices of default relating to the
    Property that Trustor receives under any agreement relating to the
    borrowing of money by Trustor or from any Person.
    
          37.16  No Merger.  So long as any of the Indebtedness
    shall remain unpaid or Trustor shall have any further obligation under
    the Loan Documents, unless Beneficiary shall otherwise consent in
    writing, the fee estate of Trustor in the Property or any part thereof
    shall not merge, by operation of law or otherwise, with any leasehold
    or other estate in the Property or any part thereof, but shall always
    be kept separate and distinct therefrom, notwithstanding the union of
    said fee estate and such leasehold or other estate in Trustor or any
    other Person.
    
          37.17  Right of Entry.  In addition to the rights
    granted to Beneficiary under Paragraph 3.10 hereof, Beneficiary may
    enter at any reasonable time upon any part of the Property for the
    purpose of performing any of the acts Beneficiary is authorized to
    perform under the terms of this Deed of Trust or of any of the other
    Loan Documents.  Trustor agrees to cooperate with Beneficiary to
    facilitate such entry.
    
          37.18  Performance by Trustor.  Trustor will
    faithfully perform each and every Obligation to be performed by
    Trustor under any lien or encumbrance, including, without limitation,
    mortgages, deeds of trust, leases, declarations or covenants,
    conditions and/or restrictions and other agreements which affect the
    Property.  If Trustor fails to do so, Beneficiary, without demand or
    notice, may do any or all things necessary to perform the Obligations
    of Trustor under the pertinent instrument.
    
          37.19  Personalty Security Instruments.  Trustor
    covenants and agrees that if Beneficiary at any time holds additional
    security for any obligations secured hereby, it may enforce the terms
    thereof or otherwise realize upon the same, at its option, either
    before or concurrently herewith or after a sale is made hereunder, and
    may apply the proceeds upon the Indebtedness secured hereby without
    affecting the status of or waiving any right to exhaust all or any
    other security, including the security hereunder, and without waiving
    any breach or default or any right or power whether exercised
    hereunder, and without waiving any breach or default or any right or
    power whether exercised hereunder or contained herein or in any such
    other security.
    
          37.20  Suits to Protect Property.  Trustor covenants
    and agrees to appear in and defend any action or proceeding purporting
    to affect the security of the Deed of Trust, or of any additional or
    other security for the Obligations, the interest of Beneficiary or the
    rights, powers and duties of Trustee hereunder; and to pay all costs
    and expenses, including, without limitation, costs of evidence of
    title and reasonable attorneys' fees, in any action or proceeding in
    which Beneficiary and/or Trustee may appear or be made a party,
    including, without limitation, foreclosure or other proceedings
    commenced by those claiming a right to any part of the Property in any
    action to partition or condemn all or part of the Property, whether or
    not pursued to final judgment, and in any exercise of the power of
    sale contained herein, whether or not the sale is actually
    consummated.  Trustee agrees that in any such action or proceeding in
    which Beneficiary is made a party, Beneficiary may at its option
    defend such action, and all costs of such defense, including all court
    costs and reasonable attorneys' fees, shall be borne and paid by
    Trustor.
    
          37.21  Junior Liens.  Trustor represents and warrants
    that as of the date hereof there are no encumbrances to secure debt
    junior to this Deed of Trust and covenants that there are to be none
    as of the date when this Deed of Trust becomes of record.
    
          37.22  Charges for Statements.  Trustor agrees to pay
    Beneficiary's charge, up to the maximum amount permitted by law, for
    any statement regarding the obligations secured by this Deed of Trust
    requested by Trustor or on its behalf.
    
          37.23  Usury.  In the event that Beneficiary
    determines that any charge, fee or interest paid or agreed to be paid
    in connection with the Loan may, under the applicable usury laws,
    cause the interest rate on the Loan to exceed the maximum permitted by
    law, then such charges, fees or interest shall be reduced and any
    amounts actually paid in excess of the maximum interest permitted by
    such laws shall be applied by Beneficiary to reduce the outstanding
    principal balance of the Loan.  The parties intend that Trustor shall
    not be required to pay, and Beneficiary shall not be entitled to
    collect, interest in excess of the maximum legal rate permitted under
    the applicable usury laws.
    
          37.24  Publicity.  Trustor hereby agrees that
    Beneficiary, at its expense, may publicize the financing of the
    Property.  Beneficiary shall endeavor to notify Trustor of its intent
    to publicize the financing; provided, however, that Beneficiary's
    failure to so notify Trustor shall not constitute a breach by
    Beneficiary under the Loan Documents.
    
          37.25  Information Reporting Under IRC
    Section 6045(e).  Any information returns or certifications that must
    be filed with the Internal Revenue Service and/or provided to other
    parties, pursuant to Internal Revenue Code Section 6045(e) shall be
    prepared, filed by and sent to the appropriate parties by Trustor.  To
    the extent permitted by law, Beneficiary shall have no responsibility
    to perform such services; provided however, upon demand Trustor shall
    reimburse Beneficiary for any costs incurred by Beneficiary in doing
    so and shall also pay such fee as Beneficiary may reasonably and
    lawfully request.  Beneficiary shall, where requested by Trustor,
    promptly supply Trustor with all information pertaining to Beneficiary
    reasonably required by Trustor to prepare and file any such return or
    certification.  Trustor shall indemnify Beneficiary and defend,
    protect and hold Beneficiary harmless from and against all loss, cost,
    damage and expense (including, without limitation, attorneys' fees and
    costs incurred in the investigation, defense and settlement of claims)
    that Beneficiary may incur, directly or indirectly, as a result of or
    in connection with the assertion against Beneficiary of any claim
    relating to the failure of Trustor to comply with its obligations
    under this Paragraph.
    
          37.26  ERISA.
    
              A.  Trustor understands and acknowledges that on
    the Closing Date, the source of funds from which Beneficiary extends
    the Loan is its general account, which is subject to the claims of its
    general creditors under state law.  Beneficiary (i) represents and
    warrants that either (a) it is not funding the Loan with Plan Assets
    (as described below) or (b) if Beneficiary is funding the Loan with
    Plan Assets, such funding satisfies the provisions of Prohibited
    Transaction Class Exemption 95-60 and (ii) covenants that either
    clause (a) or (b) immediately above will be true throughout the term
    of the Loan.
    
              B.  Trustor represents and warrants to Beneficiary
    that, as of the date of this Deed of Trust and throughout the term of
    the Loan, (i) Trustor is not an "employee benefit plan" as defined in
    Section 3(3) of the Employee Retirement Income Security Act of 1974,
    as amended ("ERISA"), which is subject to Title I of ERISA, and (ii)
    the assets of Trustor do not constitute "plan assets" of one or more
    such plans within the meaning of 29 C.F.R. Section 2510.3-101 ("Plan
    Assets").
    
              C.  Trustor represents and warrants to Beneficiary
    that, as of the date of this Deed of Trust and throughout the term of
    the Loan, (i) Trustor is not a "governmental plan" within the meaning
    of Section 3(32) of ERISA, and (ii) transactions by or with Trustor
    are not subject to state statutes regulating investments of and
    fiduciary obligations with respect to governmental plans.
    
              D.  Trustor covenants and agrees to deliver to
    Beneficiary such certifications or other evidence on the Closing Date
    and from time to time throughout the term of the Loan, as requested by
    Beneficiary in its sole discretion, that (i) Trustor is not an
    "employee benefit plan" or a "governmental plan"; and (ii) Trustor is
    not subject to state statutes regulating investments and fiduciary
    obligations with respect to governmental plans; and (iii) one or more
    of the following circumstances is true:
    
                     (1)  Equity interests in Trustor are
    publicly offered securities, within the meaning of 29 C.F.R. Section
    2510.3-101(b)(2);
    
                     (2)  Less than twenty-five percent (25%)
    of all equity interests in Trustor are held by "benefit plan
    investors" within the meaning of 29 C.F.R Section 2510.3-101(f)(2); or
    
                     (3)  Trustor qualifies as an "operating
    company" or a "real estate operating company" within the meaning of 29
    C.F.R. Section 2510.3-101(c) or (e).
              
              E.  Any of the following shall constitute an Event
    of Default entitling Beneficiary to exercise any and all remedies to
    which it may be entitled under the Loan Documents:  (i) the failure of
    any representation or warranty made by Trustor under this Paragraph
    9.26 to be true and correct in all material respects, (ii) the failure
    of Trustor to comply in all material respects with the obligation to
    provide Beneficiary with the written certifications and evidence
    referred to above, or (iii) assuming compliance by Beneficiary with
    the representations, warranties and covenants in Paragraph 9.26.Aabove, 
    the consummation by Trustor of a transaction which would cause
    the Loan or any exercise of Beneficiary's rights under the Loan
    Documents to constitute a non-exempt prohibited transaction under
    ERISA or a material violation of a state statute regulating
    governmental plans, subjecting Beneficiary to liability for violation
    of ERISA or such state statute, provided, that Trustor shall have
    thirty (30) days after its receipt of notice of default from
    Beneficiary within which to commence the cure of such default and,
    with respect to defaults under clause (i) immediately above, Trustor
    shall have an additional ninety (90) days thereafter within which to
    effect such cure provided it shall have commenced its efforts to cure
    within such thirty (30) day period and shall thereafter diligently and
    in good faith continuously prosecute such cure to completion.  Failure
    by Trustor to cure any such default within the applicable time period
    set forth above shall constitute an Event of Default.
    
              F.  Trustor hereby indemnifies, defends and holds
    Beneficiary harmless from and against all loss, cost, damage and
    expense (including, without limitation, attorneys' fees and costs
    incurred in the investigation, defense and settlement of claims and
    losses incurred in correcting any prohibited transaction or in the
    sale of a prohibited loan, and in obtaining any individual prohibited
    transaction exemption under ERISA that may be required) that
    Beneficiary may incur as a direct result of an Event of Default under
    clause (E) above, assuming compliance by Beneficiary with the
    representations, warranties and covenants set forth in Paragraph
    9.26.A above.  This indemnity shall survive any termination,
    satisfaction or foreclosure of this Deed of Trust and shall not be
    subject to the limitation on personal liability described in Paragraph
    19 of the Note.
    
              G.  Anything in the Application, Paragraph 4.2 or
    elsewhere in this Deed of Trust or the Loan Documents to the contrary
    notwithstanding, no sale, assignment or transfer of any direct or
    indirect interest in Trustor shall be permitted which would negate
    Trustor's representations in this Paragraph 9.26 or cause this Deed of
    Trust (or any exercise of Beneficiary's rights under the Loan
    Documents) to constitute a violation of any provision of ERISA or of
    any applicable state statute regulating a governmental plan, assuming
    compliance by Beneficiary with the representations, warranties and
    covenants set forth in Paragraph 9.26.A above.
    
              H.  Anything in the Application, Paragraph 4.2
    elsewhere in this Deed of Trust or the Loan Documents to the contrary
    notwithstanding, no direct or indirect transfer of the Property or any
    interest therein including, without limitation, a junior lien or
    leasehold interest, shall be permitted which would cause this Deed of
    Trust (or any exercise of Beneficiary's rights under the Loan
    Documents) to constitute a violation of ERISA or any applicable state
    statute regulating a governmental plan, assuming compliance by
    Beneficiary with the representations, warranties and covenants set
    forth in Paragraph 9.26.A above.
    
              I.  Anything in the Application, this Deed of
    Trust or the Loan Documents to the contrary notwithstanding, no less
    than fifteen (15) before consummation of any permitted transfer of
    title to the Property or of an interest in Trustor, or of any direct
    or indirect right, title or interest in either of them, or of the
    placing of any lien or encumbrance on the Property, Borrower shall
    obtain from the proposed transferee or lienholder a representation to
    Beneficiary in form and substance satisfactory to Beneficiary that the
    provisions of Paragraph 9.26.D above will be true after the transfer,
    or in the case of a lien or encumbrance, would remain true following
    any foreclosure or conveyance in lieu thereof, and further provided
    that any proposed lienholder agrees that any direct or indirect
    transfer of its lien or any interest therein will be governed by this
    section.
    
          37.27  Defense and Indemnity Rights.  Whenever, under
    any Loan Document, Trustor is obligated to indemnify and/or defend
    Beneficiary, or Trustor is obligated to defend or prosecute any action
    or proceeding, then Beneficiary shall have the right of counsel of
    Beneficiary's choice reasonably exercised, and all costs and expenses
    incurred by Beneficiary in connection with such participation
    (including, without limitation, reasonable attorneys' fees) shall be
    reimbursed by Trustor to Beneficiary immediately upon demand.  In
    addition, Beneficiary shall have the right to approve any counsel
    retained by Trustor in connection with the prosecution or defense of
    any such action or proceeding by Trustor.  Trustor shall give notice
    to Beneficiary of the initiation of all proceedings prosecuted or
    required to be defended by Trustor, or which are subject to Trustor's
    indemnity obligations, under this Deed of Trust, promptly after the
    receipt by Trustor of notice of the existence of any such proceeding,
    but in no event later than five (5) days thereafter.  All costs or
    expenses required to be reimbursed by Trustor to Beneficiary hereunder
    shall, if not paid when due as herein specified, bear interest at the
    Secondary Interest Rate.  As used herein, "proceeding" shall include
    litigation (whether by way of complaint, answer, cross-complaint,
    counter claim or third party claim), arbitration and administrative
    hearings or proceedings.
    
          37.28  Destruction of Note.  Trustor shall, if the
    Note is mutilated or destroyed by any cause whatsoever, or otherwise
    lost or stolen and regardless of whether due to the act or neglect of
    Beneficiary or Trustee, execute and deliver to Beneficiary in
    substitution therefor a duplicate promissory note containing the same
    terms and conditions as the Note, within ten (10) days after
    Beneficiary notifies Trustor of any such mutilation, destruction, loss
    or theft of the Note.  Any new promissory note executed and delivered
    hereunder shall be in full substitution for the Note, shall not
    constitute any new or additional indebtedness of Trustor to
    Beneficiary, shall constitute solely a substitute evidence of the
    indebtedness evidenced by the original Note, and shall not affect in
    any manner the priority of this Deed of Trust, or any other document
    or instrument executed in connection with or evidencing or securing
    the Indebtedness under the Note.  Failure or delay by Beneficiary to
    notify Trustor hereunder shall not affect in any manner Trustor's lia-
    
    bility for the Indebtedness under the Note or Trustor's obligation to
    execute a new promissory note hereunder; and Trustor's failure to
    execute a new promissory note on Beneficiary's request hereunder shall
    likewise not affect Trustor's liability for the indebtedness under the
    Note.
    
          37.29  Trustor, Beneficiary and Trustee Defined.  As
    used in this Deed of Trust, "Trustor" includes the original signators
    of this Deed of Trust as Trustor, and its successors and assigns; the
    term "Beneficiary" means the Beneficiary named herein or any future
    owner or holder, including pledgee and participants, of any note,
    notes or instrument secured hereby, or any participation therein; and
    "Trustee" includes the original Trustee under this Deed of Trust and
    its successors and assigns.
    
          37.30  Rules of Construction.  When the identity of
    the parties or other circumstances make appropriate, the masculine
    gender shall include the feminine and/or neuter, and the singular
    number shall include the plural.  Specific enumeration of rights,
    powers and remedies of Trustee and Beneficiary and of acts which they
    may do and of acts Trustor must do or not do shall not exclude or
    limit the general.  The headings of each Article and Paragraph are for
    information and convenience and do not limit or construe the contents
    of any provision hereof.  The provisions of this Deed of Trust, all
    other Loan Documents and the Remediation and Indemnification
    Agreements shall be construed as a whole according to their common
    meaning, not strictly for or against any party and consistent with the
    provisions herein contained, in order to achieve the objectives and
    purposes of such documents.  Each party and its counsel has reviewed
    and revised the Loan Documents and the Remediation and Indemnification
    Agreements and agree that the normal rule of construction to the
    effect that any ambiguities to be resolved against the drafting party
    shall not be employed in the interpretation of such document.  The use
    in this Deed of Trust, all other Loan Documents and the Remediation
    and Indemnification Agreements of the words "including," "such as," or
    words of similar import, when following any general term, statement or
    matter shall not be construed to limit such statement, term or matter
    to the specific items or matters, whether or not language of non-
    limitation such as "without limitation" or "but not limited to," or
    words of similar import, are used with reference thereto, but rather
    shall be deemed to refer to all other items or matters that could
    reasonably fall within the broadest possible scope of such statement,
    term or matter.
    
          37.31  Information to Third Persons.  If, at any time,
    Beneficiary desires to sell or transfer, or grant a participation
    interest in, all or any portion of, or any interest in, the Note, this
    Deed of Trust or any other Loan Document to any Person, Trustor and
    each Loan Party shall furnish in a timely manner any and all financial
    information concerning the Property and Leases, and concerning
    Trustor's or such Loan Party's financial condition, requested by
    Beneficiary or such person in connection with any such sale or
    transfer.
    
          37.32  Commingling of Funds.  Any and all sums
    collected or retained by Beneficiary hereunder (including insurance
    and condemnation proceeds and any amounts paid by Trustor to
    Beneficiary under Paragraph 3.4 hereof), shall not be deemed to be
    held in trust, and Beneficiary may commingle any and all such funds or
    proceeds with its general assets and shall not be liable for the
    payment of any interest or other return thereon, except to the extent
    expressly provided herein or otherwise required by law.
    
          37.33  Standards of Discretion.  Nothing contained in
    this Deed of Trust, the Note, or any other Loan Documents, shall limit
    the right of Beneficiary to exercise its good faith business judgment,
    or act, in a subjective manner with respect to any matter as to which
    it has specifically been granted such right or the right to act in its
    sole discretion or sole judgment hereunder or thereunder, whether
    "objectively" reasonable under the circumstances.  Any such exercise
    shall not be deemed inconsistent with any covenant of good faith and
    fair dealing otherwise implied by law to be a part of this Deed of
    Trust; and the parties intend by the foregoing to set forth and affirm
    their entire understanding with respect to the terms, covenants and
    conditions and standards pursuant to which their rights, duties and
    obligations are to be judged, their performance measured, and the
    parameters within which Beneficiary's discretion may be exercised
    hereunder and under the other Loan Documents; provided, however, that
    the foregoing shall not limit Beneficiary's obligation to act
    reasonably under the circumstances where any provision of the Loan
    Documents provides for the reasonable consent or approval of
    Beneficiary.
    
          37.34  Certain Standards on Efforts of Trustor. 
    Whenever in this Deed of Trust, or any other Loan Document, the phrase
    "cause to be" is used in conjunction with any of Trustor's
    Obligations, such phrase shall be deemed to include the use by Trustor
    of best efforts and all due diligence to cause the applicable act,
    event or circumstance to occur or be performed or taken, and such
    efforts and due diligence shall encompass the initiation of litigation
    or other proceedings in order to enforce or bring about the happening
    of the applicable act or matter.
    
          37.35  Certain Obligations Unsecured.  Notwithstanding
    anything to the contrary set forth herein or any of the Loan
    Documents, this Deed of Trust shall not secure the following
    obligations (the "Unsecured Obligations"):  (i) any obligations
    evidenced by or arising under the Remediation and Indemnification
    Agreements, and (ii) any other obligations in this Deed of Trust or in
    any of the other Loan Documents to the extent that such other
    obligations relate specifically to the presence on the Property of
    Hazardous Materials (as defined in the Remediation and Indemnification
    Agreements) and are the same or have the same effect as any of the
    obligations evidenced by or arising under the Remediation and
    Indemnification Agreements.  Any breach or default with respect to the
    Unsecured Obligations shall constitute an Event of Default hereunder,
    notwithstanding the fact that such Unsecured Obligations are not
    secured by this Deed of Trust.  Nothing in this section shall, in
    itself, impair or limit Beneficiary's right to obtain a judgment in
    accordance with applicable law after foreclosure for any deficiency in
    recovery of all obligations that are secured by this Deed of Trust
    following foreclosure.
    
          37.36  Partial Release.  Beneficiary agrees to
    release, at any time after May 31, 1998, the Property from the lien of
    this Deed of Trust upon the satisfaction of the following conditions
    at the time of reconveyance:
    
              (1)    No Event of Default shall have occurred
          and no event which, with the passage of time or the
          giving on notice, or both, would constitute an Event
          of Default shall have occurred either at the time of
          Beneficiary's receipt of the Trustor's written request
          for a reconveyance or as of the date of such
          reconveyance;
    
              (2)    Not more than a total of three (3) of the
          Combined Deeds of Trust (including, without
          limitation, this Deed of Trust) shall have been
          previously reconveyed or shall be reconveyed hereby or
          concurrently herewith (and in no event shall Trustor
          be entitled to more than three (3) total releases of
          any or all of the Combined Properties hereunder and/or
          under the Combined Deeds of Trust);
    
              (3)    Trustor shall pay to Beneficiary, prior to
          or concurrently with the reconveyance of this Deed of
          Trust, the Allocable Loan Amount for the Property
          along with the prepayment premium allocable to such
          Allocable Loan Amount as determined pursuant to the
          applicable Note;
    
              (4)    Beneficiary shall have been provided
          satisfactory evidence that the reconveyance of this
          Deed of Trust does not violate the provisions of any
          declaration of covenants, conditions and restrictions,
          reciprocal easement agreement, Lease or other
          agreement affecting the Property or any portion
          thereof;
    
              (5)    The Remaining Properties shall have:  (i)
          after the first reconveyance, both a Combined Debt
          Service Coverage and a Future Combined Debt Service
          Coverage of not less than 1.80 and a Combined Loan to
          Value Ratio of not more than 65%, (ii) after the
          second reconveyance, both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 1.90 and a Combined Loan to Value
          Ratio of not more than 60%, and (iii) after the third
          and final reconveyance both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 2.00 and a Combined Loan to Value
          Ratio of not more than 55%;
    
              (6)    Each of the individual Remaining
          Properties shall have both an Individual Debt Service
          Coverage and a Future Individual Debt Service Coverage
          of not less than 1.00 and an Individual Loan to Value
          Ratio of not more than 75%;
    
              (7)    Beneficiary shall have received a
          commitment that the title company insuring the liens
          of the Milpitas Deed of Trust, the Ontario Deed of
          Trust, the Tustin Deed of Trust, the Woodlands Deed of
          Trust, the Nevada Deed of Trust, the Arizona Deed of
          Trust, and the South San Francisco Deed of Trust will
          issue such title endorsements as Beneficiary deems
          necessary or desirable for attachment to the
          applicable title policies, including without
          limitation, CLTA Endorsement Nos. 110.5, 111, and
          111.1;
    
              (8)    Trustor shall pay to Beneficiary all
          escrow, closing and recording costs, the cost of
          preparing and delivering any reconveyance
          documentation, including legal fees and costs, the
          cost of any title insurance endorsements that
          Beneficiary may require, recording fees, any sums then
          due and payable under the Loan Documents and a non-
          refundable $25,000 processing fee, which fee shall be
          paid at the time of notice of the requested
          reconveyance;
    
              (9)    Trustor shall have provided Beneficiary
          with forty-five (45) days prior written notice of the
          requested reconveyance; and
    
              (10)   Such other terms and conditions as
          Beneficiary shall reasonably require.
    
          Notwithstanding the foregoing, in the event that the
    Debt Service Coverage and the Loan to Value Ratio tests set forth in
    Paragraphs 9.36(5) and 9.36(6), above, cannot be satisfied because of
    the value of, or the net cash flow from, the applicable Combined
    Properties, Trustor may, at its option, satisfy such tests by making a
    principal prepayment (the "Excess Principal Payment") on the Loan in
    an amount sufficient to satisfy such tests so long as Trustor also
    pays to Beneficiary any prepayment premium relating to such principal
    prepayment, as determined by the applicable Note.  Upon receipt of the
    Excess Principal Payment, Beneficiary shall apply such amount to
    reduce the outstanding Loan and may apply such amount to any one or
    more of the Multistate Note, the Nevada Note and/or the
    Arizona/California Note (in such order or priority as to satisfy such
    tests, as determined by Beneficiary), and shall allocate the Excess
    Principal Payment to the applicable Allocable Loan Amount in
    proportion to each such Allocable Loan Amount's share of the
    outstanding principal balance of the Note to which such amount is
    applied, and, the monthly payments due under such applicable Note
    shall be adjusted, as of the date of the release of this Deed of Trust
    pursuant to this Paragraph 9.36, to reflect the Excess Principal
    Payment applied to such applicable Note, such adjustment to be based
    on the applicable interest rate under such Note and an amortization
    schedule equal to 300 months minus the number of months that have
    elapsed since May 31, 1998.
    
          37.37      Limitation on Personal Liabilities. 
    Trustor's liability (i) under the Multistate Note is subject to the
    terms and conditions set forth in Paragraph 19 of the Multistate Note;
    (ii) under the Nevada Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
    
            <PAGE>
  
          IN WITNESS WHEREOF, Trustor has caused this Deed of
    Trust to be executed as of the day and year first above written.
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/ Scott R. Whitney                                     
    
          Scott R. Whitney, Senior Vice President                  
          [Printed Name and Title]
    
    
    
    
      [11128.AGRE]H61141<PAGE>
  State of California              )
                                )    ss.
    County of                   Contra Costa        )
    
    
    
    On February 2, 1998, before me,   Colette M. Pennington   , a notary
    public, personally appeared
    Scott R. Whitney   
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/ Colette M. Pennington          
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
                                  
    
                                                                           
                                              RECORDING REQUESTED BY
    AND WHEN RECORDED MAIL TO:
    
    Steefel, Levitt & Weiss
    One Embarcadero Center, 30th Floor
    San Francisco, California  94111
    
          Attention:  James F. Eastman, Esq.
    
    
    
    
                                                                   
    
    
              
    
    
    
             DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
         FILING WITH ASSIGNMENT OF LEASES, RENTS AND AGREEMENTS
                         (South San Francisco)
    
    
          THIS DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE
    FILING WITH ASSIGNMENT OF LEASES, RENTS AND AGREEMENTS (this "Deed of
    Trust") dated as of January 30, 1998 is made by BEDFORD PROPERTY
    INVESTORS, INC., a Maryland corporation, having offices at 270
    Lafayette Circle, Lafayette, California 94549 ("Trustor"), First
    American Title Insurance Company, having offices at 1850 Mount Diablo
    Boulevard, Suite 300, Walnut Creek, California  94596 ("Trustee"), and
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation,
    having offices at Four Embarcadero Center, Suite 2700, San Francisco,
    California 94111 ("Beneficiary").
    
    
                              WITNESSETH:
    
    
        Trustor HEREBY IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO
    Trustee, IN TRUST, WITH POWER OF SALE, all of Trustor's right, title
    and interest now owned or hereafter acquired in and to the following
    property, together with the Personalty (as hereinafter defined), all
    of which is hereinafter collectively defined as the "Property": 
    (i) those certain real properties (collectively, the "Land") located
    in the County of San Mateo, State of California, and more particularly
    described in Exhibit A-1 and Exhibit A-2 attached hereto and
    incorporated herein by this reference; (ii) all Improvements (as
    hereinafter defined) and all appurtenances, easements, rights and
    privileges thereof, including all minerals, oil, gas and other
    hydrocarbon substances thereon or therein, air rights, water rights
    and development rights, and any land lying in the streets, roads or
    avenues adjoining the Land or any part thereof; (iii) all Fixtures (as
    hereinafter defined), whether now or hereafter installed, being hereby
    declared to be for all purposes of this Deed of Trust a part of the
    Land; and (iv) the rents, issues and profits of or from the Land,
    Improvements and Fixtures.
    
    FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary
    may determine:  (i) payment of the Indebtedness (as hereinafter
    defined), and (ii) payment (with interest as provided) and performance
    by Trustor of the Obligations (as hereinafter defined). 
    Notwithstanding the foregoing, or any other term contained herein or
    in the Loan Documents, none of Trustor's obligations under or pursuant
    to the Remediation and Indemnification Agreements (as hereinafter
    defined) shall be secured by the lien of this Deed of Trust.
    
    
                                ARTICLE 38
    
                              Definitions
    
    
             As used in this Deed of Trust the following terms shall have
    the following meanings; other terms are defined where they appear in
    this Deed of Trust:
    
    Allocable Loan Amount:  (i) For the property encumbered by the Ontario
    Deed of Trust, $8,000,000 less the product of (x) all payments of
    principal made under the Multistate Note (other than payments made
    pursuant to Paragraph 9.36(3) of any of the Combined Deeds of Trust)
    multiplied by (y) a fraction, the numerator of which is 8,000,000, and
    the denominator of which is 25,000,000; (ii) for the property
    encumbered by the Tustin Deed of Trust, $7,000,000 less the product of
    (x) all payments of principal made under the Multistate Note (other
    than payments made pursuant to Paragraph 9.36(3) of any of the
    Combined Deeds of Trust) multiplied by (y) a fraction, the numerator
    of which is $7,000,000, and the denominator of which is 25,000,000;
    (iii) for the property encumbered by the Woodlands Deed of Trust,
    $5,200,000 less the product of (x) all payments of principal made
    under the Multistate Note (other than payments made pursuant to
    Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied by
    (y) a fraction, the numerator of which is 5,200,000, and the
    denominator of which is 25,000,000; (iv) for the property encumbered
    by the Milpitas Deed of Trust, $4,800,000 less the product of (x) all
    payments of principal made under the Multistate Note (other than
    payments made pursuant to Paragraph 9.36(3) of any of the Combined
    Deeds of Trust) multiplied by (y) a fraction, the numerator of which
    is 4,800,000, and the denominator of which is 25,000,000; (v) for the
    property encumbered by the Nevada Deed of Trust, $8,913,730.85 less
    all payments of principal made under the Nevada Note; (vi) for the
    property encumbered by the Arizona Deed of Trust, $7,200,000 less the
    product of (x) all payments of principal made under the
    Arizona/California Note (other than payments made pursuant to
    Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied by
    (y) a fraction, the numerator of which is 7,200,000, and the
    denominator of which is 20,900,000; (vii) for the property encumbered
    by the Fremont Deed of Trust, $7,200,000 less the product of (x) all
    payments of principal made under the Arizona/California Note (other
    than payments made pursuant to Paragraph 9.36(3) of any of the
    Combined Deeds of Trust) multiplied by (y) a fraction, the numerator
    of which is 7,200,000, and the denominator of which is 20,900,000; and
    (viii) for the properties encumbered by this Deed of Trust, $6,500,000
    less the product of (x) all payments of principal made under the
    Arizona/California Note (other than payments made pursuant to
    Paragraph 9.36(3) of any of the Combined Deeds of Trust) multiplied by
    (y) a fraction, the numerator of which is 6,500,000, and the
    denominator of which is 20,900,000.
    
    Application:  Collectively, the Application dated December 5, 1995,
    executed by Trustor (referred to as "Borrower" therein), which
    Application includes the exhibits attached thereto, the Application
    dated January 5, 1996, executed by Trustor (referred to as "Borrower"
    therein), which Application includes the exhibits attached thereto,
    the Application executed by Trustor (referred to as "Borrower"
    therein) on April 13, 1996, which Application includes the exhibits
    attached thereto, and the Application executed by Trustor (referred to
    as "Borrower" therein) on October 31, 1997, which Application includes
    the exhibits attached thereto.
    
    Arizona Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of even date herewith, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Maricopa County,
    Arizona, as amended from time to time.
    
    Closing Date:  The date this Deed of Trust is recorded in the Official
    Records of Alameda County, California.
    
    Combined Debt Service Coverage:  The ratio, as determined by
    Beneficiary, of (a) Net Operating Income for the preceding twelve-
    month period for the Remaining Properties, to (b) the sum of (i) the
    annual debt service payments (including principal and interest) for
    the preceding twelve-month period on the portion of the Loan
    consisting of the aggregate of the Allocable Loan Amounts for the
    Remaining Properties, and (ii) the annual debt service payments
    (including principal and interest) on all other indebtedness secured
    or which will be secured by a lien on all or part of the Remaining
    Properties for the preceding twelve-month period.  For purposes of
    calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory notes or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Combined Deeds of Trust:  Collectively, this Deed of Trust, the
    Ontario Deed of Trust, the Tustin Deed of Trust, the Milpitas Deed of
    Trust, the Woodlands Deed of Trust, the Nevada Deed of Trust, the
    Arizona Deed of Trust, and the Fremont Deed of Trust.
    
    Combined Loan to Value Ratio:  The ratio, as determined by
    Beneficiary, of (i) the aggregate principal balance, together with all
    accrued but unpaid interest, of all encumbrances against the Remaining
    Properties, to (ii) the fair market value of the Remaining Properties,
    as determined by Beneficiary.
    
    Combined Properties:  Collectively, the Property, the property
    encumbered by the Ontario Deed of Trust, the property encumbered by
    the Tustin Deed of Trust, the property encumbered by the Milpitas Deed
    of Trust, the property encumbered by the Woodlands Deed of Trust, the
    property encumbered by the Nevada Deed of Trust, the property
    encumbered by the Arizona Deed of Trust, and the property encumbered
    by the Fremont Deed of Trust.
    
    Event of Default:  As defined in Paragraph 6.1 hereof.
    
    Fixtures:  All fixtures located upon or within the Improvements or now
    or hereafter installed in, or used in connection with any of the
    Improvements, including boilers, furnaces, pipes, plumbing, elevators,
    cleaning and sprinkler systems, fire extinguishing apparatus and
    equipment, water tanks, heating, ventilating, air conditioning and air
    cooling equipment, whether or not permanently affixed to the Land or
    the Improvements.
    
    Fremont Deed of Trust:  That certain Deed of Trust dated as of this
    date herewith, executed by Trustor for the benefit of Beneficiary,
    recorded in the Official Records of Alameda County, California as
    amended from time to time.
    
    Future Combined Debt Service Coverage:  The ratio, as determined by
    Beneficiary, of (a) Net Operating Income for the immediately upcoming
    twelve-month period for the Remaining Properties (based on reasonable
    assumptions determined by Beneficiary), to (b) the sum of (i) the
    annual debt service payments (including principal and interest) for
    the same twelve-month period on the portion of the Loan consisting of
    the aggregate of the Allocable Loan Amounts for the Remaining
    Properties, and (ii) the annual debt service payments (including
    principal and interest) on all other indebtedness secured or which
    will be secured by a lien on all or part of the Remaining Properties
    for the same twelve-month period.  For purposes of calculating annual
    debt service, amortization of the aggregate principal indebtedness
    over a thirty (30) year period (or such lesser period if the
    applicable promissory notes or other loan documents in the case of
    loans other than the Loan provide otherwise) is assumed to apply
    during the entire term of the Loan.
    
    Future Individual Debt Service Coverage:  For each of the Combined
    Properties, the ratio, as determined by Beneficiary, of (a) Net
    Operating Income for such Combined Property for the next upcoming
    twelve-month period (based on reasonable assumptions determined by
    Beneficiary), to (b) the sum of (i) the annual debt service payments
    (including principal and interest) on the portion of the Loan
    consisting of the Allocable Loan Amount for such Combined Property for
    the same twelve-month period, and (ii) the annual debt service
    payments (including principal and interest) on all other indebtedness
    secured or which will be secured by a lien on all or part of such
    Combined Property for the same twelve-month period.  For purposes of
    calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory note or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Impositions:  All real estate and personal property and other taxes
    and assessments, water and sewer rates and charges levied or assessed
    upon or with respect to the Property, and all other governmental
    charges and any interest or costs or penalties with respect thereto,
    ground rent and charges for any easement or agreement maintained for
    the benefit of the Property, general and special, ordinary and
    extraordinary, foreseen or unforeseen, of any kind and nature
    whatsoever that at any time prior to or after the execution of the
    Loan Documents may be assessed, levied, imposed, or become a lien upon
    the Property or the rent or income received therefrom, or any use or
    occupancy thereof; and any and all other charges, expenses, payments,
    claims, mechanics' or material suppliers' liens or assessments of any
    nature, if any, which are or may become a lien upon the Property or
    the rent or income received therefrom.
    
    Impound Account:  The account that Trustor may be required to maintain
    pursuant to Paragraph 3.4 hereof for the deposit of amounts required
    to pay Impositions and insurance premiums.
    
    Improvements:  All buildings and other improvements and appurtenances
    located on the Land, including surface improvements, such as parking
    areas and landscaping structures and all improvements, additions and
    replacements thereof, and other buildings and improvements, at any
    time hereafter constructed or placed upon the Land.
    
    Indebtedness:  The principal of and all other amounts, payments and
    premiums due under the Note (and each and every of them) and any
    extensions or renewals thereof (including extensions or renewals at a
    different rate of interest, whether or not evidenced by a new or
    additional promissory note or notes), and all other indebtedness of
    Trustor to Beneficiary and additional advances under, evidenced by
    and/or secured by the Loan Documents, plus interest on all such
    amounts.
    
    Individual Debt Service Coverage:  For each of the Combined
    Properties, the ratio, as determined by Beneficiary, of (a) Net
    Operating Income for such Combined Property for the preceding twelve-
    month period, to (b) the sum of (i) the annual debt service payments
    (including principal and interest) on the portion of the Loan
    consisting of the Allocable Loan Amount for such Combined Property for
    the preceding twelve-month period, and (ii) the annual debt service
    payments (including principal and interest) on all other indebtedness
    secured or which will be secured by a lien on all or part of such
    Combined Property for the preceding twelve-month period.  For purposes
    of calculating annual debt service, amortization of the aggregate
    principal indebtedness over a thirty (30) year period (or such lesser
    period if the applicable promissory note or other loan documents in
    the case of loans other than the Loan provide otherwise) is assumed to
    apply during the entire term of the Loan.
    
    Individual Loan to Value Ratio:  For each individual Combined
    Property, the ratio, as determined by Beneficiary, of (i) the
    aggregate principal balance, together with all accrued but unpaid
    interest, of the Allocable Loan Amount for such Combined Property and
    all other encumbrances (other than the Loan) against such Combined
    Property, to (ii) the fair market value of such Combined Property, as
    determined by Beneficiary.
    
    Inventory:  The personal property Inventory attached hereto as
    Exhibits C-1 and C-2.
    
    Laws and Restrictions:  All federal, state, regional, county, local
    and other laws, regulations, orders, codes, ordinances, rules,
    statutes and policies, restrictive covenants and other title
    encumbrances, permits and approvals, Leases and other rental
    agreements, relating to the development, occupancy, ownership,
    management, use, and/or operation of the Property or otherwise
    affecting all or any part of the Property or Trustor.
    
    Leases:  Any and all leasehold interests, including subleases and
    tenancies following attornment, now or hereafter affecting or covering
    any part of the Property.
    
    Loan:  The loans from Beneficiary to Trustor evidenced by the Note.
    
    Loan Documents:  The Note, the Application, the Owner's Affidavit,
    this Deed of Trust, the Ontario Deed of Trust, the Tustin Deed of
    Trust, the Milpitas Deed of Trust, the Woodlands Deed of Trust, that
    certain Note Assignment and Assumption Agreement dated as of May 9,
    1997 relating to the Nevada Note, the Nevada Deed of Trust, the
    Arizona Deed of Trust, the Fremont Deed of Trust, each of the
    Assignments of Agreements, each of the Assignments of Lessor's
    Interest in Leases, the Post-Closing Agreement, and all other
    documents, with the exception of the Remediation and Indemnification
    Agreements, evidencing, securing or relating to the Loan, the payment
    of the Indebtedness or the performance of the Obligations.
    
    Loan Parties:  Trustor.
    
    Material Adverse Change:  Any material and adverse change in (i) the
    financial condition of any of the Loan Parties, or (ii) the condition
    or operation of the Property.
    
    Milpitas Deed of Trust:  That certain Deed of Trust, Security
    Agreement and Fixture Filing with Assignment of Leases, Rents and
    Agreements dated as of May 24, 1996, executed by Trustor for the
    benefit of Beneficiary, recorded in the Official Records of Santa
    Clara County, California, as amended by that certain First
    Modification of Deed of Trust and Other Loan Documents dated as of May
    9, 1997, as further amended by that certain Second Modification of
    Deed of Trust and Other Loan Documents dated as of even date herewith,
    as further amended from time to time.
    
    Net Operating Income:  For any period, gross income from operations of
    the Remaining Properties, for the purposes of determining Combined
    Debt Service Coverage or Future Combined Debt Service Coverage, or
    from operations of an individual Combined Property, for the purposes
    of determining the Individual Debt Service Coverage or Future
    Individual Debt Service Coverage for such Combined Property, in either
    case, derived from arm's length, market rate rents from leases with
    unaffiliated third parties in possession of the leased premises and
    paying rent on a current basis, service fees or charges, and addi-
    
    tional rent resulting from operating expense, common area maintenance,
    utilities and tax escalation pass through provisions (excluding
    capital gains income derived from the sale of assets and other items
    of income which Beneficiary reasonably determines are unlikely to
    occur in any subsequent period), less operating expenses (such as
    cleaning, utilities, administrative, landscaping, security and common
    area maintenance expenses, common area association fees, repairs and
    maintenance and less fixed expenses (such as insurance, real estate
    and other taxes), which expenses shall be related to the property
    producing such gross income, shall be for services from arm's length
    third party transactions or equivalent to the same, and shall exclude
    all expenses for capital improvements and replacements, debt service
    and depreciation or amortization of capital expenditures and other
    similar noncash items.  Operating expenses shall include not less than
    4.0% of gross income for the property encumbered by the Woodlands Deed
    of Trust and not less than 3.5% of gross income for each of the other
    Combined Properties and shall include reserves for replacements of not
    less than $31,000 for the Property encumbered by the Tustin Deed of
    Trust and not less than $23,000 for each of the other Combined
    Properties.  Real estate taxes shall be calculated based upon the
    greater of (i) the current tax bill plus the next subsequent year's
    escalations as permitted under applicable law, or (ii) the estimated
    market value of such Combined Properties (as determined by
    Beneficiary) at the time of any reconveyance described in
    Paragraph 9.36 of this Deed of Trust multiplied by the then current
    tax rate.  Gross income shall not be anticipated for any greater
    period than that approved by generally accepted accounting principles,
    nor shall operating expenses be prepaid.
    
    Nevada Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of May 9, 1997, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Washoe County Nevada,
    as amended by that certain First Modification of Deed of Trust and
    Other Loan Documents dated as of even date herewith, as further
    amended from time to time.
    
    Note:  Collectively (i) that certain Amended and Restated Promissory
    Note dated May 24, 1996 (and deemed made as of, and relating back to,
    March 20, 1996), executed by Trustor in the original principal amount
    of Twenty-Five Million and No/100 Dollars ($25,000,000.00), payable to
    Beneficiary or its order, and all modifications, renewals or
    extensions thereof (the "Multistate Note"), (ii) that certain Amended
    and Restated Promissory Note dated as of May 9, 1997 executed by
    Trustor in the original principal amount of Eight Million Nine Hundred
    Thirteen Thousand Seven Hundred Thirty and 85/100 Dollars
    ($8,913,730.85), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Nevada Note"), and
    (iii) that certain Promissory Note dated as of even date herewith
    executed by Trustor in the original principal amount of Twenty Million
    Nine Hundred Thousand Dollars ($20,900,000), payable to Beneficiary or
    its order, and all modifications, renewals or extensions thereof (the
    "Arizona/California Note").
    
    Obligations:  Any and all of the covenants, promises and other
    obligations (including, without limitation, the Indebtedness) made or
    owing by Trustor to or due to Beneficiary under and/or as set forth in
    the Loan Documents and all of the material covenants, promises and
    other obligations made or owing by Trustor to each and every other
    Person relating to the Property.
    
    Ontario Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of San Bernardino
    County, California, as amended by that certain First Modification of
    Deed of Trust and Other Loan Documents dated as of May 24, 1996, as
    further amended by that certain Second Modification of Deed of Trust
    and Other Loan Documents dated as of May 9, 1997, as further amended
    by that certain Third Modification of Deed of Trust and Other Loan
    Documents dated as of even date herewith, as further amended from time
    to time.
    
    Owner's Affidavit:  That certain Owner's Affidavit dated as of even
    date herewith, executed by Trustor in favor of Beneficiary.
    
    Permitted Exceptions:  All of those matters described on Exhibit B
    attached hereto.
    
    Person:  Any natural person, corporation, firm, association,
    government, governmental agency or any other entity, whether acting in
    an individual, fiduciary or other capacity.
    
    Personalty:  Trustor's right, title and interest in all personal
    property (other than Fixtures) now or hereafter located in, upon or
    about or collected or used in connection with the Property, together
    with all present and future attachments, accessions, replacements,
    substitutions and additions thereto or therefor, and the cash and
    noncash proceeds thereof, including all property listed in the
    Inventory, the Impound Account, all goods, documents, instruments and
    chattel paper, all drawings, plans and specifications, all causes of
    action and recoveries now or hereafter existing for any loss or
    diminution in value of the Property, all licenses, governmental
    authorizations or permits pertaining to the Property or the
    development, ownership, management or operation thereof, all
    trademarks, service marks, designs, logos, trade names, names or
    similar identifications pertaining to the Property, and all accounts,
    contract rights and general intangibles (including, without
    limitation, any insurance proceeds and condemnation awards or
    compensation) arising out of or incident to the ownership, development
    or operation of the Property owned by or in which Trustor has an
    interest including, without limitation, all personal property
    described in the UCC-1 Financing Statement executed by Trustor of even
    date herewith, which is incorporated herein by this reference, and all
    furniture, furnishings, equipment, machinery, construction materials
    and supplies, leasehold interests in personal property and the Leases. 
    Notwithstanding the foregoing, Personalty shall not include any
    proprietary computer software developed by Trustor for the
    interpretation, manipulation or presentation of the information
    comprising the books and records of Trustor.
    
    Post-Closing Agreement:  That certain Post-Closing Actions Agreement
    dated as of even date herewith, executed by Trustor in favor of
    Beneficiary.
    
    Property:  As defined in the above granting paragraph of this Deed of
    Trust.
    
    Receiver:  Any trustee, receiver, custodian, fiscal agent, liquidator
    or similar officer.
    
    Remaining Properties:  Collectively, each of the Combined Properties
    which remain encumbered by any of the Combined Deeds of Trust
    following the requested reconveyance of this Deed of Trust pursuant to
    Paragraph 9.36 of this Deed of Trust and following the prior or
    concurrent reconveyance of any of the other Combined Deeds of Trust
    pursuant to Paragraph 9.36 of any of the other Combined Deeds of
    Trust.
    
    Remediation and Indemnification Agreements:  Collectively, (i) the
    Hazardous Substances Remediation and Indemnification Agreement dated
    as of May 24, 1996 executed by Trustor in favor of Beneficiary in
    connection with the property encumbered by the Milpitas Deed of Trust,
    (ii) the Hazardous Substances Remediation and Indemnification
    Agreement dated as of March 20, 1996, executed by Trustor in favor of
    Beneficiary in connection with the property encumbered by the Ontario
    Deed of Trust, (iii) the Hazardous Substances Remediation and
    Indemnification Agreement dated as of March 20, 1996, executed by
    Trustor in favor of Beneficiary in connection with the property
    encumbered by the Tustin Deed of Trust, (iv) the Hazardous Substances
    Remediation and Indemnification Agreement dated as of March 20, 1996,
    executed by Trustor in favor of Beneficiary in connection with the
    property encumbered by the Woodlands Deed of Trust, (v) the Hazardous
    Substances Remediation and Indemnification Agreement dated as of May
    9, 1997 executed by Trustor in favor of Beneficiary in connection with
    the property encumbered by the Nevada Deed of Trust, (vi) the
    Hazardous Substances Remediation and Indemnification Agreement dated
    as of even date herewith executed by Trustor in favor of Beneficiary
    in connection with the property encumbered by the Arizona Deed of
    Trust, (vii) the Hazardous Substances Remediation and Indemnification
    Agreement dated as of even date herewith executed by Trustor in favor
    of Beneficiary in connection with the property encumbered by the
    Fremont Deed of Trust, and (viii) the Hazardous Substances Remediation
    and Indemnification Agreement dated as of even date herewith executed
    by Trustor in favor of Beneficiary in connection with the Property.
    
    Rents:  All rents, royalties, revenues, issues, profits, proceeds and
    other income from the Property.
    
    Secondary Interest Rate:  As defined in the Note.
    
    Tustin Deed of Trust:  That certain Deed of Trust, Security Agreement
    and Fixture Filing with Assignment of Leases, Rents and Agreements
    dated as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary, recorded in the Official Records of Orange County,
    California, as amended by that certain First Modification of Deed of
    Trust and Other Loan Documents dated as of May 24, 1996, as further by
    that certain Second Modification of Deed of Trust and Other Loan
    Documents dated as of May 9, 1997, as further amended by that certain
    Third Modification of Deed of Trust and Other Loan Documents dated as
    of even date herewith, as further amended from time to time.
    
    Woodlands Deed of Trust:  That certain Deed of Trust, Security
    Agreement and Fixture Filing with Assignment of Leases, Rents and
    Agreements dated as of March 20, 1996, executed by Trustor for the
    benefit of Beneficiary, recorded in the Official Records of Salt Lake
    County, Utah, as amended by that certain First Modification of Deed of
    Trust and Other Loan Documents dated as of May 24, 1996, as further by
    that certain Second Modification of Deed of Trust and Other Loan
    Documents dated as of May 9, 1997, as further amended by that certain
    Third Modification of Deed of Trust and Other Loan Documents dated as
    of even date herewith, as further amended from time to time.
    
    
    
                               ARTICLE 39
    
                     Representations and Warranties
    
    
        Trustor hereby represents and warrants to Beneficiary and Trustee
    that as of the date of this Deed of Trust and as of the date of any
    subsequent disbursement pursuant to the Loan Documents:
    
        39.1  Title, Authorization and Organization.  Trustor (i) is the
    lawful owner of the Property and holds good and marketable title to
    the Property free and clear of all defects, liens, encumbrances, ease-
    
    ments, exceptions and assessments, except the Permitted Exceptions;
    (ii) has good, right and lawful authority to grant the Property as
    provided in and by this Deed of Trust; (iii) has the requisite power
    and authority to own, develop and operate the Property; (iv) is duly
    organized, validly existing and in good standing under the laws of the
    State of its organization and is duly qualified to do business in the
    State in which the Land is located; and (v) is in compliance with all
    Laws and Restrictions applicable to it.
    
        39.2  Validity of Loan Documents.  The execution, delivery and
    performance by Trustor of the Loan Documents and the borrowings
    evidenced by the Note are within the power of Trustor, have been
    authorized by all requisite corporate or partnership authority and
    will not violate any Laws and Restrictions or any agreement or other
    instrument.  Each of the Loan Documents when executed and delivered to
    Beneficiary, will constitute a legal, valid and binding obligation of
    Trustor enforceable in accordance with its terms.
    
        39.3  Financial Statements.  All financial statements and data that
    have been given to Beneficiary with respect to the Property or any
    Loan Party are true, accurate, complete and correct and except as
    expressly noted to the contrary therein, have been prepared in
    accordance with generally accepted accounting principles consistently
    applied throughout the periods covered thereby.  There has been no
    Material Adverse Change since the date of the most recent financial
    statement given to Beneficiary.
    
        39.4  Other Information.  All reports, papers, data and information
    given to Beneficiary with respect to Loan Parties and the Property are
    accurate, correct and complete.
    
        39.5  Litigation.  There is not now pending against or affecting
    any Loan Party or the Property, nor to the best of Trustor's knowledge
    is there threatened any action, suit or proceeding at law or in equity
    or by or before any administrative agency that, if adversely
    determined, would materially impair or affect (i) the financial
    condition or operations of such Loan Party, or (ii) the condition, use
    or operation of the Property.
    
        39.6  Additional Representations and Warranties.  (i) The Property
    is not used principally or primarily for agricultural or grazing
    purposes; (ii) each Loan Party has filed all federal, state, county
    and municipal income tax returns required to have been filed by it and
    has paid all taxes that have become due pursuant to such returns or
    pursuant to any assessments received by it (and no Loan Party knows of
    any basis for any additional assessment against it in respect of such
    taxes); (iii) all costs for labor and materials for the construction
    of the Improvements have been paid in full other than ongoing work for
    leasehold improvements under Leases approved in writing by
    Beneficiary; (iv) Trustor is not aware of any assessment for public
    improvements which is pending and which could become a lien upon the
    Property; (v) no event has occurred which with the giving of notice or
    the passage of time, or both, would constitute an Event of Default
    under any of the Loan Documents; (vi) Trustor is not a party to any
    agreement or instrument materially and adversely affecting its present
    or proposed business conducted on the Property or the Property itself,
    financial or otherwise; (vii) Trustor is not in default in the
    performance, observance or fulfillment of any of the material
    obligations, covenants or conditions set forth in any such agreement
    or instrument to which it is a party to the extent that the same would
    have a material and adverse effect on the Property or Trustor's
    ability to timely perform its Obligations under the Loan Documents;
    (viii) all Fixtures are permanently affixed to the Improvements and
    Trustor has not executed any financing statement or security
    agreements covering the Fixtures, or any of them, and the costs of all
    Fixtures due as of the date hereof have been paid; (ix) neither the
    Property, nor any part thereof, has sustained, incurred or suffered
    any material damage or destruction; and (x) subject to the Permitted
    Exceptions, the Personalty is owned by Trustor, free and clear of any
    liens, encumbrances, mortgages, security interests, claims and rights
    of others.
    
        39.7  Compliance with Laws.  The Property and the proposed and
    actual use thereof comply with all Laws and Restrictions and the Laws
    and Restrictions contain no unsatisfied conditions necessary for the
    actual use of the Property as it is currently used.  Trustor has
    received no notices of violations of any Laws and Restrictions.
    
        39.8  Bankruptcy.  No petition in bankruptcy, petition or answer
    seeking assignment for the benefit of creditors or appointment of a
    Receiver with respect to Trustor has occurred or is contemplated, and
    no reorganization, arrangement, liquidation or dissolution or similar
    relief under the Federal Bankruptcy laws or any state laws have been
    instituted by or against Trustor, and none is contemplated.
    
    
                               ARTICLE 40
    
                         Affirmative Covenants
    
    
        Trustor hereby covenants and agrees as follows:
    
        40.1  Obligations of Trustor.  Trustor will (i) timely perform, or
    cause to be timely performed, all the Obligations; (ii) maintain and
    preserve the lien of this Deed of Trust; and (iii) forever warrant and
    defend its grant made herein against any and all claims and demands
    whatsoever.
    
        40.2  Insurance.
    
             A.   Trustor, at its sole cost and expense, will keep and
    maintain for the mutual benefit of Trustor and Beneficiary, the
    following policies of insurance:
    
              (1) Insurance against loss or damage to the Property by
    fire and other risks covered by insurance commonly known as the broad
    form of extended coverage, including losses sustained by reason of
    riot and civil commotion, vandalism, malicious mischief, burglary,
    theft and mysterious disappearance, flood (if the Property is located
    in a HUD designated special flood hazard area) and against such other
    risks or hazards as Beneficiary from time to time reasonably may
    designate, in an amount equal to one hundred percent (100%) of the
    then "full replacement cost" of the Improvements, the Fixtures and the
    Personalty, without deduction for physical depreciation.
    
              (2) Rental income insurance against loss of income in an
    amount not less than twelve (12) months rental and taxes and other
    operating expense reimbursements or payments at then-current income
    levels.
    
              (3) Commercial General Liability insurance including
    broad form property damage, contractual liability and personal injury
    or death coverage, with a combined single limit of at least
    $5,000,000.
    
              (4) "Builders Risk" insurance, during any material
    construction, repair, replacement, renovation or alteration of the
    Improvements, in such amounts as are reasonably approved by
    Beneficiary.
    
              (5) If applicable, boiler and machinery insurance
    covering boilers and other pressure vessels, the air conditioning
    system, high pressure piping and other machinery and equipment
    required for the operation of the Property.
    
              (6) Such other insurance, and in such amounts, as may
    from time to time be reasonably required by Beneficiary (but excluding
    earthquake insurance, unless earthquake insurance is required pursuant
    to the terms of any of the Leases).
    
             B.   Trustor shall provide Beneficiary with satisfactory
    evidence of compliance with applicable requirements for Worker's
    Compensation insurance and of employee automobile coverage.
    
             C.   All policies of insurance required by this Deed of Trust
    (i) shall be satisfactory in form and substance to Beneficiary and
    written with companies satisfactory to Beneficiary, (ii) shall name
    Beneficiary as an additional insured as its interests may appear,
    (iii) shall contain a Standard Lender's Loss Payable endorsement and
    other non-contributory standard mortgagee protection clauses
    acceptable to Beneficiary, and at Beneficiary's option, a waiver of
    subrogation rights by the insurer, (iv) shall contain an agreement by
    the insurer that such policy shall not be amended or canceled without
    at least thirty (30) days' prior written notice to Beneficiary,
    (v) shall be in the full replacement cost of the Improvements, without
    deduction for physical depreciation and (vi) shall contain such other
    provisions as Beneficiary deems reasonably necessary or desirable to
    protect its interests.  Any policies containing a coinsurance clause
    shall include a replacement cost endorsement adequate to ensure that
    the coinsurance clause is rendered inoperative.
    
             D.   In the event a blanket policy is submitted to satisfy
    Trustor's responsibilities under this Paragraph 3.2, in addition to
    such other requirements set forth herein, Trustor shall deliver to
    Beneficiary a certificate from such insurer indicating that
    Beneficiary is an insured under such policy and designating the amount
    of such insurance applicable to the Property.
    
             E.   Trustor shall furnish evidence, satisfactory to
    Beneficiary, that (i) all insurance requirements (including, without
    limitation, provisions for waivers of subrogation) set forth in the
    Leases or any other agreements affecting the Property shall have been
    satisfied by each party thereto, and (ii) Trustor's insurance coverage
    is sufficient (assuming the total destruction of the Property) to
    permit Trustor to rebuild the Improvements (including basic tenant
    improvements) and to replace the Fixtures and Personalty in such
    manner as to enable the Property to be operable and rentable as it is
    currently rented and operated, and no tenant shall have the right to
    terminate its lease of any portion of the Property as a result of the
    failure of Trustor to rebuild above-standard tenant improvements.
    
             F.   Self-insurance (other than the applicable deductibles
    approved by Beneficiary) shall not be employed to satisfy the
    requirements of this Paragraph 3.2.
    
             G.   All of Trustor's right, title and interest in and to all
    policies of property insurance and any unearned premiums paid thereon
    are hereby assigned (to the fullest extent assignable) to Beneficiary
    who shall have the right, but not the obligation, to assign the same
    to any purchaser of the Property at any foreclosure sale.
    
             H.   Not less than thirty (30) days prior to the expiration
    dates of any policy previously furnished pursuant to this
    Paragraph 3.2, Trustor shall provide Beneficiary with duplicate
    originals or certified copies of the renewal policies together with
    evidence satisfactory to Beneficiary of Trustor's payment of the
    applicable premiums.
    
        40.3  Maintenance, Waste and Repair.  Trustor will (i) maintain the
    Property in good order and condition, (ii) promptly make all necessary
    structural and non-structural repairs to the Property, (iii) not
    diminish or materially alter the Improvements, nor erect any new
    buildings, structures or building additions on the Property, without
    the prior written consent of Beneficiary, and (iv) not permit any
    waste of the Property or make any change in the use thereof, nor do or
    permit to be done thereon anything, that may in any way impair the
    security of this Deed of Trust.
    
        40.4  Impositions; Impounds.  Trustor will pay when due all
    Impositions.  Upon an Event of Default, Trustor will pay monthly to
    Beneficiary an amount equal to one-twelfth (1/12th) of the annual cost
    of Impositions together with an amount equal to the estimated next
    hazard and other required insurance premiums.  These funds will be
    held by Beneficiary (and may be commingled with other funds of
    Beneficiary) without interest and will be released to Trustor for
    payment of Impositions and insurance premiums, or directly applied to
    such costs by Beneficiary, as Beneficiary may elect.
    
        40.5  Compliance with Law.  Trustor will promptly and faithfully
    comply with all present and future Laws and Restrictions.
    
        40.6  Books and Records.  Trustor, without expense to Beneficiary,
    will maintain full and complete books of account and other records
    reflecting the results of the operations of the Property in accordance
    with generally accepted accounting principles consistently applied,
    and will furnish or cause to be furnished to Beneficiary such
    financial information concerning the condition of the Loan Parties and
    the Property as Beneficiary shall reasonably request.  The following
    information will be furnished without request:
    
             A.   As soon as available, and in any event within thirty
    (30) days after the close of each fiscal quarter of each fiscal year
    of Trustor, a statement of revenues and expenses relating to the
    rentals and operations of the Property for the applicable fiscal
    quarter just ended, certified by Trustor;
    
             B.   As soon as available, and in any event within ninety
    (90) days after the end of each fiscal year of Trustor, an annual
    operating statement for the Property certified by an independent
    certified public accountant acceptable to Beneficiary and a rent roll
    in the form delivered to Beneficiary in connection with the closing of
    the Loan certified by Trustor reflecting all the existing Leases; and
    
             C.   As soon as available, and in any event within ninety
    (90) days after the end of Trustor's fiscal year, a balance sheet of
    Trustor, certified in a manner acceptable to Beneficiary.
    
        After the occurrence of an Event of Default, or in the event
    Trustor fails to deliver an annual operating statement for the
    Property certified by an independent certified public accountant
    acceptable to Beneficiary within the time frame set forth in
    Paragraph 3.6.B, above, Beneficiary shall have the right, at all
    reasonable times and upon reasonable notice, to audit the books of
    account and records of any Loan Party, all of which shall be made
    available at Trustor's office during reasonable business hours to
    Beneficiary and Beneficiary's representatives for such purpose, from
    time to time.  If such audit discloses a variance of three per-
    
    cent (3%) or more in income or expenses, the cost of such audit shall
    be paid by Trustor.
    
        40.7  Further Assurances.  Trustor, at any time upon the reasonable
    request of Beneficiary, will at Trustor's expense execute, acknowledge
    and deliver all such additional papers and instruments (including,
    without limitation, a declaration of no setoff) and all such further
    acts and things as may be reasonably necessary to carry out the
    purposes of the Loan Documents and to subject to the liens thereof any
    property intended by the terms thereof to be covered thereby and any
    renewals, additions, substitutions or replacements thereto.
    
        40.8  Indemnity and Attorneys' Fees.  Trustor will indemnify,
    defend, protect and hold Beneficiary harmless from any and all
    liability, loss, claims, damage, cost or expense (including, without
    limitation, reasonable attorneys' fees) that Beneficiary may or might
    incur hereunder, or in connection with the making or administering of
    the Loan, the enforcement of any of Beneficiary's rights or remedies
    hereunder or under the other Loan Documents, any action taken by
    Beneficiary hereunder or thereunder, whether or not suit is filed, or
    by reason or in defense of any and all claims and demands whatsoever
    that may be asserted against Beneficiary arising out of the Property,
    or any part thereof or interest therein, or as to which it becomes
    necessary to defend or uphold the lien of this Deed of Trust or other
    Loan Documents.  Should Beneficiary incur any such liability, loss,
    claim, damage, cost or expense, the amount thereof with interest
    thereon at the Secondary Interest Rate shall be payable by Trustor
    immediately without demand, shall be secured by this Deed of Trust,
    and shall be part of the Indebtedness.
    
        40.9  Litigation.  Trustor will promptly give notice in writing to
    Beneficiary of any litigation which may reasonably be expected to
    result in a Material Adverse Change.
    
        40.10  Inspection of Property.  Trustor hereby grants to
    Beneficiary, its agents, employees, consultants and contractors, the
    right to enter upon the Property for the purpose of making any and all
    inspections, reports, tests (including, without limitation, soils
    borings, ground water testing, wells and/or soils analysis), inquiries
    and reviews as Beneficiary (in its sole and absolute discretion) may
    deem necessary to assess the then current condition of the Property;
    provided, however, that Beneficiary shall not conduct any such tests
    (including, without limitation, soil borings, ground water testing,
    wells and/or soils analysis) (i) unless Beneficiary becomes aware of,
    or reasonably suspects, an environmental event on or near the Property
    which could have a material adverse effect on any portion of the
    Property and Trustor refuses or fails to conduct such tests in a
    manner reasonably requested by Beneficiary, or (ii) until after the
    occurrence of an Event of Default under any of the Loan documents or
    the Remediation and Indemnification Agreements.  Beneficiary shall
    provide Trustor with one (1) business day's notice of such entry;
    provided, however, that, subject to the preceding sentence, Trustor's
    consent shall not be required for such entry or for the performance of
    such tests.  All costs, fees and expenses (including those of Benefi-
    
    ciary's legal counsel and consultants) incurred by Beneficiary with
    respect to such inspections, reports, tests, inquiries and reviews
    shall be paid by Trustor to Beneficiary upon demand, shall accrue
    interest at the Secondary Interest Rate until paid, and shall be
    secured by this Deed of Trust.  Beneficiary shall make reasonable
    efforts in the exercise of its entry, inspection, and other rights
    under this Paragraph to avoid interference with the business
    operations of any tenant or licensee occupying space at the Property
    pursuant to Leases permitted by the Loan Documents, and, so long as no
    Event of Default has occurred, shall cooperate with Trustor in setting
    the time for such entry, inspections and tests.
    
        40.11  Contest.  Notwithstanding the provisions of Paragraphs 3.4
    and 3.5 hereof, Trustor may, at its expense, contest the validity or
    application of any Impositions or Laws and Restrictions by appropriate
    legal proceedings promptly initiated and conducted in good faith and
    with due diligence, provided that (i) Beneficiary is reasonably
    satisfied that neither the Property nor any part thereof or interest
    therein will be in danger of being sold, forfeited, or lost as a
    result of such contest, and (ii) Trustor shall have posted a bond or
    furnished such other security as may be reasonably required from time
    to time by Beneficiary.
    
        40.12  Tax Receipts.  Trustor will deliver to Beneficiary, within
    seven (7) days after the demand made therefor, bills showing the
    payment to the extent then due of all taxes, assessments (including,
    without limitation, those payable in periodic installments), and any
    Imposition that may have become a lien upon the Property or any part
    thereof.
    
        40.13  Additional Information.  Trustor will furnish to
    Beneficiary, within seven (7) days after written request therefor, any
    and all information that Beneficiary may reasonably request concerning
    the Property or the performance by Trustor of the Obligations.
    
        40.14  Prepayment.  Trustor may prepay the Loan only on the terms
    and conditions set forth in the Note and Trustor shall pay Beneficiary
    prepayment charges in respect of any prepayment, whether voluntary or
    involuntary, as required by and on the terms and conditions set forth
    in the Note.
    
        40.15  FIRPTA Affidavit.  In the event of any transfer by Trustor
    of its rights hereunder or of any interest in the Property otherwise
    permitted under this Deed of Trust, such transferee shall, as an addi-
    
    tional condition to such transfer, under penalty of perjury, execute
    and deliver to Beneficiary an affidavit concerning the non-foreign
    status of such transferee substantially in the form required to be
    delivered by Trustor in connection with the funding of the Loan. 
    Nothing in this Paragraph 3.15 shall be deemed a modification or
    waiver of any other provision of any of the Loan Documents limiting,
    prohibiting or otherwise relating to any transfer of any interest in
    the Property or Trustor.
    
        40.16  Tax Service Contract.  Throughout the term of the Loan, at
    Trustor's sole expense, Beneficiary shall be furnished tax service
    contracts issued by a tax reporting agency satisfactory to
    Beneficiary.
    
        40.17  Reimbursement.  Any amount paid by Beneficiary for any tax,
    stamp tax, assessment, water rate, sewer rate, insurance premium,
    repair, rent charge, debt, claim, inspection or lien having priority
    over this Deed of Trust or to in any way protect the security for the
    Loan, shall (i) bear interest at the Secondary Interest Rate from the
    date of payment by Beneficiary, (ii) constitute additional
    indebtedness secured by this Deed of Trust, prior to any right, title
    or interest in or claim upon the Property attaching or accruing
    subsequent to the lien of this Deed of Trust, (iii) be secured by this
    Deed of Trust, and (iv) be payable by Trustor to Beneficiary upon
    demand.
    
        40.18  Plans and Specifications.  Trustor agrees to keep at its
    offices at the Property, and to make available to Beneficiary during
    normal business hours, "As-Built Plans and Specifications", or, if
    unavailable, the final set of plans and specifications from which the
    Improvements were constructed ("As-Builts"), certified by a licensed
    architect or licensed contractor as true, correct and complete
    As-Builts for the Improvements.
    
    
                               ARTICLE 41
    
                           Negative Covenants
    
    
            Trustor hereby covenants and agrees as follows:
    
        41.1  Restrictive Uses.  Trustor will not initiate, join in, or
    consent to any change in the current use of the Property or in any
    zoning ordinance, private restrictive covenant, assessment proceedings
    or other public or private restrictions limiting or restricting the
    uses that may be made of the Property or any part thereof without the
    prior written consent of Beneficiary.
    
        41.2  Due on Sale or Encumbrance.
    
             A.   Except as expressly otherwise provided in this
    Paragraph 4.2, in the event that Trustor, without the prior written
    consent of Beneficiary (which consent may be withheld for any reason
    or for no reason or given upon such terms and conditions as Bene-
    
    ficiary deems necessary or appropriate, all within Beneficiary's
    absolute discretion), shall sell, convey, assign, transfer, alienate
    or otherwise dispose of or be divested of its title to, or, shall
    mortgage, convey security title to, or otherwise encumber or cause to
    be encumbered, the Property or any part thereof or any interest
    therein in any manner or way, whether voluntary or involuntary, or in
    the event of (a) any merger, consolidation or dissolution involving,
    or the sale or transfer of all or substantially all of the assets of,
    Trustor or any general partner of Trustor, (b) the transfer (at one
    time or over any period of time) of ten percent (10%) or more of the
    voting stock of (i) a corporate Trustor or (ii) any corporate general
    partner of Trustor, (c) the transfer of any general partnership
    interest in Trustor or in any partnership which is a direct or
    indirect general partner of Trustor, or (d) the conversion of any such
    general partnership interest to a limited partnership interest, then
    the entire balance of the Indebtedness, plus the Prepayment Premium
    (as defined in the Note), shall become immediately due and payable at
    the option of Beneficiary.  Trustor hereby covenants not to
    participate in, cause or permit any of the foregoing actions or events
    described in this Paragraph 4.2 without Beneficiary's prior written
    consent.  Consent to one such transfer by Beneficiary shall not be
    deemed a waiver of the right to require such consent to further or
    future transfers.  Any such transferee shall, as a condition of the
    effectiveness of any consent or waiver by Beneficiary hereunder, as a
    covenant of Trustor and such transferee, and in form and substance
    required by Beneficiary, assume all obligations under the Loan
    Documents and the assumption shall not, however, release Trustor, or
    any maker or guarantor of the Note, from any liability thereunder. 
    This provision shall not apply to transfers of title or interest under
    any will or testament or applicable law of descent.
    
             B.   Notwithstanding the foregoing, the provisions of this
    Paragraph 4.2 shall not apply to (i) the sale of stock on any
    recognized public stock exchange in the ordinary course of business,
    (ii) any merger or consolidation of Trustor where the surviving
    company has a Debt Ratio (as defined below) which does not exceed the
    Debt Ratio of Trustor as of the Closing Date, as shown by evidence
    reasonably satisfactory to Beneficiary, and (iii) a public tender
    offer by a Person unaffiliated with Trustor to purchase the stock of
    Trustor.  Notwithstanding anything to the contrary contained herein,
    unless a change in the ownership of Trustor is the result of one or
    more of the acts described in the immediately preceding sentence (in
    which case the prior consent of Beneficiary is not required),
    Beneficiary's prior written consent shall be required in the event of
    a change in the ownership of Trustor (in a single transaction or
    cumulative transactions) such that in excess of 50% of Trustor's stock
    is owned or controlled by a sole shareholder or an affiliated group of
    shareholders ("Sale").  Notwithstanding the foregoing, a Sale shall
    specifically exclude:  (a) the conversion ("Conversion") to common
    stock shares of some or all of the Series A convertible preferred
    stock of Trustor outstanding as of the Closing Date (the "Preferred
    Stock"), (b) any initial sale ("Initial Sale") of any of the Preferred
    Stock to a Person unaffiliated with Trustor which occurs either prior
    to and/or subsequent to any Conversion, and (c) any sale of any of the
    Preferred Stock subsequent to an Initial Sale of such Preferred Stock
    to a Person unaffiliated with Trustor which previously acquired some
    or all of the Preferred Stock in an Initial Sale.  As used herein,
    "Debt Ratio" means the ratio of all indebtedness of Trustor and its
    subsidiaries to the sum of all assets of Trustor and it subsidiaries,
    before depreciation and less the sum of any intangible assets. 
    
        41.3  Replacement of Fixtures and Personalty.  Trustor will not
    permit any of the Fixtures or Personalty to be removed at any time
    from the Property without the prior written consent of Beneficiary
    unless actually replaced by articles of equal suitability and value
    owned by Trustor free and clear of any lien or security interest.
    
        41.4  No Cooperative or Condominium.  Trustor shall not operate the
    Property or permit the Property to be operated, as a cooperative or
    condominium building or buildings in which the tenants or occupants
    participate in the ownership, control, or management of the Property
    or any part thereof, as tenant stockholders or otherwise.
    
        41.5  Partnership Agreement.  Trustor, if a partnership, will not
    terminate, alter, modify or amend or permit the termination,
    alteration, modification or amendment of its Partnership Agreement
    without Beneficiary's prior written consent.
    
    
                               ARTICLE 42
    
                      Casualties and Condemnation
    
    
        42.1  Insurance and Condemnation Proceeds.
    
             A.   Trustor will notify Beneficiary in writing promptly
    after loss or damage caused by fire or other casualty to all or any
    part of the Property resulting in damage in excess of $25,000 per
    occurrence, and prior to the making of any repairs thereto.  Trustor
    will furnish to Beneficiary within sixty (60) days after such loss or
    damage (a) preliminary plans and specifications for the repair and
    reconstruction of the Property (the "Preliminary Plans and Specifi-
    
    cations"); and (b) evidence satisfactory to Beneficiary (i) of the
    cost of repair or reconstruction in accordance with the Preliminary
    Plans and Specifications, (ii) that sufficient funds are available
    and/or committed for the benefit of Beneficiary, including insurance
    proceeds, funds provided by the Trustor, payment and performance bond,
    or otherwise, to complete such repair or reconstruction, and
    (iii) that such repair or reconstruction may be completed in
    accordance with all applicable Laws and Restrictions within the time
    frame described in Paragraph 5.1.C.(v) hereof and that all necessary
    permits and approvals have been or will be obtained.  Trustor hereby
    unconditionally and irrevocably waives all rights of a property owner
    under applicable law providing for the allocation of condemnation
    proceeds between a property owner and a lien holder.
    
             B.   In the event of any insured loss in excess of Two
    Hundred Fifty Thousand Dollars ($250,000) or in the event an Event of
    Default, or an event which with the giving of notice or the passing of
    time or both constitutes an Event of Default, shall have occurred and
    be continuing, all insurance proceeds on account of any damage to the
    Property shall be payable to, and deposited with, Beneficiary. 
    Beneficiary, at its sole option, may (i) apply such insurance proceeds
    in payment of the Indebtedness or in satisfaction of any other
    Obligation in such order as Beneficiary may determine, (ii) use such
    insurance proceeds to repair or reconstruct the Improvements,
    (iii) release such insurance proceeds to Trustor for repair or
    reconstruction of the Improvements in accordance with the procedures
    described in Paragraph 5.1.E hereof, or (iv) divide such proceeds in
    any manner among any such application, use or release.  No such
    application, use or release shall, however, extend or postpone the due
    date of any installments under the Note or change the amount of such
    installments or cure or waive any Event of Default or notice of Event
    of Default under the Loan Documents or invalidate any act done
    pursuant to such notice.
    
             C.   Notwithstanding the provisions of Paragraph 5.1.B
    hereof, if all or any part of the Property is damaged or destroyed or
    less than all of the Property is taken by any public or quasi-public
    authority through condemnation, eminent domain, deed in lieu thereof,
    or otherwise, Beneficiary shall make the net amount of all insurance
    proceeds and condemnation awards received by Beneficiary after
    deduction of Beneficiary's reasonable costs and expenses, if any, in
    collection of the same and costs associated with Beneficiary's review
    of the Preliminary Plans and Specifications and other costs associated
    with disbursement of such proceeds (the "Net Proceeds") available for
    the repair and reconstruction of the Property (or so much thereof as
    was not condemned) pursuant to the procedures described in
    Paragraph 5.1.E hereof, provided that (i) no Event of Default or event
    which, with the giving of notice or the passage of time, or both,
    would constitute an Event of Default, shall have occurred and shall be
    continuing, (ii) Trustor has complied with the provisions of Para-
    
    graph 5.1.A hereof and Beneficiary has approved the Preliminary Plans
    and Specifications, (iii) Trustor shall proceed with the
    reconstruction of the Property as nearly as possible to the condition
    it was in immediately prior to the occurrence of such casualty or
    taking (the "Occurrence") and in accordance with the Plans and
    Specifications as promptly as is practicable after the Occurrence, but
    in no event later than four (4) months after the Occurrence,
    (iv) Beneficiary shall be satisfied that such reconstruction can be
    completed no later than twelve (12) months after the Occurrence and at
    least twelve (12) months before the maturity of the Loan,
    (v) Beneficiary shall be satisfied that the reconstruction can be
    completed at a cost which does not exceed the Net Proceeds, or, in the
    event the cost of such restoration exceeds the Net Proceeds, Trustor
    shall have satisfied the requirements set forth in Para-
    
    graph 5.1.F(i) hereof or Paragraph 5.1.F(ii) hereof, (vi) Beneficiary
    shall be satisfied that Trustor (whether with rental loss insurance
    proceeds or otherwise) will continue to be able to timely pay all
    payments as they become due on the Indebtedness during such period of
    repair and reconstruction, (vii) Trustor shall cause such
    reconstruction to be completed with due diligence as promptly as
    possible after commencement, but in no event later than twelve
    (12) months after the Occurrence and at least twelve (12) months
    before the maturity of the Loan, (viii) Beneficiary determines that
    repair or reconstruction is economically feasible and that the
    Property can physically and legally be restored to at least its value
    as of the Closing Date, (ix) Trustor shall have entered into a guaran-
    
    teed maximum price general construction contract acceptable in all
    respects to Beneficiary for completion of the repair or
    reconstruction, which contract must include provision for a retainage
    of not less than ten percent (10%) until full completion of the repair
    or reconstruction, and (x) the insurer does not deny liability to any
    named insured.
    
             D.   Beneficiary shall be entitled to settle and adjust all
    insurance claims, and Beneficiary may deduct and retain from the
    proceeds of any insurance the amount of all expenses incurred by
    Beneficiary in connection with any settlement or adjustment. 
    Notwithstanding the foregoing, so long as no Event of Default or event
    which, with the giving of notice or the passage of time or both, would
    constitute an Event of Default shall have occurred and be continuing,
    Trustor may settle directly with the insurer any insurance claims
    involving an amount less than Two Hundred Fifty Thousand Dollars
    ($250,000) so long as (i) Trustor applies all insurance proceeds to
    reconstruction of the Property, (ii) Trustor promptly and diligently
    pursues the repairs to completion, and (iii) Trustor follows the
    provisions of Paragraph 5.1.A hereof.
    
             E.   The Net Proceeds and any additional funds deposited by
    Trustor with Beneficiary shall constitute additional security for the
    Loan.  Trustor shall execute, deliver, file and/or record, at its own
    expense, such documents and instruments as Beneficiary deems necessary
    or advisable to grant to Beneficiary a perfected, first priority
    security interest in the Net Proceeds and such additional funds. 
    Provided that Trustor is otherwise entitled to receive the Net
    Proceeds pursuant to the terms and provisions of this Deed of Trust,
    Beneficiary or, at Beneficiary's option, a disbursing agent (the
    "Disbursing Agent") selected by Beneficiary (whose fees and expenses
    shall be paid by Trustor), shall pay the Net Proceeds to Trustor from
    time to time during the course of the restoration, subject to the
    following terms and conditions:
    
              (1) The work shall be administered and overseen by an
    architect or engineer approved by Beneficiary (the "Architect"). 
    Complete copies of the plans and specifications for the work (the
    "Plans and Specifications"), approved by all governmental authorities
    whose approval is required, and bearing the signed approval thereof by
    the Architect and accompanied by the Architect's signed estimate,
    bearing the Architect's seal, of the entire cost of completing the
    work, shall be delivered to Beneficiary;
    
              (2) Each request for payment shall be made upon seven
    (7) day's prior written notice to Beneficiary or the Disbursing Agent
    and shall be accompanied by a certificate to be made by the Architect
    stating that (i) all of the work completed has been done in compliance
    with the Plans and Specifications, as approved by Beneficiary,
    (ii) the sum requested is justly required to reimburse Trustor for
    payments by Trustor to, or is justly due to, the contractor,
    subcontractors, materialmen, laborers, engineers, architects or other
    persons rendering services and materials for the work (giving a brief
    description of such services and materials) and, when added to all
    sums previously paid out by Beneficiary or the Disbursing Agent, does
    not exceed the value of the work done to the date of such certificate,
    and (iii) the amount of such proceeds remaining with Beneficiary are
    sufficient on completion of the work to pay for the same in full
    (giving in such reasonable detail as Beneficiary may require an
    estimate of the cost of such completion);
    
              (3) Each request shall be accompanied by waivers of lien
    satisfactory to Beneficiary and the Disbursing Agent covering that
    part of the work for which payment or reimbursement is being requested
    and, if required by Beneficiary or the Disbursing Agent, by a search
    prepared by a title company satisfactory to Beneficiary or the
    Disbursing Agent, that there has not been filed with respect to the
    Property any mechanics', materialmen's or other liens;
    
              (4) The request for any payment after the work has been
    completed shall be accompanied by a copy of any certificate or
    certificates required by any Laws and Restrictions for legal occupancy
    of the Improvements;
    
              (5) Trustor shall deliver to Beneficiary or the
    Disbursing Agent certified or photostatic copies of all permits and
    approvals required by any Laws and Restrictions in connection with the
    commencement and conduct of the work; and
    
              (6) Trustor shall deliver to Beneficiary or the
    Disbursing Agent a surety bond for and/or guaranty of the payment for
    and completion of the work, which bond or guaranty shall be in form
    and substance satisfactory to Beneficiary and in an amount no less
    than the Architect's estimate of the entire cost of completing the
    work.
    
             F.   Notwithstanding anything to the contrary contained
    herein or in any of the insurance policies, all proceeds paid to
    Trustor under such policies shall immediately be delivered to
    Beneficiary.  If the Net Proceeds exceed the costs of completion of
    the restoration of the Property, such excess proceeds shall belong and
    be retained by and/or paid over to Beneficiary to be applied against
    the Indebtedness.  If at any time the Net Proceeds shall not, in
    Beneficiary's opinion, be sufficient to pay in full the balance of the
    costs which will be incurred in connection with the repair and
    reconstruction of the Property and all payments as they come due on
    the Indebtedness and all other obligations which are or may be secured
    by a lien on the Property during the reconstruction period, Trustor
    shall, prior to receiving any further disbursement, either
    (i) complete, using its own funds and not borrowed funds, such portion
    of the reconstruction as shall be sufficient to render the Net
    Proceeds sufficient to complete the reconstruction, or (ii) deposit
    the deficiency with Beneficiary before any further disbursement of the
    Net Proceeds shall be made, which deficiency deposit shall be held by
    Beneficiary in an interest bearing special account and shall be
    disbursed on the same conditions applicable to the Net Proceeds. 
    Beneficiary shall remit to Trustor the balance, if any, of any such
    deficiency deposit remaining after completion of the reconstruction.
    
        42.2  Additional Provisions Relating to Condemnation.  Trustor,
    immediately upon obtaining knowledge of the commencement of any
    proceedings for the condemnation of the entire Property or any
    material part thereof, will notify Trustee and the Beneficiary of the
    pendency of such proceedings.  Trustee and Beneficiary may participate
    in any such proceedings and Trustor from time to time will deliver to
    Beneficiary all instruments requested by Beneficiary to permit such
    participation.  In the event of such condemnation proceedings, the
    award or compensation payable is hereby assigned to and shall be paid
    to Beneficiary.  Beneficiary shall be under no obligation to question
    the amount of any such award or compensation and may accept the same
    in the amount in which the same shall be paid.  In any such
    condemnation proceedings Beneficiary may be represented by counsel
    selected by Beneficiary, the cost of such counsel to be borne by
    Trustor.  The proceeds of any award or compensation so received shall,
    subject to Paragraph 5.1.C hereof as it relates to condemnation, and
    at the option of Beneficiary, either be applied to the prepayment of
    the Indebtedness or be paid over to the Trustor for restoration of the
    Improvements in accordance with the provisions of Paragraph 5.1.E
    hereof.  Trustor hereby unconditionally and irrevocably waives all
    rights of a property owner under Section 1265.225(a) of the California
    Code of Civil Procedure or any successor statute.
        
                               ARTICLE 43
    
             Events of Default and Remedies of Beneficiary
    
    
        43.1  Events of Default.
    
             A.   If one or more of the following events shall have
    occurred and be continuing:
    
              (1) Trustor shall fail to pay when due any part of the
    Indebtedness;
    
              (2) Trustor shall fail to timely observe, perform or
    discharge any Obligation contained in any of the Loan Documents, any
    agreement relating to the Property or any other loan documents with
    respect to the Property on its part to be performed or observed, other
    than as described in Paragraphs 6.1.A(1), (3), (4), (5), (6), (7) and
    (8), and any such failure shall remain unremedied for thirty (30) days
    or such lesser period as may be otherwise specified in the applicable
    Loan Document (the "Grace Period") after notice to Trustor of the
    occurrence of such failure; provided, however, that the Grace Period
    may be extended to ninety (90) days if:  (a) Beneficiary determines in
    good faith that (i) such default cannot be cured within the Grace
    Period but can be cured within ninety (90) days, (ii) no lien or
    security interest created by the Loan Documents shall be impaired
    prior to the completion of such cure, and (iii) Beneficiary's
    immediate exercise of any remedies provided hereunder or by law is not
    necessary for the protection or preservation of the Property or
    Beneficiary's security interest therein, and (b) Trustor shall
    immediately commence and diligently pursue the cure of such default;
    
              (3) Trustor, as lessor or sublessor, as the case may be,
    shall assign the rents or income of the Property or any part thereof
    (other than to Beneficiary) without first obtaining the written
    consent of Beneficiary;
    
              (4) Any representation or warranty made by Trustor in,
    under or pursuant to the Loan Documents was false or misleading in any
    material respect as of the date on which such representation or
    warranty was made or deemed remade, and Trustor does not cause to be
    taken and completed within thirty (30) days following notice of such
    breach any and all action required to cause such representation or
    warranty to be true and correct in all respects as originally made;
    
              (5) (i) Any claim or lien shall be filed against the
    Property or any part thereof, whether or not such lien shall be prior
    to this Deed of Trust, which shall be maintained for a period of
    thirty (30) days without discharge, satisfaction or adequate bonding
    in accordance with the terms of this Deed of Trust; (ii) the existence
    of any interest in the Property other than the Permitted Exceptions,
    those of Trustor, Trustee, Beneficiary and any tenants in the
    Property; or (iii) the sale, hypothecation, conveyance or other
    disposition of the Property without the prior written consent of
    Beneficiary except as the result of the condemnation of a non-material
    part of the Property as set forth in Paragraph 5.1 above or as
    otherwise expressly permitted under the Loan Documents; 
    
              (6) Any of the Loan Documents, at any time after their
    respective execution and delivery and for any reason, other than an
    act or omission of Beneficiary, shall cease to be in full force and
    effect or be declared null and void, or shall cease to constitute
    valid and subsisting liens and/or valid and perfected security
    interests in and to the Property, or Trustor shall contest or deny in
    writing that it has any further liability or obligation under any of
    the Loan Documents;
    
              (7) The failure of Trustor to observe the provisions of
    Paragraph 4.2 hereof; and/or
    
              (8) An "Event of Default" occurs under any one or more
    of the Woodlands Deed of Trust, the Milpitas Deed of Trust, the
    Ontario Deed of Trust, the Tustin Deed of Trust, the Nevada Deed of
    Trust, the Arizona Deed of Trust and/or the Fremont Deed of Trust.
    
        THEN and in any such event Beneficiary may, by written notice
    delivered to Trustor, which notice specifically states the occurrence
    of an Event of Default, declare Trustor to be in default.  Upon the
    occurrence of such event and the giving of such notice, the same shall
    constitute an event of default (an "Event of Default").
    
             B.   It shall constitute an Event of Default hereunder
    without the requirement of any notice if one or more of the following
    events shall have occurred and be continuing:
    
              (1) (i) The entry of an order for relief under Title 11
    of the United States Code as to Trustor, any general partner of
    Trustor, any parent company of such partner, or any owner of the
    Property or any interest therein or the adjudication of Trustor, any
    general partner of Trustor, or any owner of the Property as insolvent
    or bankrupt pursuant to the provisions of any state insolvency or
    bankruptcy act; (ii) the commencement by Trustor, any general partner
    of Trustor, or any parent company of such partner of any case,
    proceeding or other action seeking any reorganization, arrangement,
    composition, adjustment, liquidation, dissolution or similar relief
    for itself under any present or future statute, law or regulation
    relating to bankruptcy, insolvency, reorganization or other relief for
    debtors; (iii) consent to, acquiescence in or attempt to secure the
    appointment of any Receiver of all or any substantial part of its
    properties or of the Property by Trustor, any general partner of
    Trustor, any parent company of such partner, or any owner of the
    Property or any interest therein; (iv) Trustor, any general partner of
    Trustor, or any parent company of such partner shall generally not pay
    its debts as they become due or shall admit in writing its inability
    to pay its debts or shall make a general assignment for the benefit of
    creditors; or (v) Trustor, any general partner of Trustor, or any
    parent company of such partner shall take any action to authorize any
    of the acts set forth above; or
    
              (2) Any case, proceeding or other action against
    Trustor, any general partner of Trustor, any parent company of such
    partner, or any owner of Property or any interest therein shall be
    commenced seeking to have an order for relief entered against such
    party as a debtor or seeking any reorganization, arrangement,
    composition, adjustment, liquidation, dissolution or similar relief
    for itself under any present or future statute, law or regulation
    relating to bankruptcy, insolvency, reorganization or other relief for
    debtors, or seeking the appointment of any Receiver for Trustor, any
    general partner thereof, or any parent company of such partner or for
    all or any substantial part of its property or the Property, and such
    case, proceeding or other action remains undismissed for an aggregate
    of sixty (60) days (whether or not consecutive) or Trustor or general
    partner or parent company during the period of its ownership fails to
    proceed diligently during such sixty (60) day period to have such
    proceeding or other action dismissed.
    
             C.   Upon the occurrence of any Event of Default, Beneficiary
    may at any time declare all of the Indebtedness to be due and payable
    and the same shall thereupon become immediately due and payable,
    together with any prepayment fee due in accordance with the terms of
    the Note, without any further presentment, demand, protest or notice
    of any kind.  Beneficiary may in its sole discretion, also do any of
    the following:
    
              (1) in person, by agent, or by a Receiver, and without
    regard to the adequacy of security, the solvency of Trustor or the
    condition of the Property, enter upon and take possession of the
    Property, or any part thereof, in its own name or in the name of
    Trustee and do any acts which Beneficiary deems necessary to preserve
    the value, marketability or rentability of the Property; sue for or
    otherwise collect the rents, issues and profits therefrom, including
    those past due and unpaid, and apply the same, less cost and expenses
    of operation and collection, including, without limitation, reasonable
    attorneys' fees, against the Indebtedness, all in such order as
    Beneficiary may determine.  The entering upon and taking possession of
    said property, the collection of such rents, issues and profits and
    the application thereof as aforesaid shall not cure or waive any
    default or notice of default hereunder or invalidate any act done
    pursuant to such notice;
    
              (2) commence an action to foreclose this Deed of Trust
    in the manner provided under this Deed of Trust or by law;
    
              (3) with respect to any Personalty, proceed as to both
    the real and personal property in accordance with Beneficiary's rights
    and remedies in respect of the Land, or proceed to sell said
    Personalty separately and without regard to the Land in accordance
    with Beneficiary's rights and remedies as to personal property; and/or
    
              (4) deliver to Trustee a written declaration of default
    and demand for sale, and a written notice of default and election to
    cause the Property to be sold, which notice Trustee or Beneficiary
    shall cause to be duly filed for record.
    
        43.2  Power of Sale.
    
             A.   Should Beneficiary elect to foreclose by exercise of the
    power of sale herein contained, Beneficiary shall also deposit with
    Trustee this Deed of Trust and the Note and such receipts and evidence
    of expenditures made and secured hereby as Trustee may require, and
    notice of default having been given as then required by law, and after
    lapse of such time as may then be required by law, after recordation
    of such notice of default, Trustee, without demand on Trustor, shall,
    after notice of sale having been given as required by law, sell the
    Property at the time and place of sale fixed by it in said notice of
    sale, either as a whole or in separate parcels as Beneficiary shall
    determine, and in such order as Beneficiary may determine, at public
    auction to the highest bidder.  Beneficiary may, in its sole
    discretion, designate the order in which the Property shall be offered
    for sale or sold through a single sale or through two or more
    successive sales, or in any other manner Beneficiary deems to be in
    its best interest.  If Beneficiary elects more than one sale or other
    disposition of the Property, Beneficiary may at its option cause the
    same to be conducted simultaneously or successively, on the same day
    or at such different days or times and in such order as Beneficiary
    may deem to be in its best interest, and no such sale shall terminate
    or otherwise affect the lien of this Deed of Trust on any part of the
    Property not then sold until all Indebtedness secured hereby has been
    fully paid.  If Beneficiary elects to dispose of the Property though
    more than one sale, Trustor shall pay the costs and expenses of each
    such sale of its interest in the Property and of any proceedings where
    the same may be made.  Trustee may postpone sale of all or any part of
    the Property by public announcement at such time and place of sale,
    and from time to time thereafter may postpone such sale by public
    announcement at the time fixed by the preceding postponement, and
    without further notice make such sale at the time fixed by the last
    postponement; or Trustee may, in its discretion, give a new notice of
    sale.  Beneficiary may rescind any such notice of default at any time
    before Trustee's sale by executing a notice of rescission and
    recording the same.  The recordation of such notice shall constitute a
    cancellation of any prior declaration of default and demand for sale
    and of any acceleration of maturity of Indebtedness affected by any
    prior declaration or notice of default.  The exercise by Beneficiary
    of the right of rescission shall not constitute a waiver of any
    default then existing or subsequently occurring, or impair the right
    of Beneficiary to execute other declarations of default and demand for
    sale, or notices of default and of election to cause the Property to
    be sold, nor otherwise affect the Note or this Deed of Trust, or any
    of the rights, obligations or remedies of Beneficiary or Trustee
    hereunder or thereunder.  After sale Trustee shall deliver to such
    purchaser its deed conveying the property so sold, but without any
    covenant or warranty, express or implied.  The recitals in such deed
    of any matters or facts shall be conclusive proof of the truthfulness
    thereof.  Any Person, including, without limitation, Trustor, Trustee
    or Beneficiary, may purchase at such sale.  If allowed by law,
    Beneficiary, if it is the purchaser, may turn in the Note at the
    amount owing therein toward payment of the purchase price (or for
    endorsement of the purchase price as a payment on the Note if the
    amount owing thereon exceeds the purchase price).  Trustor hereby
    expressly waives any right of redemption after sale that Trustor may
    have at the time of sale or that may apply to the sale.  Trustor
    hereby expressly waives all rights of marshalling with respect to each
    of the Combined Properties that Trustor may have in the event of
    foreclosure hereunder or under any of the other Combined Deeds of
    Trust.
    
             B.   Trustee, upon such sale, shall make (without any
    covenant or warranty, express or implied), execute and after due
    payment made, deliver to the purchaser, its heirs or assigns, a deed
    or other record of interest, as the case may be, in and to the
    property so sold that shall convey to the purchaser all the title and
    interest of Trustor in the Property (or part thereof sold), and shall
    apply the proceeds of such sale in payment, first, of the expenses of
    such sale together with the reasonable expenses of the trust,
    including, without limitation, attorneys' fees, that shall become due
    upon any default made by Trustor, and also such sums, if any, as
    Trustee or Beneficiary shall have paid for procuring a search of the
    title to the Property, or any part thereof, subsequent to the
    execution of this Deed of Trust; and in payment, second, of the
    Indebtedness then remaining unpaid, and the amount of all other monies
    with interest thereon agreed or provided to be paid by Trustor; and
    the balance or surplus of such proceeds of sale Trustee shall pay to
    Trustor, its successors or assigns as their interest may appear.
    
        43.3  Proof of Default.  In the event of a sale of the Property, or
    any part thereof, and the execution of a deed therefor, the recital
    therein of default, and of recording notice of default and election of
    sale, and of the elapsing of the required time (if any) between the
    foregoing recording and the following notice, and of the giving of
    notice of sale, and of a demand by Beneficiary, or its successors or
    assigns, that such sale should be made, shall be conclusive proof of
    such default, recording, election, elapsing of time, and of the due
    giving of such notice, and that the sale was regularly and validly
    made on due and proper demand by Beneficiary, its successors or
    assigns.  Any such deed or deeds with such recitals therein shall be
    effective and conclusive against Trustor, its successors and assigns,
    and all other Persons.  The receipt for the purchase money recited or
    contained in any deed executed to the purchaser as aforesaid shall be
    sufficient to discharge such purchaser from all obligations to see to
    the proper application of the purchase money.
    
        43.4  Protection of Security.  If an Event of Default shall have
    occurred and be continuing, then Beneficiary or Trustee, but without
    obligation so to do and without notice to or demand upon Trustor and
    without releasing Trustor from any obligations or defaults hereunder,
    may:  (i) perform any act in such manner and to such extent as either
    may deem necessary to protect the security hereof, Beneficiary and
    Trustee being authorized to enter upon the Property for such purpose;
    (ii) appear in and defend any action or proceeding purporting to
    affect, in any manner whatsoever, the obligations or the Indebtedness,
    the security hereof or the rights or powers of Beneficiary or Trustee;
    (iii) pay, purchase or compromise any encumbrance, charge or lien that
    in the judgment of Beneficiary or Trustee is prior or superior hereto;
    and (iv) in exercising any such powers, pay necessary expenses, employ
    counsel and pay reasonable attorneys' fees.  Trustor agrees that all
    sums expended by Trustee or Beneficiary pursuant to this paragraph,
    together with interest at the Secondary Interest Rate from the date of
    expenditure by Beneficiary, shall be added to the principal amount of
    the Indebtedness secured by the Loan Documents and this Deed of Trust
    and shall be payable by Trustor to Beneficiary upon demand.
    
        43.5  Receiver.  If an Event of Default shall have occurred and be
    continuing, Beneficiary, as a matter of strict right and without
    notice to Trustor or anyone claiming under Trustor, and without regard
    to the then value of the Property, shall have the right to apply ex
    parte to any court having jurisdiction to appoint a Receiver to enter
    upon and take possession of the Property, and Trustor hereby waives
    notice of any application therefor, provided a hearing to confirm such
    appointment with notice to Trustor is set within the time required by
    law.  Any such Receiver shall have all the powers and duties of
    Receivers in like or similar cases and all the powers and duties of
    Beneficiary in case of entry as provided in this Deed of Trust, and
    shall continue as such and exercise all such powers until the date of
    confirmation of sale, unless such receivership is sooner terminated.
    
        43.6  Remedies Cumulative.  All remedies of Beneficiary provided
    for herein are cumulative and shall be in addition to any and all
    other rights and remedies provided in the other Loan Documents or by
    law, including, without limitation, any right of offset.  The exercise
    of any right or remedy by Beneficiary hereunder shall not in any way
    constitute a cure or waiver of default hereunder or under the Loan
    Documents, or invalidate any act done pursuant to any notice of
    default, or prejudice Beneficiary in the exercise of any of its rights
    hereunder or under the Loan Documents.
    
        43.7  Curing of Defaults.  If Trustor shall at any time fail to
    perform or comply with any of the terms, covenants and conditions
    required on Trustor's part to be performed and complied with under
    this Deed of Trust, any of the other Loan Documents or any other
    agreement that, under the terms of this Deed of Trust, Trustor is
    required to perform, then Beneficiary, and without waiving or
    releasing Trustor from any of the Obligations, may, in its sole
    discretion:
    
                          (i)    make any payments thereunder payable by 
    Trustor and take out, pay for and maintain any of the insurance policies 
    provided for therein; and/or
    
                         (ii)    after the expiration of any applicable grace 
    period and subject to Trustor's rights to contest certain obligations
    specifically granted hereby, perform any such other acts thereunder on
    the part of Trustor to be performed and enter upon the Property for
    such purpose.
    
    All sums so paid out of Beneficiary's own funds and all reasonable
    costs and expenses incurred and paid by Beneficiary in connection with
    the performance of any such act, together with interest on unpaid
    balances thereof at the Secondary Interest Rate from the respective
    dates of Beneficiary's making of each such payment, shall be added to
    the principal of the Indebtedness, shall be secured by the Loan
    Documents and by the lien of this Deed of Trust, prior to any right,
    title or interest in or claim upon the Property attaching or accruing
    subsequent to the lien of this Deed of Trust, and shall be payable by
    Trustor to Beneficiary on demand.
    
    
    
                       
                               ARTICLE 44
    
                 Security Agreement and Fixture Filing
    
    
        44.1  Grant of Security Interest.  Trustor hereby grants to
    Beneficiary a security interest in and to all Trustor's right, title
    and interest now owned or hereafter acquired in and to the Personalty
    and the Fixtures (collectively, the "Collateral"), to secure the
    payment and performance of the Obligations.
    
        44.2  Remedies.  This Deed of Trust constitutes a security
    agreement with respect to the Collateral in which Beneficiary is
    hereby granted a security interest.  In addition to the rights and
    remedies provided under this Deed of Trust, Beneficiary shall have all
    of the rights and remedies of a secured party under the California
    Uniform Commercial Code as well as all other rights and remedies
    available at law or in equity.  Trustor hereby agrees to execute and
    deliver on demand and irrevocably constitutes and appoints Beneficiary
    the attorney-in-fact of Trustor to, at Trustor's expense, execute,
    deliver and, if appropriate, to file with the appropriate filing
    officer or office such security agreements, financing statements, con-
    
    tinuation statements or other instruments as Beneficiary may request
    or require in order to impose, perfect or continue the perfection of
    the lien or security interest created hereby.  Upon the occurrence of
    any Event of Default, Beneficiary shall have (i) the right to cause
    any of the Collateral which is personal property to be sold at any one
    or more public or private sales as permitted by applicable law and to
    apply the proceeds thereof to the Indebtedness or any other monetary
    obligation of Trustor to Beneficiary, and (ii) the right to apply to
    the Indebtedness or any other monetary obligation of Trustor to
    Beneficiary, any Collateral which is cash, negotiable documents or
    chattel paper.  Any such disposition may be conducted by an employee
    or agent of Beneficiary or Trustee.  Any Person, including, without
    limitation, both Trustor and Beneficiary, shall be eligible to
    purchase any part or all of such Personalty at any such disposition.
    
        44.3  Expenses.  Expenses of retaking, holding, preparing for sale,
    selling or the like pertaining to the Collateral shall be borne by
    Trustor and shall include Beneficiary's and Trustee's reasonable
    attorneys' fees and legal expenses.  Trustor, upon demand of
    Beneficiary shall assemble the Collateral and make it available to
    Beneficiary at the Property, a place which is hereby deemed to be
    reasonably convenient to Beneficiary and Trustor.  Beneficiary shall
    give Trustor at least ten (10) days' prior written notice of the time
    and place of any public sale or other disposition of the Collateral or
    of the time after which any private sale or any other intended
    disposition is to be made.  Any such notice sent to Trustor in the
    manner provided for the mailing of notices herein is hereby deemed to
    be reasonable notice to Trustor.
    
        44.4  Fixture Filing.  This Deed of Trust covers certain goods
    which are or are to become fixtures related to the Land and
    constitutes a fixture filing with respect to such goods executed by
    Trustor as debtor in favor of Beneficiary as secured party.
    
        44.5  Waivers.  Trustor waives (a) any right to require Beneficiary
    to (i) proceed against any Person, (ii) proceed against or exhaust any
    Collateral or (iii) pursue any other remedy in its power; and (b) any
    defense arising by reason of any disability or other defense of
    Trustor or any other Person, or by reason of the cessation from any
    cause whatsoever of the liability of Trustor or any other Person. 
    Until the Indebtedness shall have been paid in full, Trustor shall not
    have any right to subrogation, and Trustor waives any right to enforce
    any remedy which Beneficiary now has or may hereafter have against
    Trustor or against any other Person and waives any benefit of and any
    right to participate in any Collateral or security whatsoever now or
    hereafter held by Beneficiary.
    
    
                               ARTICLE 45
    
                          Assignment of Rents
    
    
        45.1  Assignment of Rents.  Trustor absolutely and unconditionally
    assigns and transfers the Rents to Beneficiary, whether now due, past
    due or to become due, and gives to and confers upon Beneficiary the
    right, power and authority to collect such Rents, and apply the same
    to the Indebtedness.  Trustor irrevocably appoints Beneficiary its
    agent to, at any time, demand, receive and enforce payment, to give
    receipts, releases and satisfactions, and to sue, either in the name
    of Trustor or in the name of Beneficiary, for all such Rents.  Neither
    the foregoing assignment of Rents to Beneficiary nor the exercise by
    Beneficiary of any of its rights or remedies under this Deed of Trust
    shall be deemed to make Beneficiary a "mortgagee-in-possession" or
    otherwise responsible or liable in any manner with respect to the
    Property or the use, occupancy, enjoyment or operation of all or any
    part thereof, unless and until Beneficiary, in person or by its own
    agent, assumes actual possession thereof, nor shall appointment of a
    Receiver for the Property by any court at the request of Beneficiary
    or by agreement with Trustor or the entering into possession of the
    Property or any part thereof by such Receiver be deemed to make
    Beneficiary a "mortgagee-in-possession" or otherwise responsible or
    liable in any manner with respect to the Property or the use,
    occupancy, enjoyment or operation of all or any part thereof.
    
        45.2  Collection of Rents.  Notwithstanding anything to the
    contrary contained herein or in the Note, so long as no Event of
    Default shall occur, Trustor shall have a license, revocable upon the
    occurrence of an Event of Default or, if an Event of Default shall
    have occurred, so long as such Event of Default shall not have been
    waived by Beneficiary, to collect all Rents, and to first apply same
    to the Indebtedness as and when due and thereafter to retain, use and
    enjoy the same and to otherwise exercise all rights with respect
    thereto, subject to the terms hereof.  Upon the occurrence of an Event
    of Default, Beneficiary shall have the right, on written notice to
    Trustor, to terminate and revoke the license heretofore granted to
    Trustor and shall have the complete right and authority then or
    thereafter to exercise and enforce any and all of its rights and
    remedies provided herein or by law or at equity.
    
    
                               ARTICLE 46
    
                             Miscellaneous
    
    
        46.1  Successor Trustee.  Beneficiary may remove Trustee or any
    successor trustee at any time or times and appoint a successor trustee
    by recording a written substitution in the county where the Property
    is located, or in any other manner permitted by law.
    
        46.2  Change of Law.  In the event of the passage, after the date
    of this Deed of Trust, of any law deducting from the value of the
    Property, for the purposes of taxation, any lien thereon, or changing
    in any way the laws now in force for the taxation of mortgages, deeds
    of trust, or debts secured by mortgage or deed of trust (other than
    laws imposing taxes on income), or the manner of the collection of any
    such taxes so as to materially affect the anticipated yield of
    Beneficiary as holder of the Note and/or Beneficiary under this Deed
    of Trust, the Indebtedness plus any applicable prepayment charges
    shall become due and payable at the option of Beneficiary exercised by
    thirty (30) days' notice to Trustor unless Trustor, within such thirty
    (30) day period shall, if permitted by law, assume the payment of any
    tax or other charge so imposed upon Beneficiary for the period
    remaining until full payment by Trustor of the Indebtedness.
    
        46.3  No Waiver.  No waiver by Beneficiary of any default or breach
    by Trustor hereunder shall be implied from any omission by Beneficiary
    to take action on account of such default if such default persists or
    is repeated, and no express waiver shall affect any default other than
    the default expressly referenced in the waiver and such waiver shall
    be operative only for the time and to the extent therein stated. 
    Waivers of any covenant, term or condition contained herein shall not
    be construed as a waiver of any subsequent breach of the same
    covenant, term or condition.  The consent or approval by Beneficiary
    to or of any act by Trustor requiring further consent or approval
    shall not be deemed to waive or render unnecessary the consent or
    approval to or of any subsequent similar act.
    
        46.4  Abandonment.  Subject to such chattel mortgages, security
    agreements or other liens on title as may exist thereon with the
    consent of Beneficiary, or any provided for herein, any and all
    Personalty that upon foreclosure of the Property is owned by Trustor
    and is used in connection with the operation of the Property shall be
    deemed at the option of Beneficiary to have become on such date a part
    of the Property and abandoned to Beneficiary in its then condition.
    
        46.5  Notices.  All notices, demands, requests, consents,
    statements, satisfactions, waivers, designations, refusals,
    confirmation or denials that may be required or otherwise provided for
    or contemplated under the terms of this Deed of Trust shall be in
    writing, and shall be deemed to have been properly given (i) upon
    delivery, if delivered in person or by facsimile transmission with
    receipt acknowledged, (ii) one business day after having been
    deposited for overnight delivery with Federal Express or another
    comparable overnight courier service, or (iii) three business days
    after having been deposited in any post office or mail depository
    regularly maintained by the U.S. Postal Service and sent by registered
    or certified mail, postage prepaid, addressed as follows:
    
        If to Trustor:
    
             Bedford Property Investors, Inc.
             270 Lafayette Circle
             Lafayette, California  94549
             Attention:  Mr. Scott Whitney
    
        If to Trustee:
    
             First American Title Insurance Company
             1850 Mount Diablo Boulevard, Suite 300
             Walnut Creek, California  94596 
    
        If to Beneficiary:
    
             The Prudential Insurance Company of America
             Four Embarcadero Center
             Suite 2700
             San Francisco, California  94111
             Attention:  Regional Counsel
             Loan No. 6 101 085
    
             with a copy to:
    
             The Prudential Insurance Company of America
             One Ravinia Drive, Suite 1400
             Atlanta, Georgia  30346
             Attention:  Vice President, Loan Servicing
             Loan No. 6 101 085
    
    or addressed to each respective party at such other address as such
    party may from time to time designate by written notice to the other
    parties given in the manner aforesaid.
    
        46.6  Severability.  If any term, provision, covenant or condition
    hereof or any application thereof should be held by a court of
    competent jurisdiction to be invalid, void or unenforceable, in whole
    or in part, all terms, provisions, covenants and conditions hereof and
    all applications thereof not held invalid, void or unenforceable shall
    continue in full force and effect and shall in no way be affected,
    impaired or invalidated thereby.
    
        46.7  Joinder of Foreclosure.  Should Beneficiary hold any other or
    additional security for the payment of the Indebtedness or performance
    of the Obligations, its sale or foreclosure, upon any default in such
    payment or performance, in the sole discretion of Beneficiary, may be
    prior to, subsequent to, or joined or otherwise contemporaneous with
    any sale or foreclosure hereunder.  In addition to the rights herein
    specifically conferred, Beneficiary, at any time and from time to
    time, may exercise any right or remedy now or hereafter given by law
    to beneficiaries under deeds of trust generally, or to the holders of
    any obligations of the kind hereby secured.
    
        46.8  Governing Law.  The parties expressly agree that this Deed of
    Trust (including, without limitation, all questions regarding
    permissible rates of interest) shall be governed by and construed in
    accordance with the laws of the state in which the Land is located.
    
        46.9  Subordination.  At the option of Beneficiary, this Deed of
    Trust shall become subject and subordinate in whole or in part (but
    not with respect to priority of entitlement to any insurance proceeds,
    damages, awards, or compensation resulting from damage to the Property
    or condemnation or exercise of power of eminent domain), to any and
    all contracts of sale and/or any and all Leases upon the execution by
    Beneficiary and recording thereof in the Official Records of the
    County in which the Land is located of a unilateral declaration to
    that effect.  Beneficiary may require the issuance of such title
    insurance endorsements to the Title Policy in connection with any such
    subordination as Beneficiary, in its reasonable judgment, shall
    determine are appropriate, and Trustor shall be obligated to pay any
    cost or expense incurred in connection with the issuance thereof.
    
        46.10  Future Advances.   Upon the request of Trustor or its
    permitted successors in ownership of the Property, Beneficiary may
    hereafter, at its option, at any time before full payment of the
    Indebtedness, make future advances to Trustor or said successors, and
    the same, with interest and late charges, shall be secured by this
    Deed of Trust; provided, however, that the amount of principal secured
    by this Deed of Trust and remaining unpaid, shall not at the time of
    and including any such advance exceed the original principal sum
    secured hereby; and provided further that if Beneficiary, at its
    option, shall make a future advance or advances as aforesaid, Trustor
    or said successors in ownership agree to execute and deliver to
    Beneficiary (i) a note  to evidence the same, payable on or before the
    maturity of the Indebtedness secured hereby and bearing such other
    terms as Beneficiary shall require, and (ii) satisfactory evidence
    that after such advance this Deed of Trust will secure such advance
    and continue to constitute a valid first mortgage lien on the Property
    subject only to the Permitted Exceptions.
    
        46.11  Waiver of Statute of Limitations and Rights to Trial by
    Jury.  The pleading of any statute of limitations as a defense to any
    and all obligations secured by this Deed of Trust and the right to a
    jury trial in any action under or relating to the Loan Documents is
    hereby waived, to the fullest extent allowed by law.
    
        46.12  Entire Agreement.  The Loan Documents and the Remediation
    and Indemnification Agreements set forth the entire understanding
    between Trustor and Beneficiary relative to the Loan and the same
    shall not be amended except by a written instrument duly executed by
    each of Trustor and Beneficiary.  Any and all previous
    representations, warranties, agreements and understandings between or
    among the parties regarding the subject matter of the Loan or the Loan
    Documents, whether written or oral, are superseded by this Deed of
    Trust and the other Loan Documents.  The foregoing notwithstanding,
    the terms and the conditions of the Application shall survive the
    funding of the Loan but in the event of any conflict between the
    provisions of the Application and any of the other Loan Documents or
    the Remediation and Indemnification Agreements, except as otherwise
    specifically provided herein, the terms of such other Loan Documents
    and the Remediation and Indemnification Agreements shall control.
    
        46.13  References to Foreclosure.  References in this Deed of Trust
    to "foreclosure" and related phrases shall be deemed references to the
    appropriate procedure in connection with Trustee's private power of
    sale as well as any judicial foreclosure proceeding or a conveyance in
    lieu of foreclosure.
    
        46.14  Rights of Beneficiary and Trustee.  At any time or from time
    to time, without liability therefor and without notice, and without
    releasing or otherwise affecting the liability of any person for
    payment of any Indebtedness (i) Beneficiary at its sole discretion and
    only in writing may extend the time for, or release any Person now or
    hereafter liable for, payment of any or all such Indebtedness, or
    accept or release additional security therefor, or subordinate the
    lien or charge hereof, or (ii) Trustee upon written request of
    Beneficiary and presentation of the Note, any additional notes secured
    by this Deed of Trust and this Deed of Trust for endorsement may
    reconvey any part of the Property, consent to the making of any map or
    plat thereof, join in granting any easement thereon, or join in any
    such agreement of extension or subordination.  Upon written request of
    Beneficiary and surrender of the Note, any additional notes secured by
    this Deed of Trust and this Deed of Trust to the Trustee for cancella-
    
    tion, and upon payment to Trustee of its fees and expenses, Trustee
    shall reconvey without warranty the remaining Property.  The recitals
    in any reconveyance shall be conclusive proof of the truthfulness
    thereof and the grantee in any reconveyance may be described as "the
    person or persons legally entitled thereto."
    
        46.15  Copies.  Trustor will promptly give to Beneficiary copies of
    all (i) notices of violation relating to the Property that Trustor
    receives from any governmental agency or authority, and (ii) notices
    of default that Trustor shall give or receive under any agreement that
    Trustor covenants to perform hereunder, including, without limitation,
    notices of default relating to the Property that Trustor receives
    under any agreement relating to the borrowing of money by Trustor or
    from any Person.
    
        46.16  No Merger.  So long as any of the Indebtedness shall remain
    unpaid or Trustor shall have any further obligation under the Loan
    Documents, unless Beneficiary shall otherwise consent in writing, the
    fee estate of Trustor in the Property or any part thereof shall not
    merge, by operation of law or otherwise, with any leasehold or other
    estate in the Property or any part thereof, but shall always be kept
    separate and distinct therefrom, notwithstanding the union of said fee
    estate and such leasehold or other estate in Trustor or any other
    Person.
    
        46.17  Right of Entry.  In addition to the rights granted to
    Beneficiary under Paragraph 3.10 hereof, Beneficiary may enter at any
    reasonable time upon any part of the Property for the purpose of
    performing any of the acts Beneficiary is authorized to perform under
    the terms of this Deed of Trust or of any of the other Loan Documents. 
    Trustor agrees to cooperate with Beneficiary to facilitate such entry.
    
        46.18  Performance by Trustor.  Trustor will faithfully perform
    each and every Obligation to be performed by Trustor under any lien or
    encumbrance, including, without limitation, mortgages, deeds of trust,
    leases, declarations or covenants, conditions and/or restrictions and
    other agreements which affect the Property.  If Trustor fails to do
    so, Beneficiary, without demand or notice, may do any or all things
    necessary to perform the Obligations of Trustor under the pertinent
    instrument.
    
        46.19  Personalty Security Instruments.  Trustor covenants and
    agrees that if Beneficiary at any time holds additional security for
    any obligations secured hereby, it may enforce the terms thereof or
    otherwise realize upon the same, at its option, either before or
    concurrently herewith or after a sale is made hereunder, and may apply
    the proceeds upon the Indebtedness secured hereby without affecting
    the status of or waiving any right to exhaust all or any other
    security, including the security hereunder, and without waiving any
    breach or default or any right or power whether exercised hereunder,
    and without waiving any breach or default or any right or power
    whether exercised hereunder or contained herein or in any such other
    security.
    
        46.20  Suits to Protect Property.  Trustor covenants and agrees to
    appear in and defend any action or proceeding purporting to affect the
    security of the Deed of Trust, or of any additional or other security
    for the Obligations, the interest of Beneficiary or the rights, powers
    and duties of Trustee hereunder; and to pay all costs and expenses,
    including, without limitation, costs of evidence of title and
    reasonable attorneys' fees, in any action or proceeding in which
    Beneficiary and/or Trustee may appear or be made a party, including,
    without limitation, foreclosure or other proceedings commenced by
    those claiming a right to any part of the Property in any action to
    partition or condemn all or part of the Property, whether or not
    pursued to final judgment, and in any exercise of the power of sale
    contained herein, whether or not the sale is actually consummated. 
    Trustee agrees that in any such action or proceeding in which
    Beneficiary is made a party, Beneficiary may at its option defend such
    action, and all costs of such defense, including all court costs and
    reasonable attorneys' fees, shall be borne and paid by Trustor.
    
        46.21  Junior Liens.  Trustor represents and warrants that as of
    the date hereof there are no encumbrances to secure debt junior to
    this Deed of Trust and covenants that there are to be none as of the
    date when this Deed of Trust becomes of record.
    
        46.22  Charges for Statements.  Trustor agrees to pay Beneficiary's
    charge, up to the maximum amount permitted by law, for any statement
    regarding the obligations secured by this Deed of Trust requested by
    Trustor or on its behalf.
    
        46.23  Usury.  In the event that Beneficiary determines that any
    charge, fee or interest paid or agreed to be paid in connection with
    the Loan may, under the applicable usury laws, cause the interest rate
    on the Loan to exceed the maximum permitted by law, then such charges,
    fees or interest shall be reduced and any amounts actually paid in
    excess of the maximum interest permitted by such laws shall be applied
    by Beneficiary to reduce the outstanding principal balance of the
    Loan.  The parties intend that Trustor shall not be required to pay,
    and Beneficiary shall not be entitled to collect, interest in excess
    of the maximum legal rate permitted under the applicable usury laws.
    
        46.24  Publicity.  Trustor hereby agrees that Beneficiary, at its
    expense, may publicize the financing of the Property.  Beneficiary
    shall endeavor to notify Trustor of its intent to publicize the
    financing; provided, however, that Beneficiary's failure to so notify
    Trustor shall not constitute a breach by Beneficiary under the Loan
    Documents.
    
        46.25  Information Reporting Under IRC Section 6045(e).  Any
    information returns or certifications that must be filed with the
    Internal Revenue Service and/or provided to other parties, pursuant to
    Internal Revenue Code Section 6045(e) shall be prepared, filed by and
    sent to the appropriate parties by Trustor.  To the extent permitted
    by law, Beneficiary shall have no responsibility to perform such
    services; provided however, upon demand Trustor shall reimburse
    Beneficiary for any costs incurred by Beneficiary in doing so and
    shall also pay such fee as Beneficiary may reasonably and lawfully
    request.  Beneficiary shall, where requested by Trustor, promptly
    supply Trustor with all information pertaining to Beneficiary
    reasonably required by Trustor to prepare and file any such return or
    certification.  Trustor shall indemnify Beneficiary and defend,
    protect and hold Beneficiary harmless from and against all loss, cost,
    damage and expense (including, without limitation, attorneys' fees and
    costs incurred in the investigation, defense and settlement of claims)
    that Beneficiary may incur, directly or indirectly, as a result of or
    in connection with the assertion against Beneficiary of any claim
    relating to the failure of Trustor to comply with its obligations
    under this Paragraph.
    
        46.26  ERISA.
    
              A.  Trustor understands and acknowledges that on the
    Closing Date, the source of funds from which Beneficiary extends the
    Loan is its general account, which is subject to the claims of its
    general creditors under state law.  Beneficiary (i) represents and
    warrants that either (a) it is not funding the Loan with Plan Assets
    (as described below) or (b) if Beneficiary is funding the Loan with
    Plan Assets, such funding satisfies the provisions of Prohibited
    Transaction Class Exemption 95-60 and (ii) covenants that either
    clause (a) or (b) immediately above will be true throughout the term
    of the Loan.
    
              B.  Trustor represents and warrants to Beneficiary that,
    as of the date of this Deed of Trust and throughout the term of the
    Loan, (i) Trustor is not an "employee benefit plan" as defined in
    Section 3(3) of the Employee Retirement Income Security Act of 1974,
    as amended ("ERISA"), which is subject to Title I of ERISA, and (ii)
    the assets of Trustor do not constitute "plan assets" of one or more
    such plans within the meaning of 29 C.F.R. Section 2510.3-101 ("Plan
    Assets").
    
              C.  Trustor represents and warrants to Beneficiary that,
    as of the date of this Deed of Trust and throughout the term of the
    Loan, (i) Trustor is not a "governmental plan" within the meaning of
    Section 3(32) of ERISA, and (ii) transactions by or with Trustor are
    not subject to state statutes regulating investments of and fiduciary
    obligations with respect to governmental plans.
    
              D.  Trustor covenants and agrees to deliver to
    Beneficiary such certifications or other evidence on the Closing Date
    and from time to time throughout the term of the Loan, as requested by
    Beneficiary in its sole discretion, that (i) Trustor is not an
    "employee benefit plan" or a "governmental plan"; and (ii) Trustor is
    not subject to state statutes regulating investments and fiduciary
    obligations with respect to governmental plans; and (iii) one or more
    of the following circumstances is true:
    
                  (1)  Equity interests in Trustor are publicly offered
    securities, within the meaning of 29 C.F.R. Section 2510.3-101(b)(2);
    
                  (2)  Less than twenty-five percent (25%) of all equity
    interests in Trustor are held by "benefit plan investors" within the
    meaning of 29 C.F.R Section 2510.3-101(f)(2); or
    
                  (3)  Trustor qualifies as an "operating company" or a
    "real estate operating company" within the meaning of 29 C.F.R.
    Section 2510.3-101(c) or (e).
              
              E.  Any of the following shall constitute an Event of
    Default entitling Beneficiary to exercise any and all remedies to
    which it may be entitled under the Loan Documents:  (i) the failure of
    any representation or warranty made by Trustor under this Paragraph
    9.26 to be true and correct in all material respects, (ii) the failure
    of Trustor to comply in all material respects with the obligation to
    provide Beneficiary with the written certifications and evidence
    referred to above, or (iii) assuming compliance by Beneficiary with
    the representations, warranties and covenants in Paragraph 9.26.A
    above, the consummation by Trustor of a transaction which would cause
    the Loan or any exercise of Beneficiary's rights under the Loan
    Documents to constitute a non-exempt prohibited transaction under
    ERISA or a material violation of a state statute regulating
    governmental plans, subjecting Beneficiary to liability for violation
    of ERISA or such state statute, provided, that Trustor shall have
    thirty (30) days after its receipt of notice of default from
    Beneficiary within which to commence the cure of such default and,
    with respect to defaults under clause (i) immediately above, Trustor
    shall have an additional ninety (90) days thereafter within which to
    effect such cure provided it shall have commenced its efforts to cure
    within such thirty (30) day period and shall thereafter diligently and
    in good faith continuously prosecute such cure to completion.  Failure
    by Trustor to cure any such default within the applicable time period
    set forth above shall constitute an Event of Default.
    
              F.  Trustor hereby indemnifies, defends and holds
    Beneficiary harmless from and against all loss, cost, damage and
    expense (including, without limitation, attorneys' fees and costs
    incurred in the investigation, defense and settlement of claims and
    losses incurred in correcting any prohibited transaction or in the
    sale of a prohibited loan, and in obtaining any individual prohibited
    transaction exemption under ERISA that may be required) that
    Beneficiary may incur as a direct result of an Event of Default under
    clause (E) above, assuming compliance by Beneficiary with the
    representations, warranties and covenants set forth in Paragraph
    9.26.A above.  This indemnity shall survive any termination,
    satisfaction or foreclosure of this Deed of Trust and shall not be
    subject to the limitation on personal liability described in Paragraph
    19 of the Note.
    
              G.  Anything in the Application, Paragraph 4.2 or
    elsewhere in this Deed of Trust or the Loan Documents to the contrary
    notwithstanding, no sale, assignment or transfer of any direct or
    indirect interest in Trustor shall be permitted which would negate
    Trustor's representations in this Paragraph 9.26 or cause this Deed of
    Trust (or any exercise of Beneficiary's rights under the Loan
    Documents) to constitute a violation of any provision of ERISA or of
    any applicable state statute regulating a governmental plan, assuming
    compliance by Beneficiary with the representations, warranties and
    covenants set forth in Paragraph 9.26.A above.
    
              H.  Anything in the Application, Paragraph 4.2 elsewhere
    in this Deed of Trust or the Loan Documents to the contrary
    notwithstanding, no direct or indirect transfer of the Property or any
    interest therein including, without limitation, a junior lien or
    leasehold interest, shall be permitted which would cause this Deed of
    Trust (or any exercise of Beneficiary's rights under the Loan
    Documents) to constitute a violation of ERISA or any applicable state
    statute regulating a governmental plan, assuming compliance by
    Beneficiary with the representations, warranties and covenants set
    forth in Paragraph 9.26.A above.
    
              I.  Anything in the Application, this Deed of Trust or
    the Loan Documents to the contrary notwithstanding, no less than
    fifteen (15) before consummation of any permitted transfer of title to
    the Property or of an interest in Trustor, or of any direct or
    indirect right, title or interest in either of them, or of the placing
    of any lien or encumbrance on the Property, Borrower shall obtain from
    the proposed transferee or lienholder a representation to Beneficiary
    in form and substance satisfactory to Beneficiary that the provisions
    of Paragraph 9.26.D above will be true after the transfer, or in the
    case of a lien or encumbrance, would remain true following any
    foreclosure or conveyance in lieu thereof, and further provided that
    any proposed lienholder agrees that any direct or indirect transfer of
    its lien or any interest therein will be governed by this section.
    
        46.27  Defense and Indemnity Rights.  Whenever, under any Loan
    Document, Trustor is obligated to indemnify and/or defend Beneficiary,
    or Trustor is obligated to defend or prosecute any action or
    proceeding, then Beneficiary shall have the right of counsel of
    Beneficiary's choice reasonably exercised, and all costs and expenses
    incurred by Beneficiary in connection with such participation
    (including, without limitation, reasonable attorneys' fees) shall be
    reimbursed by Trustor to Beneficiary immediately upon demand.  In
    addition, Beneficiary shall have the right to approve any counsel
    retained by Trustor in connection with the prosecution or defense of
    any such action or proceeding by Trustor.  Trustor shall give notice
    to Beneficiary of the initiation of all proceedings prosecuted or
    required to be defended by Trustor, or which are subject to Trustor's
    indemnity obligations, under this Deed of Trust, promptly after the
    receipt by Trustor of notice of the existence of any such proceeding,
    but in no event later than five (5) days thereafter.  All costs or
    expenses required to be reimbursed by Trustor to Beneficiary hereunder
    shall, if not paid when due as herein specified, bear interest at the
    Secondary Interest Rate.  As used herein, "proceeding" shall include
    litigation (whether by way of complaint, answer, cross-complaint,
    counter claim or third party claim), arbitration and administrative
    hearings or proceedings.
    
        46.28  Destruction of Note.  Trustor shall, if the Note is
    mutilated or destroyed by any cause whatsoever, or otherwise lost or
    stolen and regardless of whether due to the act or neglect of
    Beneficiary or Trustee, execute and deliver to Beneficiary in
    substitution therefor a duplicate promissory note containing the same
    terms and conditions as the Note, within ten (10) days after
    Beneficiary notifies Trustor of any such mutilation, destruction, loss
    or theft of the Note.  Any new promissory note executed and delivered
    hereunder shall be in full substitution for the Note, shall not
    constitute any new or additional indebtedness of Trustor to
    Beneficiary, shall constitute solely a substitute evidence of the
    indebtedness evidenced by the original Note, and shall not affect in
    any manner the priority of this Deed of Trust, or any other document
    or instrument executed in connection with or evidencing or securing
    the Indebtedness under the Note.  Failure or delay by Beneficiary to
    notify Trustor hereunder shall not affect in any manner Trustor's lia-
    
    bility for the Indebtedness under the Note or Trustor's obligation to
    execute a new promissory note hereunder; and Trustor's failure to
    execute a new promissory note on Beneficiary's request hereunder shall
    likewise not affect Trustor's liability for the indebtedness under the
    Note.
    
        46.29  Trustor, Beneficiary and Trustee Defined.  As used in this
    Deed of Trust, "Trustor" includes the original signators of this Deed
    of Trust as Trustor, and its successors and assigns; the term "Benefi-
    
    ciary" means the Beneficiary named herein or any future owner or
    holder, including pledgee and participants, of any note, notes or
    instrument secured hereby, or any participation therein; and "Trustee"
    includes the original Trustee under this Deed of Trust and its
    successors and assigns.
    
        46.30  Rules of Construction.  When the identity of the parties or
    other circumstances make appropriate, the masculine gender shall
    include the feminine and/or neuter, and the singular number shall
    include the plural.  Specific enumeration of rights, powers and
    remedies of Trustee and Beneficiary and of acts which they may do and
    of acts Trustor must do or not do shall not exclude or limit the
    general.  The headings of each Article and Paragraph are for
    information and convenience and do not limit or construe the contents
    of any provision hereof.  The provisions of this Deed of Trust, all
    other Loan Documents and the Remediation and Indemnification
    Agreements shall be construed as a whole according to their common
    meaning, not strictly for or against any party and consistent with the
    provisions herein contained, in order to achieve the objectives and
    purposes of such documents.  Each party and its counsel has reviewed
    and revised the Loan Documents and the Remediation and Indemnification
    Agreements and agree that the normal rule of construction to the
    effect that any ambiguities to be resolved against the drafting party
    shall not be employed in the interpretation of such document.  The use
    in this Deed of Trust, all other Loan Documents and the Remediation
    and Indemnification Agreements of the words "including," "such as," or
    words of similar import, when following any general term, statement or
    matter shall not be construed to limit such statement, term or matter
    to the specific items or matters, whether or not language of non-
    limitation such as "without limitation" or "but not limited to," or
    words of similar import, are used with reference thereto, but rather
    shall be deemed to refer to all other items or matters that could
    reasonably fall within the broadest possible scope of such statement,
    term or matter.
    
        46.31  Information to Third Persons.  If, at any time, Beneficiary
    desires to sell or transfer, or grant a participation interest in, all
    or any portion of, or any interest in, the Note, this Deed of Trust or
    any other Loan Document to any Person, Trustor and each Loan Party
    shall furnish in a timely manner any and all financial information
    concerning the Property and Leases, and concerning Trustor's or such
    Loan Party's financial condition, requested by Beneficiary or such
    person in connection with any such sale or transfer.
    
        46.32  Commingling of Funds.  Any and all sums collected or
    retained by Beneficiary hereunder (including insurance and
    condemnation proceeds and any amounts paid by Trustor to Beneficiary
    under Paragraph 3.4 hereof), shall not be deemed to be held in trust,
    and Beneficiary may commingle any and all such funds or proceeds with
    its general assets and shall not be liable for the payment of any
    interest or other return thereon, except to the extent expressly
    provided herein or otherwise required by law.
    
        46.33  Standards of Discretion.  Nothing contained in this Deed of
    Trust, the Note, or any other Loan Documents, shall limit the right of
    Beneficiary to exercise its good faith business judgment, or act, in a
    subjective manner with respect to any matter as to which it has
    specifically been granted such right or the right to act in its sole
    discretion or sole judgment hereunder or thereunder, whether
    "objectively" reasonable under the circumstances.  Any such exercise
    shall not be deemed inconsistent with any covenant of good faith and
    fair dealing otherwise implied by law to be a part of this Deed of
    Trust; and the parties intend by the foregoing to set forth and affirm
    their entire understanding with respect to the terms, covenants and
    conditions and standards pursuant to which their rights, duties and
    obligations are to be judged, their performance measured, and the
    parameters within which Beneficiary's discretion may be exercised
    hereunder and under the other Loan Documents; provided, however, that
    the foregoing shall not limit Beneficiary's obligation to act
    reasonably under the circumstances where any provision of the Loan
    Documents provides for the reasonable consent or approval of
    Beneficiary.
    
        46.34  Certain Standards on Efforts of Trustor.  Whenever in this
    Deed of Trust, or any other Loan Document, the phrase "cause to be" is
    used in conjunction with any of Trustor's Obligations, such phrase
    shall be deemed to include the use by Trustor of best efforts and all
    due diligence to cause the applicable act, event or circumstance to
    occur or be performed or taken, and such efforts and due diligence
    shall encompass the initiation of litigation or other proceedings in
    order to enforce or bring about the happening of the applicable act or
    matter.
    
        46.35  Certain Obligations Unsecured.  Notwithstanding anything to
    the contrary set forth herein or any of the Loan Documents, this Deed
    of Trust shall not secure the following obligations (the "Unsecured
    Obligations"):  (i) any obligations evidenced by or arising under the
    Remediation and Indemnification Agreements, and (ii) any other
    obligations in this Deed of Trust or in any of the other Loan
    Documents to the extent that such other obligations relate
    specifically to the presence on the Property of Hazardous Materials
    (as defined in the Remediation and Indemnification Agreements) and are
    the same or have the same effect as any of the obligations evidenced
    by or arising under the Remediation and Indemnification Agreements. 
    Any breach or default with respect to the Unsecured Obligations shall
    constitute an Event of Default hereunder, notwithstanding the fact
    that such Unsecured Obligations are not secured by this Deed of Trust. 
    Nothing in this section shall, in itself, impair or limit
    Beneficiary's right to obtain a judgment in accordance with applicable
    law after foreclosure for any deficiency in recovery of all
    obligations that are secured by this Deed of Trust following
    foreclosure.
    
        46.36  Partial Release.  Beneficiary agrees to release, at any time
    after May 31, 1998, the Property from the lien of this Deed of Trust
    upon the satisfaction of the following conditions at the time of
    reconveyance:
    
              (1) No Event of Default shall have occurred and no event
        which, with the passage of time or the giving on notice, or both,
        would constitute an Event of Default shall have occurred either at
        the time of Beneficiary's receipt of the Trustor's written request
        for a reconveyance or as of the date of such reconveyance;
    
              (2) Not more than a total of three (3) of the Combined
        Deeds of Trust (including, without limitation, this Deed of Trust)
        shall have been previously reconveyed or shall be reconveyed hereby
        or concurrently herewith (and in no event shall Trustor be entitled
        to more than three (3) total releases of any or all of the Combined
        Properties hereunder and/or under the Combined Deeds of Trust);
    
              (3) Trustor shall pay to Beneficiary, prior to or
        concurrently with the reconveyance of this Deed of Trust, the
        Allocable Loan Amount for the Property along with the prepayment
        premium allocable to such Allocable Loan Amount as determined
        pursuant to the applicable Note;
    
              (4) Beneficiary shall have been provided satisfactory
        evidence that the reconveyance of this Deed of Trust does not
        violate the provisions of any declaration of covenants, conditions
        and restrictions, reciprocal easement agreement, Lease or other
        agreement affecting the Property or any portion thereof;
    
              (5) The Remaining Properties shall have:  (i) after the
        first reconveyance, both a Combined Debt Service Coverage and a
        Future Combined Debt Service Coverage of not less than 1.80 and a
        Combined Loan to Value Ratio of not more than 65%, (ii) after the
        second reconveyance, both a Combined Debt Service Coverage and a
        Future Combined Debt Service Coverage of not less than 1.90 and a
        Combined Loan to Value Ratio of not more than 60%, and (iii) after
        the third and final reconveyance both a Combined Debt Service
        Coverage and a Future Combined Debt Service Coverage of not less
        than 2.00 and a Combined Loan to Value Ratio of not more than 55%;
    
              (6) Each of the individual Remaining Properties shall
        have both an Individual Debt Service Coverage and a Future
        Individual Debt Service Coverage of not less than 1.00 and an
        Individual Loan to Value Ratio of not more than 75%;
    
              (7) Beneficiary shall have received a commitment that
        the title company insuring the liens of the Milpitas Deed of Trust,
        the Ontario Deed of Trust, the Tustin Deed of Trust, the Woodlands
        Deed of Trust, the Nevada Deed of Trust, the Arizona Deed of Trust,
        and the Fremont Deed of Trust will issue such title endorsements as
        Beneficiary deems necessary or desirable for attachment to the
        applicable title policies, including without limitation, CLTA
        Endorsement Nos. 110.5, 111, and 111.1;
    
              (8) Trustor shall pay to Beneficiary all escrow, closing
        and recording costs, the cost of preparing and delivering any
        reconveyance documentation, including legal fees and costs, the
        cost of any title insurance endorsements that Beneficiary may
        require, recording fees, any sums then due and payable under the
        Loan Documents and a non-refundable $25,000 processing fee, which
        fee shall be paid at the time of notice of the requested
        reconveyance;
    
              (9) Trustor shall have provided Beneficiary with forty-
        five (45) days prior written notice of the requested reconveyance;
        and
    
              (10)   Such other terms and conditions as Beneficiary
        shall reasonably require.
    
        Notwithstanding the foregoing, in the event that the Debt Service
    Coverage and the Loan to Value Ratio tests set forth in
    Paragraphs 9.36(5) and 9.36(6), above, cannot be satisfied because of
    the value of, or the net cash flow from, the applicable Combined
    Properties, Trustor may, at its option, satisfy such tests by making a
    principal prepayment (the "Excess Principal Payment") on the Loan in
    an amount sufficient to satisfy such tests so long as Trustor also
    pays to Beneficiary any prepayment premium relating to such principal
    prepayment, as determined by the applicable Note.  Upon receipt of the
    Excess Principal Payment, Beneficiary shall apply such amount to
    reduce the outstanding Loan and may apply such amount to any one or
    more of the Multistate Note, the Nevada Note and/or the
    Arizona/California Note (in such order or priority as to satisfy such
    tests, as determined by Beneficiary), and shall allocate the Excess
    Principal Payment to the applicable Allocable Loan Amount in
    proportion to each such Allocable Loan Amount's share of the
    outstanding principal balance of the Note to which such amount is
    applied, and, the monthly payments due under such applicable Note
    shall be adjusted, as of the date of the release of this Deed of Trust
    pursuant to this Paragraph 9.36, to reflect the Excess Principal
    Payment applied to such applicable Note, such adjustment to be based
    on the applicable interest rate under such Note and an amortization
    schedule equal to 300 months minus the number of months that have
    elapsed since May 31, 1998.
    
        46.37 Limitation on Personal Liabilities.  Trustor's liability
    (i) under the Multistate Note is subject to the terms and conditions
    set forth in Paragraph 19 of the Multistate Note; (ii) under the
    Nevada Note is subject to the terms and conditions set forth in
    Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
    
    
          <PAGE>
  
        IN WITNESS WHEREOF, Trustor has caused this Deed of Trust to be
    executed as of the day and year first above written.
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By: /s/ Scott R. Whitney                                       
    
        Scott R. Whitney, Senior Vice President                    
        [Printed Name and Title]
    
    
    
    
      [11128.AGRE]I12494<PAGE>
  State of                    California          )
                                )    ss.
    County of                   Contra Costa        )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca , a notary public,
    personally appeared
     Scott R. Whitney, Sr. V. P.  
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/ Rebecca L. Ingraca             
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  RECORDING REQUESTED BY
    AND WHEN RECORDED MAIL TO:
    
    Steefel, Levitt & Weiss
    One Embarcadero Center, 30th Floor
    San Francisco, California  94111
    
    Attention:  James F. Eastman, Esq.
    
    
    
    
    _______________________________________________________________
    
    
    
                    ASSIGNMENT OF LESSOR'S INTEREST
                               IN LEASES
                               (Arizona)
    
    
          THIS ASSIGNMENT OF LESSOR'S INTEREST IN LEASES (this
    "Assignment") is made as of January 30, 1998, by BEDFORD PROPERTY
    INVESTORS, INC., a Maryland corporation having offices at 270
    Lafayette Circle, Lafayette, California 94549 ("Assignor"), in favor
    of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
    corporation having offices at Four Embarcadero Center, Suite 2700,
    San Francisco, California 94111 ("Assignee"), for the benefit and
    protection of Assignee as beneficiary under that certain Deed of
    Trust, Security Agreement and Fixture Filing with Assignment of
    Leases, Rents and Agreements of even date herewith executed by
    Assignor in favor of Assignee (the "Deed of Trust") encumbering that
    certain real property, together with any improvements now or at any
    time located thereon, located in the County of Maricopa, State of
    Arizona (the "Property"), and more particularly described in Exhibit A
    attached hereto and incorporated herein by this reference and for the
    benefit and protection of Assignee as payee and holder of that certain
    Amended and Restated Promissory Note dated May 24, 1996 (and deemed
    made as of, and relating back to, March 20, 1996), executed by
    Assignor, as maker, to and for the benefit of Assignee, as holder, in
    the original principal amount of Twenty-Five Million and No/100
    Dollars ($25,000,000.00), and all modifications, renewals or
    extensions thereof (the "Multistate Note"), and that certain Amended
    and Restated Promissory Note dated as of May 9, 1997 executed by
    Assignor, as maker, to and for the benefit of Assignee, as holder, in
    the original principal amount of Eight Million Nine Hundred Thirteen
    Thousand Seven Hundred Thirty and 85/100 Dollars ($8,913,730.85),
    payable to Assignee or its order, and all modifications, renewals or
    extensions thereof (the "Nevada Note"), and that certain Promissory
    Note dated as of even date herewith executed by Assignor, as maker, to
    and for the benefit of Assignee, as holder, in the original principal
    amount of Twenty Million Nine Hundred Thousand Dollars ($20,900,000),
    payable to Assignee or its order, and all modifications, renewals or
    extensions thereof (the "Arizona/California Note," and together with
    the Multistate Note and the Nevada Note, collectively, the "Note").
    
                          W I T N E S S E T H:
    
          FOR VALUE RECEIVED, Assignor does hereby irrevocably
    and absolutely SELL, ASSIGN, TRANSFER, SET OVER AND DELIVER unto
    Assignee any and all leasehold interests, including subleases and
    tenancies following attornment, now or hereafter affecting or covering
    any part of the Property, including, without limitation, those leases
    described in Exhibit B attached hereto (collectively, the "Leases").
    
          TOGETHER, with the immediate and continuing right to
    collect and receive all of the rents, income, receipts, revenues,
    issues and profits now due or which may become due or to which
    Assignor may now or shall hereafter (including the period of
    redemption, if any) become entitled or may demand or claim, arising or
    issuing from or out of the Leases or from deficiency rents and
    liquidated damages following default, including, without limitation,
    all security and other deposits now or hereafter held by Assignor, and
    all proceeds payable under any policy of insurance covering loss of
    rents or other income from the Property, together with any and all
    rights and claims of any kind that Assignor may have against lessees
    under the Leases or any subtenants or occupants of the Property, or
    any part thereof (all such moneys, rights and claims described in this
    paragraph being hereinafter called the "Receipts").
    
          SUBJECT, however, to a license hereby granted by
    Assignee to Assignor, but limited as hereinafter provided, to collect
    and receive the Receipts.
    
          ASSIGNOR REPRESENTS, WARRANTS, COVENANTS AND AGREES AS
    FOLLOWS:
    
          47  Representations and Warranties.  Assignor
    represents and warrants that:  (i) Assignor is the owner of the
    Property, and has good title to the Leases and Receipts and full and
    complete right to assign the same; (ii) no other Person (as herein-
    
    after defined) has any right, title or interest in the Leases or
    Receipts; (iii) Assignor has duly and punctually performed all and
    singular the obligations, terms, covenants, conditions and warranties
    of the Leases on Assignor's part to be kept, observed and performed;
    (iv) Assignor has not previously sold, assigned, transferred,
    mortgaged or pledged the Leases or the Receipts, whether now due or
    hereafter to become due; (v) no Receipts for any period of more than
    thirty (30) days subsequent to the date hereof have been collected,
    nor has payment of any of same been otherwise discharged or
    compromised; (vi) the lessees under the Leases ("Lessees") are not in
    default of any of the terms thereof and do not have any defense, set-
    off or counter claim against Assignor thereunder; (vii) the Leases are
    in full force and effect, are valid and enforceable in accordance with
    their terms, and have not been modified, amended or altered, whether
    in writing or orally, except as otherwise disclosed to Assignee in
    writing; (viii) except as disclosed on the rent roll delivered to
    Assignee in connection with the funding of the Loan (the "Rent Roll"),
    there are no unextinguished rent concessions, abatements or other
    inducements relating to the Leases, and no Lessee has any option or
    right to acquire any interest in the Property; and (ix) the Rent Roll
    discloses all currently existing Leases and is complete, accurate and
    true in all respects.  As used herein, the term "Person" shall mean
    and refer to any natural person, corporation, firm, association,
    government, governmental agency or any other entity, whether acting in
    an individual, fiduciary or other capacity.
    
          48  Affirmative Covenants.  Assignor shall: 
    (i) observe, perform and discharge, duly and punctually, all and
    singular the obligations, terms, covenants, conditions and warranties
    of the Leases, on the part of Assignor to be kept, observed and per-
    
    formed, and give prompt notice to Assignee of any failure on the part
    of Assignor to observe, perform and discharge the same; (ii) direct
    the Lessees to deliver all rents and other payments due under the
    Leases to Assignee upon written request of Assignee and without
    further action of Assignor; (iii) upon request of Assignee, notify
    Lessees in writing of this Assignment and that any security deposit,
    or other deposits heretofore delivered to Assignor have been retained
    by Assignor or assigned and delivered to Assignee, as the case may be;
    (iv) enforce or secure in the name of Assignee the performance of each
    and every obligation, term, covenant, condition and agreement of the
    Leases to be performed by Lessees; (v) appear in and defend any action
    or proceeding arising under, occurring out of, or in any manner con-
    
    nected with the Leases or the obligations, duties, or liabilities of
    Assignor and Lessees thereunder; and (vi) upon request by Assignee, to
    do so in the name and on behalf of Assignee but at the expense of
    Assignor, and to pay all costs and expenses of Assignee, including,
    without limitation, reasonable attorneys' fees.  In the negotiation of
    any future leases or the renewal of any of the Leases, Assignor shall
    use commercially reasonable efforts not to agree to obtain the
    agreement of Assignee to execute a subordination, non-disturbance and
    attornment agreement ("SNDA") with the Lessee or proposed lessee.  So
    long as Assignor uses such commercially reasonable efforts, Assignee
    shall enter into an SNDA on Assignee's then current standard SNDA form
    with the tenant for any lease which is either expressly approved by
    Assignee in writing or which meets the criteria set forth in
    paragraphs (a) or (b) of Section 3, below.  Pursuant to such SNDA,
    Assignee shall agree that in the exercise of any foreclosure remedies
    under the Deed of Trust, Assignee will not disturb such tenant in its
    possession of the demised premises so long as such tenant is not in
    default under its lease.
    
          49  Negative Covenants.  Assignor shall not, without
    the prior written consent of Assignee:  (i) lease any part of the
    Property or renew or extend any of the Leases; (ii) terminate, amend,
    modify or alter in any manner any of the Leases, or waive, excuse,
    condone, discount, set off, compromise, or in any manner release or
    discharge Lessees from any obligations, covenants, conditions or
    agreements by such Lessees to be kept, or accept or consent to any
    surrender of the Leases; (iii) receive or collect any Receipts for a
    period of more than one month in advance (whether in cash or by
    promissory note or otherwise); (iv) further assign the Leases or
    pledge, transfer, mortgage or otherwise encumber or assign future
    payments of Receipts; (v) commence an action of ejectment or summary
    proceedings for dispossession of the Lessees under any of the Leases;
    (vi) consent to any modification of the express purposes for which the
    Property has been leased; or (vii) consent to any subletting of the
    Property or any part thereof, or to any assignment of the Leases by
    lessees thereunder or to any assignment or further subletting by any
    sublessees.  Notwithstanding the foregoing, Assignor may do the
    following with respect to the Leases, including without limitation any
    new leases affecting the Property, without obtaining Assignee's prior
    written consent:
    
            A.       Enter into any amendment or modification
          of any Lease, so long as the Lessee under such Lease
          leases not more than 10,000 rentable square feet of
          the Property, provided that Assignor delivers to
          Assignee an executed copy of such amendment within a
          reasonable time after execution thereof, but in no
          case later than 5 business days after such execution,
          and provided further that such amendment (i) is
          consistent with the ordinary and reasonable business
          practices and procedures customarily employed by
          Assignor for properties similar to the Property,
          (ii) does not substantially increase the obligations
          of the landlord by providing non-market inducements to
          the Lessee, (iii) does not decrease or accelerate the
          rent under such Lease, (iv) does not decrease the term
          of such Lease, unless such a reduced lease term is
          granted in conjunction with both retaining an existing
          Lessee and with enlarging the size of the same
          Lessee's space in the Property, (v) does not cause
          such Lease to vary substantially from Assignor's
          standard form lease, and (vi) is not of a Lease for a
          single tenant space which comprises all or
          substantially all of the area for an individual
          building on the Property; and
    
            B.       Enter into new bona fide arms-length
          leases (or renew existing Leases) with third-party
          tenants for premises of 10,000 rentable square feet or
          less, provided such leases (i) are on Assignor's
          standard form lease approved by Assignee, with no
          modifications that substantially increase the
          obligations of the landlord by providing non-market
          inducements to the Lessee, and (ii) are not for a
          single tenant space which comprises all or
          substantially all of the area for an individual
          building on the Property; and
    
            C.       Terminate any Lease (for premises of
          10,000 rentable square feet or less) in the ordinary
          course of Assignor's business (i) for non-payment of
          rent or other material default by the Lessee
          thereunder so long as such termination does not
          include a payment by such Lessee to Assignor, or
          (ii) if all of the space occupied pursuant to the
          Lease to be terminated is to be leased to another
          Lessee in conjunction with a transaction permitted
          under Section 3(a)(iv), above.
    
    In any case in which Assignee's consent is required pursuant to this
    Section 3, Assignee shall respond to requests for such consent in an
    expedient manner, and such consent shall not be unreasonably withheld
    or delayed and shall be deemed given unless objections in reasonable
    detail are given to Assignee within eight (8) business days following
    Assignor's receipt of (i) written request for such consent, which
    written request shall include the date Assignee's response is due, and
    (ii) all pertinent information relating to the Lease or proposed lease
    in question, including, without limitation, copies of the proposed
    amendment or new lease, if applicable.
    
          50  Default and Remedies.  In the event any
    representation or warranty herein of Assignor shall be found to be
    untrue in any material respect when made, or thereafter becomes untrue
    in any material respect, or in the event Assignor shall default in the
    payment of any Indebtedness (as hereinafter defined) or in the
    observance or performance of any other Obligation (as hereinafter
    defined), after the expiration of all applicable grace or cure
    periods, if any, set forth in the Deed of Trust, then, in each such
    instance, the same shall constitute an "Event of Default" hereunder
    and under the Loan Documents (as defined in the Deed of Trust),
    thereby entitling Assignee to declare all Indebtedness immediately due
    and payable and to exercise any and all of the rights and remedies
    provided thereunder and hereunder as well as by law or in equity. 
    Specifically, but without limiting the generality of the foregoing,
    upon or at any time after the occurrence of an Event of Default,
    Assignee, at its option, shall have the complete right, power and
    authority to exercise and enforce any or all of the following rights
    and remedies:
    
           (i)             to terminate and revoke the license granted to
                           Assignor hereunder and collect the Receipts, and
                           without taking possession of the Property, in
                           Assignee's own name, to demand, collect, receive,
                           sue for, attach and levy the Receipts, to give
                           proper receipts, releases and acquittances
                           therefor, and after deducting all necessary and
                           proper costs and expenses of operation and
                           collection, as determined in Assignee's sole
                           judgment, and including reasonable attorneys'
                           fees, to apply the net proceeds thereof, together
                           with any funds of Assignor deposited with
                           Assignee, upon the Indebtedness and in such order
                           as Assignee may determine in its sole discretion;
                           and
    
          (ii)             without regard to the adequacy of the security,
                           with or without any action or proceeding, through
                           any person or by agent, by the Trustee under the
                           Deed of Trust, or by a receiver appointed by a
                           court of competent jurisdiction, and irrespective
                           of Assignor's possession, to enter upon, take
                           possession of, manage and operate the Property, or
                           any part thereof or interest therein, make,
                           modify, enforce, cancel or accept surrender of,
                           any of the Leases, remove and evict any Lessee,
                           increase or decrease rents under any of the
                           Leases, decorate, clean and repair any premises
                           under any of the Leases, and otherwise do any act
                           or incur any costs or expenses as Assignee deems
                           necessary or proper to protect the rights of
                           Assignee therein, as fully and to the same extent
                           as Assignor could do if in possession, and in such
                           event to apply the Receipts so collected to the
                           operation and management of the Property, in such
                           order as the Assignee shall deem proper in its
                           sole discretion, including payment of reasonable
                           management, brokerage and attorneys' fees, payment
                           of the Indebtedness and maintenance, without
                           interest, of reserves for replacements.
  
    Collection of Receipts hereunder, and application thereof as specified
    above, and/or the entry upon and taking possession of the Property, or
    any part thereof or interest therein, shall not cure or waive any
    default or waive, modify or affect any notice of default under any
    Loan Documents, or invalidate any act done pursuant to such notice,
    and the enforcement of such right or remedy by Assignee, once
    exercised, shall continue for so long as Assignee shall elect.  If
    Assignee shall thereafter elect to discontinue the exercise of any
    such right or remedy, the same or any other right or remedy hereunder
    may be reasserted at any time and from time to time following any
    subsequent Event of Default.  A demand upon any Lessee made by
    Assignee for payment of Receipts by reason of any default claimed by
    Assignee hereunder or under any other Loan Documents shall be
    sufficient to warrant to said Lessee to make future payments of all
    Receipts to Assignee without the necessity for further consent by
    Assignor.
    
          As used herein, the term "Indebtedness" shall mean and
    refer to the principal of and all other amounts, payments and premiums
    due under the Note and any extensions or renewals thereof (including
    extensions or renewals at a different rate of interest, whether or not
    evidenced by a new or additional promissory note or notes), and all
    other indebtedness of Assignor to Assignee and additional advances
    under, evidenced by and/or secured by the Loan Documents, plus
    interest on all such amounts.  As used herein, the term "Obligations"
    shall mean and refer to any and all of the covenants, promises and
    other obligations (including the Indebtedness) made or owing by
    Assignor to or due Assignee under and/or as set forth in the Loan
    Documents and all of the material covenants, promises and other
    obligations made or owing by Assignor to each and every other Person
    relating to the Property.
    
          51  Grant of License to Assignor.  So long as there
    shall exist no Event of Default, Assignor shall have the right under a
    license granted hereby (but limited as provided in this paragraph) to
    collect, but not prior to accrual, all Receipts.  Assignor shall
    receive such Receipts, and shall hold the same, as well as the right
    and license to receive the same, as a trust fund to be applied, and
    Assignor shall so apply the same, first to the payment of taxes and
    assessments upon the Property before penalty or interest are due
    thereon, second to the cost of such insurance and of such maintenance
    and repairs as is required by the terms of the Deed of Trust, third to
    the satisfaction of all obligations under the Leases, and fourth to
    the payment of the Indebtedness before using any part of the Receipts
    for any other purpose.
    
          52  Power of Attorney.  Effective automatically upon
    the occurrence of an Event of Default and continuously thereafter, and
    without the necessity of the execution of any further documents or
    instruments, Assignor hereby constitutes and appoints Assignee as
    Assignor's true and lawful attorney, coupled with an interest, in the
    name, place and stead of Assignor (i) to collect, demand, sue for,
    attach, levy, recover and receive all Receipts due and payable by
    Lessees pursuant to the Leases and to give proper notices, receipts,
    releases and acquittances therefor and after deducting expenses of
    collection, to apply the net proceeds as a credit upon any portion, as
    selected by Assignee, of the Indebtedness, notwithstanding that the
    amount owing thereunder may not then be due and payable or that the
    Indebtedness is adequately secured, and Assignor does hereby authorize
    and direct such Lessees to deliver such payment to Assignee in
    accordance with the foregoing; and (ii) to subject and subordinate at
    any time and from time to time, the Leases, to the lien of the Deed of
    Trust or any other Loan Documents or any other mortgage or deed of
    trust on or to any ground lease of the Property or to request or
    require such subordination, where such reservation, option or
    authority was reserved under the Leases to the Assignor, or in any
    case, where the Assignor otherwise would have the right, power or
    privilege so to do.  Assignor hereby ratifies and confirms all acts
    that Assignee shall do or cause to be done by virtue of the powers
    granted hereby and warrants that the Assignor has not, on or at any
    time prior to the date hereof, exercised any such right of
    subordination under clause (ii) above and covenants not to exercise
    any such right except as may be required by Assignee.  The power of
    attorney hereunder granted is irrevocable and continuing, shall
    survive the insolvency or dissolution of Assignor, and such rights,
    powers and privileges shall be exclusive in Assignee, its successors
    and assigns so long as any part of the Indebtedness shall remain
    unpaid.
    
          53  Indemnity.  Assignor shall indemnify, defend,
    protect and hold Assignee harmless from and against any and all lia-
    
    bility, loss, cost, damage or expense (including, without limitation,
    reasonable attorneys' fees) that Assignee may or might incur under or
    by reason of this Assignment, for any action taken by Assignee
    hereunder, or the enforcement of this Assignment, or by reason or in
    defense of any and all claims and demands whatsoever that may be
    asserted against Assignee arising out of the Leases, including any
    claim by any Lessees of credit from rental paid to and received by
    Assignor.  If Assignee incurs any such liability, loss, cost, damage
    or expense, the amount thereof with interest thereon at the Secondary
    Interest Rate (as defined in the Note), shall be payable by Assignor
    immediately upon demand, shall be secured by the Deed of Trust, and
    shall be part of the Indebtedness.
    
          54  No Waiver.  The failure of Assignee to avail
    itself of any of the terms, covenants and conditions of this
    Assignment for any period of time, or at any time or times, shall not
    be construed or deemed to be a waiver of any such right, and nothing
    herein contained, nor anything done or omitted to be done by Assignee
    pursuant hereto, shall be deemed a waiver by Assignee of any of its
    rights and remedies under the Loan Documents, or under any applicable
    laws.  The rights of Assignee to collect the Indebtedness and to
    enforce any security therefor may be exercised by Assignee, either
    prior to, simultaneously with, or subsequent to, any action taken
    hereunder.
    
          55  No Merger.  So long as any of the Indebtedness
    shall remain unpaid, unless Assignee shall otherwise consent in
    writing, the leasehold estates and the subleasehold estates on the
    Property, if any, shall not merge, but shall always be kept separate
    and distinct, notwithstanding the union of said estates either in
    Assignor or in any Lessees or in a third party, by purchase or
    otherwise.
    
          56  No Mortgagee in Possession; No Other Liability. 
    The acceptance by Assignee of this Assignment, with all of the rights,
    power, privileges and authority so created, shall not, prior to entry
    upon and taking of possession of the Property by Assignee, be deemed
    or construed to (i) constitute Assignee a mortgagee in possession nor
    thereafter or at any time or in any event obligate Assignee to appear
    in or defend any action or proceeding relating to the Leases or to the
    Property, (ii) require Assignee to take any action hereunder, or to
    expend any money or incur any expenses or perform or discharge any
    obligation, duty or liability under the Leases, or (iii) require
    Assignee to assume any obligation or responsibility for any security
    deposits or other deposits delivered to Assignor by Lessees and not
    assigned and delivered to Assignee.  Assignee shall not be liable in
    any way for any injury or damage to person or property sustained by
    any Person in or about the Property.
    
          57  Payment of Indebtedness.  Upon payment in full of
    all of the Indebtedness, this Assignment shall become and be void and
    of no effect, but the affidavit, certificate, letter or statement of
    any officer of Assignee showing any part of said Indebtedness to
    remain unpaid shall be and constitute conclusive evidence of the
    validity, effectiveness and continuing force of this Assignment, and
    any Person may and is hereby authorized to rely thereon.
    
          58  Notices.  All notices, demands or documents of any
    kind that Assignee or Assignor may be required or may desire to serve
    shall be served in the manner provided in the Deed of Trust.
    
          59  Successors and Assigns; Gender.  The terms,
    covenants, conditions and warranties contained herein and the powers
    granted hereby shall run with the land, shall inure to the benefit of
    and bind all parties hereto and their respective heirs, executors,
    administrators, successors and assigns, and all subsequent owners of
    the Property, and all subsequent holders of the Note and the Deed of
    Trust, subject in all events to the provisions of the Deed of Trust
    regarding transfers of the Property by Assignor.  In this Assignment,
    whenever the context so requires, the masculine gender shall include
    the feminine and/or neuter and the singular number shall include the
    plural and conversely in each case.  If there is more than one party
    constituting Assignor, all obligations of each Assignor hereunder
    shall be joint and several.
    
          60  Severability.  If any term, provision, covenant or
    condition hereof or any application thereof should be held unen-
    
    forceable, in whole or in part, all terms, provisions, covenants and
    conditions hereof and all applications thereof not held invalid, void
    or unenforceable shall continue in full force and effect and shall in
    no way be affected, impaired or invalidated thereby.
    
          61  Governing Law.  This Assignment shall be governed
    by and construed in accordance with the laws of the State of Arizona.
    
          62  Expenses.  Assignor shall pay on demand all costs
    and expenses incurred by Assignee in connection with the review of
    Leases, including the fees and disbursements of Assignee's outside
    counsel.
    
          63  Absolute Assignment.  Notwithstanding anything
    contained herein to the contrary, this Assignment is intended by
    Assignor and Assignee to create and shall be construed to create an
    absolute assignment by Assignor to Assignee of all of Assignor's
    right, title and interest in the Leases and Receipts and shall not be
    deemed to create a security interest therein.  Assignor and Assignee
    further agree that, during the term of this Assignment, the Leases and
    Receipts shall not constitute property of Assignor (or of any estate
    of Assignor) within the meaning of 11 U.S.C. Section 541, as amended
    from time to time.
    
          64  Priority Of Leases.  NOTICE OF THE FOLLOWING IS
    HEREBY GIVEN TO ALL TENANTS EXECUTING A LEASE AFFECTING THE PROPERTY,
    EACH OF WHICH SHALL BE ON NOTICE OF, BOUND BY AND SUBJECT TO THE TERMS
    OF THIS PARAGRAPH 18:
    
            18.1     Anything to the contrary in any Lease
    notwithstanding, Assignee shall have the right, but not the
    obligation, to change the priority of that Lease and the lien of the
    Deed of Trust from time to time by one or more unilateral notices to
    the tenant that (a) the lien of the Deed of Trust shall be subordinate
    to such Lease, or (b) the Lease shall be subordinate to the Deed of
    Trust.
    
            18.2     Upon written request of Assignee, every
    tenant under a Lease receiving such request shall execute and deliver
    to Assignee within the time period specified in that written request a
    written agreement which provides the following: (a) upon the
    foreclosure of the Deed of Trust such tenant shall attorn to the
    purchaser of the Property at the foreclosure sale, and (b) the
    foreclosure of the Deed of Trust shall not disturb or result in the
    cancellation or termination of that tenant's Lease.  Assignee has no
    obligation to deliver such a request to any tenant.
    
            18.3     Assignor covenants that, unless Assignee
    otherwise agrees, each Lease shall provide, among other things, that
    Assignee shall have the right to (a) change the relative priority of
    that Lease and the Deed of Trust by notice to the tenant that (i) the
    Lease shall be subordinate to the Deed of Trust, or (ii) the Deed of
    Trust shall be subordinate to the Lease, and (b) elect whether or not
    (i) such Lease shall survive foreclosure of the Deed of Trust, and
    (ii) such tenant shall attorn to Assignee or the purchaser upon a
    foreclosure sale.
    
            18.4     Assignee shall have the right to elect to
    be a third party beneficiary of any attornment provisions contained in
    any Lease. Anything to the contrary in any Lease notwithstanding, no
    election by Assignor under any Lease or otherwise to alter the
    relative priority of that Lease and the Deed of Trust shall be
    effective unless Assignee shall have consented thereto in writing.
    
          65  Limitation on Personal Liabilities.  Assignor's
    liability (i) under the Multistate Note is subject to the terms and
    conditions set forth in Paragraph 19 of the Multistate Note; (ii)
    under the Nevada Note is subject to the terms and conditions set forth
    in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
    
          66  Counterparts.  This Assignment may be executed in
    any number of counterparts, each of which counterparts shall be deemed
    to be an original and all of which together shall constitute but one
      and the same Assignment.<PAGE>
  
          IN WITNESS WHEREOF, this Assignment of Lessor's
    Interest in Leases has been duly executed by Assignor the day and year
    first above written.
    
    "ASSIGNOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:    /s/ Scott R. Whitney
    
            Scott R. Whitney, Senior Vice President
          [Printed Name and Title]
    
    
    Witness (other than Notary Public):
    
       /s/ Cindy Lynds     
    
    Name: Cindy Lynds   
    
    
    The Prudential Insurance Company
    of America hereby executes this
    Assignment to evidence its agreement
    with the last two sentences of
    Section 2, hereof.
    
    THE PRUDENTIAL INSURANCE COMPANY OF
    AMERICA, a New Jersey corporation
    
    
    By:     /s/ Michael B. Jameson
        
    
            Michael B. Jameson   
           [Printed Name and Title]
    
    
    Witness (other than Notary Public):
    
                                 
    
    Name:                        
    
    
      [11128.AGRE]I13400<PAGE>
  
    
    State of                    California          )
                                )    ss.
    County of                   Contra Costa        )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca  , a notary public,
    personally appeared
    Scott R. Whitney, Sr. V.P.
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/ Rebecca L. Ingraca             
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  State of                    California          )
                                )    ss.
    County of                   Contra Costa        )
    
    
    
    On February 2, 1998, before me,      Rebecca L. Ingraca    , a notary
    public, personally appeared
    Scott R. Whitney, Sr. V. P.    
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/Rebecca L. Ingraca              
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
                                    <PAGE>
  
    RECORDING REQUESTED BY
    AND WHEN RECORDED MAIL TO:
    
    Steefel, Levitt & Weiss
    One Embarcadero Center, 30th Floor
    San Francisco, California  94111
    
    Attention:  James F. Eastman, Esq.
    
    
    
    
    _______________________________________________________________
    
    
    
                    ASSIGNMENT OF LESSOR'S INTEREST
                               IN LEASES
                               (Fremont)
    
    
          THIS ASSIGNMENT OF LESSOR'S INTEREST IN LEASES (this
    "Assignment") is made as of January 30, 1998, by BEDFORD PROPERTY
    INVESTORS, INC., a Maryland corporation having offices at 270
    Lafayette Circle, Lafayette, California 94549 ("Assignor"), in favor
    of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
    corporation having offices at Four Embarcadero Center, Suite 2700,
    San Francisco, California 94111 ("Assignee"), for the benefit and
    protection of Assignee as beneficiary under that certain Deed of
    Trust, Security Agreement and Fixture Filing with Assignment of
    Leases, Rents and Agreements of even date herewith executed by
    Assignor in favor of Assignee (the "Deed of Trust") encumbering that
    certain real property, together with any improvements now or at any
    time located thereon, located in the County of Alameda, State of
    California (the "Property"), and more particularly described in
    Exhibit A attached hereto and incorporated herein by this reference
    and for the benefit and protection of Assignee as payee and holder of
    that certain Amended and Restated Promissory Note dated May 24, 1996
    (and deemed made as of, and relating back to, March 20, 1996),
    executed by Assignor, as maker, to and for the benefit of Assignee, as
    holder, in the original principal amount of Twenty-Five Million and
    No/100 Dollars ($25,000,000.00), and all modifications, renewals or
    extensions thereof (the "Multistate Note"), and that certain Amended
    and Restated Promissory Note dated as of May 9, 1997 executed by
    Assignor, as maker, to and for the benefit of Assignee, as holder, in
    the original principal amount of Eight Million Nine Hundred Thirteen
    Thousand Seven Hundred Thirty and 85/100 Dollars ($8,913,730.85),
    payable to Assignee or its order, and all modifications, renewals or
    extensions thereof (the "Nevada Note"), and that certain Promissory
    Note dated as of even date herewith executed by Assignor, as maker, to
    and for the benefit of Assignee, as holder, in the original principal
    amount of Twenty Million Nine Hundred Thousand Dollars ($20,900,000),
    payable to Assignee or its order, and all modifications, renewals or
    extensions thereof (the "Arizona/California Note," and together with
    the Multistate Note and the Nevada Note, collectively, the "Note").
    
                          W I T N E S S E T H:
    
          FOR VALUE RECEIVED, Assignor does hereby irrevocably
    and absolutely SELL, ASSIGN, TRANSFER, SET OVER AND DELIVER unto
    Assignee any and all leasehold interests, including subleases and
    tenancies following attornment, now or hereafter affecting or covering
    any part of the Property, including, without limitation, those leases
    described in Exhibit B attached hereto (collectively, the "Leases").
    
          TOGETHER, with the immediate and continuing right to
    collect and receive all of the rents, income, receipts, revenues,
    issues and profits now due or which may become due or to which
    Assignor may now or shall hereafter (including the period of
    redemption, if any) become entitled or may demand or claim, arising or
    issuing from or out of the Leases or from deficiency rents and
    liquidated damages following default, including, without limitation,
    all security and other deposits now or hereafter held by Assignor, and
    all proceeds payable under any policy of insurance covering loss of
    rents or other income from the Property, together with any and all
    rights and claims of any kind that Assignor may have against lessees
    under the Leases or any subtenants or occupants of the Property, or
    any part thereof (all such moneys, rights and claims described in this
    paragraph being hereinafter called the "Receipts").
    
          SUBJECT, however, to a license hereby granted by
    Assignee to Assignor, but limited as hereinafter provided, to collect
    and receive the Receipts.
    
          ASSIGNOR REPRESENTS, WARRANTS, COVENANTS AND AGREES AS
    FOLLOWS:
    
          67  Representations and Warranties.  Assignor
    represents and warrants that:  (i) Assignor is the owner of the
    Property, and has good title to the Leases and Receipts and full and
    complete right to assign the same; (ii) no other Person (as herein-
    
    after defined) has any right, title or interest in the Leases or
    Receipts; (iii) Assignor has duly and punctually performed all and
    singular the obligations, terms, covenants, conditions and warranties
    of the Leases on Assignor's part to be kept, observed and performed;
    (iv) Assignor has not previously sold, assigned, transferred,
    mortgaged or pledged the Leases or the Receipts, whether now due or
    hereafter to become due; (v) no Receipts for any period of more than
    thirty (30) days subsequent to the date hereof have been collected,
    nor has payment of any of same been otherwise discharged or
    compromised; (vi) the lessees under the Leases ("Lessees") are not in
    default of any of the terms thereof and do not have any defense, set-
    off or counter claim against Assignor thereunder; (vii) the Leases are
    in full force and effect, are valid and enforceable in accordance with
    their terms, and have not been modified, amended or altered, whether
    in writing or orally, except as otherwise disclosed to Assignee in
    writing; (viii) except as disclosed on the rent roll delivered to
    Assignee in connection with the funding of the Loan (the "Rent Roll"),
    there are no unextinguished rent concessions, abatements or other
    inducements relating to the Leases, and no Lessee has any option or
    right to acquire any interest in the Property; and (ix) the Rent Roll
    discloses all currently existing Leases and is complete, accurate and
    true in all respects.  As used herein, the term "Person" shall mean
    and refer to any natural person, corporation, firm, association,
    government, governmental agency or any other entity, whether acting in
    an individual, fiduciary or other capacity.
    
          68  Affirmative Covenants.  Assignor shall: 
    (i) observe, perform and discharge, duly and punctually, all and
    singular the obligations, terms, covenants, conditions and warranties
    of the Leases, on the part of Assignor to be kept, observed and per-
    
    formed, and give prompt notice to Assignee of any failure on the part
    of Assignor to observe, perform and discharge the same; (ii) direct
    the Lessees to deliver all rents and other payments due under the
    Leases to Assignee upon written request of Assignee and without
    further action of Assignor; (iii) upon request of Assignee, notify
    Lessees in writing of this Assignment and that any security deposit,
    or other deposits heretofore delivered to Assignor have been retained
    by Assignor or assigned and delivered to Assignee, as the case may be;
    (iv) enforce or secure in the name of Assignee the performance of each
    and every obligation, term, covenant, condition and agreement of the
    Leases to be performed by Lessees; (v) appear in and defend any action
    or proceeding arising under, occurring out of, or in any manner con-
    
    nected with the Leases or the obligations, duties, or liabilities of
    Assignor and Lessees thereunder; and (vi) upon request by Assignee, to
    do so in the name and on behalf of Assignee but at the expense of
    Assignor, and to pay all costs and expenses of Assignee, including,
    without limitation, reasonable attorneys' fees.  In the negotiation of
    any future leases or the renewal of any of the Leases, Assignor shall
    use commercially reasonable efforts not to agree to obtain the
    agreement of Assignee to execute a subordination, non-disturbance and
    attornment agreement ("SNDA") with the Lessee or proposed lessee.  So
    long as Assignor uses such commercially reasonable efforts, Assignee
    shall enter into an SNDA on Assignee's then current standard SNDA form
    with the tenant for any lease which is either expressly approved by
    Assignee in writing or which meets the criteria set forth in
    paragraphs (a) or (b) of Section 3, below.  Pursuant to such SNDA,
    Assignee shall agree that in the exercise of any foreclosure remedies
    under the Deed of Trust, Assignee will not disturb such tenant in its
    possession of the demised premises so long as such tenant is not in
    default under its lease.
    
          69  Negative Covenants.  Assignor shall not, without
    the prior written consent of Assignee:  (i) lease any part of the
    Property or renew or extend any of the Leases; (ii) terminate, amend,
    modify or alter in any manner any of the Leases, or waive, excuse,
    condone, discount, set off, compromise, or in any manner release or
    discharge Lessees from any obligations, covenants, conditions or
    agreements by such Lessees to be kept, or accept or consent to any
    surrender of the Leases; (iii) receive or collect any Receipts for a
    period of more than one month in advance (whether in cash or by
    promissory note or otherwise); (iv) further assign the Leases or
    pledge, transfer, mortgage or otherwise encumber or assign future
    payments of Receipts; (v) commence an action of ejectment or summary
    proceedings for dispossession of the Lessees under any of the Leases;
    (vi) consent to any modification of the express purposes for which the
    Property has been leased; or (vii) consent to any subletting of the
    Property or any part thereof, or to any assignment of the Leases by
    lessees thereunder or to any assignment or further subletting by any
    sublessees.  Notwithstanding the foregoing, Assignor may do the
    following with respect to the Leases, including without limitation any
    new leases affecting the Property, without obtaining Assignee's prior
    written consent:
    
            A.       Enter into any amendment or modification
          of any Lease, so long as the Lessee under such Lease
          leases not more than 10,000 rentable square feet of
          the Property, provided that Assignor delivers to
          Assignee an executed copy of such amendment within a
          reasonable time after execution thereof, but in no
          case later than 5 business days after such execution,
          and provided further that such amendment (i) is
          consistent with the ordinary and reasonable business
          practices and procedures customarily employed by
          Assignor for properties similar to the Property,
          (ii) does not substantially increase the obligations
          of the landlord by providing non-market inducements to
          the Lessee, (iii) does not decrease or accelerate the
          rent under such Lease, (iv) does not decrease the term
          of such Lease, unless such a reduced lease term is
          granted in conjunction with both retaining an existing
          Lessee and with enlarging the size of the same
          Lessee's space in the Property, (v) does not cause
          such Lease to vary substantially from Assignor's
          standard form lease, and (vi) is not of a Lease for a
          single tenant space which comprises all or
          substantially all of the area for an individual
          building on the Property; and
    
            B.       Enter into new bona fide arms-length
          leases (or renew existing Leases) with third-party
          tenants for premises of 10,000 rentable square feet or
          less, provided such leases (i) are on Assignor's
          standard form lease approved by Assignee, with no
          modifications that substantially increase the
          obligations of the landlord by providing non-market
          inducements to the Lessee, and (ii) are not for a
          single tenant space which comprises all or
          substantially all of the area for an individual
          building on the Property; and
    
            C.       Terminate any Lease (for premises of
          10,000 rentable square feet or less) in the ordinary
          course of Assignor's business (i) for non-payment of
          rent or other material default by the Lessee
          thereunder so long as such termination does not
          include a payment by such Lessee to Assignor, or
          (ii) if all of the space occupied pursuant to the
          Lease to be terminated is to be leased to another
          Lessee in conjunction with a transaction permitted
          under Section 3(a)(iv), above.
    
    In any case in which Assignee's consent is required pursuant to this
    Section 3, Assignee shall respond to requests for such consent in an
    expedient manner, and such consent shall not be unreasonably withheld
    or delayed and shall be deemed given unless objections in reasonable
    detail are given to Assignee within eight (8) business days following
    Assignor's receipt of (i) written request for such consent, which
    written request shall include the date Assignee's response is due, and
    (ii) all pertinent information relating to the Lease or proposed lease
    in question, including, without limitation, copies of the proposed
    amendment or new lease, if applicable.
    
          70  Default and Remedies.  In the event any
    representation or warranty herein of Assignor shall be found to be
    untrue in any material respect when made, or thereafter becomes untrue
    in any material respect, or in the event Assignor shall default in the
    payment of any Indebtedness (as hereinafter defined) or in the
    observance or performance of any other Obligation (as hereinafter
    defined), after the expiration of all applicable grace or cure
    periods, if any, set forth in the Deed of Trust, then, in each such
    instance, the same shall constitute an "Event of Default" hereunder
    and under the Loan Documents (as defined in the Deed of Trust),
    thereby entitling Assignee to declare all Indebtedness immediately due
    and payable and to exercise any and all of the rights and remedies
    provided thereunder and hereunder as well as by law or in equity. 
    Specifically, but without limiting the generality of the foregoing,
    upon or at any time after the occurrence of an Event of Default,
    Assignee, at its option, shall have the complete right, power and
    authority to exercise and enforce any or all of the following rights
    and remedies:
    
         (i)             to terminate and revoke the license granted to
                         Assignor hereunder and collect the Receipts, and
                         without taking possession of the Property, in
                         Assignee's own name, to demand, collect, receive,
                         sue for, attach and levy the Receipts, to give
                         proper receipts, releases and acquittances
                         therefor, and after deducting all necessary and
                         proper costs and expenses of operation and
                         collection, as determined in Assignee's sole
                         judgment, and including reasonable attorneys'
                         fees, to apply the net proceeds thereof, together
                         with any funds of Assignor deposited with
                         Assignee, upon the Indebtedness and in such order
                         as Assignee may determine in its sole discretion;
                         and
    
        (ii)             without regard to the adequacy of the security,
                         with or without any action or proceeding, through
                         any person or by agent, by the Trustee under the
                         Deed of Trust, or by a receiver appointed by a
                         court of competent jurisdiction, and irrespective
                         of Assignor's possession, to enter upon, take
                         possession of, manage and operate the Property, or
                         any part thereof or interest therein, make,
                         modify, enforce, cancel or accept surrender of,
                         any of the Leases, remove and evict any Lessee,
                         increase or decrease rents under any of the
                         Leases, decorate, clean and repair any premises
                         under any of the Leases, and otherwise do any act
                         or incur any costs or expenses as Assignee deems
                         necessary or proper to protect the rights of
                         Assignee therein, as fully and to the same extent
                         as Assignor could do if in possession, and in such
                         event to apply the Receipts so collected to the
                         operation and management of the Property, in such
                         order as the Assignee shall deem proper in its
                         sole discretion, including payment of reasonable
                         management, brokerage and attorneys' fees, payment
                         of the Indebtedness and maintenance, without
                         interest, of reserves for replacements.
    
    Collection of Receipts hereunder, and application thereof as specified
    above, and/or the entry upon and taking possession of the Property, or
    any part thereof or interest therein, shall not cure or waive any
    default or waive, modify or affect any notice of default under any
    Loan Documents, or invalidate any act done pursuant to such notice,
    and the enforcement of such right or remedy by Assignee, once
    exercised, shall continue for so long as Assignee shall elect.  If
    Assignee shall thereafter elect to discontinue the exercise of any
    such right or remedy, the same or any other right or remedy hereunder
    may be reasserted at any time and from time to time following any
    subsequent Event of Default.  A demand upon any Lessee made by
    Assignee for payment of Receipts by reason of any default claimed by
    Assignee hereunder or under any other Loan Documents shall be
    sufficient to warrant to said Lessee to make future payments of all
    Receipts to Assignee without the necessity for further consent by
    Assignor.
    
          As used herein, the term "Indebtedness" shall mean and
    refer to the principal of and all other amounts, payments and premiums
    due under the Note and any extensions or renewals thereof (including
    extensions or renewals at a different rate of interest, whether or not
    evidenced by a new or additional promissory note or notes), and all
    other indebtedness of Assignor to Assignee and additional advances
    under, evidenced by and/or secured by the Loan Documents, plus
    interest on all such amounts.  As used herein, the term "Obligations"
    shall mean and refer to any and all of the covenants, promises and
    other obligations (including the Indebtedness) made or owing by
    Assignor to or due Assignee under and/or as set forth in the Loan
    Documents and all of the material covenants, promises and other
    obligations made or owing by Assignor to each and every other Person
    relating to the Property.
    
          71  Grant of License to Assignor.  So long as there
    shall exist no Event of Default, Assignor shall have the right under a
    license granted hereby (but limited as provided in this paragraph) to
    collect, but not prior to accrual, all Receipts.  Assignor shall
    receive such Receipts, and shall hold the same, as well as the right
    and license to receive the same, as a trust fund to be applied, and
    Assignor shall so apply the same, first to the payment of taxes and
    assessments upon the Property before penalty or interest are due
    thereon, second to the cost of such insurance and of such maintenance
    and repairs as is required by the terms of the Deed of Trust, third to
    the satisfaction of all obligations under the Leases, and fourth to
    the payment of the Indebtedness before using any part of the Receipts
    for any other purpose.
    
          72  Power of Attorney.  Effective automatically upon
    the occurrence of an Event of Default and continuously thereafter, and
    without the necessity of the execution of any further documents or
    instruments, Assignor hereby constitutes and appoints Assignee as
    Assignor's true and lawful attorney, coupled with an interest, in the
    name, place and stead of Assignor (i) to collect, demand, sue for,
    attach, levy, recover and receive all Receipts due and payable by
    Lessees pursuant to the Leases and to give proper notices, receipts,
    releases and acquittances therefor and after deducting expenses of
    collection, to apply the net proceeds as a credit upon any portion, as
    selected by Assignee, of the Indebtedness, notwithstanding that the
    amount owing thereunder may not then be due and payable or that the
    Indebtedness is adequately secured, and Assignor does hereby authorize
    and direct such Lessees to deliver such payment to Assignee in
    accordance with the foregoing; and (ii) to subject and subordinate at
    any time and from time to time, the Leases, to the lien of the Deed of
    Trust or any other Loan Documents or any other mortgage or deed of
    trust on or to any ground lease of the Property or to request or
    require such subordination, where such reservation, option or
    authority was reserved under the Leases to the Assignor, or in any
    case, where the Assignor otherwise would have the right, power or
    privilege so to do.  Assignor hereby ratifies and confirms all acts
    that Assignee shall do or cause to be done by virtue of the powers
    granted hereby and warrants that the Assignor has not, on or at any
    time prior to the date hereof, exercised any such right of
    subordination under clause (ii) above and covenants not to exercise
    any such right except as may be required by Assignee.  The power of
    attorney hereunder granted is irrevocable and continuing, shall
    survive the insolvency or dissolution of Assignor, and such rights,
    powers and privileges shall be exclusive in Assignee, its successors
    and assigns so long as any part of the Indebtedness shall remain
    unpaid.
    
          73  Indemnity.  Assignor shall indemnify, defend,
    protect and hold Assignee harmless from and against any and all lia-
    
    bility, loss, cost, damage or expense (including, without limitation,
    reasonable attorneys' fees) that Assignee may or might incur under or
    by reason of this Assignment, for any action taken by Assignee
    hereunder, or the enforcement of this Assignment, or by reason or in
    defense of any and all claims and demands whatsoever that may be
    asserted against Assignee arising out of the Leases, including any
    claim by any Lessees of credit from rental paid to and received by
    Assignor.  If Assignee incurs any such liability, loss, cost, damage
    or expense, the amount thereof with interest thereon at the Secondary
    Interest Rate (as defined in the Note), shall be payable by Assignor
    immediately upon demand, shall be secured by the Deed of Trust, and
    shall be part of the Indebtedness.
    
          74  No Waiver.  The failure of Assignee to avail
    itself of any of the terms, covenants and conditions of this
    Assignment for any period of time, or at any time or times, shall not
    be construed or deemed to be a waiver of any such right, and nothing
    herein contained, nor anything done or omitted to be done by Assignee
    pursuant hereto, shall be deemed a waiver by Assignee of any of its
    rights and remedies under the Loan Documents, or under any applicable
    laws.  The rights of Assignee to collect the Indebtedness and to
    enforce any security therefor may be exercised by Assignee, either
    prior to, simultaneously with, or subsequent to, any action taken
    hereunder.
    
          75  No Merger.  So long as any of the Indebtedness
    shall remain unpaid, unless Assignee shall otherwise consent in
    writing, the leasehold estates and the subleasehold estates on the
    Property, if any, shall not merge, but shall always be kept separate
    and distinct, notwithstanding the union of said estates either in
    Assignor or in any Lessees or in a third party, by purchase or
    otherwise.
    
          76  No Mortgagee in Possession; No Other Liability. 
    The acceptance by Assignee of this Assignment, with all of the rights,
    power, privileges and authority so created, shall not, prior to entry
    upon and taking of possession of the Property by Assignee, be deemed
    or construed to (i) constitute Assignee a mortgagee in possession nor
    thereafter or at any time or in any event obligate Assignee to appear
    in or defend any action or proceeding relating to the Leases or to the
    Property, (ii) require Assignee to take any action hereunder, or to
    expend any money or incur any expenses or perform or discharge any
    obligation, duty or liability under the Leases, or (iii) require
    Assignee to assume any obligation or responsibility for any security
    deposits or other deposits delivered to Assignor by Lessees and not
    assigned and delivered to Assignee.  Assignee shall not be liable in
    any way for any injury or damage to person or property sustained by
    any Person in or about the Property.
    
          77  Payment of Indebtedness.  Upon payment in full of
    all of the Indebtedness, this Assignment shall become and be void and
    of no effect, but the affidavit, certificate, letter or statement of
    any officer of Assignee showing any part of said Indebtedness to
    remain unpaid shall be and constitute conclusive evidence of the
    validity, effectiveness and continuing force of this Assignment, and
    any Person may and is hereby authorized to rely thereon.
    
          78  Notices.  All notices, demands or documents of any
    kind that Assignee or Assignor may be required or may desire to serve
    shall be served in the manner provided in the Deed of Trust.
    
          79  Successors and Assigns; Gender.  The terms,
    covenants, conditions and warranties contained herein and the powers
    granted hereby shall run with the land, shall inure to the benefit of
    and bind all parties hereto and their respective heirs, executors,
    administrators, successors and assigns, and all subsequent owners of
    the Property, and all subsequent holders of the Note and the Deed of
    Trust, subject in all events to the provisions of the Deed of Trust
    regarding transfers of the Property by Assignor.  In this Assignment,
    whenever the context so requires, the masculine gender shall include
    the feminine and/or neuter and the singular number shall include the
    plural and conversely in each case.  If there is more than one party
    constituting Assignor, all obligations of each Assignor hereunder
    shall be joint and several.
    
          80  Severability.  If any term, provision, covenant or
    condition hereof or any application thereof should be held unen-
    
    forceable, in whole or in part, all terms, provisions, covenants and
    conditions hereof and all applications thereof not held invalid, void
    or unenforceable shall continue in full force and effect and shall in
    no way be affected, impaired or invalidated thereby.
    
          81  Governing Law.  This Assignment shall be governed
    by and construed in accordance with the laws of the State of
    California.
    
          82  Expenses.  Assignor shall pay on demand all costs
    and expenses incurred by Assignee in connection with the review of
    Leases, including the fees and disbursements of Assignee's outside
    counsel.
    
          83  Absolute Assignment.  Notwithstanding anything
    contained herein to the contrary, this Assignment is intended by
    Assignor and Assignee to create and shall be construed to create an
    absolute assignment by Assignor to Assignee of all of Assignor's
    right, title and interest in the Leases and Receipts and shall not be
    deemed to create a security interest therein.  Assignor and Assignee
    further agree that, during the term of this Assignment, the Leases and
    Receipts shall not constitute property of Assignor (or of any estate
    of Assignor) within the meaning of 11 U.S.C. Section 541, as amended
    from time to time.
    
          84  Priority Of Leases.  NOTICE OF THE FOLLOWING IS
    HEREBY GIVEN TO ALL TENANTS EXECUTING A LEASE AFFECTING THE PROPERTY,
    EACH OF WHICH SHALL BE ON NOTICE OF, BOUND BY AND SUBJECT TO THE TERMS
    OF THIS PARAGRAPH 18:
    
            18.1     Anything to the contrary in any Lease
    notwithstanding, Assignee shall have the right, but not the
    obligation, to change the priority of that Lease and the lien of the
    Deed of Trust from time to time by one or more unilateral notices to
    the tenant that (a) the lien of the Deed of Trust shall be subordinate
    to such Lease, or (b) the Lease shall be subordinate to the Deed of
    Trust.
    
            18.2     Upon written request of Assignee, every
    tenant under a Lease receiving such request shall execute and deliver
    to Assignee within the time period specified in that written request a
    written agreement which provides the following: (a) upon the
    foreclosure of the Deed of Trust such tenant shall attorn to the
    purchaser of the Property at the foreclosure sale, and (b) the
    foreclosure of the Deed of Trust shall not disturb or result in the
    cancellation or termination of that tenant's Lease.  Assignee has no
    obligation to deliver such a request to any tenant.
    
            18.3     Assignor covenants that, unless Assignee
    otherwise agrees, each Lease shall provide, among other things, that
    Assignee shall have the right to (a) change the relative priority of
    that Lease and the Deed of Trust by notice to the tenant that (i) the
    Lease shall be subordinate to the Deed of Trust, or (ii) the Deed of
    Trust shall be subordinate to the Lease, and (b) elect whether or not
    (i) such Lease shall survive foreclosure of the Deed of Trust, and
    (ii) such tenant shall attorn to Assignee or the purchaser upon a
    foreclosure sale.
    
            18.4     Assignee shall have the right to elect to
    be a third party beneficiary of any attornment provisions contained in
    any Lease. Anything to the contrary in any Lease notwithstanding, no
    election by Assignor under any Lease or otherwise to alter the
    relative priority of that Lease and the Deed of Trust shall be
    effective unless Assignee shall have consented thereto in writing.
    
          85  Limitation on Personal Liabilities.  Assignor's
    liability (i) under the Multistate Note is subject to the terms and
    conditions set forth in Paragraph 19 of the Multistate Note; (ii)
    under the Nevada Note is subject to the terms and conditions set forth
    in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
    
          86  This Assignment may be executed in any number of
    counterparts, each of which counterparts shall be deemed to be an
    original and all of which together shall constitute but one and the
      same Assignment.<PAGE>
  
          IN WITNESS WHEREOF, this Assignment of Lessor's
    Interest in Leases has been duly executed by Assignor the day and year
    first above written.
    
    "ASSIGNOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/ Scott R. Whitney      
    
            Scott R. Whitney, Senior Vice President  
          [Printed Name and Title]
    
    
    The Prudential Insurance Company
    of America hereby executes this
    Assignment to evidence its agreement
    with the last two sentences of
    Section 2, hereof.
    
    THE PRUDENTIAL INSURANCE COMPANY OF
    AMERICA, a New Jersey corporation
    
    
    By:     /s/ Michael B. Jameson
        
    
            Michael B. Jameson   
           [Printed Name and Title]
    
    
    
    [11128.AGRE]H61452
    
    
      <PAGE>
  State of                    California          )
                                )    ss.
    County of                   Contra Costa        )
    
    
    
    On February 2, 1998, before me,    Rebecca L. Ingraca     , a notary
    public, personally appeared
    Scott R. Whitney, Sr. V. P.   
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/ Rebecca L. Ingraca             
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  State of                         )
                                )    ss.
    County of                        )
    
    
    
    On _______________________, 1998, before me,                           
              , a notary public, personally appeared
                                
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                                                   
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
                                       RECORDING REQUESTED BY, AND
     WHEN RECORDED RETURN TO:
    
     Steefel, Levitt & Weiss
     One Embarcadero Center, 30th Floor
     San Francisco, California  94111
    
      Attention:  James F. Eastman, Esq.
    
    
    
    
    
    _____________________________________________________________________
    
    
                  FIRST MODIFICATION OF DEED OF TRUST
                          AND OTHER DOCUMENTS
                                (Nevada)
    
    
            This First Modification of Deed of Trust and Other
    Documents, dated as of January 30, 1998 (this "Modification"), is made
    by and between BEDFORD PROPERTY INVESTORS, INC., a Maryland
    corporation ("Trustor"), and THE PRUDENTIAL INSURANCE COMPANY OF
    AMERICA, a New Jersey corporation ("Beneficiary"), as a first
    modification to that certain Deed of Trust, Security Agreement and
    Fixture Filing with Assignment of Leases, Rents and Agreements dated
    as of May 9, 1997, executed by Trustor for the benefit of Beneficiary
    and recorded on May 9, 1997 as Instrument No. 2026926 in the Official
    Records of Washoe County, Nevada (the "Deed of Trust") and the other
    documents described herein.  The Deed of Trust secures certain
    obligations of Trustor more particularly described therein and
    encumbers the real property described in Exhibit A attached hereto.
    
            Reference is also made to that certain Assignment of
    Lessor's Interest in Leases dated as of May 9, 1997, executed by
    Trustor in favor of Beneficiary and recorded on May 9, 19976 as
    Instrument No. 2096927 in the Official Records of Washoe County,
    Nevada (the "Assignment").
    
            This Modification is entered into in conjunction
    with that certain Third Modification of Deed of Trust and Other
    Documents (The Woodlands Business Park) of even date herewith, to be
    recorded in the Official Records of Salt Lake County, Utah, that
    certain Third Modification of Deed of Trust and Other Documents
    (Tustin Business Park) of even date herewith, to be recorded in the
    Official Records of Orange County, California, that certain Third
    Modification of Deed of Trust and Other Documents (Dupont Industrial
    Center, Ontario) of even date herewith, to be recorded in the Official
    Records of San Bernardino County, California, and that certain Second
    Modification of Deed of Trust and Other Documents (Milpitas Business
    Park) of even date herewith, to be recorded in the Official Records of
    Santa Clara County, California (collectively, together with this
    Modification, the "Modification Documents").
    
            The Modification Documents are entered into with
    reference to (i) Trustor's assumption of, and amendment and
    restatement of, that certain Amended and Restated Promissory Note
    dated as of May 9, 1997 executed by Trustor in the original principal
    amount of Eight Million Nine Hundred Thirteen Thousand Seven Hundred
    Thirty and 85/100 Dollars ($8,913,730.85), payable to Beneficiary or
    its order, and all modifications, renewals or extensions thereof (the
    "Nevada Note"), (ii) the indebtedness of Trustor evidenced by that
    certain Amended and Restated Promissory Note dated as of May 24, 1996,
    made by Trustor to the order of Beneficiary in the face principal
    amount of $25,000,000 (the "Multistate Note"), and (iii) the
    indebtedness of Trustor evidenced by that certain Promissory Note
    dated as of even date herewith executed by Trustor in the original
    principal amount of Twenty Million Nine Hundred Thousand Dollars
    ($20,900,000), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Arizona/California
    Note," and together with the Multistate Note and the Nevada Note,
    collectively, the "Note").  Capitalized terms used and not otherwise
    defined herein have the meanings set forth for them in the Deed of
    Trust.
    
            In consideration of the foregoing, and for other
    valuable consideration, the receipt and sufficiency of which are
    hereby acknowledged, Trustor and Beneficiary hereby agree as follows:
    
          I.  Modification of Deed of Trust.  The Deed of Trust is hereby
    modified as follows:
    
            A.       The definitions of Allocable Loan Amount,
    Combined Deeds of Trust, Combined Properties, Loan Documents, Milpitas
    Deed of Trust, Note, Ontario Deed of Trust, Remediation and
    Indemnification Agreements, Tustin Deed of Trust, and Woodlands Deed
    of Trust, as set forth in Article 1 of the Deed of Trust are hereby
    deleted in their entirety, and the following new definitions are
    inserted in their place, in the appropriate alphabetical order:
    
          Allocable Loan Amount:  (i) For the property
          encumbered by the Ontario Deed of Trust, $8,000,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 8,000,000, and the denominator
          of which is 25,000,000; (ii) for the property
          encumbered by the Tustin Deed of Trust, $7,000,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is $7,000,000, and the denominator
          of which is 25,000,000; (iii) for the property
          encumbered by the Woodlands Deed of Trust, $5,200,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 5,200,000, and the denominator
          of which is 25,000,000; (iv) for the property
          encumbered by the Milpitas Deed of Trust, $4,800,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 4,800,000, and the denominator
          of which is 25,000,000; (v) for the property
          encumbered by this Deed of Trust, $8,913,730.85 less
          all payments of principal made under the Nevada Note;
          (vi) for the property encumbered by the Arizona Deed
          of Trust, $7,200,000 less the product of (x) all
          payments of principal made under the
          Arizona/California Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 7,200,000, and the denominator
          of which is 20,900,000; (vii) for the properties
          encumbered by the South San Francisco Deed of Trust,
          $6,500,000 less the product of (x) all payments of
          principal made under the Arizona/California Note
          (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 6,500,000, and the denominator of which is
          20,900,000; and (viii) for the property encumbered by
          the Fremont Deed of Trust, $7,200,000 less the product
          of (x) all payments of principal made under the
          Arizona/California Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 7,200,000, and the denominator
          of which is 20,900,000.
    
          Combined Deeds of Trust:  Collectively, this Deed of
          Trust, the Woodlands Deed of Trust, the Ontario Deed
          of Trust, the Milpitas Deed of Trust, the Tustin Deed
          of Trust, the Arizona Deed of Trust, the South San
          Francisco Deed of Trust, and the Fremont Deed of
          Trust.
    
          Combined Properties:  Collectively, the Property, the
          property encumbered by the Woodlands Deed of Trust,
          the property encumbered by the Ontario Deed of Trust,
          the property encumbered by the Milpitas Deed of Trust,
          the property encumbered by the Tustin Deed of Trust,
          the property encumbered by the Arizona Deed of Trust,
          the properties encumbered by the South San Francisco
          Deed of Trust and the property encumbered by the
          Fremont Deed of Trust.
    
          Loan Documents:  The Note, the Application, that
          certain Note Assignment and Assumption Agreement dated
          as of May 9, 1997 relating to the Nevada Note, this
          Deed of Trust, the Woodlands Deed of Trust, the
          Ontario Deed of Trust, the Tustin Deed of Trust, the
          Milpitas Deed of Trust, the Arizona Deed of Trust, the
          South San Francisco Deed of Trust, the Fremont Deed of
          Trust, each of the Assignments of Agreements, each of
          the Assignments of Lessor's Interest in Leases and all
          other documents, with the exception of the Remediation
          and Indemnification Agreements, evidencing, securing
          or relating to the Loan, the payment of the
          Indebtedness or the performance of the Obligations.
    
          Milpitas Deed of Trust:  That certain Deed of Trust
          dated as of May 24, 1996, executed by Trustor for the
          benefit of Beneficiary, recorded in the Official
          Records of Santa Clara County, California, as amended
          by that certain First Modification of Deed of Trust
          and Other Loan Documents dated as of May 9, 1997, as
          amended by that certain Second Modification of Deed of
          Trust and Other Loan Documents dated as of January 30,
          1998, as further amended from time to time.
    
          Note:  Collectively (i) that certain Amended and
          Restated Promissory Note dated May 24, 1996 (and
          deemed made as of, and relating back to, March 20,
          1996), executed by Trustor in the original principal
          amount of Twenty-Five Million and No/100 Dollars
          ($25,000,000.00), payable to Beneficiary or its order,
          and all modifications, renewals or extensions thereof
          (the "Multistate Note"), (ii) that certain Amended and
          Restated Promissory Note dated as of May 9, 1997
          executed by Trustor in the original principal amount
          of Eight Million Nine Hundred Thirteen Thousand Seven
          Hundred Thirty and 85/100 Dollars ($8,913,730.85),
          payable to Beneficiary or its order, and all
          modifications, renewals or extensions thereof (the
          "Nevada Note"), and (iii) that certain Promissory Note
          dated as of January 30, 1998 executed by Trustor in
          the original principal amount of Twenty Million Nine
          Hundred Thousand Dollars ($20,900,000) payable to
          Beneficiary or its order, and all modifications,
          renewals or extensions thereof (the
          "Arizona/California Note").
    
          Ontario Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of San Bernardino County, California, as
          amended by that certain First Modification of Deed of
          Trust and Other Loan Documents dated as of May 24,
          1996, as amended by that certain Second Modification
          of Deed of Trust and Other Loan Documents dated as of
          May 9, 1997, as amended by that certain Third
          Modification of Deed of Trust and Other Loan Documents
          dated as of January   , 1998, as further amended from
          time to time.
    
          Remediation and Indemnification Agreements: 
          Collectively, (i) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of May 9, 1997,
          executed by Trustor in favor of Beneficiary in
          connection with the Property, (ii) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of March 20, 1996, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Woodlands Deed of Trust, (iii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of March 20, 1996, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the Ontario Deed of Trust,
          (iv) the Hazardous Substances Remediation and
          Indemnification Agreement dated as of March 20, 1996,
          executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Tustin
          Deed of Trust, (v) the Hazardous Substances
          Remediation and Indemnification Agreement dated as of
          May 24, 1996, executed by Trustor in favor of
          Beneficiary in connection with the property encumbered
          by the Milpitas Deed of Trust, (vi) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of January 30, 1998, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Arizona Deed of Trust, (vii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of January 30, 1998, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the South San Francisco Deed of
          Trust, and (viii) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of January 30,
          1998, executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Fremont
          Deed of Trust.
    
          Tustin Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Orange County, California, as amended by
          that certain First Modification of Deed of Trust and
          Other Loan Documents dated as of May 24, 1996, as
          amended by that certain Second Modification of Deed of
          Trust and Other Loan Documents dated as of May 9,
          1997, as amended by that certain Third Modification of
          Deed of Trust and Other Loan Documents dated as of
          January 30, 1998, as further amended from time to
          time.
    
          Woodlands Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Salt Lake County, Utah, as amended by that
          certain First Modification of Deed of Trust and Other
          Loan Documents dated as of May 24, 1996, as amended by
          that certain Second Modification of Deed of Trust and
          Other Loan Documents dated as of May 9, 1997, as
          amended by that certain Third Modification of Deed of
          Trust and Other Loan Documents dated as of January 30,
          1998, as further amended from time to time.
    
            B.       The following new definitions of Arizona
    Deed of Trust, Fremont Deed of Trust and South San Francisco Deed of
    Trust are hereby added to Article 1 of the Deed of Trust, in
    alphabetical order:
    
          Arizona Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Maricopa County, Arizona, as amended from
          time to time.
    
          Fremont Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Alameda County, California, as amended from
          time to time.
          
          South San Francisco Deed of Trust:  That certain Deed
          of Trust dated as of January 30, 1998, executed by
          Trustor for the benefit of Beneficiary, recorded in
          the Official Records of San Mateo County, California
          as amended from time to time.
    
            C.       Paragraph 6.1.A(8) of the Deed of Trust is
    hereby deleted in its entirety and the following new paragraph is
    hereby inserted in its place:
    
                     (8)         An "Event of Default" occurs
          under any one or more of the Tustin Deed of Trust, the
          Woodlands Deed of Trust, the Milpitas Deed of Trust,
          the Ontario Deed of Trust, the Arizona Deed of Trust,
          the South San Francisco Deed of Trust and/or the
          Fremont Deed of Trust.
    
            D.       Paragraph 9.36 of the Deed of Trust is
    hereby deleted in its entirety and the following new Paragraph 9.36 is
    hereby inserted in its place:
    
    
              9.36  Partial Release.  Beneficiary agrees to
          release, at any time after May 31, 1998, the Property
          from the lien of this Deed of Trust upon the satisfac-
          
          tion of the following conditions at the time of
          reconveyance:
    
                  (1)  No Event of Default shall have occurred
              and no event which, with the passage of time or
              the giving on notice, or both, would constitute an
              Event of Default shall have occurred either at the
              time of Beneficiary's receipt of the Trustor's
              written request for a reconveyance or as of the
              date of such reconveyance;
    
                  (2)  Not more than a total of three (3) of
              the Combined Deeds of Trust (including, without
              limitation, this Deed of Trust) shall have been
              previously reconveyed or shall be reconveyed
              hereby or concurrently herewith (and in no event
              shall Trustor be entitled to more than three (3)
              total releases of any or all of the Combined
              Properties hereunder and/or under the Combined
              Deeds of Trust);
    
                  (3)  Trustor shall pay to Beneficiary, prior
              to or concurrently with the reconveyance of this
              Deed of Trust, the Allocable Loan Amount for the
              Property along with the prepayment premium
              allocable to such Allocable Loan Amount as
              determined pursuant to the applicable Note;
    
                  (4)  Beneficiary shall have been provided
              satisfactory evidence that the reconveyance of
              this Deed of Trust does not violate the provisions
              of any declaration of covenants, conditions and
              restrictions, reciprocal easement agreement, Lease
              or other agreement affecting the Property or any
              portion thereof;
    
                  (5)  The Remaining Properties shall have: 
              (i) after the first reconveyance, both a Combined
              Debt Service Coverage and a Future Combined Debt
              Service Coverage of not less than 1.80 and a
              Combined Loan to Value Ratio of not more than 65%,
              (ii) after the second reconveyance, both a
              Combined Debt Service Coverage and a Future
              Combined Debt Service Coverage of not less than
              1.90 and a Combined Loan to Value Ratio of not
              more than 60%, and (iii) after the third and final
              reconveyance both a Combined Debt Service Coverage
              and a Future Combined Debt Service Coverage of not
              less than 2.00 and a Combined Loan to Value Ratio
              of not more than 55%;
    
                  (6)  Each of the individual Remaining
              Properties shall have both an Individual Debt
              Service Coverage and a Future Individual Debt
              Service Coverage of not less than 1.00 and an
              Individual Loan to Value Ratio of not more than
              75%;
    
                  (7)  Beneficiary shall have received a
              commitment that the title company insuring the
              liens of the Woodlands Deed of Trust, the Tustin
              Deed of Trust, the Milpitas Deed of Trust, the
              Ontario Deed of Trust, the Arizona Deed of Trust,
              the South San Francisco Deed of Trust, and the
              Fremont Deed of Trust will issue such title
              endorsements as Beneficiary deems necessary or
              desirable for attachment to the applicable title
              policies, including without limitation, CLTA
              Endorsement Nos. 110.5, 111, and 111.1;
    
                  (8)  Trustor shall pay to Beneficiary all
              escrow, closing and recording costs, the cost of
              preparing and delivering any reconveyance
              documentation, including legal fees and costs, the
              cost of any title insurance endorsements that
              Beneficiary may require, recording fees, any sums
              then due and payable under the Loan Documents and
              a non-refundable $25,000 processing fee, which fee
              shall be paid at the time of notice of the
              requested reconveyance;
    
                  (9)  Trustor shall have provided Beneficiary
              with forty-five (45) days prior written notice of
              the requested reconveyance; and
    
                  (10) Such other terms and conditions as
              Beneficiary shall reasonably require.
    
                  Notwithstanding the foregoing, in the event
          that the Debt Service Coverage and the Loan to Value
          Ratio tests set forth in Paragraphs 9.36(5) and
          9.36(6), above, cannot be satisfied because of the
          value of, or the net cash flow from, the applicable
          Combined Properties, Trustor may, at its option,
          satisfy such tests by making a principal prepayment
          (the "Excess Principal Payment") on the Loan in an
          amount sufficient to satisfy such tests so long as
          Trustor also pays to Beneficiary any prepayment
          premium relating to such principal prepayment, as
          determined by the applicable Note.  Upon receipt of
          the Excess Principal Payment, Beneficiary shall apply
          such amount to reduce the outstanding Loan and may
          apply such amount to any one or more of the Multistate
          Note, the Nevada Note and/or the Arizona/California
          Note (in such order or priority as to satisfy such
          tests, as determined by Beneficiary), and shall
          allocate the Excess Principal Payment to the
          applicable Allocable Loan Amount in proportion to each
          such Allocable Loan Amount's share of the outstanding
          principal balance of the Note to which such amount is
          applied, and, the monthly payments due under such
          applicable Note shall be adjusted, as of the date of
          the release of this Deed of Trust pursuant to this
          Paragraph 9.36, to reflect the Excess Principal
          Payment applied to such applicable Note, such
          adjustment to be based on the applicable interest rate
          under such Note and an amortization schedule equal to
          300 months minus the number of months that have
          elapsed since May 31, 1998.
    
          E.  Paragraph 9.37 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.37 is hereby
    inserted in its place:
    
              9.37     Limitation on Personal Liabilities. 
    Trustor's liability (i) under the Multistate Note is subject to the
    terms and conditions set forth in Paragraph 19 of the Multistate Note;
    (ii) under the Nevada Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
    
          F.  The Deed of Trust is hereby modified to provide
    that it secures, in addition to all other obligations now or hereafter
    secured thereby, a. Trustor's obligations to Beneficiary under the
    Multistate Note, the Nevada Note, the Arizona/California Note and all
    other Loan Documents, as supplemented and/or otherwise modified by
    this Modification, and b. Trustor's obligations to Beneficiary under
    the (i) the Arizona Deed of Trust, (ii) the South San Francisco Deed
    of Trust, (iii) the Fremont Deed of Trust, and (iv) the Modification
    Documents.
    
          II.  Modification of Multistate Note.  The Multistate
    Note is hereby amended so that (i) the term "Deeds of Trust" as used
    therein includes the Arizona Deed of Trust, the South San Francisco
    Deed of Trust and the Fremont Deed of Trust (as defined in Paragraph
    1.2 of this Modification) as well as the balance of the Deeds of Trust
    provided therein, as modified by the Modification Documents, (ii) the
    term "Remediation and Indemnification Agreements" as used therein
    shall have the meaning ascribed thereto in the Deeds of Trust (as
    modified by the Modification Documents).
    
          III.  Modification of Assignment.  The Assignment is
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, and (ii) the term "Deed of Trust" as used
    therein shall mean the Deed of Trust as modified by this Modification. 
    
          IV.  Modification of Other Documents.  The other Loan
    Documents and the Remediation and Indemnification Agreement executed
    by Trustor in favor of Beneficiary in connection with the Property are
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, the term "Deed of Trust" as used therein
    shall mean the Deed of Trust as modified by this Modification. 
    
          V.  No Other Modification.  Except as expressly
    modified hereby, the Note, the Deed of Trust, and other Loan Documents
    remain unmodified and in full force and effect.
    
          VI.  Miscellaneous.  This Modification shall bind, and
    shall inure to the benefit of, the successors and assigns of the
    parties.  This document may be executed in counterparts with the same
    force and effect as if the parties had executed one instrument, and
    each such counterpart shall constitute an original hereof.  This
    Modification shall be governed by the laws of the State of Nevada
    (without regard to any choice of law provisions thereof).
      <PAGE>
  
              IN WITNESS WHEREOF, Trustor and Beneficiary have
    caused this Modification to be duly executed as of the date first
    written above.
    
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/ Scott R. Whitney      
    
              Scott R. Whitney, Senior Vice President
              [Printed Name and Title]
    
    
    "BENEFICIARY":
    
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
    
    
    By:   /s/ Michael B. Jameson
              Michael B. Jameson     
              Vice President
    
    
    [11128.AGRE]I3394
    
    
    
      <PAGE>
  State of California       )
                         )
    County of  Contra Costa             )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca, Notary Public,
    personally appeared   Scott R. Whitney, Sr. V. P.,
    
     X  personally known to me or ____ proved to me on the basis of
    satisfactory evidence to be the person(s) whose name(s) is/are
    subscribed to the within instrument and acknowledged to me that
    he/she/they executed the same in his/her/their authorized
    capacity(ies), and that by his/her/their signature(s) on the
    instrument the person(s), or the entity upon behalf of which the
    person(s) acted, executed the instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                    /s/ Rebecca L. Ingraca
      <PAGE>
  State of California       )
                         )
    County of                 )
    
    
    
    On _________, 1998, before me, ________________, Notary Public,
    personally appeared ___________________________________,
    
    ____ personally known to me or ____ proved to me on the basis of
    satisfactory evidence to be the person(s) whose name(s) is/are
    subscribed to the within instrument and acknowledged to me that
    he/she/they executed the same in his/her/their authorized
    capacity(ies), and that by his/her/their signature(s) on the
    instrument the person(s), or the entity upon behalf of which the
    person(s) acted, executed the instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                    _______________________________
    
    
    
    
    
    
    
    
    
    
      <PAGE>
   RECORDING REQUESTED BY, AND
     WHEN RECORDED RETURN TO:
    
     Steefel, Levitt & Weiss
     One Embarcadero Center, 30th Floor
     San Francisco, California  94111
    
      Attention:  James F. Eastman, Esq.
    
    
    
    
    
    _____________________________________________________________________
    
    
                  SECOND MODIFICATION OF DEED OF TRUST
                          AND OTHER DOCUMENTS
                         (Milpitas Town Center)
    
    
            This Second Modification of Deed of Trust and Other
    Documents, dated as of January 30, 1998 (this "Modification"), is made
    by and between BEDFORD PROPERTY INVESTORS, INC., a Maryland
    corporation ("Trustor"), and THE PRUDENTIAL INSURANCE COMPANY OF
    AMERICA, a New Jersey corporation ("Beneficiary"), as a second
    modification to that certain Deed of Trust, Security Agreement and
    Fixture Filing with Assignment of Leases, Rents and Agreements dated
    as of May 24, 1996, executed by Trustor for the benefit of Beneficiary
    and recorded on May 31, 1996 as Instrument No. 13312305 in the
    Official Records of Santa Clara County, California, as modified by
    that certain First Modification of Deed of Trust and Other Documents
    (the "First Modification") dated as of May 9, 1997 and recorded on May
    9, 1997 as Instrument No. 13702775 in the Official Records of Santa
    Clara County, California (collectively, the "Deed of Trust") and the
    other documents described herein.  The Deed of Trust secures certain
    obligations of Trustor more particularly described therein and
    encumbers the real property described in Exhibit A attached hereto.
    
            Reference is also made to that certain Assignment of
    Lessor's Interest in Leases dated as of May 24, 1996, executed by
    Trustor in favor of Beneficiary and recorded on May 31, 1996 as
    Instrument No. 13312306 in the Official Records of Santa Clara County,
    California, as modified by the First Modification (collectively, the
    "Assignment").
    
            This Modification is entered into in conjunction
    with that certain Third Modification of Deed of Trust and Other
    Documents (The Woodlands Business Park) of even date herewith, to be
    recorded in the Official Records of Salt Lake County, Utah, that
    certain Third Modification of Deed of Trust and Other Documents
    (Tustin Business Park) of even date herewith, to be recorded in the
    Official Records of Orange County, California, that certain Third
    Modification of Deed of Trust and Other Documents (Dupont Industrial
    Center, Ontario) of even date herewith, to be recorded in the Official
    Records of San Bernardino County, California, and that certain First
    Modification of Deed of Trust and Other Documents (Nevada) of even
    date herewith, to be recorded in the Official Records of Washoe
    County, Nevada (collectively, together with this Modification, the
    "Modification Documents").
    
            The Modification Documents are entered into with
    reference to (i) Trustor's assumption of, and amendment and
    restatement of, that certain Amended and Restated Promissory Note
    dated as of May 9, 1997 executed by Trustor in the original principal
    amount of Eight Million Nine Hundred Thirteen Thousand Seven Hundred
    Thirty and 85/100 Dollars ($8,913,730.85), payable to Beneficiary or
    its order, and all modifications, renewals or extensions thereof (the
    "Nevada Note"), (ii) the indebtedness of Trustor evidenced by that
    certain Amended and Restated Promissory Note dated as of May 24, 1996,
    made by Trustor to the order of Beneficiary in the face principal
    amount of $25,000,000 (the "Multistate Note"), and (iii) the
    indebtedness of Trustor evidenced by that certain Promissory Note
    dated as of even date herewith executed by Trustor in the original
    principal amount of Twenty Million Nine Hundred Thousand Dollars
    ($20,900,000), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Arizona/California
    Note," and together with the Multistate Note and the Nevada Note,
    collectively, the "Note").  Capitalized terms used and not otherwise
    defined herein have the meanings set forth for them in the Deed of
    Trust.
    
            In consideration of the foregoing, and for other
    valuable consideration, the receipt and sufficiency of which are
    hereby acknowledged, Trustor and Beneficiary hereby agree as follows:
    
          I.  Modification of Deed of Trust.  The Deed of Trust is hereby
    modified as follows:
    
            A.       The definitions of Allocable Loan Amount,
    Combined Deeds of Trust, Combined Properties, Loan Documents, Nevada
    Deed of Trust, Note, Ontario Deed of Trust, Remediation and
    Indemnification Agreements, Tustin Deed of Trust, and Woodlands Deed
    of Trust, as set forth in Article 1 of the Deed of Trust are hereby
    deleted in their entirety, and the following new definitions are
    inserted in their place, in the appropriate alphabetical order:
    
          Allocable Loan Amount:  (i) For the property
          encumbered by the Ontario Deed of Trust, $8,000,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 8,000,000, and the denominator
          of which is 25,000,000; (ii) for the property
          encumbered by the Tustin Deed of Trust, $7,000,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is $7,000,000, and the denominator
          of which is 25,000,000; (iii) for the property
          encumbered by the Woodlands Deed of Trust, $5,200,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 5,200,000, and the denominator
          of which is 25,000,000; (iv) for the property
          encumbered by the this Deed of Trust, $4,800,000 less
          the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 4,800,000, and the denominator
          of which is 25,000,000; (v) for the property
          encumbered by the Nevada Deed of Trust, $8,913,730.85
          less all payments of principal made under the Nevada
          Note; (vi) for the property encumbered by the Arizona
          Deed of Trust, $7,200,000 less the product of (x) all
          payments of principal made under the
          Arizona/California Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 7,200,000, and the denominator
          of which is 20,900,000; (vii) for the properties
          encumbered by the South San Francisco Deed of Trust,
          $6,500,000 less the product of (x) all payments of
          principal made under the Arizona/California Note
          (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 6,500,000, and the denominator of which is
          20,900,000; and (viii) for the property encumbered by
          the Fremont Deed of Trust, $7,200,000 less the product
          of (x) all payments of principal made under the
          Arizona/California Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 7,200,000, and the denominator
          of which is 20,900,000.
    
          Combined Deeds of Trust:  Collectively, this Deed of
          Trust, the Woodlands Deed of Trust, the Ontario Deed
          of Trust, the Nevada Deed of Trust, the Tustin Deed of
          Trust, the Arizona Deed of Trust, the South San
          Francisco Deed of Trust, and the Fremont Deed of
          Trust.
    
          Combined Properties:  Collectively, the Property, the
          property encumbered by the Woodlands Deed of Trust,
          the property encumbered by the Ontario Deed of Trust,
          the property encumbered by the Nevada Deed of Trust,
          the property encumbered by the Tustin Deed of Trust,
          the property encumbered by the Arizona Deed of Trust,
          the properties encumbered by the South San Francisco
          Deed of Trust and the property encumbered by the
          Fremont Deed of Trust.
    
          Loan Documents:  The Note, the Application, that
          certain Note Assignment and Assumption Agreement dated
          as of May 9, 1997 relating to the Nevada Note, this
          Deed of Trust, the Woodlands Deed of Trust, the
          Ontario Deed of Trust, the Tustin Deed of Trust, the
          Nevada Deed of Trust, the Arizona Deed of Trust, the
          South San Francisco Deed of Trust, the Fremont Deed of
          Trust, each of the Assignments of Agreements, each of
          the Assignments of Lessor's Interest in Leases and all
          other documents, with the exception of the Remediation
          and Indemnification Agreements, evidencing, securing
          or relating to the Loan, the payment of the
          Indebtedness or the performance of the Obligations.
    
          Nevada Deed of Trust:  That certain Deed of Trust
          dated as of May 9, 1997, executed by Trustor for the
          benefit of Beneficiary, recorded in the Official
          Records of Washoe County, Nevada, as amended by that
          certain First Modification of Deed of Trust and Other
          Loan Documents dated as of January 30, 1998, as
          further amended from time to time.
    
          Note:  Collectively (i) that certain Amended and
          Restated Promissory Note dated May 24, 1996 (and
          deemed made as of, and relating back to, March 20,
          1996), executed by Trustor in the original principal
          amount of Twenty-Five Million and No/100 Dollars
          ($25,000,000.00), payable to Beneficiary or its order,
          and all modifications, renewals or extensions thereof
          (the "Multistate Note"), (ii) that certain Amended and
          Restated Promissory Note dated as of May 9, 1997
          executed by Trustor in the original principal amount
          of Eight Million Nine Hundred Thirteen Thousand Seven
          Hundred Thirty and 85/100 Dollars ($8,913,730.85),
          payable to Beneficiary or its order, and all
          modifications, renewals or extensions thereof (the
          "Nevada Note"), and (iii) that certain Promissory Note
          dated as of January 30, 1998 executed by Trustor in
          the original principal amount of Twenty Million Nine
          Hundred Thousand Dollars ($20,900,000) payable to
          Beneficiary or its order, and all modifications,
          renewals or extensions thereof (the
          "Arizona/California Note").
    
          Ontario Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of San Bernardino County, California, as
          amended by that certain First Modification of Deed of
          Trust and Other Loan Documents dated as of May 24,
          1996, as amended by that certain Second Modification
          of Deed of Trust and Other Loan Documents dated as of
          May 9, 1997, as amended by that certain Third
          Modification of Deed of Trust and Other Loan Documents
          dated as of January 30, 1998, as further amended from
          time to time.
    
          Remediation and Indemnification Agreements: 
          Collectively, (i) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of May 24,
          1996, executed by Trustor in favor of Beneficiary in
          connection with the Property, (ii) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of March 20, 1996, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Woodlands Deed of Trust, (iii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of March 20, 1996, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the Ontario Deed of Trust,
          (iv) the Hazardous Substances Remediation and
          Indemnification Agreement dated as of March 20, 1996,
          executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Tustin
          Deed of Trust, (v) the Hazardous Substances
          Remediation and Indemnification Agreement dated as of
          May 9, 1997, executed by Trustor in favor of
          Beneficiary in connection with the property encumbered
          by the Nevada Deed of Trust, (vi) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of January 30, 1998, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Arizona Deed of Trust, (vii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of January 30, 1998, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the South San Francisco Deed of
          Trust, and (viii) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of January 30,
          1998, executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Fremont
          Deed of Trust.
    
          Tustin Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Orange County, California, as amended by
          that certain First Modification of Deed of Trust and
          Other Loan Documents dated as of May 24, 1996, as
          amended by that certain Second Modification of Deed of
          Trust and Other Loan Documents dated as of May 9,
          1997, as amended by that certain Third Modification of
          Deed of Trust and Other Loan Documents dated as of
          January 30, 1998, as further amended from time to
          time.
    
          Woodlands Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Salt Lake County, Utah, as amended by that
          certain First Modification of Deed of Trust and Other
          Loan Documents dated as of May 24, 1996, as amended by
          that certain Second Modification of Deed of Trust and
          Other Loan Documents dated as of May 9, 1997, as
          amended by that certain Third Modification of Deed of
          Trust and Other Loan Documents dated as of January 30,
          1998, as further amended from time to time.
    
            B.       The following new definitions of Arizona
    Deed of Trust, Fremont Deed of Trust and South San Francisco Deed of
    Trust are hereby added to Article 1 of the Deed of Trust, in
    alphabetical order:
    
          Arizona Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Maricopa County, Arizona, as amended from
          time to time.
    
          Fremont Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Alameda County, California, as amended from
          time to time.
          
          South San Francisco Deed of Trust:  That certain Deed
          of Trust dated as of January 30, 1998, executed by
          Trustor for the benefit of Beneficiary, recorded in
          the Official Records of San Mateo County, California
          as amended from time to time.
    
            C.       Paragraph 6.1.A(8) of the Deed of Trust is
    hereby deleted in its entirety and the following new paragraph is
    hereby inserted in its place:
    
                     (8)         An "Event of Default" occurs
          under any one or more of the Tustin Deed of Trust, the
          Woodlands Deed of Trust, the Nevada Deed of Trust, the
          Ontario Deed of Trust, the Arizona Deed of Trust, the
          South San Francisco Deed of Trust and/or the Fremont
          Deed of Trust.
    
            D.       Paragraph 9.36 of the Deed of Trust is
    hereby deleted in its entirety and the following new Paragraph 9.36 is
    hereby inserted in its place:
    
    
              9.36  Partial Release.  Beneficiary agrees to
          release, at any time after May 31, 1998, the Property
          from the lien of this Deed of Trust upon the satisfac-
          
          tion of the following conditions at the time of
          reconveyance:
    
                  (1)  No Event of Default shall have occurred
              and no event which, with the passage of time or
              the giving on notice, or both, would constitute an
              Event of Default shall have occurred either at the
              time of Beneficiary's receipt of the Trustor's
              written request for a reconveyance or as of the
              date of such reconveyance;
    
                  (2)  Not more than a total of three (3) of
              the Combined Deeds of Trust (including, without
              limitation, this Deed of Trust) shall have been
              previously reconveyed or shall be reconveyed
              hereby or concurrently herewith (and in no event
              shall Trustor be entitled to more than three (3)
              total releases of any or all of the Combined
              Properties hereunder and/or under the Combined
              Deeds of Trust);
    
                  (3)  Trustor shall pay to Beneficiary, prior
              to or concurrently with the reconveyance of this
              Deed of Trust, the Allocable Loan Amount for the
              Property along with the prepayment premium
              allocable to such Allocable Loan Amount as
              determined pursuant to the applicable Note;
    
                  (4)  Beneficiary shall have been provided
              satisfactory evidence that the reconveyance of
              this Deed of Trust does not violate the provisions
              of any declaration of covenants, conditions and
              restrictions, reciprocal easement agreement, Lease
              or other agreement affecting the Property or any
              portion thereof;
    
                  (5)  The Remaining Properties shall have: 
              (i) after the first reconveyance, both a Combined
              Debt Service Coverage and a Future Combined Debt
              Service Coverage of not less than 1.80 and a
              Combined Loan to Value Ratio of not more than 65%,
              (ii) after the second reconveyance, both a
              Combined Debt Service Coverage and a Future
              Combined Debt Service Coverage of not less than
              1.90 and a Combined Loan to Value Ratio of not
              more than 60%, and (iii) after the third and final
              reconveyance both a Combined Debt Service Coverage
              and a Future Combined Debt Service Coverage of not
              less than 2.00 and a Combined Loan to Value Ratio
              of not more than 55%;
    
                  (6)  Each of the individual Remaining
              Properties shall have both an Individual Debt
              Service Coverage and a Future Individual Debt
              Service Coverage of not less than 1.00 and an
              Individual Loan to Value Ratio of not more than
              75%;
    
                  (7)  Beneficiary shall have received a
              commitment that the title company insuring the
              liens of the Woodlands Deed of Trust, the Tustin
              Deed of Trust, the Nevada Deed of Trust, the
              Ontario Deed of Trust, the Arizona Deed of Trust,
              the South San Francisco Deed of Trust, and the
              Fremont Deed of Trust will issue such title
              endorsements as Beneficiary deems necessary or
              desirable for attachment to the applicable title
              policies, including without limitation, CLTA
              Endorsement Nos. 110.5, 111, and 111.1;
    
                  (8)  Trustor shall pay to Beneficiary all
              escrow, closing and recording costs, the cost of
              preparing and delivering any reconveyance
              documentation, including legal fees and costs, the
              cost of any title insurance endorsements that
              Beneficiary may require, recording fees, any sums
              then due and payable under the Loan Documents and
              a non-refundable $25,000 processing fee, which fee
              shall be paid at the time of notice of the
              requested reconveyance;
    
                  (9)  Trustor shall have provided Beneficiary
              with forty-five (45) days prior written notice of
              the requested reconveyance; and
    
                  (10) Such other terms and conditions as
              Beneficiary shall reasonably require.
    
                  Notwithstanding the foregoing, in the event
          that the Debt Service Coverage and the Loan to Value
          Ratio tests set forth in Paragraphs 9.36(5) and
          9.36(6), above, cannot be satisfied because of the
          value of, or the net cash flow from, the applicable
          Combined Properties, Trustor may, at its option,
          satisfy such tests by making a principal prepayment
          (the "Excess Principal Payment") on the Loan in an
          amount sufficient to satisfy such tests so long as
          Trustor also pays to Beneficiary any prepayment
          premium relating to such principal prepayment, as
          determined by the applicable Note.  Upon receipt of
          the Excess Principal Payment, Beneficiary shall apply
          such amount to reduce the outstanding Loan and may
          apply such amount to any one or more of the Multistate
          Note, the Nevada Note and/or the Arizona/California
          Note (in such order or priority as to satisfy such
          tests, as determined by Beneficiary), and shall
          allocate the Excess Principal Payment to the
          applicable Allocable Loan Amount in proportion to each
          such Allocable Loan Amount's share of the outstanding
          principal balance of the Note to which such amount is
          applied, and, the monthly payments due under such
          applicable Note shall be adjusted, as of the date of
          the release of this Deed of Trust pursuant to this
          Paragraph 9.36, to reflect the Excess Principal
          Payment applied to such applicable Note, such
          adjustment to be based on the applicable interest rate
          under such Note and an amortization schedule equal to
          300 months minus the number of months that have
          elapsed since May 31, 1998.
    
          E.  Paragraph 9.37 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.37 is hereby
    inserted in its place:
    
              9.37     Limitation on Personal Liabilities. 
    Trustor's liability (i) under the Multistate Note is subject to the
    terms and conditions set forth in Paragraph 19 of the Multistate Note;
    (ii) under the Nevada Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
          
          F.  Paragraph 9.38 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.38 is hereby
    inserted in its place:
    
              9.38  Reconveyance on Full Payment of Multistate
          Note.  In the event that the Indebtedness evidenced by
          the Multistate Note is repaid in full on the Maturity
          Date thereof (as defined in the Multistate Note), and
          provided (i) no Event of Default shall have occurred
          and be continuing under the Nevada Deed of Trust, the
          Arizona Deed of Trust, the South San Francisco Deed of
          Trust or the Fremont Deed of Trust, (ii) the Remaining
          Properties (after the proposed release of the Ontario
          Deed of Trust, this Deed of Trust, the Woodlands Deed
          of Trust and the Tustin Deed of Trust) would have both
          a Combined Debt Service Coverage and a Future Combined
          Debt Service Coverage of not less than 2.00 and a
          Combined Loan to Value Ratio of not more than 55%, and
          (iii) each of the individual Remaining Properties
          (after such release) shall have both an Individual
          Debt Service Coverage and a Future Individual Debt
          Service Coverage of not less than 1.00 and an
          Individual Loan to Value Ratio of not more than 75%;
          provided, however, that if there is only one Remaining
          Property then such Remaining Property would have both
          an Individual Debt Service Coverage and a Future
          Individual Debt Service Coverage of not less than 2.00
          and an Individual Loan to Value Ratio of not more than
          55%, then Beneficiary agrees to release and reconvey
          the Ontario Deed of Trust, this Deed of Trust, the
          Woodlands Deed of Trust and the Tustin Deed of Trust,
          and the Combined Properties (other than the properties
          encumbered by the Nevada Deed of Trust, the Arizona
          Deed of Trust, the South San Francisco Deed of Trust
          or the Fremont Deed of Trust) encumbered thereby shall
          then and thereafter no longer serve as collateral for
          the Nevada Note or the Arizona/California Note.
    
          G.  The Deed of Trust is hereby modified to provide
    that it secures, in addition to all other obligations now or hereafter
    secured thereby, a. Trustor's obligations to Beneficiary under the
    Multistate Note, the Nevada Note, the Arizona/California Note and all
    other Loan Documents, as supplemented and/or otherwise modified by the
    First Modification and this Modification, and b. Trustor's obligations
    to Beneficiary under the (i) Nevada Deed of Trust, (ii) the Arizona
    Deed of Trust, (iii) the South San Francisco Deed of Trust, (iv) the
    Fremont Deed of Trust, and (v) the Modification Documents.
    
          II.  Modification of Multistate Note.  The Multistate
    Note is hereby amended so that (i) the term "Deeds of Trust" as used
    therein includes the Arizona Deed of Trust, the South San Francisco
    Deed of Trust and the Fremont Deed of Trust (as defined in Paragraph
    1.2 of this Modification) as well as the balance of the Deeds of Trust
    provided therein, as modified by the Modification Documents, (ii) the
    term "Remediation and Indemnification Agreements" as used therein
    shall have the meaning ascribed thereto in the Deeds of Trust (as
    modified by the Modification Documents).
    
          III.  Modification of Assignment.  The Assignment is
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, and (ii) the term "Deed of Trust" as used
    therein shall mean the Deed of Trust as modified by the First
    Modification and this Modification. 
    
          IV.  Modification of Other Documents.  The other Loan
    Documents and the Remediation and Indemnification Agreement executed
    by Trustor in favor of Beneficiary in connection with the Property are
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, the term "Deed of Trust" as used therein
    shall mean the Deed of Trust as modified by the First Modification and
    this Modification. 
    
          V.  No Other Modification.  Except as expressly
    modified hereby, the Note, the Deed of Trust, and other Loan Documents
    remain unmodified and in full force and effect.
    
          VI.  Miscellaneous.  This Modification shall bind, and
    shall inure to the benefit of, the successors and assigns of the
    parties.  This document may be executed in counterparts with the same
    force and effect as if the parties had executed one instrument, and
    each such counterpart shall constitute an original hereof.  This
    Modification shall be governed by the laws of the State of California
    (without regard to any choice of law provisions thereof).
      <PAGE>
  
              IN WITNESS WHEREOF, Trustor and Beneficiary have
    caused this Modification to be duly executed as of the date first
    written above.
    
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:    Scott R. Whitney
    
                Scott R. Whitney, Senior Vice President
              [Printed Name and Title]
    
    
    "BENEFICIARY":
    
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
    
    
    By:    /s/ Michael B. Jameson           
                 Michael B. Jameson              
              Vice President
    
    
    [11128.AGRE]I3393
      <PAGE>
  State of California       )
                         )
    County of California)
    
    
    
    On February 2, 1998, before me, Colette M. Pennington, Notary Public,
    personally appeared Scott R. Whitney,
    
    personally known to me or proved to me on the basis of satisfactory
    evidence to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                   /s/Colette M. Pennington
    
      <PAGE>
  State of California  California     )
                         )
    County of  Contra Costa             )
    
    
    
    On February 2, 1998, before me, Colette M. Pennington, Notary Public,
    personally appeared Scott R. Whitney,
    
    personally known to me or proved to me on the basis of satisfactory
    evidence to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                            Colette M. Pennington  
    
    
    
    
    
    
      <PAGE>
   RECORDING REQUESTED BY, AND
     WHEN RECORDED RETURN TO:
    
     Steefel, Levitt & Weiss
     One Embarcadero Center, 30th Floor
     San Francisco, California  94111
    
          Attention:  James F. Eastman, Esq.
    
    
    
    
    
    _____________________________________________________________________
    
    
                  THIRD MODIFICATION OF DEED OF TRUST
                          AND OTHER DOCUMENTS
                     (The Woodlands Business Park)
    
    
            This Third Modification of Deed of Trust and Other
    Documents, dated as of January 30, 1998 (this "Modification"), is made
    by and between BEDFORD PROPERTY INVESTORS, INC., a Maryland
    corporation ("Trustor"), and THE PRUDENTIAL INSURANCE COMPANY OF
    AMERICA, a New Jersey corporation ("Beneficiary"), as a third
    modification to that certain Deed of Trust, Security Agreement and
    Fixture Filing with Assignment of Leases, Rents and Agreements dated
    as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary and recorded on March 27, 1996 as Instrument No. 6313696
    in the Official Records of Salt Lake County, Utah, as modified by that
    certain First Modification of Deed of Trust and Other Documents (the
    "First Modification"), dated as of May 24, 1996 and recorded on
    May 31, 1996 as Instrument No. 6371832 in the Official Records of Salt
    Lake County, Utah, as modified by that certain Second Modification of
    Deed of Trust and Other Documents (the "Second Modification "), dated
    as of May 9, 1997 and recorded on May 9, 1997 as Instrument No.
    6641142 in the Official Records of Salt Lake County, Utah
    (collectively, the "Deed of Trust") and the other documents described
    herein.  The Deed of Trust secures certain obligations of Trustor more
    particularly described therein and encumbers the real property
    described in Exhibit A attached hereto.
    
            Reference is also made to that certain Assignment of
    Lessor's Interest in Leases dated as of March 20, 1996, executed by
    Trustor in favor of Beneficiary and recorded on March 27, 1996 as
    Instrument No. 6313697 in the Official Records of Salt Lake County,
    Utah, as modified by the First Modification and the Second
    Modification (collectively, the "Assignment").
    
            This Modification is entered into in conjunction
    with that certain Third Modification of Deed of Trust and Other
    Documents (Dupont Industrial Center, Ontario) of even date herewith,
    to be recorded in the Official Records of San Bernardino County,
    California, that certain Third Modification of Deed of Trust and Other
    Documents (Tustin Business Park) of even date herewith, to be recorded
    in the Official Records of Orange County, California, that certain
    Second Modification of Deed of Trust and Other Documents (Milpitas
    Business Park) of even date herewith, to be recorded in the Official
    Records of Santa Clara County, California, and that certain First
    Modification of Deed of Trust and Other Documents (Nevada) of even
    date herewith, to be recorded in the Official Records of Washoe
    County, Nevada (collectively, together with this Modification, the
    "Modification Documents").
    
            The Modification Documents are entered into with
    reference to (i) Trustor's assumption of, and amendment and
    restatement of, that certain Amended and Restated Promissory Note
    dated as of May 9, 1997 executed by Trustor in the original principal
    amount of Eight Million Nine Hundred Thirteen Thousand Seven Hundred
    Thirty and 85/100 Dollars ($8,913,730.85), payable to Beneficiary or
    its order, and all modifications, renewals or extensions thereof (the
    "Nevada Note"), (ii) the indebtedness of Trustor evidenced by that
    certain Amended and Restated Promissory Note dated as of May 24, 1996,
    made by Trustor to the order of Beneficiary in the face principal
    amount of $25,000,000 (the "Multistate Note"), and (iii) the
    indebtedness of Trustor evidenced by that certain Promissory Note
    dated as of even date herewith executed by Trustor in the original
    principal amount of Twenty Million Nine Hundred Thousand Dollars
    ($20,900,000), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Arizona/California
    Note," and together with the Multistate Note and the Nevada Note,
    collectively, the "Note"). Capitalized terms used and not otherwise
    defined herein have the meanings set forth for them in the Deed of
    Trust.
    
            In consideration of the foregoing, and for other
    valuable consideration, the receipt and sufficiency of which are
    hereby acknowledged, Trustor and Beneficiary hereby agree as follows:
    
          I.  Modification of Deed of Trust.  The Deed of Trust is hereby
    modified as follows:
    
            A.       The definitions of Allocable Loan Amount,
    Combined Deeds of Trust, Combined Properties, Loan Documents, Milpitas
    Deed of Trust, Nevada Deed of Trust, Note, Ontario Deed of Trust,
    Remediation and Indemnification Agreements, and Tustin Deed of Trust,
    as set forth in Article 1 of the Deed of Trust are hereby deleted in
    their entirety, and the following new definitions are inserted in
    their place, in the appropriate alphabetical order:
    
          Allocable Loan Amount:  (i) For the property
          encumbered by the Ontario Deed of Trust, $8,000,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 8,000,000, and the denominator
          of which is 25,000,000; (ii) for the property
          encumbered by the Tustin Deed of Trust, $7,000,000
          less the product of (x) all payments of principal made
          under the Multistate Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is $7,000,000, and the denominator
          of which is 25,000,000; (iii) for the property
          encumbered by this Deed of Trust, $5,200,000 less the
          product of (x) all payments of principal made under
          the Multistate Note (other than payments made pursuant
          to Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 5,200,000, and the denominator of which is
          25,000,000; (iv) for the property encumbered by the
          Milpitas Deed of Trust, $4,800,000 less the product of
          (x) all payments of principal made under the
          Multistate Note (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 4,800,000, and the denominator of which is
          25,000,000; (v) for the property encumbered by the
          Nevada Deed of Trust, $8,913,730.85 less all payments
          of principal made under the Nevada Note; (vi) for the
          property encumbered by the Arizona Deed of Trust,
          $7,200,000 less the product of (x) all payments of
          principal made under the Arizona/California Note
          (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 7,200,000, and the denominator of which is
          20,900,000; (vii) for the properties encumbered by the
          South San Francisco Deed of Trust, $6,500,000 less the
          product of (x) all payments of principal made under
          the Arizona/California Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 6,500,000, and the denominator
          of which is 20,900,000; and (viii) for the property
          encumbered by the Fremont Deed of Trust, $7,200,000
          less the product of (x) all payments of principal made
          under the Arizona/California Note (other than payments
          made pursuant to Paragraph 9.36(3) of any of the
          Combined Deeds of Trust) multiplied by (y) a fraction,
          the numerator of which is 7,200,000, and the
          denominator of which is 20,900,000. 
    
          Combined Deeds of Trust:  Collectively, this Deed of
          Trust, the Ontario Deed of Trust, the Milpitas Deed of
          Trust, the Nevada Deed of Trust, the Tustin Deed of
          Trust, the Arizona Deed of Trust, the South San
          Francisco Deed of Trust and the Fremont Deed of Trust.
    
          Combined Properties:  Collectively, the Property, the
          property encumbered by the Ontario Deed of Trust, the
          property encumbered by the Milpitas Deed of Trust, the
          property encumbered by the Nevada Deed of Trust, the
          property encumbered by the Tustin Deed of Trust, the
          property encumbered by the Arizona Deed of Trust, the
          properties encumbered by the South San Francisco Deed
          of Trust and the property encumbered by the Fremont
          Deed of Trust.
    
    
          Loan Documents:  The Note, the Application, that
          certain Note Assignment and Assumption Agreement dated
          as of May 9, 1997 relating to the Nevada Note, this
          Deed of Trust, the Ontario Deed of Trust, the Milpitas
          Deed of Trust, the Tustin Deed of Trust, the Nevada
          Deed of Trust, the Arizona Deed of Trust, the South
          San Francisco Deed of Trust, the Fremont Deed of
          Trust, each of the Assignments of Agreements, each of
          the Assignments of Lessor's Interest in Leases and all
          other documents, with the exception of the Remediation
          and Indemnification Agreements, evidencing, securing
          or relating to the Loan, the payment of the
          Indebtedness or the performance of the Obligations.
    
          Milpitas Deed of Trust:  That certain Deed of Trust
          dated as of May 24, 1996, executed by Trustor for the
          benefit of Beneficiary, recorded in the Official
          Records of Santa Clara County, California, as amended
          by that certain First Modification of Deed of Trust
          and Other Loan Documents dated as of May 9, 1997, as
          amended by that certain Second Modification of Deed of
          Trust and Other Loan Documents dated as of January 30,
          1998, as further amended from time to time.
    
          Nevada Deed of Trust:  That certain Deed of Trust
          dated as of May 9, 1997, executed by Trustor for the
          benefit of Beneficiary, recorded in the Official
          Records of Washoe County, Nevada, as amended by that
          certain First Modification of Deed of Trust and Other
          Loan Documents dated as of January 30, 1998, as
          further amended from time to time.
    
          Note:  Collectively (i) that certain Amended and
          Restated Promissory Note dated May 24, 1996 (and
          deemed made as of, and relating back to, March 20,
          1996), executed by Trustor in the original principal
          amount of Twenty-Five Million and No/100 Dollars
          ($25,000,000.00), payable to Beneficiary or its order,
          and all modifications, renewals or extensions thereof
          (the "Multistate Note"), (ii) that certain Amended and
          Restated Promissory Note dated as of May 9, 1997
          executed by Trustor in the original principal amount
          of Eight Million Nine Hundred Thirteen Thousand Seven
          Hundred Thirty and 85/100 Dollars ($8,913,730.85),
          payable to Beneficiary or its order, and all
          modifications, renewals or extensions thereof (the
          "Nevada Note"), and (iii) that certain Promissory Note
          dated as of January 30, 1998 executed by Trustor in
          the original principal amount of Twenty Million Nine
          Hundred Thousand Dollars ($20,900,000) payable to
          Beneficiary or its order, and all modifications,
          renewals or extensions thereof (the
          "Arizona/California Note").
    
          Ontario Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of San Bernardino County, California, as
          amended by that certain First Modification of Deed of
          Trust and Other Loan Documents dated as of May 24,
          1996, as amended by that certain Second Modification
          of Deed of Trust and Other Loan Documents dated as of
          May 9, 1997, as amended by that certain Third
          Modification of Deed of Trust and Other Loan Documents
          dated as of January 30, 1998, as further amended from
          time to time.
    
          Remediation and Indemnification Agreements: 
          Collectively, (i) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of March 20,
          1996, executed by Trustor in favor of Beneficiary in
          connection with the Property, (ii) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of March 20, 1996, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Ontario Deed of Trust, (iii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of May 24, 1996, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the Milpitas Deed of Trust,
          (iv) the Hazardous Substances Remediation and
          Indemnification Agreement dated as of March 20, 1996,
          executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Tustin
          Deed of Trust, (v) the Hazardous Substances
          Remediation and Indemnification Agreement dated as of
          May 9, 1997, executed by Trustor in favor of
          Beneficiary in connection with the property encumbered
          by the Nevada Deed of Trust, (vi) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of January 30, 1998, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Arizona Deed of Trust, (vii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of January 30, 1998, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the South San Francisco Deed of
          Trust, and (viii) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of January 30,
          1998, executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Fremont
          Deed of Trust.
          
          Tustin Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Orange County, California, as amended by
          that certain First Modification of Deed of Trust and
          Other Loan Documents dated as of May 24, 1996, as
          amended by that certain Second Modification of Deed of
          Trust and Other Loan Documents dated as of May 9,
          1997, as amended by that certain Third Modification of
          Deed of Trust and Other Loan Documents dated as of
          January 30, 1998, as further amended from time to
          time.
    
            B.       The following new definitions of Arizona
    Deed of Trust, Fremont Deed of Trust and South San Francisco Deed of
    Trust are hereby added to Article 1 of the Deed of Trust, in
    alphabetical order:
    
          Arizona Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Maricopa County, Arizona, as amended from
          time to time.
    
          Fremont Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Alameda County, California, as amended from
          time to time.
          
          South San Francisco Deed of Trust:  That certain Deed
          of Trust dated as of January 30, 1998, executed by
          Trustor for the benefit of Beneficiary, recorded in
          the Official Records of San Mateo County, California
          as amended from time to time.
          
            C.       Paragraph 6.1.A(8) of the Deed of Trust is
    hereby deleted in its entirety and the following new paragraph is
    hereby inserted in its place:
    
                     (8)         An "Event of Default" occurs
          under any one or more of the Tustin Deed of Trust, the
          Ontario Deed of Trust, the Nevada Deed of Trust, the
          Milpitas Deed of Trust, the Arizona Deed of Trust, the
          South San Francisco Deed of Trust and/or the Fremont
          Deed of Trust.
    
            D.       Paragraph 9.36 of the Deed of Trust is
    hereby deleted in its entirety and the following new Paragraph 9.36 is
    hereby inserted in its place:
    
    
              9.36  Partial Release.  Beneficiary agrees to
          release, at any time after May 31, 1998, the Property
          from the lien of this Deed of Trust upon the satisfac-
          
          tion of the following conditions at the time of
          reconveyance:
    
                  (1)  No Event of Default shall have occurred
              and no event which, with the passage of time or
              the giving on notice, or both, would constitute an
              Event of Default shall have occurred either at the
              time of Beneficiary's receipt of the Trustor's
              written request for a reconveyance or as of the
              date of such reconveyance;
    
                  (2)  Not more than a total of three (3) of
              the Combined Deeds of Trust (including, without
              limitation, this Deed of Trust) shall have been
              previously reconveyed or shall be reconveyed
              hereby or concurrently herewith (and in no event
              shall Trustor be entitled to more than three (3)
              total releases of any or all of the Combined
              Properties hereunder and/or under the Combined
              Deeds of Trust);
    
                  (3)  Trustor shall pay to Beneficiary, prior
              to or concurrently with the reconveyance of this
              Deed of Trust, the Allocable Loan Amount for the
              Property along with the prepayment premium
              allocable to such Allocable Loan Amount as
              determined pursuant to the applicable Note;
    
                  (4)  Beneficiary shall have been provided
              satisfactory evidence that the reconveyance of
              this Deed of Trust does not violate the provisions
              of any declaration of covenants, conditions and
              restrictions, reciprocal easement agreement, Lease
              or other agreement affecting the Property or any
              portion thereof;
    
                  (5)  The Remaining Properties shall have: 
              (i) after the first reconveyance, both a Combined
              Debt Service Coverage and a Future Combined Debt
              Service Coverage of not less than 1.80 and a
              Combined Loan to Value Ratio of not more than 65%,
              (ii) after the second reconveyance, both a
              Combined Debt Service Coverage and a Future
              Combined Debt Service Coverage of not less than
              1.90 and a Combined Loan to Value Ratio of not
              more than 60%, and (iii) after the third and final
              reconveyance both a Combined Debt Service Coverage
              and a Future Combined Debt Service Coverage of not
              less than 2.00 and a Combined Loan to Value Ratio
              of not more than 55%;
    
                  (6)  Each of the individual Remaining
              Properties shall have both an Individual Debt
              Service Coverage and a Future Individual Debt
              Service Coverage of not less than 1.00 and an
              Individual Loan to Value Ratio of not more than
              75%;
    
                  (7)  Beneficiary shall have received a
              commitment that the title company insuring the
              liens of the Ontario Deed of Trust, the Tustin
              Deed of Trust, the Nevada Deed of Trust, the
              Milpitas Deed of Trust, the Arizona Deed of Trust,
              the South San Francisco Deed of Trust, and the
              Fremont Deed of Trust will issue such title
              endorsements as Beneficiary deems necessary or
              desirable for attachment to the applicable title
              policies, including without limitation, CLTA
              Endorsement Nos. 110.5, 111, and 111.1;
    
                  (8)  Trustor shall pay to Beneficiary all
              escrow, closing and recording costs, the cost of
              preparing and delivering any reconveyance
              documentation, including legal fees and costs, the
              cost of any title insurance endorsements that
              Beneficiary may require, recording fees, any sums
              then due and payable under the Loan Documents and
              a non-refundable $25,000 processing fee, which fee
              shall be paid at the time of notice of the
              requested reconveyance;
    
                  (9)  Trustor shall have provided Beneficiary
              with forty-five (45) days prior written notice of
              the requested reconveyance; and
    
                  (10) Such other terms and conditions as
              Beneficiary shall reasonably require.
    
                  Notwithstanding the foregoing, in the event
          that the Debt Service Coverage and the Loan to Value
          Ratio tests set forth in Paragraphs 9.36(5) and
          9.36(6), above, cannot be satisfied because of the
          value of, or the net cash flow from, the applicable
          Combined Properties, Trustor may, at its option,
          satisfy such tests by making a principal prepayment
          (the "Excess Principal Payment") on the Loan in an
          amount sufficient to satisfy such tests so long as
          Trustor also pays to Beneficiary any prepayment
          premium relating to such principal prepayment, as
          determined by the applicable Note.  Upon receipt of
          the Excess Principal Payment, Beneficiary shall apply
          such amount to reduce the outstanding Loan and may
          apply such amount to any one or more of the Multistate
          Note, the Nevada Note and/or the Arizona/California
          Note (in such order or priority as to satisfy such
          tests, as determined by Beneficiary), and shall
          allocate the Excess Principal Payment to the
          applicable Allocable Loan Amount in proportion to each
          such Allocable Loan Amount's share of the outstanding
          principal balance of the Note to which such amount is
          applied, and, the monthly payments due under such
          applicable Note shall be adjusted, as of the date of
          the release of this Deed of Trust pursuant to this
          Paragraph 9.36, to reflect the Excess Principal
          Payment applied to such applicable Note, such
          adjustment to be based on the applicable interest rate
          under such Note and an amortization schedule equal to
          300 months minus the number of months that have
          elapsed since May 31, 1998.
    
              E.  Paragraph 9.37 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.37 is hereby
    inserted in its place:
    
              9.37     Limitation on Personal Liabilities. 
    Trustor's liability (i) under the Multistate Note is subject to the
    terms and conditions set forth in Paragraph 19 of the Multistate Note;
    (ii) under the Nevada Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
                                         
              F.  Paragraph 9.38 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.38 is hereby
    inserted in its place:
    
              9.38  Reconveyance on Full Payment of Multistate
          Note.  In the event that the Indebtedness evidenced by
          the Multistate Note is repaid in full on the Maturity
          Date thereof (as defined in the Multistate Note), and
          provided (i) no Event of Default shall have occurred
          and be continuing under the Nevada Deed of Trust, the
          Arizona Deed of Trust, the South San Francisco Deed of
          Trust or the Fremont Deed of Trust, (ii) the Remaining
          Properties (after the proposed release of the Ontario
          Deed of Trust, the Milpitas Deed of Trust, the Tustin
          Deed of Trust and this Deed of Trust) would have both
          a Combined Debt Service Coverage and a Future Combined
          Debt Service Coverage of not less than 2.00 and a
          Combined Loan to Value Ratio of not more than 55%, and
          (iii) each of the individual Remaining Properties
          (after such release) shall have both an Individual
          Debt Service Coverage and a Future Individual Debt
          Service Coverage of not less than 1.00 and an
          Individual Loan to Value Ratio of not more than 75%;
          provided, however, that if there is only one Remaining
          Property then such Remaining Property would have both
          an Individual Debt Service Coverage and a Future
          Individual Debt Service Coverage of not less than 2.00
          and an Individual Loan to Value Ratio of not more than
          55%, then Beneficiary agrees to release and reconvey
          the Ontario Deed of Trust, the Milpitas Deed of Trust,
          the Woodlands Deed of Trust and this Deed of Trust,
          and the Combined Properties (other than the properties
          encumbered by the Nevada Deed of Trust, the Arizona
          Deed of Trust, the South San Francisco Deed of Trust
          or the Fremont Deed of Trust) encumbered thereby shall
          then and thereafter no longer serve as collateral for
          the Nevada Note or the Arizona/California Note.
    
              G.  The Deed of Trust is hereby modified to
    provide that it secures, in addition to all other obligations now or
    hereafter secured thereby, a. Trustor's obligations to Beneficiary
    under the Multistate Note, the Nevada Note, the Arizona/California
    Note and all other Loan Documents, as supplemented and/or otherwise
    modified by the First Modification, the Second Modification and this
    Modification, and b. Trustor's obligations to Beneficiary under the
    (i) Nevada Deed of Trust, (ii) the Arizona Deed of Trust, (iii) the
    South San Francisco Deed of Trust, (iv) the Fremont Deed of Trust, and
    (v) the Modification Documents.
                  
          II.  Modification of Multistate Note.  The Multistate
    Note is hereby amended so that (i) the term "Deeds of Trust" as used
    therein includes the Arizona Deed of Trust, the South San Francisco
    Deed of Trust and the Fremont Deed of Trust (as defined in Paragraph
    1.2 of this Modification) as well as the balance of the Deeds of Trust
    provided therein, as modified by the Modification Documents, (ii) the
    term "Remediation and Indemnification Agreements" as used therein
    shall have the meaning ascribed thereto in the Deeds of Trust (as
    modified by the Modification Documents).
    
          III.  Modification of Assignment.  The Assignment is
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, and (ii) the term "Deed of Trust" as used
    therein shall mean the Deed of Trust as modified by the First
    Modification, the Second Modification and this Modification. 
    
          IV.  Modification of Other Documents.  The other Loan
    Documents and the Remediation and Indemnification Agreement executed
    by Trustor in favor of Beneficiary in connection with the Property are
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, the term "Deed of Trust" as used therein
    shall mean the Deed of Trust as modified by the First Modification,
    the Second Modification and this Modification. 
    
          V.  No Other Modification.  Except as expressly
    modified hereby, the Note, the Deed of Trust, and other Loan Documents
    remain unmodified and in full force and effect.
    
          VI.  Miscellaneous.  This Modification shall bind, and
    shall inure to the benefit of, the successors and assigns of the
    parties.  This document may be executed in counterparts with the same
    force and effect as if the parties had executed one instrument, and
    each such counterpart shall constitute an original hereof.  This
    Modification shall be governed by the laws of the State of Utah
    (without regard to any choice of law provisions thereof).
      <PAGE>
  
              IN WITNESS WHEREOF, Trustor and Beneficiary have
    caused this Modification to be duly executed as of the date first
    written above.
    
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/Scott R. Whitney
    
              Scott R. Whitney, Senior Vice President
              [Printed Name and Title]
    
    
    "BENEFICIARY":
    
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
    
    
    By:    /s/ Michael B. Jameson         
                  Vice President
    
    
      [11128.AGRE]I12581<PAGE>
  State of California  )
                         )
    County of Contra Costa    )
    
    
    
    On February 2, 1998, before me, Colette M. Pennington, Notary Public,
    personally appeared Scott R. Whitney,
    personally known to me or proved to me on the basis of satisfactory
    evidence to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                   /s/ Colette M. Pennington
                                   Notary Public
    
    
      <PAGE>
  State of California  )
                         )
    County of Contra Costa    )
    
    
    
    On February 2, 1998, before me, Colette M. Pennington, Notary Public,
    personally appeared Scott R. Whitney,
    
    personally known to me or  proved to me on the basis of satisfactory
    evidence to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                   /s/Colette M. Pennington
                                   Notary Public
      <PAGE>
   RECORDING REQUESTED BY, AND
     WHEN RECORDED RETURN TO:
    
     Steefel, Levitt & Weiss
     One Embarcadero Center, 30th Floor
     San Francisco, California  94111
    
      Attention:  James F. Eastman, Esq.
    
    
    
    
    
    _____________________________________________________________________
    
    
                  THIRD MODIFICATION OF DEED OF TRUST
                          AND OTHER DOCUMENTS
                  (Dupont Industrial Center, Ontario)
    
    
            This Third Modification of Deed of Trust and Other
    Documents, dated as of January 30, 1998 (this "Modification"), is made
    by and between BEDFORD PROPERTY INVESTORS, INC., a Maryland
    corporation ("Trustor"), and THE PRUDENTIAL INSURANCE COMPANY OF
    AMERICA, a New Jersey corporation ("Beneficiary"), as a third
    modification to that certain Deed of Trust, Security Agreement and
    Fixture Filing with Assignment of Leases, Rents and Agreements dated
    as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary and recorded on March 27, 1996 as Instrument
    No. 19960104594 in the Official Records of San Bernardino County,
    California, as modified by that certain First Modification of Deed of
    Trust and Other Documents (the "First Modification"), dated as of
    May 24, 1996 and recorded on May 31, 1996 as Instrument
    No. 19960193054 in the Official Records of San Bernardino County,
    California, as modified by that certain Second Modification of Deed of
    Trust and Other Documents (the "Second Modification"), dated as of May
    9, 1997 and recorded on May 9, 1997 as Instrument No. 19970167135 in
    the Official Records of San Bernadino County, California
    (collectively, the "Deed of Trust") and the other documents described
    herein.  The Deed of Trust secures certain obligations of Trustor more
    particularly described therein and encumbers the real property
    described in Exhibit A attached hereto.
    
            Reference is also made to that certain Assignment of
    Lessor's Interest in Leases dated as of March 20, 1996, executed by
    Trustor in favor of Beneficiary and recorded on March 27, 1996 as
    Instrument No. 19960104597 in the Official Records of San Bernardino
    County, California, as modified by the First Modification and the
    Second Modification (collectively, the "Assignment").
    
            This Modification is entered into in conjunction
    with that certain Third Modification of Deed of Trust and Other
    Documents (The Woodlands Business Park) of even date herewith, to be
    recorded in the Official Records of Salt Lake County, Utah, that
    certain Third Modification of Deed of Trust and Other Documents
    (Tustin Business Park) of even date herewith, to be recorded in the
    Official Records of Orange County, California, that certain Second
    Modification of Deed of Trust and Other Documents (Milpitas Business
    Park) of even date herewith, to be recorded in the Official Records of
    Santa Clara County, California, and that certain First Modification of
    Deed of Trust and Other Documents (Nevada) of even date herewith, to
    be recorded in the Official Records of Washoe County, Nevada
    (collectively, together with this Modification, the "Modification
    Documents").
    
            The Modification Documents are entered into with
    reference to (i) Trustor's assumption of, and amendment and
    restatement of, that certain Amended and Restated Promissory Note
    dated as of May 9, 1997 executed by Trustor in the original principal
    amount of Eight Million Nine Hundred Thirteen Thousand Seven Hundred
    Thirty and 85/100 Dollars ($8,913,730.85), payable to Beneficiary or
    its order, and all modifications, renewals or extensions thereof (the
    "Nevada Note"), (ii) the indebtedness of Trustor evidenced by that
    certain Amended and Restated Promissory Note dated as of May 24, 1996,
    made by Trustor to the order of Beneficiary in the face principal
    amount of $25,000,000 (the "Multistate Note"), and (iii) the
    indebtedness of Trustor evidenced by that certain Promissory Note
    dated as of even date herewith executed by Trustor in the original
    principal amount of Twenty Million Nine Hundred Thousand Dollars
    ($20,900,000), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Arizona/California
    Note," and together with the Multistate Note and the Nevada Note,
    collectively, the "Note").  Capitalized terms used and not otherwise
    defined herein have the meanings set forth for them in the Deed of
    Trust.
    
            In consideration of the foregoing, and for other
    valuable consideration, the receipt and sufficiency of which are
    hereby acknowledged, Trustor and Beneficiary hereby agree as follows:
    
          I.  Modification of Deed of Trust.  The Deed of Trust is hereby
    modified as follows:
    
            A.       The definitions of Allocable Loan Amount,
    Combined Deeds of Trust, Combined Properties, Loan Documents, Milpitas
    Deed of Trust, Nevada Deed of Trust, Note, Remediation and
    Indemnification Agreements, Tustin Deed of Trust, and Woodlands Deed
    of Trust, as set forth in Article 1 of the Deed of Trust are hereby
    deleted in their entirety, and the following new definitions are
    inserted in their place, in the appropriate alphabetical order:
    
          Allocable Loan Amount:  (i) For the property
          encumbered by this Deed of Trust, $8,000,000 less the
          product of (x) all payments of principal made under
          the Multistate Note (other than payments made pursuant
          to Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 8,000,000, and the denominator of which is
          25,000,000; (ii) for the property encumbered by the
          Tustin Deed of Trust, $7,000,000 less the product of
          (x) all payments of principal made under the
          Multistate Note (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is $7,000,000, and the denominator of which is
          25,000,000; (iii) for the property encumbered by the
          Woodlands Deed of Trust, $5,200,000 less the product
          of (x) all payments of principal made under the
          Multistate Note (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 5,200,000, and the denominator of which is
          25,000,000; (iv) for the property encumbered by the
          Milpitas Deed of Trust, $4,800,000 less the product of
          (x) all payments of principal made under the
          Multistate Note (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 4,800,000, and the denominator of which is
          25,000,000; (v) for the property encumbered by the
          Nevada Deed of Trust, $8,913,730.85 less all payments
          of principal made under the Nevada Note; (vi) for the
          property encumbered by the Arizona Deed of Trust,
          $7,200,000 less the product of (x) all payments of
          principal made under the Arizona/California Note
          (other than payments made pursuant to
          Paragraph 9.36(3) of any of the Combined Deeds of
          Trust) multiplied by (y) a fraction, the numerator of
          which is 7,200,000, and the denominator of which is
          20,900,000; (vii) for the properties encumbered by the
          South San Francisco Deed of Trust, $6,500,000 less the
          product of (x) all payments of principal made under
          the Arizona/California Note (other than payments made
          pursuant to Paragraph 9.36(3) of any of the Combined
          Deeds of Trust) multiplied by (y) a fraction, the
          numerator of which is 6,500,000, and the denominator
          of which is 20,900,000; and (viii) for the property
          encumbered by the Fremont Deed of Trust, $7,200,000
          less the product of (x) all payments of principal made
          under the Arizona/California Note (other than payments
          made pursuant to Paragraph 9.36(3) of any of the
          Combined Deeds of Trust) multiplied by (y) a fraction,
          the numerator of which is 7,200,000, and the
          denominator of which is 20,900,000.
    
          Combined Deeds of Trust:  Collectively, this Deed of
          Trust, the Woodlands Deed of Trust, the Milpitas Deed
          of Trust, the Nevada Deed of Trust, the Tustin Deed of
          Trust, the Arizona Deed of Trust, the South San
          Francisco Deed of Trust and the Fremont Deed of Trust.
    
          Combined Properties:  Collectively, the Property, the
          property encumbered by the Woodlands Deed of Trust,
          the property encumbered by the Milpitas Deed of Trust,
          the property encumbered by the Nevada Deed of Trust,
          the property encumbered by the Tustin Deed of Trust,
          the property encumbered by the Arizona Deed of Trust,
          the properties encumbered by the South San Francisco
          Deed of Trust and the property encumbered by the
          Fremont Deed of Trust.
    
          Loan Documents:  The Note, the Application, that
          certain Note Assignment and Assumption Agreement dated
          as of May 9, 1997 relating to the Nevada Note, this
          Deed of Trust, the Woodlands Deed of Trust, the
          Milpitas Deed of Trust, the Tustin Deed of Trust, the
          Nevada Deed of Trust, the Arizona Deed of Trust, the
          South San Francisco Deed of Trust, the Fremont Deed of
          Trust, each of the Assignments of Agreements, each of
          the Assignments of Lessor's Interest in Leases and all
          other documents, with the exception of the Remediation
          and Indemnification Agreements, evidencing, securing
          or relating to the Loan, the payment of the
          Indebtedness or the performance of the Obligations.
    
          Milpitas Deed of Trust:  That certain Deed of Trust
          dated as of May 24, 1996, executed by Trustor for the
          benefit of Beneficiary, recorded in the Official
          Records of Santa Clara County, California, as amended
          by that certain First Modification of Deed of Trust
          and Other Loan Documents dated as of May 9, 1997, as
          amended by that certain Second Modification of Deed of
          Trust and Other Loan Documents dated as of January 30,
          1998, as further amended from time to time.
    
          Nevada Deed of Trust:  That certain Deed of Trust
          dated as of May 9, 1997, executed by Trustor for the
          benefit of Beneficiary, recorded in the Official
          Records of Washoe County, Nevada, as amended by that
          certain First Modification of Deed of Trust and Other
          Loan Documents dated as of January 30, 1998, as
          further amended from time to time.
    
          Note:  Collectively (i) that certain Amended and
          Restated Promissory Note dated May 24, 1996 (and
          deemed made as of, and relating back to, March 20,
          1996), executed by Trustor in the original principal
          amount of Twenty-Five Million and No/100 Dollars
          ($25,000,000.00), payable to Beneficiary or its order,
          and all modifications, renewals or extensions thereof
          (the "Multistate Note"), (ii) that certain Amended and
          Restated Promissory Note dated as of May 9, 1997
          executed by Trustor in the original principal amount
          of Eight Million Nine Hundred Thirteen Thousand Seven
          Hundred Thirty and 85/100 Dollars ($8,913,730.85),
          payable to Beneficiary or its order, and all
          modifications, renewals or extensions thereof (the
          "Nevada Note"), and (iii) that certain Promissory Note
          dated as of January 30, 1998 executed by Trustor in
          the original principal amount of Twenty Million Nine
          Hundred Thousand Dollars ($20,900,000) payable to
          Beneficiary or its order, and all modifications,
          renewals or extensions thereof (the
          "Arizona/California Note").
    
          Remediation and Indemnification Agreements: 
          Collectively, (i) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of March 20,
          1996, executed by Trustor in favor of Beneficiary in
          connection with the Property, (ii) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of March 20, 1996, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Woodlands Deed of Trust, (iii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of May 24, 1996, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the Milpitas Deed of Trust,
          (iv) the Hazardous Substances Remediation and
          Indemnification Agreement dated as of March 20, 1996,
          executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Tustin
          Deed of Trust, (v) the Hazardous Substances
          Remediation and Indemnification Agreement dated as of
          May 9, 1997, executed by Trustor in favor of
          Beneficiary in connection with the property encumbered
          by the Nevada Deed of Trust, (vi) the Hazardous
          Substances Remediation and Indemnification Agreement
          dated as of January 30, 1998, executed by Trustor in
          favor of Beneficiary in connection with the property
          encumbered by the Arizona Deed of Trust, (vii) the
          Hazardous Substances Remediation and Indemnification
          Agreement dated as of January 30, 1998, executed by
          Trustor in favor of Beneficiary in connection with the
          property encumbered by the South San Francisco Deed of
          Trust, and (viii) the Hazardous Substances Remediation
          and Indemnification Agreement dated as of January 30,
          1998, executed by Trustor in favor of Beneficiary in
          connection with the property encumbered by the Fremont
          Deed of Trust.
    
          Tustin Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Orange County, California, as amended by
          that certain First Modification of Deed of Trust and
          Other Loan Documents dated as of May 24, 1996, as
          amended by that certain Second Modification of Deed of
          Trust and Other Loan Documents dated as of May 9,
          1997, as amended by that certain Third Modification of
          Deed of Trust and Other Loan Documents dated as of
          January 30, 1998, as further amended from time to
          time.
    
          Woodlands Deed of Trust:  That certain Deed of Trust
          dated as of March 20, 1996, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Salt Lake County, Utah, as amended by that
          certain First Modification of Deed of Trust and Other
          Loan Documents dated as of May 24, 1996, as amended by
          that certain Second Modification of Deed of Trust and
          Other Loan Documents dated as of May 9, 1997, as
          amended by that certain Third Modification of Deed of
          Trust and Other Loan Documents dated as of January 30,
          1998, as further amended from time to time.
    
            B.       The following new definitions of Arizona
    Deed of Trust, Fremont Deed of Trust and South San Francisco Deed of
    Trust are hereby added to Article 1 of the Deed of Trust, in
    alphabetical order:
    
          Arizona Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Maricopa County, Arizona, as amended from
          time to time.
    
          Fremont Deed of Trust:  That certain Deed of Trust
          dated as of January 30, 1998, executed by Trustor for
          the benefit of Beneficiary, recorded in the Official
          Records of Alameda County, California, as amended from
          time to time.
          
          South San Francisco Deed of Trust:  That certain Deed
          of Trust dated as of January 30, 1998, executed by
          Trustor for the benefit of Beneficiary, recorded in
          the Official Records of San Mateo County, California
          as amended from time to time.
    
            C.  Paragraph 6.1.A(8) of the Deed of Trust is
    hereby deleted in its entirety and the following new paragraph is
    hereby inserted in its place:
    
                     (8)  An "Event of Default" occurs under
          any one or more of the Woodlands Deed of Trust, the
          Tustin Deed of Trust, the Nevada Deed of Trust, the
          Milpitas Deed of Trust, the Arizona Deed of Trust, the
          South San Francisco Deed of Trust and/or the Fremont
          Deed of Trust.
          
    
            D.  Paragraph 9.36 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.36 is hereby
    inserted in its place:
    
    
              9.36  Partial Release.  Beneficiary agrees to
          release, at any time after May 31, 1998, the Property
          from the lien of this Deed of Trust upon the satisfac-
          
          tion of the following conditions at the time of
          reconveyance:
    
    
                  (1)  No Event of Default shall have occurred
          and no event which, with the passage of time or the
          giving on notice, or both, would constitute an Event
          of Default shall have occurred either at the time of
          Beneficiary's receipt of the Trustor's written request
          for a reconveyance or as of the date of such
          reconveyance;
    
                  (2)  Not more than a total of three (3) of
          the Combined Deeds of Trust (including, without
          limitation, this Deed of Trust) shall have been
          previously reconveyed or shall be reconveyed hereby or
          concurrently herewith (and in no event shall Trustor
          be entitled to more than three (3) total releases of
          any or all of the Combined Properties hereunder and/or
          under the Combined Deeds of Trust);
    
                  (3)  Trustor shall pay to Beneficiary, prior
          to or concurrently with the reconveyance of this Deed
          of Trust, the Allocable Loan Amount for the Property
          along with the prepayment premium allocable to such
          Allocable Loan Amount as determined pursuant to the
          applicable Note;
    
                  (4)  Beneficiary shall have been provided
          satisfactory evidence that the reconveyance of this
          Deed of Trust does not violate the provisions of any
          declaration of covenants, conditions and restrictions,
          reciprocal easement agreement, Lease or other
          agreement affecting the Property or any portion
          thereof;
    
                  (5)  The Remaining Properties shall have: 
          (i) after the first reconveyance, both a Combined Debt
          Service Coverage and a Future Combined Debt Service
          Coverage of not less than 1.80 and a Combined Loan to
          Value Ratio of not more than 65%, (ii) after the
          second reconveyance, both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 1.90 and a Combined Loan to Value
          Ratio of not more than 60%, and (iii) after the third
          and final reconveyance both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 2.00 and a Combined Loan to Value
          Ratio of not more than 55%;
    
                  (6)  Each of the individual Remaining
          Properties shall have both an Individual Debt Service
          Coverage and a Future Individual Debt Service Coverage
          of not less than 1.00 and an Individual Loan to Value
          Ratio of not more than 75%;
    
                  (7)  Beneficiary shall have received a
          commitment that the title company insuring the liens
          of the Milpitas Deed of Trust, the Tustin Deed of
          Trust, the Woodlands Deed of Trust, the Nevada Deed of
          Trust, the Arizona Deed of Trust, the South San
          Francisco Deed of Trust, and the Fremont Deed of Trust
          will issue such title endorsements as Beneficiary
          deems necessary or desirable for attachment to the
          applicable title policies, including without
          limitation, CLTA Endorsement Nos. 110.5, 111, and
          111.1;
    
                  (8)  Trustor shall pay to Beneficiary all
          escrow, closing and recording costs, the cost of
          preparing and delivering any reconveyance
          documentation, including legal fees and costs, the
          cost of any title insurance endorsements that
          Beneficiary may require, recording fees, any sums then
          due and payable under the Loan Documents and a non-
          refundable $25,000 processing fee, which fee shall be
          paid at the time of notice of the requested
          reconveyance;
    
                  (9)  Trustor shall have provided Beneficiary
          with forty-five (45) days prior written notice of the
          requested reconveyance; and
    
                  (10) Such other terms and conditions as
          Beneficiary shall reasonably require.
    
          Notwithstanding the foregoing, in the event that the
    Debt Service Coverage and the Loan to Value Ratio tests set forth in
    Paragraphs 9.36(5) and 9.36(6), above, cannot be satisfied because of
    the value of, or the net cash flow from, the applicable Combined
    Properties, Trustor may, at its option, satisfy such tests by making a
    principal prepayment (the "Excess Principal Payment") on the Loan in
    an amount sufficient to satisfy such tests so long as Trustor also
    pays to Beneficiary any prepayment premium relating to such principal
    prepayment, as determined by the applicable Note.  Upon receipt of the
    Excess Principal Payment, Beneficiary shall apply such amount to
    reduce the outstanding Loan and may apply such amount to any one or
    more of the Multistate Note, the Nevada Note and/or the
    Arizona/California Note (in such order or priority as to satisfy such
    tests, as determined by Beneficiary), and shall allocate the Excess
    Principal Payment to the applicable Allocable Loan Amount in
    proportion to each such Allocable Loan Amount's share of the
    outstanding principal balance of the Note to which such amount is
    applied, and, the monthly payments due under such applicable Note
    shall be adjusted, as of the date of the release of this Deed of Trust
    pursuant to this Paragraph 9.36, to reflect the Excess Principal
    Payment applied to such applicable Note, such adjustment to be based
    on the applicable interest rate under such Note and an amortization
    schedule equal to 300 months minus the number of months that have
    elapsed since May 31, 1998.
                       
          1.5  Paragraph 9.37 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.37 is hereby
    inserted in its place:
    
              9.37     Limitation on Personal Liabilities. 
    Trustor's liability (i) under the Multistate Note is subject to the
    terms and conditions set forth in Paragraph 19 of the Multistate Note;
    (ii) under the Nevada Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
          
          1.6  Paragraph 9.38 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.38 is hereby
    inserted in its place:
    
              9.38  Reconveyance on Full Payment of Multistate
          Note.  In the event that the Indebtedness evidenced by
          the Multistate Note is repaid in full on the Maturity
          Date thereof (as defined in the Multistate Note), and
          provided (i) no Event of Default shall have occurred
          and be continuing under the Nevada Deed of Trust, the
          Arizona Deed of Trust, the South San Francisco Deed of
          Trust or the Fremont Deed of Trust, (ii) the Remaining
          Properties (after the proposed release of the Tustin
          Deed of Trust, the Milpitas Deed of Trust, the
          Woodlands Deed of Trust and this Deed of Trust) would
          have both a Combined Debt Service Coverage and a
          Future Combined Debt Service Coverage of not less than
          2.00 and a Combined Loan to Value Ratio of not more
          than 55%, and (iii) each of the individual Remaining
          Properties (after such release) shall have both an
          Individual Debt Service Coverage and a Future
          Individual Debt Service Coverage of not less than 1.00
          and an Individual Loan to Value Ratio of not more than
          75%; provided, however, that if there is only one
          Remaining Property then such Remaining Property would
          have both an Individual Debt Service Coverage and a
          Future Individual Debt Service Coverage of not less
          than 2.00 and an Individual Loan to Value Ratio of not
          more than 55%, then Beneficiary agrees to release and
          reconvey the Tustin Deed of Trust, the Milpitas Deed
          of Trust, the Woodlands Deed of Trust and this Deed of
          Trust, and the Combined Properties (other than the
          properties encumbered by the Nevada Deed of Trust, the
          Arizona Deed of Trust, the South San Francisco Deed of
          Trust or the Fremont Deed of Trust) encumbered thereby
          shall then and thereafter no longer serve as
          collateral for the Nevada Note or the
          Arizona/California Note.
    
          1.7  The Deed of Trust is hereby modified to provide
    that it secures, in addition to all other obligations now or hereafter
    secured thereby, (a) Trustor's obligations to Beneficiary under the
    Multistate Note, the Nevada Note, the Arizona/California Note and all
    other Loan Documents, as supplemented and/or otherwise modified by the
    First Modification, the Second Modification and this Modification, and
    (b) Trustor's obligations to Beneficiary under the (i) Nevada Deed of
    Trust, (ii) the Arizona Deed of Trust, (iii) the South San Francisco
    Deed of Trust, (iv) the Fremont Deed of Trust, and (v) the
    Modification Documents.
    
          2.  Modification of Multistate Note.  The Multistate
    Note is hereby amended so that (i) the term "Deeds of Trust" as used
    therein includes the Arizona Deed of Trust, the South San Francisco
    Deed of Trust and the Fremont Deed of Trust (as defined in Paragraph
    1.2 of this Modification) as well as the balance of the Deeds of Trust
    provided therein, as modified by the Modification Documents, (ii) the
    term "Remediation and Indemnification Agreements" as used therein
    shall have the meaning ascribed thereto in the Deeds of Trust (as
    modified by the Modification Documents).
    
          3.  Modification of Assignment.  The Assignment is
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, and (ii) the term "Deed of Trust" as used
    therein shall mean the Deed of Trust as modified by the First
    Modification, the Second Modification and this Modification. 
    
          4.  Modification of Other Documents.  The other Loan
    Documents and the Remediation and Indemnification Agreement executed
    by Trustor in favor of Beneficiary in connection with the Property are
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, the term "Deed of Trust" as used therein
    shall mean the Deed of Trust as modified by the First Modification,
    the Second Modification and this Modification. 
              
          5.  No Other Modification.  Except as expressly
    modified hereby, the Note, the Deed of Trust, and other Loan Documents
    remain unmodified and in full force and effect.
    
          6.  Miscellaneous.  This Modification shall bind, and
    shall inure to the benefit of, the successors and assigns of the
    parties.  This document may be executed in counterparts with the same
    force and effect as if the parties had executed one instrument, and
    each such counterpart shall constitute an original hereof.  This
    Modification shall be governed by the laws of the State of California
    (without regard to any choice of law provisions thereof).
      <PAGE>
  
              IN WITNESS WHEREOF, Trustor and Beneficiary have
    caused this Modification to be duly executed as of the date first
    written above.
    
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/ Scott R. Whitney
    
              Scott R. Whitney, Senior Vice President
              [Printed Name and Title]
    
    
    "BENEFICIARY":
    
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
    
    
    By:         /s/ Michael B. Jameson       
                     Michael B. Jameson           
              Vice President
    
    
      [11128.AGRE]I12549<PAGE>
  State of California                 )
                         )
    County of       Contra Costa        )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca, Notary Public,
    personally appeared Scott R. Whitney, Sr. V. P.,
                              
    personally known to me or proved to me on the basis of satisfactory
    evidence to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                   /s/ Rebecca L. Ingraca    
                                   Notary Public
      <PAGE>
  State of California                 )
                         )
    County of  Contra Costa             )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca, Notary Public,
    personally appeared Scott R. Whitney, Sr. V. P.,
    
    personally known to me or  proved to me on the basis of satisfactory
    evidence to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                   /s/ Rebecca L. Ingraca
                                   Notary Public
    
      <PAGE>
  RECORDING REQUESTED BY, AND
    WHEN RECORDED RETURN TO:
    
    Steefel, Levitt & Weiss
    One Embarcadero Center, 30th Floor
    San Francisco, California  94111
    
    Attention:  James F. Eastman, Esq.
    
    
    
    
    
    _____________________________________________________________________
    
    
                  THIRD MODIFICATION OF DEED OF TRUST
                          AND OTHER DOCUMENTS
                         (Tustin Business Park)
    
    
          This Third Modification of Deed of Trust and Other
    Documents, dated as of January 30, 1998 (this "Modification"), is made
    by and between BEDFORD PROPERTY INVESTORS, INC., a Maryland
    corporation ("Trustor"), and THE PRUDENTIAL INSURANCE COMPANY OF
    AMERICA, a New Jersey corporation ("Beneficiary"), as a third
    modification to that certain Deed of Trust, Security Agreement and
    Fixture Filing with Assignment of Leases, Rents and Agreements dated
    as of March 20, 1996, executed by Trustor for the benefit of
    Beneficiary and recorded on March 27, 1996 as Instrument
    No. 19960147696 in the Official Records of Orange County, California,
    as modified by that certain First Modification of Deed of Trust and
    Other Documents (the "First Modification"), dated as of May 24, 1996
    and recorded on May 31, 1996 as Instrument No. 19960272607 in the
    Official Records of Orange County, California, as modified by that
    certain Second Modification of Deed of Trust and Other Documents (the
    "Second Modification"), dated as of May 9, 1997 and recorded on May 9,
    1997 as Instrument No. 19970217603 in the Official Records of Orange
    County, California (collectively, the "Deed of Trust") and the other
    documents described herein.  The Deed of Trust secures certain
    obligations of Trustor more particularly described therein and
    encumbers the real property described in Exhibit A attached hereto.
    
          Reference is also made to that certain Assignment of
    Lessor's Interest in Leases dated as of March 20, 1996, executed by
    Trustor in favor of Beneficiary and recorded on March 27, 1996 as
    Instrument No. 19960147697 in the Official Records of Orange County,
    California, as modified by the First Modification and the Second
    Modification (collectively, the "Assignment").
    
          This Modification is entered into in conjunction with that
    certain Third Modification of Deed of Trust and Other Documents
    (Dupont Industrial Center, Ontario) of even date herewith, to be
    recorded in the Official Records of San Bernardino County, California,
    that certain Third Modification of Deed of Trust and Other Documents
    (The Woodlands Business Park) of even date herewith, to be recorded in
    the Official Records of Salt Lake County, Utah, that certain Second
    Modification of Deed of Trust and Other Documents (Milpitas Business
    Park) of even date herewith, to be recorded in the Official Records of
    Santa Clara County, California, and that certain First Modification of
    Deed of Trust and Other Documents (Nevada) of even date herewith, to
    be recorded in the Official Records of Washoe County, Nevada
    (collectively, together with this Modification, the "Modification
    Documents").
    
          The Modification Documents are entered into with reference
    to (i) Trustor's assumption of, and amendment and restatement of, that
    certain Amended and Restated Promissory Note dated as of May 9, 1997
    executed by Trustor in the original principal amount of Eight Million
    Nine Hundred Thirteen Thousand Seven Hundred Thirty and 85/100 Dollars
    ($8,913,730.85), payable to Beneficiary or its order, and all
    modifications, renewals or extensions thereof (the "Nevada Note"),
    (ii) the indebtedness of Trustor evidenced by that certain Amended and
    Restated Promissory Note dated as of May 24, 1996, made by Trustor to
    the order of Beneficiary in the face principal amount of $25,000,000
    (the "Multistate Note"), and (iii) the indebtedness of Trustor
    evidenced by that certain Promissory Note dated as of even date
    herewith executed by Trustor in the original principal amount of
    Twenty Million Nine Hundred Thousand Dollars ($20,900,000), payable to
    Beneficiary or its order, and all modifications, renewals or
    extensions thereof (the "Arizona/California Note," and together with
    the Multistate Note and the Nevada Note, collectively, the "Note"). 
    Capitalized terms used and not otherwise defined herein have the
    meanings set forth for them in the Deed of Trust.
    
          In consideration of the foregoing, and for other valuable
    consideration, the receipt and sufficiency of which are hereby
    acknowledged, Trustor and Beneficiary hereby agree as follows:
    
     7  Modification of Deed of Trust.  The Deed of Trust is hereby
    modified as follows:
    
          7.1  The definitions of Allocable Loan Amount, Combined
    Deeds of Trust, Combined Properties, Loan Documents, Milpitas Deed of
    Trust, Nevada Deed of Trust, Note, Ontario Deed of Trust, Remediation
    and Indemnification Agreements, and Woodlands Deed of Trust, as set
    forth in Article 1 of the Deed of Trust are hereby deleted in their
    entirety, and the following new definitions are inserted in their
    place, in the appropriate alphabetical order:
    
     Allocable Loan Amount:  (i) For the property encumbered by the
     Ontario Deed of Trust, $8,000,000 less the product of (x) all
     payments of principal made under the Multistate Note (other than
     payments made pursuant to Paragraph 9.36(3) of any of the
     Combined Deeds of Trust) multiplied by (y) a fraction, the
     numerator of which is 8,000,000, and the denominator of which is
     25,000,000; (ii) for the property encumbered by this Deed of
     Trust, $7,000,000 less the product of (x) all payments of
     principal made under the Multistate Note (other than payments
     made pursuant to Paragraph 9.36(3) of any of the Combined Deeds
     of Trust) multiplied by (y) a fraction, the numerator of which is
     $7,000,000, and the denominator of which is 25,000,000; (iii) for
     the property encumbered by the Woodlands Deed of Trust,
     $5,200,000 less the product of (x) all payments of principal made
     under the Multistate Note (other than payments made pursuant to
     Paragraph 9.36(3) of any of the Combined Deeds of Trust)
     multiplied by (y) a fraction, the numerator of which is
     5,200,000, and the denominator of which is 25,000,000; (iv) for
     the property encumbered by the Milpitas Deed of Trust, $4,800,000
     less the product of (x) all payments of principal made under the
     Multistate Note (other than payments made pursuant to
     Paragraph 9.36(3) of any of the Combined Deeds of Trust)
     multiplied by (y) a fraction, the numerator of which is
     4,800,000, and the denominator of which is 25,000,000; (v) for
     the property encumbered by the Nevada Deed of Trust,
     $8,913,730.85 less all payments of principal made under the
     Nevada Note; (vi) for the property encumbered by the Arizona Deed
     of Trust, $7,200,000 less the product of (x) all payments of
     principal made under the Arizona/California Note (other than
     payments made pursuant to Paragraph 9.36(3) of any of the
     Combined Deeds of Trust) multiplied by (y) a fraction, the
     numerator of which is 7,200,000, and the denominator of which is
     20,900,000; (vii) for the properties encumbered by the South San
     Francisco Deed of Trust, $6,500,000 less the product of (x) all
     payments of principal made under the Arizona/California Note
     (other than payments made pursuant to Paragraph 9.36(3) of any of
     the Combined Deeds of Trust) multiplied by (y) a fraction, the
     numerator of which is 6,500,000, and the denominator of which is
     20,900,000; and (viii) for the property encumbered by the Fremont
     Deed of Trust, $7,200,000 less the product of (x) all payments of
     principal made under the Arizona/California Note (other than
     payments made pursuant to Paragraph 9.36(3) of any of the
     Combined Deeds of Trust) multiplied by (y) a fraction, the
     numerator of which is 7,200,000, and the denominator of which is
     20,900,000.
    
     Combined Deeds of Trust:  Collectively, this Deed of Trust, the
     Ontario Deed of Trust, the Milpitas Deed of Trust, the Nevada
     Deed of Trust, the Woodlands Deed of Trust, the Arizona Deed of
     Trust, the South San Francisco Deed of Trust, and the Fremont
     Deed of Trust.
    
     Combined Properties:  Collectively, the Property, the property
     encumbered by the Ontario Deed of Trust, the property encumbered
     by the Milpitas Deed of Trust, the property encumbered by the
     Nevada Deed of Trust, the property encumbered by the Woodlands
     Deed of Trust, the property encumbered by the Arizona Deed of
     Trust, the properties encumbered by the South San Francisco Deed
     of Trust and the property encumbered by the Fremont Deed of
     Trust.
    
     
     Loan Documents:  The Note, the Application, that certain Note
     Assignment and Assumption Agreement dated as of May 9, 1997
     relating to the Nevada Note, this Deed of Trust, the Ontario Deed
     of Trust, the Milpitas Deed of Trust, the Woodlands Deed of
     Trust, the Nevada Deed of Trust, the Arizona Deed of Trust, the
     South San Francisco Deed of Trust, the Fremont Deed of Trust,
     each of the Assignments of Agreements, each of the Assignments of
     Lessor's Interest in Leases and all other documents, with the
     exception of the Remediation and Indemnification Agreements,
     evidencing, securing or relating to the Loan, the payment of the
     Indebtedness or the performance of the Obligations.
    
     Milpitas Deed of Trust:  That certain Deed of Trust dated as of
     May 24, 1996, executed by Trustor for the benefit of Beneficiary,
     recorded in the Official Records of Santa Clara County,
     California, as amended by that certain First Modification of Deed
     of Trust and Other Loan Documents dated as of May 9, 1997, as
     amended by that certain Second Modification of Deed of Trust and
     Other Loan Documents dated as of January 30, 1998, as further
     amended from time to time.
    
     Nevada Deed of Trust:  That certain Deed of Trust dated as of
     May 9, 1997, executed by Trustor for the benefit of Beneficiary,
     recorded in the Official Records of Washoe County, Nevada, as
     amended by that certain First Modification of Deed of Trust and
     Other Loan Documents dated as of January 30, 1998, as further
     amended from time to time.
    
     Note:  Collectively (i) that certain Amended and Restated
     Promissory Note dated May 24, 1996 (and deemed made as of, and
     relating back to, March 20, 1996), executed by Trustor in the
     original principal amount of Twenty-Five Million and No/100
     Dollars ($25,000,000.00), payable to Beneficiary or its order,
     and all modifications, renewals or extensions thereof (the
     "Multistate Note"), (ii) that certain Amended and Restated
     Promissory Note dated as of May 9, 1997 executed by Trustor in
     the original principal amount of Eight Million Nine Hundred
     Thirteen Thousand Seven Hundred Thirty and 85/100 Dollars
     ($8,913,730.85), payable to Beneficiary or its order, and all
     modifications, renewals or extensions thereof (the "Nevada
     Note"), and (iii) that certain Promissory Note dated as of
     January 30, 1998 executed by Trustor in the original principal
     amount of Twenty Million Nine Hundred Thousand Dollars
     ($20,900,000) payable to Beneficiary or its order, and all
     modifications, renewals or extensions thereof (the
     "Arizona/California Note").
    
     Ontario Deed of Trust:  That certain Deed of Trust dated as of
     March 20, 1996, executed by Trustor for the benefit of
     Beneficiary, recorded in the Official Records of San Bernardino
     County, California, as amended by that certain First Modification
     of Deed of Trust and Other Loan Documents dated as of May 24,
     1996, as amended by that certain Second Modification of Deed of
     Trust and Other Loan Documents dated as of May 9, 1997, as
     amended by that certain Third Modification of Deed of Trust and
     Other Loan Documents dated as of January 30, 1998, as further
     amended from time to time.
    
     Remediation and Indemnification Agreements:  Collectively,
     (i) the Hazardous Substances Remediation and Indemnification
     Agreement dated as of March 20, 1996, executed by Trustor in
     favor of Beneficiary in connection with the Property, (ii) the
     Hazardous Substances Remediation and Indemnification Agreement
     dated as of March 20, 1996, executed by Trustor in favor of
     Beneficiary in connection with the property encumbered by the
     Ontario Deed of Trust, (iii) the Hazardous Substances Remediation
     and Indemnification Agreement dated as of May 24, 1996, executed
     by Trustor in favor of Beneficiary in connection with the
     property encumbered by the Milpitas Deed of Trust, (iv) the
     Hazardous Substances Remediation and Indemnification Agreement
     dated as of March 20, 1996, executed by Trustor in favor of
     Beneficiary in connection with the property encumbered by the
     Woodlands Deed of Trust, (v) the Hazardous Substances Remediation
     and Indemnification Agreement dated as of May 9, 1997, executed
     by Trustor in favor of Beneficiary in connection with the
     property encumbered by the Nevada Deed of Trust, (vi) the
     Hazardous Substances Remediation and Indemnification Agreement
     dated as of January 30, 1998, executed by Trustor in favor of
     Beneficiary in connection with the property encumbered by the
     Arizona Deed of Trust, (vii) the Hazardous Substances Remediation
     and Indemnification Agreement dated as of January 30, 1998,
     executed by Trustor in favor of Beneficiary in connection with
     the property encumbered by the South San Francisco Deed of Trust,
     and (viii) the Hazardous Substances Remediation and
     Indemnification Agreement dated as of January 30, 1998, executed
     by Trustor in favor of Beneficiary in connection with the
     property encumbered by the Fremont Deed of Trust.
     
     Woodlands Deed of Trust:  That certain Deed of Trust dated as of
     March 20, 1996, executed by Trustor for the benefit of
     Beneficiary, recorded in the Official Records of Salt Lake
     County, Utah, as amended by that certain First Modification of
     Deed of Trust and Other Loan Documents dated as of May 24, 1996,
     as amended by that certain Second Modification of Deed of Trust
     and Other Loan Documents dated as of May 9, 1997, as amended by
     that certain Third Modification of Deed of Trust and Other Loan
     Documents dated as of January 30, 1998, as further amended from
     time to time.
    
    
          7.2  The following new definitions of Arizona Deed of Trust,
    Fremont Deed of Trust and South San Francisco Deed of Trust are hereby
    added to Article 1 of the Deed of Trust, in alphabetical order:
    
     Arizona Deed of Trust:  That certain Deed of Trust dated as of
     January 30, 1998, executed by Trustor for the benefit of
     Beneficiary, recorded in the Official Records of Maricopa County,
     Arizona, as amended from time to time.
    
     Fremont Deed of Trust:  That certain Deed of Trust dated as of
     January 30, 1998, executed by Trustor for the benefit of
     Beneficiary, recorded in the Official Records of Alameda County,
     California, as amended from time to time.
     
     South San Francisco Deed of Trust:  That certain Deed of Trust
     dated as of January 30, 1998, executed by Trustor for the benefit
     of Beneficiary, recorded in the Official Records of San Mateo
     County, California as amended from time to time.
    
          7.3  Paragraph 6.1.A(8) of the Deed of Trust is hereby
    deleted in its entirety and the following new paragraph is hereby
    inserted in its place:
    
                    (8)  An "Event of Default" occurs under any one
     or more of the Woodlands Deed of Trust, the Ontario Deed of
     Trust, the Nevada Deed of Trust, the Milpitas Deed of Trust, the
     Arizona Deed of Trust, the South San Francisco Deed of Trust
     and/or the Fremont Deed of Trust.
     
    
          7.4  Paragraph 9.36 of the Deed of Trust is hereby deleted
    in its entirety and the following new Paragraph 9.36 is hereby
    inserted in its place:
    
    
              9.36  Partial Release.  Beneficiary agrees to
          release, at any time after May 31, 1998, the Property
          from the lien of this Deed of Trust upon the satisfac-
          
          tion of the following conditions at the time of
          reconveyance:
    
    
                  (1)  No Event of Default shall have occurred
          and no event which, with the passage of time or the
          giving on notice, or both, would constitute an Event
          of Default shall have occurred either at the time of
          Beneficiary's receipt of the Trustor's written request
          for a reconveyance or as of the date of such
          reconveyance;
    
                  (2)  Not more than a total of three (3) of
          the Combined Deeds of Trust (including, without
          limitation, this Deed of Trust) shall have been
          previously reconveyed or shall be reconveyed hereby or
          concurrently herewith (and in no event shall Trustor
          be entitled to more than three (3) total releases of
          any or all of the Combined Properties hereunder and/or
          under the Combined Deeds of Trust);
    
                  (3)  Trustor shall pay to Beneficiary, prior
          to or concurrently with the reconveyance of this Deed
          of Trust, the Allocable Loan Amount for the Property
          along with the prepayment premium allocable to such
          Allocable Loan Amount as determined pursuant to the
          applicable Note;
    
                  (4)  Beneficiary shall have been provided
          satisfactory evidence that the reconveyance of this
          Deed of Trust does not violate the provisions of any
          declaration of covenants, conditions and restrictions,
          reciprocal easement agreement, Lease or other
          agreement affecting the Property or any portion
          thereof;
    
                  (5)  The Remaining Properties shall have: 
          (i) after the first reconveyance, both a Combined Debt
          Service Coverage and a Future Combined Debt Service
          Coverage of not less than 1.80 and a Combined Loan to
          Value Ratio of not more than 65%, (ii) after the
          second reconveyance, both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 1.90 and a Combined Loan to Value
          Ratio of not more than 60%, and (iii) after the third
          and final reconveyance both a Combined Debt Service
          Coverage and a Future Combined Debt Service Coverage
          of not less than 2.00 and a Combined Loan to Value
          Ratio of not more than 55%;
    
                  (6)  Each of the individual Remaining
          Properties shall have both an Individual Debt Service
          Coverage and a Future Individual Debt Service Coverage
          of not less than 1.00 and an Individual Loan to Value
          Ratio of not more than 75%;
    
                  (7)  Beneficiary shall have received a
          commitment that the title company insuring the liens
          of the Milpitas Deed of Trust, the Ontario Deed of
          Trust, the Woodlands Deed of Trust, the Nevada Deed of
          Trust, the Arizona Deed of Trust, the South San
          Francisco Deed of Trust, and the Fremont Deed of Trust
          will issue such title endorsements as Beneficiary
          deems necessary or desirable for attachment to the
          applicable title policies, including without
          limitation, CLTA Endorsement Nos. 110.5, 111, and
          111.1;
    
                  (8)  Trustor shall pay to Beneficiary all
          escrow, closing and recording costs, the cost of
          preparing and delivering any reconveyance
          documentation, including legal fees and costs, the
          cost of any title insurance endorsements that
          Beneficiary may require, recording fees, any sums then
          due and payable under the Loan Documents and a non-
          refundable $25,000 processing fee, which fee shall be
          paid at the time of notice of the requested
          reconveyance;
    
                  (9)  Trustor shall have provided Beneficiary
          with forty-five (45) days prior written notice of the
          requested reconveyance; and
    
                  (10) Such other terms and conditions as
          Beneficiary shall reasonably require.
    
          Notwithstanding the foregoing, in the event that the
    Debt Service Coverage and the Loan to Value Ratio tests set forth in
    Paragraphs 9.36(5) and 9.36(6), above, cannot be satisfied because of
    the value of, or the net cash flow from, the applicable Combined
    Properties, Trustor may, at its option, satisfy such tests by making a
    principal prepayment (the "Excess Principal Payment") on the Loan in
    an amount sufficient to satisfy such tests so long as Trustor also
    pays to Beneficiary any prepayment premium relating to such principal
    prepayment, as determined by the applicable Note.  Upon receipt of the
    Excess Principal Payment, Beneficiary shall apply such amount to
    reduce the outstanding Loan and may apply such amount to any one or
    more of the Multistate Note, the Nevada Note and/or the
    Arizona/California Note (in such order or priority as to satisfy such
    tests, as determined by Beneficiary), and shall allocate the Excess
    Principal Payment to the applicable Allocable Loan Amount in
    proportion to each such Allocable Loan Amount's share of the
    outstanding principal balance of the Note to which such amount is
    applied, and, the monthly payments due under such applicable Note
    shall be adjusted, as of the date of the release of this Deed of Trust
    pursuant to this Paragraph 9.36, to reflect the Excess Principal
    Payment applied to such applicable Note, such adjustment to be based
    on the applicable interest rate under such Note and an amortization
    schedule equal to 300 months minus the number of months that have
    elapsed since May 31, 1998.
    
          A..5  Paragraph 9.37 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.37 is hereby
    inserted in its place:
    
              9.37     Limitation on Personal Liabilities. 
    Trustor's liability (i) under the Multistate Note is subject to the
    terms and conditions set forth in Paragraph 19 of the Multistate Note;
    (ii) under the Nevada Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Nevada Note; and (iii) under the
    Arizona/California Note is subject to the terms and conditions set
    forth in Paragraph 19 of the Arizona/California Note.
                                         
          1.6  Paragraph 9.38 of the Deed of Trust is hereby
    deleted in its entirety and the following new Paragraph 9.38 is hereby
    inserted in its place:
    
              9.38  Reconveyance on Full Payment of Multistate
          Note.  In the event that the Indebtedness evidenced by
          the Multistate Note is repaid in full on the Maturity
          Date thereof (as defined in the Multistate Note), and
          provided (i) no Event of Default shall have occurred
          and be continuing under the Nevada Deed of Trust, the
          Arizona Deed of Trust, the South San Francisco Deed of
          Trust or the Fremont Deed of Trust, (ii) the Remaining
          Properties (after the proposed release of the Ontario
          Deed of Trust, the Milpitas Deed of Trust, the
          Woodlands Deed of Trust and this Deed of Trust) would
          have both a Combined Debt Service Coverage and a
          Future Combined Debt Service Coverage of not less than
          2.00 and a Combined Loan to Value Ratio of not more
          than 55%, and (iii) each of the individual Remaining
          Properties (after such release) shall have both an
          Individual Debt Service Coverage and a Future
          Individual Debt Service Coverage of not less than 1.00
          and an Individual Loan to Value Ratio of not more than
          75%; provided, however, that if there is only one
          Remaining Property then such Remaining Property would
          have both an Individual Debt Service Coverage and a
          Future Individual Debt Service Coverage of not less
          than 2.00 and an Individual Loan to Value Ratio of not
          more than 55%, then Beneficiary agrees to release and
          reconvey the Ontario Deed of Trust, the Milpitas Deed
          of Trust, the Woodlands Deed of Trust and this Deed of
          Trust, and the Combined Properties (other than the
          properties encumbered by the Nevada Deed of Trust, the
          Arizona Deed of Trust, the South San Francisco Deed of
          Trust or the Fremont Deed of Trust) encumbered thereby
          shall then and thereafter no longer serve as
          collateral for the Nevada Note or the
          Arizona/California Note.
    
          1.7  The Deed of Trust is hereby modified to provide
    that it secures, in addition to all other obligations now or hereafter
    secured thereby, a. Trustor's obligations to Beneficiary under the
    Multistate Note, the Nevada Note, the Arizona/California Note and all
    other Loan Documents, as supplemented and/or otherwise modified by the
    First Modification, the Second Modification and this Modification, and
    b. Trustor's obligations to Beneficiary under the (i) Nevada Deed of
    Trust, (ii) the Arizona Deed of Trust, (iii) the South San Francisco
    Deed of Trust, (iv) the Fremont Deed of Trust, and (v) the
    Modification Documents.
    
          II.  Modification of Multistate Note.  The Multistate
    Note is hereby amended so that (i) the term "Deeds of Trust" as used
    therein includes the Arizona Deed of Trust, the South San Francisco
    Deed of Trust and the Fremont Deed of Trust (as defined in Paragraph
    1.2 of this Modification) as well as the balance of the Deeds of Trust
    provided therein, as modified by the Modification Documents, (ii) the
    term "Remediation and Indemnification Agreements" as used therein
    shall have the meaning ascribed thereto in the Deeds of Trust (as
    modified by the Modification Documents).
    
          III.  Modification of Assignment.  The Assignment is
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, and (ii) the term "Deed of Trust" as used
    therein shall mean the Deed of Trust as modified by the First
    Modification, the Second Modification and this Modification. 
    
          IV.  Modification of Other Documents.  The other Loan
    Documents and the Remediation and Indemnification Agreement executed
    by Trustor in favor of Beneficiary in connection with the Property are
    hereby amended so that (i) the term "Note" as used therein shall mean
    collectively, the Multistate Note, the Nevada Note and the
    Arizona/California Note, the term "Deed of Trust" as used therein
    shall mean the Deed of Trust as modified by the First Modification,
    the Second Modification and this Modification. 
    
          V.  No Other Modification.  Except as expressly
    modified hereby, the Note, the Deed of Trust, and other Loan Documents
    remain unmodified and in full force and effect.
    
          VI.  Miscellaneous.  This Modification shall bind, and
    shall inure to the benefit of, the successors and assigns of the
    parties.  This document may be executed in counterparts with the same
    force and effect as if the parties had executed one instrument, and
    each such counterpart shall constitute an original hereof.  This
    Modification shall be governed by the laws of the State of California
    (without regard to any choice of law provisions thereof).
      <PAGE>
  
              IN WITNESS WHEREOF, Trustor and Beneficiary have
    caused this Modification to be duly executed as of the date first
    written above.
    
    
    "TRUSTOR":
    
    BEDFORD PROPERTY INVESTORS, INC.,
    a Maryland corporation
    
    
    By:   /s/ Scott R. Whitney
    
              Scott R. Whitney, Sr. Vice President
              [Printed Name and Title]
    
    
    "BENEFICIARY":
    
    THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey corporation
    
    
    By:      /s/ Michael B. Jameson         
                    Michael B. Jameson           
              Vice President
    
    [11128.AGRE]H61738
      <PAGE>
  
                REAFFIRMATION OF SUBORDINATION AGREEMENT
    
              THE IRVINE COMPANY, a Michigan corporation
    ("Irvine"), hereby acknowledges, agrees and consents to the foregoing
    Third Modification of Deed of Trust and Other Documents (the
    "Modification"), and agrees that the Subordination Agreement (the
    "Subordination Agreement") dated as of March 20, 1996 by and among
    Bedford Property Investors, Inc., a Maryland corporation, The
    Prudential Insurance Company of American, a New Jersey corporation,
    and Irvine, a short form of which was recorded on March 27, 1996 as
    Instrument No. 19960147698 in the Official Records of Orange County,
    California, as affirmed by the First Modification and the Second
    Modification, shall remain in full force and effect.  Capitalized
    terms used herein and not otherwise defined shall have the meaning set
    forth in the Subordination Agreement.
    
              The Deed of Trust as amended by the Modification,
    and all present and future indebtedness and obligations secured
    thereby, and any further renewals, extensions or modifications
    thereof, shall be and remain at all times a lien or charge upon the
    Real Property prior and superior to the Declaration and to all liens
    and enforcement rights and remedies of Irvine under the Declaration,
    including without limitation the right to require payment of an
    additional purchase price in the event of Owner's violation of certain
    Restrictions and the right of first refusal with respect to the sale
    of all or a portion of the Real Property.
    
              IN WITNESS WHEREOF, Irvine has duly executed this
    Reaffirmation of Subordination as of January 29, 1998.
    
                               "IRVINE"
    
                               THE IRVINE COMPANY,
                               a Michigan corporation
    
    
    
                               By:  /s/ Clarence W. Barker         
                                    Clarence W. Barker
                                    President, Irvine
                                    Industrial Company
                                    A division of The Irvine
                                    Company
    
    
    
                               By:  /s/ Jeffrey J. Wallace         
                                    Jeffrey J. Wallace
                                    Assistant Secretary
    
      <PAGE>
  State of California              )
                                )    ss.
    County of Contra Costa           )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca, a notary public,
    personally appeared Scott R. Whitney, Sr. V. P.
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/ Rebecca L. Ingraca             
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  State of California              )
                                )    ss.
    County of Contra Costa           )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca, a notary public,
    personally appeared Scott R. Whitney, Sr. V. P.
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                /s/ Rebecca L. Ingraca             
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  State of California              )
                                )    ss.
    County of Contra Costa           )
    
    
    
    On February 2, 1998, before me, Rebecca L. Ingraca, a notary public,
    personally appeared Scott R. Whitney, Sr. V.P.
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                Rebecca L. Ingraca                 
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  State of                         )
                                )    ss.
    County of                        )
    
    
    
    On _______________________, 1998, before me,
    ___________________________, a notary public, personally appeared
    __________________________________
    personally known to me (or proved to me on the basis of satisfactory
    evidence) to be the person(s) whose name(s) is/are subscribed to the
    within instrument and acknowledged to me that he/she/they executed the
    same in his/her/their authorized capacity(ies), and that by
    his/her/their signature(s) on the instrument the person(s), or the
    entity upon behalf of which the person(s) acted, executed the
    instrument.
    
    WITNESS my hand and official seal.
    
    
    
                                                                   
                                Notary Public
    
    
    
    
    
            (seal)
    
    
      <PAGE>
  Loan No.:      6-102-291
                                
  
  
                    ASSIGNMENT OF AGREEMENTS
                                
                                
       THIS ASSIGNMENT OF AGREEMENTS (this "Assignment") is made as
  of January 30,1998, by BEDFORD PROPERTY INVESTORS, INC., a Maryland
  corporation ("Assignor"), in favor of THE PRUDENTIAL INSURANCE
  COMPANY OF AMERICA, a New Jersey corporation ("Assignee").
  
                            RECITALS
                                
       Assignee has made certain loans (collectively, the "Loan") to
  Assignor (or which have been assumed by Assignor), which are
  evidenced by (i) that certain Amended and Restated Promissory Note
  dated May 24, 1996 (and deemed made as of, and relating back to,
  March 20, 1996), executed by Assignor, as maker, to and for the
  benefit of Assignee, as holder, in the original principal amount of
  Twenty-Five Million and No/100 Dollars ($25,000,000.00), and all
  modifications, renewals or extensions thereof (the "Multistate
  Note"), (ii) that certain Amended and Restated Promissory Note dated
  as of even date herewith executed by Assignor, as maker, to and for
  the benefit of Assignee, as holder, in the original principal amount
  of Eight Million Nine Hundred Thirteen Thousand Seven Hundred Thirty
  and 85/100 Dollars ($8,913,730.85), payable to Beneficiary or its
  order, and all modifications, renewals or extensions thereof (the
  "Nevada Note"), and (iii) that certain Promissory Note dated as of
  even date herewith executed by Assignor, as maker, to and for the
  benefit of Assignee, as holder, in the original principal amount of
  Twenty Million Nine Hundred Thousand Dollars ($20,900,000) (the
  "Arizona/California Note," and together with the Multistate Note and
  the Nevada Note, collectively, the "Note"), and which is to be
  secured by, among other things, a Deed of Trust, Security Agreement
  and Fixture Filing with Assignment of Leases, Rents and Agreements
  of even date herewith made by Assignor, as trustor, for the benefit
  of Assignee, as beneficiary (the "Deed of Trust"), which Deed of
  Trust encumbers property located in Alameda County, California (the
  "Property"), as more particularly described in Exhibit A attached
  hereto and incorporated herein by this reference.
  
       Assignor has entered into and, from time to time, intends to
  enter into certain agreements pertaining to the operation of the
  Property and the construction of certain improvements (the
  "Improvements") on the Property (as defined in the Deed of Trust).
  
          As a condition to the making of the Loan, Assignee has
     required that Assignor execute and deliver this Assignment.
     
                           AGREEMENT
                                
     NOW, THEREFORE, IN CONSIDERATION for the Loan and other good and
     valuable consideration, the parties agree as follows:
     
          Assignment.  Assignor hereby sells, assigns, transfers, sets
     over and delivers to Assignee all of Assignor's right, title and
     interest in and to any and all agreements and contracts whatsoever
     pertaining to the operation of the Property and any and all
     agreements and contracts whatsoever pertaining to the construction
     of the Improvements, including all preliminary and final development
     plans and specifications, architectural drawings, environmental
     impact reports, negative declarations, map approvals, conditional
     use permits, management agreements, agreements with contractors and
     agreements pertaining to the transfer of development rights or
     permitted floor area under all federal, state, regional, county,
     local and other laws, regulations, orders, codes, ordinances, rules,
     statutes and policies, restrictive covenants and other title
     encumbrances, permits and approvals, and agreements, relating to the
     development, occupancy, ownership, management, use and/or operation
     of the Property or otherwise affecting all or any part of the
     Property or Assignor, including, without limitation, those
     agreements described in Exhibit B attached hereto and incorporated
     herein by this reference (collectively, the "Agreements"), as the
     same may be amended or otherwise modified from time to time.  The
     foregoing assignment shall not include the "Leases" as defined in
     that certain Assignment of Lessor's Interest in Leases of even date
     herewith, executed by Assignor in favor of Assignee.  The foregoing
     assignment encompasses the right of Assignor to terminate any of the
     Agreements, to perform thereunder and to compel performance and
     otherwise exercise all remedies thereunder, together with the
     immediate and continuing right to collect and receive all sums which
     may become due to Assignor or which Assignor may now or shall
     hereafter become entitled to demand or claim, arising from or out of
     the Agreements, including claims of Assignor for damages arising out
     of, or for breach of, of default under, any of the Agreements and
     all rights of Assignor to receive proceeds of any insurance,
     indemnity, warranty or guaranty with respect to any of the
     Agreements.
     
          Further Assurances.  Assignor shall execute, at its cost, upon
     Assignee's request, any documents necessary to cause the specific
     assignment of any particular Agreements which are necessary, proper
     or desirable in Assignee's judgment to carry out the purposes of
     this Assignment.
     
          Obligations.  Assignor shall observe, perform, and discharge
     duly and punctually all the obligations, terms, covenants,
     conditions and warranties to be performed by it pursuant to the
     Agreements.  Assignor shall not, without the prior written consent
     of Assignee, which consent shall not be unreasonably withheld,
     terminate, amend, modify or alter in any manner any Agreements, or
     waive, execute, condone, discount, set off, compromise, or in any
     manner release or discharge the other parties to any Agreements from
     any obligations, covenants, conditions, or agreements by such
     parties to be kept, or accept or consent to any surrender of the
     Agreements.
     
          Revocable License.  So long as no event of default shall have
     occurred hereunder or under any of the other Loan Documents,
     Assignor shall have the right under a revocable license granted
     hereby to collect and retain all sums which may become payable to
     Assignor under the Agreements.  Assignee, upon the occurrence of an
     event of default hereunder or under any of the other Loan Documents,
     at its option, on written notice to Assignor shall have the right to
     terminate and revoke the license herein granted and shall have the
     complete right and authority then or thereafter to exercise and
     enforce any and all of its rights and remedies provided herein,
     under any of the Loan Documents or by law or in equity.
     
          Representations and Warranties.  Assignor represents and
     warrants that, to the best of its knowledge, it has the right to
     assign the Agreements to Assignee as herein provided (except for
     those Agreements which by their express terms are not assignable)
     and that Assignor has not previously sold, assigned, mortgaged,
     pledged or otherwise transferred or encumbered any of its rights,
     title or interest therein.
     
          Nonresponsibility.  The acceptance by Assignee of this
     Assignment with all the rights, powers, privileges and authority so
     granted shall not obligate Assignee to assume any obligations under
     the Agreements or to take any action thereunder or to expend any
     money or incur any expense or perform or discharge any obligation or
     responsibility for the nonperformance of the provisions thereof by
     Assignor.
     
          Attorney-in-Fact.  Assignor does hereby constitute and appoint
     Assignee its true and lawful attorney-in-fact, which appointment is
     coupled with an interest to (i) exercise any and all rights under
     the Agreements and (ii) demand, sue for, collect, attach, levy,
     recover and receive any and all sums which may become due to
     Assignor, to which Assignor now or shall hereafter become entitled
     or which Assignor may demand or claim, arising or issuing from or
     out of the Agreements and to give proper notices, receipts, releases
     and acquittances therefor and after deducting expenses of
     collection, to apply the net proceeds as a credit upon any portion
     of the Indebtedness (as hereinafter defined), as selected by
     Assignee, notwithstanding that the amount owing thereunder may not
     then be due and payable or that the Note is adequately secured. 
     Assignor does hereby authorize and direct the delivery and payment
     of such sums to Assignee and authorizes Assignee to sign and deliver
     written instructions to this effect in Assignor's name and stead,
     and hereby ratifies and confirms all whatsoever that its said
     attorney shall do or cause to be done by virtue of the powers
     granted hereby.  The power of attorney hereunder is irrevocable and
     continuing and such rights, powers and privileges shall be exclusive
     in Assignee, it successors and assigns so long as any part of the
     Indebtedness remains unpaid; provided, however, Assignee shall not
     exercise any of its rights or authority as attorney-in-fact prior to
     the occurrence of an event of default hereunder or under any of the
     other Loan Documents.  As used herein, the term "Indebtedness" shall
     mean and refer to the principal of and all other amounts, payments
     and premiums due under the Note and any extensions or renewals
     thereof (including extensions or renewals at a different rate of
     interest, whether or not evidenced by a new or additional promissory
     note or notes), and all other indebtedness of Assignor to Assignee
     and additional advances under, evidenced by and/or secured by the
     Loan Documents, plus interest on all such amounts.
     
          Indemnity.  Assignor shall pay any and all costs and expenses
     incurred by Assignee in enforcing any rights or remedies under this
     Assignment, including, without limitation, reasonable attorneys'
     fees.  Assignor shall indemnify, defend, protect and hold Assignee
     harmless from and against any and all claims, losses, liabilities,
     costs and expenses (including, without limitation, reasonable
     attorneys' fees) arising out of or resulting from this Assignment,
     including the exercise or enforcement of any of the rights of
     Assignee hereunder, and Assignor shall reimburse Assignee on demand
     for any and all such expenses.
     
          Counterparts.  This Assignment may be executed in any number
     of counterparts, each of which counterparts shall be deemed to be an
     original and all of which together shall constitute but one and the
     same Assignment.
     
          Successors and Assigns.  The covenants and agreements herein
     contained shall bind and inure to the benefit of the parties hereto
     and their successors and assigns, subject, however, to the
     provisions of the Deed of Trust regarding transfer of the Property
     by Assignor.
     
          Governing Law.  This Assignment shall be governed by and
     construed in accordance with the laws of the State of California.
     
          Limitation on Personal Liabilities.  Assignor's liability (i)
     under the Multistate Note is subject to the terms and conditions set
     forth in Paragraph 19 of the Multistate Note; (ii) under the Nevada
     Note is subject to the terms and conditions set forth in Paragraph
     19 of the Nevada Note; and (iii) under the Arizona/California Note
     is subject to the terms and conditions set forth in Paragraph 19 of
     the Arizona/California Note.
     
     IN WITNESS WHEREOF, Assignor has executed this Assignment of
     Agreements on the day and year first above written.
     
                              "ASSIGNOR":
                              
                              
                              BEDFORD PROPERTY INVESTORS, INC.,
                              a Maryland corporation
                              
                              
                              By:  /s/ Scott R. Whitney   
                              
                              Scott R. Whitney, Senior Vice President
                              [Printed Name and Title]
                              
                              
                              
                              
                              
                              
                              
                              
     [11128.AGRE]H61652
                                <PAGE>
                     RECORDING REQUESTED BY
                   AND WHEN RECORDED MAIL TO:
                                
                    Steefel, Levitt & Weiss
               One Embarcadero Center, 30th Floor
                San Francisco, California  94111
                                
               Attention:  James F. Eastman, Esq.
                                
                                
                                
                                
_______________________________________________________________
                                
                                
                                
                ASSIGNMENT OF LESSOR'S INTEREST
                           IN LEASES
                     (South San Francisco)
                                
                                
       THIS ASSIGNMENT OF LESSOR'S INTEREST IN LEASES (this
"Assignment") is made as of January 30, 1998, by BEDFORD PROPERTY
INVESTORS, INC., a Maryland corporation having offices at 270
Lafayette Circle, Lafayette, California 94549 ("Assignor"), in favor
of THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey
corporation having offices at Four Embarcadero Center, Suite 2700, San
Francisco, California 94111 ("Assignee"), for the benefit and
protection of Assignee as beneficiary under that certain Deed of
Trust, Security Agreement and Fixture Filing with Assignment of
Leases, Rents and Agreements of even date herewith executed by
Assignor in favor of Assignee (the "Deed of Trust") encumbering those
certain real properties, together with any improvements now or at any
time located thereon, located in the County of San Mateo, State of
California (collectively, the "Property"), and more particularly
described in Exhibits A-1 and A-2 attached hereto and incorporated
herein by this reference and for the benefit and protection of
Assignee as payee and holder of that certain Amended and Restated
Promissory Note dated May 24, 1996 (and deemed made as of, and
relating back to, March 20, 1996), executed by Assignor, as maker, to
and for the benefit of Assignee, as holder, in the original principal
amount of Twenty-Five Million and No/100 Dollars ($25,000,000.00), and
all modifications, renewals or extensions thereof (the "Multistate
Note"), and that certain Amended and Restated Promissory Note dated as
of May 9, 1997 executed by Assignor, as maker, to and for the benefit
of Assignee, as holder, in the original principal amount of Eight
Million Nine Hundred Thirteen Thousand Seven Hundred Thirty and 85/100
Dollars ($8,913,730.85), payable to Assignee or its order, and all
modifications, renewals or extensions thereof (the "Nevada Note"), and
that certain Promissory Note dated as of even date herewith executed
by Assignor, as maker, to and for the benefit of Assignee, as holder,
in the original principal amount of Twenty Million Nine Hundred
Thousand Dollars ($20,900,000), payable to Assignee or its order, and
all modifications, renewals or extensions thereof (the
"Arizona/California Note," and together with the Multistate Note and
the Nevada Note, collectively, the "Note").

                      W I T N E S S E T H:
                                
       FOR VALUE RECEIVED, Assignor does hereby irrevocably and
absolutely SELL, ASSIGN, TRANSFER, SET OVER AND DELIVER unto Assignee
any and all leasehold interests, including subleases and tenancies
following attornment, now or hereafter affecting or covering any part
of the Property, including, without limitation, those leases described
in Exhibits B-1 and B-2 attached hereto (collectively, the "Leases").

       TOGETHER, with the immediate and continuing right to collect
and receive all of the rents, income, receipts, revenues, issues and
profits now due or which may become due or to which Assignor may now
or shall hereafter (including the period of redemption, if any) become
entitled or may demand or claim, arising or issuing from or out of the
Leases or from deficiency rents and liquidated damages following
default, including, without limitation, all security and other
deposits now or hereafter held by Assignor, and all proceeds payable
under any policy of insurance covering loss of rents or other income
from the Property, together with any and all rights and claims of any
kind that Assignor may have against lessees under the Leases or any
subtenants or occupants of the Property, or any part thereof (all such
moneys, rights and claims described in this paragraph being
hereinafter called the "Receipts").

       SUBJECT, however, to a license hereby granted by Assignee to
Assignor, but limited as hereinafter provided, to collect and receive
the Receipts.

       ASSIGNOR REPRESENTS, WARRANTS, COVENANTS AND AGREES AS
FOLLOWS:

     Representations and Warranties.  Assignor represents and warrants
that:  (i)ASSIGNOR is the owner of the Property, and has good title to
the Leases and Receipts and full and complete right to assign the
same; (ii)no other Person (as hereinafter defined) has any right,
title or interest in the Leases or Receipts; (iii)ASSIGNOR has duly
and punctually performed all and singular the obligations, terms,
covenants, conditions and warranties of the Leases on Assignor's part
to be kept, observed and performed; (iv) Assignor has not previously
sold, assigned, transferred, mortgaged or pledged the Leases or the
Receipts, whether now due or hereafter to become due; (v)No Receipts
for any period of more than thirty (30) days subsequent to the date
hereof have been collected, nor has payment of any of same been
otherwise discharged or compromised; (vi)the lessees under the Leases
("Lessees") are not in default of any of the terms thereof and do not
have any defense, set-off or counter claim against Assignor
thereunder; (vii)The Leases are in full force and effect, are valid
and enforceable in accordance with their terms, and have not been
modified, amended or altered, whether in writing or orally, except as
otherwise disclosed to Assignee in writing; (viii)except as disclosed
on the rent rolls delivered to Assignee in connection with the funding
of the Loan (the "Rent Rolls"), there are no unextinguished rent
concessions, abatements or other inducements relating to the Leases,
and no Lessee has any option or right to acquire any interest in the
Property; and (ix)The Rent Rolls disclose all currently existing
Leases and is complete, accurate and true in all respects.  As used
herein, the term "Person" shall mean and refer to any natural person,
corporation, firm, association, government, governmental agency or any
other entity, whether acting in an individual, fiduciary or other
capacity.

     Affirmative Covenants.  Assignor shall:  (i) observe, perform and
discharge, duly and punctually, all and singular the obligations,
terms, covenants, conditions and warranties of the Leases, on the part
of Assignor to be kept, observed and performed, and give prompt notice
to Assignee of any failure on the part of Assignor to observe, perform
and discharge the same; (ii) direct the Lessees to deliver all rents
and other payments due under the Leases to Assignee upon written
request of Assignee and without further action of Assignor; (iii) upon
request of Assignee, notify Lessees in writing of this Assignment and
that any security deposit, or other deposits heretofore delivered to
Assignor have been retained by Assignor or assigned and delivered to
Assignee, as the case may be; (iv) enforce or secure in the name of
Assignee the performance of each and every obligation, term, covenant,
condition and agreement of the Leases to be performed by Lessees; (v)
appear in and defend any action or proceeding arising under, occurring
out of, or in any manner connected with the Leases or the obligations,
duties, or liabilities of Assignor and Lessees thereunder; and (vi)
upon request by Assignee, to do so in the name and on behalf of
Assignee but at the expense of Assignor, and to pay all costs and
expenses of Assignee, including, without limitation, reasonable
attorneys' fees.  In the negotiation of any future leases or the
renewal of any of the Leases, Assignor shall use commercially
reasonable efforts not to agree to obtain the agreement of Assignee to
execute a subordination, non-disturbance and attornment agreement
("SNDA") with the Lessee or proposed lessee.  So long as Assignor uses
such commercially reasonable efforts, Assignee shall enter into an
SNDA on Assignee's then current standard SNDA form with the tenant for
any lease which is either expressly approved by Assignee in writing or
which meets the criteria set forth in paragraphs (a) or (b) of Section
3, below.  Pursuant to such SNDA, Assignee shall agree that in the
exercise of any foreclosure remedies under the Deed of Trust, Assignee
will not disturb such tenant in its possession of the demised premises
so long as such tenant is not in default under its lease.

     Negative Covenants.  Assignor shall not, without the prior
written consent of Assignee:  (i) lease any part of the Property or
renew or extend any of the Leases; (ii) terminate, amend, modify or
alter in any manner any of the Leases, or waive, excuse, condone,
discount, set off, compromise, or in any manner release or discharge
Lessees from any obligations, covenants, conditions or agreements by
such Lessees to be kept, or accept or consent to any surrender of the
Leases; (iii) receive or collect any Receipts for a period of more
than one month in advance (whether in cash or by promissory note or
otherwise); (iv) further assign the Leases or pledge, transfer,
mortgage or otherwise encumber or assign future payments of Receipts;
(v) commence an action of ejectment or summary proceedings for
dispossession of the Lessees under any of the Leases; (vi) consent to
any modification of the express purposes for which the Property has
been leased; or (vii) consent to any subletting of the Property or any
part thereof, or to any assignment of the Leases by lessees thereunder
or to any assignment or further subletting by any sublessees. 
Notwithstanding the foregoing, Assignor may do the following with
respect to the Leases, including without limitation any new leases
affecting the Property, without obtaining Assignee's prior written
consent:

            Enter into any amendment or modification of any Lease, so
       long as the Lessee under such Lease leases not more than
       10,000 rentable square feet of the Property, provided that
       Assignor delivers to Assignee an executed copy of such
       amendment within a reasonable time after execution thereof,
       but in no case later than 5 business days after such
       execution, and provided further that such amendment (i)is
       consistent with the ordinary and reasonable business practices
       and procedures customarily employed by Assignor for properties
       similar to the Property, (ii) does not substantially increase
       the obligations of the landlord by providing non-market
       inducements to the Lessee, (iii) does not decrease or
       accelerate the rent under such Lease, (iv) does not decrease
       the term of such Lease, unless such a reduced lease term is
       granted in conjunction with both retaining an existing Lessee
       and with enlarging the size of the same Lessee's space in the
       Property, (v) does not cause such Lease to vary substantially
       from Assignor's standard form lease, and (vi) is not of a
       Lease for a single tenant space which comprises all or
       substantially all of the area for an individual building on
       the Property; and
       
            Enter into new bona fide arms-length leases (or renew
       existing Leases) with third-party tenants for premises of
       10,000 rentable square feet or less, provided such leases (i)
       are on Assignor's standard form lease approved by Assignee,
       with no modifications that substantially increase the
       obligations of the landlord by providing non-market
       inducements to the Lessee, and (ii) are not for a single
       tenant space which comprises all or substantially all of the
       area for an individual building on the Property; and
       
            Terminate any Lease (for premises of 10,000 rentable
       square feet or less) in the ordinary course of Assignor's
       business (i) for non-payment of rent or other material default
       by the Lessee thereunder so long as such termination does not
       include a payment by such Lessee to Assignor, or (ii) if all
       of the space occupied pursuant to the Lease to be terminated
       is to be leased to another Lessee in conjunction with a
       transaction permitted under Section 3(a)(iv), above.
       
In any case in which Assignee's consent is required pursuant to this
Section 3, Assignee shall respond to requests for such consent in an
expedient manner, and such consent shall not be unreasonably withheld
or delayed and shall be deemed given unless objections in reasonable
detail are given to Assignee within eight (8) business days following
Assignor's receipt of (i) written request for such consent, which
written request shall include the date Assignee's response is due, and
(ii) all pertinent information relating to the Lease or proposed lease
in question, including, without limitation, copies of the proposed
amendment or new lease, if applicable.

     Default and Remedies.  In the event any representation or
warranty herein of Assignor shall be found to be untrue in any
material respect when made, or thereafter becomes untrue in any
material respect, or in the event Assignor shall default in the
payment of any Indebtedness (as hereinafter defined) or in the
observance or performance of any other Obligation (as hereinafter
defined), after the expiration of all applicable grace or cure
periods, if any, set forth in the Deed of Trust, then, in each such
instance, the same shall constitute an "Event of Default" hereunder
and under the Loan Documents (as defined in the Deed of Trust),
thereby entitling Assignee to declare all Indebtedness immediately due
and payable and to exercise any and all of the rights and remedies
provided thereunder and hereunder as well as by law or in equity. 
Specifically, but without limiting the generality of the foregoing,
upon or at any time after the occurrence of an Event of Default,
Assignee, at its option, shall have the complete right, power and
authority to exercise and enforce any or all of the following rights
and remedies:

                  to terminate and revoke the license granted to
           Assignor hereunder and collect the Receipts, and without
           taking possession of the Property, in Assignee's own name,
           to demand, collect, receive, sue for, attach and levy the
           Receipts, to give proper receipts, releases and
           acquittances therefor, and after deducting all necessary
           and proper costs and expenses of operation and collection,
           as determined in Assignee's sole judgment, and including
           reasonable attorneys' fees, to apply the net proceeds
           thereof, together with any funds of Assignor deposited
           with Assignee, upon the Indebtedness and in such order as
           Assignee may determine in its sole discretion; and

                  without regard to the adequacy of the security,
           with or without any action or proceeding, through any
           person or by agent, by the Trustee under the Deed of
           Trust, or by a receiver appointed by a court of competent
           jurisdiction, and irrespective of Assignor's possession,
           to enter upon, take possession of, manage and operate the
           Property, or any part thereof or interest therein, make,
           modify, enforce, cancel or accept surrender of, any of the
           Leases, remove and evict any Lessee, increase or decrease
           rents under any of the Leases, decorate, clean and repair
           any premises under any of the Leases, and otherwise do any
           act or incur any costs or expenses as Assignee deems
           necessary or proper to protect the rights of Assignee
           therein, as fully and to the same extent as Assignor could
           do if in possession, and in such event to apply the
           Receipts so collected to the operation and management of
           the Property, in such order as the Assignee shall deem
           proper in its sole discretion, including payment of
           reasonable management, brokerage and attorneys' fees,
           payment of the Indebtedness and maintenance, without
           interest, of reserves for replacements.

Collection of Receipts hereunder, and application thereof as specified
above, and/or the entry upon and taking possession of the Property, or
any part thereof or interest therein, shall not cure or waive any
default or waive, modify or affect any notice of default under any
Loan Documents, or invalidate any act done pursuant to such notice,
and the enforcement of such right or remedy by Assignee, once
exercised, shall continue for so long as Assignee shall elect.  If
Assignee shall thereafter elect to discontinue the exercise of any
such right or remedy, the same or any other right or remedy hereunder
may be reasserted at any time and from time to time following any
subsequent Event of Default.  A demand upon any Lessee made by
Assignee for payment of Receipts by reason of any default claimed by
Assignee hereunder or under any other Loan Documents shall be
sufficient to warrant to said Lessee to make future payments of all
Receipts to Assignee without the necessity for further consent by
Assignor.
As used herein, the term "Indebtedness" shall mean and refer to the
principal of and all other amounts, payments and premiums due under
the Note and any extensions or renewals thereof (including extensions
or renewals at a different rate of interest, whether or not evidenced
by a new or additional promissory note or notes), and all other
indebtedness of Assignor to Assignee and additional advances under,
evidenced by and/or secured by the Loan Documents, plus interest on
all such amounts.  As used herein, the term "Obligations" shall mean
and refer to any and all of the covenants, promises and other
obligations (including the Indebtedness) made or owing by Assignor to
or due Assignee under and/or as set forth in the Loan Documents and
all of the material covenants, promises and other obligations made or
owing by Assignor to each and every other Person relating to the
Property.

     Grant of License to Assignor.  So long as there shall exist no
Event of Default, Assignor shall have the right under a license
granted hereby (but limited as provided in this paragraph) to collect,
but not prior to accrual, all Receipts.  Assignor shall receive such
Receipts, and shall hold the same, as well as the right and license to
receive the same, as a trust fund to be applied, and Assignor shall so
apply the same, first to the payment of taxes and assessments upon the
Property before penalty or interest are due thereon, second to the
cost of such insurance and of such maintenance and repairs as is
required by the terms of the Deed of Trust, third to the satisfaction
of all obligations under the Leases, and fourth to the payment of the
Indebtedness before using any part of the Receipts for any other
purpose.

     Power of Attorney.  Effective automatically upon the occurrence
of an Event of Default and continuously thereafter, and without the
necessity of the execution of any further documents or instruments,
Assignor hereby constitutes and appoints Assignee as Assignor's true
and lawful attorney, coupled with an interest, in the name, place and
stead of Assignor (i)to collect, demand, sue for, attach, levy,
recover and receive all Receipts due and payable by Lessees pursuant
to the Leases and to give proper notices, receipts, releases and
acquittances therefor and after deducting expenses of collection, to
apply the net proceeds as a credit upon any portion, as selected by
Assignee, of the Indebtedness, notwithstanding that the amount owing
thereunder may not then be due and payable or that the Indebtedness is
adequately secured, and Assignor does hereby authorize and direct such
Lessees to deliver such payment to Assignee in accordance with the
foregoing; and (ii)To subject and subordinate at any time and from
time to time, the Leases, to the lien of the Deed of Trust or any
other Loan Documents or any other mortgage or deed of trust on or to
any ground lease of the Property or to request or require such
subordination, where such reservation, option or authority was
reserved under the Leases to the Assignor, or in any case, where the
Assignor otherwise would have the right, power or privilege so to do. 
Assignor hereby ratifies and confirms all acts that Assignee shall do
or cause to be done by virtue of the powers granted hereby and
warrants that the Assignor has not, on or at any time prior to the
date hereof, exercised any such right of subordination under
clause(ii) above and covenants not to exercise any such right except
as may be required by Assignee.  The power of attorney hereunder
granted is irrevocable and continuing, shall survive the insolvency or
dissolution of Assignor, and such rights, powers and privileges shall
be exclusive in Assignee, its successors and assigns so long as any
part of the Indebtedness shall remain unpaid.

     Indemnity.  Assignor shall indemnify, defend, protect and hold
Assignee harmless from and against any and all liability, loss, cost,
damage or expense (including, without limitation, reasonable
attorneys' fees) that Assignee may or might incur under or by reason
of this Assignment, for any action taken by Assignee hereunder, or the
enforcement of this Assignment, or by reason or in defense of any and
all claims and demands whatsoever that may be asserted against
Assignee arising out of the Leases, including any claim by any Lessees
of credit from rental paid to and received by Assignor.  If Assignee
incurs any such liability, loss, cost, damage or expense, the amount
thereof with interest thereon at the Secondary Interest Rate (as
defined in the Note), shall be payable by Assignor immediately upon
demand, shall be secured by the Deed of Trust, and shall be part of
the Indebtedness.

     No Waiver.  The failure of Assignee to avail itself of any of the
terms, covenants and conditions of this Assignment for any period of
time, or at any time or times, shall not be construed or deemed to be
a waiver of any such right, and nothing herein contained, nor anything
done or omitted to be done by Assignee pursuant hereto, shall be
deemed a waiver by Assignee of any of its rights and remedies under
the Loan Documents, or under any applicable laws.  The rights of
Assignee to collect the Indebtedness and to enforce any security
therefor may be exercised by Assignee, either prior to, simultaneously
with, or subsequent to, any action taken hereunder.

     No Merger.  So long as any of the Indebtedness shall remain
unpaid, unless Assignee shall otherwise consent in writing, the
leasehold estates and the subleasehold estates on the Property, if
any, shall not merge, but shall always be kept separate and distinct,
notwithstanding the union of said estates either in Assignor or in any
Lessees or in a third party, by purchase or otherwise.

     No Mortgagee in Possession; No Other Liability.  The acceptance
by Assignee of this Assignment, with all of the rights, power,
privileges and authority so created, shall not, prior to entry upon
and taking of possession of the Property by Assignee, be deemed or
construed to (i)constitute Assignee a mortgagee in possession nor
thereafter or at any time or in any event obligate Assignee to appear
in or defend any action or proceeding relating to the Leases or to the
Property, (ii)require Assignee to take any action hereunder, or to
expend any money or incur any expenses or perform or discharge any
obligation, duty or liability under the Leases, or (iii)Require
Assignee to assume any obligation or responsibility for any security
deposits or other deposits delivered to Assignor by Lessees and not
assigned and delivered to Assignee.  Assignee shall not be liable in
any way for any injury or damage to person or property sustained by
any Person in or about the Property.

     Payment of Indebtedness.  Upon payment in full of all of the
Indebtedness, this Assignment shall become and be void and of no
effect, but the affidavit, certificate, letter or statement of any
officer of Assignee showing any part of said Indebtedness to remain
unpaid shall be and constitute conclusive evidence of the validity,
effectiveness and continuing force of this Assignment, and any Person
may and is hereby authorized to rely thereon.

     Notices.  All notices, demands or documents of any kind that
Assignee or Assignor may be required or may desire to serve shall be
served in the manner provided in the Deed of Trust.

     Successors and Assigns; Gender.  The terms, covenants, conditions
and warranties contained herein and the powers granted hereby shall
run with the land, shall inure to the benefit of and bind all parties
hereto and their respective heirs, executors, administrators,
successors and assigns, and all subsequent owners of the Property, and
all subsequent holders of the Note and the Deed of Trust, subject in
all events to the provisions of the Deed of Trust regarding transfers
of the Property by Assignor.  In this Assignment, whenever the context
so requires, the masculine gender shall include the feminine and/or
neuter and the singular number shall include the plural and conversely
in each case.  If there is more than one party constituting Assignor,
all obligations of each Assignor hereunder shall be joint and several.

     Severability.  If any term, provision, covenant or condition
hereof or any application thereof should be held unenforceable, in
whole or in part, all terms, provisions, covenants and conditions
hereof and all applications thereof not held invalid, void or
unenforceable shall continue in full force and effect and shall in no
way be affected, impaired or invalidated thereby.

     Governing Law.  This Assignment shall be governed by and
construed in accordance with the laws of the State of California.

     Expenses.  Assignor shall pay on demand all costs and expenses
incurred by Assignee in connection with the review of Leases,
including the fees and disbursements of Assignee's outside counsel.

     Absolute Assignment.  Notwithstanding anything contained herein
to the contrary, this Assignment is intended by Assignor and Assignee
to create and shall be construed to create an absolute assignment by
Assignor to Assignee of all of Assignor's right, title and interest in
the Leases and Receipts and shall not be deemed to create a security
interest therein.  Assignor and Assignee further agree that, during
the term of this Assignment, the Leases and Receipts shall not
constitute property of Assignor (or of any estate of Assignor) within
the meaning of 11 U.S.C. Section 541, as amended from time to time.

     Priority Of Leases.  NOTICE OF THE FOLLOWING IS HEREBY GIVEN TO
ALL TENANTS EXECUTING A LEASE AFFECTING THE PROPERTY, EACH OF WHICH
SHALL BE ON NOTICE OF, BOUND BY AND SUBJECT TO THE TERMS OF THIS
PARAGRAPH 18:

       18.1       Anything to the contrary in any Lease
notwithstanding, Assignee shall have the right, but not the
obligation, to change the priority of that Lease and the lien of the
Deed of Trust from time to time by one or more unilateral notices to
the tenant that (a) the lien of the Deed of Trust shall be subordinate
to such Lease, or (b) the Lease shall be subordinate to the Deed of
Trust.
       18.2       Upon written request of Assignee, every tenant
under a Lease receiving such request shall execute and deliver to
Assignee within the time period specified in that written request a
written agreement which provides the following: (a)upon the
foreclosure of the Deed of Trust such tenant shall attorn to the
purchaser of the Property at the foreclosure sale, and (b)The
foreclosure of the Deed of Trust shall not disturb or result in the
cancellation or termination of that tenant's Lease.  Assignee has no
obligation to deliver such a request to any tenant.

       18.3       Assignor covenants that, unless Assignee otherwise
agrees, each Lease shall provide, among other things, that Assignee
shall have the right to (a) change the relative priority of that Lease
and the Deed of Trust by notice to the tenant that (i) the Lease shall
be subordinate to the Deed of Trust, or (ii) the Deed of Trust shall
be subordinate to the Lease, and (b) elect whether or not (i) such
Lease shall survive foreclosure of the Deed of Trust, and (ii) such
tenant shall attorn to Assignee or the purchaser upon a foreclosure
sale.

       18.4       Assignee shall have the right to elect to be a
third party beneficiary of any attornment provisions contained in any
Lease. Anything to the contrary in any Lease notwithstanding, no
election by Assignor under any Lease or otherwise to alter the
relative priority of that Lease and the Deed of Trust shall be
effective unless Assignee shall have consented thereto in writing.

     Limitation on Personal Liabilities.  Assignor's liability (i)
under the Multistate Note is subject to the terms and conditions set
forth in Paragraph 19 of the Multistate Note; (ii) under the Nevada
Note is subject to the terms and conditions set forth in Paragraph 19
of the Nevada Note; and (iii) under the Arizona/California Note is
subject to the terms and conditions set forth in Paragraph 19 of the
Arizona/California Note.

     Counterparts.  This Assignment may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an
original and all of which together shall constitute but one and the
same Assignment.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Lessor's Interest in Leases has
been duly executed by Assignor the day and year first above written.

                           "ASSIGNOR":
                           
                           BEDFORD PROPERTY INVESTORS, INC.,
                           a Maryland corporation
                           
                           
                           By:     /s/ Scott R. Whitney   
                              
                              Scott R. Whitney, Senior Vice
                              President
                           [Printed Name and Title]
                           
                           
  The Prudential Insurance Company
  of America hereby executes this
  Assignment to evidence its agreement
  with the last two sentences of
  Section 2, hereof.
  
  THE PRUDENTIAL INSURANCE COMPANY OF
  AMERICA, a New Jersey corporation
  
  
  By:    /s/ Michael B. Jameson              
  
              Michael B. Jameson, Vice President
   [Printed Name and Title]
  
  
  
  [11128.AGRE]I13399
  
    <PAGE>
  State of                    California          )
          )                   ss.
  County of                   Contra Costa        )
  
  
  
  On February 2, 1998, before me,      Colette M. Pennington    , a
  notary public, personally appeared
  Scott R. Whitney                        
  personally known to me (or proved to me on the basis of satisfactory
  evidence) to be the person(s) whose name(s) is/are subscribed to the
  within instrument and acknowledged to me that he/she/they executed
  the same in his/her/their authorized capacity(ies), and that by
  his/her/their signature(s) on the instrument the person(s), or the
  entity upon behalf of which the person(s) acted, executed the
  instrument.
  
  WITNESS my hand and official seal.
  
  
  
          /s/ Colette M. Pennington
          Notary Public
  
  
  
  
  
     (seal)
  
    <PAGE>
  State of                    California          )
          )                   ss.
  County of                   Contra Costa        )
  
  
  
  On February 2, 1998, before me,      Colette M. Pennington    , a
  notary public, personally appeared
  Scott R. Whitney                        
  personally known to me (or proved to me on the basis of satisfactory
  evidence) to be the person(s) whose name(s) is/are subscribed to the
  within instrument and acknowledged to me that he/she/they executed
  the same in his/her/their authorized capacity(ies), and that by
  his/her/their signature(s) on the instrument the person(s), or the
  entity upon behalf of which the person(s) acted, executed the
  instrument.
  
  WITNESS my hand and official seal.
  
  
  
          /s/ Colette M. Pennington
          Notary Public
  
  
  
  
  
     (seal)
  
<PAGE>
  State of                    California          )
          )                   ss.
  County of                   Contra Costa        )
  
  
  
  On February 2, 1998, before me,      Colette M. Pennington    , a
  notary public, personally appeared
  Scott R. Whitney                        
  personally known to me (or proved to me on the basis of satisfactory
  evidence) to be the person(s) whose name(s) is/are subscribed to the
  within instrument and acknowledged to me that he/she/they executed
  the same in his/her/their authorized capacity(ies), and that by
  his/her/their signature(s) on the instrument the person(s), or the
  entity upon behalf of which the person(s) acted, executed the
  instrument.
  
  WITNESS my hand and official seal.
  
  
  
          /s/ Colette M. Pennington
          Notary Public
  
  
  
  
  
     (seal)
  
  
                                 
                                 
                                 
                                 
                                <PAGE>
  Loan No.:      6-102-324
                                
  
  
ASSIGNMENT OF AGREEMENTS
(South San Francisco)

       THIS ASSIGNMENT OF AGREEMENTS (this "Assignment") is made as
  of January 30, 1998, by BEDFORD PROPERTY INVESTORS, INC., a Maryland
  corporation ("Assignor"), in favor of THE PRUDENTIAL INSURANCE
  COMPANY OF AMERICA, a New Jersey corporation ("Assignee").
  
                            RECITALS
                                
       Assignee has made certain loans (collectively, the "Loan") to
  Assignor (or which have been assumed by Assignor), which are
  evidenced by (i)that certain Amended and Restated Promissory Note
  dated May 24, 1996 (and deemed made as of, and relating back to,
  March 20, 1996), executed by Assignor, as maker, to and for the
  benefit of Assignee, as holder, in the original principal amount of
  Twenty-Five Million and No/100 Dollars ($25,000,000.00), and all
  modifications, renewals or extensions thereof (the "Multistate
  Note"), (ii)That certain Amended and Restated Promissory Note dated
  as of even date herewith executed by Assignor, as maker, to and for
  the benefit of Assignee, as holder, in the original principal amount
  of Eight Million Nine Hundred Thirteen Thousand Seven Hundred Thirty
  and 85/100 Dollars ($8,913,730.85), payable to Beneficiary or its
  order, and all modifications, renewals or extensions thereof (the
  "Nevada Note"), and (iii) that certain Promissory Note dated as of
  even date herewith executed by Assignor, as maker, to and for the
  benefit of Assignee, as holder, in the original principal amount of
  Twenty Million Nine Hundred Thousand Dollars ($20,900,000) (the
  "Arizona/California Note," and together with the Multistate Note and
  the Nevada Note, collectively, the "Note"), and which is to be
  secured by, among other things, a Deed of Trust, Security Agreement
  and Fixture Filing with Assignment of Leases, Rents and Agreements
  of even date herewith made by Assignor, as trustor, for the benefit
  of Assignee, as beneficiary (the "Deed of Trust"), which Deed of
  Trust encumbers property located in San Mateo County, California
  (the "Property"), as more particularly described in Exhibits a-1 and
  A-2 attached hereto and incorporated herein by this reference.
  
       Assignor has entered into and, from time to time, intends to
  enter into certain agreements pertaining to the operation of the
  Property and the construction of certain improvements (the
  "Improvements") on the Property (as defined in the Deed of Trust).
  
          As a condition to the making of the Loan, Assignee has
     required that Assignor execute and deliver this Assignment.
     
                           AGREEMENT
                                
     NOW, THEREFORE, IN CONSIDERATION for the Loan and other good and
     valuable consideration, the parties agree as follows:
     
          Assignment.  Assignor hereby sells, assigns, transfers, sets
     over and delivers to Assignee all of Assignor's right, title and
     interest in and to any and all agreements and contracts whatsoever
     pertaining to the operation of the Property and any and all
     agreements and contracts whatsoever pertaining to the construction
     of the Improvements, including all preliminary and final development
     plans and specifications, architectural drawings, environmental
     impact reports, negative declarations, map approvals, conditional
     use permits, management agreements, agreements with contractors and
     agreements pertaining to the transfer of development rights or
     permitted floor area under all federal, state, regional, county,
     local and other laws, regulations, orders, codes, ordinances, rules,
     statutes and policies, restrictive covenants and other title
     encumbrances, permits and approvals, and agreements, relating to the
     development, occupancy, ownership, management, use and/or operation
     of the Property or otherwise affecting all or any part of the
     Property or Assignor, including, without limitation, those
     agreements described in Exhibits B-1 and B-2 attached hereto and
     incorporated herein by this reference (collectively, the
     "Agreements"), as the same may be amended or otherwise modified from
     time to time.  The foregoing assignment shall not include the
     "Leases" as defined in that certain Assignment of Lessor's Interest
     in Leases of even date herewith, executed by Assignor in favor of
     Assignee.  The foregoing assignment encompasses the right of
     Assignor to terminate any of the Agreements, to perform thereunder
     and to compel performance and otherwise exercise all remedies
     thereunder, together with the immediate and continuing right to
     collect and receive all sums which may become due to Assignor or
     which Assignor may now or shall hereafter become entitled to demand
     or claim, arising from or out of the Agreements, including claims of
     Assignor for damages arising out of, or for breach of, of default
     under, any of the Agreements and all rights of Assignor to receive
     proceeds of any insurance, indemnity, warranty or guaranty with
     respect to any of the Agreements.
     
          Further Assurances.  Assignor shall execute, at its cost, upon
     Assignee's request, any documents necessary to cause the specific
     assignment of any particular Agreements which are necessary, proper
     or desirable in Assignee's judgment to carry out the purposes of
     this Assignment.
     
          Obligations.  Assignor shall observe, perform, and discharge
     duly and punctually all the obligations, terms, covenants,
     conditions and warranties to be performed by it pursuant to the
     Agreements.  Assignor shall not, without the prior written consent
     of Assignee, which consent shall not be unreasonably withheld,
     terminate, amend, modify or alter in any manner any Agreements, or
     waive, execute, condone, discount, set off, compromise, or in any
     manner release or discharge the other parties to any Agreements from
     any obligations, covenants, conditions, or agreements by such
     parties to be kept, or accept or consent to any surrender of the
     Agreements.
     
          Revocable License.  So long as no event of default shall have
     occurred hereunder or under any of the other Loan Documents,
     Assignor shall have the right under a revocable license granted
     hereby to collect and retain all sums which may become payable to
     Assignor under the Agreements.  Assignee, upon the occurrence of an
     event of default hereunder or under any of the other Loan Documents,
     at its option, on written notice to Assignor shall have the right to
     terminate and revoke the license herein granted and shall have the
     complete right and authority then or thereafter to exercise and
     enforce any and all of its rights and remedies provided herein,
     under any of the Loan Documents or by law or in equity.
     
          Representations and Warranties.  Assignor represents and
     warrants that, to the best of its knowledge, it has the right to
     assign the Agreements to Assignee as herein provided (except for
     those Agreements which by their express terms are not assignable)
     and that Assignor has not previously sold, assigned, mortgaged,
     pledged or otherwise transferred or encumbered any of its rights,
     title or interest therein.
     
          Nonresponsibility.  The acceptance by Assignee of this
     Assignment with all the rights, powers, privileges and authority so
     granted shall not obligate Assignee to assume any obligations under
     the Agreements or to take any action thereunder or to expend any
     money or incur any expense or perform or discharge any obligation or
     responsibility for the nonperformance of the provisions thereof by
     Assignor.
     
          Attorney-in-Fact.  Assignor does hereby constitute and appoint
     Assignee its true and lawful attorney-in-fact, which appointment is
     coupled with an interest to (i)exercise any and all rights under the
     Agreements and (ii)demand, sue for, collect, attach, levy, recover
     and receive any and all sums which may become due to Assignor, to
     which Assignor now or shall hereafter become entitled or which
     Assignor may demand or claim, arising or issuing from or out of the
     Agreements and to give proper notices, receipts, releases and
     acquittances therefor and after deducting expenses of collection, to
     apply the net proceeds as a credit upon any portion of the
     Indebtedness (as hereinafter defined), as selected by Assignee,
     notwithstanding that the amount owing thereunder may not then be due
     and payable or that the Note is adequately secured.  Assignor does
     hereby authorize and direct the delivery and payment of such sums to
     Assignee and authorizes Assignee to sign and deliver written
     instructions to this effect in Assignor's name and stead, and hereby
     ratifies and confirms all whatsoever that its said attorney shall do
     or cause to be done by virtue of the powers granted hereby.  The
     power of attorney hereunder is irrevocable and continuing and such
     rights, powers and privileges shall be exclusive in Assignee, it
     successors and assigns so long as any part of the Indebtedness
     remains unpaid; provided, however, Assignee shall not exercise any
     of its rights or authority as attorney-in-fact prior to the
     occurrence of an event of default hereunder or under any of the
     other Loan Documents.  As used herein, the term "Indebtedness" shall
     mean and refer to the principal of and all other amounts, payments
     and premiums due under the Note and any extensions or renewals
     thereof (including extensions or renewals at a different rate of
     interest, whether or not evidenced by a new or additional promissory
     note or notes), and all other indebtedness of Assignor to Assignee
     and additional advances under, evidenced by and/or secured by the
     Loan Documents, plus interest on all such amounts.
     
          Indemnity.  Assignor shall pay any and all costs and expenses
     incurred by Assignee in enforcing any rights or remedies under this
     Assignment, including, without limitation, reasonable attorneys'
     fees.  Assignor shall indemnify, defend, protect and hold Assignee
     harmless from and against any and all claims, losses, liabilities,
     costs and expenses (including, without limitation, reasonable
     attorneys' fees) arising out of or resulting from this Assignment,
     including the exercise or enforcement of any of the rights of
     Assignee hereunder, and Assignor shall reimburse Assignee on demand
     for any and all such expenses.
     
          Counterparts.  This Assignment may be executed in any number
     of counterparts, each of which counterparts shall be deemed to be an
     original and all of which together shall constitute but one and the
     same Assignment.
     
          Successors and Assigns.  The covenants and agreements herein
     contained shall bind and inure to the benefit of the parties hereto
     and their successors and assigns, subject, however, to the
     provisions of the Deed of Trust regarding transfer of the Property
     by Assignor.
     
          Governing Law.  This Assignment shall be governed by and
     construed in accordance with the laws of the State of California.
     
          Limitation on Personal Liabilities.  Assignor's liability (i)
     under the Multistate Note is subject to the terms and conditions set
     forth in Paragraph 19 of the Multistate Note; (ii) under the Nevada
     Note is subject to the terms and conditions set forth in Paragraph
     19 of the Nevada Note; and (iii) under the Arizona/California Note
     is subject to the terms and conditions set forth in Paragraph 19 of
     the Arizona/California Note.
     
     IN WITNESS WHEREOF, Assignor has executed this Assignment of
     Agreements on the day and year first above written.
     
                              "ASSIGNOR":
                              
                              
                              BEDFORD PROPERTY INVESTORS, INC.,
                              a Maryland corporation
                              
                              By:  /s/ Scott R. Whitney  
                              
                              Scott R. Whitney, Senior Vice President
                              [Printed Name and Title]
                              
                              
                              
                              
                              
                              
                              
                              
     [11128.AGRE]I13401
     
<PAGE>
  Loan No.:      6-102-104
                                
  
  
                    ASSIGNMENT OF AGREEMENTS
                                
                                
       THIS ASSIGNMENT OF AGREEMENTS (this "Assignment") is made as
  of January 30, 1998, by BEDFORD PROPERTY INVESTORS, INC., a Maryland
  corporation ("Assignor"), in favor of THE PRUDENTIAL INSURANCE
  COMPANY OF AMERICA, a New Jersey corporation ("Assignee").
  
                            RECITALS
                                
       Assignee has made certain loans (collectively, the "Loan") to
  Assignor (or which have been assumed by Assignor), which are
  evidenced by (i) that certain Amended and Restated Promissory Note
  dated May 24, 1996 (and deemed made as of, and relating back to,
  March 20, 1996), executed by Assignor, as maker, to and for the
  benefit of Assignee, as holder, in the original principal amount of
  Twenty-Five Million and No/100 Dollars ($25,000,000.00), and all
  modifications, renewals or extensions thereof (the "Multistate
  Note"), (ii) that certain Amended and Restated Promissory Note dated
  as of even date herewith executed by Assignor, as maker, to and for
  the benefit of Assignee, as holder, in the original principal amount
  of Eight Million Nine Hundred Thirteen Thousand Seven Hundred Thirty
  and 85/100 Dollars ($8,913,730.85), payable to Beneficiary or its
  order, and all modifications, renewals or extensions thereof (the
  "Nevada Note"), and (iii) that certain Promissory Note dated as of
  even date herewith executed by Assignor, as maker, to and for the
  benefit of Assignee, as holder, in the original principal amount of
  Twenty Million Nine Hundred Thousand Dollars ($20,900,000) (the
  "Arizona/California Note," and together with the Multistate Note and
  the Nevada Note, collectively, the "Note"), and which is to be
  secured by, among other things, a Deed of Trust, Security Agreement
  and Fixture Filing with Assignment of Leases, Rents and Agreements
  of even date herewith made by Assignor, as trustor, for the benefit
  of Assignee, as beneficiary (the "Deed of Trust"), which Deed of
  Trust encumbers property located in Maricopa County, Arizona (the
  "Property"), as more particularly described in Exhibit A attached
  hereto and incorporated herein by this reference.
  
       Assignor has entered into and, from time to time, intends to
  enter into certain agreements pertaining to the operation of the
  Property and the construction of certain improvements (the
  "Improvements") on the Property (as defined in the Deed of Trust).
  
          As a condition to the making of the Loan, Assignee has
     required that Assignor execute and deliver this Assignment.
     
                           AGREEMENT
                                
     NOW, THEREFORE, IN CONSIDERATION for the Loan and other good and
     valuable consideration, the parties agree as follows:
     
          Assignment.  Assignor hereby sells, assigns, transfers, sets
     over and delivers to Assignee all of Assignor's right, title and
     interest in and to any and all agreements and contracts whatsoever
     pertaining to the operation of the Property and any and all
     agreements and contracts whatsoever pertaining to the construction
     of the Improvements, including all preliminary and final development
     plans and specifications, architectural drawings, environmental
     impact reports, negative declarations, map approvals, conditional
     use permits, management agreements, agreements with contractors and
     agreements pertaining to the transfer of development rights or
     permitted floor area under all federal, state, regional, county,
     local and other laws, regulations, orders, codes, ordinances, rules,
     statutes and policies, restrictive covenants and other title
     encumbrances, permits and approvals, and agreements, relating to the
     development, occupancy, ownership, management, use and/or operation
     of the Property or otherwise affecting all or any part of the
     Property or Assignor, including, without limitation, those
     agreements described in Exhibit B attached hereto and incorporated
     herein by this reference (collectively, the "Agreements"), as the
     same may be amended or otherwise modified from time to time.  The
     foregoing assignment shall not include the "Leases" as defined in
     that certain Assignment of Lessor's Interest in Leases of even date
     herewith, executed by Assignor in favor of Assignee.  The foregoing
     assignment encompasses the right of Assignor to terminate any of the
     Agreements, to perform thereunder and to compel performance and
     otherwise exercise all remedies thereunder, together with the
     immediate and continuing right to collect and receive all sums which
     may become due to Assignor or which Assignor may now or shall
     hereafter become entitled to demand or claim, arising from or out of
     the Agreements, including claims of Assignor for damages arising out
     of, or for breach of, of default under, any of the Agreements and
     all rights of Assignor to receive proceeds of any insurance,
     indemnity, warranty or guaranty with respect to any of the
     Agreements.
     
          Further Assurances.  Assignor shall execute, at its cost, upon
     Assignee's request, any documents necessary to cause the specific
     assignment of any particular Agreements which are necessary, proper
     or desirable in Assignee's judgment to carry out the purposes of
     this Assignment.
     
          Obligations.  Assignor shall observe, perform, and discharge
     duly and punctually all the obligations, terms, covenants,
     conditions and warranties to be performed by it pursuant to the
     Agreements.  Assignor shall not, without the prior written consent
     of Assignee, which consent shall not be unreasonably withheld,
     terminate, amend, modify or alter in any manner any Agreements, or
     waive, execute, condone, discount, set off, compromise, or in any
     manner release or discharge the other parties to any Agreements from
     any obligations, covenants, conditions, or agreements by such
     parties to be kept, or accept or consent to any surrender of the
     Agreements.
     
          Revocable License.  So long as no event of default shall have
     occurred hereunder or under any of the other Loan Documents,
     Assignor shall have the right under a revocable license granted
     hereby to collect and retain all sums which may become payable to
     Assignor under the Agreements.  Assignee, upon the occurrence of an
     event of default hereunder or under any of the other Loan Documents,
     at its option, on written notice to Assignor shall have the right to
     terminate and revoke the license herein granted and shall have the
     complete right and authority then or thereafter to exercise and
     enforce any and all of its rights and remedies provided herein,
     under any of the Loan Documents or by law or in equity.
     
          Representations and Warranties.  Assignor represents and
     warrants that, to the best of its knowledge, it has the right to
     assign the Agreements to Assignee as herein provided (except for
     those Agreements which by their express terms are not assignable)
     and that Assignor has not previously sold, assigned, mortgaged,
     pledged or otherwise transferred or encumbered any of its rights,
     title or interest therein.
     
          Nonresponsibility.  The acceptance by Assignee of this
     Assignment with all the rights, powers, privileges and authority so
     granted shall not obligate Assignee to assume any obligations under
     the Agreements or to take any action thereunder or to expend any
     money or incur any expense or perform or discharge any obligation or
     responsibility for the nonperformance of the provisions thereof by
     Assignor.
     
          Attorney-in-Fact.  Assignor does hereby constitute and appoint
     Assignee its true and lawful attorney-in-fact, which appointment is
     coupled with an interest to (i) exercise any and all rights under
     the Agreements and (ii) demand, sue for, collect, attach, levy,
     recover and receive any and all sums which may become due to
     Assignor, to which Assignor now or shall hereafter become entitled
     or which Assignor may demand or claim, arising or issuing from or
     out of the Agreements and to give proper notices, receipts, releases
     and acquittances therefor and after deducting expenses of
     collection, to apply the net proceeds as a credit upon any portion
     of the Indebtedness (as hereinafter defined), as selected by
     Assignee, notwithstanding that the amount owing thereunder may not
     then be due and payable or that the Note is adequately secured. 
     Assignor does hereby authorize and direct the delivery and payment
     of such sums to Assignee and authorizes Assignee to sign and deliver
     written instructions to this effect in Assignor's name and stead,
     and hereby ratifies and confirms all whatsoever that its said
     attorney shall do or cause to be done by virtue of the powers
     granted hereby.  The power of attorney hereunder is irrevocable and
     continuing and such rights, powers and privileges shall be exclusive
     in Assignee, it successors and assigns so long as any part of the
     Indebtedness remains unpaid; provided, however, Assignee shall not
     exercise any of its rights or authority as attorney-in-fact prior to
     the occurrence of an event of default hereunder or under any of the
     other Loan Documents.  As used herein, the term "Indebtedness" shall
     mean and refer to the principal of and all other amounts, payments
     and premiums due under the Note and any extensions or renewals
     thereof (including extensions or renewals at a different rate of
     interest, whether or not evidenced by a new or additional promissory
     note or notes), and all other indebtedness of Assignor to Assignee
     and additional advances under, evidenced by and/or secured by the
     Loan Documents, plus interest on all such amounts.
     
          Indemnity.  Assignor shall pay any and all costs and expenses
     incurred by Assignee in enforcing any rights or remedies under this
     Assignment, including, without limitation, reasonable attorneys'
     fees.  Assignor shall indemnify, defend, protect and hold Assignee
     harmless from and against any and all claims, losses, liabilities,
     costs and expenses (including, without limitation, reasonable
     attorneys' fees) arising out of or resulting from this Assignment,
     including the exercise or enforcement of any of the rights of
     Assignee hereunder, and Assignor shall reimburse Assignee on demand
     for any and all such expenses.
     
          Counterparts.  This Assignment may be executed in any number
     of counterparts, each of which counterparts shall be deemed to be an
     original and all of which together shall constitute but one and the
     same Assignment.
     
          Successors and Assigns.  The covenants and agreements herein
     contained shall bind and inure to the benefit of the parties hereto
     and their successors and assigns, subject, however, to the
     provisions of the Deed of Trust regarding transfer of the Property
     by Assignor.
     
          Governing Law.  This Assignment shall be governed by and
     construed in accordance with the laws of the State of Arizona.
     
          Limitation on Personal Liabilities.  Assignor's liability (i)
     under the Multistate Note is subject to the terms and conditions set
     forth in Paragraph 19 of the Multistate Note; (ii) under the Nevada
     Note is subject to the terms and conditions set forth in Paragraph
     19 of the Nevada Note; and (iii) under the Arizona/California Note
     is subject to the terms and conditions set forth in Paragraph 19 of
     the Arizona/California Note.
     
     IN WITNESS WHEREOF, Assignor has executed this Assignment of
     Agreements on the day and year first above written.
     
                              "ASSIGNOR":
                              
                              
                              BEDFORD PROPERTY INVESTORS, INC.,
                              a Maryland corporation
                              
                              
                              By:  /s/ Scott R. Whitney  
                              
                              Scott R. Whitney, Senior Vice President
                              [Printed Name and Title]
                              
                              
                              Witness (other than a Notary Public):
                              
                              /s/ Cindy D. Lynds  
                              
                           Name:      Cindy D. Lynds
                           
                           
                           
                           
  [11128.AGRE]I13405