PROMISSORY NOTE


$7,250,000.00                                             New York, New York
                                                          As of November 1, 1996

                  FOR  VALUE  RECEIVED  CAMELBACK  PLAZA  DEVELOPMENT  L.C.,  an
Arizona  limited  liability  company,  as maker,  having its principal  place of
business c/o  Performance  Industries,  Inc.,  2425 Camelback  Road,  Suite 620,
Phoenix,  Arizona 85016 ("Borrower"),  hereby unconditionally promises to pay to
the  order  of  BOSTON  CAPITAL   MORTGAGE   COMPANY  LIMITED   PARTNERSHIP,   a
Massachusetts  limited  partnership,  as payee,  having an address at One Boston
Place,  Suite 2100,  Boston,  Massachusetts  02108 ("Lender"),  or at such other
place as the  holder  hereof may from time to time  designate  in  writing,  the
principal  sum of SEVEN MILLION TWO HUNDRED  FIFTY  THOUSAND AND 00/100  DOLLARS
($7,250,000.00),  in lawful money of the United  States of America with interest
thereon to be  computed  from the date of this Note at the  Applicable  Interest
Rate (defined below), and to be paid in installments as follows:

                            ARTICLE 1: PAYMENT TERMS

                  (a) A payment of interest only on November 1, 1996;

                  (b) A  constant  payment  of  $60,148.19  on the  first day of
December,  1996 and on the first day of each calendar month thereafter up to and
including the first day of October, 2003;

each of the payments to be applied as follows:

                  (i)      first,  to the  payment of  interest  computed at the
                           Applicable Interest Rate; and

                  (ii)     the balance  toward the  reduction  of the  principal
                           sum;

and the balance of the principal  sum and all interest  thereon shall be due and
payable on the first day of November,  2003 (the "Maturity  Date").  Interest on
the  principal  sum of this  Note  shall be  calculated  on the basis of a three
hundred  sixty (360) day year based on twelve (12) thirty (30) day months except
that  interest  due and  payable for a period of less than a full month shall be
calculated by multiplying  the actual number of days elapsed in such period by a
daily rate based on said 360-day year.


                               ARTICLE 2: INTEREST

                  The term  "Applicable  Interest  Rate" as used in the Security
Instrument  (defined  below) and this Note shall mean an interest  rate equal to
eight and eighty-six hundredths percent (8.86%) per annum.
<PAGE>
                       ARTICLE 3: DEFAULT AND ACCELERATION

                  (a) The whole of the principal sum of this Note, (b) interest,
default  interest,  late charges and other sums,  as provided in this Note,  the
Security  Instrument or the Other Security  Documents  (defined below),  (c) all
other  monies  agreed or  provided  to be paid by  Borrower  in this  Note,  the
Security  Instrument  or the Other  Security  Documents,  (d) all sums  advanced
pursuant  to the  Security  Instrument  to protect  and  preserve  the  Property
(defined below) and the lien and the security interest created thereby,  and (e)
all sums advanced and costs and expenses  incurred by Lender in connection  with
the Debt (defined below) or any part thereof, any renewal,  extension, or change
of or  substitution  for the Debt or any part  thereof,  or the  acquisition  or
perfection of the security therefor,  whether made or incurred at the request of
Borrower  or Lender  (all the sums  referred  to in (a)  through (e) above shall
collectively  be  referred  to  as  the  "Debt")  shall  without  notice  become
immediately  due and payable at the option of Lender if any payment  required in
this Note is not paid  prior to the tenth  (10th) day after the date when due or
on the  Maturity  Date or on the  happening  of any  other  default,  after  the
expiration of any applicable notice and grace periods, herein or under the terms
of the Security Instrument or any of the Other Security Documents (collectively,
an "Event of Default").


                           ARTICLE 4: DEFAULT INTEREST

                  Borrower  does  hereby  agree that upon the  occurrence  of an
Event of Default,  Lender  shall be entitled to receive and  Borrower  shall pay
interest on the entire unpaid principal sum at a rate equal to the lesser of (a)
five percent (5%) plus the Applicable Interest Rate and (b) the maximum interest
rate which Borrower may by law pay (the "Default Rate").  The Default Rate shall
be computed from the occurrence of the Event of Default until the earlier of the
date upon which the Event of Default is cured or the date upon which the Debt is
paid in full.  Interest  calculated  at the  Default  Rate shall be added to the
Debt,  and shall be deemed  secured by the  Security  Instrument.  This  clause,
however,  shall not be construed as an agreement or privilege to extend the date
of the  payment  of the  Debt,  nor as a waiver  of any  other  right or  remedy
accruing to Lender by reason of the occurrence of any Event of Default.


                              ARTICLE 5: PREPAYMENT

         (a) The principal  balance of this Note may be prepaid,  in whole,  but
not in part, at anytime  during the term of the Loan,  provided the Borrower has
not breached any  covenant or agreement of the Borrower in the  Instrument.  The
principal  balance  of this Note may be prepaid on any  scheduled  payment  date
under this Note upon not less than  thirty (30) days'  prior  written  notice to
Lender  specifying the scheduled  payment date on which prepayment is to be made
(the  "Prepayment  Date") and the amount which is to be prepaid and upon payment
of (a) interest accrued and unpaid on the principal  balance of this Note to and
including the Prepayment  Date, (b) all other sums then due under this Note, the
Instrument  and  any  of  the  other  Loan  Documents,   and  (c)  a  prepayment
consideration  in an amount  equal to the product of (A) the ratio of the amount
of the  principal  balance  of the  Note  being  prepaid  over  the  outstanding
principal  balance of the Note on the  Prepayment  Date (after  subtracting  the
scheduled  principal  payment on such  Prepayment  Date),  multiplied by (B) the
present value as of the Prepayment
                                       -2-
<PAGE>
Date of the  remaining  scheduled  payments of principal  and interest  from the
Prepayment  Date  through the  Maturity  Date  (including  any balloon  payment)
determined by  discounting  such  payments at the Discount Rate (as  hereinafter
defined) less the amount of the outstanding principal balance of the Note on the
Prepayment  Date (after  subtracting  the  scheduled  principal  payment on such
Prepayment  Date).  The  "Discount  Rate" is the  rate  which,  when  compounded
monthly,  is  equivalent  to the Treasury Rate (as  hereinafter  defined),  when
compounded  semi-annually.  The "Treasury  Rate" is the yield  calculated by the
linear  interpolation of the yields, as reported in Federal Reserve  Statistical
Release   H.15-Selected   Interest  Rates  under  the  heading  U.S.  Government
Securities/Treasury  constant  maturities  for  the  week  ending  prior  to the
Prepayment Date, of U.S. Treasury constant  maturities for the week ending prior
to the Prepayment Date, of U.S. Treasury constant maturities with maturity dates
(one longer and one shorter) most nearly  approximating  the Maturity  Date. (In
the event Release H.15 is no longer published,  Lender shall select a comparable
publication to determine the Treasury Rate). Lender shall notify Borrower of the
amount and the basis of determination of the required prepayment  consideration.
Notwithstanding the foregoing,  Borrower shall have the additional  privilege to
prepay the entire  principal  balance of this Note,  together  with all interest
accrued  and  unpaid  thereon  and all  other  sums due  under  this  Note,  the
Instrument and any of the other Loan  Documents,  on any date during the six (6)
months  preceding  the Maturity Date without any fee or  consideration  for such
privilege.  If any notice of prepayment is given,  the amount  specified in such
notice and the other sums required under this paragraph shall be due and payable
on the Prepayment  Date.  Lender shall not be obligated to accept any prepayment
of the principal balance of this Note unless it is accompanied by the prepayment
consideration due in connection therewith.

         (b) If any notice of  prepayment  is given  under  this  Section 5, the
principal balance of this Note and the other sums required under this prepayment
section  shall be due and payable on the  Prepayment  Date.  Lender shall not be
obligated to accept any prepayment of the principal  balance of this Note unless
it is  accompanied  by all sums  due in  connection  therewith.  Notwithstanding
anything  contained  in this  Section 5 to the  contrary,  provided  no Event of
Default exists,  no Prepayment  Consideration  shall be due in connection with a
complete or partial  prepayment  resulting  from the  application  of  insurance
proceeds or condemnation awards pursuant to Sections 3.3 and 3.6 of the Security
Instrument, but Borrower shall be required to pay all other sums due hereunder.

         (c) If a Default Prepayment (defined below) occurs,  Borrower shall pay
to Lender  the  entire  Debt,  including,  without  limitation,  the  Prepayment
Consideration.

For purposes of this Note, the term "Default Prepayment" shall mean a prepayment
of the principal  amount of this Note made after the  occurrence of any Event of
Default  or an  acceleration  of the  Maturity  Date  under  any  circumstances,
including,  without  limitation,  a  prepayment  occurring  in  connection  with
reinstatement of the Security  Instrument  provided by statute under foreclosure
proceedings  or exercise of a power of sale,  any statutory  right of redemption
exercised by Borrower or any other party  having a statutory  right to redeem or
prevent  foreclosure,  any sale in  foreclosure  or under exercise of a power of
sale or otherwise.
                                       -3-
<PAGE>
                               ARTICLE 6: SECURITY

                  This Note is secured by the Security  Instrument and the Other
Security  Documents.  The term "Security  Instrument" as used in this Note shall
mean the deed of trust  and  security  agreement  dated  the date  hereof in the
principal  sum of  $7,250,000.00  given by  Borrower  to (or for the benefit of)
Lender covering the leasehold  estate of Borrower in certain premises located in
Maricopa County, State  (Commonwealth) of Arizona,  and other property,  as more
particularly described therein (collectively, the "Property") and intended to be
duly  recorded in said County.  The term "Other  Security  Documents" as used in
this Note  shall mean all and any of the  documents  other than this Note or the
Security  Instrument now or hereafter  executed by Borrower and/or others and by
or in favor of Lender,  which wholly or partially secure or guarantee payment of
this Note.  Whenever  used,  the singular  number shall include the plural,  the
plural number shall include the singular,  and the words "Lender" and "Borrower"
shall  include  their  respective  successors,  assigns,  heirs,  executors  and
administrators.

         All of the terms,  covenants and  conditions  contained in the Security
Instrument and the Other Security Documents are hereby made part of this Note to
the same extent and with the same force as if they were fully set forth herein.


                            ARTICLE 7: SAVINGS CLAUSE

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


                             ARTICLE 8: LATE CHARGE

         If any sum  payable  under  this  Note is not paid  prior to the  tenth
(10th) day after the date on which it is due,  Borrower shall pay to Lender upon
demand an amount  equal to the lesser of five  percent (5%) of the unpaid sum or
the maximum amount  permitted by applicable law to defray the expenses  incurred
by Lender in handling and processing  the  delinquent  payment and to compensate
Lender for the loss of the use of the delinquent payment and the amount shall be
secured by the Security Instrument and the Other Security Documents.
                                       -4-
<PAGE>
                            ARTICLE 9: NO ORAL CHANGE

         This Note may not be  modified,  amended,  waived,  extended,  changed,
discharged or  terminated  orally or by any act or failure to act on the part of
Borrower  or Lender,  but only by an  agreement  in writing  signed by the party
against whom  enforcement of any  modification,  amendment,  waiver,  extension,
change, discharge or termination is sought.


                     ARTICLE 10: JOINT AND SEVERAL LIABILITY

         If Borrower  consists of more than one person or party, the obligations
and liabilities of each person or party shall be joint and several.


                               ARTICLE 11: WAIVERS

         Borrower and all others who may become liable for the payment of all or
any part of the Debt do  hereby  severally  waive  presentment  and  demand  for
payment,  notice of dishonor,  protest and notice of protest and non-payment and
all other  notices  of any kind.  No  release  of any  security  for the Debt or
extension  of time for payment of this Note or any  installment  hereof,  and no
alteration,  amendment  or waiver of any  provision  of this Note,  the Security
Instrument or the Other Security  Documents made by agreement  between Lender or
any other person or party shall release,  modify, amend, waive, extend,  change,
discharge,  terminate or affect the liability of Borrower,  and any other person
or entity who may become  liable for the payment of all or any part of the Debt,
under this Note,  the Security  Instrument or the Other Security  Documents.  No
notice to or demand on Borrower shall be deemed to be a waiver of the obligation
of Borrower or of the right of Lender to take  further  action  without  further
notice or demand as provided for in this Note,  the Security  Instrument  or the
Other Security Documents. If Borrower is a partnership, the agreements contained
herein shall remain in full force and effect, notwithstanding any changes in the
individuals or entities comprising the partnership,  and the term "Borrower," as
used herein,  shall  include any  alternate or  successor  partnership,  but any
predecessor  partnership and its partners shall not thereby be released from any
liability.  If Borrower is a corporation,  the agreements contained herein shall
remain in full force and effect  notwithstanding any changes in the shareholders
comprising, or the officers and directors relating to, the corporation,  and the
term  "Borrower"  as used  herein,  shall  include any  alternate  or  successor
corporation,  but any predecessor corporation shall not be relieved of liability
hereunder.  If Borrower is a limited  liability  company,  the agreements herein
contained shall remain in full force and effect,  notwithstanding any changes in
the  individuals or entities  comprising the limited  liability  company and the
term  "Borrower,"  as used  herein,  shall  include any  alternate  or successor
limited liability company, but any predecessor limited liability company and its
members  shall not be released  from any  liability.  (Nothing in the  foregoing
sentence shall be construed as a consent to, or a waiver of, any  prohibition or
restriction  on  transfers  of interests  in such  partnership,  corporation  or
limited liability  company which may be set forth in the Security  Instrument or
any Other Security Document.)
                                       -5-
<PAGE>
                              ARTICLE 12: TRANSFER

         Upon the transfer of this Note,  Borrower  hereby waiving notice of any
such transfer, Lender may deliver all the collateral mortgaged, granted, pledged
or  assigned  pursuant  to  the  Security  Instrument  and  the  Other  Security
Documents,  or any part thereof,  to the transferee who shall  thereupon  become
vested with all the rights herein or under  applicable  law given to Lender with
respect  thereto,  and Lender  shall  thereafter  forever be relieved  and fully
discharged from any liability or responsibility in the matter;  but Lender shall
retain all rights  hereby  given to it with respect to any  liabilities  and the
collateral not so transferred.


                       ARTICLE 13: WAIVER OF TRIAL BY JURY

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


                             ARTICLE 14: EXCULPATION

         (a) Except as otherwise provided herein, in the Security  Instrument or
in the Other  Security  Documents,  Lender shall not enforce the  liability  and
obligation of Borrower to perform and observe the obligations  contained in this
Note or the  Security  Instrument  by any action or  proceeding  wherein a money
judgment  shall be sought  against  Borrower,  except  that  Lender  may bring a
foreclosure action,  action for specific performance or other appropriate action
or  proceeding  to enable  Lender to enforce  and  realize  upon this Note,  the
Security  Instrument,  the Other  Security  Documents,  and the  interest in the
Property,  the Rents  (as  defined  in the  Security  Instrument)  and any other
collateral given to Lender created by this Note, the Security Instrument and the
Other  Security  Documents;  provided,  however,  that any  judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's  interest in the Property,  in the Rents and in any other  collateral
given to Lender.  Lender,  by accepting  this Note and the Security  Instrument,
agrees that it shall not,  except as otherwise  provided in Section 11.10 of the
Security  Instrument,  sue for, seek or demand any deficiency  judgment  against
Borrower in any such action or proceeding,  under or by reason of or under or in
connection  with  this  Note,  the  Other  Security  Documents  or the  Security
Instrument.  The provisions of this Section shall not, however, (i) constitute a
waiver,  release or  impairment of any  obligation  evidenced or secured by this
Note, the Other Security Documents or the Security  Instrument;  (ii) impair the
right of Lender to name Borrower as a party  defendant in any action or suit for
judicial  foreclosure and sale under the Security  Instrument;  (iii) affect the
validity or enforceability of any indemnity,  guaranty,  master lease or similar
instrument  made in connection with this Note, the Security  Instrument,  or the
Other  Security  Documents;  (iv)  impair  the right of  Lender  to  obtain  the
appointment of a receiver; (v) impair the enforcement of the Assignment
                                       -6-
<PAGE>
of Leases and Rents executed in connection herewith; or (vi) impair the right of
Lender to enforce the provisions of Sections  11.10,  13.2, 13.3 and 13.4 of the
Security Instrument.

         (b)  Notwithstanding  the  provisions  of this Article to the contrary,
Borrower and Joseph Hrudka shall be  personally  liable to Lender for the Losses
(as  defined  in the  Security  Instrument)  it  incurs  due to:  (i)  fraud  or
intentional  misrepresentation  by  Borrower  or any  other  person or entity in
connection  with the  execution  and the  delivery  of this Note,  the  Security
Instrument or the Other Security  Documents;  (ii) Borrower's  misapplication or
misappropriation  of Rents received by Borrower after the occurrence of an Event
of  Default;  (iii)  Borrower's  misapplication  or  misappropriation  of tenant
security deposits or Rents collected in advance;  (iv) the misapplication or the
misappropriation  of insurance  proceeds or condemnation  awards; (v) Borrower's
failure to pay Taxes (as defined in the Security Instrument), Insurance Premiums
(as  defined in the  Security  Instrument),  Other  Charges  (as  defined in the
Security  Instrument)  (except to the extent  that sums  sufficient  to pay such
amounts have been  deposited in escrow with Lender  pursuant to the terms of the
Security  Instrument),  charges for labor or materials or other charges that can
create liens on the Property;  (vi)  Borrower's  failure to maintain,  repair or
restore the Property in accordance  with the Security  Instrument  and the Other
Security  Documents;  (vii) Borrower's  failure to return or to reimburse Lender
for all Personal Property (as defined in the Security Instrument) taken from the
Property by or on behalf of Borrower and not replaced with Personal  Property of
the same  utility  and of the same or  greater  value;  (viii) any act of actual
waste or arson by Borrower, any principal,  affiliate, member or general partner
thereof  or by any  Indemnitor  (as  defined  in  the  Security  Instrument)  or
Guarantor (as defined in the Security Instrument);  (ix) any fees or commissions
paid by  Borrower  to any  principal,  affiliate,  member or general  partner of
Borrower,  Indemnitor  or Guarantor in violation of the terms of this Note,  the
Security Instrument or the Other Security  Documents;  or (x) Borrower's failure
to  comply  with the  provisions  of  Sections  4.2,  7.1,  12.1 and 12.2 of the
Security Instrument.

         (c)  Notwithstanding  the  foregoing,  the  agreement  of Lender not to
pursue recourse liability as set forth in Subsection (a) above SHALL BECOME NULL
AND VOID and shall be of no further  force and effect in the event of Borrower's
default  under  Sections  3.11,  4.3 or  8.1,  8.2,  8.3 or 8.4 of the  Security
Instrument,  or if the Property or any part thereof shall become an asset in (i)
a  voluntary  bankruptcy  or  insolvency  proceeding,  or  (ii)  an  involuntary
bankruptcy or insolvency  proceeding  which is not dismissed  within ninety (90)
days of filing.

         (d)  Nothing  herein  shall be deemed to be a waiver of any right which
Lender may have under Section 506(a),  506(b), 1111(b) or any other provision of
the U.S. Bankruptcy Code to file a claim for the full amount of the indebtedness
secured by the  Security  Instrument  or to require  that all  collateral  shall
continue to secure all of the  indebtedness  owing to Lender in accordance  with
this Note, the Security Instrument and the Other Security Documents.


                              ARTICLE 15: AUTHORITY

         Borrower  (and the  undersigned  representative  of  Borrower,  if any)
represents  that  Borrower has full power,  authority and legal right to execute
and deliver this Note, the Security
                                       -7-
<PAGE>
Instrument  and the Other  Security  Documents and that this Note,  the Security
Instrument  and the  Other  Security  Documents  constitute  valid  and  binding
obligations of Borrower.


                           ARTICLE 16: APPLICABLE LAW

         This Note shall be deemed to be a contract entered into pursuant to the
laws of the State of New York and shall in all respects be governed,  construed,
applied and enforced in accordance with the laws of the State of New York.


                         ARTICLE 17: SERVICE OF PROCESS

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

                  (ii)  Borrower  initially  and  irrevocably   designates  C.T.
Corporation,  with offices on the date hereof at 1633  Broadway,  New York,  New
York 10019,  to receive for and on behalf of Borrower  service of process in New
York, New York with respect to this Note.

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

         (c)  Nothing  in this  Note  will be deemed  to  preclude  Lender  from
bringing an action or proceeding with respect hereto in any other jurisdiction.
                                       -8-
<PAGE>
                            ARTICLE 18: COUNSEL FEES

         In the event  that it should  become  necessary  to employ  counsel  to
collect the Debt or to protect or foreclose the security therefor, Borrower also
agrees to pay all  reasonable  fees and expenses of Lender,  including,  without
limitation,  reasonable attorney's fees for the services of such counsel whether
or not suit be brought.


                               ARTICLE 19: NOTICES

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

If to Borrower:            Camelback Plaza Development L.C.
                           2401 West 1st Street
                           Tempe, Arizona  85281
                           Attention: James W. Brown
                           Facsimile No. (602) 912-0480

With a copy to:            Ridenour, Swenson, Cleere & Evans, P.C.
                           302 North First Avenue, Suite 900
                           Phoenix, Arizona 85003
                           Attention: Gerard R. Cleere, Esq.
                           Facsimile No. (602) 254-8670

If to Lender:              Boston Capital Mortgage Company Limited Partnership
                           One Boston Place, Suite 2100
                           Boston, Massachusetts 02108
                           Attention: Ms. Kathie Valyeau
                           Facsimile No. (617) 624-8999

With a copy to:            Thacher Proffitt & Wood
                           2 World Trade Center, 40th Floor
                           New York, New York 10048
                           Attention: Donald F. Simone, Esq.
                           Facsimile No. (212) 912-7751

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

                  Either party by notice to the other may  designate  additional
or different addresses for subsequent notices or communications.
                                       -9-
<PAGE>
                  "Business  Day" shall mean a day upon which  commercial  banks
are not authorized or required by law to close in New York, New York.


                            ARTICLE 20: MISCELLANEOUS

                  (a) Wherever  pursuant to this Note (i) Lender  exercises  any
right given to it to approve or disapprove,  (ii) any  arrangement or term is to
be satisfactory to Lender, or (iii) any other decision or determination is to be
made by Lender,  the decision of Lender to approve or disapprove,  all decisions
that  arrangements or terms are  satisfactory or not  satisfactory and all other
decisions and determinations  made by Lender,  shall be in the sole and absolute
discretion  of  Lender  and  shall be final  and  conclusive,  except  as may be
otherwise expressly and specifically provided herein.

         (b) Wherever pursuant to this Note it is provided that Borrower pay any
costs and expenses,  such costs and expenses shall  include,  but not be limited
to,  legal fees and  disbursements  of Lender,  whether with respect to retained
firms, the reimbursement for the expenses of in-house staff, or otherwise.


                             ARTICLE 21: DEFINITIONS

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

         (a)      Applicable Interest Rate:  Article 2;
                  ------------------------

         (b)      Borrower:  Preamble, Articles 6 and 11;
                  --------

         (c)      Business Day:  Article 19;
                  ------------

         (d)      Calculated Payments:  Article 5, Section (b);
                  -------------------

         (e)      Debt:  Article 3;
                  ----

         (f)      Default Prepayment:  Article 5, Section (d);
                  ------------------

         (g)      Default Rate:  Article 4;
                  ------------

         (h)      Discount Rate:  Article 5, Section (b);
                  -------------

         (i)      Event of Default:  Article 3;
                  ----------------

         (j)      Interest Shortfall Payment:  Article 5, Subsection (a)(ii);
                  --------------------------

         (k)      Lender:  Preamble and Article 6;
                  ------

         (l)      Loan Year:  Article 5, Section (b);
                  ---------
                                      -10-
<PAGE>
         (m)      Maturity Date:  Article 1, Section (b);
                  -------------

         (n)      Other Security Documents:  Article 6;
                  ------------------------

         (o)      Prepayment Consideration:  Article 5, Subsection (a)(iv);
                  ------------------------

         (p)      Prepayment Date:  Article 5, Section (a);
                  ---------------

         (q)      Property:  Article 6;
                  --------

         (r)      Security Instrument:  Article 6; and
                  -------------------

         (s)      Treasury Rate:  Article 5, Section (b).
                  -------------
                                      -11-
<PAGE>
         IN WITNESS WHEREOF,  Borrower has duly executed this Note as of the day
and year first above written.

                                        CAMELBACK PLAZA DEVELOPMENT L.C., an
                                        Arizona limited liability company

                                        By:   PERFORMANCE CAMELBACK
                                              DEVELOPMENT CORP., an Arizona
                                              corporation, its managing member


                                              By:  _____________________________
                                                   Name:
                                                   Title:
                                      -12-
<PAGE>
STATE OF_______          )
                         SS.
COUNTY OF_________       )




                  This  instrument was  acknowledged  before me the  undersigned
notary  public this ____day  of_____________,  1996,  by______________________as
President of PERFORMANCE CAMELBACK DEVELOPMENT CORP., an Arizona corporation, as
Managing  Member of  CAMELBACK  PLAZA  DEVELOPMENT,  L.C.,  an  Arizona  limited
liability company with full powers to so do.



                                                        -------------
                                                        Notary Public



My commission expires:___________________
                                      -13-
<PAGE>
================================================================================

                  CAMELBACK PLAZA DEVELOPMENT L.C., as grantor
                                             (Borrower)

                                       to

                   LAWYERS TITLE OF ARIZONA, INC., as trustee
                                              (Trustee)

                                       and

       BOSTON CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, as beneficiary
                                              (Lender)

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

                                DEED OF TRUST AND
                               SECURITY AGREEMENT

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


                          Dated: As of November 1, 1996

                          Location:        Camelback Plaza
                                           2621 East Camelback Road
                                           Phoenix, Arizona

                          County:          Maricopa

                          PREPARED BY AND UPON
                          RECORDATION RETURN TO:

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

                          Attention:       Donald F. Simone, Esq.

                          File No.:        18001-00003

                          Title No.:  601228

================================================================================
<PAGE>
                  THIS  DEED OF TRUST  AND  SECURITY  AGREEMENT  (the  "Security
Instrument")  is made as of the first day of November,  1996, by CAMELBACK PLAZA
DEVELOPMENT  L.C., an Arizona limited  liability  company,  having its principal
place of business c/o Performance  Industries,  Inc., 2425 Camelback Road, Suite
620,  Phoenix,  Arizona  85016,  as grantor  ("Borrower")  and LAWYERS  TITLE OF
ARIZONA, INC., an Arizona corporation, having its principal place of business at
40 East Mitchell Drive,  Phoenix,  Arizona 85011, as trustee ("Trustee") for the
benefit of BOSTON CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP,  a Massachusetts
limited partnership, having its principal place of business at One Boston Place,
Suite 2100, Boston, Massachusetts 02108 as beneficiary ("Lender").


                                    RECITALS:

                  Borrower by its promissory note of even date herewith given to
Lender is indebted to Lender in the  principal  sum of SEVEN MILLION TWO HUNDRED
FIFTY THOUSAND AND 00/100 DOLLARS  ($7,250,000.00) in lawful money of the United
States  of  America  (the  note   together   with  all   extensions,   renewals,
modifications,  substitutions  and  amendments  thereof  shall  collectively  be
referred to as the "Note"), with interest from the date thereof at the rates set
forth in the Note,  principal and interest to be payable in accordance  with the
terms and conditions provided in the Note.

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


                         Article 1 - GRANTS OF SECURITY

                  Section  1.1   PROPERTY   MORTGAGED.   Borrower   does  hereby
irrevocably mortgage,  grant, bargain, sell, pledge, assign,  warrant,  transfer
and convey to Trustee,  its successors  and assigns,  for the benefit of Lender,
and grant a security interest to Lender and Trustee in, the following  property,
rights,  interests and estates  (including  the  leasehold  interest in the Land
(defined  below)  created by that  certain  instrument  dated  December 15, 1976
between  Bill J. Davis,  Betty Davis and Ida E. Davis,  as owner  ("Owner")  and
Douglas P. Simpson and Janice C. Simpson, d/b/a Bayshore Development Company, as
tenant recorded on February 3, 1977 in Docket 12063 at Page 1032, as amended and
assigned (the "Ground  Lease"));  now owned,  or hereafter  acquired by Borrower
(collectively, the "Property"):

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

                           (b) Additional  Land. All additional  lands,  estates
                  and development  rights hereafter acquired by Borrower for use
                  in connection  with the Land and the  development  of the Land
                  and all additional  lands and estates  therein which may, from
                  time  to  time,  by  supplemental  mortgage  or  otherwise  be
                  expressly   made   subject  to  the  lien  of  this   Security
                  Instrument;
<PAGE>
                           (c)   Improvements.   The   buildings,    structures,
                  fixtures, additions, enlargements,  extensions, modifications,
                  repairs,   replacements  and  improvements  now  or  hereafter
                  erected or located on the Land (the "Improvements");

                           (d) Easements.  All easements,  rights-of-way or use,
                  rights,  strips  and  gores of land,  streets,  ways,  alleys,
                  passages, sewer rights, water, water courses, water rights and
                  powers,  air rights and development  rights,  and all estates,
                  rights, titles, interests, privileges,  liberties, servitudes,
                  tenements,  hereditaments  and  appurtenances  of  any  nature
                  whatsoever, in any way now or hereafter belonging, relating or
                  pertaining  to the  Land  and the  Improvements  under  and by
                  virtue of the Ground Lease and the reversion  and  reversions,
                  remainder and remainders, and all land lying in the bed of any
                  street,  road or avenue,  opened or  proposed,  in front of or
                  adjoining  the Land,  to the center  line  thereof and all the
                  estates, rights, titles, interests, dower and rights of dower,
                  curtesy and rights of curtesy, property, possession, claim and
                  demand whatsoever,  both at law and in equity, of Borrower of,
                  in and to the Land and the Improvements under and by virtue of
                  the Ground Lease and every part and parcel  thereof,  with the
                  appurtenances thereto;

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

                           (f) Leases and Rents. All leases and other agreements
                  affecting the use,  enjoyment or occupancy of the Land and the
                  Improvements   heretofore  or  hereafter   entered  into  (the
                  "Leases") and all right,  title and interest of Borrower,  its
                  successors  and  assigns  therein and  thereunder,  including,
                  without limitation, cash or securities deposited thereunder to
                  secure the  performance  by the  lessees of their  obligations
                  thereunder and all rents,  additional rents, revenues,  issues
                  and  profits  (including  all  oil and  gas or  other  mineral
                  royalties and bonuses) from the Land and the Improvements (the
                  "Rents") and all proceeds  from the sale or other  disposition
                  of the Leases and the right to receive  and apply the Rents to
                  the payment of the Debt;
                                      - 2 -
<PAGE>
                           (g)  Condemnation  Awards.  All  awards or  payments,
                  including interest thereon, which may heretofore and hereafter
                  be  made  with  respect  to the  Property,  whether  from  the
                  exercise  of the right of eminent  domain  (including  but not
                  limited to any transfer made in lieu of or in  anticipation of
                  the exercise of the right),  or for a change of grade,  or for
                  any other injury to or decrease in the value of the Property;

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

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

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

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

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

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

                           (n) The Ground Lease and the leasehold estate created
                  thereby;

                           (o) all modifications, extensions and renewals of the
                  Ground Lease and all credits,  deposits,  options,  privileges
                  and  rights of  Borrower  as tenant  under the  Ground  Lease,
                  including,  but not limited to, the right, if any, to renew or
                  extend the Ground Lease for a succeeding term or terms;
                                      - 3 -
<PAGE>
                           (p) all the  estate,  right,  title,  claim or demand
                  whatsoever  of  Borrower  either  in  law  or  in  equity,  in
                  possession  or  expectancy,  of,  in and to  the  Land  or the
                  Improvements  or any part thereof,  and Borrower's  right,  as
                  tenant  under  the  Ground  Lease,   to  elect  under  Section
                  365(h)(1)  of  Title  11  U.S.C.A.  Section  101 et seq.  (the
                  "Bankruptcy  Code") to  terminate or treat the Ground Lease as
                  terminated  in the event of a  bankruptcy,  reorganization  or
                  insolvency  of the Owner or the  rejection of the Ground Lease
                  by the  Owner,  as debtor  in  possession  or by a trustee  in
                  bankruptcy,  pursuant to Section 365 of the  Bankruptcy  Code;
                  and

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

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

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

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

                               CONDITIONS TO GRANT

                  TO HAVE AND TO HOLD the Ground Lease and the renewals  therein
provided for, and the above  granted and described  Property unto and to the use
and benefit of Lender and Trustee,  and the successors and assigns of Lender and
Trustee, forever;

                  IN TRUST,  WITH POWER OF SALE, to secure  payment to Lender of
the Debt at the time and in the manner  provided for its payment in the Note and
in this Security Agreement, and with respect to that portion of the Land subject
to the Ground Lease, for and during the rest,  residue and remainder of the term
of years yet to come and unexpired in the
                                      - 4 -
<PAGE>
Ground Lease and the renewals therein provided for; subject  nevertheless to the
rents, covenants, conditions and provisions in the Ground Lease.

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


                    Article 2 - DEBT AND OBLIGATIONS SECURED

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

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

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

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

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

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

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

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

                  (b) the performance of each  obligation of Borrower  contained
         in any other  agreement  given by Borrower  to Lender  which is for the
         purpose of further  securing the obligations  secured  hereby,  and any
         amendments, modifications and changes thereto; and
                                      - 5 -
<PAGE>
                  (c) the performance of each  obligation of Borrower  contained
         in any  renewal,  extension,  amendment,  modification,  consolidation,
         change of, or substitution  or replacement  for, all or any part of the
         Note, this Security Instrument or the Other Security Documents.

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

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


                         Article 3 - BORROWER COVENANTS

                  Borrower covenants and agrees that:

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

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

                  Section 3.3 INSURANCE.

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

                           (i)   comprehensive   all  risk   insurance   on  the
                  Improvements and the Personal Property,  including  contingent
                  liability from Operation of Building  Laws,  Demolition  Costs
                  and Increased Cost of Construction Endorsements,  in each case
                  (A) in an amount equal to 100% of the "Full Replacement Cost,"
                  which for  purposes  of this  Security  Instrument  shall mean
                  actual  replacement  value (exclusive of costs of excavations,
                  foundations, underground utilities and footings)
                                      - 6 -
<PAGE>
                  with a waiver  of  depreciation,  but the  amount  shall in no
                  event be less than the  outstanding  principal  balance of the
                  Note; (B) containing an agreed amount endorsement with respect
                  to  the  Improvements   and  Personal   Property  waiving  all
                  co-insurance  provisions;  (C)  providing for no deductible in
                  excess of $100,000;  and (D)  containing  an "Ordinance or Law
                  Coverage"  or   "Enforcement"   endorsement   if  any  of  the
                  Improvements  or the use of the  Property  shall  at any  time
                  constitute legal  non-conforming  structures or uses. The Full
                  Replacement Cost shall be redetermined  from time to time (but
                  not more  frequently  than once in any  twelve  (12)  calendar
                  months) at the request of Lender by an appraiser or contractor
                  designated and paid by Borrower and approved by Lender,  or by
                  an engineer or appraiser in the regular employ of the insurer.
                  After the first appraisal,  additional appraisals may be based
                  on  construction  cost  indices  customarily  employed  in the
                  trade.  No  omission on the part of Lender to request any such
                  ascertainment shall relieve Borrower of any of its obligations
                  under this Subsection;

                           (ii) commercial  general liability  insurance against
                  claims for personal injury,  bodily injury,  death or property
                  damage  occurring  upon,  in  or  about  the  Property,   such
                  insurance (A) to be on the so-called  "occurrence" form with a
                  combined  single  limit of not less  than  $2,000,000;  (B) to
                  continue at not less than the aforesaid  limit until  required
                  to be  changed  by Lender  in  writing  by  reason of  changed
                  economic conditions making such protection inadequate; and (C)
                  to cover at least the  following  hazards:  (1)  premises  and
                  operations;  (2) products and  completed  operations on an "if
                  any"  basis;   (3)   independent   contractors;   (4)  blanket
                  contractual liability for all written and oral contracts;  and
                  (5) contractual  liability covering the indemnities  contained
                  in Article hereof to the extent the same is available;

                           (iii) business income insurance (A) with loss payable
                  to Lender;  (B) covering  all risks  required to be covered by
                  the  insurance   provided  for  in  Subsection   (a)(i);   (C)
                  containing an extended period of indemnity  endorsement  which
                  provides that after the physical loss to the  Improvements and
                  Personal  Property has been  repaired,  the continued  loss of
                  income will be insured until such income either returns to the
                  same level it was at prior to the loss,  or the  expiration of
                  twelve (12) months from the date of the loss,  whichever first
                  occurs, and  notwithstanding  that the policy may expire prior
                  to the end of such period;  and (D) in an amount equal to 100%
                  of the  projected  gross income from the Property for a period
                  of twelve  (12)  months.  The amount of such  business  income
                  insurance shall be determined  prior to the date hereof and at
                  least once each year thereafter based on Borrower's reasonable
                  estimate  of the  gross  income  from  the  Property  for  the
                  succeeding twelve-month period. All insurance proceeds payable
                  to Lender pursuant to this Subsection  shall be held by Lender
                  and shall be applied to the obligations secured hereunder from
                  time to time due and  payable  hereunder  and  under the Note;
                  provided,  however,  that nothing  herein  contained  shall be
                  deemed  to  relieve  Borrower  of its  obligations  to pay the
                  obligations  secured  hereunder  on the  respective  dates  of
                  payment provided for in
                                      - 7 -
<PAGE>
                  the Note except to the extent such amounts are  actually  paid
                  out of the proceeds of such business income insurance;

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

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

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

                           (vii) flood  hazard  insurance  if any portion of the
                  Improvements is currently or at any time in the future located
                  in a federally designated "special flood hazard area"; and

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

                           (b) All  insurance  provided  for in  Subsection  (a)
         hereof  shall be obtained  under valid and  enforceable  policies  (the
         "Policies" or in the singular,  the "Policy"),  in such forms and, from
         time to time after the date hereof, in such amounts as may from time to
         time be  satisfactory  to  Lender,  issued  by  financially  sound  and
         responsible  insurance companies authorized to do business in the state
         in which the Property is located and approved by Lender.  The insurance
         companies  must have a  general  policy  rating  of A or  better  and a
         financial  class of VI or better by A.M.  Best  Company,  Inc.,  and if
         there are any  Securities  (defined in Section 19.1 below) issued which
         have been  assigned  a rating by a credit  rating  agency  approved  by
         Lender (a "Rating  Agency"),  the insurance company shall have a claims
         paying  ability  rating by such Rating  Agency equal to or greater than
         the rating of the highest  class of the  Securities  (each such insurer
         shall be referred  to below as a  "Qualified  Insurer").  Not less than
         thirty  (30)  days  prior  to the  expiration  dates  of  the  Policies
         theretofore  furnished to Lender pursuant to Subsection (a),  certified
         copies of the Policies marked "premium paid" or accompanied by evidence
         satisfactory  to Lender of payment of the premiums due thereunder  (the
         "Insurance Premiums"), shall be delivered by Borrower
                                      - 8 -
<PAGE>
         to Lender;  provided,  however,  that in the case of renewal  Policies,
         Borrower may furnish Lender with binders therefor to be followed by the
         original Policies when issued.

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

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

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

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

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

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

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

                           (f) Borrower  shall  furnish to Lender,  on or before
         thirty (30) days after the close of each of Borrower's  fiscal years, a
         statement  certified  by  Borrower  or a  duly  authorized  officer  of
         Borrower of the amounts of insurance maintained in compliance herewith,
         of the risks covered by such insurance and of the insurance
                                      - 9 -
<PAGE>
         company or companies  which carry such  insurance  and, if requested by
         Lender,   verification   of  the  adequacy  of  such  insurance  by  an
         independent insurance broker or appraiser acceptable to Lender.

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

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

                       Section 3.4 PAYMENT OF TAXES, ETC.

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

                  (b) After prior written notice to Lender, Borrower, at its own
         expense,   may  contest  by  appropriate  legal  proceeding,   promptly
         initiated  and  conducted  in good  faith and with due  diligence,  the
         amount or  validity  or  application  in whole or in part of any of the
         Taxes,  provided  that (i) no  Event of  Default  has  occurred  and is
         continuing under the Note, this Security Instrument or any of the Other
         Security Documents, (ii) Borrower
                                     - 10 -
<PAGE>
         is permitted to do so under the provisions of any other mortgage,  deed
         of trust or deed to secure  debt  affecting  the  Property,  (iii) such
         proceeding  shall suspend the collection of the Taxes from Borrower and
         from the  Property or  Borrower  shall have paid all of the Taxes under
         protest, (iv) such proceeding shall be permitted under and be conducted
         in  accordance  with the  provisions  of any other  instrument to which
         Borrower is subject and shall not constitute a default thereunder,  (v)
         neither the Property  nor any part thereof or interest  therein will be
         in danger of being sold, forfeited, terminated, cancelled or lost, (vi)
         Borrower  shall have deposited  with Lender  adequate  reserves for the
         payment of the Taxes, together with all interest and penalties thereon,
         unless  Borrower  has paid all of the Taxes  under  protest,  and (vii)
         Borrower  shall have  furnished  the security as may be required in the
         proceeding,  or as may be  requested by Lender to insure the payment of
         any contested Taxes, together with all interest and penalties thereon.

                  Section 3.5 ESCROW FUND.  In addition to the initial  deposits
with respect to Taxes and  Insurance  Premiums made by Borrower to Lender on the
date hereof to be held by Lender in escrow,  Borrower shall pay to Lender on the
first day of each  calendar  month (a)  one-twelfth  of an amount which would be
sufficient  to pay the Taxes  payable,  or  estimated  by Lender to be  payable,
during the next  ensuing  twelve  (12) months and (b)  one-twelfth  of an amount
which would be sufficient  to pay the Insurance  Premiums due for the renewal of
the coverage  afforded by the Policies upon the expiration  thereof (the amounts
in (a) and (b) above  shall be called the  "Escrow  Fund").  Borrower  agrees to
notify  Lender  immediately  of  any  changes  to  the  amounts,  schedules  and
instructions for payment of any Taxes and Insurance  Premiums of which it has or
obtains  knowledge  and  authorizes  Lender or its agent to obtain the bills for
Taxes and Other Charges  directly from the  appropriate  taxing  authority.  The
Escrow Fund and the payments of interest or principal or both,  payable pursuant
to the Note shall be added  together  and shall be paid as an  aggregate  sum by
Borrower  to Lender.  Lender will apply the Escrow Fund to payments of Taxes and
Insurance  Premiums  required  to be made by Borrower  pursuant to Sections  and
hereof.  If the amount of the Escrow Fund shall exceed the amounts due for Taxes
and Insurance  Premiums  pursuant to Sections and hereof,  Lender shall,  in its
discretion,  return any excess to Borrower or credit such excess  against future
payments to be made to the Escrow Fund.  In allocating  such excess,  Lender may
deal  with the  person  shown on the  records  of  Lender to be the owner of the
Property. If the Escrow Fund is not sufficient to pay the items set forth in (a)
and (b) above,  Borrower  shall promptly pay to Lender,  upon demand,  an amount
which Lender shall estimate as sufficient to make up the deficiency.  The Escrow
Fund shall not  constitute a trust fund and may be commingled  with other monies
held by Lender.  No  earnings or interest on the Escrow Fund shall be payable to
Borrower.  With respect to that portion of the Land subject to the Ground Lease,
compliance by Borrower with any  provisions of the Ground Lease  relating to the
deposit of funds by Borrower  for the payment of all taxes,  assessments,  water
and sewer rents and/or insurance premiums shall constitute  compliance with this
Section 3.5 to the extent such Ground Lease provisions cover each of said items;
provided  that  Borrower  shall in any event be  required  to  deliver to Lender
evidence of such payments and receipted bills for all such items.

                  Section 3.6 CONDEMNATION.  Borrower shall promptly give Lender
notice of the actual or threatened  commencement of any  condemnation or eminent
domain  proceeding  and shall  deliver  to Lender  copies of any and all  papers
served in connection with such  proceedings.  Notwithstanding  any taking by any
public or quasi-public authority through eminent domain or
                                     - 11 -
<PAGE>
otherwise  (including  but not  limited  to any  transfer  made in lieu of or in
anticipation of the exercise of such taking), Borrower shall continue to pay the
Debt at the time and in the manner  provided  for its payment in the Note and in
this  Security  Instrument  and the Debt shall not be reduced until any award or
payment therefor shall have been actually received and applied by Lender,  after
the  deduction of expenses of  collection,  to the reduction or discharge of the
Debt.  Lender  shall not be  limited  to the  interest  paid on the award by the
condemning  authority but shall be entitled to receive out of the award interest
at the rate or rates provided herein or in the Note.  Lender may apply any award
or payment to the reduction or discharge of the Debt whether or not then due and
payable. If the Property is sold, through foreclosure or otherwise, prior to the
receipt by Lender of the award or payment,  Lender shall have the right, whether
or not a deficiency  judgment on the Note shall have been  sought,  recovered or
denied, to receive the award or payment,  or a portion thereof sufficient to pay
the Debt.

                  Section 3.7 LEASES AND RENTS.

                  (a) Except as  otherwise  consented  to by Lender,  all Leases
         shall be written on the  standard  form of lease  which shall have been
         approved by Lender.  Upon request,  Borrower  shall furnish Lender with
         executed copies of all Leases.  No material  changes may be made to the
         Lender-approved  standard  lease without the prior  written  consent of
         Lender.  In addition,  all  renewals of Leases and all proposed  Leases
         shall provide for rental rates and terms  comparable to existing  local
         market rates and terms and shall be arms-length  transactions with bona
         fide, independent third party tenants. All proposed Leases and renewals
         of  existing  Leases  (other  than  residential  Leases  relating  to a
         residential  multifamily  property)  shall  be  subject  to  the  prior
         approval of Lender and its counsel, at Borrower's  expense.  All Leases
         shall provide that they are subordinate to this Security Instrument and
         that the lessee agrees to attorn to Lender.  Borrower (i) shall observe
         and  perform  all the  obligations  imposed  upon the lessor  under the
         Leases  and shall not do or permit to be done  anything  to impair  the
         value  of any of the  Leases  as  security  for the  Debt;  (ii)  shall
         promptly send copies to Lender of all notices of default which Borrower
         shall send or receive thereunder; (iii) shall enforce all of the terms,
         covenants and  conditions  contained in the Leases upon the part of the
         lessee  thereunder  to be observed or performed,  short of  termination
         thereof;  provided  however,  with respect to  multifamily  residential
         property,  a  residential  Lease  may be  terminated  in the event of a
         default by the tenant  thereunder;  (iv) shall not  collect  any of the
         Rents more than one (1) month in  advance;  (v) shall not  execute  any
         other  assignment of the lessor's  interest in any of the Leases or the
         Rents;  (vi) shall not alter,  modify or change the terms of any Leases
         without the prior written consent of Lender, or cancel or terminate any
         Leases or accept a surrender thereof or convey or transfer or suffer or
         permit a conveyance or transfer of the Land or of any interest  therein
         so as to effect a merger of the estates and rights of or a  termination
         or diminution of the  obligations of, lessees  thereunder;  (vii) shall
         not alter, modify or change the terms of any guaranty, letter of credit
         or other  credit  support with respect to any of the Leases (the "Lease
         Guaranty") or cancel or terminate such Lease Guaranty without the prior
         written  consent  of  Lender;  and  (viii)  shall  not  consent  to any
         assignment  of or subletting  under any Leases not in  accordance  with
         their terms, without the prior written consent of Lender.
                                     - 12 -
<PAGE>
                  (b)  Notwithstanding  the  provisions of Subsection (a) above,
         renewals of existing Leases and Leases for commercial space for in-line
         stores  (as  determined  by  Lender)  shall not be subject to the prior
         approval  of  Lender  provided  all of  the  following  conditions  are
         satisfied:  (i) the rental  income  pursuant to the renewal or proposed
         Lease is not more than ten percent (10%) of the total rental income for
         the in-line stores, (ii) the renewal or proposed Lease covers less than
         ten percent (10%) of the in-line store space,  in the aggregate,  (iii)
         the  renewal or  proposed  Lease  shall have a lease term not to exceed
         eight (8) years including options to renew, (iv) no rent credits,  free
         rents or  concessions  have been granted  under the renewal or proposed
         Lease, (v) the renewal or proposed Lease shall provide for rental rates
         and terms comparable to existing local market rates and terms, (vi) the
         renewal or proposed  Lease shall be an arms-length  transaction  with a
         bona fide,  independent  third  party  tenant and (vii) the  renewal or
         proposed  Lease shall  satisfy  other  criteria as shall be required by
         Lender in its sole discretion.  Borrower shall deliver to Lender copies
         of all Leases which are entered into  pursuant to this  Subsection  (b)
         together with Borrower's certification that it has satisfied all of the
         conditions of the preceding  sentence within thirty (30) days after the
         execution of the Lease.

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

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

                  Section  3.9  WASTE.  Borrower  shall not commit or suffer any
waste of the Property or make any change in the use of the  Property  which will
in any way materially
                                     - 13 -
<PAGE>
increase  the risk of fire or other hazard  arising out of the  operation of the
Property,   or  take  any  action  that  might  invalidate  or  give  cause  for
cancellation of any Policy, or do or permit to be done thereon anything that may
in any way impair the value of the  Property or the  security  of this  Security
Instrument.  Borrower  will not,  without the prior  written  consent of Lender,
permit any drilling or exploration for or extraction,  removal, or production of
any minerals from the surface or the  subsurface of the Land,  regardless of the
depth thereof or the method of mining or extraction thereof.

                  Section 3.10 COMPLIANCE WITH LAWS.

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

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

                  (c)  Notwithstanding any provisions set forth herein or in any
         document  regarding  Lender's  approval of alterations of the Property,
         Borrower  shall  not alter  the  Property  in any  manner  which  would
         increase  Borrower's  responsibilities  for compliance  with Applicable
         Laws without the prior written approval of Lender. Lender's approval of
         the plans,  specifications,  or working drawings for alterations of the
         Property  shall  create no  responsibility  or  liability  on behalf of
         Lender for their completeness,  design, sufficiency or their compliance
         with Applicable Laws. The foregoing shall apply to tenant  improvements
         constructed by Borrower or by any of its tenants.  Lender may condition
         any such  approval upon receipt of a  certificate  of  compliance  with
         Applicable  Laws  from an  independent  architect,  engineer,  or other
         person acceptable to Lender.

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

                  Section 3.11 BOOKS AND RECORDS.

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

                           (i) quarterly  certified  rent rolls signed and dated
                  by  Borrower,  detailing  the  names  of  all  tenants  of the
                  Improvements,  the  portion of  Improvements  occupied by each
                  tenant, the base rent and any other charges payable under each
                  Lease and the term of each Lease, including the expiration
                                     - 14 -
<PAGE>
                  date, and any other  information as is reasonably  required by
                  Lender, within twenty (20) days after the end of each calendar
                  quarter;

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

                           (iii) an annual  operating  statement of the Property
                  detailing  the  total   revenues   received,   total  expenses
                  incurred,  total cost of all capital improvements,  total debt
                  service and total cash flow,  to be prepared and  certified by
                  Borrower  in the form  required  by Lender,  or if required by
                  Lender,  an audited annual  operating  statement  prepared and
                  certified  by  an  independent   certified  public  accountant
                  acceptable to Lender,  within ninety (90) days after the close
                  of each fiscal year of Borrower;

                           (iv) an  annual  balance  sheet and  profit  and loss
                  statement of Borrower in the form required by Lender, prepared
                  and certified by the respective  Borrower,  Guarantors  and/or
                  Indemnitor(s),  or if  required by Lender,  audited  financial
                  statements   prepared  by  an  independent   certified  public
                  accountant  acceptable to Lender, within sixty (60) days after
                  the close of each  fiscal  year of  Borrower,  Guarantors  and
                  Indemnitor(s), as the case may be;

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

                           (vi) annual year-end  certified rent rolls signed and
                  dated by Borrower,  detailing  the names of all tenants of the
                  Improvements,  the  portion of  Improvements  occupied by each
                  tenant, the base rent and any other charges payable under each
                  Lease and the term of each  Lease,  including  the  expiration
                  date, and any other  information as is reasonably  required by
                  Lender, within thirty (30) days after the end of each calendar
                  year.

                  To the extent any of the  foregoing  documents are required to
be certified, such certification may come from the Property manager.

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

                           (i) a property  management  report for the  Property,
                  showing   the  number  of   inquiries   made   and/or   rental
                  applications  received from tenants or prospective tenants and
                  deposits received from tenants and any other information
                                     - 15 -
<PAGE>
                  requested by Lender,  in  reasonable  detail and  certified by
                  Borrower (or an officer,  general partner, member or principal
                  of Borrower if Borrower is not an individual) under penalty of
                  perjury to be true and complete,  but no more  frequently than
                  quarterly; and

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

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

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

                  Section 3.12 PAYMENT FOR LABOR AND  MATERIALS.  Borrower  will
promptly pay when due all bills and costs for labor, materials, and specifically
fabricated  materials  incurred in connection with the Property and never permit
to exist  beyond the due date  thereof in  respect of the  Property  or any part
thereof any lien or security interest, even though inferior to the liens and the
security  interests hereof, and in any event never permit to be created or exist
in respect of the Property or any part thereof any other or  additional  lien or
security interest other than the liens or security interests hereof,  except for
the Permitted Exceptions (defined below).

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


                  Section 3.14 OWNER'S  BANKRUPTCY.  Borrower  shall not, in any
event,  including the  bankruptcy,  reorganization  or insolvency of Borrower or
Owner, (i) surrender its leasehold estate created under the Ground Lease, or any
portion  thereof,  nor  terminate,  cancel or acquiesce in the  rejection of the
Ground  Lease;  or (ii) modify,  change,  supplement,  alter or amend the Ground
Lease  in any  respect,  either  orally  or in  writing.  Borrower  does  hereby
expressly  release,  assign,  relinquish  and surrender  unto the Lender all its
right, power and authority to terminate,  cancel, acquiesce in the rejection of,
modify,  change,  supplement,  alter or amend the Ground  Lease in any  respect,
either  orally  or in  writing,  at any  time,  including  in the  event  of the
bankruptcy, reorganization or insolvency of Borrower or Owner under the
                                     - 16 -
<PAGE>
Ground Lease, and any attempt on the part of Borrower to exercise any such right
without the consent of the Lender  shall be null and void.  Notwithstanding  the
foregoing,  in the event of a threatened  termination of the Ground Lease due to
the  bankruptcy,  reorganization  or insolvency of Borrower,  Borrower shall, at
Lender's election, absolutely assign to Lender, in lieu of such termination, all
of Borrower's right, title and interest in and to the Ground Lease.

                  In the event the Ground Lease is rejected by Owner,  as debtor
in  possession,  or by a trustee  for  Owner,  pursuant  to  Section  365 of the
Bankruptcy  Code,  Borrower  shall not exercise its right to elect under Section
365(h)(1)  of the  Bankruptcy  Code to  terminate  or treat the Ground  Lease as
terminated.  Any  such  election  made  shall be null and  void.  In any  event,
Borrower  hereby  waives,  for the benefit of the  Lender,  its  successors  and
assigns only, and not  enforceable by anyone else, the provisions of section 365
of the  Bankruptcy  Code,  or of any statute or rule of law now or  hereafter in
effect  which  gives or  purports  to give  Borrower  any right of  election  to
terminate the Ground Lease,  to acquiesce in the termination of the Ground Lease
or to  surrender  possession  of the  Property  in the event of the  bankruptcy,
reorganization  or insolvency of Borrower or any other party including,  without
limitation, Owner.

                          Article 4 - SPECIAL COVENANTS

         Borrower covenants and agrees that:

                  Section 4.1 PROPERTY USE. The Property  shall be used only for
a retail complex and uses incidental  thereto,  and for no other use without the
prior written consent of Lender,  which consent may be withheld in Lender's sole
and absolute discretion.

                  Section 4.2 ERISA.

                  (a) It shall not engage in any  transaction  which would cause
         any  obligation,  or  action  taken or to be taken,  hereunder  (or the
         exercise by Lender of any of its rights under the Note,  this  Security
         Instrument and the Other Security  Documents) to be a non-exempt (under
         a statutory or administrative class exemption)  prohibited  transaction
         under the Employee  Retirement  Income Security Act of 1974, as amended
         ("ERISA").

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

                           (A) Equity interests in Borrower are publicly offered
                  securities,    within   the   meaning   of   29   C.F.R.   ss.
                  2510.3-101(b)(2);
                                     - 17 -
<PAGE>
                           (B) Less than 25 percent of each outstanding class of
                  equity  interests  in  Borrower  are  held  by  "benefit  plan
                  investors"    within   the   meaning   of   29   C.F.R.    ss.
                  2510.3-101(f)(2); or

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

                  Section 4.3 SINGLE PURPOSE ENTITY. It has not and shall not:

                  (a)  engage  in  any  business  or  activity  other  than  the
         ownership,  operation and  maintenance of the Property,  and activities
         incidental thereto;

                  (b)  acquire  or own any  material  assets  other than (i) the
         Property,  and  (ii)  such  incidental  Personal  Property  as  may  be
         necessary for the operation of the Property;

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

                  (d)  fail  to  preserve  its   existence  as  an  entity  duly
         organized,  validly existing and in good standing (if applicable) under
         the laws of the  jurisdiction  of its  organization  or  formation,  or
         without the prior written consent of Lender,  amend, modify,  terminate
         or fail  to  comply  with  the  provisions  of  Borrower's  Partnership
         Agreement,  Articles  or  Certificate  of  Incorporation,  Articles  of
         Organization or similar organizational  documents,  as the case may be,
         as same may be further  amended  or  supplemented,  if such  amendment,
         modification,  termination or failure to comply would adversely  affect
         the ability of Borrower to perform its obligations hereunder, under the
         Note or under the Other Security Documents;

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

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

                  (g) incur any debt, secured or unsecured, direct or contingent
         (including  guaranteeing any obligation),  other than the Debt,  except
         for trade payables in the ordinary course of its business of owning and
         operating the Property, provided that such debt is paid when due;

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

                  (i) fail to maintain  its  records,  books of account and bank
         accounts  separate  and  apart  from  those  of  the  members,  general
         partners, principals and affiliates of
                                     - 18 -
<PAGE>
         Borrower,  the affiliates of a member,  general partner or principal of
         Borrower, and any other person or entity;

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

                  (k) seek the  dissolution or winding up in whole,  or in part,
         of Borrower;

                  (l)  maintain  its  assets  in such a  manner  that it will be
         costly or difficult to segregate,  ascertain or identify its individual
         assets  from  those  of  any  member,  general  partner,  principal  or
         affiliate of Borrower,  or any member,  general  partner,  principal or
         affiliate thereof or any other person;

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

                  (n) make any loans or advances to any third  party,  including
         any member, general partner, principal or affiliate of Borrower, or any
         member, general partner, principal or affiliate thereof;

                  (o) fail to file its own tax returns;

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

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

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

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

                  Section 4.4 RESTORATION.  The following provisions shall apply
in connection with the Restoration of the Property:
                                     - 19 -
<PAGE>
                  (a) If the Net  Proceeds  (defined  below)  shall be less than
         $25,000 and the costs of completing the Restoration  shall be less than
         $25,000,  the Net Proceeds will be disbursed by Lender to Borrower upon
         receipt,  provided that all of the  conditions  set forth in Subsection
         (b)(i) are met and Borrower delivers to Lender a written undertaking to
         expeditiously   commence  and  to  satisfactorily   complete  with  due
         diligence the Restoration in accordance with the terms of this Security
         Instrument.

                  (b) If the Net  Proceeds  are equal to or greater than $25,000
         or the costs of completing the  Restoration is equal to or greater than
         $25,000,  Lender  shall make the net amount of all  insurance  proceeds
         received by Lender pursuant to Subsections (a)(i), (iv), (vi) and (vii)
         of this Security  Instrument as a result of such damage or destruction,
         after deduction of its reasonable  costs and expenses  (including,  but
         not limited to,  reasonable  counsel  fees),  if any, in collecting the
         same (the "Net  Proceeds")  available for the Restoration in accordance
         with the provisions of this Subsection (b).

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

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

                                    (B) less  than  fifty  percent  (50%) of the
                           total  floor  area  of  the   Improvements  has  been
                           damaged,  destroyed or rendered  unusable as a result
                           of such fire or other casualty;

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

                                    (D) Borrower shall commence the  Restoration
                           as soon as  reasonably  practicable  (but in no event
                           later than  thirty  (30) days  after  such  damage or
                           destruction  occurs) and shall diligently  pursue the
                           same to satisfactory completion;

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

                                    (F) Lender shall be satisfied that, upon the
                           completion  of the  Restoration,  the gross cash flow
                           and  the  net  cash  flow  of the  Property  will  be
                           restored to a level  sufficient to cover all carrying
                           costs  and   operating   expenses  of  the  Property,
                           including, without limitation, debt service on the
                                     - 20 -
<PAGE>
                           Note  at  a  coverage  ratio  (after   deducting  all
                           required  reserves  as  required  by Lender  from net
                           operating  income)  of at  least  1.3 to  1.0,  which
                           coverage  ratio shall be  determined by Lender in its
                           sole  and  absolute  discretion  on the  basis of the
                           Applicable Interest Rate (as defined in the Note);

                                    (G)  Lender  shall  be  satisfied  that  the
                           Restoration  will  be  completed  on  or  before  the
                           earliest to occur of (1) six (6) months  prior to the
                           Maturity  Date (as defined in the Note),  (2) six (6)
                           months  after  the  occurrence  of such fire or other
                           casualty,  (3) the  earliest  date  required for such
                           completion  under the terms of any  Leases  which are
                           required in  accordance  with the  provisions of this
                           Subsection (b) to remain in effect  subsequent to the
                           occurrence  of such  fire or other  casualty  and the
                           completion of the  Restoration  or under the terms of
                           [specify  key  Leases]  or (4)  such  time  as may be
                           required under applicable zoning law, ordinance, rule
                           or  regulation  in order to repair  and  restore  the
                           Property to the condition it was in immediately prior
                           to such fire or other casualty;

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

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

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

                           (iii)  All  plans  and  specifications   required  in
                  connection  with the  Restoration  shall be  subject  to prior
                  review  and  acceptance  in all  respects  by Lender and by an
                  independent   consulting  engineer  selected  by  Lender  (the
                  "Casualty Consultant"). Lender shall have the use of the plans
                  and  specifications  and all permits,  licenses and  approvals
                  required or obtained in connection with
                                     - 21 -
<PAGE>
                  the   Restoration.    The   identity   of   the   contractors,
                  subcontractors and materialmen engaged in the Restoration,  as
                  well as the  contracts  under  which  they have been  engaged,
                  shall be subject to prior review and  acceptance by Lender and
                  the Casualty  Consultant.  All costs and expenses  incurred by
                  Lender in  connection  with making the Net Proceeds  available
                  for the Restoration including, without limitation,  reasonable
                  counsel fees and disbursements  and the Casualty  Consultant's
                  fees, shall be paid by Borrower.

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

                           (v)   Lender   shall   not  be   obligated   to  make
                  disbursements  of the Net Proceeds more  frequently  than once
                  every calendar month.
                                     - 22 -
<PAGE>
                           (vi)  If  at  any  time  the  Net   Proceeds  or  the
                  undisbursed  balance  thereof  shall  not,  in the  opinion of
                  Lender,  be sufficient to pay in full the balance of the costs
                  which are estimated by the Casualty  Consultant to be incurred
                  in connection with the completion of the Restoration, Borrower
                  shall deposit the deficiency  (the "Net Proceeds  Deficiency")
                  with  Lender  before  any  further  disbursement  of  the  Net
                  Proceeds shall be made. The Net Proceeds Deficiency  deposited
                  with Lender shall be held by Lender and shall be disbursed for
                  costs actually  incurred in connection with the Restoration on
                  the same conditions  applicable to the disbursement of the Net
                  Proceeds,  and until so disbursed  pursuant to this Subsection
                  (b) shall constitute additional security for the Obligations.

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

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


                   Article 5 - REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender that:

                  Section 5.1 WARRANTY OF TITLE.  Borrower has good title to the
Property and has the right to mortgage,  grant, bargain,  sell, pledge,  assign,
warrant,   transfer  and  convey  the  same  and  that  Borrower   possesses  an
unencumbered  leasehold estate in the Land and the  Improvements  created by and
pursuant to the  provisions  of the Ground  Lease and that it owns the  Property
free and clear of all liens,  encumbrances  and  charges  whatsoever  except for
those  exceptions  shown in the title insurance policy insuring the lien of this
Security  Instrument  (the  "Permitted  Exceptions").   In  addition,   Borrower
represents  and  warrants  that (a) the Ground Lease is in full force and effect
and has not been modified or amended in any manner whatsoever,  (b) there are no
defaults  under the Ground  Lease and no event has  occurred,  which but for the
passage of time, or notice, or both, would constitute a default under the Ground
Lease, (c) all rents,  additional rents and other sums due and payable under the
Ground Lease
                                     - 23 -
<PAGE>
have been paid in full,  and (d) neither  Borrower  nor the  landlord  under the
Ground  Lease has  commenced  any action or given or received any notice for the
purpose of terminating the Ground Lease. Borrower shall forever warrant,  defend
and  preserve  the  title  and the  validity  and  priority  of the lien of this
Security  Instrument  and shall  forever  warrant  and defend the same to Lender
and/or Trustee against the claims of all persons whomsoever.

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

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

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

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

                  Section 5.6 STATUS OF PROPERTY.
                                     - 24 -
<PAGE>
                  (a) No  portion  of the  Improvements  is  located  in an area
         identified  by the  Secretary of Housing and Urban  Development  or any
         successor  thereto as an area having special flood hazards  pursuant to
         the  National  Flood  Insurance  Act  of  1968  or the  Flood  Disaster
         Protection  Act of 1973,  as  amended,  or any  successor  law,  or, if
         located  within any such area,  Borrower has obtained and will maintain
         the insurance prescribed in Section hereof.

                  (b) Borrower has obtained all necessary certificates, licenses
         and other  approvals,  governmental  and  otherwise,  necessary for the
         operation  of the  Property  and the  conduct of its  business  and all
         required  zoning,  building  code,  land use,  environmental  and other
         similar permits or approvals, all of which are in full force and effect
         as of the  date  hereof  and not  subject  to  revocation,  suspension,
         forfeiture or modification.

                  (c) The  Property  and the  present and  contemplated  use and
         occupancy  thereof are in full  compliance  with all applicable  zoning
         ordinances,  building codes, land use and environmental  laws and other
         similar laws.

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

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

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

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

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

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

                  (j) All  liquid  and solid  waste  disposal,  septic and sewer
         systems  located on the Property are in a good and safe  condition  and
         repair and in compliance with all Applicable Laws.

                  Section  5.7 NO  FOREIGN  PERSON.  Borrower  is not a "foreign
person" within the meaning of Sections  1445(f)(3) of the Internal  Revenue Code
of 1986, as amended and the related Treasury Department  regulations,  including
temporary regulations.
                                     - 25 -
<PAGE>
                  Section 5.8  SEPARATE  TAX LOT.  The  Property is assessed for
real  estate tax  purposes as one or more  wholly  independent  tax lot or lots,
separate from any adjoining land or improvements not constituting a part of such
lot or lots,  and no other land or  improvements  is assessed and taxed together
with the Property or any portion thereof.

                  Section 5.9 ERISA COMPLIANCE.

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

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

                  Section  5.10  LEASES.  (a)  Borrower is the sole owner of the
entire  lessor's  interest  in  the  Leases;   (b)  the  Leases  are  valid  and
enforceable;  (c) the terms of all alterations,  modifications and amendments to
the Leases are reflected in the certified  occupancy  statement delivered to and
approved  by Lender;  (d) none of the Rents  reserved  in the  Leases  have been
assigned or otherwise  pledged or hypothecated;  (e) none of the Rents have been
collected for more than one (1) month in advance; (f) the premises demised under
the Leases have been  completed  and the tenants  under the Leases have accepted
the same and have taken  possession of the same on a rent-paying  basis; and (g)
there exist no offsets or defenses to the payment of any portion of the Rents.

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

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

                  Section 5.13 TAXES. Borrower, any Guarantor and any Indemnitor
have filed all federal, state, county,  municipal, and city income and other tax
returns  required to have been filed by them and have paid all taxes and related
liabilities  which have become due  pursuant to such  returns or pursuant to any
assessments received by them. Neither Borrower, any Guarantor nor any Indemnitor
knows of any basis for any  additional  assessment  in respect of any such taxes
and related liabilities for prior years.
                                     - 26 -
<PAGE>
                  Section 5.14 MAILING ADDRESS.  Borrower's mailing address,  as
set forth in the opening  paragraph  hereof or as changed in accordance with the
provisions hereof, is true and correct.

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

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

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


                      Article 6 - OBLIGATIONS AND RELIANCES

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

                  Section  6.2 NO  RELIANCE  ON  LENDER.  The  members,  general
partners,  principals and (if Borrower is a trust) beneficial owners of Borrower
are  experienced  in the ownership  and  operation of properties  similar to the
Property,  and Borrower and Lender are relying  solely upon such  expertise  and
business  plan in  connection  with the ownership and operation of the Property.
Borrower  is not  relying on Lender's  expertise,  business  acumen or advice in
connection with the Property.

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

                  (b)  By  accepting  or  approving   anything  required  to  be
observed,  performed  or  fulfilled  or to be given to Lender  pursuant  to this
Security Instrument, the Note or the Other Security Documents, including without
limitation,  any officer's  certificate,  balance sheet, statement of profit and
loss or other  financial  statement,  survey,  appraisal,  or insurance  policy,
Lender  shall not be deemed to have  warranted,  consented  to, or affirmed  the
sufficiency,  the legality or  effectiveness  of same,  and such  acceptance  or
approval  thereof shall not constitute any warranty or affirmation  with respect
thereto by Lender.
                                     - 27 -
<PAGE>
                  Section 6.4 RELIANCE.  Borrower  recognizes  and  acknowledges
that in accepting the Note,  this  Security  Instrument  and the Other  Security
Documents,  Lender is expressly and primarily  relying on the truth and accuracy
of  the  warranties  and  representations  set  forth  in  Article  without  any
obligation to investigate the Property and  notwithstanding any investigation of
the Property by Lender;  that such reliance  existed on the part of Lender prior
to the date  hereof;  that the  warranties  and  representations  are a material
inducement to Lender in accepting the Note,  this  Security  Instrument  and the
Other Security Documents;  and that Lender would not be willing to make the Loan
and  accept  this  Security  Instrument  in the  absence of the  warranties  and
representations as set forth in Article 5.


                         Article 7 - FURTHER ASSURANCES

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

                  Section 7.2 FURTHER ACTS,  ETC.  Borrower will, at the cost of
Borrower,  and without expense to Lender,  do, execute,  acknowledge and deliver
all and every such further acts, deeds, conveyances,  deeds of trust, mortgages,
assignments,  notices of assignments,  transfers and assurances as Lender shall,
from time to time,  require,  for the  better  assuring,  conveying,  assigning,
transferring,  and  confirming  unto Lender and Trustee the  property and rights
hereby  mortgaged,  deeded,  granted,  bargained,  sold,  conveyed,   confirmed,
pledged, assigned,  warranted and transferred or intended now or hereafter so to
be, or which  Borrower may be or may hereafter  become bound to convey or assign
to Lender,  or for carrying out the intention or facilitating the performance of
the terms of this Security  Instrument or for filing,  registering  or recording
this Security  Instrument,  or for complying with all Applicable Laws. Borrower,
on demand,  will execute and deliver and hereby  authorizes Lender to execute in
the name of Borrower or without the  signature of Borrower to the extent  Lender
may lawfully do so, one or more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security interest of Lender in the
Property.  Borrower  grants to Lender an irrevocable  power of attorney  coupled
with an interest for the purpose of exercising and perfecting any and all
                                     - 28 -
<PAGE>
rights and remedies available to Lender at law and in equity,  including without
limitation such rights and remedies available to Lender pursuant to this Section
 .

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

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

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

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

                  Section 7.4 ESTOPPEL CERTIFICATES.

                  (a) After request by Lender,  Borrower,  within ten (10) days,
         shall furnish  Lender or any proposed  assignee with a statement,  duly
         acknowledged  and  certified,  setting  forth  (i)  the  amount  of the
         original principal amount of the Note, (ii) the unpaid principal amount
         of the Note,  (iii) the rate of interest of the Note, (iv) the terms of
         payment and maturity  date of the Note,  (v) the date  installments  of
         interest and/or principal were last paid, (v) that,  except as provided
         in such  statement,  there are no  defaults  or events  which  with the
         passage of time or the giving of notice or both,  would  constitute  an
         event of default under the Note or the Security  Instrument,  (vi) that
         the Note and this  Security  Instrument  are valid,  legal and  binding
         obligations  and  have  not  been  modified  or  if  modified,   giving
         particulars of such modification, (vii) whether any offsets or defenses
         exist against the obligations secured hereby and, if any are alleged to
         exist, a detailed  description  thereof,  (viii) that all Leases are in
         full force and effect and  (provided  the Property is not a residential
         multifamily  property) have not been modified (or if modified,  setting
         forth all  modifications),  (ix) the date to which the Rents thereunder
         have been paid pursuant to the Leases,  (x) whether or not, to the best
         knowledge  of  Borrower,  any of the  lessees  under the  Leases are in
         default under the
                                     - 29 -
<PAGE>
         Leases,  and, if any of the lessees are in default,  setting  forth the
         specific  nature of all such  defaults,  (xi) the  amount  of  security
         deposits  held by Borrower  under each Lease and that such  amounts are
         consistent with the amounts  required under each Lease, and (xii) as to
         any other matters reasonably requested by Lender and reasonably related
         to the Leases,  the obligations  secured  hereby,  the Property or this
         Security Instrument.

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

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

                  Section 7.5 FLOOD INSURANCE.  After Lender's request, Borrower
shall  deliver   evidence   satisfactory  to  Lender  that  no  portion  of  the
Improvements is situated in a federally designated "special flood hazard area."

                  Section 7.6  SPLITTING OF SECURITY  INSTRUMENT.  This Security
Instrument  and the Note  shall,  at any time until the same shall be fully paid
and satisfied,  at the sole election of Lender,  be split or divided into two or
more notes and two or more security  instruments,  each of which shall cover all
or a portion of the Property to be more particularly  described therein. To that
end, Borrower,  upon written request of Lender,  shall execute,  acknowledge and
deliver,  or cause to be executed,  acknowledged and delivered by the then owner
of the Property, to Lender and/or its designee or designees substitute notes and
security  instruments in such principal  amounts,  aggregating not more than the
then unpaid principal amount of this Security Instrument,  and containing terms,
provisions and clauses  similar to those  contained  herein and in the Note, and
such other documents and instruments as may be required by Lender.

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


                       Article 8 - DUE ON SALE/ENCUMBRANCE
                                     - 30 -
<PAGE>
                  Section 8.1 LENDER RELIANCE. Borrower acknowledges that Lender
has examined and relied on the  experience of Borrower and its members,  general
partners,  principals and (if Borrower is a trust)  beneficial  owners in owning
and  operating  properties  such as the  Property  in  agreeing to make the loan
secured  hereby,  and  will  continue  to rely on  Borrower's  ownership  of the
Property as a means of  maintaining  the value of the  Property as security  for
repayment of the Debt and the  performance  of the Other  Obligations.  Borrower
acknowledges  that Lender has a valid interest in  maintaining  the value of the
Property so as to ensure that,  should Borrower  default in the repayment of the
Debt or the performance of the Other Obligations, Lender can recover the Debt by
a sale of the Property.

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

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

                  Section 8.4  LENDER'S  RIGHTS.  Lender  reserves  the right to
condition the consent required hereunder upon a modification of the terms hereof
and on assumption of the Note,  this Security  Instrument and the Other Security
Documents as so modified by the proposed  transferee,  payment of a transfer fee
of not less than one percent (1%) of the principal balance
                                     - 31 -
<PAGE>
of the Note and all of  Lender's  expenses  incurred  in  connection  with  such
transfer,  the  approval  by a Rating  Agency of the  proposed  transferee,  the
proposed  transferee's  continued  compliance  with the  covenants  set forth in
Section hereof,  or such other  conditions as Lender shall determine in its sole
discretion  to be in the  interest  of Lender.  Lender  shall not be required to
demonstrate  any actual  impairment  of its  security or any  increased  risk of
default  hereunder in order to declare the Debt immediately due and payable upon
Borrower's sale,  conveyance,  mortgage,  grant, bargain,  encumbrance,  pledge,
assignment, or transfer of the Property without Lender's consent. This provision
shall apply to every sale, conveyance,  mortgage,  grant, bargain,  encumbrance,
pledge,  assignment, or transfer of the Property regardless of whether voluntary
or not, or whether or not Lender has consented to any previous sale, conveyance,
mortgage, grant, bargain,  encumbrance,  pledge,  assignment, or transfer of the
Property.


                             Article 9 - PREPAYMENT

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

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

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

                  (a) if the Default  Prepayment  occurs  prior to the time when
         prepayment of the principal balance of the Note is permitted, an amount
         equal  to the sum of (i) the  present  value of the  interest  payments
         which  would  have  accrued  on  the  principal  balance  of  the  Note
         (outstanding  as of  the  date  of  such  Default  Prepayment)  at  the
         Applicable Interest Rate (as defined in the Note) from the date of such
         Default Prepayment to the first day prepayment is permitted pursuant to
         the Note discounted at a rate equal to the Treasury Rate (as defined in
         the Note)  except  that such  Treasury  Rate shall be based on the U.S.
         Treasury  constant  maturity  most nearly  approximating  the date upon
         which prepayment is first permitted  pursuant to the Note, and (ii) the
         Prepayment  Consideration  (defined  in the Note) which would have been
         payable  to Lender as of the first day of the [third  (3rd)]  Loan Year
         (as  defined in the Note) based on the  Treasury  Rate in effect at the
         time of such Default Prepayment; and

                  (b) if the Default Prepayment occurs at a time when prepayment
         of the  principal  balance  of the Note is  permitted,  the  Prepayment
         Consideration and the Interest Shortfall Payment (defined in the Note),
         if applicable.
                                     - 32 -
<PAGE>
For purposes of this Section 9.3,  the term  "Default  Prepayment"  shall mean a
prepayment of the principal  amount of the Note made after the occurrence of any
Event of Default or an  acceleration  of the  Maturity  Date (as  defined in the
Note) under any  circumstances,  including,  without  limitation,  a  prepayment
occurring in connection with reinstatement of this Security  Instrument provided
by statute under  foreclosure  proceedings  or exercise of a power of sale,  any
statutory right of redemption  exercised by Borrower or any other party having a
statutory  right to redeem or prevent  foreclosure,  any sale in  foreclosure or
under exercise of a power of sale or otherwise.


                              Article 10 - DEFAULT

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

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

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

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

                  (d) if the  Property is subject to actual  waste or  hazardous
         nuisance;

                  (e) if  Borrower  violates  or does not comply with any of the
         provisions of Sections and and Articles 8, and ;

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

                  (g) if (i) Borrower or any managing  member or general partner
         of Borrower,  or any Guarantor or Indemnitor  shall  commence any case,
         proceeding  or other action (A) under any existing or future law of any
         jurisdiction,  domestic or foreign, relating to bankruptcy, insolvency,
         reorganization,  conservatorship or relief of debtors,  seeking to have
         an  order  for  relief  entered  with  respect  to it,  or  seeking  to
         adjudicate  it a bankrupt  or  insolvent,  or  seeking  reorganization,
         arrangement,   adjustment,   winding-up,   liquidation,    dissolution,
         composition  or other  relief with  respect to it or its debts,  or (B)
         seeking appointment of a receiver, trustee,  custodian,  conservator or
         other similar official for it or for all or any substantial part of its
         assets, or the Borrower or any managing
                                     - 33 -
<PAGE>
         member or general  partner of Borrower,  or any Guarantor or Indemnitor
         shall make a general  assignment for the benefit of its  creditors;  or
         (ii) there shall be commenced  against  Borrower or any managing member
         or general  partner of Borrower,  or any  Guarantor or  Indemnitor  any
         case,  proceeding or other action of a nature referred to in clause (i)
         above which (A) results in the entry of an order for relief or any such
         adjudication or appointment or (B) remains undismissed, undischarged or
         unbonded  for a period of sixty  (60)  days;  or (iii)  there  shall be
         commenced  against  the  Borrower  or any  managing  member or  general
         partner  of  Borrower,   or  any  Guarantor  or  Indemnitor  any  case,
         proceeding or other action seeking issuance of a warrant of attachment,
         execution,  distraint or similar process against all or any substantial
         part of its assets which results in the entry of any order for any such
         relief  which  shall not have been  vacated,  discharged,  or stayed or
         bonded pending appeal within sixty (60) days from the entry thereof; or
         (iv)  the  Borrower  or any  managing  member  or  general  partner  of
         Borrower,  or any  Guarantor  or  Indemnitor  shall  take any action in
         furtherance   of,  or  indicating  its  consent  to,  approval  of,  or
         acquiescence  in,  any of the acts set forth in clause  (i),  (ii),  or
         (iii)  above;  or (v) the  Borrower or any  managing  member or general
         partner of Borrower,  or any  Guarantor or Indemnitor  shall  generally
         not, or shall be unable to, or shall admit in writing its inability to,
         pay its debts as they become due;

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

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

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

                  (k) if  Borrower  fails to cure  promptly  any  violations  of
         Applicable Laws;

                  (l) if any condemnation  proceeding is instituted which would,
         in  Lender's  reasonable  judgment,   materially  impair  the  use  and
         enjoyment of the Property for its intended purposes;

                  (m) if (i) Borrower  fails to timely  provide  Lender with the
         written  certification  and evidence  referred to in Section hereof, or
         (ii) Borrower  consummates a transaction which would cause the Security
         Instrument  or  Lender's  exercise  of its rights  under this  Security
         Instrument,  the Note or the Other  Security  Documents to constitute a
         nonexempt  prohibited  transaction under ERISA or result in a violation
         of a state statute regulating  governmental plans, subjecting Lender to
         liability for a violation of ERISA or a state statute;
                                     - 34 -
<PAGE>
                  (n) if Borrower shall fail to reimburse Lender on demand, with
         interest  calculated at the Default Rate, for all Insurance Premiums or
         Taxes,  together with interest and penalties  imposed thereon,  paid by
         Lender pursuant to this Security Instrument;

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

                  (p) if Borrower shall fail to deliver to Lender, after request
         by Lender, the statements referred to in Section in accordance with the
         terms thereof;

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

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

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

                  (t) if  Borrower  shall  fail  in  the  payment  of any  rent,
         additional  rent or other  charge  mentioned  in or made payable by the
         Ground Lease when said rent or other charge is due and payable; or

                  (u) if there shall occur any  default by  Borrower,  as lessee
         under the Ground Lease,  in the  observance or performance of any term,
         covenant or condition  of the Ground Lease on the part of Borrower;  to
         be observed or performed, and said default is not cured within ten (10)
         days prior to the  expiration of any  applicable  grace period  therein
         provided, or if any one or more of the events referred to in the Ground
         Lease  shall occur  which  would  cause the Ground  Lease to  terminate
         without  notice or action by the  landlord  under the  Ground  Lease or
         which would  entitle the  landlord  under the Ground Lease to terminate
         the Ground Lease and the term thereof by giving notice to Borrower,  as
         tenant  thereunder,  or if the leasehold  estate  created by the Ground
         Lease shall be  surrendered  or the Ground Lease shall be terminated or
         cancelled for any reason or under any circumstances  whatsoever,  or if
         any of the terms,  covenants or conditions of the Ground Lease shall in
         any manner be modified, changed, supplemented, altered,
                                     - 35 -
<PAGE>
         or amended without the consent of Lender,  or if Borrower shall fail to
         exercise  any option to renew the  Ground  Lease  contained  therein or
         shall fail or neglect to pursue  diligently  all actions  necessary  to
         exercise such renewal rights pursuant to the terms of the Ground Lease.

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

                  Section 10.3 DEFAULT  INTEREST.  Borrower  will pay,  from the
date of an Event of Default through the earlier of the date upon which the Event
of Default is cured or the date upon which the Debt is paid in full, interest on
the unpaid principal balance of the Note at a per annum rate equal to the lesser
of (a) five percent (5%) plus the  Applicable  Interest  Rate (as defined in the
Note), and (b) the maximum interest rate which Borrower may by law pay or Lender
may charge and collect (the "Default Rate").


                        Article 11 - RIGHTS AND REMEDIES

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

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

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

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

                  (d) sell  for cash or upon  credit  the  Property  or any part
         thereof and all estate,  claim,  demand,  right,  title and interest of
         Borrower therein and rights of redemption
                                     - 36 -
<PAGE>
         thereof,  pursuant to power of sale or otherwise, at one or more sales,
         as an entity or in parcels, at such time and place, upon such terms and
         after such notice thereof as may be required or permitted by law;

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

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

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

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

                  (i)  exercise  any and all  rights and  remedies  granted to a
         secured  party  upon  default  under  the  Uniform   Commercial   Code,
         including, without limiting the generality
                                     - 37 -
<PAGE>
         of the  foregoing:  (i) the right to take  possession  of the  Personal
         Property or any part thereof, and to take such other measures as Lender
         or Trustee may deem necessary for the care, protection and preservation
         of the Personal  Property,  and (ii) request Borrower at its expense to
         assemble  the  Personal  Property  and make it available to Lender at a
         convenient place acceptable to Lender. Any notice of sale,  disposition
         or other  intended  action by Lender or  Trustee  with  respect  to the
         Personal  Property sent to Borrower in accordance  with the  provisions
         hereof at least five (5) days prior to such  action,  shall  constitute
         commercially reasonable notice to Borrower;

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

                           (i) Taxes and Other Charges;

                           (ii) Insurance Premiums;

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

                           (iv)  Amortization of the unpaid principal balance of
                  the Note;

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

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

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

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

In the event of a sale, by  foreclosure,  power of sale,  or otherwise,  of less
than all of the Property,  this Security Instrument shall continue as a lien and
security  interest  on the  remaining  portion of the  Property  unimpaired  and
without loss of priority.  Notwithstanding the provisions of this Section to the
contrary,  if any  Event  of  Default  as  described  in  clause  (i) or (ii) of
Subsection (g) shall occur,  the entire unpaid Debt shall be  automatically  due
and payable, without any further notice, demand or other action by Lender.
                                     - 38 -
<PAGE>
                  Section  11.2  APPLICATION  OF PROCEEDS.  The purchase  money,
proceeds and avails of any disposition of the Property,  or any part thereof, or
any  other  sums  collected  by  Lender  pursuant  to the  Note,  this  Security
Instrument  or the Other  Security  Documents,  may be  applied by Lender to the
payment of the Debt in such priority and proportions as Lender in its discretion
shall deem proper.

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

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

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

                  Section 11.6  EXAMINATION  OF BOOKS AND RECORDS.  Lender,  its
agents,  accountants  and attorneys shall have the right to examine the records,
books,  management  and other  papers of Borrower and its  affiliates  or of any
Guarantor or Indemnitor  which reflect upon their  financial  condition,  at the
Property or at any office  regularly  maintained by Borrower,  its affiliates or
any Guarantor or Indemnitor where the books and records are located.  Lender and
its agents shall have the right to make copies and extracts  from the  foregoing
records and other  papers.  In addition,  Lender,  its agents,  accountants  and
attorneys  shall  have the right to examine  and audit the books and  records of
Borrower and its affiliates or of any Guarantor or Indemnitor  pertaining to the
income,  expenses and operation of the Property during reasonable business hours
at any office of Borrower,  its affiliates or any Guarantor or Indemnitor  where
the books and records are located.
                                     - 39 -
<PAGE>
                  Section 11.7 OTHER  RIGHTS,  ETC. (a) The failure of Lender or
Trustee to insist upon strict performance of any term hereof shall not be deemed
to be a waiver of any term of this Security  Instrument.  Borrower  shall not be
relieved of  Borrower's  obligations  hereunder  by reason of (i) the failure of
Lender or Trustee to comply with any request of Borrower,  any  Guarantor or any
Indemnitor to take any action to foreclose this Security Instrument or otherwise
enforce  any of the  provisions  hereof  or of the  Note or the  Other  Security
Documents,  (ii) the release,  regardless of consideration,  of the whole or any
part of the  Property,  or of any  person  liable  for the  Debt or any  portion
thereof,  or (iii) any agreement or stipulation by Lender  extending the time of
payment or otherwise  modifying  or  supplementing  the terms of the Note,  this
Security Instrument or the Other Security Documents.

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

                  (c) Lender may resort for the payment of the Debt to any other
security held by Lender in such order and manner as Lender,  in its  discretion,
may elect. Lender or Trustee may take action to recover the Debt, or any portion
thereof,  or to enforce any covenant  hereof  without  prejudice to the right of
Lender or Trustee thereafter to foreclose this Security  Instrument.  The rights
of Lender or Trustee under this Security Instrument shall be separate,  distinct
and cumulative and none shall be given effect to the exclusion of the others. No
act of  Lender  shall be  construed  as an  election  to  proceed  under any one
provision  herein to the exclusion of any other  provision.  Neither  Lender nor
Trustee shall be limited  exclusively  to the rights and remedies  herein stated
but shall be entitled to every right and remedy now or hereafter afforded at law
or in equity.

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

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

                  Section 11.10 RECOURSE AND CHOICE OF REMEDIES. Notwithstanding
any other  provision of this Security  Instrument,  including but not limited to
Article 15 hereof,  Lender and other  Indemnified  Parties  (defined  in Section
below) are  entitled to enforce  the  obligations  of  Borrower,  Guarantor  and
Indemnitor contained in Sections , and without first
                                     - 40 -
<PAGE>
resorting to or exhausting  any security or collateral  and without first having
recourse to the Note or any of the Property, through foreclosure,  sale pursuant
to a power of sale, or acceptance of a deed in lieu of foreclosure or otherwise,
and in the event Lender commences a foreclosure action against the Property,  or
otherwise causes Trustee to exercise the power of sale pursuant  hereto,  Lender
is entitled to pursue a deficiency  judgment  with  respect to such  obligations
against Borrower, any Guarantor and/or Indemnitor.  The provisions of Sections ,
and
 are exceptions to any non-recourse or exculpation  provisions in the Note, this
Security Instrument or the Other Security Documents, and Borrower, Guarantor and
Indemnitor  are fully and  personally  liable for the  obligations  pursuant  to
Subsections , and . The liability of Borrower,  Guarantor and  Indemnitor is not
limited  to the  original  principal  amount  of the Note.  Notwithstanding  the
foregoing,  nothing  herein  shall  inhibit  or prevent  Lender or Trustee  from
foreclosing  or exercising a power of sale pursuant to this Security  Instrument
or exercising any other rights and remedies  pursuant to the Note, this Security
Instrument  and  the  Other  Security  Documents,  whether  simultaneously  with
foreclosure  proceedings or in any other sequence.  A separate action or actions
may be brought and prosecuted against Borrower, whether or not action is brought
against any other  person or entity or whether or not any other person or entity
is joined in the action or actions.  In addition,  Lender and Trustee shall have
the right but not the obligation to join and participate in, as a party if it so
elects,  any  administrative  or judicial  proceedings  or actions  initiated in
connection with any matter addressed in Article or Section .

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


                       Article 12 - ENVIRONMENTAL HAZARDS

                  Section 12.1  ENVIRONMENTAL  REPRESENTATIONS  AND  WARRANTIES.
Borrower represents and warrants,  based upon an environmental assessment of the
Property and  information  that Borrower knows or should  reasonably have known,
that:  (a) there are no  Hazardous  Substances  (defined  below) or  underground
storage tanks in, on, or under the  Property,  except those that are both (i) in
compliance  with  Environmental  Laws  (defined  below) and with permits  issued
pursuant  thereto and (ii) fully disclosed to Lender in writing  pursuant to the
written  reports  resulting from the  environmental  assessments of the Property
delivered to Lender (the "Environmental Report"); (b) there are no past, present
or threatened Releases (defined below) of Hazardous  Substances in, on, under or
from the Property except as described in the Environmental  Report; (c) there is
no threat of any  Release of  Hazardous  Substances  migrating  to the  Property
except as described in the Environmental Report; (d) there is no past or present
non-compliance with Environmental Laws, or with permits issued pursuant thereto,
in connection with the Property except as described in the Environmental Report;
(e) Borrower does not know of, and has not received,  any written or oral notice
or other communication from any person or entity (including but not limited to a
governmental  entity) relating to Hazardous  Substances or Remediation  (defined
below)  thereof,  of possible  liability of any person or entity pursuant to any
Environmental  Law,  other  environmental  conditions  in  connection  with  the
Property,  or any actual or potential  administrative or judicial proceedings in
connection with any of the foregoing;  and (f) Borrower has truthfully and fully
provided to Lender, in writing,  any and all information  relating to conditions
in, on, under or from the Property that is known to
                                     - 41 -
<PAGE>
Borrower and that is contained in  Borrower's  files and records,  including but
not limited to any reports  relating to  Hazardous  Substances  in, on, under or
from  the  Property  and/or  to the  environmental  condition  of the  Property.
"Environmental Law" means any present and future federal,  state and local laws,
statutes,  ordinances,  rules,  regulations and the like, as well as common law,
relating to protection of human health or the environment, relating to Hazardous
Substances,  relating to liability for or costs of  Remediation or prevention of
Releases of Hazardous  Substances or relating to liability for or costs of other
actual or threatened  danger to human health or the environment.  "Environmental
Law" includes,  but is not limited to, the following statutes,  as amended,  any
successor thereto,  and any regulations  promulgated  pursuant thereto,  and any
state or local statutes,  ordinances, rules, regulations and the like addressing
similar issues:  the  Comprehensive  Environmental  Response,  Compensation  and
Liability  Act; the  Emergency  Planning and  Community  Right-to-Know  Act; the
Hazardous Substances  Transportation Act; the Resource Conservation and Recovery
Act  (including  but not limited to Subtitle I relating to  underground  storage
tanks);  the Solid Waste  Disposal  Act; the Clean Water Act; the Clean Air Act;
the Toxic Substances  Control Act; the Safe Drinking Water Act; the Occupational
Safety and Health Act;  the Federal  Water  Pollution  Control  Act; the Federal
Insecticide,  Fungicide and  Rodenticide  Act; the  Endangered  Species Act; the
National  Environmental Policy Act; and the River and Harbors Appropriation Act.
"Environmental Law" also includes, but is not limited to, any present and future
federal, state and local laws, statutes,  ordinances, rules, regulations and the
like, as well as common law:  conditioning  transfer of property upon a negative
declaration or other approval of a governmental  authority of the  environmental
condition of the property;  requiring  notification or disclosure of Releases of
Hazardous  Substances  or other  environmental  condition of the Property to any
governmental  authority or other person or entity,  whether or not in connection
with  transfer of title to or  interest  in  property;  imposing  conditions  or
requirements  in  connection  with  permits  or other  authorization  for lawful
activity;  relating to nuisance,  trespass or other causes of action  related to
the Property;  and relating to wrongful death,  personal injury,  or property or
other damage in connection  with any physical  condition or use of the Property.
"Hazardous  Substances"  include but are not  limited to any and all  substances
(whether  solid,  liquid or gas)  defined,  listed,  or otherwise  classified as
pollutants,   hazardous  wastes,  hazardous  substances,   hazardous  materials,
extremely  hazardous  wastes,  or words of similar meaning or regulatory  effect
under any  present  or  future  Environmental  Laws or that may have a  negative
impact  on  human  health  or the  environment,  including  but not  limited  to
petroleum and petroleum products,  asbestos and  asbestos-containing  materials,
polychlorinated  biphenyls,  lead, radon, radioactive materials,  flammables and
explosives.  "Release" of any Hazardous Substance includes but is not limited to
any  release,  deposit,   discharge,   emission,   leaking,  spilling,  seeping,
migrating,  injecting,  pumping, pouring, emptying, escaping, dumping, disposing
or other  movement of Hazardous  Substances.  "Remediation"  includes but is not
limited to any response,  remedial,  removal, or corrective action, any activity
to  cleanup,  detoxify,  decontaminate,   contain  or  otherwise  remediate  any
Hazardous Substance, any actions to prevent, cure or mitigate any Release of any
Hazardous  Substance,  any action to comply with any Environmental  Laws or with
any permits issued  pursuant  thereto,  any  inspection,  investigation,  study,
monitoring,  assessment,  audit,  sampling  and  testing,  laboratory  or  other
analysis,  or  evaluation  relating to any  Hazardous  Substances or to anything
referred to in Article .

                  Section 12.2 ENVIRONMENTAL  COVENANTS.  Borrower covenants and
agrees  that:  (a) all uses and  operations  on or of the  Property,  whether by
Borrower or any other person
                                     - 42 -
<PAGE>
or entity, shall be in compliance with all Environmental Laws and permits issued
pursuant thereto; (b) there shall be no Releases of Hazardous Substances in, on,
under or from the Property;  (c) there shall be no Hazardous  Substances in, on,
or under the  Property,  except those that are both (i) in  compliance  with all
Environmental  Laws and with  permits  issued  pursuant  thereto  and (ii) fully
disclosed to Lender in writing;  (d) Borrower  shall keep the Property  free and
clear of all liens and other encumbrances  imposed pursuant to any Environmental
Law,  whether due to any act or  omission  of  Borrower  or any other  person or
entity (the  "Environmental  Liens");  (e) Borrower  shall, at its sole cost and
expense, fully and expeditiously cooperate in all activities pursuant to Section
below,  including  but not limited to  providing  all relevant  information  and
making  knowledgeable  persons available for interviews;  (f) Borrower shall, at
its sole cost and expense,  perform any  environmental  site assessment or other
investigation  of  environmental  conditions  in  connection  with the Property,
pursuant to any reasonable  written request of Lender (including but not limited
to sampling,  testing and analysis of soil, water,  air, building  materials and
other  materials and substances  whether  solid,  liquid or gas), and share with
Lender the reports and other results thereof,  and Lender and other  Indemnified
Parties shall be entitled to rely on such reports and other results thereof; (g)
Borrower shall, at its sole cost and expense, comply with all reasonable written
requests of Lender to (i)  reasonably  effectuate  Remediation  of any condition
(including but not limited to a Release of a Hazardous  Substance) in, on, under
or from the Property;  (ii) comply with any Environmental Law; (iii) comply with
any  directive  from  any  governmental  authority;  and  (iv)  take  any  other
reasonable action necessary or appropriate for protection of human health or the
environment;  (h) Borrower shall not do or allow any tenant or other user of the
Property to do any act that materially  increases the dangers to human health or
the  environment,  poses an  unreasonable  risk of harm to any  person or entity
(whether  on or off the  Property),  impairs  or may  impair  the  value  of the
Property, is contrary to any requirement of any insurer, constitutes a public or
private  nuisance,  constitutes  waste,  or violates  any  covenant,  condition,
agreement  or  easement  applicable  to the  Property;  and (i)  Borrower  shall
immediately  notify  Lender  in  writing  of (A) any  presence  or  Releases  or
threatened  Releases of Hazardous  Substances  in, on, under,  from or migrating
towards the Property; (B) any non-compliance with any Environmental Laws related
in any way to the Property; (C) any actual or potential  Environmental Lien; (D)
any required or proposed Remediation of environmental conditions relating to the
Property;  and (E) any  written  or oral  notice  or other  communication  which
Borrower becomes aware from any source whatsoever  (including but not limited to
a  governmental   entity)  relating  in  any  way  to  Hazardous  Substances  or
Remediation thereof,  possible liability of any person or entity pursuant to any
Environmental  Law,  other  environmental  conditions  in  connection  with  the
Property,  or any actual or potential  administrative or judicial proceedings in
connection  with anything  referred to in this Article . Any failure of Borrower
to perform its obligations pursuant to this Section
 shall constitute bad faith waste with respect to the Property.

                  Section 12.3 LENDER'S  RIGHTS.  Lender and any other person or
entity  designated by Lender,  including  but not limited to any  receiver,  any
representative of a governmental entity, and any environmental consultant, shall
have the  right,  but not the  obligation,  to enter  upon the  Property  at all
reasonable times to assess any and all aspects of the environmental condition of
the  Property  and  its  use,  including  but  not  limited  to  conducting  any
environmental  assessment  or audit (the scope of which shall be  determined  in
Lender's sole and absolute  discretion) and taking samples of soil,  groundwater
or other water, air, or building
                                     - 43 -
<PAGE>
materials, and conducting other invasive testing.  Borrower shall cooperate with
and provide access to Lender and any such person or entity designated by Lender.


                          Article 13 - INDEMNIFICATION

                  Section 13.1 GENERAL  INDEMNIFICATION.  Borrower shall, at its
sole cost and expense, protect, defend, indemnify, release and hold harmless the
Indemnified  Parties  from and against any and all  claims,  suits,  liabilities
(including,  without  limitation,  strict  liabilities),  actions,  proceedings,
obligations,  debts,  damages,  losses, costs,  expenses,  diminutions in value,
fines, penalties,  charges, fees, expenses,  judgments,  awards, amounts paid in
settlement,   punitive  damages,  foreseeable  and  unforeseeable  consequential
damages,  of whatever  kind or nature  (including  but not limited to attorneys'
fees and other costs of defense) (the  "Losses")  imposed upon or incurred by or
asserted against any Indemnified  Parties and directly or indirectly arising out
of or in any way relating to any one or more of the following:  (a) ownership of
this Security Instrument, the Property or any interest therein or receipt of any
Rents; (b) any amendment to, or  restructuring  of, the Debt, and the Note, this
Security  Instrument,  or any Other Security  Documents;  (c) any and all lawful
action that may be taken by Lender in  connection  with the  enforcement  of the
provisions of this Security  Instrument or the Note or any of the Other Security
Documents,  whether  or not  suit  is  filed  in  connection  with  same,  or in
connection  with  Borrower,  any  Guarantor  or  Indemnitor  and/or any  member,
partner,  joint venturer or shareholder  thereof becoming a party to a voluntary
or involuntary  federal or state bankruptcy,  insolvency or similar  proceeding;
(d) any accident, injury to or death of persons or loss of or damage to property
occurring  in, on or about the Property or any part thereof or on the  adjoining
sidewalks,  curbs, adjacent property or adjacent parking areas, streets or ways;
(e) any use,  nonuse  or  condition  in, on or about  the  Property  or any part
thereof or on the  adjoining  sidewalks,  curbs,  adjacent  property or adjacent
parking  areas,  streets or ways;  (f) any  failure on the part of  Borrower  to
perform or be in compliance  with any of the terms of this Security  Instrument;
(g)  performance  of any labor or services or the furnishing of any materials or
other  property in respect of the Property or any part thereof;  (h) the failure
of any person to file timely with the Internal  Revenue Service an accurate Form
1099-B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter
Exchange  Transactions,  which may be required in  connection  with the Security
Instrument,  or to supply a copy thereof in a timely fashion to the recipient of
the  proceeds  of  the  transaction  in  connection  with  which  this  Security
Instrument is made; (i) any failure of the Property to be in compliance with any
Applicable Laws; (j) the enforcement by any Indemnified  Party of the provisions
of this  Article ; (k) any and all claims and  demands  whatsoever  which may be
asserted against Lender by reason of any alleged  obligations or undertakings on
its part to perform or  discharge  any of the terms,  covenants,  or  agreements
contained in any Lease;  (l) the payment of any commission,  charge or brokerage
fee to anyone  which may be payable in  connection  with the funding of the Loan
evidenced  by the Note  and  secured  by this  Security  Instrument;  or (m) any
misrepresentation  made by Borrower  in this  Security  Instrument  or any Other
Security Document. Any amounts payable to Lender by reason of the application of
this Section shall become immediately due and payable and shall bear interest at
the Default Rate from the date loss or damage is sustained by Lender until paid.
For purposes of this Article , the term  "Indemnified  Parties" means Lender and
any person or entity who is or will have been involved in the origination of the
Loan, any person or entity who is or will have been involved in the servicing of
the Loan, any person or entity
                                     - 44 -
<PAGE>
in whose name the  encumbrance  created by this  Security  Instrument is or will
have been  recorded,  persons and  entities who may hold or acquire or will have
held a full or partial  interest  in the Loan  (including,  but not  limited to,
Investors or  prospective  Investors in the  Securities,  as well as custodians,
trustees and other  fiduciaries who hold or have held a full or partial interest
in the  Loan  for the  benefit  of  third  parties)  as  well as the  respective
directors,  officers,   shareholders,   partners,  members,  employees,  agents,
servants,    representatives,     contractors,    subcontractors,    affiliates,
subsidiaries,  participants,  successors  and  assigns  of  any  and  all of the
foregoing  (including but not limited to any other person or entity who holds or
acquires or will have held a participation  or other full or partial interest in
the Loan or the Property, whether during the term of the Loan or as a part of or
following  a  foreclosure  of the Loan and  including,  but not  limited to, any
successors  by merger,  consolidation  or  acquisition  of all or a  substantial
portion of Lender's assets and business).

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

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

                  Section 13.4 ENVIRONMENTAL INDEMNIFICATION. Borrower shall, at
its sole cost and expense, protect, defend, indemnify, release and hold harmless
the  Indemnified  Parties  from and  against  any and all  Losses  and  costs of
Remediation   (whether  or  not   performed   voluntarily),   engineers'   fees,
environmental  consultants' fees, and costs of investigation  (including but not
limited to  sampling,  testing,  and  analysis  of soil,  water,  air,  building
materials  and other  materials and  substances  whether  solid,  liquid or gas)
imposed upon or incurred by or asserted  against any  Indemnified  Parties,  and
directly or indirectly  arising out of or in any way relating to any one or more
of the following: (a) any presence of any Hazardous Substances in, on, above, or
under the Property;  (b) any past,  present or  threatened  Release of Hazardous
Substances  in, on,  above,  under or from the  Property;  (c) any  activity  by
Borrower,  any person or entity  affiliated with Borrower or any tenant or other
user of the Property in connection with any actual,  proposed or threatened use,
treatment,   storage,   holding,   existence,   disposition  or  other  Release,
generation,   production,   manufacturing,    processing,   refining,   control,
management,  abatement, removal, handling, transfer or transportation to or from
the Property of any Hazardous  Substances  at any time located in, under,  on or
above  the  Property;  (d) any  activity  by  Borrower,  any  person  or  entity
affiliated  with  Borrower  or any  tenant  or  other  user of the  Property  in
connection with any actual or proposed  Remediation of any Hazardous  Substances
at any time located in, under, on or above the Property, whether or not such
                                     - 45 -
<PAGE>
Remediation is voluntary or pursuant to court or administrative order, including
but not limited to any removal,  remedial or  corrective  action;  (e) any past,
present or threatened non-compliance or violations of any Environmental Laws (or
permits  issued  pursuant  to any  Environmental  Law) in  connection  with  the
Property  or  operations  thereon,  including  but not limited to any failure by
Borrower,  any person or entity  affiliated with Borrower or any tenant or other
user of the Property to comply with any order of any  governmental  authority in
connection with any Environmental Laws; (f) the imposition,  recording or filing
or the  threatened  imposition,  recording or filing of any  Environmental  Lien
encumbering  the Property;  (g) any  administrative  processes or proceedings or
judicial  proceedings in any way connected with any matter  addressed in Article
and this Section ; (h) any past, present or threatened injury to, destruction of
or loss of natural  resources in any way connected with the Property,  including
but not limited to costs to investigate  and assess such injury,  destruction or
loss;  (i) any acts of Borrower or other users of the Property in arranging  for
disposal or  treatment,  or  arranging  with a  transporter  for  transport  for
disposal or  treatment,  of  Hazardous  Substances  owned or  possessed  by such
Borrower  or other  users,  at any  facility  or  incineration  vessel  owned or
operated by another  person or entity and containing  such or similar  Hazardous
Materials; (j) any acts of Borrower or other users of the Property, in accepting
any  Hazardous  Substances  for  transport to disposal or treatment  facilities,
incineration  vessels or sites  selected by Borrower or such other  users,  from
which there is a Release,  or a threatened  Release of any  Hazardous  Substance
which causes the incurrence of costs for  Remediation;  (k) any personal injury,
wrongful  death, or property damage arising under any statutory or common law or
tort  law  theory,  including  but  not  limited  to  damages  assessed  for the
maintenance  of a  private  or  public  nuisance  or for  the  conducting  of an
abnormally   dangerous   activity  on  or  near  the   Property;   and  (l)  any
misrepresentation  or inaccuracy in any  representation  or warranty or material
breach or failure to perform  any  covenants  or other  obligations  pursuant to
Article .

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


                              Article 14 - WAIVERS

                  Section 14.1 WAIVER OF  COUNTERCLAIM.  Borrower  hereby waives
the  right to  assert a  counterclaim,  other  than a  mandatory  or  compulsory
counterclaim,  in any action or proceeding  brought against it by Lender arising
out of or in any way connected with this Security  Instrument,  the Note, any of
the Other Security Documents, or the Obligations.
                                     - 46 -
<PAGE>
                  Section 14.2  MARSHALLING  AND OTHER MATTERS.  Borrower hereby
waives,  to the  extent  permitted  by law,  the  benefit  of all  appraisement,
valuation,  stay, extension,  reinstatement and redemption laws now or hereafter
in force and all rights of marshalling in the event of any sale hereunder of the
Property or any part thereof or any interest therein.  Further,  Borrower hereby
expressly  waives any and all rights of redemption  from sale under any order or
decree of foreclosure of this Security Instrument on behalf of Borrower,  and on
behalf  of each and  every  person  acquiring  any  interest  in or title to the
Property subsequent to the date of this Security Instrument and on behalf of all
persons to the extent permitted by applicable law.

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

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

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

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

                  SECTION 14.7 WAIVER OF TRIAL BY JURY.  BORROWER HEREBY WAIVES,
TO THE  FULLEST  EXTENT  PERMITTED  BY LAW,  THE  RIGHT  TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM, WHETHER IN
                                     - 47 -
<PAGE>
CONTRACT,  TORT OR  OTHERWISE,  RELATING  DIRECTLY  OR  INDIRECTLY  TO THE  LOAN
EVIDENCED BY THE NOTE, THE  APPLICATION  FOR THE LOAN EVIDENCED BY THE NOTE, THE
NOTE,  THIS SECURITY  INSTRUMENT OR THE OTHER SECURITY  DOCUMENTS OR ANY ACTS OR
OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES,  DIRECTORS OR AGENTS IN CONNECTION
THEREWITH.


                            Article 15 - EXCULPATION

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

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

                  Section 15.3  EXCEPTIONS TO EXCULPATION.  Notwithstanding  the
provisions of this Article to the contrary,  Borrower and Joseph Hrudka shall be
personally  liable to Lender  for the  Losses  it  incurs  due to:  (i) fraud or
intentional  misrepresentation  by  Borrower  or any  other  person or entity in
connection  with the  execution  and the  delivery  of the Note,  this  Security
Instrument or the Other Security  Documents;  (ii) Borrower's  misapplication or
misappropriation  of Rents received by Borrower after the occurrence of an Event
of Default;  (iii) Borrower's  misappropriation  of tenant security  deposits or
Rents collected in advance;  (iv) the misapplication or the  misappropriation of
insurance proceeds or condemnation  awards; (v) Borrower's failure to pay Taxes,
Insurance Premiums,  Other Charges (except to the extent that sums sufficient to
pay such amounts have been deposited in escrow with Lender pursuant to the terms
of this  Security  Instrument),  charges for labor or materials or other charges
that can create  liens on the  Property;  (vi)  Borrower's  failure to maintain,
repair or restore the Property in
                                     - 48 -
<PAGE>
accordance with the Security Instrument and the Other Security Documents;  (vii)
Borrower's  failure to return or to reimburse  Lender for all Personal  Property
taken  from the  Property  by or on behalf of  Borrower  and not  replaced  with
Personal  Property of the same utility and of the same or greater value;  (viii)
any act of actual waste or arson by Borrower, any principal,  affiliate,  member
or general partner  thereof or by any Indemnitor or Guarantor;  (ix) any fees or
commissions  paid by Borrower  to any  principal,  affiliate,  member or general
partner of  Borrower,  Indemnitor  or Guarantor in violation of the terms of the
Note,  this  Security  Instrument  or  the  Other  Security  Documents;  or  (x)
Borrower's  failure to comply  with the  provisions  of Sections , , and of this
Security Instrument.

                  Section 15.4  RECOURSE.  Notwithstanding  the  foregoing,  the
agreement  of Lender not to pursue  recourse  liability  as set forth in Section
15.1  above  SHALL  BECOME  NULL AND VOID and shall be of no  further  force and
effect in the event of Borrower's  default under Sections , , or , 8.2, 8.3 or ,
or if the Property or any part thereof  shall become an asset in (i) a voluntary
bankruptcy  or  insolvency  proceeding,  or (ii) an  involuntary  bankruptcy  or
insolvency proceeding which is not dismissed within ninety (90) days of filing.

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


                              Article 16 - NOTICES

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

If to Borrower:            Camelback Plaza Development L.C.
                           2401 West 1st Street
                           Tempe, Arizona  85281
                           Attention: James W. Brown
                           Facsimile No. (602) 912-0480
                                     - 49 -
<PAGE>
With a copy to:            Ridenour, Swenson, Cleere & Evans, P.C.
                           302 North First Avenue, Suite 900
                           Phoenix, Arizona 85003
                           Attention: Gerard R. Cleere, Esq.
                           Facsimile No. (602) 254-8670


If to Lender:              Boston Capital Mortgage Company Limited Partnership
                           One Boston Place, Suite 2100
                           Boston, Massachusetts 02108
                           Attention: Ms. Kathie Valyeau
                           Facsimile No. (617) 624-8999


With a copy to:            Thacher Proffitt & Wood
                           2 World Trade Center, 40th Floor
                           New York, New York 10048
                           Attention: Donald F. Simone, Esq.
                           Facsimile No. (212) 912-7751

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

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

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


                         Article 17 - SERVICE OF PROCESS

                  Section 17.1 CONSENT TO SERVICE.

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

                  (b)  Borrower   initially  and  irrevocably   designates  C.T.
         Corporation,  with  offices on the date  hereof at 1633  Broadway,  New
         York, New York 10019, to receive
                                     - 50 -
<PAGE>
         for and on behalf of Borrower  service of process in New York, New York
         with respect to this Security Instrument.

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

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


                           Article 18 - APPLICABLE LAW

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

                  Section 18.2 USURY LAWS. This Security Instrument and the Note
are subject to the express condition that at no time shall Borrower be obligated
or required to pay interest on the Debt at a rate which could subject the holder
of the Note to either civil or criminal liability as a result of being in excess
of the maximum  interest rate which  Borrower is permitted by applicable  law to
contract or agree to pay.  If by the terms of this  Security  Instrument  or the
Note,  Borrower is at any time required or obligated to pay interest on the Debt
at a rate in  excess  of such  maximum  rate,  the rate of  interest  under  the
Security  Instrument and the Note shall be deemed to be  immediately  reduced to
such  maximum rate and the  interest  payable  shall be computed at such maximum
rate and all prior  interest  payments in excess of such  maximum  rate shall be
applied and shall be deemed to have been  payments in reduction of the principal
balance  of the Note.  All sums paid or agreed to be paid to Lender for the use,
forbearance,  or  detention  of the  Debt  shall,  to the  extent  permitted  by
applicable law, be amortized,  prorated,  allocated,  and spread  throughout the
full stated term of the Note until payment in full so that the rate or amount of
interest  on  account of the Debt does not exceed  the  maximum  lawful  rate of
interest  from time to time in effect and  applicable to the Debt for so long as
the Debt is outstanding.
                                     - 51 -
<PAGE>
                  Section 18.3 PROVISIONS SUBJECT TO APPLICABLE LAW. All rights,
powers and remedies  provided in this Security  Instrument may be exercised only
to the  extent  that the  exercise  thereof  does  not  violate  any  applicable
provisions of law and are intended to be limited to the extent necessary so that
they will not render this  Security  Instrument  invalid,  unenforceable  or not
entitled  to be  recorded,  registered  or filed  under  the  provisions  of any
applicable  law.  If any term of this  Security  Instrument  or any  application
thereof  shall be invalid  or  unenforceable,  the  remainder  of this  Security
Instrument and any other application of the term shall not be affected thereby.


                          Article 19 - SECONDARY MARKET

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


                               Article 20 - COSTS

                  Section  20.1  PERFORMANCE  AT  BORROWER'S  EXPENSE.  Borrower
acknowledges  and  confirms  that Lender  shall  impose  certain  administrative
processing and/or commitment fees in connection with (a) the extension, renewal,
modification,  amendment  and  termination  of the  Loan,  (b)  the  release  or
substitution of collateral therefor, (c) obtaining certain consents, waivers and
approvals  with  respect  to the  Property,  or (d) the  review  of any Lease or
proposed   Lease  or  the   preparation   or   review   of  any   subordination,
non-disturbance agreement (the occurrence of any of the above shall be called an
"Event").   Borrower  further   acknowledges  and  confirms  that  it  shall  be
responsible  for the payment of all costs of  reappraisal of the Property or any
part thereof, whether required by law, regulation, Lender or any governmental or
quasi-governmental  authority.  Borrower hereby  acknowledges and agrees to pay,
immediately, with or without demand, all such fees (as the same may be increased
or decreased from time to time),  and any  additional  fees of a similar type or
nature which may be imposed by Lender from time to time,
                                     - 52 -
<PAGE>
upon the  occurrence  of any Event or  otherwise.  Wherever it is  provided  for
herein that Borrower pay any costs and expenses,  such costs and expenses  shall
include,  but not be limited  to, all legal  fees and  disbursements  of Lender,
whether with respect to retained firms,  the  reimbursement  for the expenses of
in-house staff or otherwise.

                  Section 20.2  ATTORNEY'S  FEES FOR  ENFORCEMENT.  (a) Borrower
shall  pay all  legal  fees  incurred  by  Lender  in  connection  with  (i) the
preparation  of the  Note,  this  Security  Instrument  and the  Other  Security
Documents and (ii) the items set forth in Section above,  and (b) Borrower shall
pay to Lender on demand  any and all  expenses,  including  legal  expenses  and
attorneys'  fees,  incurred or paid by Lender in protecting  its interest in the
Property or Personal  Property or in collecting any amount payable  hereunder or
in  enforcing  its rights  hereunder  with  respect to the  Property or Personal
Property,  whether  or not  any  legal  proceeding  is  commenced  hereunder  or
thereunder  and  whether  or not any  default  or Event of  Default  shall  have
occurred and is continuing,  together with interest  thereon at the Default Rate
from the date  paid or  incurred  by  Lender  until  such  expenses  are paid by
Borrower.


                            Article 21 - DEFINITIONS

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


                      Article 22 - MISCELLANEOUS PROVISIONS

                  Section 22.1 NO ORAL CHANGE. This Security Instrument, and any
provisions  hereof, may not be modified,  amended,  waived,  extended,  changed,
discharged or  terminated  orally or by any act or failure to act on the part of
Borrower  or Lender,  but only by an  agreement  in writing  signed by the party
against whom  enforcement of any  modification,  amendment,  waiver,  extension,
change, discharge or termination is sought.
                                     - 53 -
<PAGE>
                  Section 22.2 LIABILITY.  If Borrower consists of more than one
person,  the obligations and liabilities of each such person  hereunder shall be
joint and several.  This Security  Instrument shall be binding upon and inure to
the benefit of Borrower and Lender and their  respective  successors and assigns
forever.

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

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

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

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

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


                     Article 23 - SPECIAL ARIZONA PROVISIONS

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

                  Section 23.2 MAILING ADDRESS.  The principal place of business
and/or address of Borrower,  Trustee and Lender set forth in the first paragraph
of  this  Deed of  Trust  shall  be  deemed  to be the  mailing  address  of the
respective party.
                                     - 54 -
<PAGE>
                  Section  23.3  PROPERTY  MORTGAGED.  (a) The words  "mortgage,
grant, bargain, sell, pledge, assign, warrant, transfer and convey" appearing in
Section 1.1,  entitled  "Property  Mortgaged"  are hereby  deleted and the words
"grant, transfer, convey and assign" are substituted therefor.

                  (b) The words "in  trust,  with  power of  sale,"  are  hereby
inserted immediately after the words "for the benefit of Lender" and immediately
before  the words  "and grant a security  interest"  appearing  in Section  1.1,
entitled "Property Mortgaged".

                  Section 23.4 SECURITY AGREEMENT. The following is hereby added
immediately  following  the last  sentence of Section  1.3,  entitled  "Security
Agreement":

                           Upon recording  this Security  Instrument in the real
                  property records,  this Security Instrument shall be effective
                  as a  financing  statement  filed  as  a  fixture  filing.  In
                  addition, a carbon, photographic or other reproduction of this
                  Security  Instrument and/or any financing  statement  relating
                  hereto shall be sufficient  for filing  and/or  recording as a
                  financing  statement.   The  filing  of  any  other  financing
                  statement   relating  to  any  personal   property  rights  or
                  interests  described herein shall not be construed to diminish
                  any right or priority hereunder.

                  Section  23.5  REMEDIES.  The text of  Section  11.1  entitled
"Remedies" is hereby deleted and the following is hereby substituted therefor:

                           Upon the occurrence of any Event of Default, Borrower
                  agrees that Lender  acting by or through  Trustee  may, at its
                  option, and without further notice or demand, declare the Debt
                  immediately  due and  payable,  and  irrespective  of  whether
                  Lender acting through Trustee  exercises such option,  it may,
                  at its option and in its sole  discretion,  without  any prior
                  notice or demand  to or upon  Borrower,  do one or more of the
                  following:

                                    (a)  Subject  to  any  applicable  law,  the
                           license  granted to Borrower  under Section 1.2 shall
                           automatically  be revoked  and Lender may enter upon,
                           take  possession  of, manage and operate the Property
                           or any part  thereof;  make repairs and  alterations,
                           and do any acts which  Lender deems proper to protect
                           the  security  hereof;  and  either  with or  without
                           taking  possession,  in  its  own  name,  sue  for or
                           otherwise  collect and  receive the Rents,  including
                           those  past due and  unpaid,  and apply the same less
                           costs  and  expenses  of  operation  and  collection,
                           including reasonable  attorneys' fees, upon the Debt,
                           and in such  order  as  Lender  may  determine.  Upon
                           request of Lender,  Borrower  shall assemble and make
                           available  to  Lender  at  the  Property  any  of the
                           Property  which  has  been  removed  therefrom.   The
                           entering upon and taking  possession of the Property,
                           the  collection  of any  Rents  and  the  application
                           thereof  as  aforesaid,  shall  not cure or waive any
                           default  theretofore  or  thereafter  occurring,   or
                           affect any notice of default  hereunder or invalidate
                           any  act   done   pursuant   to  any   such   notice.
                           Notwithstanding Lender's continuance in possession or
                           receipt and  application  of Rents,  Lender  shall be
                           entitled 
                                     - 55 -
<PAGE>
                           to exercise every right provided for in this Security
                           Instrument or by law upon or after the  occurrence of
                           an Event of Default,  including the right to exercise
                           the power of sale hereinafter  described.  Any of the
                           actions  referred to in this  Subsection may be taken
                           by Lender  at such  time as  Lender  is so  entitled,
                           without  regard to the  adequacy of any  security for
                           the Debt;

                                    (b) Lender shall,  without limitation on the
                           rights  provided  for  in  A.R.S.   ss.33-702(B)  and
                           without  regard to the  adequacy of any  security for
                           the  Debt,  be  entitled  to  the  appointment  of  a
                           receiver by any court  having  jurisdiction,  without
                           notice,   to  take  possession  of  and  protect  the
                           Property,  and operate the same and collect the Rents
                           therefrom;

                                    (c)  Lender may bring an action in any court
                           of competent  jurisdiction to foreclose this Security
                           Instrument  as a mortgage  or to  enforce  any of the
                           covenants hereof;

                                    (d) Lender  may elect to cause the  Property
                           or any part thereof to be sold as follows:

                                            (i) Lender may  proceed as if all of
                                    the   Property   were  real   property,   in
                                    accordance  with  Subsection  (iv) below, or
                                    Lender   may  elect  to  treat  any  of  the
                                    Property which consists of a right in action
                                    or which  is  property  that can be  severed
                                    from the Property without causing structural
                                    damage  thereto as if the same were personal
                                    property,   and   dispose  of  the  same  in
                                    accordance  with  Subsection   (iii)  below,
                                    separate  and  apart  from  the sale of real
                                    property,  the  remainder  of  the  Property
                                    being treated as real property;

                                            (ii)  Lender may cause any such sale
                                    or  other   disposition   to  be   conducted
                                    immediately   upon  the  expiration  of  any
                                    notice  period  required  by law, if any, or
                                    Lender  may  delay  any  such  sale or other
                                    disposition  for  such  period  of  time  as
                                    Lender  deems  to be in its  best  interest.
                                    Should Lender desire that more than one such
                                    sale  or  other  disposition  be  conducted,
                                    Lender 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  Lender  may
                                    deem to be in its best interest;

                                             (iii) Should  Lender elect to cause
                                    any of the  Property  to be  disposed  of as
                                    personal property as permitted by Subsection
                                    (i)  above,  it  may  dispose  of  any  part
                                    thereof  in  any  manner  now  or  hereafter
                                    permitted   by  Article  9  of  the  Uniform
                                    Commercial  Code or in  accordance  with any
                                    other remedy  provided by law. Both Borrower
                                    and Lender shall be eligible to purchase any
                                    part or all of  such  property  at any  such
                                    disposition. Any such disposition
                                     - 56 -
<PAGE>
                                    may be either  public or  private  as Lender
                                    may so elect,  subject to the  provisions of
                                    the Uniform Commercial Code;

                                            (iv) Should Lender elect to sell the
                                    Property  which  is real  property  or which
                                    Lender   has   elected   to  treat  as  real
                                    property,   upon  such  election  Lender  or
                                    Trustee  shall  give such  notice of default
                                    and election to sell as may then be required
                                    by law.  Thereafter,  upon the expiration of
                                    such time and the  giving of such  notice of
                                    sale  as  may  then  be   required  by  law,
                                    Trustee,  at the time and place specified by
                                    the   notice  of  sale,   shall   sell  such
                                    Property,  or any portion thereof  specified
                                    by Lender,  at public auction to the highest
                                    bidder  for  cash  in  lawful  money  of the
                                    United States of America,  subject, however,
                                    to the  provisions  of  subparagraph  (f) of
                                    this  Section  23.5.  Trustee  may, and upon
                                    request of Lender shall,  from time to time,
                                    postpone  the  sale by  public  announcement
                                    thereof  at  the  time  and  place   noticed
                                    therefor.   If  the  Property   consists  of
                                    several   lots  or   parcels,   Lender   may
                                    designate  the  order in which  such lots or
                                    parcels  shall be offered  for sale or sold.
                                    Any person,  including Borrower,  Trustee or
                                    Lender,  may purchase at the sale.  Upon any
                                    sale,  Trustee  shall execute and deliver to
                                    the  purchaser or purchasers a deed or deeds
                                    conveying the property so sold,  but without
                                    any covenant or warranty whatsoever, express
                                    or  implied,  whereupon  such  purchaser  or
                                    purchasers   shall  be  let  into  immediate
                                    possession;

                                            (v) In the  event of a sale or other
                                    disposition  of any  such  property,  or any
                                    part thereof, and the execution of a deed or
                                    other  conveyance,   pursuant  thereto,  the
                                    recitals   therein  of  facts,   such  as  a
                                    default, the giving of notice of default and
                                    notice  of  sale,   terms  of  sale,   sale,
                                    purchaser,  payment of purchase  money,  and
                                    any other fact  affecting the  regularity or
                                    validity of such sale or disposition,  shall
                                    be  conclusive  proof  of the  truth of such
                                    facts; and any such deed or conveyance shall
                                    be conclusive against all persons as to such
                                    facts recited therein; and

                                            (vi) Lender and/or Trustee (with the
                                    prior  consent  of Lender)  shall  apply the
                                    proceeds   of  any   sale   or   disposition
                                    hereunder to payment of the  following:  (A)
                                    the costs and  expenses  of  exercising  the
                                    power   of  sale   and  of   such   sale  or
                                    disposition,  including  trustee's  fees and
                                    attorneys'  fees,  and  including,   without
                                    limitation,  the actual cost of  publishing,
                                    recording,  mailing and posting notice,  the
                                    cost of any search and/or other  evidence of
                                    title  procured in connection  therewith and
                                    revenue stamps on any deed or  reconveyance;
                                    (B) to the payment of the Debt;  and (C) the
                                    remainder,  if any, to the person or persons
                                    legally  entitled  thereto  in the  order of
                                    their priority;
                                     - 57 -
<PAGE>
                                    (e) Subject to the  provisions of Article 15
                           and to the extent permitted by law, Borrower shall be
                           and remain liable for any deficiency  remaining after
                           sale either pursuant to the power of sale or judicial
                           proceedings.  After default or breach, Borrower shall
                           pay  Lender's  and  Trustee's  reasonable  attorneys'
                           fees,  Trustee's  fees  and its  costs  and  expenses
                           incurred as a result of said  default or breach,  and
                           if suit is brought,  all costs of suit,  all of which
                           sums shall be secured  by this  Security  Instrument.
                           Borrower's statutory rights of reinstatement, if any,
                           are expressly  conditioned upon Borrower's payment of
                           all sums required  under the  applicable  statute and
                           performance of all required acts;

                                    (f)  Borrower  hereby  expressly  waives any
                           right  which it may have to direct the order in which
                           any of the Property shall be sold in the event of any
                           sale or sales  pursuant  hereto.  Also,  Lender shall
                           have  the  right  to  foreclose,  sell  or  otherwise
                           proceed  against  the  Property  encumbered  by  this
                           Security  Instrument  and the Property  encumbered by
                           any other Security  Instrument securing the bonds, if
                           any, in such order as Lender shall  elect.  Any party
                           that  has  signed  this  Instrument  as a  surety  or
                           accommodation  party or that has subjected his or its
                           property  to this  Instrument  to secure  the debt of
                           another   expressly  waives  the  benefit  of  A.R.S.
                           ss.ss.12-1641   through  and  including  12-1644  and
                           44-142 and Ariz.  R. Civ.  P. 17 (f) or such  similar
                           provisions as may be enacted or adopted hereafter;

                                    (g) Subject to the provisions of Article 15,
                           upon any sale of the  Property,  whether made under a
                           power of sale herein  granted or pursuant to judicial
                           proceedings, if the holder of the Note is a purchaser
                           at such sale,  it shall be  entitled to use and apply
                           all or any portion of the  indebtedness  then secured
                           hereby for or in  settlement or payment of all or any
                           portion  of  the  purchase   price  of  the  property
                           purchased;

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

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

                                    (j) Lender may recover  judgment on the Note
                           either before,  during or after any  proceedings  for
                           the  enforcement  of this Security  Instrument or the
                           Other Security Documents;
                                     - 58 -
<PAGE>
                                    (k) Lender may  exercise  any and all rights
                           and remedies  granted to a secured party upon default
                           under the Uniform Commercial Code, including, without
                           limiting the  generality  of the  foregoing:  (i) the
                           right to take possession of the Personal  Property or
                           any part thereof,  and to take such other measures as
                           Lender or Trustee  may deem  necessary  for the care,
                           protection and preservation of the Personal Property,
                           and (ii) request  Borrower at its expense to assemble
                           the Personal Property and make it available to Lender
                           at a  convenient  place  acceptable  to  Lender.  Any
                           notice of sale,  disposition or other intended action
                           by Lender or Trustee  with  respect  to the  Personal
                           Property  sent to  Borrower  in  accordance  with the
                           provisions  hereof  at least  five (5) days  prior to
                           such action, shall constitute commercially reasonable
                           notice to Borrower;

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

                                         (i)         Taxes and Other Charges;

                                        (ii)         Insurance Premiums;

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

                                        (iv)         Amortization  of the unpaid
                                                     principal  balance  of  the
                                                     Note;

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

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

                                    (n) Lender may apply the undisbursed balance
                           of any Net Proceeds Deficiency deposit, together with
                           interest thereon,  to the payment of the Debt in such
                           order,  priority and proportions as Lender shall deem
                           to be appropriate in its discretion; and
                                     - 59 -
<PAGE>
                                    (o)  Lender may  exercise  any and all other
                           rights and remedies  available at law or in equity or
                           as otherwise provided in this Security  Instrument or
                           the  Other  Security  Documents  as  may  legally  be
                           available  to Lender to protect  its  interest in the
                           Property and to collect the Debt.

                  In the  event of a sale,  by  foreclosure,  power of sale,  or
otherwise,  of less than all of the  Property,  this Security  Instrument  shall
continue  as a lien  and  security  interest  on the  remaining  portion  of the
Property unimpaired and without loss of priority. Notwithstanding the provisions
of this  Section 23.5 to the  contrary,  if any Event of Default as described in
clause  (i) of  Subsection  (g) shall  occur,  the entire  unpaid  Debt shall be
automatically  due and  payable,  without  any further  notice,  demand or other
action by Lender.

                  Section  23.6  NOTICES.  The first word,  "All",  of the first
sentence of Section 16.1, entitled "Notices" is hereby deleted and the following
is hereby substituted therefor:

                           "Except as otherwise provided by applicable law, all"

                  Section 23.7 USURY. The following  sentence is hereby inserted
immediately prior to the first sentence of Section 18.2, entitled "Usury Laws":

                           Borrower  agrees to pay an effective rate of interest
                  that is equal to the rate  provided  for in the Note  together
                  with all other  payments of, or in the nature of,  interest to
                  be made by Borrower to Lender under the Note and this Security
                  Instrument.   Notwithstanding  any  provision  herein  or  any
                  instrument  now or  hereafter  securing  the  Note,  the total
                  liability  of Borrower  for the payment of interest  under the
                  Note and the Assignment of Rents and this Security  Instrument
                  shall not exceed  the  applicable  limit  imposed by the usury
                  laws of the State of Arizona.  If Lender receives  interest in
                  an amount which  exceeds such limit,  such excess amount shall
                  be applied  instead to the  reduction of the unpaid  principal
                  balance and not to the  payment of  interest  and if a surplus
                  remains after full payment of principal  and lawful  interest,
                  the surplus  shall be  remitted  to  Borrower  by Lender,  and
                  Borrower hereby agrees to accept such remittance.

                  Section  23.8 TIME OF  ESSENCE.  Time is of the  essence  with
respect to each of Borrower's covenants under this Security Instrument.

                      Article 24 - DEED OF TRUST PROVISIONS

                  Section 24.1 CONCERNING THE TRUSTEE. Trustee shall be under no
duty to take any action hereunder except as expressly  required  hereunder or by
law,  or to  perform  any act which  would  involve  Trustee  in any  expense or
liability or to institute or defend any suit in respect hereof,  unless properly
indemnified to Trustee's reasonable satisfaction. Trustee, by acceptance of this
Security Instrument, covenants to perform and fulfill the trusts herein created,
being liable,  however,  only for gross  negligence or willful  misconduct,  and
hereby waives any statutory fee and agrees to accept reasonable compensation, in
lieu thereof,  for any services rendered by Trustee in accordance with the terms
hereof.  Trustee  may resign at any time upon giving  notice to Borrower  and to
Lender.  Lender may remove Trustee at any time or from time 
                                     - 60 -
<PAGE>
to time and select a  successor  trustee.  In the event of the  death,  removal,
resignation,  refusal to act, or  inability  to act of  Trustee,  or in its sole
discretion  for any reason  whatsoever  Lender may,  without  notice and without
specifying  any reason  therefor and without  applying to any court,  select and
appoint a successor  trustee,  by an instrument  recorded wherever this Security
Instrument is recorded and all powers,  rights, duties and authority of Trustee,
as aforesaid,  shall thereupon become vested in such successor.  Such substitute
trustee shall not be required to give bond for the faithful  performance  of the
duties of Trustee  hereunder unless required by Lender.  The procedure  provided
for in this  paragraph for  substitution  of Trustee shall be in addition to and
not in exclusion of any other provisions for substitution, by law or otherwise.

                  Section 24.2 TRUSTEE'S FEES. Borrower shall pay all reasonable
costs, fees and expenses incurred by Trustee and Trustee's agents and counsel in
connection with the performance by Trustee of Trustee's duties hereunder and all
such costs, fees and expenses shall be secured by this Security Instrument.

                  Section  24.3  CERTAIN  RIGHTS.  With the  approval of Lender,
Trustee shall have the right to take any and all of the following  actions:  (i)
to select, employ, and advise with counsel (who may be, but need not be, counsel
for Lender)  upon any matters  arising  hereunder,  including  the  preparation,
execution, and interpretation of the Note, this Security Instrument or the Other
Security Documents,  and shall be fully protected in relying as to legal matters
on the advice of counsel,  (ii) to execute  any of the trusts and powers  hereof
and to perform any duty hereunder  either  directly or through his/her agents or
attorneys,  (iii) to select and employ,  in and about the  execution  of his/her
duties hereunder, suitable accountants,  engineers and other experts, agents and
attorneys-in-fact,  either corporate or individual,  not regularly in the employ
of  Trustee,  and  Trustee  shall  not  be  answerable  for  any  act,  default,
negligence,  or  misconduct  of any such  accountant,  engineer or other expert,
agent or attorney-in-fact, if selected with reasonable area, or for any error of
judgment or act done by Trustee in good faith,  or be otherwise  responsible  or
accountable  under any  circumstances  whatsoever,  except for  Trustee's  gross
negligence or bad faith,  and (iv) any and all other lawful action as Lender may
instruct  Trustee  to take to  protect or  enforce  Lender's  rights  hereunder.
Trustee  shall not be personally  liable in case of entry by Trustee,  or anyone
entering by virtue of the powers  herein  granted to Trustee,  upon the Property
for debts  contracted for or liability or damages  incurred in the management or
operation  of the  Property.  Trustee  shall  have  the  right  to  rely  on any
instrument,  document, or signature authorizing or supporting an action taken or
proposed to be taken by Trustee hereunder,  believed by Trustee in good faith to
be  genuine.  Trustee  shall be entitled to  reimbursement  for actual  expenses
incurred by Trustee in the  performance  of Trustee's  duties  hereunder  and to
reasonable  compensation  for such of Trustee's  services  hereunder as shall be
rendered.

                  Section  24.4  RETENTION  OF MONEY.  All  moneys  received  by
Trustee shall,  until used or applied as herein  provided,  be held in trust for
the purposes for which they were  received,  but need not be  segregated  in any
manner from any other moneys (except to the extent  required by applicable  law)
and Trustee shall be under no liability  for interest on any moneys  received by
Trustee hereunder.

                  Section  24.5  PERFECTION  OF  APPOINTMENT.  Should  any deed,
conveyance, or instrument of any nature be required from Borrower by any Trustee
or  substitute  trustee to more 
                                     - 61 -
<PAGE>
fully and  certainly  vest in and confirm to the Trustee or  substitute  trustee
such estates rights,  powers,  and duties,  then, upon request by the Trustee or
substitute trustee, any and all such deeds, conveyances and instruments shall be
made, executed,  acknowledged,  and delivered and shall be caused to be recorded
and/or filed by Borrower.

                  Section 24.6 SUCCESSION  INSTRUMENTS.  Any substitute  trustee
appointed  pursuant to any of the provisions  hereof shall,  without any further
act,  deed,  or  conveyance,  become  vested with all the  estates,  properties,
rights,  powers,  and trusts of its or his  predecessor in the rights  hereunder
with like effect as if originally  named as Trustee  herein;  but  nevertheless,
upon the written  request of Lender or of the  substitute  trustee,  the Trustee
ceasing to act shall  execute and deliver any  instrument  transferring  to such
substitute  trustee,  upon  the  trusts  herein  expressed,   all  the  estates,
properties,  rights,  powers,  and trusts of the Trustee so ceasing to act,  and
shall duly  assign,  transfer and deliver any of the property and moneys held by
such Trustee to the substitute trustee so appointed in the Trustee's place.

                 Article 25 - MISCELLANEOUS LEASEHOLD PROVISIONS

                  Section  25.1 THE  GROUND  LEASE.  Borrower  shall (i) pay all
rents,  additional  rents and other sums  required  to be paid by  Borrower,  as
tenant under and pursuant to the  provisions  of the Ground Lease when such rent
or other charge is due and payable,  (ii) diligently  perform and observe all of
the terms, covenants and conditions of the Ground Lease on the part of Borrower,
as tenant thereunder,  to be performed and observed at least ten (10) days prior
to the expiration of any applicable  grace period  therein  provided,  and (iii)
promptly  notify  Lender of the giving of any notice by the  landlord  under the
Ground Lease to Borrower of any default by Borrower, as tenant thereunder, to be
performed  or observed  and  deliver to Lender a true copy of each such  notice.
Borrower shall not, without the prior consent of Lender, surrender the leasehold
estate  created by the Ground  Lease or  terminate or cancel the Ground Lease or
modify,  change,  supplement,  alter or amend the Ground Lease,  in any respect,
either orally or in writing,  and Borrower hereby assigns to Lender,  as further
security for the payment of the Debt and for the  performance  and observance of
the terms,  covenants and  conditions of this  Security  Instrument,  all of the
rights,  privileges  and  prerogatives  of Borrower,  as tenant under the Ground
Lease,  to  surrender  the  leasehold  estate  created by the Ground Lease or to
terminate,  cancel, modify, change, supplement, alter or amend the Ground Lease,
and any such  surrender of the leasehold  estate  created by the Ground Lease or
termination,  cancellation,  modification,  change,  supplement,  alteration  or
amendment of the Ground Lease  without the prior consent of Lender shall be void
and of no force and effect.  If Borrower  shall  default in the  performance  or
observance of any term, covenant or condition of the Ground Lease on the part of
Borrower,  as tenant  thereunder,  to be performed or  observed,  then,  without
limiting the generality of the other provisions of this Security Instrument, and
without  waiving or releasing  Borrower from any of its  obligations  hereunder,
Lender shall have the right,  but shall be under no obligation,  to pay any sums
and to perform any act or take any action as may be  appropriate to cause all of
the terms, covenants and conditions of the Ground Lease on the part of Borrower,
as tenant thereunder, to be performed or observed or to be promptly performed or
observed on behalf of  Borrower,  to the end that the rights of Borrower  in, to
and under the Ground Lease shall be kept  unimpaired  and free from default.  If
Lender  shall make any payment or perform  any act or take action in  accordance
with the preceding  sentence,  Lender will notify  Borrower of the making of any
such payment, the performance of any such act, or the taking of any such action.
In any 
                                     - 62 -
<PAGE>
such event,  subject to the rights of lessees,  sublessees  and other  occupants
under the Leases, Lender and any person designated by Lender shall have, and are
hereby  granted,  the right to enter upon the Property at any time and from time
to time for the purpose of taking any such  action.  If the  landlord  under the
Ground  Lease  shall  deliver to Lender a copy of any notice of default  sent by
said landlord to Borrower,  as tenant under the Ground Lease,  such notice shall
constitute full protection to Lender for any action taken or omitted to be taken
by Lender,  in good faith,  in reliance  thereon.  Borrower  shall exercise each
individual  option, if any, to extend or renew the term of the Ground Lease upon
demand by Lender made at any time within one (1) year of the last day upon which
any such option may be exercised,  and Borrower hereby expressly  authorizes and
appoints Lender its  attorney-in-fact to exercise any such option in the name of
and upon behalf of Borrower,  which power of attorney shall be  irrevocable  and
shall be deemed to be coupled with an interest.

                  Section 25.2  SUBLEASES.  Each Lease  hereafter  made and each
renewal  of any  existing  Lease  shall  provide  that,  (a) in the event of the
termination of the Ground Lease,  the lease shall not terminate or be terminable
by the  lessee;  (b) in the  event of any  action  for the  foreclosure  of this
Security  Instrument,  the lease shall not  terminate  or be  terminable  by the
subtenant by reason of the  termination of the Ground Lease unless the lessee is
specifically  named and  joined in any such  action  and  unless a  judgment  is
obtained therein against the lessee;  and (c) in the event that the Ground Lease
is  terminated  as  aforesaid,  the lessee  shall attorn to the lessor under the
Ground  Lease  or to  the  purchaser  at  the  sale  of  the  Property  on  such
foreclosure, as the case may be.

                  Section 25.3 NO MERGER OF FEE AND LEASEHOLD ESTATES; RELEASES.
So long as any portion of the Debt shall  remain  unpaid,  unless  Lender  shall
otherwise  consent,  the fee title to the Land and the leasehold  estate therein
created pursuant to the provisions of the Ground Lease shall not merge but shall
always be kept separate and distinct,  notwithstanding the union of such estates
in Borrower,  Owner,  or in any other  person by  purchase,  operation of law or
otherwise.  Lender reserves the right,  at any time, to release  portions of the
Property,  including,  but not limited to, the leasehold  estate  created by the
Ground  Lease,  with or without  consideration,  at Lender's  election,  without
waiving or affecting any of its rights  hereunder or under the Note or the Other
Security  Documents  and any such release  shall not affect  Lender's  rights in
connection with the portion of the Property not so released.

                  Section  25.4  BORROWER'S  ACQUISITION  OF FEE ESTATE.  In the
event that Borrower, so long as any portion of the Debt remains unpaid, shall be
the  owner and  holder  of the fee  title to the Land the lien of this  Security
Instrument  shall be spread to cover  Borrower's  fee title to the Land and said
fee title shall be deemed to be included in the Property.  Borrower  agrees,  at
its sole cost and expense,  including without  limitation,  Lender's  reasonable
attorney's  fees, to (i) execute any and all documents or instruments  necessary
to subject  its fee title to the Land to the lien of this  Security  Instrument;
and (ii)  provide a title  insurance  policy which shall insure that the lien of
this Security Instrument is a first lien on Borrower's fee title to the Land.




                         [NO FURTHER TEXT ON THIS PAGE]
                                     - 63 -
<PAGE>
                  IN WITNESS WHEREOF, THIS SECURITY INSTRUMENT has been executed
by Borrower the day and year first above written.

                                        CAMELBACK PLAZA DEVELOPMENT L.C., an
                                        Arizona limited liability company

                                        By:   PERFORMANCE CAMELBACK
                                              DEVELOPMENT CORP., an Arizona
                                              corporation, its managing member


                                              By:  __________________________
                                                   Name:
                                                   Title:
                                     - 64 -
<PAGE>
STATE OF______          )
                        SS.
COUNTY OF_______        )




                  This  instrument was  acknowledged  before me the  undersigned
notary public this _____day  of_____________,  1996,  by______________________as
President of PERFORMANCE CAMELBACK DEVELOPMENT CORP., an Arizona corporation, as
Managing  Member of  CAMELBACK  PLAZA  DEVELOPMENT,  L.C.,  an  Arizona  limited
liability company with full powers to so do.



                                                        -------------
                                                        Notary Public



My commission expires:______________________
<PAGE>
                                    EXHIBIT A

                              (Description of Land)

                  ALL of that  certain  lot,  piece or parcel of land,  with the
buildings and improvements thereon, situate, lying and being
<PAGE>
                                TABLE OF CONTENTS
<TABLE>
         <S>                   <C>                                                                            <C>
                                          Article 1 - GRANTS OF SECURITY......................................- 1 -
         Section 1.1           PROPERTY MORTGAGED.............................................................- 1 -
                               ------------------
         Section 1.2           ASSIGNMENT OF RENTS............................................................- 4 -
                               -------------------
         Section 1.3           SECURITY AGREEMENT.............................................................- 4 -
                               ------------------
         Section 1.4           PLEDGE OF MONIES HELD..........................................................- 4 -
                               ---------------------

                                     Article 2 - DEBT AND OBLIGATIONS SECURED.................................- 5 -
         Section 2.1           DEBT...........................................................................- 5 -
                               ----
         Section 2.2           OTHER OBLIGATIONS..............................................................- 5 -
                               -----------------
         Section 2.3           DEBT AND OTHER OBLIGATIONS.....................................................- 6 -
                               --------------------------
         Section 2.4           PAYMENTS.......................................................................- 6 -
                               --------

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

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

                                    Article 5 - REPRESENTATIONS AND WARRANTIES...............................- 24 -
         Section 5.1           WARRANTY OF TITLE.............................................................- 24 -
                               -----------------
         Section 5.2           AUTHORITY.....................................................................- 24 -
                               ---------
         Section 5.3           LEGAL STATUS AND AUTHORITY....................................................- 24 -
                               --------------------------
         Section 5.4           VALIDITY OF DOCUMENTS.........................................................- 24 -
                               ---------------------
         Section 5.5           LITIGATION....................................................................- 25 -
                               ----------
         Section 5.6           STATUS OF PROPERTY............................................................- 25 -
                               ------------------
         Section 5.7           NO FOREIGN PERSON.............................................................- 26 -
                               -----------------
         Section 5.8           SEPARATE TAX LOT..............................................................- 26 -
                               ----------------
         Section 5.9           ERISA COMPLIANCE..............................................................- 26 -
                               ----------------
</TABLE>
                                                   -i-
<PAGE>
<TABLE>
         <S>                   <C>                                                                            <C>
         Section 5.10          LEASES........................................................................- 26 -
                               ------
         Section 5.11          FINANCIAL CONDITION...........................................................- 27 -
                               -------------------
         Section 5.12          BUSINESS PURPOSES.............................................................- 27 -
                               -----------------
         Section 5.13          TAXES.........................................................................- 27 -
                               -----
         Section 5.14          MAILING ADDRESS...............................................................- 27 -
                               ---------------
         Section 5.15          NO CHANGE IN FACTS OR CIRCUMSTANCES...........................................- 27 -
                               -----------------------------------
         Section 5.16          DISCLOSURE....................................................................- 27 -
                               ----------
         Section 5.17          THIRD PARTY REPRESENTATIONS...................................................- 27 -
                               ---------------------------

                                       Article 6 - OBLIGATIONS AND RELIANCES.................................- 27 -
         Section 6.1           RELATIONSHIP OF BORROWER AND LENDER...........................................- 27 -
                               -----------------------------------
         Section 6.2           NO RELIANCE ON LENDER.........................................................- 27 -
                               ---------------------
         Section 6.3           NO LENDER OBLIGATIONS.........................................................- 28 -
                               ---------------------
         Section 6.4           RELIANCE......................................................................- 28 -
                               --------

                                          Article 7 - FURTHER ASSURANCES.....................................- 28 -
         Section 7.1           RECORDING OF SECURITY INSTRUMENT, ETC.........................................- 28 -
                               -------------------------------------
         Section 7.2           FURTHER ACTS, ETC.............................................................- 29 -
                               -----------------
         Section 7.3           CHANGES IN TAX, DEBT CREDIT AND DOCUMENTARY STAMP
                               -------------------------------------------------
                  LAWS.......................................................................................- 29 -
                  ----
         Section 7.4           ESTOPPEL CERTIFICATES.........................................................- 29 -
                               ---------------------
         Section 7.5           FLOOD INSURANCE...............................................................- 30 -
                               ---------------
         Section 7.6           SPLITTING OF SECURITY INSTRUMENT..............................................- 30 -
                               --------------------------------
         Section 7.7           REPLACEMENT DOCUMENTS.........................................................- 31 -
                               ---------------------

                                        Article 8 - DUE ON SALE/ENCUMBRANCE..................................- 31 -
         Section 8.1           LENDER RELIANCE...............................................................- 31 -
                               ---------------
         Section 8.2           NO SALE/ENCUMBRANCE...........................................................- 31 -
                               -------------------
         Section 8.3           SALE/ENCUMBRANCE DEFINED......................................................- 31 -
                               ------------------------
         Section 8.4           LENDER'S RIGHTS...............................................................- 32 -
                               ---------------

                                              Article 9 - PREPAYMENT.........................................- 32 -
         Section 9.1           PREPAYMENT BEFORE EVENT OF DEFAULT............................................- 32 -
                               ----------------------------------
         Section 9.2           PREPAYMENT ON CASUALTY AND CONDEMNATION.......................................- 32 -
                               ---------------------------------------
         Section 9.3           PREPAYMENT AFTER EVENT OF DEFAULT.............................................- 32 -
                               ---------------------------------

                                               Article 10 - DEFAULT..........................................- 33 -
         Section 10.1          EVENTS OF DEFAULT.............................................................- 33 -
                               -----------------
         Section 10.2          LATE PAYMENT CHARGE...........................................................- 36 -
                               -------------------
         Section 10.3          DEFAULT INTEREST..............................................................- 36 -
                               ----------------

                                         Article 11 - RIGHTS AND REMEDIES....................................- 37 -
         Section 11.1          REMEDIES......................................................................- 37 -
                               --------
         Section 11.2          APPLICATION OF PROCEEDS.......................................................- 39 -
                               -----------------------
         Section 11.3          RIGHT TO CURE DEFAULTS........................................................- 39 -
                               ----------------------
         Section 11.4          ACTIONS AND PROCEEDINGS.......................................................- 40 -
                               -----------------------
         Section 11.5          RECOVERY OF SUMS REQUIRED TO BE PAID..........................................- 40 -
                               ------------------------------------
</TABLE>
                                      -ii-
<PAGE>
<TABLE>
         <S>                   <C>                                                                            <C>
         Section 11.6          EXAMINATION OF BOOKS AND RECORDS..............................................- 40 -
                               --------------------------------
         Section 11.7          OTHER RIGHTS, ETC.............................................................- 40 -
                               -----------------
         Section 11.8          RIGHT TO RELEASE ANY PORTION OF THE PROPERTY..................................- 41 -
                               --------------------------------------------
         Section 11.9          VIOLATION OF LAWS.............................................................- 41 -
                               -----------------
         Section 11.10         RECOURSE AND CHOICE OF REMEDIES...............................................- 41 -
                               -------------------------------
         Section 11.11         RIGHT OF ENTRY................................................................- 41 -
                               --------------

                                        Article 12 - ENVIRONMENTAL HAZARDS...................................- 42 -
         Section 12.1          ENVIRONMENTAL REPRESENTATIONS AND WARRANTIES..................................- 42 -
                               --------------------------------------------
         Section 12.2          ENVIRONMENTAL COVENANTS.......................................................- 43 -
                               -----------------------
         Section 12.3          LENDER'S RIGHTS...............................................................- 44 -
                               ---------------

                                           Article 13 - INDEMNIFICATION......................................- 44 -
         Section 13.1          GENERAL INDEMNIFICATION.......................................................- 44 -
                               -----------------------
         Section 13.2          MORTGAGE AND/OR INTANGIBLE TAX................................................- 45 -
                               ------------------------------
         Section 13.3          ERISA INDEMNIFICATION.........................................................- 45 -
                               ---------------------
         Section 13.4          ENVIRONMENTAL INDEMNIFICATION.................................................- 46 -
                               -----------------------------
         Section 13.5          DUTY TO DEFEND; ATTORNEYS' FEES AND OTHER FEES AND
                               --------------------------------------------------
                  EXPENSES...................................................................................- 47 -
                  --------

                                               Article 14 - WAIVERS..........................................- 47 -
         Section 14.1          WAIVER OF COUNTERCLAIM........................................................- 47 -
                               ----------------------
         Section 14.2          MARSHALLING AND OTHER MATTERS.................................................- 47 -
                               -----------------------------
         Section 14.3          WAIVER OF NOTICE..............................................................- 47 -
                               ----------------
         Section 14.4          WAIVER OF STATUTE OF LIMITATIONS..............................................- 47 -
                               --------------------------------
         Section 14.5          SOLE DISCRETION OF LENDER.....................................................- 47 -
                               -------------------------
         Section 14.6          SURVIVAL......................................................................- 48 -
                               --------
         SECTION 14.7          WAIVER OF TRIAL BY JURY.......................................................- 48 -
                               -----------------------

                                             Article 15 - EXCULPATION........................................- 48 -
         Section 15.1          EXCULPATION...................................................................- 48 -
                               -----------
         Section 15.2          RESERVATION OF CERTAIN RIGHTS.................................................- 49 -
                               -----------------------------
         Section 15.3          EXCEPTIONS TO EXCULPATION.....................................................- 49 -
                               -------------------------
         Section 15.4          RECOURSE......................................................................- 49 -
                               --------
         Section 15.5          BANKRUPTCY CLAIMS.............................................................- 49 -
                               -----------------

                                               Article 16 - NOTICES..........................................- 50 -
         Section 16.1          NOTICES.......................................................................- 50 -
                               -------

                                          Article 17 - SERVICE OF PROCESS....................................- 51 -
         Section 17.1          CONSENT TO SERVICE............................................................- 51 -
                               ------------------
         Section 17.2          SUBMISSION TO JURISDICTION....................................................- 51 -
                               --------------------------
         Section 17.3          JURISDICTION NOT EXCLUSIVE....................................................- 51 -
                               --------------------------

                                            Article 18 - APPLICABLE LAW......................................- 51 -
         Section 18.1          CHOICE OF LAW.................................................................- 51 -
                               -------------
         Section 18.2          USURY LAWS....................................................................- 52 -
                               ----------
</TABLE>
                                      -iii-
<PAGE>
<TABLE>
         <S>                   <C>                                                                            <C>
         Section 18.3          PROVISIONS SUBJECT TO APPLICABLE LAW..........................................- 52 -
                               ------------------------------------

                                           Article 19 - SECONDARY MARKET.....................................- 52 -
         Section 19.1          TRANSFER OF LOAN..............................................................- 52 -
                               ----------------

                                                Article 20 - COSTS...........................................- 53 -
         Section 20.1          PERFORMANCE AT BORROWER'S EXPENSE.............................................- 53 -
                               ---------------------------------
         Section 20.2          ATTORNEY'S FEES FOR ENFORCEMENT...............................................- 53 -
                               -------------------------------

                                             Article 21 - DEFINITIONS........................................- 53 -
         Section 21.1          GENERAL DEFINITIONS...........................................................- 53 -
                               -------------------

                                       Article 22 - MISCELLANEOUS PROVISIONS.................................- 54 -
         Section 22.1          NO ORAL CHANGE................................................................- 54 -
                               --------------
         Section 22.2          LIABILITY.....................................................................- 54 -
                               ---------
         Section 22.3          INAPPLICABLE PROVISIONS.......................................................- 54 -
                               -----------------------
         Section 22.4          HEADINGS, ETC.................................................................- 54 -
                               -------------
         Section 22.5          DUPLICATE ORIGINALS; COUNTERPARTS.............................................- 54 -
                               ---------------------------------
         Section 22.6          NUMBER AND GENDER.............................................................- 54 -
                               -----------------
         Section 22.7          SUBROGATION...................................................................- 54 -
                               -----------

                                      Article 23 - SPECIAL ARIZONA PROVISIONS................................- 55 -
         Section 23.1          INCONSISTENCIES...............................................................- 55 -
                               ---------------
         Section 23.2          MAILING ADDRESS...............................................................- 55 -
                               ---------------
         Section 23.3          PROPERTY MORTGAGED............................................................- 55 -
                               ------------------
         Section 23.4          SECURITY AGREEMENT............................................................- 55 -
                               ------------------
         Section 23.5          REMEDIES......................................................................- 55 -
                               --------
         Section 23.6          NOTICES.......................................................................- 60 -
                               -------
         Section 23.7          USURY.  ......................................................................- 60 -
                               -----
         Section 23.8          TIME OF ESSENCE.  ............................................................- 61 -
                               ---------------

                                       Article 24 - DEED OF TRUST PROVISIONS.................................- 61 -
         Section 24.1          CONCERNING THE TRUSTEE........................................................- 61 -
                               ----------------------
         Section 24.2          TRUSTEE'S FEES................................................................- 61 -
                               --------------
         Section 24.3          CERTAIN RIGHTS................................................................- 61 -
                               --------------
         Section 24.4          RETENTION OF MONEY............................................................- 62 -
                               ------------------
         Section 24.5          PERFECTION OF APPOINTMENT.....................................................- 62 -
                               -------------------------
         Section 24.6          SUCCESSION INSTRUMENTS........................................................- 62 -
                               ----------------------

                                  Article 25 - MISCELLANEOUS LEASEHOLD PROVISIONS............................- 62 -
         Section 25.1          THE GROUND LEASE..............................................................- 62 -
                               ----------------
         Section 25.2          SUBLEASES.....................................................................- 63 -
                               ---------
         Section 25.3          NO MERGER OF FEE AND LEASEHOLD ESTATES; RELEASES..............................- 63 -
                               ------------------------------------------------
         Section 25.4          BORROWER'S ACQUISITION OF FEE ESTATE..........................................- 64 -
                               ------------------------------------
         DEFINITIONS............................................................................................-v-
         -----------
</TABLE>
                                      -iv-
<PAGE>
                                   DEFINITIONS
                                   -----------

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

         (a)      Applicable Laws:  Article 3, Subsection 3.10(a);
                  ---------------
         (b)      Attorneys' Fees/Counsel Fees:  Article 21, Section 21.1;
                  ----------------------------
         (c)      Borrower:  Preamble and Article 21, Section 21.1;
                  --------
         (d)      Business Day:  Article 16, Section 16.1;
                  ------------
         (e)      Casualty Consultant:  Article 4, Subsection 4.4(b)(iii);
                  -------------------
         (f)      Casualty Retainage:  Article 4, Subsection 4.4(b)(iv);
                  ------------------
         (g)      Debt:  Article 2, Section 2.1;
                  ----
         (h)      Default Prepayment:  Article 9, Section 9.3;
                  ------------------
         (i)      Default Rate:  Article 10, Section 10.3;
                  ------------
         (j)      Environmental Indemnity:  Article 10, Subsection 10.1(q);
                  -----------------------
         (k)      Environmental Law:  Article 12, Section 12.1;
                  -----------------
         (l)      Environmental Liens:  Article 12, Subsection 12.2(d);
                  -------------------
         (m)      Environmental Report: Article 12, Subsection 12.1(a)
                  --------------------
         (n)      ERISA:  Article 4, Subsection 4.2(a);
                  -----
         (o)      Escrow Fund:  Article 3, Section 3.5;
                  -----------
         (p)      Event:  Article 20, Section 20.1;
                  -----
         (q)      Event of Default:  Article 10, Section 10.1;
                  ----------------
         (r)      Full Replacement Cost:  Article 3, Subsection 3.3(a)(i)(A);
                  ---------------------
         (s)      GAAP:  Article 3, Subsection 3.11(a);
                  ----
         (t)      Gains Tax:  Article 23, Subsection 23.5(c);
                  ---------
                                       -v-
<PAGE>
         (u)      Guarantor:  Article 10, Subsection 10.1(f);
                  ---------
         (v)      Hazardous Substances:  Article 12, Section 12.1;
                  --------------------
         (w)      Improvements:  Article 1, Subsection 1.1(c);
                  ------------
         (x)      Indemnified Parties:  Article 13, Section 13.1;
                  -------------------
         (y)      Indemnitor(s):  Article 10, Subsection 10.1(q);
                  -------------
         (z)      Insurance Premiums:  Article 3, Subsection 3.3(b);
                  ------------------
         (aa)     Investor:  Article 19, Section 19.1;
                  --------
         (bb)     Land:  Article 1, Subsection 1.1(a);
                  ----
         (cc)     Lease Guaranty:  Article 3, Subsection 3.7(a);
                  --------------
         (dd)     Leases:  Article 1, Subsection 1.1(f);
                  ------
         (ee)     Lender:  Preamble and Article 21, Section 21.1;
                  ------
         (ff)     Loan:  Article 5, Subsection 5.12;
                  ----
         (gg)     Loan Application:  Article 5, Section 5.15;
                  ----------------
         (hh)     Losses:  Article 13, Section 13.1;
                  ------
         (ii)     Net Proceeds:  Article 4, Subsection 4.4(b);
                  ------------
         (jj)     Net Proceeds Deficiency:  Article 4, Subsection 4.4(b)(vi);
                  -----------------------
         (kk)     Note:  Recitals and Article 21, Section 21.1;
                  ----
         (ll)     Obligations:  Article 2, Section 2.3;
                  -----------
         (mm)     Other Charges:  Article 3, Subsection 3.4(a);
                  -------------
         (nn)     Other Obligations:  Article 2, Section 2.2;
                  -----------------
         (oo)     Other Security Documents:  Article 3, Section 3.2;
                  ------------------------
         (pp)     Permitted Exceptions:  Article 5, Section 5.1;
                  --------------------
         (qq)     Person:  Article 21, Section 21.1;
                  ------
         (rr)     Personal Property:  Article 1, Subsection 1.1(e);
                  -----------------
                                       -vi-
<PAGE>
        (ss)     Policies/Policy:  Article 3, Subsection 3.3(b);
                  ---------------
        (tt)     Property:  Article 1, Section 1.1 and Article 21, Section 21.1;
                 --------
        (uu)     Qualified Insurer:  Article 3, Subsection 3.3(b);
                 -----------------
        (vv)     Rating Agency:  Article 3, Subsection 3.3(b);
                 -------------
        (ww)     Release:  Article 12, Section 12.1;
                 -------
        (xx)     Remediation:  Article 12, Section 12.1;
                 -----------
        (yy)     Rents:  Article 1, Subsection 1.1(f);
                 -----
        (zz)     Restoration:  Article 3, Subsection 3.3(h);
                 -----------
        (aaa)    Securities:  Article 19, Section 19.1;
                 ----------
        (bbb)    Security Deposits:  Article 3, Subsection 3.7(c);
                 -----------------
        (ccc)    Security Instrument:  Preamble;
                 -------------------
        (ddd)    Taxes:  Article 3, Subsection 3.4(a);
                 -----
        (eee)    Transfer Tax:  Article 23, Subsection 23.5(b); and
                 ------------
        (fff)    Uniform Commercial Code:  Article 1, Subsection 1.1(e)
                 -----------------------
                                      -vii-
<PAGE>
================================================================================

                  CAMELBACK PLAZA DEVELOPMENT L.C., as assignor
                                        (Borrower)


                                       to


        BOSTON CAPITAL MORTGAGE COMPANY LIMITED PARTNERSHIP, as assignee
                                       (Lender)



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

                                   ASSIGNMENT
                               OF LEASES AND RENTS

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


                          Dated: As of November 1, 1996

                          Location:        Camelback Plaza
                                           2621 East Camelback Road
                                           Phoenix, Arizona

                          County:          Maricopa

                          PREPARED BY AND UPON
                          RECORDATION RETURN TO:

                          Messrs. Thacher, Proffitt & Wood
                          2 World Trade Center
                          New York, New York  10048

                          Attention:       Donald F. Simone, Esq.
                          File No.:        18001-00003

                          Title No.:  601228

================================================================================
<PAGE>
                  THIS ASSIGNMENT OF LEASES AND RENTS  ("Assignment") made as of
the first day of November, 1996, by CAMELBACK PLAZA DEVELOPMENT L.C., an Arizona
limited liability company,  as assignor,  having its principal place of business
c/o  Performance  Industries,  Inc., 2425 Camelback  Road,  Suite 620,  Phoenix,
Arizona  85016   ("Borrower")  to  BOSTON  CAPITAL   MORTGAGE   COMPANY  LIMITED
PARTNERSHIP, a Massachusetts limited partnership, as assignee, having an address
at One Boston Place, Suite 2100, Boston, Massachusetts 02108 ("Lender").

                                    RECITALS:

                  Borrower by its promissory note of even date herewith given to
Lender is indebted to Lender in the  principal  sum of SEVEN MILLION TWO HUNDRED
FIFTY THOUSAND AND 00/100 DOLLARS  ($7,250,000.00) in lawful money of the United
States  of  America  (together  with all  extensions,  renewals,  modifications,
substitutions and amendments thereof,  the "Note"),  with interest from the date
thereof at the rates set forth in the Note, principal and interest to be payable
in accordance with the terms and conditions provided in the Note.

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

                              ARTICLE 1-ASSIGNMENT

                  Section 1.1 PROPERTY ASSIGNED.  Borrower hereby absolutely and
unconditionally  assigns and grants to Lender the  following  property,  rights,
interests and estates, now owned, or hereafter acquired by Borrower:

                  (a) Leases.  All existing and future leases affecting the use,
enjoyment, or occupancy of all or any part of that certain lot or piece of land,
more particularly  described in Exhibit A annexed hereto and made a part hereof,
together with the  buildings,  structures,  fixtures,  additions,  enlargements,
extensions,   modifications,  repairs,  replacements  and  improvements  now  or
hereafter located thereon  (collectively,  the "Property") and the right,  title
and interest of Borrower, its successors and assigns, therein and thereunder.

                  (b) Other  Leases and  Agreements.  All other leases and other
agreements, whether or not in writing, affecting the use, enjoyment or occupancy
of the Property or any portion thereof now or hereafter made,  together with any
extension,  renewal or replacement of the same, this Assignment of other present
and future  leases and present and future  agreements  being  effective  without
further or supplemental  assignment.  The leases described in Subsection  1.1(a)
and the  leases  and  other  agreements  described  in this  Subsection  1.1(b),
together  with all other  present  and  future  leases  and  present  and future
agreements and any extension or renewal of the same are collectively referred to
as the "Leases".

                  (c) Rents.  All rents,  additional  rents,  revenues,  income,
issues and profits arising from the Leases and renewals and replacements thereof
and any cash or security deposited in connection therewith and together with all
rents, revenues, income, issues and
<PAGE>
profits  (including all oil and gas or other mineral royalties and bonuses) from
the use, enjoyment and occupancy of the Property (collectively, the "Rents").

                   (d) Bankruptcy  Claims.  All of Borrower's  claims and rights
(the  "Bankruptcy  Claims") to the payment of damages arising from any rejection
by a lessee of any Lease under the Bankruptcy Code, 11 U.S.C. ss.101 et seq., as
the same may be amended (the "Bankruptcy Code").

                  (e)  Lease  Guaranties.  All of  Borrower's  right,  title and
interest in and claims under any and all lease guaranties, letters of credit and
any other credit  support given by any  guarantor in connection  with any of the
Leases (individually, a "Lease Guarantor", collectively, the "Lease Guarantors")
to  Borrower  (individually,  a  "Lease  Guaranty",   collectively,  the  "Lease
Guaranties").

                   (f) Proceeds. All proceeds from the sale or other disposition
of the Leases, the Rents, the Lease Guaranties and the Bankruptcy Claims.

                  (g) Other. All rights, powers,  privileges,  options and other
benefits of Borrower as lessor under the Leases and beneficiary  under the Lease
Guaranties,  including without  limitation the immediate and continuing right to
make claim for, receive, collect and receipt for all Rents payable or receivable
under the Leases and all sums  payable  under the Lease  Guaranties  or pursuant
thereto  (and  to  apply  the  same to the  payment  of the  Debt  or the  Other
Obligations),  and to do all other things which Borrower or any lessor is or may
become entitled to do under the Leases or the Lease Guaranties.

                  (h) Entry. The right, at Lender's  option,  upon revocation of
the license granted herein, to enter upon the Property in person, by agent or by
court-appointed receiver, to collect the Rents.

                  (i)  Power  of  Attorney.   Borrower's  irrevocable  power  of
attorney, coupled with an interest, to take any and all of the actions set forth
in Section 3.1 of this  Assignment  and any or all other  actions  designated by
Lender for the proper management and preservation of the Property.

                   (j) Other Rights and Agreements.  Any and all other rights of
Borrower in and to the items set forth in subsections (a) through (i) above, and
all amendments, modifications, replacements, renewals and substitutions thereof.

                  Section  1.2   CONSIDERATION.   This  Assignment  is  made  in
consideration  of that certain loan made by Lender to Borrower  evidenced by the
Note and secured by that certain mortgage and security agreement,  deed of trust
and security  agreement,  deed to secure debt and security  agreement or similar
real  estate  security  instrument  given by  Borrower  to or for the benefit of
Lender, dated the date hereof, in the principal sum of SEVEN MILLION TWO HUNDRED
FIFTY and 00/100 DOLLARS ($7,250,000.00),  covering the Property and intended to
be duly recorded (the "Security  Instrument").  The principal sum,  interest and
all other sums due and payable  under the Note,  the Security  Instrument,  this
Assignment and the Other Security  Documents  (defined  below) are  collectively
referred to as the "Debt". The documents other than
                                      - 2 -
<PAGE>
this Assignment,  the Note or the Security  Instrument now or hereafter executed
by Borrower and/or others and by or in favor of Lender which wholly or partially
secure or  guarantee  payment of the Debt are  referred  to herein as the "Other
Security Documents".

                         ARTICLE 2 - TERMS OF ASSIGNMENT

                  Section  2.1  PRESENT  ASSIGNMENT  AND  LICENSE  BACK.  It  is
intended  by  Borrower  that this  Assignment  constitute  a  present,  absolute
assignment of the Leases, Rents, Lease Guaranties and Bankruptcy Claims, and not
an assignment for additional security only.  Nevertheless,  subject to the terms
of this Section , Lender  grants to Borrower a revocable  license to collect and
receive the Rents and other sums due under the Lease Guaranties.  Borrower shall
hold the Rents  and all sums  received  pursuant  to any  Lease  Guaranty,  or a
portion  thereof  sufficient  to discharge  all current sums due on the Debt, in
trust for the benefit of Lender for use in the payment of such sums.

                  Section  2.2  NOTICE TO  LESSEES.  Borrower  hereby  agrees to
authorize  and  direct  the  lessees  named in the Leases or any other or future
lessees or occupants of the  Property  and all Lease  Guarantors  to pay over to
Lender or to such other party as Lender directs all Rents and all sums due under
any Lease  Guaranties  upon receipt from Lender of written  notice to the effect
that  Lender is then the holder of the  Security  Instrument  and that a Default
(defined  below) exists,  and to continue so to do until  otherwise  notified by
Lender.

                  Section 2.3 INCORPORATION BY REFERENCE.  All  representations,
warranties,  covenants,  conditions  and  agreements  contained  in the Security
Instrument as same may be modified, renewed,  substituted or extended are hereby
made a part of this  Assignment to the same extent and with the same force as if
fully set forth herein.

                              ARTICLE 3 - REMEDIES

                  Section 3.1 REMEDIES OF LENDER.  Upon or at any time after the
occurrence of a default under this Assignment or an Event of Default (as defined
in the Security  Instrument) (a "Default"),  the license  granted to Borrower in
Section 2.1 of this Assignment shall automatically be revoked, and Lender shall,
without  limitation on its rights under A.R.S.  ss. 33- 702(B),  immediately  be
entitled  to  possession  of all Rents and sums due under any Lease  Guaranties,
whether or not Lender enters upon or takes control of the Property. In addition,
Lender may, at its option,  without  waiving such  Default,  without  notice and
without regard to the adequacy of the security for the Debt, either in person or
by  agent,  nominee  or  attorney,  with  or  without  bringing  any  action  or
proceeding,  or by a receiver appointed by a court,  dispossess Borrower and its
agents and servants from the Property,  without liability for trespass,  damages
or otherwise and exclude  Borrower and its agents or servants wholly  therefrom,
and take possession of the Property and all books, records and accounts relating
thereto and have, hold, manage, lease and operate the Property on such terms and
for such  period of time as Lender may deem  proper  and either  with or without
taking possession of the Property in its own name,  demand, sue for or otherwise
collect and receive all Rents and sums due under all Lease Guaranties, including
those  past  due and  unpaid  with  full  power  to make  from  time to time all
alterations, renovations, repairs or replacements thereto or thereof as may seem
proper to Lender and may apply the Rents and sums received pursuant to any Lease
Guaranties to the payment
                                      - 3 -
<PAGE>
of the following in such order and  proportion as Lender in its sole  discretion
may determine, any law, custom or use to the contrary  notwithstanding:  (a) all
expenses of managing and securing the Property, including, without being limited
thereto,  the  salaries,  fees and  wages of a  managing  agent  and such  other
employees or agents as Lender may deem  necessary or desirable  and all expenses
of operating  and  maintaining  the Property,  including,  without being limited
thereto, all taxes, charges, claims, assessments, water charges, sewer rents and
any other liens,  and premiums for all insurance which Lender may deem necessary
or  desirable,  and  the  cost  of  all  alterations,  renovations,  repairs  or
replacements,  and all expenses  incident to taking and retaining  possession of
the  Property;  and (b)  the  Debt,  together  with  all  costs  and  reasonable
attorneys' fees. In addition,  upon the occurrence of a Default,  Lender, at its
option,  may (1)  complete any  construction  on the Property in such manner and
form as Lender deems advisable,  (2) exercise all rights and powers of Borrower,
including, without limitation, the right to negotiate,  execute, cancel, enforce
or modify Leases,  obtain and evict tenants,  and demand,  sue for,  collect and
receive all Rents from the Property and all sums due under any Lease Guaranties,
(3) either require Borrower to pay monthly in advance to Lender, or any receiver
appointed to collect the Rents, the fair and reasonable rental value for the use
and  occupancy of such part of the Property as may be in  possession of Borrower
or (4) require  Borrower to vacate and  surrender  possession of the Property to
Lender or to such receiver and, in default  thereof,  Borrower may be evicted by
summary proceedings or otherwise.

                  Section  3.2  OTHER  REMEDIES.   Nothing   contained  in  this
Assignment and no act done or omitted by Lender pursuant to the power and rights
granted  to  Lender  hereunder  shall be  deemed to be a waiver by Lender of its
rights  and  remedies  under the Note,  the  Security  Instrument,  or the Other
Security Documents and this Assignment is made and accepted without prejudice to
any of the rights and remedies possessed by Lender under the terms thereof.  The
right of Lender to collect the Debt and to enforce any other  security  therefor
held by it may be exercised by Lender either prior to,  simultaneously  with, or
subsequent  to any action taken by it  hereunder.  Borrower  hereby  absolutely,
unconditionally  and irrevocably waives any and all rights to assert any setoff,
counterclaim  or  crossclaim  of  any  nature  whatsoever  with  respect  to the
obligations  of  Borrower  under  this   Assignment,   the  Note,  the  Security
Instrument,  the Other Security  Documents or otherwise with respect to the loan
secured hereby in any action or proceeding brought by Lender to collect same, or
any  portion  thereof,  or to enforce  and  realize  upon the lien and  security
interest created by this Assignment,  the Note, the Security Instrument,  or any
of the Other Security Documents (provided, however, that the foregoing shall not
be deemed a waiver of Borrower's right to assert any compulsory  counterclaim if
such  counterclaim is compelled under local law or rule of procedure,  nor shall
the foregoing be deemed a waiver of  Borrower's  right to assert any claim which
would  constitute a defense,  setoff,  counterclaim  or crossclaim of any nature
whatsoever against Lender in any separate action or proceeding). For the purpose
of A.R.S.  ss. 33-702 (B), this Assignment shall be deemed to be a "mortgage" or
"trust deed," and Lender's  rights shall  include,  but shall not be limited to,
those rights and methods of enforcement enumerated therein.

                  Section 3.3 OTHER  SECURITY.  Lender may take or release other
security  for the  payment  of the Debt,  may  release  any party  primarily  or
secondarily  liable  therefor and may apply any other security held by it to the
reduction or  satisfaction  of the Debt  without  prejudice to any of its rights
under this Assignment.
                                      - 4 -
<PAGE>
                  Section 3.4  NON-WAIVER.  The exercise by Lender of the option
granted it in Section of this  Assignment  and the  collection  of the Rents and
sums due  under the  Lease  Guaranties  and the  application  thereof  as herein
provided  shall not be considered a waiver of any default by Borrower  under the
Note, the Security Instrument, the Leases, this Assignment or the Other Security
Documents.  The failure of Lender to insist upon strict  performance of any term
hereof  shall  not be  deemed  to be a waiver  of any  term of this  Assignment.
Borrower shall not be relieved of Borrower's  obligations hereunder by reason of
(a) the  failure of Lender to comply  with any  request of Borrower or any other
party to take any  action  to  enforce  any of the  provisions  hereof or of the
Security Instrument,  the Note or the Other Security Documents,  (b) the release
regardless of  consideration,  of the whole or any part of the Property,  or (c)
any  agreement  or  stipulation  by  Lender  extending  the time of  payment  or
otherwise modifying or supplementing the terms of this Assignment, the Note, the
Security Instrument or the Other Security  Documents.  Lender may resort for the
payment  of the Debt to any other  security  held by  Lender  in such  order and
manner as Lender,  in its discretion,  may elect.  Lender may take any action to
recover the Debt,  or any portion  thereof,  or to enforce any  covenant  hereof
without  prejudice to the right of Lender thereafter to enforce its rights under
this  Assignment.  The rights of Lender under this Assignment shall be separate,
distinct and  cumulative  and none shall be given effect to the exclusion of the
others.  No act of Lender shall be construed as an election to proceed under any
one provision herein to the exclusion of any other provision.

                  Section  3.5  BANKRUPTCY.  (a) Upon or at any time  after  the
occurrence of a Default,  Lender shall have the right to proceed in its own name
or in the name of Borrower in respect of any claim,  suit,  action or proceeding
relating to the rejection of any Lease, including, without limitation, the right
to file and  prosecute,  to the  exclusion  of  Borrower,  any  proofs of claim,
complaints,  motions, applications,  notices and other documents, in any case in
respect of the lessee under such Lease under the Bankruptcy Code.

                   (b) If there shall be filed by or against Borrower a petition
under the  Bankruptcy  Code,  and  Borrower,  as lessor  under any Lease,  shall
determine  to reject  such Lease  pursuant to Section  365(a) of the  Bankruptcy
Code,  then Borrower shall give Lender not less than ten (10) days' prior notice
of the date on which Borrower shall apply to the bankruptcy  court for authority
to reject the Lease.  Lender shall have the right,  but not the  obligation,  to
serve upon Borrower  within such ten-day period a notice stating that (i) Lender
demands that Borrower  assume and assign the Lease to Lender pursuant to Section
365 of the Bankruptcy Code and (ii) Lender covenants to cure or provide adequate
assurance of future  performance under the Lease. If Lender serves upon Borrower
the notice  described  in the  preceding  sentence,  Borrower  shall not seek to
reject the Lease and shall comply with the demand  provided for in clause (i) of
the preceding  sentence within thirty (30) days after the notice shall have been
given,  subject to the  performance  by Lender of the  covenant  provided for in
clause (ii) of the preceding sentence.

                  ARTICLE 4 - NO LIABILITY, FURTHER ASSURANCES

                  Section 4.1 NO LIABILITY OF LENDER.  This Assignment shall not
be  construed  to  bind  Lender  to the  performance  of  any of the  covenants,
conditions or provisions  contained in any Lease or Lease  Guaranty or otherwise
impose  any  obligation  upon  Lender.  Lender  shall not be liable for any loss
sustained by Borrower resulting from Lender's failure to let the
                                      - 5 -
<PAGE>
Property after a Default or from any other act or omission of Lender in managing
the  Property  after a  Default  unless  such  loss  is  caused  by the  willful
misconduct and bad faith of Lender.  Lender shall not be obligated to perform or
discharge  any  obligation,  duty or  liability  under  the  Leases or any Lease
Guaranties  or under or by reason of this  Assignment  and Borrower  shall,  and
hereby agrees, to indemnify Lender for, and to hold Lender harmless from, and to
be responsible for, any and all liability,  loss or damage which may or might be
incurred  under the Leases,  any Lease  Guaranties or under or by reason of this
Assignment  and from any and all claims and demands  whatsoever,  including  the
defense of any such claims or demands  which may be asserted  against  Lender by
reason of any alleged  obligations  and  undertakings  on its part to perform or
discharge any of the terms,  covenants or agreements  contained in the Leases or
any Lease  Guaranties.  Should  Lender  incur  any such  liability,  the  amount
thereof,  including  costs,  expenses and reasonable  attorneys'  fees, shall be
secured by this Assignment and by the Security Instrument and the Other Security
Documents and Borrower shall reimburse  Lender therefor  immediately upon demand
and upon the failure of Borrower so to do Lender may, at its option, declare all
sums secured by this  Assignment  and by the Security  Instrument  and the Other
Security  Documents  immediately  due and  payable.  This  Assignment  shall not
operate to place any obligation or liability for the control,  care,  management
or repair of the Property  upon  Lender,  nor for the carrying out of any of the
terms and conditions of the Leases or any Lease Guaranties; nor shall it operate
to make Lender  responsible or liable for any waste committed on the Property by
the tenants or any other parties, or for any dangerous or defective condition of
the  Property,  including  without  limitation  the  presence  of any  Hazardous
Substances (as defined in the Security Instrument), or for any negligence in the
management,  upkeep,  repair or control  of the  Property  resulting  in loss or
injury or death to any tenant, licensee, employee or stranger.

                  Section  4.2  NO  MORTGAGEE  IN  POSSESSION.   Nothing  herein
contained shall be construed as constituting  Lender a "mortgagee in possession"
in the absence of the taking of actual  possession of the Property by Lender. In
the exercise of the powers herein granted Lender, no liability shall be asserted
or enforced  against  Lender,  all such  liability  being  expressly  waived and
released by Borrower.

                  Section 4.3 FURTHER ASSURANCES.  Borrower will, at the cost of
Borrower,  and without expense to Lender,  do, execute,  acknowledge and deliver
all  and  every  such  further  acts,  conveyances,   assignments,   notices  of
assignments,  transfers  and  assurances  as  Lender  shall,  from time to time,
require  for  the  better  assuring,  conveying,  assigning,   transferring  and
confirming  unto Lender the property and rights hereby  assigned or intended now
or hereafter so to be, or which Borrower may be or may hereafter become bound to
convey or assign to Lender,  or for carrying out the  intention or  facilitating
the  performance of the terms of this  Assignment or for filing,  registering or
recording this  Assignment  and, on demand,  will execute and deliver and hereby
authorizes  Lender to execute in the name of Borrower  to the extent  Lender may
lawfully  do  so,  one  or  more  financing  statements,  chattel  mortgages  or
comparable  security  instruments,  to evidence  more  effectively  the lien and
security interest hereof in and upon the Leases.
                                      - 6 -
<PAGE>
                          ARTICLE 5 - SECONDARY MARKET

                  Section 5.1 TRANSFER OF LOAN.  Lender may, at any time,  sell,
transfer or assign the Note, this  Assignment and the Other Security  Documents,
and any or all servicing  rights with respect thereto,  or grant  participations
therein  or  issue  mortgage  pass-through   certificates  or  other  securities
evidencing  a  beneficial  interest  in a rated or unrated  public  offering  or
private  placement  (the  "Securities").  Lender may forward to each  purchaser,
transferee, assignee, servicer, participant,  investor in such Securities or any
credit rating agency rating such Securities  (collectively,  the "Investor") and
each prospective Investor, all documents and information which Lender now has or
may hereafter acquire relating to the Debt and to Borrower,  any guarantor,  any
indemnitor,  and the Property,  whether furnished by Borrower,  any guarantor or
otherwise, as Lender determines necessary or desirable.  Borrower, any guarantor
and any  indemnitor  agree to  cooperate  with  Lender  in  connection  with any
transfer made or any  Securities  created  pursuant to this Section,  including,
without  limitation,  the  delivery  of  an  estoppel  certificate  required  in
accordance  with  Subsection  7.4(c) of the Security  Instrument  and such other
documents as may be reasonably requested by Lender.  Borrower shall also furnish
and Borrower,  any guarantor and any indemnitor  consent to Lender furnishing to
such Investors or such prospective Investors any and all information  concerning
the Property, the Leases, the financial condition of Borrower, any guarantor and
any  indemnitor as may be requested by Lender,  any Investor or any  prospective
Investor in connection with any sale, transfer or participation interest.

                      ARTICLE 6 - MISCELLANEOUS PROVISIONS

                  Section 6.1 CONFLICT OF TERMS. In case of any conflict between
the terms of this Assignment and the terms of the Security Instrument, the terms
of the Security Instrument shall prevail.

                  Section 6.2 NO ORAL CHANGE. This Assignment and any provisions
hereof may not be modified,  amended, waived, extended,  changed,  discharged or
terminated  orally,  or by any act or failure to act on the part of  Borrower or
Lender, but only by an agreement in writing signed by the party against whom the
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.

                  Section 6.3 CERTAIN  DEFINITIONS.  Unless the context  clearly
indicates a contrary intent or unless  otherwise  specifically  provided herein,
words used in this Assignment may be used  interchangeably in singular or plural
form and the word "Borrower " shall mean "each Borrower and any subsequent owner
or owners of the  Property or any part  thereof or interest  therein,"  the word
"Lender"  shall mean  "Lender and any  subsequent  holder of the Note," the word
"Note" shall mean "the Note and any other  evidence of  indebtedness  secured by
the  Security  Instrument,"  the word  "person"  shall  include  an  individual,
corporation,  partnership,  limited  liability  company,  trust,  unincorporated
association,  government, governmental authority, and any other entity, the word
"Property"  shall include any portion of the Property and any interest  therein,
the phrases  "attorneys'  fees" and  "counsel  fees"  shall  include any and all
attorneys',  paralegal and law clerk fees and disbursements,  including, but not
limited to, fees and disbursements at the pre-trial,  trial and appellate levels
incurred  or paid by Lender in  protecting  its  interest in the  Property,  the
Leases and the Rents and enforcing its
                                      - 7 -
<PAGE>
rights  hereunder,  and the word "Debt" shall mean the principal  balance of the
Note with interest  thereon as provided in the Note and the Security  Instrument
and all other sums due  pursuant  to the Note,  the  Security  Instrument,  this
Assignment and the Other Security  Documents;  whenever the context may require,
any pronouns used herein shall include the corresponding masculine,  feminine or
neuter  forms,  and the singular  form of nouns and pronouns  shall  include the
plural and vice versa.

                  Section 6.4 AUTHORITY.  Borrower  represents and warrants that
it has full power and authority to execute and deliver this  Assignment  and the
execution and delivery of this  Assignment has been duly authorized and does not
conflict  with or constitute a default  under any law,  judicial  order or other
agreement affecting Borrower or the Property.

                  Section 6.5 INAPPLICABLE PROVISIONS.  If any term, covenant or
condition of this Assignment is held to be invalid,  illegal or unenforceable in
any respect, this Assignment shall be construed without such provision.

                  Section 6.6 DUPLICATE ORIGINALS; COUNTERPARTS. This Assignment
may be executed in any number of  duplicate  originals  and each such  duplicate
original shall be deemed to be an original.  This  Assignment may be executed in
several  counterparts,  each of which  counterparts  shall be deemed an original
instrument and all of which together shall constitute a single  Assignment.  The
failure  of any party  hereto to execute  this  Assignment,  or any  counterpart
hereof,   shall  not  relieve  the  other  signatories  from  their  obligations
hereunder.

                  SECTION 6.7 CHOICE OF LAW. THIS ASSIGNMENT  SHALL BE DEEMED TO
BE A CONTRACT  ENTERED  INTO  PURSUANT  TO THE LAWS OF THE STATE OF NEW YORK AND
SHALL IN ALL RESPECTS BE GOVERNED, CONSTRUED, APPLIED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK,  PROVIDED HOWEVER,  THAT WITH RESPECT TO
THE  CREATION,  PERFECTION,  PRIORITY  AND  ENFORCEMENT  OF  THE  LIEN  OF  THIS
ASSIGNMENT, THE LAWS OF THE STATE WHERE THE PROPERTY IS LOCATED SHALL APPLY.

                  Section 6.8 TERMINATION OF ASSIGNMENT. Upon payment in full of
the Debt and the  delivery  and  recording  of a  satisfaction  or  discharge of
Security Instrument duly executed by Lender, this Assignment shall become and be
void and of no effect.

                  Section   6.9   NOTICES.   All   notices   or  other   written
communications  hereunder  shall be deemed to have been properly  given (i) upon
delivery,  if  delivered  in person or by  facsimile  transmission  with receipt
acknowledged by the recipient thereof and confirmed by telephone by sender, (ii)
one (1) Business Day  (hereinafter  defined)  after  having been  deposited  for
overnight delivery with any reputable  overnight courier service, or (iii) three
(3)  Business  Days  after  having  been  deposited  in any post  office or mail
depository  regularly  maintained  by  the  U.S.  Postal  Service  and  sent  by
registered  or  certified  mail,  postage  prepaid,  return  receipt  requested,
addressed as follows:
                                      - 8 -
<PAGE>
If to Borrower:              Camelback Plaza Development L.C.
                             2401 West 1st Street
                             Tempe, Arizona  85281
                             Attention: James W. Brown
                             Facsimile No. (602) 912-0480

With a copy to:              Ridenour, Swenson, Cleere & Evans, P.C.
                             302 North First Avenue, Suite 900
                             Phoenix, Arizona 85003
                             Attention: Gerard R. Cleere, Esq.
                             Facsimile No. (602) 254-8670

If to Lender:                Boston Capital Mortgage Company Limited Partnership
                             One Boston Place, Suite 2100
                             Boston, Massachusetts 02108
                             Attention: Ms. Kathie Valyeau
                             Facsimile No. (617) 624-8999

With a copy to:              Thacher Proffitt & Wood
                             2 World Trade Center, 40th Floor
                             New York, New York 10048
                             Attention: Donald F. Simone, Esq.
                             Facsimile No. (212) 912-7751

or addressed as such party may from time to time  designate by written notice to
the other  parties.  For purposes of this Section 6.9, the term  "Business  Day"
shall mean a day on which commercial banks are not authorized or required by law
to close in New York, New York.

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

                  SECTION 6.10 WAIVER OF TRIAL BY JURY.  BORROWER HEREBY WAIVES,
TO THE  FULLEST  EXTENT  PERMITTED  BY LAW,  THE  RIGHT  TO TRIAL BY JURY IN ANY
ACTION,  PROCEEDING  OR  COUNTERCLAIM,  WHETHER IN CONTRACT,  TORT OR OTHERWISE,
RELATING  DIRECTLY  OR  INDIRECTLY  TO  THE  LOAN  EVIDENCED  BY THE  NOTE,  THE
APPLICATION FOR THE LOAN EVIDENCED BY THE NOTE, THIS  ASSIGNMENT,  THE NOTE, THE
SECURITY  INSTRUMENT OR THE OTHER SECURITY DOCUMENTS OR ANY ACTS OR OMISSIONS OF
LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS OR AGENTS IN CONNECTION THEREWITH.

                  Section 6.11 SUBMISSION TO  JURISDICTION.  With respect to any
claim or action  arising  hereunder,  Borrower  (a)  irrevocably  submits to the
nonexclusive  jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York, New York,
and appellate courts from any thereof,  and (b) irrevocably waives any objection
which it may have at any time to the  laying  on venue of any  suit,  action  or
proceeding  arising out of or relating  to this  Assignment  brought in any such
court, irrevocably
                                      - 9 -
<PAGE>
waives any claim that any such suit,  action or  proceeding  brought in any such
court has been brought in an inconvenient forum.

                  Section 6.12 LIABILITY.  If Borrower consists of more than one
person,  the obligations and liabilities of each such person  hereunder shall be
joint  and  several.  This  Assignment  shall be  binding  upon and inure to the
benefit of  Borrower  and Lender and their  respective  successors  and  assigns
forever.

                  Section  6.13  HEADINGS,  ETC.  The  headings  and captions of
various  paragraphs of this Assignment are for convenience of reference only and
are not to be construed as defining or limiting, in any way, the scope or intent
of the provisions hereof.

                  Section  6.14  NUMBER AND  GENDER.  Whenever  the  context may
require,  any pronouns  used herein shall include the  corresponding  masculine,
feminine or neuter  forms,  and the singular  form of nouns and  pronouns  shall
include the plural and vice versa.

                  Section 6.15 SOLE DISCRETION OF LENDER.  Wherever  pursuant to
this  Assignment  (a)  Lender  exercises  any right  given to it to  approve  or
disapprove,  (b) any arrangement or term is to be satisfactory to Lender, or (c)
any other  decision or  determination  is to be made by Lender,  the decision of
Lender to approve or disapprove,  all decisions that  arrangements  or terms are
satisfactory or not satisfactory and all other decisions and determinations made
by Lender,  shall be in the sole and absolute  discretion of Lender and shall be
final and  conclusive,  except as may be otherwise  expressly  and  specifically
provided herein.

                  Section 6.16 COSTS AND EXPENSES OF BORROWER. Wherever pursuant
to this Assignment it is provided that Borrower pay any costs and expenses, such
costs  and  expenses  shall  include,  but not be  limited  to,  legal  fees and
disbursements   of  Lender,   whether  with  respect  to  retained  firms,   the
reimbursement of the expenses for in-house staff or otherwise.

                              ARTICLE 7-DEFINITIONS

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

(a)      Assignment:  Preamble;
         -----------

(b)      Attorneys' Fees:  Article 6, Section 6.3;
         ----------------

(c)      Bankruptcy Claims:  Article 1, Subsection 1.1(d);
         ------------------

(d)      Bankruptcy Code:  Article 1, Subsection 1.1(d);
         ----------------

(e)      Borrower:  Preamble and Article 6, Section 6.3;
         ---------

(f)      Business Day:  Article 6, Section 6.9;
         -------------

(g)      Counsel Fees:  Article 6, Section 6.3;
         -------------
                                     - 10 -
<PAGE>
(h)      Debt:  Article 6, Section 6.3;
         -----

(i)      Default:  Article 3, Section 3.1;
         --------

(j)      Investor:  Article 5, Section 5.1;
         ---------

(k)      Lease Guaranties:  Article 1, Subsection 1.1(e);
         -----------------

(l)      Lease Guarantor:  Article 1, Subsection 1.1(e);
         ----------------

(m)      Lease Guaranty:  Article 1, Subsection 1.1(e);
         ---------------

(n)      Leases:  Article 1, Subsection 1.1(b);
         -------

(o)      Lender:  Preamble and Article 6, Section 6.3;
         -------

(p)      Note:  Recitals and Article 6, Section 6.3;
         -----

(q)      Other Security Documents:  Article 1, Section 1.2;
         -------------------------

(r)      Person:  Article 6, Section 6.3;
         -------

(s)      Property:  Article 1, Subsection 1.1(a) and Article 6, Section 6.3;
         ---------

(t)      Rents:  Article 1, Subsection 1.1(c); and
         ------

(u)      Security Instrument:  Article 1, Section 1.2.
         --------------------

                  THIS  ASSIGNMENT,  together with the covenants and  warranties
therein  contained,  shall  inure to the  benefit of Lender  and any  subsequent
holder of the Security Instrument and shall be binding upon Borrower, its heirs,
executors,  administrators,  successors and assigns and any subsequent  owner of
the Property.
                                     - 11 -
<PAGE>
                  IN WITNESS WHEREOF,  Borrower has executed this instrument the
day and year first above written.

                                        CAMELBACK PLAZA DEVELOPMENT L.C., an
                                        Arizona limited liability company

                                        By:    PERFORMANCE CAMELBACK
                                               DEVELOPMENT CORP., an Arizona
                                               corporation, its managing member


                                               By:
                                                    ----------------------------
                                                    Name:
                                                    Title:
                                     - 12 -
<PAGE>
                                                 ACKNOWLEDGEMENTS

STATE OF_______         )
                        SS.
COUNTY OF________       )




                   This  instrument was  acknowledged  before me the undersigned
notary public this ______day of____________, 1996,  by________________________as
President of PERFORMANCE CAMELBACK DEVELOPMENT CORP., an Arizona corporation, as
Managing  Member of  CAMELBACK  PLAZA  DEVELOPMENT,  L.C.,  an  Arizona  limited
liability company with full powers to so do.



                                                       -------------
                                                       Notary Public



My commission expires:___________________
<PAGE>
                                    EXHIBIT A

                          Legal Description of Property


                                (to be attached)