Exhibit 10.240





                                 GM OLATHE, LLC,
               a Delaware limited liability company, as mortgagor
                                                (Borrower)

                                       to

                      MORGAN STANLEY MORTGAGE CAPITAL INC.,
                      a New York corporation, as mortgagee
                                                     (Lender)

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

                              AMENDED AND RESTATED
                FEE AND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES
                        AND RENTS AND SECURITY AGREEMENT

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


                        Dated:      As of June 9, 2004
                        Location:   Great Mall of the Great Plains
                                    Olathe, Kansas

                        County:     Johnson County, Kansas


                        PREPARED BY AND UPON
                        RECORDATION RETURN TO:

                        Cadwalader, Wickersham & Taft LLP
                        100 Maiden Lane
                        New York, New York 10038
                        Attention: John M. Zizzo, Esq.


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                AMENDED AND RESTATED FEE AND LEASEHOLD MORTGAGE,
              ASSIGNMENT OF LEASES AND RENTS AND SECURITY AGREEMENT

      THIS AMENDED AND RESTATED FEE AND LEASEHOLD MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS AND SECURITY AGREEMENT (this "Security Instrument") is made as of this
9th day of June, 2004, by GM OLATHE,  LLC, a Delaware limited liability company,
having an address at 150 East Gay Street,  Columbus,  Ohio 43215,  as  mortgagor
("Borrower") for the benefit of MORGAN STANLEY MORTGAGE CAPITAL INC.,  having an
address at 1221 Avenue of the Americas, 27th Floor, New York, New York 10020, as
mortgagee ("Lender").

      This  Security  Instrument  amends  and  restates  in their  entirety  the
mortgages described on the Schedule of Mortgages attached hereto and made a part
hereof which are each now held by Lender, to form a single lien in the principal
sum of $30,000,000.00.

                              W I T N E S S E T H:
                              - - - - - - - - - -

      WHEREAS,  this Security  Instrument is given to secure a loan (the "Loan")
in the principal sum of THIRTY MILLION AND NO/100 DOLLARS ($30,000,000.00) or so
much thereof as may be advanced pursuant to that certain Loan Agreement dated as
of the date  hereof  between  Borrower  and Lender (as the same may be  amended,
restated,  replaced,  supplemented or otherwise  modified from time to time, the
"Loan Agreement") and evidenced by those certain Promissory Notes dated the date
hereof made by Borrower to Lender (such  Notes,  together  with all  extensions,
renewals, replacements,  restatements or modifications thereof being hereinafter
collectively referred to as the "Note");

      WHEREAS, Borrower desires to secure the payment of the Debt (as defined in
the Loan  Agreement)  and the  performance of all of its  obligations  under the
Note, the Loan Agreement and the other Loan Documents; and

      WHEREAS, this Security Instrument is given pursuant to the Loan Agreement,
and  payment,  fulfillment,  and  performance  by  Borrower  of its  obligations
thereunder and under the other Loan Documents are secured  hereby,  and each and
every term and  provision  of the Loan  Agreement  and the Note,  including  the
rights, remedies, obligations,  covenants, conditions, agreements,  indemnities,
representations  and warranties of the parties therein,  are hereby incorporated
by reference  herein as though set forth in full and shall be  considered a part
of this  Security  Instrument  (the  Loan  Agreement,  the Note,  this  Security
Instrument,  that certain  Assignment  of Leases and Rents of even date herewith
made by Borrower in favor of Lender (the  "Assignment  of Leases") and all other
documents  evidencing or securing the Debt or delivered in  connection  with the
making  of the  Loan are  hereinafter  referred  to  collectively  as the  "Loan
Documents").

      NOW THEREFORE,  in  consideration  of the making of the Loan by Lender and
the  covenants,  agreements,  representations  and  warranties set forth in this
Security Instrument:

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                         Article 1 - GRANTS OF SECURITY

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

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

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

      (c)  Improvements.   The  buildings,   structures,   fixtures,  additions,
enlargements,  extensions, modifications, repairs, replacements and improvements
now  or   hereafter   erected  or  located  on  the  Land   (collectively,   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 and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any  street,  road or avenue,  opened or  proposed,  in
front of or adjoining  the Land, to the center line thereof and all the estates,
rights,  titles,  interests,  dower and rights of dower,  curtesy  and rights of
curtesy, property,  possession,  claim and demand whatsoever, both at law and in
equity,  of Borrower of, in and to the Land and the  Improvements and every part
and parcel thereof, with the appurtenances thereto;

      (e) Equipment.  All  "equipment,"  as such term is defined in Article 9 of
the Uniform  Commercial  Code (as hereinafter  defined),  now owned or hereafter
acquired by Borrower, which is used at or in connection with the Improvements or
the Land or is located  thereon or therein  (including,  but not limited to, all
machinery,  equipment,  furnishings,  and electronic  data-processing  and other
office  equipment  now owned or  hereafter  acquired by Borrower and any and all
additions,  substitutions  and  replacements of any of the foregoing),  together
with all attachments,  components,  parts,  equipment and accessories  installed
thereon or affixed thereto (collectively, the "Equipment").  Notwithstanding the
foregoing,  Equipment shall not include any property  belonging to tenants under
leases  except to the extent  that  Borrower  shall  have any right or  interest
therein;

      (f)  Fixtures.  All  Equipment  now owned,  or the  ownership  of which is
hereafter acquired, by Borrower which is so related to the Land and Improvements
forming part of the Property that it is deemed  fixtures or real property  under
the law of the  particular  state in which the Equipment is located,  including,
without  limitation,   all  building  or  construction  materials  intended  for
construction,  reconstruction,  alteration or repair of or  installation  on the
Property,

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construction  equipment,  appliances,   machinery,  plant  equipment,  fittings,
apparatuses, fixtures and other items now or hereafter attached to, installed in
or used in connection with  (temporarily or permanently) any of the Improvements
or the Land, including,  but not limited to, engines,  devices for the operation
of  pumps,  pipes,  plumbing,   cleaning,   call  and  sprinkler  systems,  fire
extinguishing  apparatuses  and  equipment,  heating,   ventilating,   plumbing,
laundry,  incinerating,  electrical,  air conditioning and air cooling equipment
and systems, gas and electric machinery,  appurtenances and equipment, pollution
control equipment, security systems, disposals,  dishwashers,  refrigerators and
ranges,  recreational  equipment and  facilities of all kinds,  and water,  gas,
electrical,  storm and sanitary  sewer  facilities,  utility lines and equipment
(whether owned  individually or jointly with others,  and, if owned jointly,  to
the extent of Borrower's  interest  therein) and all other utilities  whether or
not situated in easements,  all water tanks,  water  supply,  water power sites,
fuel stations, fuel tanks, fuel supply, and all other structures,  together with
all  accessions,   appurtenances,   additions,  replacements,   betterments  and
substitutions  for any of the foregoing and the proceeds thereof  (collectively,
the "Fixtures"). Notwithstanding the foregoing, "Fixtures" shall not include any
property  which tenants are entitled to remove  pursuant to leases except to the
extent that Borrower shall have any right or interest therein;

      (g)  Personal  Property.  All  furniture,  furnishings,  objects  of  art,
machinery,  goods, tools, supplies,  appliances,  general intangibles,  contract
rights, accounts, accounts receivable,  franchises,  licenses,  certificates and
permits, and all other personal property of any kind or character whatsoever (as
defined in and  subject to the  provisions  of the  Uniform  Commercial  Code as
hereinafter defined),  other than Fixtures,  which are now or hereafter owned by
Borrower  and which are located  within or about the Land and the  Improvements,
together  with  all  accessories,  replacements  and  substitutions  thereto  or
therefor and the proceeds thereof (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;

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

      (i)  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

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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;

      (j) Insurance Proceeds.  All proceeds in respect of the Property under 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;

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

      (l) 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;

      (m) 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;

      (n)  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;

      (o) Ground Lease.  All of Borrower's  right,  title and interest in and to
that  certain  Lease  Agreement  dated as of June 1,  1996  between  the City of
Olathe,  Kansas, a Kansas municipal  corporation,  as landlord,  and Olathe Mall
LLC, a Colorado limited liability company,  as tenant, a memorandum of which was
recorded  with the  Register of Deeds in Johnson  County,  Kansas in Liber 4924,
page 375; as assigned by that certain  Assignment of Lease Agreement dated as of
June 1, 1996 by the City of Olathe,  Kansas to The  Huntington  National Bank, a
national banking association, and recorded with the Register of Deeds in Johnson
County,  Kansas in Liber  4924,  page 381; as further  assigned by that  certain
Assignment  of Lease  Agreement  dated  November  26, 1996 by Olathe Mall LLC to
Great Plains Metromall,  LLC, a Delaware limited liability company, and recorded
with the Register of Deeds in Johnson  County,  Kansas in Book 5054 at Page 271;
as further assigned by that certain Assignment And Assumption Of Lease Agreement
dated as of June 9, 2004,  by Great  Plains  Metromall,  LLC to GM Mezz,  LLC, a
Delaware  limited  liability  company,  and  submitted  for  recording  with the
Register of Deeds in Johnson County,  Kansas  immediately  prior hereto;  and as
further  assigned by that certain  Assignment And Assumption Of Lease  Agreement
dated  as of June 9,  2004,  by GM  Mezz,  LLC to  Borrower  and  submitted  for
recording with the Register of Deeds in Johnson County, Kansas immediately prior
hereto (the "Ground Lease") and the leasehold estate created  thereby,  together
with all  modifications,  extensions  and  renewals of the Ground  Lease and all

<PAGE>

credits,  deposits  (including,  without  limitation,  any  deposit  of  cash or
securities  or any  other  property  which  may be  held  to  secure  Borrower's
performance of its obligations under the Ground Lease), options,  privileges and
rights of Borrower as tenant under the Ground Lease, including,  but not limited
to, (i) the right to cause fee title to the premises demised by the Ground Lease
to be conveyed to  Borrower  as provided in Article 11 of the Ground  Lease,  as
amended and (ii) 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  Property  or any part  thereof,  including  the fee  title to the  property
conveyed or to be conveyed pursuant to the right described in clause (i) of this
Section 1.1(o);

      (p) Proceeds.  All proceeds of any of the  foregoing,  including,  without
limitation,  proceeds  of  insurance  and  condemnation  awards,  whether  cash,
liquidation or other claims or otherwise; and

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

      AND  without  limiting  any of  the  other  provisions  of  this  Security
Instrument, to the extent permitted by applicable law, Borrower expressly grants
to Lender,  as secured party, a security interest in the portion of the Property
which is or may be subject to the  provisions  of the  Uniform  Commercial  Code
which are  applicable to secured  transactions;  it being  understood and agreed
that the  Improvements  and  Fixtures are part and parcel of the Land (the Land,
the  Improvements  and  the  Fixtures  collectively  referred  to as  the  "Real
Property")  appropriated  to the use thereof and,  whether affixed or annexed to
the Real Property or not, shall for the purposes of this Security  Instrument be
deemed conclusively to be real estate and mortgaged hereby.

      Section  1.2  ASSIGNMENT  OF  RENTS.   Borrower   hereby   absolutely  and
unconditionally assigns to Lender all of 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
the Assignment of Leases and Section 7.1(h) of this Security Instrument,  Lender
grants to Borrower a revocable  license to collect,  receive,  use and enjoy 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,  as security for the Obligations  (hereinafter
defined),  a security  interest in the  Fixtures,  the  Equipment,  the Personal
Property and other  property  constituting  the Property to the full extent that
the Fixtures,  the Equipment,  the Personal Property and such other property may
be subject to the  Uniform  Commercial  Code (said  portion of the  Property  so
subject to the Uniform  Commercial  Code being called the  "Collateral").  If an
Event of Default shall occur and be continuing, Lender, in addition to any other
rights and remedies which it may have,  shall have and may exercise  immediately
and

<PAGE>

without demand,  any and all rights and remedies granted to a secured party upon
default  under the Uniform  Commercial  Code,  including,  without  limiting the
generality of the foregoing,  the right to take  possession of the Collateral or
any part thereof,  and to take such other  measures as Lender may deem necessary
for the care,  protection and  preservation of the  Collateral.  Upon request or
demand of Lender after the occurrence and during the  continuance of an Event of
Default,  Borrower  shall,  at its expense,  assemble the Collateral and make it
available  to Lender at a  convenient  place (at the Land if tangible  property)
reasonably acceptable to Lender.  Borrower shall pay to Lender on demand any and
all expenses,  including reasonable legal expenses and attorneys' fees, incurred
or paid by Lender in protecting  its interest in the Collateral and in enforcing
its rights  hereunder  with respect to the  Collateral  after the occurrence and
during the continuance of an Event of Default.  Any notice of sale,  disposition
or other  intended  action by Lender  with  respect  to the  Collateral  sent to
Borrower in  accordance  with the  provisions  hereof at least ten (10) business
days prior to such action,  shall,  except as otherwise  provided by  applicable
law, constitute  reasonable notice to Borrower.  The proceeds of any disposition
of the Collateral,  or any part thereof,  may,  except as otherwise  required by
applicable law, be applied by Lender to the payment of the Debt in such priority
and  proportions  as Lender in its discretion  shall deem proper.  The principal
place of business  of  Borrower  (Debtor) is as set forth on page one hereof and
the address of Lender (Secured Party) is as set forth on page one hereof.

      Section  1.4  FIXTURE  FILING.  Certain of the  Property is or will become
"fixtures" (as that term is defined in the Uniform Commercial Code) on the Land,
described  or  referred  to in  this  Security  Instrument,  and  this  Security
Instrument,  upon being filed for record in the real estate  records of the city
or county wherein such fixtures are situated,  shall operate also as a financing
statement filed as a fixture filing in accordance with the applicable provisions
of said Uniform  Commercial Code upon such of the Property that is or may become
fixtures.

      Section 1.5 PLEDGES OF MONIES HELD.  Borrower hereby pledges to Lender any
and all  monies  now or  hereafter  held by  Lender  or on  behalf  of Lender in
connection with the Loan, including,  without limitation,  any sums deposited in
the Accounts (as defined in the Cash Management  Agreement) and Net Proceeds, as
additional security for the Obligations until expended or applied as provided in
this Security Instrument.

                               CONDITIONS TO GRANT

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

      PROVIDED,  HOWEVER, these presents are upon the express condition that, if
Borrower  shall  well and truly  pay to  Lender  the Debt at the time and in the
manner  provided in the Note, the Loan  Agreement 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,  the Loan Agreement and
the other Loan  Documents,  these  presents and the estate hereby  granted shall
cease,  terminate and be void; provided,  however, that Borrower's obligation to
indemnify  and hold  harmless  Lender  pursuant to the  provisions  hereof shall
survive any such payment or release.

<PAGE>

                    Article 2 - DEBT AND OBLIGATIONS SECURED

      Section 2.1 DEBT. This Security Instrument and the grants, assignments and
transfers made in Article 1 are given for the purpose of securing the Debt.

      Section 2.2 OTHER  OBLIGATIONS.  This Security  Instrument and the grants,
assignments  and  transfers  made in Article 1 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 the Loan
Agreement and any other Loan Document; and

      (c) the  performance  of each  obligation  of  Borrower  contained  in any
renewal,  extension,  amendment,  modification,  consolidation,  change  of,  or
substitution or replacement for, all or any part of the Note, the Loan Agreement
or any other Loan Document.

      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 herein as the "Obligations."

                         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  Loan  Agreement,  the  Note  and  this  Security
Instrument.

      Section 3.2 INCORPORATION BY REFERENCE. All the covenants,  conditions and
agreements  contained  in (a) the Loan  Agreement , (b) the Note and (c) all and
any of the  other  Loan  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.  Borrower shall obtain and maintain, or cause to be
maintained,  in full force and  effect at all times  insurance  with  respect to
Borrower and the Property as required pursuant to the Loan Agreement.

      Section 3.4 MAINTENANCE OF PROPERTY.  Borrower shall cause the Property to
be maintained in a good and safe  condition and repair.  The  Improvements,  the
Fixtures,  the  Equipment  and  the  Personal  Property  shall  not be  removed,
demolished or materially altered (except for normal replacement of the Fixtures,
the Equipment or the Personal  Property,  tenant finish and refurbishment of the
Improvements)  without the consent of Lender.  Borrower shall  promptly  repair,
replace  or  rebuild  any part of the  Property  which may be  destroyed  by any
Casualty or become damaged,  worn or dilapidated or which may be affected by any
Condemnation,  and shall  complete and pay for any  structure at any time in the
process of construction or repair on the Land.

<PAGE>

      Section  3.5 WASTE.  Borrower  shall not commit or suffer any waste of the
Property  or make any  change in the use of the  Property  which will in any way
materially  increase  the  risk of  fire  or  other  hazard  arising  out of the
operation of the Property, or take any action that might invalidate or allow the
cancellation of any Policy, or do or permit to be done thereon anything that may
in any way  materially  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 3.6 PAYMENT FOR LABOR AND  MATERIALS.  (a) Borrower  will promptly
pay  when due all  bills  and  costs  for  labor,  materials,  and  specifically
fabricated  materials  ("Labor and Material  Costs") 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 Encumbrances.

      (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 Labor and Material  Costs,  provided  that (i) no
Event of Default has occurred and is continuing  under the Loan  Agreement,  the
Note, this Security Instrument or any of the other Loan Documents, (ii) Borrower
is permitted to do so under the provisions of any other mortgage,  deed of trust
or deed to secure debt  affecting  the  Property,  (iii) such  proceeding  shall
suspend the  collection  of the Labor and Material  Costs from Borrower and from
the  Property or Borrower  shall have paid all of the Labor and  Material  Costs
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, canceled or lost, and (vi) Borrower shall have furnished
the  security  as may be  required in the  proceeding,  or as may be  reasonably
requested  by Lender to insure the payment of any  contested  Labor and Material
Costs, together with all interest and penalties thereon.

      Section 3.7  PERFORMANCE OF OTHER  AGREEMENTS.  Borrower shall observe and
perform each and every term,  covenant and provision to be observed or performed
by Borrower  pursuant to the Loan  Agreement,  any other Loan  Document  and any
other agreement or recorded  instrument  affecting or pertaining to the Property
and any amendments, modifications or changes thereto.

      Section 3.8 CHANGE OF NAME,  IDENTITY  OR  STRUCTURE.  Borrower  shall not
change Borrower's name,  identity (including its trade name or names) or, if not
an individual,  Borrower's  corporate,  partnership or other  structure  without
first (a)  notifying  Lender of such change in writing at least thirty (30) days
prior to the effective  date of such change,  (b) taking all action  required by
Lender  for the  purpose  of  perfecting  or  protecting  the lien and  security
interest  of  Lender  and (c) in the case of a change in  Borrower's  structure,
without first obtaining the prior

<PAGE>

written  consent of Lender.  Borrower shall promptly notify Lender in writing of
any change in its organizational identification number. If Borrower does not now
have an  organizational  identification  number and later obtains one,  Borrower
shall promptly  notify Lender in writing of such  organizational  identification
number.   Borrower   shall   execute  and   deliver  to  Lender,   prior  to  or
contemporaneously  with the  effective  date of any such change,  any  financing
statement  or  financing  statement  change  required by Lender to  establish or
maintain the validity,  perfection and priority of the security interest granted
herein.  At the request of Lender,  Borrower shall execute a certificate in form
satisfactory  to Lender listing the trade names under which Borrower  intends to
operate the  Property,  and  representing  and  warranting  that  Borrower  does
business under no other trade name with respect to the Property.

      Section 3.9 GROUND LEASE.

      (a) Borrower  will:  (i) pay the rent  required by the Ground Lease as the
same  becomes  due and  payable;  (ii)  promptly  perform and observe all of the
material  covenants,  agreements,  obligations  and  conditions  required  to be
performed  and observed by Borrower  under the Ground  Lease,  and do all things
necessary to preserve and keep unimpaired its rights thereunder;  (iii) promptly
notify Lender in writing of the  commencement of a proceeding  under the federal
bankruptcy  laws  by  or  against  Borrower  or,  upon  Borrower's   receipt  of
notification  thereof,  the lessor  under the Ground  Lease;  (iv) if any of the
indebtedness  secured hereby remains unpaid at the time when notice may be given
by the lessee  under the Ground  Lease of the  exercise of any right to renew or
extend  the  term of the  Ground  Lease,  promptly  give  notice  to the  lessor
thereunder  of the exercise of such right of  extension or renewal;  (v) in case
any  proceeds of insurance  upon the Property or any part thereof are  deposited
with any Person other than Lender, promptly notify Lender in writing of the name
and address of the Person with whom such  proceeds  have been  deposited and the
amount so deposited;  (vi)  promptly  notify Lender in writing of the receipt by
Borrower  of any  notice  (other  than  notices  customarily  sent on a  regular
periodic  basis) from the lessor under the Ground Lease and of any notice noting
or claiming any default by Borrower in the  performance  or observance of any of
the terms,  covenants,  or conditions on the part of Borrower to be performed or
observed under the Ground Lease;  (vii) promptly notify Lender in writing of the
receipt by  Borrower  of any notice  from the lessor of any  termination  of the
Ground  Lease and  promptly  cause a copy of each such notice to be delivered to
Lender;  and (viii)  promptly  notify  Lender in writing of any request  made by
either party to the Ground Lease to the other party thereto for  arbitration  or
appraisal  proceedings  pursuant to the Ground Lease,  and of the institution of
any arbitration or appraisal  proceedings and promptly  deliver to Lender a copy
of the determination of the arbitrators or appraisers in each such proceeding.

      (b) Except as set forth in Article  11 of the Ground  Lease in  connection
with the transfer of fee title to the Property to  Borrower,  Borrower  will not
surrender the Ground Lease or Borrower's  leasehold estate and interest therein,
nor  terminate or cancel the Ground  Lease;  and except as set forth in the Loan
Agreement,  will not,  without  the prior  written  consent of  Lender,  modify,
change,  supplement,  alter or amend  the  Ground  Lease,  either  orally  or in
writing,  and as further security for the repayment of the  indebtedness  hereby
secured and for the  performance of the covenants,  agreements,  obligations and
conditions herein and in the Ground Lease contained,  Borrower hereby assigns to
Lender all of its rights, privileges and prerogatives as lessee under the Ground
Lease to  terminate,  cancel,  modify,  change,  supplement,  alter or amend the
Ground

<PAGE>

Lease  and,  except as set forth in the Loan  Agreement,  any such  termination,
cancellation,  modification,  change, supplement, alteration or amendment of the
Ground Lease, without the prior written consent thereto by Lender, shall be void
and of no force and effect.  Without  limiting the  generality of the foregoing,
Borrower  will not reject the Ground  Lease  pursuant  to Section  365(a) of the
Bankruptcy  Code or any  successor  law, or allow the Ground  Lease to be deemed
rejected by inaction  and lapse of time,  and will not elect to treat the Ground
Lease as  terminated  by the related  lessor's  rejection  of such Ground  Lease
pursuant to Section  365(h)(1) of the Bankruptcy  Code or any successor law, and
as further security for the repayment of the indebtedness secured hereby and for
the performance of the covenants, agreements,  obligations and conditions herein
and in the Ground Lease contained,  Borrower hereby assigns to Lender all of its
rights,  privileges  and  prerogatives  of Borrower  and  Borrower's  bankruptcy
trustee to deal with the Ground Lease,  which right may arise as a result of the
commencement  of a proceeding  under the federal  bankruptcy  laws by or against
Borrower or any lessor under the Ground Lease,  including,  without  limitation,
the right to assume or reject,  or to compel the  assumption or rejection of the
Ground Lease pursuant to Section 365(a) of the Bankruptcy  Code or any successor
law,  the right to seek and  obtain  extensions  of time to assume or reject the
Ground Lease, the right to elect whether to treat the Ground Lease as terminated
by the lessor's rejection of such Ground Lease or to remain in possession of the
Property and offset damages pursuant to Section 365(b)(1) of the Bankruptcy Code
or  any  successor  law;  and  any  exercise  of  such  rights,   privileges  or
prerogatives  by Borrower or  Borrower's  bankruptcy  trustee  without the prior
written consent  thereto by Lender shall be void and of no force and effect.  No
release or  forbearance  of any of  Borrower's  obligations  as lessee under the
Ground Lease,  whether pursuant to the Ground Lease or otherwise,  shall release
Borrower from any of its obligations under this Security Instrument,  including,
but not limited to,  Borrower's  obligations with respect to the payment of rent
as provided for in the Ground Lease and the observance and performance of all of
the covenants,  agreements,  obligations and conditions  contained in the Ground
Lease to be observed and performed by the lessee thereunder. Unless Lender shall
otherwise  expressly  consent  in  writing,  the fee title to the real  property
demised by the Ground Lease and the leasehold estate thereunder shall not merge,
but shall always remain separate and distinct, notwithstanding the union of such
estates either in Borrower or in a third party by purchase or otherwise.

      (c) Upon the written demand of Lender,  Borrower will promptly  deliver to
Lender a certificate  stating that the Ground Lease is in full force and effect,
is  unmodified,  that no  notice  of  termination  thereon  has been  served  on
Borrower,  stating the date to which the net rent has been paid and stating,  to
the knowledge of Borrower,  whether or not there are any defaults thereunder and
specifying the nature of such defaults, if any. Borrower shall deliver to Lender
such certificate within twenty (20) days after Lender's demand therefor.

      (d) Borrower will furnish to Lender, upon demand,  proof of payment of all
items which are required to be paid by Borrower pursuant to the Ground Lease.

      Section  3.10  Right  to   Conveyance  of  Fee  Title.   Borrower   hereby
relinquishes forever its right to cause fee title to the premises demised by the
Ground  Lease to be conveyed  to any party  other than to  Borrower  pursuant to
Article 11 of the Ground Lease, as amended,  unless  specifically  and expressly
consented to by Lender.

<PAGE>

                      Article 4 - OBLIGATIONS AND RELIANCES

      Section 4.1 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 Loan Agreement,  the Note, this Security  Instrument and the other
Loan  Documents  shall  be  construed  so as to deem  the  relationship  between
Borrower and Lender to be other than that of debtor and creditor.

      Section  4.2  NO  RELIANCE  ON  LENDER.  The  general  partners,  members,
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 4.3 NO LENDER  OBLIGATIONS.  (a) Notwithstanding the provisions of
Subsections  1.1(h)  and (m) or  Section  1.2,  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
Loan  Agreement,  the  Note or the  other  Loan  Documents,  including,  without
limitation,  any officer's  certificate,  balance sheet, statement of profit and
loss or other  financial  statement,  survey,  appraisal,  or insurance  policy,
Lender  shall not be deemed to have  warranted,  consented  to, or affirmed  the
sufficiency,  the legality or  effectiveness  of same,  and such  acceptance  or
approval  thereof shall not constitute any warranty or affirmation  with respect
thereto by Lender.

      Section  4.4  RELIANCE.  Borrower  recognizes  and  acknowledges  that  in
accepting the Loan Agreement,  the Note, this Security  Instrument and the other
Loan  Documents,  Lender is  expressly  and  primarily  relying on the truth and
accuracy of the warranties and  representations  set forth in Article III of the
Loan  Agreement   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 making the Loan; 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 III
of the Loan Agreement.

                         Article 5 - FURTHER ASSURANCES

      Section 5.1 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 Loan 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,

<PAGE>

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  Loan  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 5.2 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,  reasonably  require,  for  the  better  assuring,  conveying,  assigning,
transferring,  and  confirming  unto  Lender  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 Legal Requirements.  Borrower, on
demand,  will execute and deliver,  and in the event it shall fail to so execute
and  deliver,  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 (including,  without limitation,  initial financing
statements and amendments  thereto and continuation  statements) with or without
the  signature of Borrower as  authorized  by  applicable  law, to evidence more
effectively  the  security  interest of Lender in the  Property.  Borrower  also
ratifies its  authorization  for Lender to have filed any like initial financing
statements,  amendments thereto and continuation  statements,  if filed prior to
the date of this Security  Instrument.  Borrower grants to Lender an irrevocable
power of attorney  coupled  with an interest for the purpose of  exercising  and
perfecting  any and all rights and  remedies  available  to Lender at law and in
equity,  including  without  limitation  such rights and  remedies  available to
Lender  pursuant to this Section 5.2. To the extent not prohibited by applicable
law,  Borrower  hereby ratifies all acts Lender has lawfully done in the past or
shall  lawfully  do or cause to be done in the future by virtue of such power of
attorney.  Nothing  contained  in this  Section 5.2 shall be deemed to create an
obligation  on the part of  Borrower to pay any costs and  expenses  incurred by
Lender in connection  with the  Securitization  or other sale or Transfer of the
Loan.

      Section 5.3 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 one hundred  twenty (120) days to
declare the Debt immediately due and payable.

<PAGE>

      (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 one  hundred  twenty
(120) 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  Loan
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 5.4 SPLITTING OF MORTGAGE.  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 the Note,  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 5.5  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 Loan Document  which is not of public  record,  and, in the case of
any such mutilation,  upon surrender and cancellation of such Note or other Loan
Document, Borrower will issue, in lieu thereof, a replacement Note or other Loan
Document,  dated the date of such lost,  stolen,  destroyed or mutilated Note or
other Loan Document in the same  principal  amount thereof and otherwise of like
tenor.

                       Article 6 - DUE ON SALE/ENCUMBRANCE

      Section  6.1  LENDER  RELIANCE.  Borrower  acknowledges  that  Lender  has
examined  and relied on the  experience  of Borrower  and its general  partners,
members, principals and (if Borrower is a trust) beneficial owners in owning and
operating properties such as the Property in agreeing to make the Loan, 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 6.2 NO TRANSFER . Borrower shall not permit or suffer any Transfer
to occur,  unless  specifically  permitted by Article 8 of the Loan Agreement or
unless Lender shall consent thereto in writing.

<PAGE>

      Section 6.3 TRANSFER  DEFINED.  As used in this Article 6 "Transfer" shall
mean any voluntary or involuntary sale,  conveyance,  mortgage,  grant, bargain,
encumbrance,  pledge,  assignment,  or  transfer  of: (a) all or any part of the
Property or any estate or interest therein including, but not be limited to, (i)
an installment  sales agreement  wherein Borrower agrees to sell the Property or
any part  thereof for a price to be paid in  installments,  (ii) an agreement by
Borrower leasing all or a substantial part of the Property for other than actual
occupancy  by a space  tenant  thereunder  and its  affiliates  or (iii) 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; or (b)
any  ownership  interest in (i) Borrower or (ii) any  indemnitor or guarantor of
any  Obligations  or  (iii)  any  corporation,  partnership,  limited  liability
company, trust or other entity owning,  directly or indirectly,  any interest in
Borrower or any indemnitor or guarantor of any Obligations.

      Section  6.4  LENDER'S  RIGHTS.  Without  obligating  Lender  to grant any
consent  under Section 6.2 hereof which Lender may grant or withhold in its sole
discretion,  Lender  reserves  the  right  to  condition  the  consent  required
hereunder upon (a) a modification of the terms hereof and of the Loan Agreement,
the Note or the other Loan  Documents;  (b) an assumption of the Loan Agreement,
the Note,  this Security  Instrument and the other Loan Documents as so modified
by the proposed  transferee,  subject to the  provisions of Section 11.22 of the
Loan Agreement;  (c) payment of all of Lender's  reasonable expenses incurred in
connection with such transfer; (d) the confirmation in writing by the applicable
Rating Agencies that the proposed transfer will not, in and of itself, result in
a downgrade,  qualification  or withdrawal of the initial,  or, if higher,  then
current ratings assigned in connection with any Securitization; (e) the delivery
of a nonconsolidation  opinion reflecting the proposed transfer  satisfactory in
form and substance to Lender; (f) the proposed transferee's continued compliance
with the representations and covenants set forth in Section 3.1.24 and 4.2.11 of
the Loan Agreement; (g) the delivery of evidence satisfactory to Lender that the
single purpose nature and bankruptcy  remoteness of Borrower,  its shareholders,
partners  or  members,  as the  case may be,  following  such  transfers  are in
accordance  with  the  standards  of  the  Rating  Agencies;  (h)  the  proposed
transferee's ability to satisfy Lender's then-current underwriting standards; or
(i) such other conditions as Lender shall determine in its reasonable discretion
to  be  in  the  interest  of  Lender,   including,   without  limitation,   the
creditworthiness,  reputation and  qualifications of the transferee with respect
to the Loan and the Property.  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 a Transfer  without
Lender's consent.  This provision shall apply to every Transfer,  other than any
Transfer  permitted  pursuant  to the  Loan  Agreement,  regardless  of  whether
voluntary  or not,  or  whether  or not Lender  has  consented  to any  previous
Transfer.

                  Article 7 - RIGHTS AND REMEDIES UPON DEFAULT

      Section 7.1 REMEDIES.  Upon the occurrence  and during the  continuance of
any Event of Default,  Borrower agrees that Lender may take such action, without
notice or demand,  as it deems  advisable  to  protect  and  enforce  its rights
against Borrower and in and to the Property,  including, but not limited to, the
following actions,  each of which may be pursued  concurrently or otherwise,  at
such time and in such order as Lender  may  determine,  in its sole  discretion,
without  impairing  or  otherwise  affecting  the other  rights and  remedies of
Lender:

<PAGE>

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

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

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

      (d) sell for cash or upon credit the  Property or any part thereof and all
estate,  claim, demand, right, title and interest of Borrower therein and rights
of redemption  thereof,  pursuant to power of sale or otherwise,  at one or more
sales, as an entirety 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, the Loan Agreement or in the other Loan Documents;

      (f)  recover  judgment  on the Note  either  before,  during  or after any
proceedings  for the  enforcement of this Security  Instrument or the other Loan
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  with respect to the Loan or of any Person liable for
the payment of the Debt;

      (h) the  license  granted to  Borrower  under  Section  1.2  hereof  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

<PAGE>

to Lender or to such receiver and, in default  thereof,  Borrower may be evicted
by summary  proceedings  or  otherwise;  and (vii) apply the  receipts  from the
Property to the payment of the Debt, in such order,  priority and proportions as
Lender shall deem appropriate in its sole discretion  after deducting  therefrom
all expenses (including  reasonable attorneys' fees) incurred in connection with
the  aforesaid  operations  and all amounts  necessary  to pay the Taxes,  Other
Charges,  insurance and other expenses in connection with the Property,  as well
as just and  reasonable  compensation  for the services of Lender,  its counsel,
agents and employees;

      (i) exercise any and all rights and  remedies  granted to a secured  party
upon default under the Uniform Commercial Code, including,  without limiting the
generality of the foregoing:  (i) the right to take  possession of the Fixtures,
the Equipment and the Personal Property,  or any part thereof,  and to take such
other  measures  as  Lender  may deem  necessary  for the care,  protection  and
preservation of the Fixtures,  the Equipment and the Personal Property, and (ii)
request Borrower at its expense to assemble the Fixtures,  the Equipment and the
Personal  Property  and  make it  available  to  Lender  at a  convenient  place
acceptable to Lender.  Any notice of sale,  disposition or other intended action
by Lender  with  respect to the  Fixtures,  the  Equipment  and/or 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 or held in escrow or otherwise by or on
behalf of  Lender  in  accordance  with the  terms of the Loan  Agreement,  this
Security  Instrument  or any other Loan 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, the Loan Agreement,
      this Security  Instrument and the other Loan Documents,  including without
      limitation  advances made by Lender pursuant to the terms of this Security
      Instrument;

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

      (l) 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 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.

<PAGE>

      Section 7.2  APPLICATION  OF PROCEEDS.  The purchase  money,  proceeds and
avails of any disposition of the Property, and or any part thereof, or any other
sums collected by Lender pursuant to the Note,  this Security  Instrument or the
other Loan  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,  to
the extent consistent with law.

      Section 7.3 RIGHT TO CURE  DEFAULTS.  Upon the  occurrence  and during the
continuance  of any Event of Default,  Lender may, but without any obligation to
do so and without notice to or demand on Borrower and without releasing Borrower
from any  obligation  hereunder,  make or do the same in such manner and to such
extent as Lender may deem  necessary to protect the security  hereof.  Lender is
authorized to enter upon the Property for such  purposes,  or appear in, defend,
or bring any action or  proceeding to protect its interest in the Property or to
foreclose this Security Instrument or collect the Debt, and the cost and expense
thereof (including  reasonable  attorneys' fees to the extent permitted by law),
with interest as provided in this Section 7.3, shall constitute a portion of the
Debt and shall be due and  payable  to Lender  upon  demand.  All such costs and
expenses  incurred by Lender in  remedying  such Event of Default or such failed
payment or act or in  appearing  in,  defending,  or bringing any such action or
proceeding  shall 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  Loan
Documents  and  shall be  immediately  due and  payable  upon  demand  by Lender
therefor.

      Section 7.4 ACTIONS AND PROCEEDINGS. Lender has the right to appear in and
defend any action or  proceeding  brought  with  respect to the  Property and to
bring any action or  proceeding,  in the name and on behalf of  Borrower,  which
Lender, in its discretion,  decides should be brought to protect its interest in
the Property.

      Section 7.5  RECOVERY OF SUMS  REQUIRED TO BE PAID.  Lender shall have the
right  from  time to  time  to take  action  to  recover  any sum or sums  which
constitute a part of the Debt as the same become due,  without regard to whether
or not the balance of the Debt shall be due, and without  prejudice to the right
of Lender thereafter to bring an action of foreclosure, or any other action, for
a default or defaults by Borrower  existing at the time such earlier  action was
commenced.

      Section 7.6 EXAMINATION OF BOOKS AND RECORDS. At reasonable times and upon
reasonable notice, Lender, its agents,  accountants and attorneys shall have the
right to examine the  records,  books,  management  and other papers of Borrower
which  reflect upon its  financial  condition,  at the Property or at any office
regularly maintained by Borrower 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,  at reasonable times and upon
reasonable notice, Lender, its agents,  accountants and attorneys shall have the
right to examine and audit the books and records of Borrower  pertaining  to the
income,  expenses and operation of the Property during reasonable business hours
at any office of Borrower where the books and records are located.  This Section
7.6 shall apply throughout the term of the Note and without regard to whether an
Event of Default has occurred or is continuing.

<PAGE>

      Section 7.7 OTHER  RIGHTS,  ETC.  (a) The failure of Lender to insist upon
strict  performance of any term hereof shall not be deemed to be a waiver of any
term of this Security  Instrument.  Borrower shall not be relieved of Borrower's
obligations  hereunder by reason of (i) the failure of Lender to comply with any
request of Borrower or any guarantor or  indemnitor  with respect to the Loan to
take any action to foreclose this Security  Instrument or otherwise  enforce any
of the provisions  hereof or of the Note or the other Loan  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 Loan 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 may take  action to  recover  the Debt,  or any  portion  thereof,  or to
enforce any covenant hereof without  prejudice to the right of Lender thereafter
to foreclose this Security Instrument.  The rights of Lender under this Security
Instrument  shall be separate,  distinct and  cumulative and none shall be given
effect to the exclusion of the others. No act of Lender shall be construed as an
election to proceed under any one provision herein to the exclusion of any other
provision.  Lender shall not be limited  exclusively  to the rights and remedies
herein  stated but shall be entitled to every right and remedy now or  hereafter
afforded at law or in equity.

      Section  7.8 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  7.9  VIOLATION  OF  LAWS.  If the  Property  is  not in  material
compliance with Legal  Requirements,  Lender may impose additional  requirements
upon Borrower in connection  herewith including,  without  limitation,  monetary
reserves or financial equivalents.

      Section 7.10  RECOURSE AND CHOICE OF REMEDIES.  Notwithstanding  any other
provision of this Security Instrument or the Loan Agreement,  including, without
limitation,  Section 11.22 of the Loan Agreement,  Lender and other  Indemnified
Parties (as  hereinafter  defined)  are entitled to enforce the  obligations  of
Borrower,  any guarantor and indemnitor contained in Sections 9.2 and 9.3 herein
and Section 9.2 of the Loan Agreement without first

<PAGE>

resorting to or exhausting  any security or collateral  and without first having
recourse to the Note or any of the Property,  through  foreclosure or acceptance
of a deed in lieu of foreclosure or otherwise, and in the event Lender commences
a  foreclosure  action  against  the  Property,  Lender is  entitled to pursue a
deficiency  judgment with respect to such  obligations  against Borrower and any
guarantor or indemnitor with respect to the Loan. The provisions of Sections 9.2
and 9.3 herein and  Section  9.2 of the Loan  Agreement  are  exceptions  to any
non-recourse  or exculpation  provisions in the Loan  Agreement,  the Note, this
Security Instrument or the other Loan Documents,  and Borrower and any guarantor
or indemnitor  with respect to the Loan are fully and personally  liable for the
obligations  pursuant to Sections 9.2 and 9.3 herein and Section 9.2 of the Loan
Agreement.  The  liability of Borrower  and any  guarantor  or  indemnitor  with
respect to the Loan  pursuant to Sections  9.2 and 9.3 herein and Section 9.2 of
the Loan Agreement is not limited to the original  principal amount of the Note.
Notwithstanding  the  foregoing,  nothing herein shall inhibit or prevent Lender
from  foreclosing  or exercising  any other rights and remedies  pursuant to the
Loan Agreement, the Note, this Security Instrument and the other Loan Documents,
whether simultaneously with foreclosure  proceedings or in any other sequence. A
separate  action or  actions  may be brought  and  prosecuted  against  Borrower
pursuant to Sections  9.2 and 9.3 herein and Section 9.2 of the Loan  Agreement,
whether or not action is brought  against any other Person or whether or not any
other Person is joined in the action or actions. In addition,  Lender 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 the Environmental Indemnity.

      Section 7.11 RIGHT OF ENTRY.  Upon reasonable  notice to Borrower,  Lender
and its agents  shall have the right to enter and  inspect  the  Property at all
reasonable times.

                        Article 8 - INTENTIONALLY OMITTED

                           Article 9 - INDEMNIFICATION

      Section 9.1 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 reasonable  attorneys'  fees and other
costs of defense)  (collectively,  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, the
Loan Agreement,  this Security Instrument,  or any other Loan 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 Loan Agreement
or the Note or any of the other Loan Documents,  whether or not suit is filed in
connection  with  same,  or  in  connection  with  Borrower,  any  guarantor  or
indemnitor and/or any 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,

<PAGE>

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 this 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 Legal Requirements;
(j) the enforcement by any  Indemnified  Party of the provisions of this Article
9; (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;  (1) the payment of any  commission,  charge or  brokerage  fee to anyone
claiming through Borrower which may be payable in connection with the funding of
the  Loan;  or (m) any  misrepresentation  made  by  Borrower  in this  Security
Instrument or any other Loan Document.  Notwithstanding the foregoing,  Borrower
shall not be liable to the  Indemnified  Parties  under this Section 9.1 for any
Losses to which the  Indemnified  Parties may become  subject to the extent such
Losses arise by reason of the gross  negligence,  illegal acts, fraud or willful
misconduct of the Indemnified  Parties.  Any amounts payable to Lender by reason
of the application of this Section 9.1 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  9, the term
"Indemnified  Parties"  means  Lender  and any  Person  who is or will have been
involved  in the  origination  of the Loan,  any Person who is or will have been
involved in the servicing of the Loan secured  hereby,  any Person 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 secured hereby  (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  secured  hereby for the  benefit of third  parties)  as well as the
respective  directors,  officers,  shareholders,  partners,  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 who holds or acquires
or will have held a participation or other full or partial interest in the Loan,
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 9.2 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 Loan Documents,  but
excluding any income, franchise or other similar taxes.

<PAGE>

      Section 9.3 ERISA  INDEMNIFICATION.  Borrower  shall, at its sole cost and
expense, protect, defend,  indemnify,  release and hold harmless the Indemnified
Parties  from and against  any and all Losses  (including,  without  limitation,
reasonable attorneys' fees and costs incurred in the investigation, defense, and
settlement of Losses incurred in correcting any prohibited transaction or in the
sale  of  a  prohibited  loan,  and  in  obtaining  any  individual   prohibited
transaction  exemption  under  ERISA  that may be  required,  in  Lender's  sole
discretion)  that  Lender may incur,  directly or  indirectly,  as a result of a
default under Sections 3.1.8 or 4.2.11 of the Loan Agreement.

      Section 9.4 INTENTIONALLY OMITTED.

      Section 9.5 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,  if the defendants in any
such claim or  proceeding  include both Borrower and any  Indemnified  Party and
Borrower and such Indemnified  Party shall have reasonably  concluded that there
are any legal defenses available to it and/or other Indemnified Parties that are
different from or additional to those  available to Borrower,  such  Indemnified
Party  shall  have the right to select  separate  counsel  to assert  such legal
defenses and to otherwise participate in the defense of such action on behalf of
such  Indemnified  Party,  provided that no  compromise  or settlement  shall be
entered  without  Borrower's  consent,  which consent shall not be  unreasonably
withheld.  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 10 - WAIVERS

      Section 10.1 WAIVER OF COUNTERCLAIM. To the extent permitted by applicable
law,  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 Loan Agreement,  the Note, any of the other Loan Documents,  or
the Obligations.

      Section 10.2  MARSHALLING  AND OTHER MATTERS.  To the extent  permitted by
applicable  law,  Borrower  hereby  waives  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 10.3 WAIVER OF NOTICE.  To the extent permitted by applicable law,
Borrower  shall not be  entitled to any  notices of any nature  whatsoever  from
Lender except with respect to

<PAGE>

matters for which this Security  Instrument  specifically and expressly provides
for the  giving of notice by Lender to  Borrower  and  except  with  respect  to
matters for which  Lender is  required by  applicable  law to give  notice,  and
Borrower  hereby  expressly  waives the right to receive  any notice from Lender
with  respect  to any  matter  for  which  this  Security  Instrument  does  not
specifically  and  expressly  provide  for the  giving  of  notice  by Lender to
Borrower.

      Section 10.4 WAIVER OF STATUTE OF LIMITATIONS.  To the extent permitted by
applicable  law,  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 10.5 SURVIVAL.  The indemnifications  made pursuant to Section 9.3
herein and the representations and warranties,  covenants, and other obligations
arising under the Environmental  Indemnity,  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 Loan Agreement, the Note or any of the other Loan 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 Loan Agreement, the
Note or the other Loan  Documents,  and any act or omission that might otherwise
be construed as a release or discharge of Borrower from the obligations pursuant
hereto.

                            Article 11 - EXCULPATION

      The  provisions  of  Section  11.22  of  the  Loan  Agreement  are  hereby
incorporated  by reference into this Security  Instrument to the same extent and
with the same force as if fully set forth herein.

                              Article 12 - NOTICES

      All notices or other written  communications  hereunder shall be delivered
in accordance with Section 11.6 of the Loan Agreement.

                           Article 13 - APPLICABLE LAW

      Section 13.1 GOVERNING LAW. (A) THIS SECURITY INSTRUMENT WAS NEGOTIATED IN
THE STATE OF NEW YORK,  AND MADE BY BORROWER AND ACCEPTED BY LENDER IN THE STATE
OF NEW YORK, AND THE PROCEEDS OF THE NOTE SECURED HEREBY WERE DISBURSED FROM THE
STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL  RELATIONSHIP
TO THE PARTIES AND TO THE UNDERLYING  TRANSACTION  EMBODIED  HEREBY,  AND IN ALL
RESPECTS, INCLUDING, WITHOUT LIMITING

<PAGE>

THE  GENERALITY  OF  THE  FOREGOING,  MATTERS  OF  CONSTRUCTION,   VALIDITY  AND
PERFORMANCE,  THIS SECURITY  INSTRUMENT AND THE  OBLIGATIONS  ARISING  HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK  APPLICABLE  TO CONTRACTS  MADE AND  PERFORMED  IN SUCH STATE  (WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY  APPLICABLE  LAW OF THE UNITED
STATES OF AMERICA, EXCEPT THAT AT ALL TIMES (I) THE PROVISIONS FOR THE CREATION,
PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED
PURSUANT  HERETO AND  PURSUANT TO THE OTHER LOAN  DOCUMENTS  WITH RESPECT TO THE
PROPERTY  (OTHER THAN THAT DESCRIBED IN SUBPARAGRAPH II BELOW) SHALL BE GOVERNED
BY AND  CONSTRUED  ACCORDING  TO THE LAW OF THE STATE IN WHICH THE  PROPERTY AND
FIXTURES  ARE  LOCATED AND (II) WITH  RESPECT TO THE  PERFECTION,  PRIORITY  AND
ENFORCEMENT  OF THE  LIENS  AND  SECURITY  INTERESTS  CREATED  BY THIS  SECURITY
INSTRUMENT  AND THE OTHER  LOAN  DOCUMENTS  IN  PROPERTY  WHOSE  PERFECTION  AND
PRIORITY IS COVERED BY ARTICLE 9 OF THE UCC (INCLUDING,  WITHOUT LIMITATION, THE
ACCOUNTS),  THE LAW OF THE  JURISDICTION  APPLICABLE IN ACCORDANCE WITH SECTIONS
9-301  THROUGH  9-307 OF THE UCC AS IN  EFFECT  IN THE  STATE OF NEW YORK  SHALL
GOVERN. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY  UNCONDITIONALLY
AND  IRREVOCABLY  WAIVES  ANY  CLAIM  TO  ASSERT  THAT  THE  LAW  OF  ANY  OTHER
JURISDICTION  GOVERNS THIS SECURITY  INSTRUMENT  AND THE NOTE, AND THIS SECURITY
INSTRUMENT  AND THE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN  ACCORDANCE  WITH
THE LAWS OF THE STATE OF NEW YORK  PURSUANT  TO  SECTION  5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW EXCEPT AS SPECIFICALLY SET FORTH ABOVE.

      (B) ANY  LEGAL  SUIT,  ACTION OR  PROCEEDING  AGAINST  LENDER OR  BORROWER
ARISING OUT OF OR RELATING TO THIS SECURITY INSTRUMENT MAY AT LENDER'S OPTION BE
INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK,  COUNTY OF NEW
YORK,  PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL  OBLIGATIONS  LAW, AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE
AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER
HEREBY  IRREVOCABLY  SUBMITS TO THE  JURISDICTION OF ANY SUCH COURT IN ANY SUIT,
ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT

                  CORPORATION SERVICE COMPANY
                  1177 AVENUE OF THE AMERICAS
                  17TH FLOOR
                  NEW YORK, NEW YORK  10036

<PAGE>

AS ITS AUTHORIZED  AGENT TO ACCEPT AND  ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY
AND ALL PROCESS  WHICH MAY BE SERVED IN ANY SUCH SUIT,  ACTION OR  PROCEEDING IN
ANY FEDERAL OR STATE  COURT IN NEW YORK,  NEW YORK,  AND AGREES THAT  SERVICE OF
PROCESS  UPON SAID AGENT AT SAID  ADDRESS  AND  WRITTEN  NOTICE OF SAID  SERVICE
MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN
EVERY  RESPECT  EFFECTIVE  SERVICE OF PROCESS  UPON  BORROWER  IN ANY SUCH SUIT,
ACTION OR  PROCEEDING  IN THE STATE OF NEW YORK.  BORROWER (I) SHALL GIVE PROMPT
NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER,  (II)
MAY AT ANY TIME AND FROM TIME TO TIME  DESIGNATE A SUBSTITUTE  AUTHORIZED  AGENT
WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE
DESIGNATED  AS THE PERSON AND ADDRESS FOR SERVICE OF  PROCESS),  AND (III) SHALL
PROMPTLY  DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED  AGENT CEASES TO HAVE AN
OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

      Section 13.2 USURY LAWS. Notwithstanding anything to the contrary, (a) all
agreements and  communications  between Borrower and Lender are hereby and shall
automatically  be limited so that,  after taking into account all amounts deemed
interest, the interest contracted for, charged or received by Lender shall never
exceed  the  maximum  lawful  rate or amount,  (b) in  calculating  whether  any
interest  exceeds the lawful  maximum,  all such  interest  shall be  amortized,
prorated,  allocated  and spread over the full amount and term of all  principal
indebtedness of Borrower to Lender, and (c) if through any contingency or event,
Lender  receives  or is  deemed to  receive  interest  in  excess of the  lawful
maximum,  any such excess shall be deemed to have been applied toward payment of
the  principal  of any and all then  outstanding  indebtedness  of  Borrower  to
Lender,  or if there is no such  indebtedness,  shall immediately be returned to
Borrower.

      Section 13.3 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 14 - DEFINITIONS

      All  capitalized  terms  not  defined  herein  shall  have the  respective
meanings set forth in the Loan Agreement. Unless the context clearly indicates a
contrary intent or unless otherwise  specifically provided herein, words used in
this Security Instrument may be used  interchangeably in singular or plural form
and the word  "Borrower"  shall mean "each Borrower and any subsequent  owner or
owners of the Property or any part thereof or any  interest  therein,"  the word
"Lender"  shall mean  "Lender and any  subsequent  holder of the Note," the word
"Note" shall

<PAGE>

mean "the Note and any other evidence of  indebtedness  secured by this Security
Instrument,"  the word "Property"  shall include any portion of the Property and
any  interest  therein,  and the phrases  "attorneys'  fees",  "legal  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 15 - MISCELLANEOUS PROVISIONS

      Section 15.1 NO ORAL CHANGE. This Security Instrument,  and any provisions
hereof, may not be modified,  amended, waived, extended,  changed, discharged or
terminated  orally or by any act or  failure to act on the part of  Borrower  or
Lender,  but only by an  agreement in writing  signed by the party  against whom
enforcement of any modification, amendment, waiver, extension, change, discharge
or termination is sought.

      Section 15.2  SUCCESSORS AND ASSIGNS.  This Security  Instrument  shall be
binding  upon and  inure  to the  benefit  of  Borrower  and  Lender  and  their
respective successors and assigns forever.

      Section 15.3 INAPPLICABLE  PROVISIONS.  If any term, covenant or condition
of the  Loan  Agreement,  the  Note or this  Security  Instrument  is held to be
invalid,  illegal or unenforceable in any respect, the Loan Agreement,  the Note
and this Security Instrument shall be construed without such provision.

      Section 15.4 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  15.5 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 15.6  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 Loan Agreement, the Note and the
other Loan Documents and the performance and discharge of the Other Obligations.

      Section 15.7 ENTIRE AGREEMENT. The Note, the Loan Agreement, this Security
Instrument and the other Loan Documents  constitute the entire understanding and
agreement  between Borrower and Lender with respect to the transactions  arising
in   connection   with  the  Debt  and  supersede  all  prior  written  or  oral
understandings and agreements between Borrower

<PAGE>

and Lender with respect thereto.  Borrower hereby  acknowledges  that, except as
incorporated  in  writing  in  the  Note,  the  Loan  Agreement,  this  Security
Instrument  and the other Loan  Documents,  there are not,  and were not, and no
persons  are  or  were  authorized  by  Lender  to  make,  any  representations,
understandings,  stipulations,  agreements  or promises,  oral or written,  with
respect to the transaction which is the subject of the Note, the Loan Agreement,
this Security Instrument and the other Loan Documents.

      Section 15.8 LIMITATION ON LENDER'S  RESPONSIBILITY.  No provision of this
Security  Instrument  shall operate to place any obligation or liability for the
control,  care,  management or repair of the Property upon Lender,  nor shall it
operate to make  Lender  responsible  or liable for any waste  committed  on the
Property by the tenants or any other  Person,  or for any dangerous or defective
condition of the  Property,  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.  Nothing  herein  contained  shall be
construed as constituting Lender a "mortgagee in possession."

      Section  15.9  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  SECURITY  INSTRUMENT  OR THE OTHER LOAN
DOCUMENTS OR ANY ACTS OR OMISSIONS OF LENDER, ITS OFFICERS, EMPLOYEES, DIRECTORS
OR AGENTS IN CONNECTION THEREWITH.

                     Article 16 - STATE-SPECIFIC PROVISIONS

      Section   16.1   PRINCIPLES   OF   CONSTRUCTION.   In  the  event  of  any
inconsistencies  between  the terms and  conditions  of this  Article 16 and the
other terms and conditions of this Security Instrument, the terms and conditions
of this Article 16 shall control and be binding.

      Section 16.2 FUTURE  ADVANCES AND MAXIMUM  AMOUNT  SECURED.  This Security
Agreement  secures all future advances and obligations  under the Obligations up
to the maximum  principal  sum of  $30,000,000  for the Property  located in the
county  in which  this  Security  Instrument  was  filed.  The  total  amount of
obligations  and advances  secured  hereby may decrease or increase from time to
time,  provided  that the amount of the lien shall not exceed,  at any one time,
the maximum principal sum of $30,000,000,  all accrued interest thereon, and all
amounts (other than  principal)  payable by Borrower under the Loan and the Loan
Agreement and the other Loan Documents, including, without limitation, all taxes
and insurance  premiums paid or advanced by Lender with respect to the Property,
all costs of enforcing and foreclosing on the lien of this Security  Instrument,
and all sums expended or incurred for the  protection  of the security  interest
hereby  created  in the  Property,  regardless  of  whether  the  foregoing  was
advanced, paid, incurred or expended now or at any future time or times.

      Section 16.3 The following  revisions are hereby  incorporated in the body
of this Security Instrument:

<PAGE>

      (a) The following  sentences are hereby added to the end of Section 1.4 of
this  Security  Instrument:  "The  addresses  of  Borrower  (Debtor)  and Lender
(Secured  Party)  are as set  forth  in page  one of this  Security  Instrument.
Borrower's  (Debtor's)  Organizational   Identification  Number  is  3795012.  A
description of the Property is attached  hereto as Exhibit A. Borrower  (Debtor)
is the record owner of a leasehold interest in the Property.

      (b) The following language is hereby added to the last sentence of Section
5.4 of this  Security  Instrument:  "provided,  however,  Borrower  shall not be
required to modify or amend any Loan Document if such  modification or amendment
would cause Borrower to incur additional Kansas mortgage registration fees."

      (c) Subsection  (d) of Section 7.1 of this Security  Instrument is deleted
and replaced with the phrase "Intentionally Omitted".

      Section 16.4 Borrower agrees that it will use the proceeds of the Note for
business purposes (other than agricultural purposes) only, and not for personal,
family or household  purposes.  The Loan is for "business  purposes"  within the
meaning of Section 16-207 of the Kansas Revised Statutes.


                         [NO FURTHER TEXT ON THIS PAGE]


<PAGE>


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


WITNESS:                    GM OLATHE, LLC, a Delaware limited liability
                            company

------------------------    By: GM MEZZ, LLC, a Delaware limited liability
Name:                           company, its sole member

                                By: GREAT PLAINS METROMALL, LLC, a Delaware
                                    limited liability company, its sole
                                    member

                                    By: GLIMCHER PROPERTIES LIMITED
                                        PARTNERSHIP, a Delaware limited
                                        partnership, its sole member

                                        By:  GLIMCHER PROPERTIES
                                             CORPORATION, a Delaware
                                             corporation, its sole general
                                             partner

                                             By: /s/ George A. Schmidt
                                                 -------------------------------
                                                 Name:  George A. Schmidt
                                                 Title: Executive Vice President



WITNESS:                       MORGAN STANLEY MORTGAGE CAPITAL INC., a New
                                York corporation


-------------------------      By: /s/ Kevin A. Swartz
Name:                              -------------------------------
                                   Name:  Kevin A. Swartz
                                   Title: Vice President


<PAGE>


STATE OF                )
                        ) ss:
COUNTY OF               )


      On the 7th day of June,  2004,  before  me,  the  undersigned,  personally
appeared George A. Schmidt,  personally known to me or proved to me on the basis
of  satisfactory  evidence to be the individual  whose name is subscribed to the
within  instrument  and  acknowledged  to me that he  executed  the  same in his
capacity,  and that by his signature on the instrument,  the individual,  or the
person on behalf of which the individual acted, executed the instrument.


                        /s/ Connie M. Gray
                        -------------------------------------
                        Signature & office of individual
                          taking the acknowledgement





STATE OF NEW YORK       )
                        ) ss:
COUNTY OF NEW YORK      )


      On the ___ day of June,  2004,  before  me,  the  undersigned,  personally
appeared Kevin A. Swartz, personally known to me or proved to me on the basis of
satisfactory  evidence  to be the  individual  whose name is  subscribed  to the
within  instrument  and  acknowledged  to me that he  executed  the  same in his
capacity,  and that by his signature on the instrument,  the individual,  or the
person on behalf of which the individual acted, executed the instrument.


                        -------------------------------------
                        Signature & office of individual
                          taking the acknowledgement


<PAGE>


                                    EXHIBIT A

                                LEGAL DESCRIPTION

Lots 1 thru 6, and Tract A, The Great Mall, a subdivision in the City of Olathe,
recorded October 31, 1996 in Plat Book 97, Page 31, in Johnson County, Kansas.

and

All of Lot 15, The Great  Mall,  a  subdivision  in the City of Olathe,  Johnson
County,  Kansas,  less  and  except  that  Part of Lot 15,  The  Great  Mall,  a
subdivision  in  the  City  of  Olathe,   Johnson  County,   Kansas  being  more
particularly described as follows:

Beginning at the  Southeast  corner of Lot 15, of said The Great Mall;  thence S
44(0) 40' 49" W, along the South line of said Lot 15, 20.00 feet; thence S 60(0)
09' 06" W, along said South line,  779.98 feet; thence N 00(0) 07' 40" E, 137.59
feet to a point on the North line of said Lot 15;  thence  along said North line
on a curve to the left,  having an initial tangent bearing of N 85(0) 19' 31" E,
a radius of 202.00 feet,  an arc distance of 88.75 feet;  thence N 60(0) 09' 06"
E, along said North line  644.59  feet to the  Northeast  corner of said Lot 15;
thence S 29(0) 50' 54" E, along the East line of said Lot 15,  94.66 feet to the
point of beginning.


<PAGE>


                              SCHEDULE OF MORTGAGES

   Leasehold Mortgage And Security Agreement ("Mortgage") from Olathe Mall, LLC,
      a Colorado limited liability company, Borrower, in favor of The Huntington
      National  Bank,  a  national  banking   association,   Key  Bank  National
      Association, a national banking association,  and Bank One, Arizona, NA, a
      national banking association, Co-Agents, dated March 1, 1996, and recorded
      July 2, 1996,  as  Document  No.  2612458 in Book 4924,  page 385,  of the
      records of the Register of Deeds for Johnson County, Kansas.

   Said Mortgage was modified by virtue of Assumption Agreement and Modification
      of Mortgage and Construction  Loan Agreement by and between The Huntington
      National Bank, Key Bank National  Association,  and Bank One, Arizona, NA,
      Co-Agents,  and Great Plains Metromall,  LLC, a Delaware limited liability
      company,  New Borrower  and Olathe Mall,  LLC,  Original  Borrower,  dated
      November 27, 1996, and recorded December 18, 1996, as Document No. 2662033
      in Book  5063,  page 664,  of the  records  of the  Register  of Deeds for
      Johnson County, Kansas.

   Said Mortgage was modified by virtue of Second  Modification  of Mortgage and
      Construction  Loan  Agreement and  Modification  of Note dated November 3,
      1997,  and recorded on November 17, 1997,  as Document No.  276317 in Book
      5374,  page 531,  of the  records  of the  Register  of Deeds for  Johnson
      County, Kansas.

   Said Mortgage  was  assigned by virtue of  Assignment  of  Mortgage  from The
      Huntington  National  Bank,  Key Bank  National  Association  and Bank One
      Arizona,   NA,  to  German  American  Capital   Corporation,   a  Maryland
      corporation,  dated as of June 30, 2000, and recorded on July 13, 2000, as
      Document  No.  3138530  in Book  6630,  page 544,  of the  records  of the
      Register of Deeds for Johnson County, Kansas.

   Said Mortgage  was  modified  by virtue of  Amended  and  Restated  Leasehold
      Mortgage,  Security  Agreement  Financial  Statement,  Filing  Fixture and
      Assignment  of Leases,  Rents and Security  Deposits by and between  Great
      Plains Metromall,  LLC, and German American Capital Corporation,  dated as
      of June 30, 2000,  and recorded July 13, 2000, as Document No.  3138531 in
      Book 6630,  page 552, of the records of the  Register of Deeds for Johnson
      County, Kansas.

   Said Mortgage was assigned to LaSalle Bank National  Association,  as trustee
      for  the  registered   holders  of  COMM  2001-FL4   Commercial   Mortgage
      Pass-Through Certificates, Series COMM 2001-FL4, by Assignment of Recorded
      Mortgage  Collateral  Security  Documents  dated June 28, 2001,  by German
      American  Capital  Corporation,  and recorded on July 9, 2001, as Document
      No.  3268076,  in Book 7147,  Page 562, in the records of the  Register of
      Deeds of Johnson County, Kansas.

   Said Mortgage was assigned to Lender by Assignment of Mortgage  dated June 9,
      2004, by LaSalle Bank National Association,  as trustee for the registered
      holders of COMM 2001-FL4  Commercial Mortgage  Pass-Through  Certificates,
      Series COMM  2001-FL4,,  and submitted for recording in the records of the
      Register of Deeds of Johnson County, Kansas immediately prior hereto.



                                    Exhibit B