EXHIBIT 10.10
================================================================================







                                 LOAN AGREEMENT

                           Dated as of October 1, 1998

                                     Between

                       77 West Wacker Limited Partnership

                                   as Borrower

                                       and

                         LEHMAN BROTHERS HOLDINGS INC.,

                        DOING BUSINESS AS LEHMAN CAPITAL,

                   A DIVISION OF LEHMAN BROTHERS HOLDINGS INC.

                                    as Lender

================================================================================













































<PAGE>
                                TABLE OF CONTENTS
                                -----------------

                                                                           Page
                                                                           ----

I.  DEFINITIONS; PRINCIPLES OF CONSTRUCTION...............................   1
    Section 1.1    Definitions............................................   1
    Section 1.2    Principles of Construction.............................  10

II. GENERAL TERMS.........................................................  10
    Section 2.1    Loan Commitment; Disbursement to Borrower..............  10
            2.1.1  The Loan...............................................  10
            2.1.2  Disbursement to Borrower...............................  11
            2.1.3  The Note, Mortgage and Loan Documents..................  11
            2.1.4  Use of Proceeds........................................  11
    Section 2.2    Interest; Loan Payments; Late Payment Charge...........  11
            2.2.1  Interest Generally.....................................  11
            2.2.2  Interest Calculation...................................  11
            2.2.3  Determination of Interest Rate.........................  11
            2.2.4  Payments of Interest...................................  13
            2.2.5  Payment on Maturity Date...............................  13
            2.2.6  Payments after Default.................................  13
            2.2.7  Late Payment Charge....................................  13
            2.2.8  Usury Savings..........................................  14
    Section 2.3    Prepayments............................................  14
            2.3.1  Voluntary Prepayments..................................  14
            2.3.2  Mandatory Prepayments..................................  14
    Section 2.4    Intentionally Omitted..................................  14
    Section 2.5    Release of Property....................................  14
    Section 2.6    Manner of Making Payments; Cash Management.............  15
            2.6.1  Deposits into Lockbox Account..........................  15
            2.6.2  Making of Payments.....................................  15
            2.6.3  Payments Received in the Lockbox Account...............  15
            2.6.4  No Deductions, etc.....................................  15

III.CONDITIONS PRECEDENT..................................................  16
    Section 3.1    Conditions Precedent to Closing........................  16
            3.1.1  Representations and Warranties; Compliance with
                   Conditions.............................................  16
            3.1.2  Loan Agreement and Note................................  16
            3.1.3  Delivery of Loan Documents; Title Insurance; Reports;
                   Leases.................................................  16
            3.1.4  Related Documents......................................  17
            3.1.5  Delivery of Organizational Documents...................  17
            3.1.6  Opinions of Borrower's Counsel.........................  17
            3.1.7  Budgets................................................  18
            3.1.8  Basic Carrying Costs...................................  18
            3.1.9  Intentionally Omitted..................................  18
            3.1.10 Payments...............................................  18
            3.1.11 Intentionally Omitted..................................  18
            3.1.12 Tenant Estoppels.......................................  18
            3.1.13 Transaction Costs......................................  18
            3.1.14 Material Adverse Change................................  18
            3.1.15 Leases and Rent Roll...................................  19
            3.1.16 Subordination and Attornment...........................  19
            3.1.17 Tax Lot................................................  19
            3.1.18 Physical Conditions Reports............................  19
            3.1.19 Management Agreement...................................  19
            3.1.20 Appraisal..............................................  19
            3.1.21 Financial Statements...................................  19
            3.1.22 Further Documents......................................  19

















                                      -i-
<PAGE>
                                                                           Page
                                                                           ----

IV. REPRESENTATIONS AND WARRANTIES........................................  19
    Section 4.1    Borrower Representations...............................  19
            4.1.1  Organization...........................................  20
            4.1.2  Proceedings............................................  20
            4.1.3  No Conflicts...........................................  20
            4.1.4  Litigation.............................................  20
            4.1.5  Agreements.............................................  20
            4.1.6  Title..................................................  21
            4.1.7  No Bankruptcy Filing...................................  21
            4.1.8  Full and Accurate Disclosure...........................  21
            4.1.9  No Plan Assets.........................................  22
            4.1.10 Compliance.............................................  22
            4.1.11 Financial Information..................................  22
            4.1.12 Condemnation...........................................  22
            4.1.13 Federal Reserve Regulations............................  22
            4.1.14 Utilities and Public Access............................  23
            4.1.15 Not a Foreign Person...................................  23
            4.1.16 Separate Lots..........................................  23
            4.1.17 Assessments............................................  23
            4.1.18 Enforceability.........................................  23
            4.1.19 No Prior Assignment....................................  23
            4.1.20 Insurance..............................................  23
            4.1.21 Use of Property........................................  24
            4.1.22 Licenses...............................................  24
            4.1.23 Flood Zone.............................................  24
            4.1.24 Physical Condition.....................................  24
            4.1.25 Boundaries.............................................  24
            4.1.26 Leases.................................................  24
            4.1.27 Intentionally Omitted..................................  25
            4.1.28 Loan to Value..........................................  25
            4.1.29 Filing and Recording Taxes.............................  25
            4.1.30 Single Purpose Entity/Separateness.....................  25
            4.1.31 Management Agreement...................................  28
            4.1.32 Ground Lease...........................................  28
            4.1.33 Illegal Activity.......................................  30
            4.1.34 No Change in Facts or Circumstances; Disclosure........  30

    Section 4.2    Survival of Representations............................  30

V.  BORROWER COVENANTS....................................................  30
    Section 5.1    Affirmative Covenants..................................  30
    Section 5.2    Negative Covenants.....................................  37

VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS...................  40
    Section 6.1    Insurance..............................................  40
    Section 6.2    Casualty...............................................  43
    Section 6.3    Condemnation...........................................  43
    Section 6.4    Restoration............................................  44

VII.RESERVE FUNDS.........................................................  48
    Section 7.1    Intentionally Omitted..................................  48
    Section 7.2    Tax Escrow Fund........................................  48
    Section 7.3    Intentionally Deleted..................................  49
    Section 7.4    Termination Account....................................  49
    Section 7.5    Reserve Funds, Generally...............................  49

VIII. DEFAULTS............................................................  49
    Section 8.1    Event of Default.......................................  49
    Section 8.2    Remedies...............................................  51
    Section 8.3    Remedies Cumulative; Waivers...........................  52

IX. SPECIAL PROVISIONS....................................................  53
    Section 9.1    Sale of Notes and Securitization.......................  53
    Section 9.2    Securitization Indemnification.........................  56
    Section 9.3    Intentionally Omitted..................................  56
    Section 9.4    Exculpation............................................  56
    Section 9.5    Termination of Manager.................................  58
    Section 9.6    Servicer...............................................  58







                                      -ii-
<PAGE>
                                                                           Page
                                                                           ----

X.  MISCELLANEOUS.........................................................  58
    Section 10.1   Survival...............................................  58
    Section 10.2   Lender's Discretion....................................  59
    Section 10.3   Governing Law..........................................  59
    Section 10.4   Modification, Waiver in Writing........................  60
    Section 10.5   Delay Not a Waiver.....................................  60
    Section 10.6   Notices................................................  60
    Section 10.7   Trial by Jury..........................................  61
    Section 10.8   Headings...............................................  62
    Section 10.9   Severability...........................................  62
    Section 10.10  Preferences............................................  62
    Section 10.11  Waiver of Notice.......................................  62
    Section 10.12  Remedies of Borrower...................................  63
    Section 10.13  Expenses; Indemnity....................................  63
    Section 10.14  Schedules Incorporated.................................  64
    Section 10.15  Offsets, Counterclaims and Defenses....................  64
    Section 10.16  No Joint Venture or Partnership; No Third Party
                   Beneficiaries..........................................  64
    Section 10.17  Publicity..............................................  65
    Section 10.18  Waiver of Marshalling of Assets;.......................  65
    Section 10.19  Waiver of Counterclaim.................................  65
    Section 10.20  Conflict; Construction of Documents; Reliance..........  65
    Section 10.21  Brokers and Financial Advisors.........................  66
    Section 10.22  Prior Agreements.......................................  66


                                    SCHEDULES
                                    ---------

Schedule I         -    Rent Roll













































                                      -iii-
<PAGE>
                                 LOAN AGREEMENT

     THIS LOAN  AGREEMENT,  dated as of October 1, 1998 (as  amended,  restated,
replaced,   supplemented   or  otherwise   modified  from  time  to  time,  this
"Agreement"),  between LEHMAN BROTHERS  HOLDINGS INC.,  doing business as Lehman
Capital, a division of Lehman Brothers Holdings Inc., having an address at Three
World Financial  Center,  New York, New York 10285 ("Lender") and 77 WEST WACKER
LIMITED PARTNERSHIP,  an Illinois limited  partnership,  having an address at 77
West Wacker Drive, Suite 3900, Chicago, Illinois 60601 ("Borrower").

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

     WHEREAS,  Borrower desires to obtain the Loan (as hereinafter defined) from
Lender; and

     WHEREAS, Lender is willing to make the Loan to Borrower,  subject to and in
accordance  with the terms of this  Agreement  and the other Loan  Documents (as
hereinafter defined).

     NOW,  THEREFORE,  in  consideration of the making of the Loan by Lender and
the  covenants,  agreements,  representations  and  warranties set forth in this
Agreement,  the parties hereto hereby covenant,  agree, represent and warrant as
follows:

     I.   DEFINITIONS; PRINCIPLES OF CONSTRUCTION

     Section 1.1 DEFINITIONS.

     For all purposes of this Agreement,  except as otherwise expressly required
or unless the context clearly indicates a contrary intent:

     "ACQUIRED  PROPERTY" shall have the meaning set forth in Section  9.1(e)(i)
hereof.

     "ACQUIRED PROPERTY  STATEMENTS" shall have the meaning set forth in Section
9.1(e)(i) hereof.

     "AFFILIATE" shall mean, as to any Person,  any other Person that,  directly
or  indirectly,  is in control of, is controlled  by or is under common  control
with such Person or is a director or  executive  officer of such Person or of an
Affiliate of such Person.

     "AGENT" shall mean LaSalle  National  Bank,  N.A. or any successor  thereto
acting as Agent under the Cash Management Agreement.

     "ALTA"  shall  mean  American  Land  Title  Association,  or any  successor
thereto.

     "ANNUAL  BUDGET"  shall mean the  operating  budget,  including all planned
capital  expenditures,  for the Property prepared by Borrower for the applicable
Fiscal Year or other period.

     "APPLICABLE  INTEREST  RATE"  shall  mean  six  and  three-eighths  percent
(6.375%)  for  the  initial  Interest  Period,   and  thereafter  shall  mean  a
fluctuating  rate per annum equal to LIBOR plus one hundred  (100) basis points,
as such  rate may  change  on each  Determination  Date for the next  succeeding
Interest Period (or the Substitute Rate, if applicable).

     "ASSIGNMENT OF LEASES" shall mean that certain first priority Assignment of
Leases and Rents, dated as of the date hereof,  from Borrower,  as assignor,  to
Lender,  as assignee,  assigning to Lender all of Borrower's  interest in and to
the Leases and Rents of the Property as security  for the Loan,  as the same may
be amended, restated, replaced,  supplemented or otherwise modified from time to
time.

     "ASSIGNMENT OF MANAGEMENT  AGREEMENT" shall mean that certain Assignment of
Management  Agreement and Subordination of Management Fees dated the date hereof
among Lender, Borrower and Manager, as the same may amended, restated, replaced,
supplemented or otherwise modified from time to time.

     "AWARD" shall mean any compensation  paid by any Governmental  Authority in
connection with a Condemnation in respect of all or any part of the Property.





                                       -1-
<PAGE>
     "BASIC  CARRYING  COSTS"  shall  mean,  the  sum  of  the  following  costs
associated with the Property for the relevant Fiscal Year or payment period: (i)
Taxes and (ii) Insurance Premiums.

     "BORROWER"  shall mean 77 West  Wacker  Limited  Partnership,  an  Illinois
limited partnership, together with its successors and assigns.

     "BREAKAGE COSTS" shall have the meaning set forth in 2.2.3(d) hereof.

     "BUSINESS  DAY"  shall mean any day other  than a  Saturday,  Sunday or any
other  day on  which  national  banks  in New  York,  New  York are not open for
business.

     "CAPITAL  EXPENDITURES" shall mean, for any period, the amount expended for
items capitalized under GAAP.

     "CASH MANAGEMENT AGREEMENT" shall mean that certain Cash Management
Agreement by and among Borrower,  Manager,  Agent and Lender, as the same may be
amended,  restated,  replaced,  supplemented or otherwise  modified from time to
time, relating to funds deposited in the Lockbox Account.

     "CASUALTY" shall have the meaning specified in Section 6.2 hereof.

     "CASUALTY   CONSULTANT"  shall  have  the  meaning  set  forth  in  Section
6.4(b)(iii) hereof.

     "CASUALTY RETAINAGE" shall have the meaning set forth in Section 6.4(b)(iv)
hereof.

     "CLOSING DATE" shall mean the date of the funding of the Loan.

     "CODE" shall mean the Internal Revenue Code of 1986, as amended,  as it may
be further amended from time to time, and any successor  statutes  thereto,  and
applicable U.S.  Department of Treasury  regulations  issued pursuant thereto in
temporary or final form.

     "CONDEMNATION"   shall  mean  a  temporary  or  permanent   taking  by  any
Governmental  Authority  as the  result  or in  lieu or in  anticipation  of the
exercise of the right of condemnation  or eminent domain,  of all or any part of
the Property,  or any interest therein or right accruing thereto,  including any
right of access  thereto or any change of grade  affecting  the  Property or any
part thereof.

     "DEBT"  shall  mean the  outstanding  principal  amount  set forth in,  and
evidenced by, this Agreement and the Note together with all interest accrued and
unpaid thereon and all other sums due to Lender in respect of the Loan under the
Note, this Agreement, the Mortgage or any other Loan Document.

     "DEBT SERVICE" shall mean,  with respect to any particular  period of time,
scheduled principal and/or interest payments under the Note.

     "DEFAULT RATE" shall mean, with respect to the Loan, a rate per annum equal
to the lesser of (a) the maximum rate permitted by applicable  law, or (b) three
percent (3%) above the Applicable Interest Rate.

     "DETERMINATION  DATE" shall mean, with respect to any Interest Period,  the
date that is (2) London  Business  Days prior to the  beginning of such Interest
Period.

     "ENVIRONMENTAL   INDEMNITY"  shall  mean  that  certain  Environmental  and
Hazardous Substance Indemnification Agreement executed by Borrower in connection
with the Loan for the benefit of Lender,  as the same may be amended,  restated,
replaced, supplemented or otherwise modified from time to time.

     "ERISA" shall mean the Employee  Retirement Income Security Act of 1974, as
amended.

     "EVENT OF  DEFAULT"  shall have the  meaning  set forth in  Section  8.1(a)
hereof.

     "EVEREN  LEASE" shall mean that certain Lease  between  Borrower and Everen
Securities,  Inc.,  formerly Kemper  Securities  Group,  Inc. for  approximately
241,225 square feet of office space at the Property.

     "EXCHANGE  ACT  FILING"  shall  have  the  meaning  set  forth  in  Section
9.1(e)(vi) hereof.


                                      -2-
<PAGE>
     "EXCULPATED PARTIES" shall have the meaning set forth in Section 9.4.

     "EXTRAORDINARY  EXPENSE"  shall  have the  meaning  set  forth  in  Section
5.1.11(e) hereof.

     "FISCAL  YEAR"  shall mean each  twelve  (12) month  period  commencing  on
January 1 and ending on December 31 during each year of the term of the Loan.

     "GAAP" shall mean generally  accepted  accounting  principles in the United
States of America as of the date of the applicable financial statement.

     "GOVERNMENTAL  AUTHORITY" shall mean any court, board, agency,  commission,
office or other  authority of any nature  whatsoever for any  governmental  unit
(federal, state, county, district,  municipal, city or otherwise) whether now or
hereafter in existence.

     "GROSS  INCOME  FROM  OPERATIONS"  shall  mean  all  income,   computed  in
accordance  with GAAP,  derived from the ownership and operation of the Property
from whatever  source,  including,  but not limited to, Rents,  utility charges,
escalations,  forfeited security deposits,  interest on credit accounts, service
fees or charges,  license fees,  parking fees, rent concessions or credits,  and
other required  pass-throughs  but excluding  sales,  use and occupancy or other
taxes on receipts  required to be accounted for by Borrower to any  Governmental
Authority,  refunds or other  reimbursements  required to be made to tenants and
uncollectible accounts,  sales of furniture,  fixtures and equipment,  Insurance
Proceeds (other than business  interruption or other loss of income  insurance),
Awards,  unforfeited  security deposits,  utility and other similar deposits and
any disbursements to Borrower from the Reserve Funds.  Gross income shall not be
diminished as a result of the Mortgage or the creation of any intervening estate
or interest in the Property or any part thereof.

     "GROUND LEASE" shall mean that certain Lease executed by American  National
Bank and Trust Company, as Trustee Under Trust Agreement Dated November 26, 1985
and known as Trust Number 66121, as Lessor, and Borrower, as Lessee, dated March
7, 1991, which Lease was recorded on March 18, 1991 as Document 91119739.

     "IMPROVEMENTS"  shall have the meaning set forth in the granting  clause of
the Mortgage.

     "INDEBTEDNESS"  of a Person,  at a particular  date, means the sum (without
duplication)  at such date of (a)  indebtedness or liability for borrowed money;
(b)  obligations  evidenced  by  bonds,  debentures,  notes,  or  other  similar
instruments;  (c)  obligations  for the deferred  purchase  price of property or
services (including trade obligations); (d) obligations under letters of credit;
(e) obligations under acceptance  facilities;  (f) all guaranties,  endorsements
(other than for  collection  or deposit in the ordinary  course of business) and
other  contingent  obligations  to purchase,  to provide  funds for payment,  to
supply  funds,  to invest in any  Person or  entity,  or  otherwise  to assure a
creditor against loss; and (g) obligations secured by any Liens,  whether or not
the obligations have been assumed.

     "INDEPENDENT  DIRECTOR"  shall  have  the  meaning  set  forth  in  Section
4.1.30(p).

     "INSOLVENCY  OPINION" shall mean that certain opinion letter dated the date
hereof delivered by Winston & Strawn in connection with the Loan.

     "INSURANCE  PREMIUMS"  shall have the meaning  set forth in Section  6.1(b)
hereof.

     "INSURANCE  PROCEEDS"  shall have the meaning  set forth in Section  6.4(b)
hereof.

     "INTEREST  PERIOD" shall mean (a) the period  commencing on the date hereof
and ending on October 31, 1998 for the first period hereunder,  and (b) for each
period thereafter, the period commencing on the first (1st) day of each calendar
month  during the term of the Loan and  ending on the last day of such  calendar
month.

     "LEASE" shall mean any lease,  sublease or subsublease,  letting,  license,
concession  or other  agreement  (whether  written  or oral and  whether  now or
hereafter  in  effect)  pursuant  to which any  person is  granted a  possessory
interest  in, or right to use or occupy  all or any  portion of any space in the
Property, and every modification,  amendment or other agreement relating to such
lease, sublease, subsublease, or other agreement entered into in connection with



                                      -3-
<PAGE>
such lease, sublease, subsublease, or other agreement and every guarantee of the
performance  and  observance of the  covenants,  conditions and agreements to be
performed and observed by the other party thereto.

     "LEGAL REQUIREMENTS" shall mean all federal,  state, county,  municipal and
other  governmental  statutes,  laws, rules,  orders,  regulations,  ordinances,
judgments,  decrees and  injunctions of Governmental  Authorities  affecting the
Property or any part thereof, or the construction,  use, alteration or operation
thereof, or any part thereof, whether now or hereafter enacted and in force, and
all permits,  licenses and authorizations and regulations  relating thereto, and
all  covenants,  agreements,  restrictions  and  encumbrances  contained  in any
instruments,  either  of  record  or  known  to  Borrower,  at any time in force
affecting the Property or any part thereof,  including,  without limitation, any
which  may  (a)  require  repairs,  modifications  or  alterations  in or to the
Property  or any part  thereof,  or (b) in any way limit  the use and  enjoyment
thereof.

     "LENDER" shall mean Lehman Brothers Holdings Inc., doing business as Lehman
Capital,  a  division  of  Lehman  Brothers  Holdings  Inc.,  together  with its
successors and assigns.

     "LENDER'S  NOTICE"  shall have the  meaning  set forth in Section  2.2.3(b)
hereof.

     "LIABILITIES" shall have the meaning set forth in Section 9.2(a) hereof.

     "LIBOR"  shall  mean,  with  respect  to each  Interest  Period,  the  rate
(expressed as a percentage per annum and rounded  upward,  if necessary,  to the
next nearest 1/1000 of 1%) for deposits in U.S. dollars, for a one-month period,
that appears on Telerate Page 3750 (or the successor  thereto) as of 11:00 a.m.,
London time, on the related  Determination Date. If such rate does not appear on
Telerate Page 3750 as of 11:00 a.m.,  London time, on such  Determination  Date,
LIBOR  shall  be the  arithmetic  mean  of the  offered  rates  (expressed  as a
percentage per annum) for deposits in U.S.  dollars for a one-month  period that
appear on the Reuters  Screen Libor Page as of 11:00 a.m.,  London time, on such
Determination  Date, if at least two such offered rates so appear. If fewer than
two such offered rates appear on the Reuters Screen Libor Page as of 11:00 a.m.,
London time,  on such  Determination  Date,  Lender shall  request the principal
London Office of any four major reference banks in the London  interbank  market
selected by Lender to provide  such bank's  offered  quotation  (expressed  as a
percentage per annum) to prime banks in the London interbank market for deposits
in U.S.  dollars for a one-month  period as of 11:00 a.m.,  London time, on such
Determination Date for the amounts of not less than U.S. $1,000,000. If at least
two such offered quotations are so provided,  LIBOR shall be the arithmetic mean
of such  quotations.  If fewer than two such quotations are so provided,  Lender
shall  request  any three  major  banks in New York City  selected  by Lender to
provide such bank's rate (expressed as a percentage per annum) for loans in U.S.
dollars to leading  European  banks for a one-month  period as of  approximately
11:00 a.m., New York City time on the applicable  Determination Date for amounts
of not less than U.S.  $1,000,000.  If at least two such rates are so  provided,
LIBOR shall be the arithmetic  mean of such rates.  LIBOR shall be determined by
Lender or its agent.

     "LICENSES" shall have the meaning set forth in Section 4.1.22 hereof.

     "LIEN" shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment,  security interest, or any other encumbrance, charge or transfer of,
on or affecting  Borrower,  the  Property,  any portion  thereof or any interest
therein,  including,  without  limitation,  any conditional  sale or other title
retention agreement,  any financing lease having substantially the same economic
effect as any of the  foregoing,  the  filing of any  financing  statement,  and
mechanic's, materialmen's and other similar liens and encumbrances.

     "LOAN"  shall  mean the loan made by Lender to  Borrower  pursuant  to this
Agreement.

     "LOAN DOCUMENTS" shall mean,  collectively,  this Agreement,  the Note, the
Mortgage,   the  Assignment  of  Leases,   the  Environmental   Indemnity,   the
Subordination  of Management  Agreement,  the Cash Management  Agreement and all
other documents executed and/or delivered in connection with the Loan.

     "LOCKBOX  ACCOUNT"  shall mean the account,  if any,  specified in the Cash
Management Agreement for deposit of Rents and other receipts from the Property.

     "LONDON  BUSINESS DAY" shall mean any day other than a Saturday,  Sunday or
any other day on which  commercial  banks in  London,  England  are not open for
business.

                                      -4-
<PAGE>
     "MANAGEMENT  AGREEMENT" shall mean the management agreement entered into by
and  between  Borrower  and the  Manager,  pursuant  to which the  Manager is to
provide management and other services with respect to the Property.

     "MANAGER" shall mean Prime Group Realty,  L.P., or any permitted  successor
managers of the Property.

     "MATURITY DATE" shall mean October 1, 1999, or such other date on which the
final  payment of  principal  of the Note  becomes due and payable as therein or
herein  provided,  whether at such  stated  maturity  date,  by  declaration  of
acceleration, or otherwise.

     "MAXIMUM LEGAL RATE" shall mean the maximum  nonusurious  interest rate, if
any,  that at any  time or from  time to  time  may be  contracted  for,  taken,
reserved,  charged or received on the indebtedness  evidenced by the Note and as
provided for herein or the other Loan Documents, under the laws of such state or
states whose laws are held by any court of competent  jurisdiction to govern the
interest rate provisions of the Loan.

     "MORTGAGE"  shall mean that certain  first  priority  Mortgage and Security
Agreement, dated the date hereof, executed and delivered by Borrower as security
for the Loan and encumbering the Property, as the same may be amended, restated,
replaced, supplemented or otherwise modified from time to time.

     "NET  CASH  FLOW"  for  any  period  shall  mean  the  amount  obtained  by
subtracting  Operating  Expenses and Capital  Expenditures  for such period from
Gross Income from Operations for such period.

     "NET CASH FLOW AFTER  DEBT  SERVICE"  for any period  shall mean the amount
obtained by subtracting Debt Service for such period from Net Cash Flow for such
period.

     "NET OPERATING  INCOME" means the amount obtained by subtracting  Operating
Expenses from Gross Income from Operations.

     "NET PROCEEDS" shall have the meaning set forth in Section 6.4(b) hereof.

     "NOTE" shall mean that certain note of even date  herewith in the principal
amount of One Hundred Seventy Million and No/100 Dollars ($170,000,000), made by
Borrower  in favor of Lender,  as the same may be amended,  restated,  replaced,
supplemented or otherwise modified from time to time.

     "OFFERING  DOCUMENT" shall have the meaning set forth in Section 9.1(e)(iv)
hereof.

     "OFFERING  DOCUMENT  DATE"  shall  have the  meaning  set forth in  Section
9.1(e)(iv) hereof.

     "OFFICERS'  CERTIFICATE"  shall mean a  certificate  delivered to Lender by
Borrower  which is signed by an  authorized  executive  officer  of the  general
partner of Borrower.

     "OPERATING EXPENSES" shall mean the total of all expenditures,  computed in
accordance  with GAAP, of whatever kind relating to the  operation,  maintenance
and  management of the Property that are incurred on a regular  monthly or other
periodic basis,  including without limitation,  utilities,  ordinary repairs and
maintenance,   insurance,   license  fees,   property  taxes  and   assessments,
advertising  expenses,  management  fees,  payroll and related  taxes,  computer
processing  charges,   operational  equipment  lease  payments  or  other  lease
payments,  and other similar costs,  but excluding  depreciation,  Debt Service,
Capital Expenditures and contributions to the Reserve Funds.

     "OTHER  CHARGES"  shall  mean  all  ground  rents,   maintenance   charges,
impositions  other  than  Taxes,  and  any  other  charges,  including,  without
limitation,  vault  charges and license  fees for the use of vaults,  chutes and
similar areas  adjoining the  Property,  now or hereafter  levied or assessed or
imposed against the Property or any part thereof.

     "PAYMENT DATE" shall mean the first (1st) day of each calendar month during
the term of the Loan or,  if such day is not a  Business  Day,  the  immediately
succeeding Business Day.

     "PERMITTED  ENCUMBRANCES"  shall  mean  collectively,  (a)  the  Liens  and
security  interests created by the Loan Documents,  (b) all Liens,  encumbrances
and other matters  disclosed in the Title Insurance  Policy,  (c) Liens, if any,
for Taxes imposed by any Governmental  Authority not yet due or delinquent,  and
(d) such other title and survey exceptions as Lender has approved or may approve

                                      -5-
<PAGE>
in writing in Lender's sole  discretion,  which  Permitted  Encumbrances  in the
aggregate do not materially adversely affect the value or use of the Property or
Borrower's ability to repay the Loan.

     "PERSONAL PROPERTY" shall have the meaning set forth in the granting clause
of the Mortgage.

     "PHYSICAL  CONDITIONS  REPORT"  shall mean a report  prepared  by a company
satisfactory  to  Lender  regarding  the  physical  condition  of the  Property,
satisfactory in form and substance to Lender in its reasonable discretion.

     "POLICIES" shall have the meaning specified in Section 6.1(b) hereof.

     "PRIME ENTITIES" shall have the meaning set forth in Section 4.1.30(p)(iii)
hereof.

     "PROPERTY" shall mean the parcel of real property, the Improvements thereon
and all personal  property  owned by Borrower and  encumbered  by the  Mortgage,
together with all rights pertaining to such property and  Improvements,  as more
particularly  described in the Granting  Clauses of the Mortgage and referred to
therein as the "Property".

     "PROVIDED  INFORMATION"  shall have the meaning set forth in Section 9.1(a)
hereof.

     "RATING  AGENCIES"  shall mean each of Standard & Poor's  Ratings  Group, a
division of McGraw-Hill,  Inc., Moody's Investors  Service,  Inc., Duff & Phelps
Credit  Rating  Co. and Fitch  IBCA,  Inc.,  or any other  nationally-recognized
statistical rating agency which has been approved by Lender.

     "RENTS" shall mean all rents, rent  equivalents,  moneys payable as damages
or  in  lieu  of  rent  or  rent  equivalents,   royalties  (including,  without
limitation,  all oil and gas or other mineral  royalties  and bonuses),  income,
receivables,   receipts,  revenues,  deposits  (including,  without  limitation,
security, utility and other deposits),  accounts, cash, issues, profits, charges
for  services  rendered,  and other  consideration  of  whatever  form or nature
received  by or paid to or for the  account  of or benefit  of  Borrower  or its
agents or employees from any and all sources arising from or attributable to the
Property,  and proceeds,  if any, from  business  interruption  or other loss of
income insurance.

     "RESERVE  FUNDS"  shall mean the Tax Escrow Fund and any other  escrow fund
established by the Loan Documents.

     "RESTORATION" shall have the meaning set forth in Section 6.2 hereof.

     "SECURITIES" shall have the meaning set forth in Section 9.1 hereof.

     "SECURITIZATION" shall have the meaning set forth in Section 9.1 hereof.

     "SERVICER" shall have the meaning set forth in Section 9.6 hereof.

     "SERVICING  AGREEMENT"  shall have the  meaning  set forth in  Section  9.6
hereof.

     "SEVERED LOAN DOCUMENTS" shall have the meaning set forth in Section 8.2(c)
hereof.

     "SPC PARTY" shall have the meaning set forth in Section 4.1.30(o) hereof.

     "STATE" shall mean the State or  Commonwealth  in which the Property or any
part thereof is located.

     "SUBSTITUTE  RATE"  shall have the  meaning  set forth in Section  2.2.3(b)
hereof.

     "SURVEY"  shall  mean a  survey  of the  Property  prepared  by a  surveyor
licensed in the State and  satisfactory  to Lender and the company or  companies
issuing the Title  Insurance  Policy,  and  containing a  certification  of such
surveyor satisfactory to Lender.

     "TAX ESCROW FUND" shall have the meaning set forth in Section 7.2 hereof.

     "TAXES"   shall  mean  all  real  estate  and  personal   property   taxes,
assessments,  water rates or sewer rents, now or hereafter levied or assessed or
imposed against the Property or part thereof.


                                       -6-
<PAGE>
     "TERMINATION  ACCOUNT"  shall have the  meaning  set forth in  Section  7.4
hereof.

     "TITLE  INSURANCE  POLICY"  shall mean an ALTA  mortgagee  title  insurance
policy in the form  (acceptable  to Lender)  (or, if the  Property is in a State
which does not permit the  issuance of such ALTA  policy,  such form as shall be
permitted  in such State and  acceptable  to Lender)  issued with respect to the
Property and insuring the lien of the Mortgage.

     "UCC" or "Uniform  Commercial Code" shall mean the Uniform  Commercial Code
as in effect in the State.

     "U.S. OBLIGATIONS" shall mean direct non-callable obligations of the United
States of America.

     Section 1.2 PRINCIPLES OF CONSTRUCTION.

     All  references  to sections and schedules are to sections and schedules in
or  to  this  Agreement  unless  otherwise  specified.  All  uses  of  the  word
"including" shall mean "including,  without limitation" unless the context shall
indicate otherwise. Unless otherwise specified, the words "hereof," "herein" and
"hereunder"  and words of similar import when used in this Agreement shall refer
to  this  Agreement  as a  whole  and not to any  particular  provision  of this
Agreement.  Unless otherwise specified, all meanings attributed to defined terms
herein shall be equally  applicable to both the singular and plural forms of the
terms so defined.

     II. GENERAL TERMS

     Section 2.1 LOAN COMMITMENT; DISBURSEMENT TO BORROWER.

     2.1.1 THE LOAN.  Subject  to and upon the  terms and  conditions  set forth
herein,  Lender hereby  agrees to make and Borrower  hereby agrees to accept the
Loan on the Closing Date.

     2.1.2  DISBURSEMENT TO BORROWER.  Borrower may request and receive only one
borrowing  hereunder  in respect of the Loan and any amount  borrowed and repaid
hereunder in respect of the Loan may not be reborrowed.

     2.1.3 THE NOTE, MORTGAGE AND LOAN DOCUMENTS. The Loan shall be evidenced by
the Note and secured by the  Mortgage,  the  Assignment  of Leases and the other
Loan Documents.

     2.1.4 USE OF PROCEEDS.  Borrower  shall use the proceeds of the Loan to (a)
repay and discharge  any existing  loans  relating to the Property,  (b) pay all
past-due  Basic  Carrying  Costs,  if any, in respect of the Property,  (c) make
deposits  into the  Reserve  Funds on the Closing  Date in the amounts  provided
herein,  (d) pay costs and expenses  incurred in connection  with the Closing of
the Loan, as approved by Lender,  (e) fund any working  capital  requirements of
the Property, and (f) distribute the balance, if any, to Borrower,  which may be
distributed to its partners.

     Section 2.2 INTEREST; LOAN PAYMENTS; LATE PAYMENT CHARGE.

     2.2.1 INTEREST GENERALLY.  Interest on the outstanding principal balance of
the Loan shall accrue from the Closing Date to but  excluding  the Maturity Date
at the Applicable Interest Rate.

     2.2.2 INTEREST  CALCULATION.  Interest on the outstanding principal balance
of the Loan shall be  calculated  by  multiplying  (a) the actual number of days
elapsed  in the  period  for  which  the  calculation  is being  made by (b) the
Applicable  Interest  Rate  divided  by  three  hundred  sixty  (360) by (c) the
outstanding principal balance.

     2.2.3 DETERMINATION OF INTEREST RATE.

     (a) Subject to the terms and  conditions  of this  Section  2.2.3  Borrower
shall pay interest on the outstanding principal amount of the Loan at LIBOR plus
one hundred  (100) basis points for each Interest  Period  following the initial
Interest Period.  Each  determination by Lender of the Applicable  Interest Rate
shall be conclusive and binding for all purposes, absent manifest error.

     (b)  If  any   requirement   of  law  or  any  change  therein  or  in  the
interpretation or application  thereof which is imposed or occurs after the date
hereof  shall make it unlawful  for Lender to make or maintain the LIBOR rate as



                                      -7-
<PAGE>
contemplated hereunder and such unlawfulness cannot be avoided by Lender through
reasonable  efforts,  Lender shall, by notice to Borrower  ("Lender's  Notice"),
offer to establish an interest rate at Lender's then  customary  spread,  taking
into account the size of the Loan,  the Net  Operating  Income from the Property
and the creditworthiness of Borrower,  above a published index used for variable
rate loans as  reasonably  determined  by Lender  (the  "Substitute  Rate").  By
written notice to Lender within thirty (30) days of receipt of Lender's  Notice,
Borrower may accept such offer in which case the Applicable  Interest Rate shall
be a rate equal to the  Substitute  Rate in effect  from time to time until such
illegality  or  condition   shall  cease  to  exist,   in  Lender's  good  faith
determination.  If Borrower  does not timely accept such offer,  interest  shall
accrue at the  Substitute  Rate and Borrower  shall,  within ninety (90) days of
Lender's  Notice,  pay to  Lender  on a  Payment  Date  the  entire  outstanding
principal of the Loan,  the accrued and unpaid  interest  and all other  amounts
then due and payable under the Loan.

     (c) In the event that Lender  shall have  determined  (which  determination
shall be conclusive and binding upon Borrower absent manifest error) that (a) by
reason of circumstances  affecting the interbank eurodollar market, adequate and
reasonable means do not exist for ascertaining the LIBOR rate, and (b) the LIBOR
rate  determined  pursuant to the terms and provisions of this Agreement for the
Interest  Period  does not  accurately  reflect  the cost to Lender of making or
maintaining the amount of the Loan, then Lender shall by a Lender's Notice offer
a  Substitute  Rate.  By written  notice to Lender  within  thirty  (30) days of
receipt of  Lender's  Notice,  Borrower  may accept such offer in which case the
Libor Rate shall be a rate equal to the  Substitute  Rate in effect from time to
time until such  circumstances  shall  cease to exist,  in  Lender's  good faith
determination.  If Borrower  does not timely accept such offer,  interest  shall
accrue at the  Substitute  Rate and Borrower  shall,  within ninety (90) days of
Lender's  Notice,  pay to  Lender  on a  Payment  Date  the  entire  outstanding
principal of the Loan,  the accrued and unpaid  interest  and all other  amounts
then due and payable under the Loan.

     (d) Borrower  agrees to indemnify  Lender and to hold Lender  harmless from
any loss or expense which Lender  sustains or incurs as a consequence of (i) any
default by  Borrower  in payment of the  principal  of or  interest at the LIBOR
rate,  including,  without  limitation,  any such loss or expense  arising  from
interest or fees  payable by Lender to lenders of funds  obtained by it in order
to maintain the Loan at the LIBOR rate, (ii) any prepayment  (whether  voluntary
or mandatory) of the Loan on a day that (A) is not the Payment Date  immediately
following the last day of an Interest  Period with respect thereto or (B) is the
Payment  Date  immediately  following  the last day of an  Interest  Period with
respect  thereto  if  Borrower  did not give the  prior  written  notice of such
prepayment required pursuant to the terms of this Agreement,  including, without
limitation, such loss or expense arising from interest or fees payable by Lender
to lenders of funds obtained by it in order to maintain the LIBOR rate hereunder
and (iii) the  conversion  (for any  reason  whatsoever,  whether  voluntary  or
involuntary) of the Applicable Interest Rate to the Substitute Rate,  including,
without limitation,  such loss or expenses arising from interest or fees payable
by Lender to lenders of funds  obtained by it in order to  maintain  the Loan at
the LIBOR  rate (the  amounts  referred  to in clauses  (i),  (ii) and (iii) are
herein  referred to  collectively  as "Breakage  Costs").  This provision  shall
survive  payment  of the  Note  in  full  and  the  satisfaction  of  all  other
obligations of Borrower under this Agreement and the other Loan Documents.

     2.2.4  PAYMENTS OF INTEREST.  Borrower shall pay to Lender (a) on the first
Payment Date following the Closing Date, an amount equal to interest only on the
outstanding  principal  balance of the Loan from the Closing  Date up to but not
including  such Payment Date and (b) on each Payment Date  thereafter  up to but
not  including  the  Maturity  Date,  an amount  equal to  interest  only on the
outstanding  principal balance of the Loan from the prior Payment Date up to but
not including such Payment Date, in each case  calculated in accordance with the
provisions of this Section 2.2.

     2.2.5  PAYMENT  ON  MATURITY  DATE.  Borrower  shall  pay to  Lender on the
Maturity Date the outstanding principal balance, all accrued and unpaid interest
and all other  amounts due  hereunder  and under the Note,  the Mortgage and the
other Loan Documents.

     2.2.6 PAYMENTS  AFTER EVENT OF DEFAULT.  Upon the occurrence and during the
continuance of an Event of Default,  (a) interest on the  outstanding  principal
balance of the Loan and, to the extent  permitted by law,  overdue  interest and
other  amounts due in respect of the Loan,  shall  accrue at the  Default  Rate,
calculated  from the date such  payment was due  without  regard to any grace or




                                      -8-
<PAGE>
cure  periods  contained  herein and (b) Lender shall be entitled to receive and
Borrower  shall pay to Lender on each  Payment  Date an amount  equal to the Net
Cash Flow After Debt Service for the prior  month,  such amount to be applied by
Lender to the payment of the Debt in such order as Lender shall determine in its
sole discretion, including, without limitation, alternating applications thereof
between  interest and principal.  Interest at the Default Rate and Net Cash Flow
After Debt Service  shall both be computed  from the  occurrence of the Event of
Default  until the actual  receipt and  collection  of the Debt (or that portion
thereof that is then due). To the extent  permitted by applicable law,  interest
at the Default Rate shall be added to the Debt,  shall itself accrue interest at
the same rate as the Loan and shall be secured by the Mortgage.  This  paragraph
shall not be  construed  as an  agreement or privilege to extend the date of the
payment of the Debt,  nor as a waiver of any other  right or remedy  accruing to
Lender by reason of the  occurrence of any Event of Default;  the  acceptance of
any payment of Net Cash Flow After Debt  Service  shall not be deemed to cure or
constitute a waiver of any Event of Default; and Lender retains its rights under
this Note to accelerate  and to continue to demand  payment of the Debt upon the
happening  of any Event of  Default,  despite any payment of Net Cash Flow After
Debt Service.

     2.2.7 LATE PAYMENT CHARGE. If any principal, interest or any other sums due
under the Loan Documents is not paid by Borrower on the date on which it is due,
Borrower  shall pay to Lender upon demand an amount  equal to the lesser of five
percent (5%) of such unpaid sum or the maximum  amount  permitted by  applicable
law in order to defray the expense incurred by Lender in handling and processing
such delinquent payment and to compensate Lender for the loss of the use of such
delinquent  payment.  Any such amount  shall be secured by the  Mortgage and the
other Loan Documents to the extent permitted by applicable law.

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

     Section 2.3 PREPAYMENTS.

     2.3.1 VOLUNTARY PREPAYMENTS.  Borrower may, at its option and upon ten (10)
Business Days prior written  notice from Borrower to Lender,  prepay in whole or
in part the Debt without  payment of any  prepayment  premium or  consideration.
Such payment,  if not paid on a Payment Date,  shall include interest that would
have accrued on such prepayment through the next Payment Date and any applicable
Breakage Costs.

     2.3.2  MANDATORY  PREPAYMENTS.  On each  date on  which  Borrower  actually
receives any Net Proceeds,  if Lender is not obligated to make such Net Proceeds
available to Borrower for the restoration of the Property, Borrower shall prepay
the outstanding  principal balance of the Note in an amount equal to one hundred
percent  (100%) of such Net  Proceeds  on the next  Payment  Date.  Any  partial
prepayment under this Section shall be applied to the last payments of principal
due under the Loan.

     Section 2.4 INTENTIONALLY OMITTEd.

     Section 2.5 RELEASE OF  PROPERTY.  Except as set forth in this Section 2.5,
no repayment or prepayment or defeasance of all or any portion of the Note shall
cause,  give rise to a right to require,  or otherwise result in, the release of
any Lien of the Mortgage on the Property. Lender shall, upon the written request
and at the  expense  of  Borrower,  upon  payment in full of all  principal  and
interest  on the Loan and all  other  amounts  due and  payable  under  the Loan
Documents in accordance  with the terms and provisions of the Note and this Loan
Agreement,  release the Lien of the  Mortgage on the  Property.  Borrower  shall
deliver to Lender a statutory  release form  appropriate in the  jurisdiction in
which the Property is located.

                                      -9-
<PAGE>
     Section 2.6 MANNER OF MAKING PAYMENTS; CASH MANAGEMENT.

     2.6.1  DEPOSITS INTO LOCKBOX  ACCOUNT.  Borrower shall cause all Rents from
the Property to be deposited  into the Lockbox  Account in  accordance  with the
Cash Management Agreement. Without limitation of the foregoing,  Borrower shall,
and shall cause Manager to, (a) deliver irrevocable written  instructions to all
Tenants  under Leases to deliver all Rents  payable  thereunder  directly to the
Lockbox  Account,  and (b) deposit  all amounts  received by Borrower or Manager
constituting  Rents or other  revenue  of any kind  from the  Property  into the
Lockbox  Account within one (1) Business Day of receipt  thereof.  Disbursements
from  the  Lockbox  Account  will be made  in  accordance  with  the  terms  and
conditions of this  Agreement and the Cash  Management  Agreement.  Lender shall
have sole dominion and control over the Lockbox  Account and, after deposits for
all reserves as set forth in the Cash Management Agreement,  Borrower shall have
the right to make  withdrawals  therefrom  as  provided  in the Cash  Management
Agreement.

     2.6.2 MAKING OF PAYMENTS.  Each payment by Borrower  hereunder or under the
Note  shall  be made in  funds  settled  through  the New  York  Clearing  House
Interbank Payments System or other funds immediately available to Lender by 2:00
p.m.,  New York City time, on the date such payment is due, to Lender by deposit
to such account as Lender may designate by written notice to Borrower.  Whenever
any payment hereunder or under the Note shall be stated to be due on a day which
is not a Business  Day,  such  payment  shall be made on the first  Business Day
succeeding such scheduled due date.

     2.6.3 PAYMENTS RECEIVED IN THE LOCKBOX ACCOUNT. Notwithstanding anything to
the  contrary  contained  in this  Agreement  or the other Loan  Documents,  and
provided  no  Event  of  Default  has  occurred  and is  continuing,  Borrower's
obligations  with respect to the monthly  payment of principal  and interest and
amounts  due for the  Reserve  Funds  shall be deemed  satisfied  to the  extent
sufficient  amounts  are  deposited  in the  Lockbox  Account  to  satisfy  such
obligations  on the dates each such payment is required,  regardless  of whether
any of such amounts are so applied by Lender.

     2.6.4 NO DEDUCTIONS,  ETC. All payments made by Borrower hereunder or under
the Note or the other Loan Documents shall be made  irrespective of, and without
any deduction for, any setoff, defense or counterclaims.

     III. CONDITIONS PRECEDENT

     Section 3.1 CONDITIONS PRECEDENT TO CLOSING.

     The  obligation  of Lender to make the Loan  hereunder  is  subject  to the
fulfillment  by  Borrower  or  waiver  by  Lender  of the  following  conditions
precedent no later than the Closing Date:

     3.1.1  REPRESENTATIONS  AND  WARRANTIES;  COMPLIANCE WITH  CONDITIONS.  The
representations  and warranties of Borrower  contained in this Agreement and the
other Loan Documents  shall be true and correct in all material  respects on and
as of the  Closing  Date with the same effect as if made on and as of such date,
and no Event of Default  shall have  occurred  and be  continuing;  and Borrower
shall be in  compliance in all material  respects with all terms and  conditions
set forth in this  Agreement  and in each other Loan  Document on its part to be
observed or performed.

     3.1.2 LOAN  AGREEMENT  AND NOTE.  Lender shall have received a copy of this
Agreement and the Note,  in each case,  duly executed and delivered on behalf of
Borrower.

     3.1.3 DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE; REPORTS; LEASES.

     (a)  Mortgage,  Assignment  of  Leases.  Lender  shall have  received  from
Borrower fully executed and  acknowledged  counterparts  of the Mortgage and the
Assignment  of  Leases  and  evidence  that  counterparts  of the  Mortgage  and
Assignment of Leases have been delivered to the title company for recording,  in
the  reasonable  judgment  of  Lender,  so as to  effectively  create  upon such
recording  valid and  enforceable  Liens  upon the  Property,  of the  requisite
priority,  in favor of Lender  (or such  other  trustee  as may be  required  or
desired under local law),  subject only to the Permitted  Encumbrances  and such
other Liens as are permitted  pursuant to the Loan Documents.  Lender shall have
also received from Borrower fully  executed  counterparts  of the  Environmental
Indemnity, Cash Management Agreement and Assignment of Management Agreement.





                                      -10-
<PAGE>
     (b) Title  Insurance.  Lender shall have received a Title Insurance  Policy
issued by a title company acceptable to Lender and dated as of the Closing Date,
with letter  confirmation of reinsurance  reasonably  acceptable to Lender. Such
Title  Insurance  Policy shall (i) provide  coverage in amounts  satisfactory to
Lender,  (ii)  insure  Lender  that the  Mortgage  creates  a valid  lien on the
Property  of the  requisite  priority,  free and  clear of all  exceptions  from
coverage  other  than  Permitted   Encumbrances  and  standard   exceptions  and
exclusions from coverage (as modified by the terms of any  endorsements),  (iii)
contain such  endorsements  and  affirmative  coverages as Lender may reasonably
request,  and (iv) name Lender as the insured.  The Title Insurance Policy shall
be  assignable.  Lender also shall have  received  evidence that all premiums in
respect of such Title Insurance Policy have been paid.

     (c)  Survey.  Lender  shall have  received a current  title  survey for the
Property,  certified to the title  company and Lender and their  successors  and
assigns,  in  form  and  content  satisfactory  to  Lender  and  prepared  by  a
professional  and properly  licensed  land  surveyor  satisfactory  to Lender in
accordance with the 1992 Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys. The survey shall meet the classification of an "Urban Survey" and
the   following   additional   items   from   the  list  of   "Optional   Survey
Responsibilities  and Specifications"  (Table A) should be added to each survey:
2, 3, 4, 6, 8, 9, 10,  11 and 13.  Such  survey  shall  reflect  the same  legal
description  contained in the Title Insurance  Policy referred to in clause (ii)
above and shall include,  among other things, a metes and bounds  description of
the real property  comprising  part of the Property  reasonably  satisfactory to
Lender.  The  surveyor's  seal shall be  affixed to the survey and the  surveyor
shall provide a certification  for each survey in form and substance  acceptable
to Lender.

     (d) Insurance.  Lender shall have received valid  certificates of insurance
for the policies of insurance required hereunder,  satisfactory to Lender in its
reasonable  discretion,  and evidence of the payment of all premiums  payable in
accordance with the premium payment schedule.

     (e)  Environmental  Reports.  Lender shall have  received an  environmental
report in respect of the Property satisfactory to Lender.

     (f) Zoning.  Lender shall have received,  at Lender's  option,  an ALTA 3.1
zoning endorsement for the Title Insurance Policy.

     (g) Intentionally Omitted.

     3.1.4  RELATED  DOCUMENTS.   Each  additional   document  not  specifically
referenced herein, but relating to the transactions  contemplated  herein, shall
have been duly  authorized,  executed and  delivered by all parties  thereto and
Lender shall have received and approved certified copies thereof.

     3.1.5 DELIVERY OF ORGANIZATIONAL  DOCUMENTS. On or before the Closing Date,
Borrower  shall deliver or cause to be delivered to Lender  copies  certified by
Borrower of all  organizational  documentation  related to  Borrower  and/or the
formation,  structure,  existence,  good  standing  and/or  qualification  to do
business,  as Lender may  request  in its sole  discretion,  including,  without
limitation,  good standing  certificates,  qualifications  to do business in the
appropriate jurisdictions, resolutions authorizing the entering into of the Loan
and incumbency certificates as may be requested by Lender.

     3.1.6 OPINIONS OF BORROWER'S  COUNSEL.  Lender shall have received opinions
of Borrower's counsel (a) with respect to  non-consolidation,  true sale or true
contribution,  and  fraudulent  transfer  issues,  and (b) with  respect  to due
execution,  authority,  enforceability  of the Loan  Documents  and  such  other
matters  as  Lender  may  require,   all  such  opinions  containing   customary
assumptions  and  qualifications  and  otherwise  in form,  scope and  substance
satisfactory to Lender and Lender's counsel in their reasonable discretion.

     3.1.7  BUDGETS.  Borrower  shall  have  delivered,  and  Lender  shall have
approved, the Annual Budget for the current Fiscal Year.

     3.1.8 BASIC  CARRYING  COSTS.  Borrower  shall have paid all Basic Carrying
Costs  relating  to  the  Property  which  are  in  arrears,  including  without
limitation,  (a) accrued but unpaid insurance premiums relating to the Property,
(b) currently due Taxes (including any in arrears) relating to the Property, and
(c) currently due Other Charges relating to the Property, which amounts shall be
funded with proceeds of the Loan.

     3.1.9 INTENTIONALLY OMITTED.



                                      -11-
<PAGE>
     3.1.10 PAYMENTS.  All payments,  deposits or escrows required to be made or
established  by  Borrower  under  this  Agreement,  the Note and the other  Loan
Documents  on or before the Closing  Date shall have been paid or paid from Loan
proceeds.

     3.1.11 INTENTIONALLY OMITTED.

     3.1.12  TENANT  ESTOPPELS.  Lender shall have  received an executed  tenant
estoppel  letter,  which shall be in form and substance  satisfactory to Lender,
from,  (a) each tenant paying base rent in an amount equal to or exceeding  five
percent  (5%) of the Gross  Income from  Operations  from the  Property  and (b)
disregarding  the area  leased by those  described  in clause (a) lessees of not
less than seventy-five percent (75%) of the remaining gross leasable area of the
Property.

     3.1.13 TRANSACTION COSTS. Borrower shall have paid or reimbursed Lender for
all title insurance premiums,  recording and filing fees, costs of environmental
reports, Physical Conditions Reports, appraisals and other reports, the fees and
costs of  Lender's  counsel and all other  third  party  out-of-pocket  expenses
incurred in connection with the origination of the Loan.

     3.1.14 MATERIAL  ADVERSE CHANGE.  There shall have been no material adverse
change in the  financial  condition  or  business  condition  of Borrower or the
Property  since the date of the most recent  financial  statements  delivered to
Lender.  The income and expenses of the Property,  the occupancy leases thereof,
and all other  features of the  transaction  shall be as  represented  to Lender
without  material  adverse  change.  Neither  Borrower  nor  any of its  general
partners shall be the subject of any bankruptcy,  reorganization,  or insolvency
proceeding.

     3.1.15  LEASES AND RENT ROLL.  Lender  shall  have  received  copies of all
tenant leases,  certified copies of any tenant leases as requested by Lender and
certified copies of all ground leases affecting the Property.  Lender shall have
received a current certified rent roll of the Property,  reasonably satisfactory
in form and substance to Lender.

     3.1.16 SUBORDINATION AND ATTORNMENT. Lender shall have received appropriate
instruments  acceptable to Lender  subordinating  the following three (3) Leases
affecting the Property:  Jones, Day, Reavis and Pogue; Everen Securities,  Inc.;
and R.R. Donnelley & Sons Company.

     3.1.17 TAX LOT.  Lender  shall have  received  evidence  that the  Property
constitutes  one  (1) or  more  separate  tax  lots,  which  evidence  shall  be
reasonably satisfactory in form and substance to Lender.

     3.1.18 PHYSICAL CONDITIONS  REPORTS.  Lender shall have received a Physical
Conditions Report with respect to the Property, which report shall be reasonably
satisfactory in form and substance to Lender.

     3.1.19 MANAGEMENT AGREEMENT. Lender shall have received a certified copy of
the   Management   Agreement  with  respect  to  the  Property  which  shall  be
satisfactory in form and substance to Lender.

     3.1.20 APPRAISAL.  Lender shall have received an appraisal of the Property,
which shall be satisfactory in form and substance to Lender.

     3.1.21  FINANCIAL  STATEMENTS.  Lender shall have  received a balance sheet
with respect to the Property for the two most recent Fiscal Years and statements
of  operations  with respect to the  Property  for the three most recent  Fiscal
Years.

     3.1.22  FURTHER  DOCUMENTS.  Lender or its counsel shall have received such
other and further  approvals,  opinions,  documents and information as Lender or
its counsel may have reasonably  requested  including the Loan Documents in form
and substance satisfactory to Lender and its counsel.

     IV. REPRESENTATIONS AND WARRANTIES

     Section 4.1 BORROWER REPRESENTATIONS.

     Borrower  represents  and  warrants  as of the  date  hereof  and as of the
Closing Date that:

     4.1.1  ORGANIZATION.  Borrower  has  been  duly  organized  and is  validly
existing and in good  standing  with  requisite  power and  authority to own its
properties and to transact the  businesses in which it is now engaged.  Borrower
is duly  qualified to do business and is in good  standing in each  jurisdiction

                                      -12-
<PAGE>
where it is required  to be so  qualified  in  connection  with its  properties,
businesses  and  operations.  To the  best  of  Borrower's  knowledge,  Borrower
possesses all rights,  licenses,  permits and  authorizations,  governmental  or
otherwise,  necessary  to entitle it to own its  properties  and to transact the
businesses in which it is now engaged,  and the sole business of Borrower is the
ownership, management and operation of the Property.

     4.1.2 PROCEEDINGS. Borrower has taken all necessary action to authorize the
execution,  delivery  and  performance  of this  Agreement  and the  other  Loan
Documents.  This Agreement and such other Loan Documents have been duly executed
and  delivered  by or on behalf of  Borrower  and  constitute  legal,  valid and
binding obligations of Borrower  enforceable against Borrower in accordance with
their respective terms,  subject only to applicable  bankruptcy,  insolvency and
similar  laws  affecting  rights of  creditors  generally,  and  subject,  as to
enforceability,   to  general   principles  of  equity  (regardless  of  whether
enforcement is sought in a proceeding in equity or at law).

     4.1.3  NO  CONFLICTS.  The  execution,  delivery  and  performance  of this
Agreement and the other Loan  Documents by Borrower at closing will not conflict
with or result in a breach of any of the terms or provisions of, or constitute a
default  under,  or result in the creation or imposition of any lien,  charge or
encumbrance (other than pursuant to the Loan Documents) upon any of the property
or assets of Borrower pursuant to the terms of any indenture,  mortgage, deed of
trust, loan agreement, partnership agreement or other agreement or instrument to
which  Borrower is a party or by which any of  Borrower's  property or assets is
subject,  nor will such action result in any violation of the  provisions of any
statute or any order, rule or regulation of any court or governmental  agency or
body having  jurisdiction  over  Borrower  or any of  Borrower's  properties  or
assets,  and  any  consent,  approval,  authorization,  order,  registration  or
qualification  of or with any court or any such  regulatory  authority  or other
governmental agency or body required for the execution, delivery and performance
by Borrower of this  Agreement or any other Loan Documents has been obtained and
is in full force and effect.

     4.1.4  LITIGATION.  To the  best  of  Borrower's  knowledge,  there  are no
actions,  suits or proceedings at law or in equity by or before any Governmental
Authority  or other  agency now  pending  or  threatened  against  or  affecting
Borrower or the Property,  which actions,  suits or  proceedings,  if determined
against  Borrower  or  the  Property,  might  materially  adversely  affect  the
condition  (financial  or otherwise) or business of Borrower or the condition or
ownership of the Property.

     4.1.5 AGREEMENTS. Borrower is not a party to any agreement or instrument or
subject to any restriction  which might materially and adversely affect Borrower
or the Property,  or Borrower's  business,  properties or assets,  operations or
condition, financial or otherwise. Borrower has not received written notice that
it is in  default in any  material  respect in the  performance,  observance  or
fulfillment of any of the obligations,  covenants or conditions contained in any
agreement  or  instrument  to which it is a party  or by which  Borrower  or the
Property is bound.  Borrower  has no  material  financial  obligation  under any
indenture,  mortgage,  deed of  trust,  loan  agreement  or other  agreement  or
instrument to which  Borrower is a party or by which Borrower or the Property is
otherwise bound,  other than (a) obligations  incurred in the ordinary course of
the operation of the Property and (b) obligations under the Loan Documents.

     4.1.6  TITLE.  As  evidenced  by the Title  Policy  delivered  to Lender at
Closing,  Borrower will have good,  marketable  and insurable  title to the real
property and leasehold estate  comprising part of the Property and good title to
the balance of the Property,  free and clear of all Liens whatsoever  except the
Permitted  Encumbrances,  such other Liens as are permitted pursuant to the Loan
Documents and the Liens created by the Loan Documents. As evidenced by the Title
Policy delivered to Lender at Closing,  the Mortgage,  when properly recorded in
the  appropriate  records,  together with any Uniform  Commercial Code financing
statements  required  to be filed in  connection  therewith,  will  create (a) a
valid,  perfected lien on the Property,  subject only to Permitted  Encumbrances
and the Liens created by the Loan Documents and (b) perfected security interests
in and to, and perfected  collateral  assignments of, all personalty  (including
the Leases), all in accordance with the terms thereof, in each case subject only
to any  applicable  Permitted  Encumbrances,  such other Liens as are  permitted
pursuant to the Loan Documents and the Liens created by the Loan  Documents.  As
evidenced by the Title Policy delivered to Lender at Closing, and except for the
Permitted  Encumbrances  (including  mechanics'  lien  claims  which  have  been
disclosed  to Lender and with  respect to which the Title  Company has issued an
endorsement omitting or insuring over same), there will be no claims for payment
for work,  labor or materials  affecting the Property  which are or may become a
lien  prior  to,  or of equal  priority  with,  the  Liens  created  by the Loan
Documents.

                                      -13-
<PAGE>
     4.1.7 NO BANKRUPTCY  FILING.  Neither  Borrower nor any of its  constituent
general or limited partners are contemplating either the filing of a petition by
it under any state or federal  bankruptcy or insolvency  laws or the liquidation
of all or a major portion of Borrower's assets or property,  and Borrower has no
knowledge of any Person contemplating the filing of any such petition against it
or such general or limited partners.

     4.1.8 FULL AND ACCURATE DISCLOSURE. To the best of Borrower's knowledge, no
statement of fact made by Borrower in this Agreement or in any of the other Loan
Documents contains any untrue statement of a material fact or omits to state any
material  fact  necessary  to make  statements  contained  herein or therein not
misleading.  There is no material fact presently known to Borrower which has not
been  disclosed to Lender which  adversely  affects,  nor as far as Borrower can
reasonably  foresee,  might  adversely  affect,  the  Property or the  business,
operations or condition (financial or otherwise) of Borrower.

     4.1.9 NO PLAN  ASSETS.  Borrower  is not an  "employee  benefit  plan,"  as
defined in Section 3(3) of ERISA,  subject to Title I of ERISA,  and none of the
assets of Borrower  constitutes or will constitute  "plan assets" of one or more
such plans within the meaning of 29 C.F.R. Section 2510.3-101.  In addition, (a)
Borrower is not a  "governmental  plan"  within the meaning of Section  3(32) of
ERISA and (b) transactions by or with Borrower are not subject to state statutes
regulating   investment   of,  and  fiduciary   obligations   with  respect  to,
governmental  plans similar to the provisions of Section 406 of ERISA or Section
4975 of the Code currently in effect,  which prohibit or otherwise  restrict the
transactions contemplated by this Loan Agreement.

     4.1.10 COMPLIANCE.  To the best of Borrower's  knowledge,  Borrower and the
Property and the use thereof comply in all material respects with all applicable
Legal  Requirements,   including,   without  limitation,   building  and  zoning
ordinances  and  codes.  Borrower  has not  received  any  notice of  default or
violation of any order, writ,  injunction,  decree or demand of any Governmental
Authority. To the best of Borrower's knowledge,  there has not been committed by
Borrower  any act or  omission  affording  the federal  government  or any other
Governmental  Authority  the right of  forfeiture as against the Property or any
part thereof or any monies paid in performance of Borrower's  obligations  under
any of the Loan Documents,  nor has Borrower received written notice of any such
act or  omission  by any  other  Person in  occupancy  of or  involved  with the
operation or use of the Property.

     4.1.11  FINANCIAL  INFORMATION.  All  financial  data,  including,  without
limitation, the statements of operations,  that have been delivered to Lender in
respect of the  Property  (i) are true,  complete  and  correct in all  material
respects,  (ii) accurately  represent the financial condition of the Property as
of the date of such reports in all material respects,  and (iii) with respect to
the  audited  financial  statements,  to the  extent  prepared  or audited by an
independent  certified  public  accounting  firm,  to  the  best  of  Borrower's
knowledge  have been prepared in  accordance  with GAAP  throughout  the periods
covered,  except as disclosed  therein.  Borrower  does not have any  contingent
liabilities,  liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments that are known
to Borrower and  reasonably  likely to have a materially  adverse  effect on the
Property or the operation  thereof as an office building,  except as referred to
or reflected in said financial statements.  To the best of Borrower's knowledge,
since  the date of such  financial  statements,  there  has  been no  materially
adverse  change in the financial  condition,  operations or business of Borrower
from that set forth in said financial statements.

     4.1.12  CONDEMNATION.  Borrower  has  received  no written  notice that any
condemnation  or other  proceeding  has been  commenced or, to  Borrower's  best
knowledge, is contemplated with respect to all or any portion of the Property or
for the relocation of roadways providing access to the Property.

     4.1.13  FEDERAL  RESERVE  REGULATIONS.  No part of the proceeds of the Loan
will be used for the purpose of  purchasing  or  acquiring  any  "margin  stock"
within the  meaning of  Regulation  U of the Board of  Governors  of the Federal
Reserve  System or for any other purpose which would be  inconsistent  with such
Regulation U or any other  Regulations  of such Board of  Governors,  or for any
purposes prohibited by Legal Requirements or by the terms and conditions of this
Agreement or the other Loan Documents.

     4.1.14  UTILITIES AND PUBLIC ACCESS.  To the best of Borrower's  knowledge:
(a) the  Property  has  rights of access to public  ways and is served by water,
sewer,  sanitary  sewer and storm  drain  facilities  adequate  to  service  the
Property for its intended uses, (b) all public utilities necessary or convenient



                                      -14-
<PAGE>
to the full use and  enjoyment of the Property are located  either in the public
right-of-way  abutting  such (which are  connected  so as to serve the  Property
without  passing  over other  property)  or in  recorded  easements  serving the
Property and such easements are set forth in and insured by the Title  Insurance
Policy,  and (c) all roads necessary for the use of the Property for its current
purposes  have been  completed  and  dedicated to public use and accepted by all
Governmental Authorities.

     4.1.15 NOT A FOREIGN PERSON.  Borrower is not a "foreign person" within the
meaning ofss.1445(f)(3) of the Code.

     4.1.16  SEPARATE LOTS. The Property is comprised of one (1) or more parcels
which constitute a separate tax lot or lots and does not constitute a portion of
any other tax lot not a part of the Property.

     4.1.17  ASSESSMENTS.  Borrower  has  received  no notice of any  pending or
proposed  special or other  assessments  for public  improvements  or  otherwise
affecting the Property,  nor has Borrower  received  notice of any  contemplated
improvements  to  the  Property  that  may  result  in  such  special  or  other
assessments.

     4.1.18  ENFORCEABILITY.  To the  best of  Borrower's  knowledge,  the  Loan
Documents are not subject to any right of rescission,  set-off,  counterclaim or
defense by Borrower,  including the defense of usury, nor would the operation of
any of the terms of the Loan Documents, or the exercise of any right thereunder,
render the Loan Documents unenforceable, and Borrower has not asserted any right
of rescission, set-off, counterclaim or defense with respect thereto.

     4.1.19 NO PRIOR  ASSIGNMENT.  As of the Closing Date there will be no prior
assignments  of the  Leases or any  portion  of the Rents due and  payable or to
become due and payable which are presently outstanding.

     4.1.20  INSURANCE.  Borrower  has  obtained  and has  delivered  to  Lender
certified copies of all insurance  policies currently in effect and covering the
Property reflecting the insurance coverages,  amounts and other requirements set
forth in this Agreement. No claims have been made under any such policy, and, to
the best of Borrower's knowledge,  no Person,  including Borrower,  has done, by
act or omission, anything which would impair the coverage of any such policy.

     4.1.21  USE OF  PROPERTY.  The  Property  is used  exclusively  for  office
purposes and other appurtenant and related uses (including a fitness center).

     4.1.22 LICENSES. To the best of Borrower's  knowledge,  all certifications,
permits, licenses and approvals,  including without limitation,  certificates of
completion  and  occupancy  permits  required for the legal use,  occupancy  and
operation  of the  Property as an office  building  complex  (collectively,  the
"Licenses"), have been obtained and are in full force and effect. Borrower shall
keep and maintain all licenses necessary for the operation of the Property as an
office building.

     4.1.23  FLOOD  ZONE.  To the  best  of  Borrower's  knowledge,  none of the
Improvements on the Property are located in an area as identified by the Federal
Emergency Management Agency as an area having special flood hazards.

     4.1.24 PHYSICAL  CONDITION.  To the best of Borrower's  knowledge:  (a) the
Property,  including, without limitation, all buildings,  improvements,  parking
facilities,  sidewalks,  storm drainage systems,  roofs,  plumbing systems, HVAC
systems,  fire protection  systems,  electrical systems,  equipment,  elevators,
exterior sidings and doors,  landscaping,  irrigation systems and all structural
components,  are in good condition,  order and repair in all material  respects;
(b) there  exists no  structural  or other  material  defects  or damages in the
Property,  whether latent or otherwise, and (c) Borrower has not received notice
from any insurance  company or bonding company of any defects or inadequacies in
the Property, or any part thereof, which would adversely affect the insurability
of the same or cause the imposition of extraordinary premiums or charges thereon
or of any  termination  or threatened  termination of any policy of insurance or
bond.

     4.1.25  BOUNDARIES.  As evidenced by the Survey (a) all of the improvements
which were  included in  determining  the  appraised  value of the  Property lie
wholly within the boundaries and building restriction lines of the Property, and
no improvements on adjoining  properties encroach upon the Property,  and (b) no
easements  or other  encumbrances  upon the  Property  encroach  upon any of the
improvements,  so as to affect the value or marketability of the Property except
those which are insured against by title insurance.



                                      -15-
<PAGE>
     4.1.26  LEASES.  The  Property is not subject to any Leases  other than the
Leases described in Schedule I attached hereto and made a part hereof. No Person
has any  possessory  interest in the Property or right to occupy the same except
under and pursuant to the  provisions of the Leases.  The current  Leases are in
full force and effect and,  to the best of  Borrower's  knowledge,  there are no
defaults  thereunder  by either party  except as  disclosed  to Lender.  No Rent
(including  security  deposits) has been paid more than one (1) month in advance
of its due date.  All work to be performed by Borrower under each Lease has been
performed as required and has been accepted by the  applicable  tenant,  and any
payments,  free rent,  partial rent, rebate of rent or other payments,  credits,
allowances  or  abatements  required  to be given by  Borrower to any tenant has
already been  received by such tenant,  except as set forth on Schedule I. There
has been no prior sale,  transfer or assignment,  hypothecation or pledge of any
Lease or of the Rents  received  therein.  Except as set  forth on  Schedule  I,
Borrower has not  consented to any  assignment by any tenant of its Lease or any
sublease of all or any portion of the premises demised  thereby,  no such tenant
holds its leased premises under  assignment or sublease,  nor does anyone except
such tenant and its employees occupy such leased  premises.  No tenant under any
Lease has a right or option  pursuant to such Lease or otherwise to purchase all
or any part of the leased  premises or the building of which the leased premises
are a part.  No tenant  under any Lease has any right or option  for  additional
space in the  Improvements  except  as set  forth in the  Lease.  To the best of
Borrower's  knowledge,  no hazardous wastes or toxic  substances,  as defined by
applicable federal,  state or local statutes,  rules and regulations,  have been
disposed, stored or treated by any tenant under any Lease on or about the leased
premises in violation of  applicable  environmental  laws nor does Borrower have
any  knowledge  of any  tenant's  intention  to use its leased  premises for any

activity which, directly or indirectly, involves the use, generation, treatment,
storage,  disposal or  transportation  of any petroleum  product or any toxic or
hazardous  chemical,  material,  substance or waste in  violation of  applicable
Environmental Laws.

     4.1.27 INTENTIONALLY OMITTED.

     4.1.28  LOAN TO VALUE.  The maximum  principal  amount of the Loan does not
exceed one hundred  twenty-five  percent  (125%) of the fair market value of the
Property.

     4.1.29  FILING AND  RECORDING  TAXES.  All  transfer  taxes,  deed  stamps,
intangible taxes or other amounts in the nature of transfer taxes required to be
paid by any Person under  applicable Legal  Requirements  currently in effect in
connection  with the  transfer of the Property to Borrower  have been paid.  All
mortgage, mortgage recording, stamp, intangible or other similar tax required to
be paid by any Person under applicable Legal Requirements currently in effect in
connection  with the execution,  delivery,  recordation,  filing,  registration,
perfection  or  enforcement  of any of the Loan  Documents,  including,  without
limitation, the Mortgage, have been paid, and, under current Legal Requirements,
the  Mortgage  is  enforceable  in  accordance  with its terms by Lender (or any
subsequent holder thereof).

     4.1.30 SINGLE PURPOSE  ENTITY/SEPARATENESS.  Borrower represents,  warrants
and covenants as follows:

     (a) The purpose for which  Borrower  is  organized  is and shall be limited
solely to (i)  owning,  holding,  selling,  leasing,  transferring,  exchanging,
operating and managing the Property and  transacting any and all lawful business
for which Borrower may be organized under its constitutive law that is incident,
necessary and appropriate to accomplish the foregoing.

     (b) Borrower does not own and will not own any asset or property other than
(i) the Property,  and (ii) incidental  personal property necessary for and used
or to be used in connection with the ownership or operation of the Property.

     (c)  Borrower  will not engage in any  business  other than the  ownership,
management and operation of the Property.

     (d)  Borrower  will not  enter  into any  contract  or  agreement  with any
Affiliate of Borrower, any constituent party of Borrower, any owner of Borrower,
any  guarantors  of  the  obligations  of  Borrower  or  any  Affiliate  of  any
constituent party,  owner or guarantor  (collectively,  the "Related  Parties"),
except  upon terms and  conditions  that are  intrinsically  fair,  commercially
reasonable  and  substantially  similar to those that would be  available  on an
arms-length  basis with third  parties not so  affiliated  with Borrower or such
Related Parties.



                                      -16-
<PAGE>
     (e) Borrower has not  incurred  and will not incur any  Indebtedness  other
than (i) the Loan, (ii) Indebtedness  incurred in the financing of equipment and
other  personal  property  used on the  Property,  trade  and  operational  debt
incurred in the ordinary  course of business with trade  creditors in amounts as
are normal and  reasonable  under the  circumstances,  provided such debt is not
evidenced  by a note and is not in excess  of sixty  (60) days past due and does
not exceed in the  aggregate  the  amount of Three  Million  and No/100  Dollars
($3,000,000).  No  Indebtedness  other  than the Debt  may be  secured  (senior,
subordinate  or pari passu) by the Property  (provided that the fee owner of the
portion of the Property  demised by the Ground Lease may encumber its  interests
therein).

     (f)  Borrower  has not made and will not make any loans or  advances to any
Person and shall not acquire obligations or securities of any Related Party.

     (g) Borrower is and will remain solvent and Borrower will pay its debts and
liabilities (including,  as applicable,  shared personnel and overhead expenses)
from its assets as the same shall become due.

     (h) Borrower has done or caused to be done and will do all things necessary
to observe organizational  formalities and preserve its existence,  and Borrower
will not, nor will Borrower permit any SPC to, amend, modify or otherwise change
the partnership  certificate,  partnership agreement,  articles of incorporation
and bylaws,  operating  agreement,  trust or other  organizational  documents of
Borrower or such SPC without the prior written consent of Lender.

     (i) Borrower  will  maintain  separate  financial  statements,  showing its
assets and  liabilities  separate  and apart  from those of any other  person or
entity and will not have its assets  listed on the  financial  statements of any
other Person except the  consolidated  financial  statements of the REIT,  which
statements shall contain  footnotes or other  information to the effect that the
assets  are owned by the Single  Purpose  Entity  and are not  available  to pay
creditors of the REIT. Borrower shall maintain its books,  records,  resolutions
and agreements as official records.

     (j)  Borrower  will be, and at all times will hold itself out to the public
as, a legal entity  separate and distinct from any other Person  (including  any
Affiliate or other  Related  Party),  shall  correct any known  misunderstanding
regarding its status as a separate entity, and shall conduct business in its own
name and from its own office, shall not identify itself or any of its Affiliates
as a division  or part of the other and shall  maintain  and  utilize a separate
telephone  number and separate  stationery,  invoices and checks;  provided that
business correspondence and other communications of Borrower may also be made by
its  managing  partner  from its office when the  managing  partner is acting on
behalf of Borrower.

     (k) Borrower  will  maintain  adequate  capital for the normal  obligations
reasonably  foreseeable  in a business of its size and character and in light of
its contemplated business operations.

     (l) Neither  Borrower  nor any SPC will seek the  dissolution,  winding up,
liquidation,  consolidation  or  merger  in  whole  or in  part,  or the sale of
material assets of Borrower.

     (m) Borrower  will not  commingle its assets with those of any other Person
and will hold all of its assets in its own name;

     (n) Borrower  will not  guarantee or become  obligated for the debts of any
other Person and does not and will not hold itself out as being  responsible for
the debts or obligations of any other Person.

     (o) If Borrower is a limited partnership or a limited liability company, at
least one general partner or member, or if Borrower is a general  partnership at
least two general  partners (an "SPC Party") shall be a  corporation  whose sole
asset is its interest in Borrower  and such SPC Party will at all times  comply,
and will cause Borrower to comply, with each of the representations, warranties,
and  covenants  contained  in this  Section  4.1.30  as if such  representation,
warranty or covenant was made directly by such SPC Party. Upon the withdrawal or
the  disassociation  of the SPC Party from Borrower,  Borrower shall immediately
appoint a new member whose articles of incorporation are  substantially  similar
to those of the SPC Party and  deliver a new  Insolvency  Opinion  to the Rating
Agency or Rating Agencies, as applicable,  with respect to the new SPC Party and
its equity owners.





                                      -17-
<PAGE>
     (p)  Borrower  shall at all  times  cause  there  to be at  least  one duly
appointed  member of the  board of  directors  (an  "Independent  Director")  of
Borrower (if a  corporation)  or of each SPC Party  reasonably  satisfactory  to
Lender  who is not at the  time of  initial  appointment  or  while  serving  as
Independent Director and has not been, at any time during the preceding five (5)
years, a stockholder,  director (other than an Independent  Director),  officer,
employee, partner, attorney or counsel of (i) the Prime Group, Inc., an Illinois
corporation,  or any of its Affiliates; (ii) the Operating Partnership or any of
its Affiliates  (except as an independent  director on the board of directors of
Finance and certain other  corporations,  each a single purpose  entity);  (iii)
Finance,  the Partnership or any of their  Affiliates  (except as an independent
director on the board of  directors of Finance and certain  other  corporations,
each a single  purpose  entity  (collectively,  the  "Prime  Entities");  (iv) a
customer, supplier or other Person who derives more than 10% of its purchases or
revenues from its activities  with any of the Prime  Entities,  Borrower or such
SPC  Party  or any  Affiliate  of  either  of them;  (v) a  Person  controlling,
controlled  by, or under  common  control  with any such  stockholder,  partner,
customer,  supplier or other Person; or (vi) a member of the immediate family of
any Person  described in clauses (i), (ii) or (iii).  (As used herein,  the term
"control" means the possession,  directly or indirectly,  of the power to direct
or cause the  direction  of  management,  policies  or  activities  of a Person,
whether through ownership of voting securities, by contract or otherwise.)

     (q)  Borrower  shall not cause or permit the board of  directors  of an SPC
Party  to  take  any  action  which,  under  the  terms  of any  certificate  of
incorporation,  by-laws or any voting trust agreement with respect to any common
stock,  requires  the vote of any SPC Party  unless  at the time of such  action
there shall be at least one member who is an Independent Director.

     (r) Borrower  shall allocate  fairly and  reasonably any overhead  expenses
that are  shared  with an  Affiliate,  including  paying  for  office  space and
services performed by any employee of an Affiliate or Related Party.

     (s)  Borrower  shall not pledge  its  assets  for the  benefit of any other
Person  other  than with  respect  to the Loan  except as  permitted  in Section
4.1.30(e).

     (t) Borrower  shall  maintain a sufficient  number of employees in light of
its contemplated  business  operations and pay the salaries of its own employees
from its own funds.

     (u) Borrower shall conduct its business so that the  assumptions  made with
respect to Borrower in the  Insolvency  Opinion shall be true and correct in all
respects.

     4.1.31 MANAGEMENT AGREEMENT.  The Management Agreement is in full force and
effect and, to the best of Borrower's  knowledge there is no default  thereunder
by any party  thereto and no event has occurred  that,  with the passage of time
and/or the giving of notice would constitute a default thereunder.

     4.1.32 GROUND LEASE.  Borrower hereby represents and warrants to Lender the
following with respect to the Ground Lease:

     (a) Recording; Modification. A memorandum of the Ground Lease has been duly
recorded.  The Ground Lease permits the interest of Borrower to be encumbered by
a mortgage or the ground lessor has approved and consented to the encumbrance of
the Property by the Mortgage. There have not been amendments or modifications to
the terms of the Ground  Lease  since its  recordation,  with the  exception  of
written  instruments  which  have been  recorded.  The  Ground  Lease may not be
canceled,  terminated,  surrendered  or amended by  Borrower  without  the prior
written consent of Lender.

     (b) No Liens. Except for the Permitted Encumbrances, Borrower's interest in
the Ground Lease is not subject to any Liens or encumbrances  superior to, or of
equal priority with,  the Mortgage  other than the ground  lessor's  related fee
interest and the existing mortgage on the ground lessor's fee interest.

     (c) Ground  Lease  Assignable.  Borrower's  interest in the Ground Lease is
assignable  to Lender  upon  notice to, but  without  the consent of, the ground
lessor (or, if any such consent is required,  it has been obtained  prior to the
Closing  Date).  The Ground Lease  contains no  restrictions  on  assignment  by
Lender, its successors and assigns.

     (d) Default.  As of the date hereof,  the Ground Lease is in full force and
effect and no default has  occurred  under the Ground  Lease and, to the best of
Borrower's knowledge,  there is no existing condition which, but for the passage
of time or the giving of notice,  could  result in a default  under the terms of
the Ground Lease.
                                      -18-
<PAGE>
     (e) Notice.  The Ground Lease  requires the ground lessor to give notice of
any  default by  Borrower  to Lender.  The Ground  Lease,  or  estoppel  letters
received  by Lender  from the ground  lessor,  further  provides  that notice of
termination  given under the Ground Lease is not effective against Lender unless
a copy of the notice has been delivered to Lender in the manner described in the
Ground Lease.

     (f) Cure. Lender is permitted the opportunity to cure any default under the
Ground Lease, which is curable after the receipt of notice of any of the default
before the ground lessor thereunder may terminate the Ground Lease in accordance
with Article XI of the Ground Lease.

     (g) Term.  The Ground Lease has a term which extends not less than ten (10)
years beyond the Maturity Date.

     (h) New Lease.  The Ground Lease  (together with an estoppel  received from
the ground lessor)  provides,  in accordance  with Article XI thereof,  that the
ground lessor shall enter into a new lease upon  termination of the Ground Lease
for  any  reason,  including  rejection  of the  Ground  Lease  in a  bankruptcy
proceeding.

     (i)  Insurance  Proceeds.  Under  the  terms of the  Ground  Lease  and the
Mortgage,  taken together,  any related insurance and condemnation proceeds will
be applied  either to the repair or  restoration of all or part of the Property,
with  Lender  having  the right to hold and  disburse  the  proceeds  payable to
Borrower  in  accordance  with  Article XI thereof as the repair or  restoration
progresses,  or to the payment of the outstanding  principal balance of the Loan
together with any accrued interest thereon.

     (j)  Subleasing.  Subject to the provisions of Articles XXI and XXXI of the
Ground Lease, Borrower may enter into subleases from time to time for all or any
portion of the property demised thereby.

     4.1.33 ILLEGAL ACTIVITY.  To the best of Borrower's knowledge no portion of
the  Property  has  been or will  be  purchased  with  proceeds  of any  illegal
activity.

     4.1.34  NO  CHANGE IN FACTS OR  CIRCUMSTANCES;  DISCLOSURE.  To the best of
Borrower's knowledge, all information submitted by Borrower to Lender and in all
financial  statements,  rent rolls,  reports,  certificates  and other documents
submitted in connection  with the Loan or in  satisfaction  of the terms thereof
and all  statements  of fact made by Borrower in this  Agreement or in any other
Loan  Document,  are  accurate,  complete and correct in all material  respects.
There has been no material adverse change in any condition,  fact,  circumstance
or event  that  would  make  any  such  information  inaccurate,  incomplete  or
otherwise  misleading in any material  respect or that otherwise  materially and
adversely  affects or might  materially and adversely affect the Property or the
business  operations  or the  financial  condition  of  Borrower.  Borrower  has
disclosed  to Lender  all  material  facts and has not  failed to  disclose  any
material fact that could cause any  representation or warranty made herein to be
materially misleading.

     Section 4.2 SURVIVAL OF REPRESENTATIONS.

     Borrower agrees that all of the  representations and warranties of Borrower
set forth in Section 4.1 and  elsewhere in this  Agreement and in the other Loan
Documents  shall survive for so long as any amount remains owing to Lender under
this   Agreement  or  any  of  the  other  Loan   Documents  by  Borrower.   All
representations,  warranties, covenants and agreements made in this Agreement or
in the other Loan Documents by Borrower shall be deemed to have been relied upon
by Lender  notwithstanding  any  investigation  heretofore or hereafter  made by
Lender or on its behalf.

     V. BORROWER COVENANTS

     Section 5.1 AFFIRMATIVE COVENANTS.

     From the date  hereof  and until  payment  and  performance  in full of all
obligations of Borrower  under the Loan Documents or the earlier  release of the
Lien of the Mortgage (and all related  obligations) in accordance with the terms
of this Agreement and the other Loan Documents,  Borrower  hereby  covenants and
agrees with Lender that:

     5.1.1 EXISTENCE;  COMPLIANCE WITH LEGAL REQUIREMENTs;  INSURANCE.  Borrower
shall do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its existence,  rights,  licenses,  permits and franchises


                                      -19-
<PAGE>
and comply with all Legal Requirements applicable to it and the Property.  There
shall never be  committed  by Borrower or any other  person in  occupancy  of or
involved with the operation or use of the Property any act or omission affording
the federal  government or any state or local government the right of forfeiture
as against the Property or any part thereof or any monies paid in performance of
Borrower's  obligations  under  any  of  the  Loan  Documents.  Borrower  hereby
covenants  and  agrees  not to  commit,  permit  or  suffer  to exist any act or
omission  affording  such  right of  forfeiture.  Borrower  shall  at all  times
maintain,  preserve and protect all  franchises and trade names and preserve all
the  remainder of its property used or useful in the conduct of its business and
shall keep the Property in good working order and repair,  and from time to time
make,  or  cause  to  be  made,  all  reasonably  necessary  repairs,  renewals,
replacements,  betterments and improvements  thereto, all as more fully provided
in the  Mortgage.  Borrower  shall  keep the  Property  insured  at all times by
financially sound and reputable insurers, to such extent and against such risks,
and maintain  liability and such other  insurance,  as is more fully provided in
this Agreement.

     5.1.2  TAXES  AND  OTHER  CHARGES.  Borrower  shall pay all Taxes and Other
Charges now or hereafter  levied or assessed or imposed  against the Property or
any  part  thereof  as the  same  become  due and  payable;  provided,  however,
Borrower's  obligation  to directly pay Taxes shall be suspended  for so long as
Borrower complies with the terms and provisions of Section 7.2 hereof.  Borrower
will deliver to Lender  receipts for payment or other evidence  satisfactory  to
Lender  that the  Taxes  and  Other  Charges  have  been so paid or are not then
delinquent  no later  than ten (10)  days  prior to the date on which  the Taxes
and/or Other Charges would  otherwise be delinquent if not paid.  Borrower shall
furnish to Lender  receipts  for the payment of the Taxes and the Other  Charges
prior to the date the same shall  become  delinquent  (provided,  however,  that
Borrower is not  required to furnish  such  receipts for payment of Taxes in the
event that such Taxes have been paid by Lender  pursuant to Section 7.2 hereof).
Borrower shall not suffer and shall promptly cause to be paid and discharged any
Lien or charge  whatsoever  which may be or become a Lien or charge  against the
Property,  and shall  promptly  pay for all  utility  services  provided  to the
Property.  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  Taxes,  Liens or Other  Charges,  provided  that (i) no
Event of Default has occurred and remains uncured; (ii) Borrower is permitted to
do so under the  provisions of any mortgage or deed of trust superior in lien to
the Mortgage; (iii) 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 and such proceeding shall
be conducted in accordance  with all applicable  statutes,  laws and ordinances;
(iv) neither the  Property  nor any part thereof or interest  therein will be in
danger of being sold,  forfeited,  terminated,  canceled or lost;  (v)  Borrower
shall  promptly  upon  final  determination  thereof  pay the amount of any such
Taxes, Liens, or Other Charges,  together with all costs, interest and penalties
which may be payable in connection therewith; (vi) such proceeding shall suspend
the collection of such contested  Taxes or Other Charges from the Property;  and
(vii) Borrower shall furnish such security as may be required in the proceeding,
or as may be  requested  by Lender,  to insure the  payment of any such Taxes or
Other Charges,  together with all interest and penalties thereon. Lender may pay
over any such cash  deposit  or part  thereof  held by  Lender  to the  claimant
entitled thereto at any time when, in the judgment of Lender, the entitlement of
such claimant is established.

     5.1.3  LITIGATION.  Borrower  shall give prompt written notice to Lender of
any  litigation  or  governmental  proceedings  pending  or  threatened  against
Borrower which might materially adversely affect Borrower's condition (financial
or otherwise) or business or the Property.

     5.1.4 ACCESS TO PROPERTY. Borrower shall permit agents, representatives and
employees of Lender to inspect the  Property or any part  thereof at  reasonable
hours upon reasonable advance notice.

     5.1.5  NOTICE OF DEFAULT.  Borrower  shall  promptly  advise  Lender of any
material adverse change in Borrower's condition,  financial or otherwise,  or of
the occurrence of any Event of Default of which Borrower has knowledge.

     5.1.6 COOPERATE IN LEGAL  PROCEEDINGS.  Borrower shall cooperate fully with
Lender  with  respect  to any  proceedings  before  any  court,  board  or other
Governmental  Authority  which  may in any  way  affect  the  rights  of  Lender
hereunder or any rights obtained by Lender under any of the other Loan Documents
and, in connection therewith,  permit Lender, at its election, to participate in
any such proceedings.


                                      -20-
<PAGE>
     5.1.7 PERFORM LOAN  DOCUMENTS.  Subject to the limitations on liability set
forth in Section 9.4 hereof, Borrower shall observe, perform and satisfy all the
terms,  provisions,  covenants  and  conditions  of,  and shall pay when due all
costs,  fees and  expenses  to the  extent  required  under  the Loan  Documents
executed and delivered by, or applicable to, Borrower.

     5.1.8 INSURANCE BENEFITS. Borrower shall cooperate with Lender in obtaining
for Lender the benefits of any Insurance  Proceeds lawfully or equitably payable
in  connection  with  the  Property,  and  Lender  shall be  reimbursed  for any
reasonable  expenses  incurred in  connection  therewith  (including  reasonable
attorneys' fees and disbursements, and the payment by Borrower of the expense of
an appraisal on behalf of Lender in case of a fire or other  casualty  affecting
the Property or any part thereof) out of such Insurance Proceeds.

     5.1.9 FURTHER  ASSURANCES.  Borrower  shall,  at  Borrower's  sole cost and
expense:

     (a)   execute  and   deliver  to  Lender   such   documents,   instruments,
certificates,  assignments and other writings,  and do such other acts necessary
or desirable,  to evidence,  preserve  and/or protect the collateral at any time
securing  or  intended  to secure the  obligations  of  Borrower  under the Loan
Documents, as Lender may reasonably require; and

     (b) do and  execute  all and  such  further  lawful  and  reasonable  acts,
conveyances and assurances for the better and more effective carrying out of the
intents and purposes of this Agreement and the other Loan  Documents,  as Lender
shall reasonably require from time to time.

     5.1.10 MORTGAGE TAXES. As of the date hereof,  Borrower  represents that it
has paid all state,  county and municipal  recording and all other taxes imposed
upon the execution and recordation of the Mortgage.

     5.1.11 FINANCIAL REPORTING.

     (a) Borrower will keep and maintain or will cause to be kept and maintained
on a Fiscal Year basis, in accordance with GAAP (or such other  accounting basis
acceptable  to  Lender),   proper  and  accurate  books,  records  and  accounts
reflecting all of the financial  affairs of Borrower and all items of income and
expense in connection with the operation of the Property.  Lender shall have the
right  from  time  to  time at all  times  during  normal  business  hours  upon
reasonable  notice to examine such books,  records and accounts at the office of
Borrower or other  Person  maintaining  such books,  records and accounts and to
make  such  copies  or  extracts  thereof  as  Lender  shall  desire.  After the
occurrence  of an Event of Default,  Borrower  shall pay any costs and  expenses
incurred by Lender to examine Borrower's  accounting records with respect to the
Property,  as Lender  shall  determine to be  necessary  or  appropriate  in the
protection of Lender's interest.

     (b)  Borrower  will  furnish to Lender  annually  within  ninety  (90) days
following the end of each Fiscal Year of Borrower, a complete copy of Borrower's
annual  financial  statements  audited by a "Big Five"  accounting firm or other
independent  certified public accountant  acceptable to Lender (Ernst & Young is
hereby  approved)  in  accordance  with  GAAP (or such  other  accounting  basis
acceptable to Lender)  covering the Property for such Fiscal Year and containing
statements  of operations  for Borrower and a balance  sheet for Borrower.  Such
statements shall set forth the financial condition and the results of operations
for the Property for such Fiscal Year.  Borrower's  annual financial  statements
shall be accompanied by (i) a comparison of the budgeted income and expenses and
the actual  income and expenses for the prior  Fiscal Year,  (ii) a  certificate
executed by the chief financial officer of Borrower or the general partner of or
the general partner of the general partner of Borrower,  as applicable,  stating
that  each  such  annual  financial  statement  presents  fairly  the  financial
condition  and the results of  operations  of Borrower  and the  Property  being
reported  upon  and has been  prepared  in  accordance  with  GAAP and  (iii) an
unqualified  opinion on Borrower's  annual financial  statements of a "Big Five"
(Ernst  &  Young  is  hereby  approved)  accounting  firm or  other  independent
certified  public  accountant  reasonably  acceptable  to Lender.  Together with
Borrower's  annual  financial  statements,  Borrower  shall furnish to Lender an
Officer's Certificate  certifying as of the date thereof whether there exists an
event or circumstance  which constitutes a Default or Event of Default under the
Loan  Documents  executed and delivered by, or applicable to,  Borrower,  and if
such Default or Event of Default exists, the nature thereof,  the period of time
it has existed and the action then being taken to remedy the same.





                                      -21-
<PAGE>
     (c) Borrower will furnish, or cause to be furnished, to Lender on or before
forty-five  (45)  days  after  the  end of each  quarter  the  following  items,
accompanied by a certificate of the chief  financial  officer of Borrower or the
general partner or the general  partner of the general  partner of Borrower,  as
applicable,  stating that such items are true, correct,  accurate,  and complete
and fairly  present the  financial  condition  and results of the  operations of
Borrower and the Property (subject to normal year-end  adjustments):  (i) a rent
roll for the  subject  quarter  accompanied  by an  Officer's  Certificate  with
respect thereto; (ii) quarterly and year-to-date operating statements (including
Capital Expenditures) prepared for each quarter in Borrower's standard form.

     (d) For the partial year period commencing on the date hereof, and for each
Fiscal Year  thereafter,  Borrower  shall submit to Lender an Annual  Budget not
later than thirty (30) days prior to the  commencement  of such period or Fiscal
Year in form reasonably satisfactory to Lender.

     (e) In the  event  that  Borrower  must  incur an  extraordinary  operating
expense  or  capital  expense  not set  forth  in the  Annual  Budget  (each  an
"Extraordinary  Expense"),  then  Borrower  shall  promptly  deliver to Lender a
reasonably detailed explanation of such proposed Extraordinary Expense.

     (f) Borrower  shall furnish to Lender,  within ten (10) Business Days after
request (or as soon  thereafter  as may be  reasonably  possible),  such further
detailed  information  with  respect to the  operation  of the  Property and the
financial  affairs of Borrower as may be reasonably  requested by Lender so long
as such information is customarily available to Borrower.

     (g) Any reports,  statements or other information  required to be delivered
under this Agreement shall be delivered in Borrower's customary format.

     5.1.12  BUSINESS AND  OPERATIONS.  Borrower  will continue to engage in the
businesses presently conducted by it as and to the extent the same are necessary
for the  ownership,  maintenance,  management  and  operation  of the  Property.
Borrower will qualify to do business and will remain in good standing  under the
laws of the  jurisdiction  as and to the  extent the same are  required  for the
ownership, maintenance, management and operation of the Property.

     5.1.13 INTENTIONALLY DELETED.

     5.1.14  COSTS  OF  ENFORCEMENT.  In the  event  (a) that  the  Mortgage  is
foreclosed  in whole or in part or that the Mortgage is put into the hands of an
attorney for collection,  suit, action or foreclosure, (b) of the foreclosure of
any mortgage prior to or subsequent to the Mortgage in which  proceeding  Lender
is made a party, or (c) of the bankruptcy,  insolvency,  rehabilitation or other
similar  proceeding in respect of Borrower or any of its general  partners or an
assignment  by Borrower or any of its  general  partners  for the benefit of its
creditors,  Borrower,  its successors or assigns,  shall be chargeable  with and
agrees  to pay  all  costs  of  collection  and  defense,  including  reasonable
attorneys'  fees and  costs,  incurred  by  Lender  or  Borrower  in  connection
therewith and in  connection  with any  appellate  proceeding  or  post-judgment
action involved therein, together with all required service or use taxes.

     5.1.15  ESTOPPEL  STATEMENT.  (a) After request by either party,  the other
party shall within ten (10) days furnish the requesting  party with a statement,
duly  acknowledged  and certified,  setting forth (i) the amount of the original
principal  amount of the Note,  (ii) the  unpaid  principal  amount of the Note,
(iii) the Applicable  Interest Rate of the Note,  (iv) the date  installments of
interest  and/or  principal  were last paid,  (v) any offsets or defenses to the
payment  of the  Debt,  if any,  and (vi)  that the Note,  this  Agreement,  the
Mortgage and the other Loan Documents are valid,  legal and binding  obligations
and  have  not  been  modified  or  if  modified,  giving  particulars  of  such
modification.

     (b)  Borrower  shall  deliver  to  Lender  upon  request,  tenant  estoppel
certificates  from each commercial  tenant leasing space at the Property in form
and substance reasonably satisfactory to Lender (or in the form required in such
tenant's  Lease if a form is specified  in such Lease)  provided  that  Borrower
shall not be required to deliver such  certificates more frequently than one (1)
time in any calendar year.

     5.1.16 LOAN PROCEEDS.  Borrower shall use the proceeds of the Loan received
by it on the Closing Date only for the purposes set forth in Section 2.1.4.

     5.1.17 PERFORMANCE BY BORROWER.  Borrower shall in a timely manner observe,
perform and fulfill  each and every  covenant,  term and  provision of each Loan
Document  executed and delivered by, or applicable to,  Borrower,  and shall not


                                      -22-
<PAGE>
enter into or  otherwise  suffer or permit any  amendment,  waiver,  supplement,
termination or other  modification  of any Loan Document  executed and delivered
by, or applicable to, Borrower without the prior written consent of Lender.

     5.1.18  CONFIRMATION  OF   REPRESENTATIONS.   Borrower  shall  deliver,  in
connection  with  any  Securitization,  (a) one or more  Officer's  Certificates
certifying  as to the  accuracy of all  representations  made by Borrower in the
Loan  Documents  as of the date of the  closing  of such  Securitization  in all
relevant  jurisdictions  or stating in such  Certificate the manner in which any
representation  is  no  longer  true,  and  (b)  certificates  of  the  relevant
Governmental  Authorities  in all  relevant  jurisdictions  indicating  the good
standing and qualification of Borrower and its general partner as of the date of
the Securitization.

     5.1.19 NO JOINT ASSESSMENT.  Except to the extent required by law, Borrower
shall not suffer,  permit or initiate the joint  assessment  of the Property (a)
with any other real property  constituting a tax lot separate from the Property,
and (b) which  constitutes  real property with any portion of the Property which
may be deemed to constitute  personal  property,  or any other procedure whereby
the lien of any taxes which may be levied  against such personal  property shall
be assessed or levied or charged to such real property portion of the Property.

     5.1.20  LEASING  MATTERS.  Any Leases with respect to the Property  written
after  the date  hereof,  for more than  15,000  square  feet and any  Leases to
Affiliates of Borrower shall be approved by Lender,  which approval shall not be
unreasonably withheld, conditioned or delayed and which approval shall be deemed
given if Lender does not respond  within five (5) Business Days after receipt of
such proposed  Lease,  provided that the notice  requesting  such approval shall
contain a legend stating that Lender's  approval shall be deemed given if Lender
fails to  respond  within  such five (5)  Business  Day  period.  Upon  request,
Borrower shall furnish Lender with executed  copies of all Leases.  All renewals
of Leases and all proposed  Leases shall provide for rental rates  comparable to
existing local market rates, as reasonably determined by Borrower.  All proposed
Leases shall be on commercially reasonable terms and shall not contain any terms
which would  materially  and  adversely  affect  Lender's  rights under the Loan
Documents. All Leases executed after the date hereof shall provide that they are
subordinate  to the Mortgage  and that the lessee  agrees to attorn to Lender or
any purchaser at a sale by  foreclosure.  Borrower (i) shall observe and perform
the  obligations  imposed  upon the lessor  under the  Leases in a  commercially
reasonable  manner;  (ii) shall  enforce and may amend or  terminate  the terms,
covenants  and  conditions  contained  in the Leases upon the part of the lessee
thereunder to be observed or performed in a commercially  reasonable  manner and
in a manner not to materially  impair the value of the Property  involved except
that no  termination  by Borrower or  acceptance of surrender by a tenant of any
Leases shall be permitted  unless by reason of a tenant default and then only in
a commercially  reasonable manner to preserve and protect the Property provided,
however,  that no such  termination or surrender of any Lease covering more than
15,000  square feet will be  permitted  without  the written  consent of Lender;
(iii)  shall not  collect  any of the rents  more than one (1) month in  advance
(other than security  deposits);  (iv) shall not execute any other assignment of
lessor's interest in the Leases or the Rents (except as contemplated by the Loan
Documents);  (v) shall not alter,  modify or change the terms of the Leases in a
manner  inconsistent  with the provisions of the Loan Documents;  and (vi) shall
execute  and  deliver  at the  request of Lender  all such  further  assurances,
confirmations and assignments in connection with the Leases as Lender shall from
time to time reasonably require.

     5.1.21 ALTERATIONS. Borrower shall obtain Lender's prior written consent to
any  alterations to any  Improvements,  which consent shall not be  unreasonably
withheld or delayed except with respect to alterations  that may have a material
adverse effect on Borrower's financial  condition,  the value of the Property or
the Net Operating Income.  Notwithstanding the foregoing, Lender's consent shall
not be required in connection with any alterations that will not have a material
adverse effect on Borrower's financial  condition,  the value of the Property or
the Net Operating Income,  provided that such alterations are made in connection
with (a) tenant  improvement  work performed  pursuant to the terms of any Lease
executed on or before the date hereof,  (b) tenant  improvement  work  performed
pursuant to the terms and provisions of a Lease and not adversely  affecting any
structural  component of any Improvements,  any utility or HVAC system contained
in any  Improvements or the exterior of any building  constituting a part of any
Improvements, or (c) alterations performed in connection with the restoration of
the Property after the occurrence of a casualty in accordance with the terms and
provisions of this  Agreement.  If the total unpaid amounts due and payable with





                                      -23-
<PAGE>
respect to  alterations  to the  Improvements  at the Property  (other than such
amounts to be paid or  reimbursed by tenants under the Leases) shall at any time
exceed Seven Million Two Hundred Thousand and 00/100 Dollars  ($7,200,000)  (the
"Threshold  Amount"),  Borrower shall promptly deliver to Lender as security for
the  payment  of  such  amounts  and  as  additional   security  for  Borrower's
obligations  under the Loan Documents any of the  following:  (A) cash, (B) U.S.
Obligations,  (C) other securities having a rating acceptable to Lender and that
the  applicable  Rating  Agencies have  confirmed in writing will not, in and of
itself,  result in a downgrade,  withdrawal or qualification of the initial, or,
if higher,  then current ratings assigned in connection with any Securitization,
or (D) a completion  bond or letter of credit issued by a financial  institution
having a rating by Standard & Poor's  Ratings Group of not less than A-1+ if the
term of such bond or letter of credit is no longer  than three (3) months or, if
such term is in excess of three (3) months,  issued by a  financial  institution
having a rating  that is  acceptable  to Lender and that the  applicable  Rating
Agencies  have  confirmed  in writing  will not,  in and of itself,  result in a
downgrade,  withdrawal  or  qualification  of the initial,  or, if higher,  then
current ratings  assigned in connection with any  Securitization.  Such security
shall be in an  amount  equal to the  excess of the total  unpaid  amounts  with
respect to  alterations  to the  Improvements  on the Property  (other than such
amounts to be paid or reimbursed by tenants under the Leases) over the Threshold
Amount  and  applied  from time to time at the  option of Lender to Pay for such
alterations or to terminate any of the  alterations  and restore the Property to
the extent  necessary to prevent any material adverse effect on the value of the
Property.

     Section 5.2 NEGATIVE COVENANTS.

     From  the  date  hereof  until  payment  and  performance  in  full  of all
obligations of Borrower  under the Loan Documents or the earlier  release of the
Lien of the  Mortgage in  accordance  with the terms of this  Agreement  and the
other Loan Documents, Borrower covenants and agrees with Lender that it will not
do, directly or indirectly, any of the following:

     5.2.1 OPERATION OF PROPERTY.  Borrower shall not, without the prior consent
of Lender (which  consent  shall not be  unreasonably  withheld),  terminate the
Management  Agreement or  otherwise  replace the Manager or enter into any other
management agreement with respect to the Property.

     5.2.2  LIENS.  Borrower  shall not,  without the prior  written  consent of
Lender,  create, incur, assume or suffer to exist any Lien on any portion of the
Property or permit any such action to be taken, except:

     (i) Permitted Encumbrances;

     (ii) Liens created by or permitted pursuant to the Loan Documents;

     (iii) Liens for Taxes or Other Charges not yet due; and

     (iv) Liens which are contested by Borrower in accordance  with the terms of
the Loan Documents.

     5.2.3  DISSOLUTION.  Borrower  shall  not (a)  engage  in any  dissolution,
liquidation or  consolidation  or merger with or into any other business entity,
(b) engage in any business  activity not related to the  ownership and operation
of the  Property,  (c)  transfer,  lease  or  sell,  in one  transaction  or any
combination  of  transactions,  the  assets or all or  substantially  all of the
properties  or assets of  Borrower  except to the extent  permitted  by the Loan
Documents, (d) modify, amend, waive or terminate its organizational documents or
its  qualification  and good standing in any  jurisdiction  or (e) cause the SPC
Party to (i) dissolve,  wind up or liquidate or take any action, or omit to take
an action,  as a result of which the SPC Party would be  dissolved,  wound up or
liquidated  in whole or in part, or (ii) amend,  modify,  waive or terminate the
certificate of incorporation  or bylaws of the SPC Party, in each case,  without
obtaining the prior written consent of Lender or Lender's designee.

     5.2.4  CHANGE  IN  BUSINESS.  Borrower  shall  not  enter  into any line of
business  other than the ownership  and  operation of the Property,  or make any
material change in the scope or nature of its business  objectives,  purposes or
operations, or undertake or participate in activities other than the continuance
of its present business.

     5.2.5 DEBT CANCELLATION.  Borrower shall not cancel or otherwise forgive or
release  any claim or debt  (other  than  termination  of  Leases in  accordance
herewith) owed to Borrower by any Person, except for adequate  consideration and
in the ordinary course of Borrower's business.


                                      -24-
<PAGE>
     5.2.6 AFFILIATE TRANSACTIONS.  Borrower shall not enter into, or be a party
to, any  transaction  with an  Affiliate  of Borrower or any of the  partners of
Borrower  except in the ordinary course of business and on terms which are fully
disclosed  to Lender in advance  and are no less  favorable  to Borrower or such
Affiliate than would be obtained in a comparable  arm's-length  transaction with
an unrelated third party.

     5.2.7  ZONING.  Borrower  shall  not  initiate  or  consent  to any  zoning
reclassification  of any portion of the Property or seek any variance  under any
existing  zoning  ordinance  or use or  permit  the  use of any  portion  of the
Property in any manner that could result in such use  becoming a  non-conforming
use under any zoning  ordinance or any other  applicable  land use law,  rule or
regulation, without the prior consent of Lender.

     5.2.8 ASSETS.  Borrower  shall not purchase or own any property  other than
the Property.

     5.2.9 DEBT.  Borrower  shall not create,  incur or assume any  Indebtedness
other than the Debt except to the extent expressly permitted hereby.

     5.2.10 NO JOINT  ASSESSMENT.  Except as required by law, Borrower shall not
suffer,  permit or initiate the joint  assessment  of the Property  with (a) any
other real property  constituting  a tax lot separate from the Property,  or (b)
any portion of the Property which may be deemed to constitute personal property,
or any other procedure whereby the Lien of any taxes which may be levied against
such personal property shall be assessed or levied or charged to the Property.

     5.2.11 PRINCIPAL PLACE OF BUSINESS. Borrower shall not change its principal
place of business set forth on the first page of this  Agreement  without  first
giving Lender written notice of such change.

     5.2.12 ERISA. (a) Borrower shall not engage in any transaction  which would
cause any obligation, or action taken or to be taken, hereunder (or the exercise
by Lender of any of its rights under the Note,  this Agreement or the other Loan
Documents)  to be a  non-exempt  (under  a  statutory  or  administrative  class
exemption) prohibited transaction under ERISA.

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

          (i) Equity  interests  in Borrower are  publicly  offered  securities,
within the meaning of 29 C.F.R. ss.2510.3 101(b)(2);

          (ii) Less than twenty-five  percent (25%) of each outstanding class of
equity  interests in Borrower are held by "benefit  plan  investors"  within the
meaning of 29 C.F.R. ss.2510.3 101(f)(2); or

          (iii) Borrower  qualifies as an "operating  company" or a "real estate
operating company" within the meaning of 29 C.F.R. ss.2510.3 101(c) or (e).

     5.2.13  TRANSFERS.  Except as set forth in the Mortgage,  without the prior
written  consent of Lender,  neither  Borrower  nor any other  Person  having an
ownership or  beneficial  interest,  direct or indirect,  in Borrower or the SPC
Party shall (a) directly or indirectly sell, transfer, convey, mortgage, pledge,
or assign the Property,  any part thereof or any interest therein (including any
ownership  interest  in  Borrower  or the  SPC  Party),  (b)  further  encumber,
alienate,  grant a Lien or grant any other  interest in the Property or any part
thereof  (including  any  ownership  interest  in  Borrower  and the SPC Party),
whether  voluntarily  or  involuntarily  or (c) enter into any easement or other
agreement  granting  rights  in or  restricting  the use or  development  of the
Property.

     VI. INSURANCE; CASUALTY; CONDEMNATION; REQUIRED REPAIRS

     Section 6.1 INSURANCE.

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



                                      -25-
<PAGE>
          (i)  comprehensive  all risk  insurance  on the  Improvements  and the
Personal  Property,  including  contingent  liability from Operation of Building
Laws, Demolition Costs and Increased Cost of Construction Endorsements,  in each
case  (A) in an  amount  equal  to  one  hundred  percent  (100%)  of the  "Full
Replacement  Cost,"  which for  purposes  of this  Agreement  shall mean  actual
replacement value (exclusive of costs of excavations,  foundations,  underground
utilities and footings) with a waiver of  depreciation,  but the amount shall in
no event  be less  than the  outstanding  principal  balance  of the  Loan;  (B)
containing an agreed amount  endorsement  with respect to the  Improvements  and
Personal  Property  waiving all  co-insurance  provisions;  (C) providing for no
deductible in excess of Ten Thousand and No/100  Dollars  ($10,000) for all such
insurance  coverage;  and (D)  containing  an  "Ordinance  or Law  Coverage"  or
"Enforcement"  endorsement if any of the Improvements or the use of the Property
shall  at any time  constitute  legal  non-conforming  structures  or  uses.  In
addition,  Borrower  shall  obtain:  (y) if any portion of the  Improvements  is
currently  or at any  time  in the  future  located  in a  federally  designated
"special  flood hazard area",  flood hazard  insurance in an amount equal to the
lesser of (1) the outstanding  principal  balance of the Note or (2) the maximum
amount of such insurance  available  under the National  Flood  Insurance Act of
1968, the Flood Disaster  Protection Act of 1973 or the National Flood Insurance
Reform  Act of 1994,  as each may be amended  or such  greater  amount as Lender
shall require; and (z) earthquake insurance in amounts and in form and substance
satisfactory  to Lender in the event the  Property  is located in an area with a
high degree of seismic activity, provided that the insurance pursuant to clauses
(y) and (z) hereof shall be on terms consistent with the  comprehensive all risk
insurance policy required under this subsection (i).

               (ii) commercial  general  liability  insurance against claims for
personal injury,  bodily injury,  death or property damage occurring upon, in or
about the Property,  such insurance (A) to be on the so-called "occurrence" form
with a combined limit, including umbrella coverage, of not less than Two Hundred
Twenty Million and No/100 Dollars  ($220,000,000) or, if any of the Improvements
contain elevators, Two Hundred Twenty Million and No/100 Dollars ($220,000,000);
(B) to continue at not less than the aforesaid limit until  reasonably  required
to be changed by Lender in  writing  by reason of  changed  economic  conditions
making such protection inadequate and any new limits shall not exceed limits for
similar properties in similar location;  and (C) to cover at least the following
hazards:  (1) premises and operations;  (2) products and completed operations on
an  "if  any"  basis;  (3)  independent  contractors;  (4)  blanket  contractual
liability for all legal contracts;  and (5) contractual  liability  covering the
indemnities  contained  in Article 9 of the  Mortgage  to the extent the same is
available;

               (iii) business income  insurance (A) with loss payable to Lender;
(B) covering all risks  required to be covered by the insurance  provided for in
subsection (i) above; (C) containing an extended period of indemnity endorsement
which  provides  that after the physical loss to the  Improvements  and Personal
Property has been  repaired,  the continued loss of income will be insured until
such income either returns to the same level it was at prior to the loss, or the
expiration  of eighteen  (18) months from the date that the Property is repaired
or  replaced  and  operations   are  resumed,   whichever   first  occurs,   and
notwithstanding  that the policy may expire prior to the end of such period; and
(D) in an amount  equal to one hundred  percent  (100%) of the  projected  gross
income from the Property for a period of eighteen (18) months from the date that
the Property is repaired or replaced and operations  are resumed.  The amount of
such business income  insurance shall be determined prior to the date hereof and
at least once each year thereafter  based on Borrower's  reasonable  estimate of
the gross  income  from the  Property  for the  succeeding  eighteen  (18) month
period. All proceeds payable to Lender pursuant to this subsection shall be held
by Lender and shall be applied to the obligations  secured by the Loan Documents
from time to time due and  payable  hereunder  and  under  the  Note;  provided,
however,  that nothing herein  contained shall be deemed to relieve  Borrower of
its  obligations  to pay the  obligations  secured by the Loan  Documents on the
respective  dates  of  payment  provided  for in the  Note  and the  other  Loan
Documents  except  to the  extent  such  amounts  are  actually  paid out of the
proceeds of such business income insurance;

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

                                      -26-
<PAGE>
               (v) workers' compensation, subject to the statutory limits of the
State, and employer's  liability insurance with a limit of at least Five Hundred
Thousand  and  No/100  Dollars  ($500,000)  per  accident  and per  disease  per
employee,  and Five Hundred  Thousand and No/100 Dollars  ($500,000) for disease
aggregate in respect of any work or operations  on or about the Property,  or in
connection with the Property or its operation (if applicable);

               (vi) comprehensive boiler and machinery insurance, if applicable,
in amounts as shall be reasonably  required by Lender on terms  consistent  with
the commercial property insurance policy required under subsection (i) above;

               (vii) umbrella liability insurance in an amount not less than Two
Hundred Twenty Million and No/100 Dollars ($220,000,000) per occurrence on terms
consistent with the commercial general liability insurance policy required under
subsection (ii) above;

               (viii)  motor  vehicle  liability  coverage  for  all  owned  and
non-owned  vehicles,  including  rented and leased vehicles  containing  minimum
limits per occurrence,  including umbrella  coverage,  of One Million and No/100
Dollars ($1,000,000); and

               (ix) upon sixty (60) days' written notice,  such other reasonable
insurance  and in such  reasonable  amounts  as  Lender  from  time to time  may
reasonably  request against such other  insurable  hazards which at the time are
commonly  insured  against for property  similar to the  Property  located in or
around the region in which the Property is located.

     (b) All insurance  provided for in Section  6.1(a) shall be obtained  under
valid and enforceable policies (collectively, the "Policies" or in the singular,
the "Policy") and shall be subject to approval of lender as to deductibles.  The
Policies  shall  be  issued  by  financially  sound  and  responsible  insurance
companies  authorized  to do  business  in the State and having a claims  paying
ability  rating of "AA" or better by Standard & Poor's  Ratings Group or, if the
insurance  companies do not have claims paying  ability rating of "AA" or better
by Standard & Poor's Ratings Group, a reinsurance  endorsement shall be provided
by an insurance company  satisfying such requirement.  The Policies described in
Section 6.1 (other than those strictly  limited to liability  protection)  shall
designate  Lender  as loss  payee.  Not less  than ten  (10)  days  prior to the
expiration dates of the Policies theretofore  furnished to Lender,  certificates
of insurance  evidencing the Policies  accompanied by evidence  satisfactory  to
Lender of payment of the premiums due  thereunder  (the  "Insurance  Premiums"),
shall be delivered by Borrower to Lender.

     (c)  Any  blanket  insurance  Policy  shall  specifically  allocate  to the
Property the amount of coverage from time to time  required  hereunder and shall
otherwise  provide the same  protection as would a separate Policy insuring only
the Property in compliance with the provisions of Section 6.1(a).
 
     (d) All  Policies of  insurance  provided  for or  contemplated  by Section
6.1(a),  except  for the Policy  referenced  in  Section  6.1(a)(v),  shall name
Borrower,  as the insured and Lender as the additional insured, as its interests
may appear, and in the case of property damage, boiler and machinery,  flood and
earthquake insurance, shall contain a standard non-contributing mortgagee clause
in favor of  Lender  providing  that the loss  thereunder  shall be  payable  to
Lender.

     (e) All  Policies of  insurance  provided  for in Section  6.1(a)(v)  shall
contain clauses or endorsements to the effect that:

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

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

          (iii) the issuers  thereof shall give written  notice to Lender if the
Policy has not been renewed fifteen (15) days prior to its expiration; and

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



                                      -27-
<PAGE>
     (f) If at any time  Lender is not in receipt of written  evidence  that all
insurance required hereunder is in full force and effect,  Lender shall have the
right, without notice to Borrower, to take such action as Lender deems necessary
to protect its interest in the  Property,  including,  without  limitation,  the
obtaining  of such  insurance  coverage as Lender in its sole  discretion  deems
appropriate.  All premiums  incurred by Lender in connection with such action or
in obtaining  such  insurance and keeping it in effect shall be paid by Borrower
to Lender upon demand and,  until  paid,  shall be secured by the  Mortgage  and
shall bear interest at the Default Rate.

     Section 6.2 CASUALTY.  If the Property  shall be damaged or  destroyed,  in
whole or in part, by fire or other casualty (a "Casualty"),  Borrower shall give
prompt  notice of such damage to Lender and,  provided that the Net Proceeds are
made available for restoration, shall promptly commence and diligently prosecute
the  completion  of the  repair and  restoration  of the  Property  as nearly as
possible to the condition the Property was in immediately  prior to such fire or
other casualty, with such alterations as may be reasonably approved by Lender (a
"Restoration")  and otherwise in accordance with Section 6.4. Borrower shall pay
all  costs  of such  Restoration  whether  or not  such  costs  are  covered  by
insurance.  Lender may,  but shall not be obligated to make proof of loss if not
made  promptly  by  Borrower.  If Lender  should  elect to apply  the  insurance
proceeds  it  receives  to the  payment of the Debt  without  first  making such
insurance  proceeds  available for the full  restoration  of the Property,  then
notwithstanding  anything to the contrary  contained  herein,  Borrower shall be
excused  from any  obligation  to  restore  the  Property  following  an insured
casualty and such failure to restore shall not  constitute a default or an Event
of Default.

     Section 6.3 CONDEMNATION. Borrower shall promptly give Lender notice of the
actual or threatened  commencement of any proceeding for the Condemnation of the
Property  and shall  deliver to Lender  copies of any and all  papers  served in
connection   with  such   proceedings.   Lender  may  participate  in  any  such
proceedings,  and  Borrower  shall  from  time to time  deliver  to  Lender  all
instruments  reasonably  requested by it to permit such participation.  Borrower
shall,  at its expense,  diligently  prosecute any such  proceedings,  and shall
consult with Lender,  its attorneys and experts,  and cooperate with them in the
carrying on or defense of any such  proceedings.  Notwithstanding  any taking by
any  public  or  quasi-public   authority  through   Condemnation  or  otherwise
(including but not limited to any transfer made in lieu of or in anticipation of
the exercise of such  taking),  Borrower  shall  continue to pay the Debt at the
time  and in the  manner  provided  for  its  payment  in the  Note  and in this
Agreement  and the Debt  shall not be  reduced  until any Award  shall have been
actually  received  and applied by Lender,  after the  deduction  of expenses of
collection,  to the  reduction  or  discharge  of the Debt.  Lender shall not be
limited to the interest paid on the Award by the condemning  authority but shall
be entitled to receive out of the Award  interest at the rate or rates  provided
herein or in the Note.  If the  Property  or any  portion  thereof is taken by a
condemning  authority,  Borrower  shall,  provided  the Net  Proceeds  are  made
available  for  Restoration,  promptly  commence and  diligently  prosecute  the
Restoration of the Property and otherwise  comply with the provisions of Section
6.4. If the Property is sold,  through  foreclosure  or otherwise,  prior to the
receipt by Lender of the Award,  Lender  shall have the right,  whether or not a
deficiency judgment on the Note shall have been sought,  recovered or denied, to
receive the Award, or a portion thereof sufficient to pay the Debt.

     Section 6.4 RESTORATION. The following provisions shall apply in connection
with the Restoration of the Property:

     (a) If the Net  Proceeds  shall  be less  than  Two  Million  Five  Hundred
Thousand  and  No/100  Dollars  ($2,500,000)  and the  costs of  completing  the
Restoration  shall be less than Two Million  Five  Hundred  Thousand  and No/100
Dollars  ($2,500,000),  the Net Proceeds will be disbursed by Lender to Borrower
upon receipt, provided that all of the conditions set forth in Section 6.4(b)(i)
are met and Borrower  delivers to Lender a written  undertaking to expeditiously
commence and to  satisfactorily  complete with due diligence the  Restoration in
accordance with the terms of this Agreement.

     (b) If the Net  Proceeds  are equal to or  greater  than Two  Million  Five
Hundred Thousand and No/100 Dollars  ($2,500,000) or the costs of completing the
Restoration is equal to or greater than Five Hundred Thousand and No/100 Dollars
($500,000)  Lender shall make the Net Proceeds  available for the Restoration in
accordance  with the provisions of this Section 6.4. The term "Net Proceeds" for
purposes of this  Section 6.4 shall  mean:  (i) the net amount of all  insurance
proceeds received by Lender pursuant to Section 6.1 (a)(i),  (iv), (vi) and (ix)
as a result of such damage or  destruction,  after  deduction of its  reasonable
costs and expenses (including,  but not limited to, reasonable counsel fees), if


                                      -28-
<PAGE>
any, in collecting same  ("Insurance  Proceeds"),  or (ii) the net amount of the
Award, after deduction of its reasonable costs and expenses (including,  but not
limited to, reasonable counsel fees), if any, in collecting same  ("Condemnation
Proceeds"), whichever the case may be.

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

               (A) no Event of Default shall have occurred and be continuing;

               (B) (1) in the event the Net  Proceeds  are  Insurance  Proceeds,
          less than  twenty-five  percent  (25%) of the total  floor area of the
          Improvements  on the Property has been damaged,  destroyed or rendered
          unusable  as a result  of such  fire or other  casualty  or (2) in the
          event  the Net  Proceeds  are  Condemnation  Proceeds,  less  than ten
          percent (10%) of the land constituting the Property is taken, and such
          land is located along the perimeter or periphery of the Property,  and
          no material portion of the Improvements is located on such land;

                    (C) Leases  demising in the  aggregate a  percentage  amount
               equal to or greater than the  Rentable  Space  Percentage  of the
               total rentable space in the Property which has been demised under
               executed  and  delivered  Leases  in effect as of the date of the
               occurrence  of such fire or other  casualty or taking,  whichever
               the case may be, shall remain in full force and effect during and
               after the completion of the Restoration. The term "Rentable Space
               Percentage"  shall mean a percentage amount equal to seventy-five
               percent (75%);

                    (D)  Borrower  shall  commence  the  Restoration  as soon as
               reasonably  practicable  (but in no event  later  than sixty (60)
               days after such damage or  destruction  or taking,  whichever the
               case may be,  occurs)  and shall  diligently  pursue  the same to
               satisfactory completion;

                    (E) Lender shall be satisfied  that any operating  deficits,
               including all scheduled  payments of principal and interest under
               the Note,  which will be incurred with respect to the Property as
               a result of the  occurrence of any such fire or other casualty or
               taking, whichever the case may be, will be covered out of (1) the
               Net Proceeds,  (2) the insurance  coverage referred to in Section
               6.1(a)(iii), if applicable, or (3) by other funds of Borrower;

                    (F) Lender shall be satisfied that the  Restoration  will be
               completed  on or before the earliest to occur of (1) the Maturity
               Date,  (2) the earliest date required for such  completion  under
               the terms of any Major  Leases,  (3) such time as may be required
               under  applicable  zoning law,  ordinance,  rule or regulation in
               order to repair and restore the Property to the  condition it was
               in  immediately  prior to such  fire or other  casualty  or to as
               nearly as possible the condition it was in  immediately  prior to
               such taking, as applicable or (4) the expiration of the insurance
               coverage referred to in Section 6.1(a)(iii);

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

                    (H) the Restoration  shall be done and completed by Borrower
               in a  diligent  fashion  and in  compliance  with all  applicable
               governmental  laws,  rules and  regulations  (including,  without
               limitation, all applicable environmental laws); and

                    (I) such fire or other  casualty or taking,  as  applicable,
               does not  result  in the loss of access  to the  Property  or the
               related Improvements; and

                    (J) the Casualty  Consultant  shall have determined that the
               Net Proceeds are sufficient to fully pay for the Restoration.

          (ii) The Net Proceeds  shall be held by Lender in an  interest-bearing
     account and,  until  disbursed in  accordance  with the  provisions of this
     Section 6.4(b), shall constitute additional security for the Debt and other
     obligations  under the Loan Documents.  The Net Proceeds shall be disbursed
     by Lender to, or as  directed  by,  Borrower  from time to time  during the
     course of the Restoration,  upon receipt of evidence satisfactory to Lender


                                      -29-
<PAGE>
     that (A) all materials  installed and work and labor  performed  (except to
     the extent that they are to be paid for out of the requested  disbursement)
     in  connection  with the  Restoration  have been paid for in full,  and (B)
     there  exist  no  notices  of   pendency,   stop  orders,   mechanic's   or
     materialman's  liens or notices  of  intention  to file same,  or any other
     liens or encumbrances  of any nature  whatsoever on the Property which have
     not either been fully bonded to the  satisfaction  of Lender and discharged
     of record or in the alternative fully insured to the satisfaction of Lender
     by the title company issuing the Title Insurance Policy.

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

          (iv) In no event shall Lender be obligated  to make  disbursements  of
     the Net  Proceeds  in  excess  of an  amount  equal to the  costs  actually
     incurred from time to time for work in place as part of the Restoration, as
     certified by the Casualty  Consultant,  minus the Casualty  Retainage.  The
     term "Casualty  Retainage"  shall mean an amount equal to ten percent (10%)
     (with release of retainage for subcontract  where work is completed) of the
     costs actually  incurred for work in place as part of the  Restoration,  as
     certified  by the  Casualty  Consultant,  until  the  Restoration  has been
     completed.  The Casualty  Retainage shall in no event, and  notwithstanding
     anything to the contrary set forth above in this  Section  6.4(b),  be less
     than  the  amount   actually  held  back  by  Borrower  from   contractors,
     subcontractors  and materialmen  engaged in the  Restoration.  The Casualty
     Retainage shall not be released until the Casualty Consultant  certifies to
     Lender that the  Restoration  has been  completed  in  accordance  with the
     provisions of this Section 6.4(b) and that all approvals  necessary for the
     re-occupancy   and  use  of  the  Property  have  been  obtained  from  all
     appropriate  governmental and  quasi-governmental  authorities,  and Lender
     receives evidence  satisfactory to Lender that the costs of the Restoration
     have  been  paid in full  or  will  be  paid  in full  out of the  Casualty
     Retainage;  provided,  however, that Lender will release the portion of the
     Casualty Retainage being held with respect to any contractor, subcontractor
     or  materialman  engaged in the  Restoration  as of the date upon which the
     Casualty Consultant certifies to Lender that the contractor,  subcontractor
     or materialman has  satisfactorily  completed all work and has supplied all
     materials  in  accordance   with  the   provisions  of  the   contractor's,
     subcontractor's or materialman's contract, the contractor, subcontractor or
     materialman  delivers  the lien  waivers and evidence of payment in full of
     all sums due to the  contractor,  subcontractor  or  materialman  as may be
     reasonably  requested by Lender or by the title  company  issuing the Title
     Insurance Policy, and Lender receives an endorsement to the Title Insurance
     Policy  insuring  the  continued  priority of the lien of the  Mortgage and
     evidence  of  payment  of any  premium  payable  for such  endorsement.  If
     required  by  Lender,  the  release  of any such  portion  of the  Casualty
     Retainage shall be approved by the surety company, if any, which has issued
     a payment or performance bond with respect to the contractor, subcontractor
     or materialman.

          (v) Lender  shall not be obligated  to make  disbursements  of the Net
     Proceeds more frequently than once every calendar month.

          (vi)  If at any  time  the Net  Proceeds  or the  undisbursed  balance
     thereof  shall  not,  in the  opinion  of Lender in  consultation  with the
     Casualty Consultant,  be sufficient to pay in full the balance of the costs
     which are estimated by the Casualty Consultant to be incurred in connection
     with the completion of the Restoration,  no further  disbursements shall be
     made until such time as such deficiency shall no longer exist.

          (vii) The excess,  if any, of the Net Proceeds  deposited  with Lender
     after the Casualty Consultant  certifies to Lender that the Restoration has
     been completed in accordance  with the  provisions of this Section  6.4(b),
     and the receipt by Lender of evidence satisfactory to Lender that all costs



                                      -30-
<PAGE>
     incurred in connection with the Restoration  have been paid in full,  shall
     be remitted by Lender to Borrower,  provided no Event of Default shall have
     occurred and shall be continuing  under the Note,  this Agreement or any of
     the other Loan Documents.

     (c)  All  Net  Proceeds  not  required  (i) to be  made  available  for the
Restoration  or (ii) to be returned to Borrower as excess Net Proceeds  pursuant
to Section  6.4(b)(vii) may be retained and applied by Lender toward the payment
of the Debt  whether or not then due and  payable in such  order,  priority  and
proportions  as Lender in its sole  discretion  shall  deem  proper,  or, at the
discretion  of  Lender,  the same may be paid,  either  in whole or in part,  to
Borrower for such purposes as Lender shall designate, in its discretion.

     (d) In the  event  of  foreclosure  of the  Mortgage  with  respect  to the
Property,  or other transfer of title to the Property in extinguishment in whole
or in part of the Debt all right,  title and  interest of Borrower in and to the
Policies that are not blanket Policies then in force concerning the Property and
all proceeds  payable  thereunder  shall thereupon vest in the purchaser at such
foreclosure or Lender or other transferee in the event of such other transfer of
title.

     VII. RESERVE FUNDS

     Section 7.1 INTENTIONALLY OMITTED.

     Section 7.2 TAX ESCROW FUND.

     On each Payment Date,  Borrower shall deposit with Agent in accordance with
the Cash Management Agreement (a) one-twelfth of the Taxes that Lender estimates
will be  payable  during  the  next  ensuing  twelve  (12)  months  in  order to
accumulate  with Lender  sufficient  funds to pay all such Taxes at least thirty
(30) days prior to their  respective due dates (said amounts in (a)  hereinafter
called the "Tax Escrow Fund"). Lender will apply the Tax Escrow Fund to payments
of Taxes  required to be made by Borrower  pursuant to Section  5.1.2 hereof and
under the  Mortgage.  In making any  payment  relating  to the Tax Escrow  Fund,
Lender may do so according to any bill,  statement or estimate procured from the
appropriate  public  office (with  respect to Taxes),  without  inquiry into the
accuracy of such bill,  statement  or estimate or into the  validity of any tax,
assessment,  sale, forfeiture, tax lien or title or claim thereof. If the amount
of the Tax  Escrow  Fund shall  exceed the  amounts  due for Taxes  pursuant  to
Section 5.1.2 hereof, Lender shall, in its sole discretion, return any excess to
Borrower  or credit such excess  against  future  payments to be made to the Tax
Escrow Fund. Any amount remaining in the Tax Escrow Fund after the Debt has been
paid in full shall be returned to Borrower.  In allocating  such excess,  Lender
may deal with the Person  shown on the  records of Lender to be the Owner of the
Property.  If at any time Lender reasonably  determines that the Tax Escrow Fund
is not or will not be  sufficient  to pay Taxes and  Insurance  Premiums  by the
dates set forth in (a) and (b)  above,  Lender  shall  notify  Borrower  of such
determination  and Borrower shall increase its monthly payments to Lender by the
amount that Lender  estimates is sufficient  to make up the  deficiency at least
thirty (30) days prior to delinquency of the Taxes and/or thirty (30) days prior
to expiration of the Policies, as the case may be.

     Section 7.3 INTENTIONALLY DELETED.

     Section 7.4 TERMINATION ACCOUNT.

     In the event that any termination  payments are paid pursuant to Section 35
of the Everen Lease, all such amounts shall be delivered to Lender and deposited
into a segregated  account with Agent (the "Termination  Account").  All amounts
deposited  into the  Termination  Account shall be invested in  accordance  with
Section 35 of the Lease and shall constitute  additional security for payment of
the Debt;  provided,  however,  that if an Event of Default shall occur,  Lender
shall not apply such amounts to the payment of the Debt until the  occurrence of
the Early Termination Date (as defined in the Everen Lease).

     Section 7.5 RESERVE FUNDS, GENERALLY.

     7.5.1  Borrower  grants  to  Lender  a  first-priority  perfected  security
interest  in each of the Reserve  Funds and any and all monies now or  hereafter
deposited in each Reserve Fund as  additional  security for payment of the Debt.
Until  expended  or applied in  accordance  herewith,  the  Reserve  Funds shall
constitute additional security for the Debt.





                                      -31-
<PAGE>
     7.5.2 Upon the  occurrence of an Event of Default,  Lender may, in addition
to any and all other  rights and remedies  available  to Lender,  apply any sums
then  present in any or all of the  Reserve  Funds to the payment of the Debt in
any order in its sole discretion.

     7.5.3 Borrower shall not,  without  obtaining the prior written  consent of
Lender,  further  pledge,  assign or grant any security  interest in any Reserve
Fund or the monies deposited therein or permit any lien or encumbrance to attach
thereto,  or any levy to be made  thereon,  or any UCC-1  Financing  Statements,
except  those  naming  Lender as the  secured  party,  to be filed with  respect
thereto.

     7.5.4 Lender shall not be liable for any loss  sustained on the  investment
of any funds constituting the Reserve Funds.

     VIII. DEFAULTS

     Section 8.1 EVENT OF DEFAULT.

     (a) Each of the  following  events  shall  constitute  an event of  default
hereunder (an "Event of Default"):

          (i) if any portion of the Debt is not paid when due;

          (ii) if any of the Taxes or Other  Charges  are not paid when the same
are due and payable  unless  sufficient  escrows are  deposited  for the payment
thereof in accordance with the provisions of Article VII and the Cash Management
Agreement;

          (iii) if the  Policies  are not kept in full force and  effect,  or if
certified  copies of the  Policies are not  delivered to Lender  within ten (10)
days after request;

          (iv) if Borrower  transfers or  encumbers  any portion of the Property
without  Lender's prior written consent or otherwise  violates the provisions of
Article 6 of the Mortgage;

          (v) if any  representation  or warranty made by Borrower  herein or in
any other Loan Document, or in any report,  certificate,  financial statement or
other  instrument,  agreement  or document  furnished  to Lender shall have been
false or misleading in any material respect as of the date the representation or
warranty was made;

          (vi)  if  Borrower  shall  make  an  assignment  for  the  benefit  of
creditors;

          (vii) if a receiver,  liquidator  or trustee  shall be  appointed  for
Borrower  shall be  adjudicated a bankrupt or insolvent,  or if any petition for
bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or
any similar federal or state law, shall be filed by or against, consented to, or
acquiesced  in by,  Borrower or such  guarantor,  or if any  proceeding  for the
dissolution or  liquidation  of Borrower or such guarantor  shall be instituted;
provided, however, if such appointment, adjudication, petition or proceeding was
involuntary  and not consented to by Borrower or such  guarantor,  upon the same
not being discharged, stayed or dismissed within sixty (60) days;

          (viii) if Borrower  attempts to assign its rights under this Agreement
or any of the  other  Loan  Documents  or any  interest  herein  or  therein  in
contravention of the Loan Documents;

          (ix) if Borrower  breaches any of its  respective  negative  covenants
contained in Section 5.2 or any covenant contained in Section 4.1.30 hereof;

          (x) with respect to any term,  covenant or provision  set forth herein
which  specifically  contains a notice  requirement or grace period, if Borrower
shall be in default under such term,  covenant or condition  after the giving of
such notice or the expiration of such grace period;

          (xi) if  Borrower  shall  continue  to be in Default  under any of the
other  terms,  covenants  or  conditions  of this  Agreement  not  specified  in
subsections  (i) to (x) above,  for ten (10) days after notice to Borrower  from
Lender, in the case of any Default which can be cured by the payment of a sum of
money, or for thirty (30) days after notice from Lender in the case of any other
Default; provided,  however, that if such non-monetary Default is susceptible of
cure but cannot  reasonably  be cured  within  such 30-day  period and  provided
further that  Borrower  shall have  commenced  to cure such Default  within such


                                      -32-
<PAGE>
30-day period and thereafter  diligently and expeditiously  proceeds to cure the
same,  such  30-day  period  shall be  extended  for such time as is  reasonably
necessary  for Borrower in the exercise of due  diligence to cure such  Default,
such additional period not to exceed sixty (60) days; or

          (xii) if there shall be default under any of the other Loan  Documents
beyond any applicable cure periods  contained in such  documents,  whether as to
Borrower or the  Property,  or if any other such event shall occur or  condition
shall  exist,  if the effect of such event or  condition  is to  accelerate  the
maturity  of any  portion  of the Debt or to  permit  Lender to  accelerate  the
maturity of all or any portion of the Debt.

     (b) Upon the  occurrence  of an Event of  Default  (other  than an Event of
Default  described  in  clauses  (vi),  (vii) or (viii)  above)  and at any time
thereafter Lender may, in addition to any other rights or remedies  available to
it  pursuant  to this  Agreement  and the other Loan  Documents  or at law or in
equity, Lender may take such action, without notice or demand, that Lender deems
advisable  to  protect  and  enforce  its  rights  against  Borrower  and in the
Property,  including,  without limitation,  declaring the Debt to be immediately
due and payable,  and Lender may enforce or avail itself of any or all rights or
remedies  provided in the Loan  Documents  against  Borrower  and the  Property,
including,  without  limitation,  all rights or remedies  available at law or in
equity; and upon any Event of Default described in clauses (vi), (vii) or (viii)
above,  the Debt and all other  obligations of Borrower  hereunder and under the
other Loan Documents shall immediately and automatically become due and payable,
without notice or demand,  and Borrower hereby  expressly waives any such notice
or  demand,  anything  contained  herein or in any other  Loan  Document  to the
contrary notwithstanding.

     Section 8.2 REMEDIES.

     (a) Upon the  occurrence of an Event of Default,  all or any one or more of
the rights,  powers,  privileges and other remedies  available to Lender against
Borrower under this  Agreement or any of the other Loan  Documents  executed and
delivered by, or applicable to, Borrower or at law or in equity may be exercised
by Lender at any time and from  time to time,  whether  or not all or any of the
Debt shall be declared  due and  payable,  and whether or not Lender  shall have
commenced any foreclosure  proceeding or other action for the enforcement of its
rights  and  remedies  under  any of the  Loan  Documents  with  respect  to the
Property.  Any such actions taken by Lender shall be cumulative  and  concurrent
and may be pursued independently,  singly, successively,  together or otherwise,
at such time and in such order as Lender may  determine in its sole  discretion,
to the fullest extent permitted by law, without impairing or otherwise affecting
the other rights and remedies of Lender  permitted by law, equity or contract or
as set  forth  herein or in the  other  Loan  Documents.  Without  limiting  the
generality  of the  foregoing,  Borrower  agrees  that if an Event of Default is
continuing  (i)  Lender is not  subject  to any "one  action"  or  "election  of
remedies"  law or  rule,  and (ii) all  liens  and  other  rights,  remedies  or
privileges provided to Lender shall remain in full force and effect until Lender
has exhausted all of its remedies against the Property and the Mortgage has been
foreclosed,  sold and/or otherwise  realized upon in satisfaction of the Debt or
the Debt has been paid in full.

     (b) Lender  shall have the right from time to time to  partially  foreclose
the Mortgage in any manner and for any amounts  secured by the Mortgage then due
and payable as determined by Lender in its sole  discretion  including,  without
limitation,  the following  circumstances:  (i) in the event  Borrower  defaults
beyond any  applicable  grace  period in the  payment  of one or more  scheduled
payments of principal and interest, Lender may foreclose the Mortgage to recover
such delinquent payments,  or (ii) in the event Lender elects to accelerate less
than the entire outstanding  principal balance of the Loan, Lender may foreclose
the Mortgage to recover so much of the  principal  balance of the Loan as Lender
may  accelerate and such other sums secured by the Mortgage as Lender may elect.
Notwithstanding  one or more partial  foreclosures,  the  Property  shall remain
subject to the  Mortgage to secure  payment of sums  secured by the Mortgage and
not previously recovered.

     (c) Lender shall have the right from time to time to sever the Note and the
other  Loan  Documents  into one or more  separate  notes,  mortgages  and other
security  documents  (the "Severed Loan  Documents")  in such  denominations  as
Lender shall  determine in its sole  discretion  for purposes of evidencing  and
enforcing its rights and remedies provided hereunder. Borrower shall execute and
deliver to Lender from time to time,  promptly  after the  request of Lender,  a
severance agreement and such other documents as Lender shall request in order to
effect  the  severance  described  in the  preceding  sentence,  all in form and



                                      -33-
<PAGE>
substance reasonably satisfactory to Lender. After the occurrence of an Event of
Default,  Borrower hereby absolutely and irrevocably appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents necessary or desirable to effect the aforesaid  severance,
Borrower  ratifying  all that  its said  attorney  shall do by  virtue  thereof;
provided,  however,  Lender shall not make or execute any such  documents  under
such power  until  three (3) days after  notice  has been given to  Borrower  by
Lender of Lender's intent to exercise its rights under such power. Except as may
be required in connection with a securitization  pursuant to Section 9.1 hereof,
(i) Borrower  shall not be  obligated  to pay any costs or expenses  incurred in
connection with the preparation,  execution,  recording or filing of the Severed
Loan  Documents,  and (ii) the  Severed  Loan  Documents  shall not  contain any
representations, warranties or covenants not contained in the Loan Documents and
any such  representations and warranties contained in the Severed Loan Documents
will be given by Borrower only as of the Closing Date.

     Section 8.3 REMEDIES CUMULATIVE; WAIVERS.

     The rights,  powers and  remedies of Lender under this  Agreement  shall be
cumulative  and not  exclusive of any other right,  power or remedy which Lender
may  have  against  Borrower  pursuant  to  this  Agreement  or the  other  Loan
Documents, or existing at law or in equity or otherwise. Lender's rights, powers
and remedies may be pursued singly,  concurrently or otherwise, at such time and
in such order as Lender may determine in Lender's sole  discretion.  No delay or
omission  to  exercise  any  remedy,  right or power  accruing  upon an Event of
Default shall impair any such remedy,  right or power or shall be construed as a
waiver thereof,  but any such remedy,  right or power may be exercised from time
to time and as often as may be  deemed  expedient.  A waiver of one  Default  or
Event of Default with respect to Borrower  shall not be construed to be a waiver
of any  subsequent  Default  or Event of Default  by  Borrower  or to impair any
remedy, right or power consequent thereon.

     IX. SPECIAL PROVISIONS

     Section 9.1 SALE OF NOTES AND SECURITIZATION.

     At the  request  of the holder of the Note and,  to the extent not  already
required to be provided by Borrower  under this  Agreement,  Borrower  shall use
reasonable  efforts to satisfy the market  standards  to which the holder of the
Note customarily  adheres or which may be reasonably required in the marketplace
or by  the  Rating  Agencies  in  connection  with  the  sale  of  the  Note  or
participations therein or the first successful  securitization (such sale and/or
securitization,  the "Securitization") of rated single or multi-class securities
(the "Securities")  secured by or evidencing ownership interests in the Note and
the Mortgage, including, without limitation, to:

     (a) (i) provide such  financial and other  information  with respect to the
Property,  Borrower and the Manager which is customarily maintained by Borrower,
(ii) provide budgets relating to the Property which is customarily maintained by
Borrower  and (iii) at  Lender's  expense,  to  perform or permit or cause to be
performed  or  permitted  such  site  inspection,  appraisals,  market  studies,
environmental  reviews and reports (Phase I's and, if appropriate,  Phase II's),
engineering reports and other due diligence  investigations of the Property,  as
may be reasonably  requested by the holder of the Note or the Rating Agencies or
as may be necessary or appropriate in connection  with the  Securitization  (the
"Provided Information"),  together, if customary,  with appropriate verification
and/or  consents  of the  Provided  Information  through  letters of auditors or
opinions of counsel of independent attorneys acceptable to Lender and the Rating
Agencies;

     (b) at Lender's  expense,  cause counsel to render  opinions,  which may be
relied upon by the holder of the Note, the Rating Agencies and their  respective
counsel,  agents  and  representatives,  as  to  non-consolidation,   fraudulent
conveyance,  and true  sale  and/or  lease or any  other  opinion  customary  in
securitization  transactions,  which  counsel and opinions  shall be  reasonably
satisfactory to the holder of the Note and the Rating Agencies;

     (c) update such  representations  and warranties made in the Loan Documents
as of the  closing  date of the  Securitization  with  respect to the  Property,
Borrower,  and the Loan Documents as are customarily  provided in securitization
transactions and as may be reasonably requested by the holder of the Note or the
Rating Agencies; and

     (d)  execute  such  amendments  to the Loan  Documents  and  organizational
documents, enter into a lockbox or similar arrangement with respect to the Rents
as may be  requested  by the  holder  of the  Note  or the  Rating  Agencies  or


                                      -34-
<PAGE>
otherwise to effect the Securitization;  provided,  however, that Borrower shall
not be required to modify or amend any Loan  Document  if such  modification  or
amendment  would (i) change  the  interest  rate,  the  stated  maturity  or the
amortization  of  principal  set forth in the Note,  or (ii) modify or amend any
other material  economic term of the Loan or materially  increase any liability,
indemnity or other obligation.

     (e) If  requested  by  Lender,  Borrower  shall  provide  Lender  with  the
following  financial  statements (it being  understood that Lender shall request
such  financial  statements if it anticipates  that the principal  amount of the
Loan at the time of  Securitization  may, or if the principal amount of the Loan
at any time during which the Loan is included in a Securitization  does,  equals
or exceeds 20% of the aggregate  principal amount of all mortgage loans included
in the  Securitization),  and  summaries  of such  financial  statements  if the
principal  amount of the Loan at any such time  equals  or  exceeds  10% of such
aggregate principal amount:

          (i) As of the  Closing  Date,  a balance  sheet  with  respect  to the
     Property for the two most recent fiscal years,  meeting the requirements of
     Section  210.3-01  of  Regulation  S-X of the  Securities  Act of 1933,  as
     amended, and statements of income and statements of cash flows with respect
     to the  Property  for the three  most  recent  fiscal  years,  meeting  the
     requirements of Section 210.3-02 of Regulation S-X, and, to the extent that
     such  balance  sheet is more  than 135  days  old as of the  Closing  Date,
     interim  financial  statements of the Property  meeting the requirements of
     Section  210.3-01 and  210.3-02 of  Regulation  S-X (all of such  financial
     statements,  collectively,  the "Standard Statements");  provided, however,
     that if the Property  would be deemed to constitute a business and not real
     estate  under  Regulation  S-X that has been  acquired by Borrower  from an
     unaffiliated  third party (an "Acquired  Property"),  as to which the other
     conditions set forth in Section 210.3-05 of Regulation S-X for provision of
     financial statements in accordance with such Section have been met, in lieu
     of the Standard Statements  otherwise required by this paragraph,  Borrower
     shall  instead  provide the financial  statements  acquired by such Section
     210.3-05 of Regulation S-X ("Acquired Property Statements").

          (ii) Not  later  than  thirty-eight  (38)  days  after the end of each
     fiscal quarter  following the Closing Date, a balance sheet of the Property
     as of the end of such fiscal quarter,  meeting the  requirements of Section
     210.3-01 of Regulation S-X, and statements of income and statements of cash
     flows of the Property for the period  commencing  following the last day of
     the most recent  fiscal year and ending on the date of such  balance  sheet
     and for the  corresponding  period of the most recent fiscal year,  meeting
     the requirements of Section  210.3-02 of Regulation S-X (provided,  that if
     for such  corresponding  period of the most  recent  fiscal  year  Acquired
     Property  Statements  were permitted to be provided  hereunder  pursuant to
     Section  9.1(e)(i) above,  Borrower shall instead provide Acquired Property
     Statements for such corresponding period). If requested by Lender, Borrower
     shall  also  provide  "summarized  financial  information,"  as  defined in
     Section  210.1-02(bb)  of Regulation  S-X,  with respect to such  quarterly
     financial statements.

          (iii)  Not later  than  eighty-three  (83) days  after the end of each
     fiscal year  following the Closing Date, a balance sheet of the Property as
     of the end of  such  fiscal  year,  meeting  the  requirements  of  Section
     210.3-01 of Regulation S-X, and statements of income and statements of cash
     flows of the  Property for such fiscal year,  meeting the  requirements  of
     Section 210.3-02 of Regulation S-X. If requested by Lender,  Borrower shall
     provide  summarized  financial  information  with  respect  to such  annual
     financial statements.

          (iv)  Within  ten (10)  Business  Days  after  notice  from  Lender in
     connection with the Securitization of this Loan, such additional  financial
     statements, such that, as of the date (each an "Offering Document Date") of
     each prospectus,  private placement memorandum,  offering circular or other
     offering document for such  Securitization  (each an "Offering  Document"),
     Borrower  shall have  provided  Lender  with all  financial  statements  as
     described in Section  9.1(e)(i)  above;  provided  that the fiscal year and
     interim periods for which such financial statements shall be provided shall
     be determined as of such Offering Document Date.

          (v)  In  the  event   Lender   determines,   in   connection   with  a
     Securitization,  that the financial  statements required in order to comply
     with  Regulation  S-X or Legal  Requirements  are  other  than as  provided
     herein,  then  notwithstanding  the provisions of this Section,  Lender may
     request, and Borrower shall promptly provide,  such combination of Acquired
     Property Statements and/or Standard Statements as may be necessary for such
     compliance.
                                      -35-
<PAGE>
          (vi) Any  other or  additional  financial  statements,  or  financial,
     statistical  or  operating  information,  as shall be required  pursuant to
     Regulation S-X or other Legal  Requirements in connection with any Offering
     Document or any filing under or pursuant to the Securities  Exchange Act in
     connection with or relating to a  Securitization  (hereinafter an "Exchange
     Act  Filing") or as shall  otherwise be  reasonably  requested by Lender to
     meet disclosure, rating agency or marketing requirements.

          (vii) All financial statements provided by Borrower hereunder shall be
     prepared in accordance with generally accepted accounting  principles,  and
     shall meet the  requirements of Regulation S-X and other  applicable  Legal
     Requirements.  All financial  statements relating to a fiscal year shall be
     audited  by  the  independent  accountants  in  accordance  with  generally
     accepted auditing standards,  Regulation S-X and all other applicable Legal
     Requirements,  shall be accompanied by the manually  executed report of the
     independent  accountants thereon,  which report shall meet the requirements
     of Regulation S-X and all other applicable Legal Requirements, and shall be
     further   accompanied  by  a  manually  executed  written  consent  of  the
     independent accountants, in form and substance acceptable to Lender, to the
     inclusion of such  financial  statements  in any offering  document and any
     Exchange  Act  Filing  and to  the  use of the  name  of  such  independent
     accountants and the reference to such independent  accountants as "experts"
     in any offering  document  and  Exchange Act Filing,  all of which shall be
     provided at the same time as the related financial  statements are required
     to be  provided,  provided  however  that  Lender  timely  provides to such
     accountants  such  information as is required by such accountants to render
     such  consent.  All  other  quarterly  financial  statements  which are not
     certified  by  Ernst & Young  shall be  certified  by the  chief  financial
     officer of Borrower,  which  certification  shall state that such financial
     statements to such person's  knowledge meet the  requirements  set forth in
     the first sentence of this paragraph.

Borrower  shall not be  obligated  to pay any third  party  costs or expenses in
connection  with  a  Securitization   other  than  (i)  costs  relating  to  the
indemnification  obligations  set forth herein and (ii) costs  relating to items
already required to be provided by Borrower under this Agreement.

     Section 9.2 SECURITIZATION INDEMNIFICATION.

     (a) In connection with a  Securitization,  Borrower agrees (i) to indemnify
Lender  and its  Affiliates  for any  losses,  claims,  damages  or  liabilities
(collectively,  the  "Liabilities") to which Lender or its Affiliates may become
subject  insofar  as the  Liabilities  arise out of or are based upon any untrue
statement  or alleged  untrue  statement  of any  material  fact in the Provided
Information  or arise out of or are based upon the omission or alleged  omission
to state in the Provided  Information  a material  fact required to be stated in
the  Provided  Information  necessary  in order to make  the  statements  in the
Provided  Information,  in light of the circumstances under which they were made
not misleading and (ii) to reimburse  Lender and its Affiliates for any legal or
other  expenses  reasonably  incurred by Lender or its  Affiliates in connection
with defending or investigating the Liabilities.

     (b) The  liabilities and obligations of both Borrower and Lender under this
Section 9.2 shall survive the termination of this Agreement and the satisfaction
and discharge of the Debt.

     Section 9.3 INTENTIONALLY OMITTED.

     Section 9.4 EXCULPATION.

     Subject to the qualifications below, Lender shall not enforce the liability
and obligation of Borrower to perform and observe the  obligations  contained in
the Note, this Agreement, the Mortgage or the other Loan Documents by any action
or proceeding  wherein a money judgment shall be sought  against  Borrower,  its
partners, officers,  directors,  employees or agents (the "Exculpated Parties"),
except  that  Lender may bring a  foreclosure  action,  an action  for  specific
performance  or any other  appropriate  action or proceeding to enable Lender to
enforce  and realize  upon its  interest  under the Note,  this  Agreement,  the
Mortgage and the other Loan  Documents,  or in the Property,  the Rents,  or any
other  collateral  given to Lender  pursuant  to the Loan  Documents;  provided,
however,  that, except as specifically provided herein, any judgment in any such
action or proceeding shall be enforceable against Borrower only to the extent of
Borrower's  interest in the Property,  in the Rents and in any other  collateral
given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage
and the other Loan  Documents,  agrees that it shall not sue for, seek or demand
any deficiency  judgment  against the  Exculpated  Parties in any such action or
proceeding  under or by reason of or under or in connection  with the Note, this

                                      -36-
<PAGE>
Agreement,  the Mortgage or the other Loan  Documents.  The  provisions  of this
section shall not,  however,  (a) constitute a waiver,  release or impairment of
any obligation evidenced or secured by any of the Loan Documents; (b) impair the
right of Lender to name Borrower as a party  defendant in any action or suit for
foreclosure  and sale under any of the Mortgage;  (c) impair the right of Lender
to obtain the  appointment  of a  receiver;  (d) impair the  enforcement  of the
Assignment of Leases;  (e)  constitute a prohibition  against Lender to commence
any other  appropriate  action or proceeding in order for Lender to exercise its
remedies  against the Property (y) as set forth in the Loan  Documents or (z) as
are available  under  applicable law; or (f) constitute a waiver of the right of
Lender to enforce the liability and obligation of Borrower, by money judgment or
otherwise,  to the extent of any actual loss, damage, cost, expense,  liability,
claim or other  obligation  incurred by Lender  (including  attorneys'  fees and
costs reasonably incurred) arising out of or in connection with the following:

     (i)  fraud or intentional misrepresentation by Borrower or any guarantor in
          connection  with the Loan which has a material  adverse  effect of the
          Borrower;

     (ii) the gross negligence or willful misconduct of Borrower;

     (iii)the  breach  of  any  covenant  or  indemnification  provision  in the
          Environmental  Indemnity or in the Mortgage  concerning  environmental
          laws,  hazardous  substances and asbestos and any  indemnification  of
          Lender with respect thereto in either document;

     (iv) the removal or disposal by Borrower or its  affiliates  of any portion
          of the Property after an Event of Default;

     (v)  the  misapplication  or  conversion  by Borrower of (A) any  insurance
          proceeds  paid by  reason of any loss,  damage or  destruction  to the
          Property,  (B) any awards or other amounts received in connection with
          the condemnation of all or a portion of the Property, or (C) any Rents
          following an Event of Default;

     (vi) failure to pay charges for labor or  materials  or other  charges that
          can create liens on any portion of the Property;

     (vii)any  security  deposits,   advance  deposits  or  any  other  deposits
          collected  with  respect to the  Property  which are not  delivered to
          Lender upon a  foreclosure  of the Property or action in lieu thereof,
          except to the  extent  any such  security  deposits  were  applied  in
          accordance with the terms and conditions of any of the Leases prior to
          the  occurrence  of the  Event  of  Default  that  gave  rise  to such
          foreclosure or action in lieu thereof; and

   (viii) Borrower's  indemnifications  of Lender  set forth in  Section  9.2
          hereof.

     Notwithstanding anything to the contrary in this Agreement, the Note or any
of the Loan  Documents,  (A) Lender shall not be deemed to have waived any right
which  Lender  may have  under  Section  506(a),  506(b),  1111(b)  or any other
provisions  of the U.S.  Bankruptcy  Code to file a claim for the full amount of
the Debt  secured  by the  Mortgage  or to  require  that all  collateral  shall
continue to secure all of the Debt owing to Lender in  accordance  with the Loan
Documents,  and (B) the Debt shall be fully  recourse  to  Borrower in the event
that:  (i)  Borrower  fails to obtain  Lender's  prior  written  consent  to any
subordinate  financing or other voluntary Lien encumbering the Property; or (ii)
Borrower  fails to obtain  Lender's  prior  written  consent to any  assignment,
transfer,  or conveyance of the Property or any interest  therein as required by
the Mortgage or hereunder.

     Section 9.5 TERMINATION OF MANAGER.

     If (a) the Manager shall default after  applicable  notice and cure periods
have expired under the Management  Agreement,  (b) the amounts  evidenced by the
Note have  been  accelerated  pursuant  to  Section  8.1(b)  hereof,  (c) at the
Maturity  Date,  the Debt is not repaid in full, or (d) the Manager shall become
insolvent,  Borrower shall,  at the request of Lender,  terminate the Management
Agreement and replace the Manager with a manager approved by Lender on terms and
conditions  reasonably  satisfactory to Lender,  it being  understood and agreed
that the  management  fee for such  replacement  manager  shall not exceed  then
prevailing market rates.





                                      -37-
<PAGE>
     Section 9.6 SERVICER.

     At the option of Lender, the Loan may be serviced at no cost to Borrower by
a servicer/trustee  (the "Servicer")  selected by Lender and Lender may delegate
all or any portion of its  responsibilities  under this  Agreement and the other
Loan Documents to the Servicer pursuant to a servicing agreement (the "Servicing
Agreement") between Lender and Servicer.

     X. MISCELLANEOUS

     Section 10.1 SURVIVAL.

     This  Agreement  and  all  covenants,   agreements,   representations   and
warranties made herein and in the certificates  delivered  pursuant hereto shall
survive  the  making by Lender of the Loan and the  execution  and  delivery  to
Lender of the Note,  and shall  continue in full force and effect so long as all
or any of the Debt is outstanding and unpaid unless a longer period is expressly
set forth herein or in the other Loan Documents.  Whenever in this Agreement any
of the parties hereto is referred to, such reference  shall be deemed to include
the legal representatives,  successors and assigns of such party. All covenants,
promises and agreements in this  Agreement,  by or on behalf of Borrower,  shall
inure to the  benefit of the legal  representatives,  successors  and assigns of
Lender.

     Section 10.2 LENDER'S DISCRETION.

     Whenever pursuant to this Agreement, Lender exercises any right given to it
to approve or disapprove,  or any  arrangement or term is to be  satisfactory to
Lender,  the decision of Lender to approve or  disapprove  or to decide  whether
arrangements or terms are satisfactory or not  satisfactory  shall (except as is
otherwise  specifically herein provided) be in the sole discretion of Lender and
shall be final and conclusive.

     Section 10.3 GOVERNING LAW.

     (A) THE LOAN WAS MADE BY LENDER AND  ACCEPTED  BY  BORROWER IN THE STATE OF
NEW YORK, AND THE PROCEEDS OF THE NOTE DELIVERED  PURSUANT HERETO 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  THE  GENERALITY  OF  THE
FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT 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 LAWS) AND
ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE
PROVISIONS  FOR THE  CREATION,  PERFECTION,  AND  ENFORCEMENT  OF THE  LIEN  AND
SECURITY  INTEREST  CREATED  PURSUANT  HERETO  AND  PURSUANT  TO THE OTHER  LOAN
DOCUMENTS  SHALL BE GOVERNED BY AND CONSTRUED  ACCORDING TO THE LAW OF THE STATE
IN WHICH THE  APPLICABLE  INDIVIDUAL  PROPERTY IS LOCATED,  IT BEING  UNDERSTOOD
THAT, TO THE FULLEST EXTENT  PERMITTED BY THE LAW OF SUCH STATE,  THE LAW OF THE
STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION,  VALIDITY AND ENFORCEABILITY OF
ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS  ARISING  HEREUNDER OR THEREUNDER.
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  AGREEMENT AND THE NOTE,  AND THIS  AGREEMENT 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.

     (B) ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING
OUT OF OR RELATING TO THIS AGREEMENT 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.

     (C)  NOTWITHSTANDING  THE FOREGOING  PROVISIONS  OF THIS SECTION 10.3,  ANY
ACTION TO ENFORCE OR FORECLOSE THE LIENS AND SECURITY INTERESTS CREATED PURSUANT
HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS SHALL BE INSTITUTED IN THE STATE
IN WHICH THE PROPERTY IS LOCATED.

     Section 10.4 MODIFICATION, WAIVER IN WRITING.

     No modification,  amendment, extension, discharge, termination or waiver of
any provision of this Agreement,  or of the Note, or of any other Loan Document,
nor  consent  to any  departure  by  Borrower  therefrom,  shall in any event be
effective unless the same shall be in a writing signed by the party against whom
enforcement  is sought,  and then such waiver or consent shall be effective only

                                      -38-
<PAGE>
in the  specific  instance,  and for the  purpose,  for which  given.  Except as
otherwise expressly provided herein, no notice to, or demand on Borrower,  shall
entitle Borrower to any other or future notice or demand in the same, similar or
other circumstances.

     Section 10.5 DELAY NOT A WAIVER.

     Neither any failure nor any delay on the part of Lender in  insisting  upon
strict performance of any term, condition,  covenant or agreement, or exercising
any right, power, remedy or privilege hereunder,  or under the Note or under any
other Loan Document,  or any other instrument given as security therefor,  shall
operate  as or  constitute  a waiver  thereof,  nor  shall a single  or  partial
exercise  thereof  preclude  any other future  exercise,  or the exercise of any
other  right,  power,  remedy or  privilege.  In  particular,  and not by way of
limitation,  by accepting payment after the due date of any amount payable under
this Agreement, the Note or any other Loan Document,  Lender shall not be deemed
to have waived any right either to require  prompt payment when due of all other
amounts due under this Agreement,  the Note or the other Loan  Documents,  or to
declare a default for failure to effect prompt payment of any such other amount.

     Section 10.6 NOTICES.

     All  notices,  consents,  approvals  and  requests  required  or  permitted
hereunder or under any other Loan  Document  shall be given in writing and shall
be  effective  for all purposes if hand  delivered  or sent by (a)  certified or
registered United States mail, postage prepaid,  return receipt requested or (b)
expedited  prepaid delivery  service,  either commercial or United States Postal
Service,  with proof of  attempted  delivery,  addressed  as follows (or at such
other address and person as shall be  designated  from time to time by any party
hereto,  as the case may be, in a written  notice to the other parties hereto in
the manner provided for in this Section):

         If to Lender:              Lehman Brothers Holdings Inc.,
                                    Three World Financial Center, 12th Floor
                                    Commercial Mortgage Surveillance Group
                                    New York, New York  10285
                                    Attention:  Scott Weiner

         with a copy to:            Cadwalader, Wickersham & Taft
                                    100 Maiden Lane
                                    New York, New York  10038
                                    Attention:  John M. Zizzo, Esq.

         If to Borrower:            77 West Wacker Limited Partnership
                                    77 West Wacker Drive
                                    Suite 3900
                                    Chicago, Illinois 60601
                                    Attention: Louis Conforti

         with a copy to:            77 West Wacker Limited Partnership
                                    77 West Wacker Drive
                                    Suite 3900
                                    Chicago, Illinois 60601
                                    Attention: James Hoffman, Esq.

         and with a copy to:        Winston & Strawn
                                    35 West Wacker Drive
                                    Chicago, Illinois 60601-9703
                                    Attention: Wayne Boberg, Esq.

A notice shall be deemed to have been given:  in the case of hand  delivery,  at
the  time of  delivery;  in the  case of  registered  or  certified  mail,  when
delivered or the first  attempted  delivery on a Business Day; or in the case of
expedited prepaid delivery, upon the first delivery on a Business Day.

     Section 10.7 TRIAL BY JURY.

     BORROWER HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF
RIGHT BY JURY,  AND WAIVES  ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT  THAT
ANY SUCH RIGHT SHALL NOW OR HEREAFTER  EXIST WITH REGARD TO THE LOAN  DOCUMENTS,
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER,
AND IS INTENDED TO  ENCOMPASS  INDIVIDUALLY  EACH  INSTANCE AND EACH ISSUE AS TO
WHICH  THE RIGHT TO A TRIAL BY JURY  WOULD  OTHERWISE  ACCRUE.  LENDER IS HEREBY
AUTHORIZED  TO FILE A COPY OF THIS  PARAGRAPH IN ANY  PROCEEDING  AS  CONCLUSIVE
EVIDENCE OF THIS WAIVER BY BORROWER.


                                      -39-
<PAGE>
     Section 10.8 HEADINGS.

     The  Article  and/or  Section  headings  and the Table of  Contents in this
Agreement are included  herein for  convenience  of reference only and shall not
constitute a part of this Agreement for any other purpose.

     Section 10.9 SEVERABILITY.

     Wherever possible, each provision of this Agreement shall be interpreted in
such  manner as to be  effective  and valid  under  applicable  law,  but if any
provision of this Agreement  shall be prohibited by or invalid under  applicable
law, such provision  shall be  ineffective to the extent of such  prohibition or
invalidity,  without  invalidating  the  remainder  of  such  provision  or  the
remaining provisions of this Agreement.

     Section 10.10 PREFERENCES.

     Lender shall have the  continuing  and exclusive  right to apply or reverse
and reapply any and all  payments by Borrower to any portion of the  obligations
of Borrower  hereunder.  To the extent  Borrower  makes a payment or payments to
Lender,  which  payment  or  proceeds  or  any  part  thereof  are  subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee,  receiver or any other party under any  bankruptcy  law,
state or federal law, common law or equitable cause, then, to the extent of such
payment or proceeds received, the obligations hereunder or part thereof intended
to be satisfied  shall be revived and  continue in full force and effect,  as if
such payment or proceeds had not been received by Lender.

     Section 10.11 WAIVER OF NOTICE.

     Borrower shall not be entitled to any notices of any nature whatsoever from
Lender except with respect to matters for which this Agreement or the other Loan
Documents  specifically and expressly provide for the giving of notice by Lender
to  Borrower  and except  with  respect to matters  for which  Borrower  is not,
pursuant to  applicable  Legal  Requirements,  permitted  to waive the giving of
notice.  Borrower hereby  expressly  waives the right to receive any notice from
Lender  with  respect to any matter for which this  Agreement  or the other Loan
Documents do not specifically and expressly  provide for the giving of notice by
Lender to Borrower.

     Section 10.12 REMEDIES OF BORROWER.

     In the event that a claim or adjudication is made that Lender or its agents
have acted unreasonably or unreasonably  delayed acting in any case where by law
or under this Agreement or the other Loan  Documents,  Lender or such agent,  as
the case may be, has an  obligation  to act  reasonably  or  promptly,  Borrower
agrees  that  neither  Lender  nor its agents  shall be liable for any  monetary
damages,  and Borrower's  sole remedies shall be limited to commencing an action
seeking injunctive relief or declaratory judgment. The parties hereto agree that
any action or proceeding to determine  whether Lender has acted reasonably shall
be determined by an action seeking declaratory judgment.

     Section 10.13 EXPENSES; INDEMNITY.

     (a) Borrower  covenants and agrees to pay or, if Borrower  fails to pay, to
reimburse,  Lender upon receipt of written notice from Lender for all reasonable
costs and expenses  (including  reasonable  attorneys'  fees and  disbursements)
incurred  by  Lender  in  connection  with  (i)  the  preparation,  negotiation,
execution and delivery of this  Agreement  and the other Loan  Documents and the
consummation  of the  transactions  contemplated  hereby and thereby and all the
costs of  furnishing  all  opinions by counsel for Borrower  (including  without
limitation any opinions  reasonably  requested by Lender as to any legal matters
arising  under this  Agreement or the other Loan  Documents  with respect to the
Property); (ii) Borrower's ongoing performance of and compliance with Borrower's
respective  agreements  and covenants  contained in this Agreement and the other
Loan  Documents on its part to be  performed or complied  with after the Closing
Date; (iv) the negotiation,  preparation, execution, delivery and administration
of any consents,  amendments,  waivers or other  modifications to this Agreement
and the other Loan  Documents  and any other  documents or matters  requested by
Lender;  (v) securing  Borrower's  compliance with any requests made pursuant to
the  provisions  of this  Agreement;  (vi) the  filing  and  recording  fees and
expenses,  title  insurance  and  reasonable  fees and  expenses  of counsel for
providing to Lender all required  legal  opinions,  and other  similar  expenses
incurred in creating and perfecting the Lien in favor of Lender pursuant to this
Agreement  and the other Loan  Documents;  (vii)  enforcing  or  preserving  any
rights, in response to third party claims or the prosecuting or defending of any


                                      -40-
<PAGE>
action  or  proceeding  or other  litigation,  in each  case  against,  under or
affecting Borrower, this Agreement,  the other Loan Documents,  the Property, or
any other security given for the Loan; and (viii)  enforcing any  obligations of
or collecting  any payments due from Borrower  under this  Agreement,  the other
Loan  Documents  or with  respect  to the  Property  or in  connection  with any
refinancing  or  restructuring  of the credit  arrangements  provided under this
Agreement  in the nature of a  "work-out"  or of any  insolvency  or  bankruptcy
proceedings;  provided,  however,  that  Borrower  shall not be  liable  for the
payment of any such costs and expenses to the extent the same arise by reason of
the gross negligence,  illegal acts, fraud or willful  misconduct of Lender. Any
cost and  expenses due and payable to Lender may be paid from any amounts in the
Lockbox Account.

     (b) Borrower  shall  indemnify,  defend and hold  harmless  Lender from and
against any and all other liabilities,  obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever  (including,  without  limitation,  the reasonable fees and
disbursements  of  counsel  for  Lender in  connection  with any  investigative,
administrative or judicial  proceeding  commenced or threatened,  whether or not
Lender shall be designated a party  thereto),  that may be imposed on,  incurred
by, or asserted  against Lender in any manner  relating to or arising out of (i)
any  breach  by   Borrower   of  its   obligations   under,   or  any   material
misrepresentation  by Borrower  contained  in, this  Agreement or the other Loan
Documents,  or  (ii)  the  use  or  intended  use of the  proceeds  of the  Loan
(collectively, the "Indemnified Liabilities");  provided, however, that Borrower
shall  not have any  obligation  to Lender  hereunder  to the  extent  that such
Indemnified Liabilities arise from the gross negligence,  illegal acts, fraud or
willful  misconduct of Lender.  To the extent that the undertaking to indemnify,
defend  and  hold  harmless  set  forth  in  the   preceding   sentence  may  be
unenforceable  because it violates any law or public policy,  Borrower shall pay
the maximum portion that it is permitted to pay and satisfy under applicable law
to the payment  and  satisfaction  of all  Indemnified  Liabilities  incurred by
Lender.

     Section 10.14 SCHEDULES INCORPORATED.

     The Schedules  annexed hereto are hereby  incorporated  herein as a part of
this Agreement with the same effect as if set forth in the body hereof.

     Section 10.15 OFFSETS, COUNTERCLAIMS AND DEFENSES.

     Any assignee of Lender's  interest in and to this  Agreement,  the Note and
the other  Loan  Documents  shall  take the same free and clear of all  offsets,
counterclaims  or defenses which are unrelated to such documents  which Borrower
may otherwise have against any assignor of such documents, and no such unrelated
counterclaim  or defense  shall be  interposed  or  asserted  by Borrower in any
action or proceeding  brought by any such  assignee upon such  documents and any
such right to interpose or assert any such  unrelated  offset,  counterclaim  or
defense in any such action or proceeding is hereby expressly waived by Borrower.

     Section   10.16  NO  JOINT   VENTURE  OR   PARTNERSHIP;   NO  THIRD   PARTY
BENEFICIARIES.

     (a) Borrower and Lender intend that the relationships created hereunder and
under the other Loan  Documents be solely that of borrower  and lender.  Nothing
herein  or  therein  is  intended  to  create  a  joint  venture,   partnership,
tenancy-in-common, or joint tenancy relationship between Borrower and Lender nor
to grant  Lender any  interest  in the  Property  other than that of  mortgagee,
beneficiary or lender.

     (b) This  Agreement and the other Loan Documents are solely for the benefit
of Lender and Borrower and nothing contained in this Agreement or the other Loan
Documents  shall be deemed to confer upon anyone  other than Lender and Borrower
any right to insist upon or to enforce the  performance  or observance of any of
the obligations  contained herein or therein.  All conditions to the obligations
of Lender to make the Loan hereunder are imposed solely and  exclusively for the
benefit  of  Lender  and  no  other  Person  shall  have   standing  to  require
satisfaction of such conditions in accordance with their terms or be entitled to
assume  that  Lender  will  refuse  to make the Loan in the  absence  of  strict
compliance  with  any or all  thereof  and  no  other  Person  shall  under  any
circumstances  be deemed to be a beneficiary of such  conditions,  any or all of
which may be freely  waived in whole or in part by Lender if, in  Lender's  sole
discretion, Lender deems it advisable or desirable to do so.





                                      -41-
<PAGE>
     Section 10.17 PUBLICITY.

     All news releases, publicity or advertising by Borrower or their Affiliates
through any media  intended to reach the general public which refers to the Loan
Documents or the financing  evidenced by the Loan Documents,  to Lender,  Lehman
Brothers Holdings Inc., or any of their Affiliates shall be subject to the prior
review and approval of Lender, such approval not to be unreasonably withheld.

     Section 10.18 WAIVER OF MARSHALLING OF ASSETS.

     To the  fullest  extent  permitted  by law,  Borrower,  for  itself and its
successors  and  assigns,  waives all rights to a  marshalling  of the assets of
Borrower,  Borrower's partners and others with interests in Borrower, and of the
Property,  and agrees not to assert any right under any laws  pertaining  to the
marshalling  of  assets,  the sale in  inverse  order of  alienation,  homestead
exemption,  the  administration  of estates of  decedents,  or any other matters
whatsoever  to  defeat,  reduce  or affect  the  right of Lender  under the Loan
Documents to a sale of the Property for the  collection  of the Debt without any
prior or  different  resort  for  collection  or of the  right of  Lender to the
payment of the Debt out of the net  proceeds of the  Property in  preference  to
every other claimant whatsoever.

     Section 10.19 WAIVER OF COUNTERCLAIM.

     Borrower  hereby  waives the right to assert a  counterclaim,  other than a
compulsory  counterclaim,  in any  action or  proceeding  brought  against it by
Lender or its agents.

     SECTION 10.20 CONFLICT; CONSTRUCTION OF DOCUMENTS; RELIANCE.

     In the event of any conflict  between the provisions of this Loan Agreement
and any of the other Loan Documents, the provisions of this Loan Agreement shall
control.  The parties hereto acknowledge that they were represented by competent
counsel in connection with the  negotiation,  drafting and execution of the Loan
Documents and that such Loan Documents  shall not be subject to the principle of
construing  their  meaning  against  the  party  which  drafted  same.  Borrower
acknowledges  that, with respect to the Loan,  Borrower shall rely solely on its
own  judgment  and  advisors in entering  into the Loan  without  relying in any
manner on any statements,  representations  or  recommendations of Lender or any
parent,  subsidiary  or Affiliate of Lender.  Lender shall not be subject to any
limitation  whatsoever in the exercise of any rights or remedies available to it
under any of the Loan  Documents or any other  agreements or  instruments  which
govern the Loan by virtue of the  ownership by it or any parent,  subsidiary  or
Affiliate of Lender of any equity  interest any of them may acquire in Borrower,
and Borrower  hereby  irrevocably  waives the right to raise any defense or take
any action on the basis of the  foregoing  with respect to Lender's  exercise of
any such rights or remedies.  Borrower  acknowledges  that Lender engages in the
business  of real  estate  financings  and other real  estate  transactions  and
investments  which may be viewed as adverse to or competitive  with the business
of Borrower or its Affiliates.

     Section 10.21 BROKERS AND FINANCIAL ADVISORs.

     Borrower hereby  represents  that it has dealt with no financial  advisors,
brokers,  underwriters,  placement agents,  agents or finders in connection with
the  transactions  contemplated  by this  Agreement.  Borrower  hereby agrees to
indemnify,  defend and hold Lender harmless from and against any and all claims,
liabilities,  costs and expenses of any kind (including Lender's attorneys' fees
and  expenses) in any way relating to or arising from a claim by any Person that
such  Person  acted on behalf of Borrower in  connection  with the  transactions
contemplated  herein.  The  provisions  of this Section  10.21 shall survive the
expiration and termination of this Agreement and the payment of the Debt.

     Section 10.22 PRIOR AGREEMENTS.

     This Agreement and the other Loan Documents contain the entire agreement of
the  parties  hereto and  thereto in  respect of the  transactions  contemplated
hereby and thereby,  and all prior  agreements  among or between  such  parties,
whether oral or written, between Borrower and Lender are superseded by the terms
of this Agreement and the other Loan Documents.

                         [NO FURTHER TEXT ON THIS PAGE]






                                      -42-
<PAGE>
     IN WITNESS  WHEREOF,  the parties hereto have caused this Loan Agreement to
be duly executed by their duly authorized representatives, all as of the day and
year first above written.

                             77 WEST WACKER LIMITED PARTNERSHIP,
                             an Illinois limited partnership

                             By: PRIME GROUP REALTY, L.P.
                                  a Delaware limited partnership,
                                  its Managing Partner

                                  By: PRIME GROUP REALTY TRUST,
                                       a Maryland real estate investment trust,
                                       its Managing General Partner

                                       By:   /s/ Louis G. Conforti
                                           ------------------------------------
                                           Name: Louis G. Conforti
                                           Title:Senior Vice President

                             Lehman  Brothers  Holdings Inc.,   doing  business
                             as Lehman Capital,  a division of Lehman Brothers
                             Holding Inc.

                             By:   /s/ Larry Kravetz
                                 ----------------------------------------------
                                 Name: Larry Kravetz
                                 Title:



















































                                      -43-
<PAGE>
                                   SCHEDULE I
                                   ----------

                                    RENT ROLL



                               [Exhibit Omitted]




                                      -44-