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                                                                   EXHIBIT 10.16

AFTER RECORDING, RETURN TO:

Daniel F. Susie
Strasburger & Price, LLP
901 Main Street, Suite 4300
Dallas, Texas  75202

                     DEED OF TRUST (WITH SECURITY AGREEMENT,
             ASSIGNMENT OF RENTS AND LEASES AND FINANCING STATEMENT)

This Document Serves as a Fixture Filing under Section 9.502 of the Texas
Business and Commerce Code. The goods described in the granting clause which are
personal property are or are to become fixtures related to the real property
described on EXHIBIT A.

Grantor's Organizational Identification Number is 800356928. Grantor is a Texas
limited partnership.

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR
STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED
FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S
LICENSE NUMBER.

        THIS DEED OF TRUST (WITH SECURITY AGREEMENT, ASSIGNMENT OF RENTS AND
LEASES AND FINANCING STATEMENT) (this "DEED OF TRUST") dated as of July 1, 2004,
is executed and delivered by Grantor (as defined herein) for good and valuable
consideration, the receipt, sufficiency and adequacy of which are hereby
acknowledged by Grantor.

                                   ARTICLE 1

                               CERTAIN DEFINITIONS

        In addition to other terms defined herein, each of the following terms
shall have the meaning assigned to it:

        1.1 "BENEFICIARY": FIRST AMERICAN BANK, SSB, a state savings bank, whose
address for purposes of notice is 8401 North Central Expressway, Suite 500,
Dallas, Texas 75225.

        1.2 "GRANTOR": BEHRINGER HARVARD QUORUM I LP, a Texas limited
partnership, whose address for purposes of notice is 1323 N. Stemmons Freeway,
Suite 212, Dallas, Texas 75207.

        1.3 "LOAN AGREEMENT": The Loan Agreement of even date herewith between
Grantor and Beneficiary, which is incorporated herein by reference for all
purposes, and as modified and amended from time to time. Capitalized terms used
in this Deed of Trust and not otherwise defined shall have the meaning given
them in the Loan Agreement.

        1.4 "NOTE": The promissory note of even date herewith made by Grantor
payable to the order of Beneficiary in the principal face amount of $7,000,000
bearing interest as therein provided, containing a provision for the payment of
a reasonable additional amount as attorneys' fees, and all extensions,
modifications, increases and renewals thereof made from time to time, and future
advances made pursuant thereto.


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        1.5 "TRUSTEE": William Kinard of Dallas County, Texas or any successor
or substitute appointed and designated as herein provided from time to time
acting hereunder.

        Any term used or defined in the Texas Business and Commerce Code, as in
effect from time to time, and not defined in this Deed of Trust has the meaning
given to the term in the Texas Business and Commerce Code, as in effect from
time to time, when used in this Deed of Trust.

                                   ARTICLE 2

                                GRANTING CLAUSES

        Grantor does hereby GRANT, BARGAIN, SELL, CONVEY, TRANSFER, ASSIGN and
SET OVER to Trustee, in trust for the benefit of Beneficiary, the following: (a)
the real estate (the "LAND") described in EXHIBIT A attached hereto and
incorporated herein by reference, and (i) all buildings, structures, and other
improvements now or hereafter situated or to be situated on the Land (the
"IMPROVEMENTS"); and (ii) all right, title and interest of Grantor in and to (1)
all streets, roads, alleys, easements, rights-of-way, licenses, rights of
ingress and egress, vehicle parking rights and public places, existing or
proposed, abutting, adjacent, used in connection with or pertaining to the Land
or the Improvements; (2) any strips or gores between or among the Land and
abutting or adjacent properties; and (3) all water and water rights, timber,
crops and mineral interests on or pertaining to the Land (the Land, Improvements
and other rights, titles and interests referred to in this clause (a) sometimes
collectively called the "PREMISES"); (b) all fixtures, equipment, systems,
machinery, furniture, furnishings, appliances, inventory, goods, building and
construction materials, supplies, and articles of personal property, of every
kind and character, now owned or hereafter acquired by Grantor, which are now or
hereafter attached to or situated in, on or about the Land or the Improvements,
or are exclusively used in or useful to the complete and proper planning,
development, use, occupancy or operation thereof, or acquired (whether delivered
to the Land or stored elsewhere) for use or installation in or on the Land or
the Improvements, and all renewals and replacements of, substitutions for and
additions to the foregoing (the properties referred to in this clause (b)
sometimes collectively called the "ACCESSORIES"); (c) all (i) of Grantor's
assignable rights in and to all plans and specifications for the Improvements,
and any and all changes thereto; (ii) Grantor's rights, but not liability for
any breach by Grantor, under all commitments (including any commitment for
financing to pay any of the Indebtedness (as defined below), insurance policies,
architectural, engineering, construction, management, leasing, and other
contracts, including any property management agreement (when signed) and any
post-closing rights under the contract or contracts pursuant to which Grantor
acquired the Land, and general intangibles (including but not limited to
trademarks, trade names and symbols) related to the Premises or the Accessories
or the design, construction, use or operation thereof, (iii) deposits (including
Grantor's rights in tenants' security deposits, deposits with respect to utility
services to the Premises, and any deposits or reserves under any Loan Instrument
for taxes, insurance or otherwise), money, accounts, instruments, documents,
notes and chattel paper arising from or by virtue of any transactions related to
the Premises or the Accessories together with any and all tax and/or insurance
escrow accounts and/or reserve accounts required under the provisions of any of
the Loan Instruments; (iv) permits, licenses, franchises, certificates,
certificates of occupancy, development rights, commitments and rights for
utilities, wells, septic systems and other rights and privileges obtained in
connection with the Premises or the Accessories; (v) leases, rents, royalties,
bonuses, issues, profits, revenues and other benefits of the Premises and the
Accessories; (vi) oil, gas and other hydrocarbons and other minerals produced
from or allocated to the Land and all products processed or obtained therefrom,
and the proceeds thereof, (vii) engineering, accounting, title, legal, and other
technical or business data concerning the Mortgaged Property (as defined below)
which are in the possession of Grantor or in which Grantor can otherwise grant a
security interest; and (viii) development fees, sales commissions and leasing
commissions; and (d) all (i) proceeds of or arising from the properties, rights,
titles and interests referred to above in this ARTICLE 2, including but not
limited to


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proceeds of any sale, lease or other disposition thereof, proceeds of each
policy of insurance relating thereto (including premium refunds), proceeds of
the taking thereof or of any rights appurtenant thereto, including change of
grade of streets, curb cuts or other rights of access, by eminent domain or
transfer in lieu thereof for public or quasi-public use under any law, and
proceeds arising out of any damage thereto; and (ii) other interests of every
kind and character which Grantor now has or hereafter acquires in, to or for the
benefit of the properties, rights, titles and interests referred to above in
this ARTICLE 2 and all property used or useful in connection therewith,
including but not limited to rights of ingress and egress and remainders,
reversions and reversionary rights or interests; and if the estate of Grantor in
any of the property referred to above in this ARTICLE 2 is a leasehold estate,
this conveyance shall include, and the lien created hereby shall encumber and
extend to, all other or additional title, estates, interests or rights which are
now owned or may hereafter be acquired by Grantor in or to the property demised
under the lease creating such leasehold estate. The above described property is
collectively referred to herein as the "MORTGAGED PROPERTY."

        TO HAVE AND TO HOLD the Mortgaged Property, together with the rights,
privileges and appurtenances thereto belonging, unto the Trustee and his
substitutes or successors, forever, and Grantor hereby binds itself and its
heirs, executors, administrators, personal representatives, successors and
assigns to warrant and forever defend the Mortgaged Property unto the Trustee,
his substitutes or successors and assigns, against the claim or claims of all
persons claiming or to claim the same or any part thereof.

                                   ARTICLE 3

                                  INDEBTEDNESS

        This Deed of Trust is given to secure the following:

        3.1 NOTE. Payment of the indebtedness evidenced by the Note.

        3.2 LOAN AGREEMENT. Performance of all obligations of Grantor under the
Loan Agreement, including without limitation all Obligations as defined therein.

        3.3 DEED OF TRUST. Payment of all sums advanced by Beneficiary to or for
the benefit of Grantor contemplated hereby and performance of all obligations
and covenants herein contained.

        3.4 OTHER INDEBTEDNESS. Payment of all other indebtedness, of whatever
kind or character, now owing or that may hereafter become owing by Grantor to
Beneficiary, whether such indebtedness is evidenced by note, open account,
overdraft, endorsement, surety agreement, guaranty, or otherwise.

        The obligations above described are hereinafter collectively called the
"INDEBTEDNESS." This Deed of Trust, the Note, the Loan Agreement, and any other
instrument given to evidence or further secure, govern or guarantee the
Indebtedness are hereinafter collectively called the "LOAN INSTRUMENTS." All
payments on the Indebtedness shall be payable at the address of Beneficiary as
set forth in SECTION 1.1 and, unless otherwise provided in any instrument
evidencing the Indebtedness, shall bear interest at the rate set forth in the
Note, but not in excess of the highest rate permitted by applicable law, from
the date of accrual of the Indebtedness until paid.


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                                   ARTICLE 4

                         ASSIGNMENT OF RENTS AND LEASES

        4.1 ASSIGNMENT OF RENTS, PROFITS, ETC. All of the Rents (as hereinafter
defined) derived from the Mortgaged Property or arising from the use or
enjoyment of any portion thereof or from any lease or agreement pertaining
thereto, are hereby absolutely and unconditionally assigned to Beneficiary, to
be applied by Beneficiary in payment of the Indebtedness. "RENTS" means all of
the rents, revenue, income, profits and proceeds derived and to be derived from
the Mortgaged Property or arising from the use or enjoyment of any portion
thereof or from any Lease (as hereinafter defined), including but not limited to
liquidated damages following default under any such Lease, or payments
applicable to a termination of a Lease, all proceeds payable under any policy of
insurance covering loss of rents resulting from damage to any part of the
Mortgaged Property, all rights that Grantor may have against any tenant under
any Lease or any subtenants or occupants of any part of the Mortgaged Property,
all of Grantor's rights to recover monetary amounts from any tenant in
bankruptcy including, without limitation, rights of recovery for use and
occupancy and damage claims arising out of Lease defaults, including rejections,
under any applicable debtor relief law, together with any sums of money that may
now or at any time hereafter be or become due and payable to Grantor by virtue
of any and all royalties, overriding royalties, bonuses, delay rentals and any
other amount of any kind or character arising under any and all present and all
future oil, gas, mineral and mining leases covering the Mortgaged Property or
any part thereof, and all proceeds and other amounts paid or owing to Grantor
under or pursuant to any and all contracts, and bonds relating to the
construction or renovation of the Mortgaged Property. Notwithstanding any
provision of this Deed of Trust or any other Loan Instrument which might be
construed to the contrary, the assignment in this Section is an absolute
assignment and not merely a security interest; however, Beneficiary's rights as
to the assignment shall be exercised only upon the occurrence of an Event of
Default (as hereinafter defined). Prior to an Event of Default, Grantor shall
have a license to collect and receive all Rents as trustee for the benefit of
Beneficiary and Grantor, and Grantor shall apply the funds so collected first to
the payment of the Indebtedness in such manner as Beneficiary elects and
thereafter to the account of Grantor. Upon the occurrence of an Event of
Default, such license in favor of Grantor shall automatically and immediately
terminate without any action or notice, or the necessity thereof, by Beneficiary
or any other party, and Beneficiary shall be entitled to immediate possession of
all Rents regardless of the value of the security for the Indebtedness and
regardless of whether Beneficiary has initiated any action to take possession of
any portion of the Mortgaged Property.

        4.2 ASSIGNMENT OF LEASES. Grantor hereby assigns to Beneficiary all of
Grantor's rights, but none of its obligations, under all Leases. "LEASE" and
"LEASES" means each and all existing or future leases, subleases (to the extent
of Grantor's rights thereunder) or other agreements under the terms of which any
person has or acquires any right to occupy or use any part of or interest in the
Mortgaged Property, and each and all existing or future guaranties of payment or
performance thereunder, and all extensions, renewals, modifications, supplements
and replacements of each such lease, sublease, agreement or guaranty upon any
part of the Mortgaged Property. Grantor hereby further assigns to Beneficiary
all guaranties of tenants' performance under the Leases. Prior to an Event of
Default, Grantor shall have the right, without joinder of Beneficiary, to
enforce the Leases, unless Beneficiary directs otherwise.

        4.3 WARRANTIES CONCERNING LEASES AND RENTS. Grantor represents and
warrants that:

        (a) Grantor has good title to the Leases and Rents hereby assigned and
authority to assign them, and no other person or entity has any right, title or
interest therein;


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        (b) all existing Leases are valid, unmodified and in full force and
effect, except as indicated herein, and no default exists thereunder;

        (c) unless otherwise provided herein, no Rents have been or will be
assigned, mortgaged or pledged;

        (d) no Rents have been or will be anticipated, waived, released,
discounted, set off or compromised by Grantor, unless in Grantor's good faith,
prudent business judgment, it would be in the best interest of the Mortgaged
Property to do so; and

        (e) except as indicated in the Leases, Grantor has not received any
funds or deposits from any tenant for which credit has not already been made on
account of accrued Rents.

        4.4 GRANTOR'S COVENANTS OF PERFORMANCE. Grantor covenants to:

        (a) perform all of its obligations under the Leases and give prompt
notice to Beneficiary of any failure to do so;

        (b) give immediate notice to Beneficiary of any notice Grantor receives
from any tenant or subtenant under any Leases, specifying any claimed default by
any party under such Leases;

        (c) enforce the tenants' obligations under the Leases unless in
Grantor's good faith, prudent business judgment, it would not be in the best
interest of the Mortgaged Property to do so;

        (d) defend, at Grantor's expense, any proceeding pertaining to the
Leases, including, if Beneficiary so requests, any such proceeding to which
Beneficiary is a party; and

        (e) neither create nor permit any encumbrance upon its interest as
lessor of the Leases, except this Deed of Trust and any other encumbrances
permitted by this Deed of Trust.

        4.5 PRIOR APPROVAL FOR ACTIONS AFFECTING LEASES. Grantor shall not,
without the prior written consent of Beneficiary:

        (a) receive or collect Rents more than one month in advance, except
security deposits obtained in advance in the ordinary course of business;

        (b) encumber or assign future Rents except pursuant to this Deed of
Trust;

        (c) waive or release any obligation of any tenant under the Leases
unless (1) in Grantor's good faith, prudent business judgment, it would be in
the best interest of the Mortgaged Property to do so, and (2) the obligation
waived or released is not a material obligation under the Lease in question;

        (d) amend, cancel, terminate or surrender any of the Leases, cause,
permit or accept any amendment, cancellation, termination or surrender of any of
the Leases, or commence any proceedings for dispossession of any tenant under
any of the Leases, except in good faith where the tenant is in material default
thereunder;

        (e) renew or extend any of the Leases, except pursuant to terms in
existing Leases unless (1) in Grantor's good faith, prudent business judgment,
it would be in the best interest of the Mortgaged Property to do so, and (2)
such renewal or extension is made at then prevailing market terms;

        (f) permit any assignment of the Leases; or


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        (g) enter into any Lease except a Lease on the form previously approved
by Beneficiary.

        4.6 SETTLEMENT FOR TERMINATION. Grantor agrees that no settlement for
damages for termination of any of the Leases under the Federal Bankruptcy Code,
or under any other federal, state, or local statute, shall be made without the
prior written consent of Beneficiary, and any check in payment of such damages
shall be made payable to both Grantor and Beneficiary. Grantor hereby assigns
any such payment to Beneficiary, to be applied to the Indebtedness as
Beneficiary may elect, and agrees to endorse any check for such payment to the
order of Beneficiary.

        4.7 MORTGAGEE IN POSSESSION. Beneficiary's acceptance of this assignment
shall not, prior to entry upon and taking possession of the Mortgaged Property
by Beneficiary, be deemed to constitute Beneficiary a "mortgagee in possession,"
nor obligate Beneficiary to appear in or defend any proceeding relating to any
of the Leases or to the Mortgaged Property, take any action hereunder, expend
any money, incur any expenses, or perform any obligation or liability under the
Leases, or assume any obligation for any deposits delivered to Grantor by any
lessee and not delivered to Beneficiary. Beneficiary shall not be liable for any
injury or damage to person or property in or about the Mortgaged Property.
Beneficiary neither has nor assumes any obligations as lessor or landlord with
respect to any Lease.

        4.8 APPOINTMENT OF ATTORNEY. Grantor hereby appoints Beneficiary its
attorney-in-fact, coupled with an interest empowering Beneficiary to subordinate
any Leases to this Deed of Trust.

        4.9 INDEMNIFICATION; HOLD HARMLESS. Grantor hereby indemnifies and holds
Beneficiary harmless from all liability, damage or expense incurred by
Beneficiary from any claims under the Leases arising out of events occurring on
or before the Release Date (as hereinafter defined), including, without
limitation, any claims by Grantor with respect to Rents paid directly to
Beneficiary after an Event of Default and claims by tenants for security
deposits or for rental payments more than one (1) month in advance and not
delivered to Beneficiary. All amounts indemnified against hereunder, including
attorneys' fees and expenses, if paid by Beneficiary shall bear interest at the
Default Rate (as defined in the Loan Agreement) and shall be payable by Grantor
immediately without demand and shall be secured hereby.

        4.10 RECORDS. Upon request by Beneficiary, Grantor shall deliver to
Beneficiary executed originals of all Leases and copies of all records relating
thereto.

        4.11 RIGHT TO RELY. Grantor hereby authorizes and directs the tenants
under the Leases to pay Rents to Beneficiary upon written demand by Beneficiary,
without further consent of Grantor and regardless of whether Beneficiary has
taken possession of any other portion of the Mortgaged Property, and the tenants
may rely upon any written statement delivered by Beneficiary to the tenants. Any
such payment to Beneficiary shall constitute payment to Grantor under the
Leases, and Grantor hereby appoints Beneficiary as Grantor's lawful
attorney-in-fact for giving, and is hereby empowered to give, acquittances to
any tenants for such Payments to Beneficiary after an Event of Default.

        4.12 RENTS. It is the intention of Beneficiary and Grantor that the
assignment effectuated by this Deed of Trust with respect to the Rents shall be
a direct and currently effective assignment and shall not constitute merely the
granting of a lien, security interest or pledge for the purpose of securing the
Indebtedness. In the event that a court of competent jurisdiction determines
that, notwithstanding such expressed intent of the parties, Beneficiary's
interest in the Rents constitutes a lien on or security interest in or pledge of
the Rents, it is agreed and understood that the forwarding of a notice to
Grantor after the occurrence of an Event of Default, advising Grantor of the
revocation of Grantor's license to collect such Rents, shall be sufficient
action by Beneficiary to (i) perfect such lien on or security interest in or
pledge of the Rents, (ii) take possession thereof and (iii) entitle Beneficiary
to immediate and direct payment of


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the Rents, for application as provided in this Deed of Trust, all without the
necessity of any further action by Beneficiary, including, without limitation,
any action to obtain possession of the Land, Improvements or any other portion
of the Mortgaged Property.

        4.13 UNILATERAL SUBORDINATION AND MERGER; APPROVAL OF LEASES. There
shall be no merger of the leasehold estates created by the Leases with the fee
estate of the Mortgaged Property without the prior written consent of
Beneficiary. Beneficiary may at any time and from time to time by specific
written instrument intended for the purpose, unilaterally subordinate the lien
of this Deed of Trust to any Lease, without joinder or consent of, or notice to,
Grantor, any tenant or any other person, and notice is hereby given to each
tenant under a Lease of such right to subordinate. No such subordination shall
constitute a subordination to any lien or other encumbrance, whenever arising,
or improve the right of any junior lienholder. Nothing herein shall be construed
as subordinating this Deed of Trust to any Lease.

                                   ARTICLE 5

                   SECURITY AGREEMENT AND FINANCING STATEMENT

        5.1 SECURITY INTEREST. This Deed of Trust shall be a security agreement
between Grantor, as the debtor, and Beneficiary, as the secured party, covering
the Mortgaged Property constituting personal property or fixtures governed by
the Texas Business and Commerce Code (the "CODE") and for the purpose of further
securing payment and performance of the Indebtedness, Grantor grants to
Beneficiary a security interest and lien in all rights, titles and interests now
owned or hereafter acquired by Grantor in the portion of the Mortgaged Property
constituting personal property or fixtures governed by the Code (the
"COLLATERAL"). In addition to Beneficiary's other rights hereunder, Beneficiary
shall have all rights of a secured party under the Code. Grantor shall execute
and deliver to Beneficiary all financing statements that may be required by
Beneficiary to establish and maintain the validity and priority of Beneficiary's
security interest in the Collateral, and Grantor shall bear all costs thereof,
including all Code searches reasonably required by Beneficiary.

        5.2 NOTICE OF CHANGES. Grantor shall give advance notice in writing to
Beneficiary of any proposed change in Grantor's name, identity, jurisdiction of
organization, or structure and shall execute and deliver to Beneficiary, prior
to or concurrently with the occurrence of any such change, all additional
financing statements that Beneficiary may require to establish and maintain the
validity and priority of Beneficiary's security interest with respect to any of
the Mortgaged Property described or referred to herein.

        5.3 FIXTURES. This Deed of Trust shall be effective as a financing
statement filed as a fixture filing with respect to all items of the Collateral
described herein that are or are to become fixtures related to the Land, and
this Deed of Trust shall be effective as such from the date of its filing for
record in the real estate records of the county in which the Collateral is
situated. Information concerning the security interest created by this
instrument may be obtained from Beneficiary, as secured party, at the address of
Beneficiary stated in SECTION 1.1. The exact legal name, type of organization,
jurisdiction of organization, and mailing address of the Grantor, as debtor, are
as stated in SECTION 1.2, and the organizational identification number of the
Grantor is as stated above the introductory paragraph of this Deed of Trust. The
mailing address of the Grantor, as debtor, is as stated in SECTION 1.2. Grantor
does have an interest of record in the Land, and the names of any additional
record owners of the Land are listed on EXHIBIT A. Proceeds and products of the
portion of the Collateral constituting fixtures are also covered. Beneficiary
shall have the right, without the consent or joinder of Grantor, to file with
any governmental authority such financing statements, financing statement
amendments and continuation statements as may, in the sole discretion of
Beneficiary, be necessary or advisable to maintain, perfect or otherwise
evidence the lien of Beneficiary in and to any of the Collateral. Grantor, as
debtor, hereby expressly authorizes


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Beneficiary, as secured party, to file any such financing statement without the
signature of Grantor to the extent permitted by applicable law.

        5.4 REPRODUCTIONS. A carbon, photostatic or other reproduction of this
Deed of Trust shall be sufficient as a financing statement. Beneficiary shall
have the right at any time to file a manually executed counterpart or a carbon,
photostatic or other reproduction of this Deed of Trust as a financing statement
in either the central or local UCC records of any jurisdiction wherein the
Collateral is situated, but the failure of Beneficiary to do so shall not impair
(a) the effectiveness of this Deed of Trust as a fixture filing as permitted by
Section 9.502(c) of the Code, or (b) the validity and enforceability of this
Deed of Trust in any respect whatsoever.

                                   ARTICLE 6

                     REPRESENTATIONS, WARRANTIES, COVENANTS

                            AND AGREEMENTS OF GRANTOR

        Grantor does hereby covenant, warrant and represent to and agree with
Beneficiary as follows:

        6.1 PAYMENT AND PERFORMANCE. Grantor shall make all payments on the
Indebtedness when due and shall punctually and properly perform all of Grantor's
covenants, obligations and liabilities under the Loan Instruments.

        6.2 TITLE TO MORTGAGED PROPERTY AND LIEN OF THIS DEED OF TRUST. Grantor
has good and indefeasible title to the Land and the Improvements, and good and
marketable title to the Collateral, free and clear of any liens, charges,
encumbrances security interests, and adverse claims whatsoever, except (a)
permitted encumbrances set forth on EXHIBIT B hereto, which are permitted
encumbrances only to the extent the same are valid and subsisting and affect the
Mortgaged Property, (b) the liens and security interests evidenced by this Deed
of Trust, (c) statutory liens for taxes on the Mortgaged Property which are not
yet delinquent, (d) mechanics' and materialman's liens with respect to
obligations which are not past due, (e) other liens and security interests, if
any, in favor of Beneficiary, and (f) purchase money security interests upon or
in assets acquire or held by Grantor in the ordinary course of business to
secure the purchase price of such property or secure indebtedness incurred
solely for the purpose of financing the acquisition of such property (the
matters described in the foregoing clauses (a) - (f) being herein called the
"PERMITTED ENCUMBRANCES"). Grantor, and Grantor's successors and assigns, will
warrant and forever defend title to the Mortgaged Property, subject as
aforesaid, to Trustee and his successors or substitutes and assigns, against the
claims and demands of all persons claiming or to claim the same or any part
thereof. Grantor will punctually pay, perform, observe and keep all covenants,
obligations and conditions in or pursuant to any Permitted Encumbrance and will
not modify or permit modification of any Permitted Encumbrance without the prior
written consent of Beneficiary. Inclusion of any matter as a Permitted
Encumbrance does not constitute approval or waiver by Beneficiary of any
existing or future violation or other breach thereof by Grantor, by the
Mortgaged Property or otherwise. No part of the Mortgaged Property constitutes
all or any part of the business or residential homestead of Grantor. If any
right or interest of Beneficiary in the Mortgaged Property or any part thereof
shall be endangered or questioned or shall be attacked directly or indirectly,
Trustee and Beneficiary, or either of them (whether or not named as parties to
legal proceedings with respect thereto), are hereby authorized and empowered to
take such steps as in their discretion may be proper for the defense of any such
legal proceedings or the protection of such right or interest of Beneficiary,
including but not limited to the employment of independent counsel, the
prosecution or defense of litigation, and the compromise or discharge of adverse
claims. All expenditures so made of every kind and character shall be a demand
obligation (which obligation Grantor hereby promises to pay) owing by Grantor to
Beneficiary or Trustee (as the case may


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be), and the party (Beneficiary or Trustee, as the case may be) making such
expenditures shall be subrogated to all rights of the person receiving such
payment.

        6.3 STATUS OF GRANTOR; SUITS AND CLAIMS; LOAN INSTRUMENTS. If Grantor is
a corporation, partnership, or other legal entity, Grantor is and will continue
to be (a) duly organized, validly existing and in good standing under the laws
of its state of organization, (b) authorized to do business in, and in good
standing in, each state in which the Mortgaged Property is located, and (c)
possessed of all requisite power and authority to carry on its business and to
own and operate the Mortgaged Property. Each Loan Instrument executed by Grantor
has been duly authorized, executed and delivered by Grantor, and the obligations
thereunder and the performance thereof by Grantor in accordance with their terms
are and will continue to be within Grantor's power and authority (without the
necessity of joinder or consent of any other person), are not and will not be in
contravention of any legal requirement to which Grantor or the Mortgaged
Property is subject, and do not and will not result in the creation of any
encumbrance against any assets or properties of Grantor, or any other person
liable, directly or indirectly, for any of the Indebtedness, except as expressly
contemplated by the Loan Instruments. There is no suit, action, claim,
investigation, inquiry, proceeding or demand pending (or, to Grantor's
knowledge, threatened) which affects the Mortgaged Property (including, without
limitation, any which challenges or otherwise pertains to Grantor's title to the
Mortgaged Property) or the validity, enforceability or priority of any of the
Loan Instruments. There is no judicial or administrative action, suit or
proceeding pending (or, to Grantor's knowledge, threatened) against Grantor, or
against any other person liable directly or indirectly for the Indebtedness,
except as has been disclosed in writing to Beneficiary in connection with the
loans evidenced by the Note. The Loan Instruments constitute legal, valid and
binding obligations of Grantor (and of each guarantor, if any) enforceable in
accordance with their terms, except as the enforceability thereof may be limited
by debtor relief laws and except as the availability of certain remedies may be
limited by general principles of equity. Grantor is not a "foreign person"
within the meaning of the Internal Revenue Code of 1986, as amended, Sections
1445 and 7701 (i.e., Grantor is not a non-resident alien, foreign corporation,
foreign partnership, foreign trust or foreign estate as those terms are defined
therein and in any regulations promulgated thereunder). Grantor will not cause
or permit any change to be made in its name, identity, structure, or
jurisdiction of organization, unless Grantor shall have notified Beneficiary of
such change prior to the effective date of such change, and shall have first
taken all action required by Beneficiary for the purpose of further perfecting
or protecting the lien and security interest of Beneficiary in the Mortgaged
Property. Grantor's principal place of business and chief executive office, and
the place where Grantor keeps its books and records concerning the Mortgaged
Property, has for the preceding four months been and will continue to be (unless
Grantor notifies Beneficiary of any change in writing prior to the date of such
change) the address of Grantor set forth in SECTION 1.2.

        6.4 EXISTENCE OF GRANTOR. Grantor shall preserve and keep in full force
and effect its existence, rights, franchises, and trade names.

        6.5 INSURANCE. Grantor shall obtain and maintain at Grantor's sole
expense: (a) mortgagee title insurance issued to Beneficiary covering the
Premises as required by Beneficiary; and (b) such other insurance as may be
required by Beneficiary from time to time pursuant to and in accordance with the
Loan Agreement. Upon any foreclosure hereof or transfer of title to the
Mortgaged Property in extinguishment of the whole or any part of the
Indebtedness, all of Grantor's right, title and interest in and to the insurance
policies referred to in this Section (including unearned premiums) and all
proceeds payable thereunder shall thereupon vest in the purchaser at foreclosure
or other such transferee, to the extent permissible under such policies.
Beneficiary shall have the right (but not the obligation) to make proof of loss
for, settle and adjust any claim under, and receive the proceeds of, all
insurance for loss of or damage to the Mortgaged Property, and the expenses
incurred by Beneficiary in the adjustment and collection of insurance proceeds
shall be a part of the Indebtedness and shall be due and payable to Beneficiary
on demand. Beneficiary shall not be, under any circumstances, liable or
responsible for


<PAGE>

failure to collect or exercise diligence in the collection of any of such
proceeds or for the obtaining, maintaining or adequacy of any insurance or for
failure to see to the proper application of any amount paid over to Grantor. Any
such proceeds received by Beneficiary shall, after deduction therefrom of all
reasonable expenses actually incurred by Beneficiary, including attorneys' fees,
at Beneficiary's option be (1) released to Grantor, or (2) applied (upon
compliance with such terms and conditions as may be required by Beneficiary) to
repair or restoration, either partly or entirely, of the Mortgaged Property so
damaged, or (3) applied to the payment of the Indebtedness in such order and
manner as Beneficiary, in its sole discretion, may elect, whether or not due. In
any event, the unpaid portion of the Indebtedness shall remain in full force and
effect and the payment thereof shall not be excused. Grantor shall at all times
comply with the requirements of the insurance policies required hereunder and of
the issuers of such policies and of any board of fire underwriters or similar
body as applicable to or affecting the Mortgaged Property.

        6.6 TAXES AND ASSESSMENTS. Grantor shall pay all taxes and assessments
against or affecting the Mortgaged Property as the same become due and payable
(except those being Contested in Good Faith, as defined in the Loan Agreement),
and, upon request by Beneficiary, Grantor shall deliver to Beneficiary such
evidence of the payment thereof as Beneficiary may require, and, if Grantor
fails to do so, Beneficiary may pay them, together with all costs and penalties
thereon, at Grantor's expense.

        6.7 RESERVE FOR INSURANCE, TAXES AND ASSESSMENTS. Upon request of
Beneficiary, Grantor will deposit with Beneficiary a sum equal to ad valorem
taxes, assessments and charges (which charges for the purpose of this paragraph
shall include without limitation any recurring charge which could result in a
lien against the Mortgaged Property) against the Mortgaged Property for the
current year and the premiums for such policies of insurance for the current
year, all as estimated by Beneficiary and prorated to the end of the calendar
month following the month during which Beneficiary's request is made, and
thereafter will deposit with Beneficiary, on each date when an installment of
principal and/or interest is due on the Note, sufficient funds (as estimated
from time to time by Beneficiary) to permit Beneficiary to pay at least fifteen
(15) days prior to the due date thereof, the next maturing ad valorem taxes,
assessments and charges and premiums for such policies of insurance. Beneficiary
shall have the right to rely upon tax information furnished by applicable taxing
authorities in the payment of such taxes or assessments and shall have no
obligation to make any protest of any such taxes or assessments. Any excess over
the amounts required for such purposes shall be held by Beneficiary for future
use, applied to any Indebtedness or refunded to Grantor, at Beneficiary's
option, and any deficiency in such funds so deposited shall be made up by
Grantor upon demand of Beneficiary. All such funds so deposited shall bear no
interest, may be mingled with the general funds of Beneficiary and shall be
applied by Beneficiary toward the payment of such taxes, assessments, charges
and premiums when statements therefor are presented to Beneficiary by Grantor
(which statements shall be presented by Grantor to Beneficiary a reasonable time
before the applicable amount is due); provided, however, that, if a default
shall have occurred hereunder, such funds may at Beneficiary's option be applied
to the payment of the Indebtedness in the order determined by Beneficiary in its
sole discretion, and that Beneficiary may (but shall have no obligation) at any
time, in its discretion, apply all or any part of such funds toward the payment
of any such taxes, assessments, charges or premiums which are past due, together
with any penalties or late charges with respect thereto. The conveyance or
transfer of Grantor's interest in the Mortgaged Property for any reason
(including without limitation the foreclosure of a subordinate lien or security
interest or a transfer by operation of law) shall constitute an assignment or
transfer of Grantor's interest in and rights to such funds held by Beneficiary
under this paragraph but subject to the rights of Beneficiary hereunder. The
obligations of Beneficiary under this Section are subject to the provisions of
Sections 7.1 and 7.2 of the Loan Agreement.

        6.8 CONDEMNATION. Grantor shall notify Beneficiary immediately of any
threatened or pending proceeding for condemnation affecting the Mortgaged
Property or arising out of damage to the


<PAGE>

Mortgaged Property, and Grantor shall, at Grantor's expense, diligently
prosecute any such proceedings. Beneficiary shall have the right (but not the
obligation) to participate in any such proceeding and to be represented by
counsel of its own choice. Beneficiary shall be entitled to receive all sums
which may be awarded or become payable to Grantor for the condemnation of the
Mortgaged Property, or any part thereof, for public or quasi-public use, or by
virtue of private sale in lieu thereof, and any sums which may be awarded or
become payable to Grantor for injury or damage to the Mortgaged Property.
Grantor shall, promptly upon request of Beneficiary, execute such additional
assignments and other documents as may be necessary from time to time to permit
such participation and to enable Beneficiary to collect and receipt for any such
sums. All such sums are hereby assigned to Beneficiary, and shall, after
deduction therefrom of all reasonable expenses actually incurred by Beneficiary,
including attorneys' fees, at Beneficiary's option be (a) released to Grantor,
or (b) applied (upon compliance with such terms and conditions as may be
required by Beneficiary) to repair or restoration of the Mortgaged Property so
affected, or (c) applied to the payment of the Indebtedness in such order and
manner as Beneficiary, in its sole discretion, may elect, whether or not due. In
any event the unpaid portion of the Indebtedness shall remain in full force and
effect and the payment thereof shall not be excused. Beneficiary shall not be,
under any circumstances, liable or responsible for failure to collect or to
exercise diligence in the collection of any such sum or for failure to see to
the proper application of any amount paid over to Grantor. Beneficiary is hereby
authorized, in the name of Grantor, to execute and deliver valid acquittances
for, and to appeal from, any such award, judgment or decree. All costs and
expenses (including but not limited to attorneys' fees) incurred by Beneficiary
in connection with any condemnation shall be a demand obligation owing by
Grantor (which Grantor hereby promises to pay) to Beneficiary pursuant to this
Deed of Trust.

        6.9 TAXES ON NOTE OR DEED OF TRUST. Grantor will promptly pay all
income, franchise and other taxes owing by Grantor and any stamp taxes or other
taxes (unless such payment by Grantor is prohibited by law) which may be
required to be paid with respect to the Note, this Deed of Trust or any other
instrument evidencing or securing any of the Indebtedness. In the event of the
enactment after this date of any law of any governmental entity applicable to
Beneficiary, the Note, the Mortgaged Property or this Deed of Trust deducting
from the value of property for the purpose of taxation any lien or security
interest thereon, or imposing upon Beneficiary the payment of the whole or any
part of the taxes or assessments or charges or liens herein required to be paid
by Grantor, or changing in any way the laws relating to the taxation of deeds of
trust or mortgages or security agreements or debts secured by deeds of trust or
mortgages or security agreements or the interest of the mortgagee or secured
party in the property covered thereby, or the manner of collection of such
taxes, so as to affect this Deed of Trust or the Indebtedness or Beneficiary,
then, and in any such event, Grantor, upon demand by Beneficiary, shall pay such
taxes, assessments, charges or liens, or reimburse Beneficiary therefor;
provided, however, that if in the opinion of counsel for Beneficiary (a) it
might be unlawful to require Grantor to make such payment or (b) the making of
such payment might result in the imposition of interest beyond the maximum
amount permitted by law, then and in such event, Beneficiary may elect, by
notice in writing given to Grantor, to declare all of the Indebtedness to be and
become due and payable sixty (60) days from the giving of such notice.

        6.10 STATEMENT BY GRANTOR. Grantor shall at any time and from time to
time furnish within seven (7) days of request by Beneficiary a written statement
in such form as may be required by Beneficiary stating that (a) the Note, this
Deed of Trust and the other Loan Instruments are valid and binding obligations
of Grantor, enforceable against Grantor in accordance with their terms; (b) the
unpaid principal balance of the Note; (c) the date to which interest on the Note
is paid; (d) the Note, this Deed of Trust and the other Loan Instruments have
not been released, subordinated or modified; and (e) there are no offsets or
defenses against the enforcement of the Note, this Deed of Trust or any other
Loan Instrument. If any of the foregoing statements are untrue, Grantor shall,
alternatively, specify the reasons therefor.


<PAGE>

        6.11 MAINTENANCE, REPAIR AND RESTORATION. Grantor will keep the
Mortgaged Property in first class order, repair, operating condition and
appearance, causing all necessary repairs, renewals, replacements, additions and
improvements to be promptly made, and will not allow any of the Mortgaged
Property to be misused, abused or wasted or to deteriorate. Notwithstanding the
foregoing, Grantor will not, without the prior written consent of Beneficiary,
(a) remove from the Mortgaged Property any fixtures or personal property covered
by this Deed of Trust except such as is replaced by Grantor by an article of
equal suitability and value, owned by Grantor, free and clear of any lien or
security interest (except that created by this Deed of Trust), or (b) make any
structural alteration to the Mortgaged Property or any other alteration thereto
which impairs the value thereof. If any act or occurrence of any kind or nature
(including any condemnation or any casualty for which insurance was not obtained
or obtainable) shall result in damage to or loss or destruction of the Mortgaged
Property, Grantor shall give prompt notice thereof to Beneficiary and Grantor
shall promptly, at Grantor's sole cost and expense and regardless of whether
insurance or condemnation proceeds (if any) shall be available or sufficient for
the purpose, commence and continue diligently to completion to restore, repair,
replace and rebuild the Mortgaged Property as nearly as possible to its value,
condition and character immediately prior to the damage, loss or destruction.

        6.12 NO OTHER LIENS. Grantor will not, without the prior written consent
of Beneficiary, create, place or permit to be created or placed, or through any
act or failure to act, acquiesce in the placing of, or allow to remain, any deed
of trust, mortgage, voluntary or involuntary lien, whether statutory,
constitutional or contractual, security interest, encumbrance or charge, or
conditional sale or other title retention document, against or covering the
Mortgaged Property, or any part thereof, other than the Permitted Encumbrances,
regardless of whether the same are expressly or otherwise subordinate to the
lien or security interest created in this Deed of Trust, and should any of the
foregoing become attached hereafter in any manner to any part of the Mortgaged
Property without the prior written consent of Beneficiary, Grantor will cause
the same to be promptly discharged and released. If Beneficiary consents to the
voluntary grant by Grantor of any lien, security interest, or other encumbrance
(hereinafter called "SUBORDINATE MORTGAGE") covering any of the Mortgaged
Property or if the foregoing prohibition is determined by a court of competent
jurisdiction to be unenforceable as to a Subordinate Mortgage, any such
Subordinate Mortgage shall contain express covenants to the effect that: (1) the
Subordinate Mortgage is unconditionally subordinate to this Deed of Trust and
all Leases; (2) if any action (whether judicial or pursuant to a power of sale)
shall be instituted to foreclose or otherwise enforce the Subordinate Mortgage,
no tenant of any of the Leases (hereinafter defined) shall be named as a party
defendant, and no action shall be taken that would terminate any occupancy or
tenancy without the prior written consent of Beneficiary; (3) Rents, if
collected by or for the holder of the Subordinate Mortgage, shall be applied
first to the payment of the Indebtedness then due and expenses incurred in the
ownership, operation and maintenance of the Mortgaged Property in such order as
Beneficiary may determine, prior to being applied to any indebtedness by the
Subordinate Mortgage; (4) written notice of default under the Subordinate
Mortgage and written notice of the commencement of any action (whether judicial
or pursuant to a power of sale) to foreclose or otherwise enforce the
Subordinate Mortgage or to seek the appointment of a receiver for all or any
part of the Mortgaged Property shall be given to Beneficiary with or immediately
after the occurrence of any such default or commencement; and (5) neither the
holder of the Subordinate Mortgage, nor any purchaser at foreclosure thereunder,
nor anyone claiming by, through or under any of them shall succeed to any of
Grantor's rights hereunder without the prior written consent of Beneficiary.

        6.13 OPERATION OF MORTGAGED PROPERTY. Grantor will operate the Mortgaged
Property in a good and workmanlike manner and in accordance with all legal
requirements and will pay all fees or charges of any kind in connection
therewith. Grantor will keep the Mortgaged Property occupied so as not to impair
the insurance carried thereon. Grantor will not use or occupy or conduct any
activity on, or allow the use or occupancy of or the conduct of any activity on,
the Mortgaged Property in any manner which violates any legal requirement or
which constitutes a public or private nuisance or which makes void, voidable or
cancelable, or increases the premium of, any insurance then in force with
respect thereto. Grantor will not initiate or permit any zoning reclassification
of the Mortgaged Property or seek any variance under existing zoning ordinances
applicable to the Mortgaged Property or use or permit the use of the Mortgaged
Property in such a manner


<PAGE>

which would result in such use becoming a nonconforming use under applicable
zoning ordinances or other legal requirement. Grantor will not impose any
easement, restrictive covenant or encumbrance upon the Mortgaged Property,
execute or file any subdivision plat or condominium declaration affecting the
Mortgaged Property or consent to the annexation of the Mortgaged Property to any
municipality, without the prior written consent of Beneficiary. Grantor will not
do or suffer to be done any act whereby the value of any part of the Mortgaged
Property may be lessened. Grantor will preserve, protect, renew, extend and
retain all material rights and privileges granted for or applicable to the
Mortgaged Property. Without the prior written consent of Beneficiary, there
shall be no drilling or exploration for or extraction, removal or production of
any mineral, hydrocarbon, gas, natural element, compound or substance (including
sand and gravel) from the surface or subsurface of the Land regardless of the
depth thereof or the method of mining or extraction thereof. Grantor will cause
all debts and liabilities of any character (including without limitation all
debts and liabilities for labor, material and equipment and all debts and
charges for utilities servicing the Mortgaged Property) incurred in the
construction, maintenance, operation and development of the Mortgaged Property
to be promptly paid except to the extent the same are being Contested in Good
Faith (as defined in the Loan Agreement).

        6.14 FINANCIAL MATTERS. Grantor is solvent after giving effect to all
borrowings contemplated by the Loan Instruments and no proceeding under any
debtor relief law is pending (or, to Grantor's knowledge, threatened) by or
against Grantor, or any affiliate of Grantor, as a debtor. All reports,
statements, plans, budgets, applications, agreements and other data and
information heretofore furnished or hereafter to be furnished by or on behalf of
Grantor to Beneficiary in connection with the loan or loans evidenced by the
Loan Instruments (including, without limitation, all financial statements and
financial information) are and will be true, correct and complete in all
material respects as of their respective dates and do not and will not omit to
state any fact or circumstance necessary to make the statements contained
therein not misleading. No material adverse change has occurred since the dates
of such reports, statements and other data in the financial condition of Grantor
or, to Grantor's knowledge, of any tenant under any lease described therein. For
the purposes of this paragraph, "GRANTOR" shall also include any person liable
directly or indirectly for the Indebtedness or any part thereof and any joint
venturer or general partner of Grantor.

        6.15 COMPLIANCE WITH LAWS. The Mortgaged Property and the use, operation
and maintenance thereof and all activities thereon do and shall at all times
comply with all applicable legal requirements. The Mortgaged Property is not,
and shall not be, dependent on any other property or premises or any interest
therein other than the Mortgaged Property to fulfill any requirement of any
legal requirement. Grantor shall not, by act or omission, permit any building or
other improvement not subject to the lien of this Deed of Trust to rely on the
Mortgaged Property or any interest therein to fulfill any requirement of any
legal requirement. No part of the Mortgaged Property constitutes a nonconforming
use under any zoning law or similar law or ordinance. Grantor has obtained and
shall preserve in force all requisite zoning, utility, building, health and
operating permits from the governmental authorities having jurisdiction over the
Mortgaged Property. If Grantor receives a notice or claim from any person that
the Mortgaged Property, or any use, activity, operation or maintenance thereof
or thereon, is not in compliance with any legal requirement, Grantor will
promptly furnish a copy of such notice or claim to Beneficiary. Grantor has
received no notice and has no knowledge of any such noncompliance.

        6.16 INCOME, EXPENSE AND FINANCIAL STATEMENTS. Grantor will keep
accurate books and records in accordance with sound accounting principles in
which full, true and correct entries shall be


<PAGE>

promptly made with respect to the Mortgaged Property and the operation thereof,
and will permit all such books and records to be inspected and copied, and the
Mortgaged Property to be inspected and photographed, by Beneficiary and its
representatives during normal business hours and at any other reasonable times.
Grantor will furnish to Beneficiary at Grantor's expense all evidence which
Beneficiary may from time to time reasonably request as to compliance with all
provisions of the Loan Instruments. Any inspection or audit of the Mortgaged
Property or the books and records of Grantor, or the procuring of documents and
financial and other information, by or on behalf of Beneficiary shall be for
Beneficiary's protection only, and shall not constitute any assumption of
responsibility to Grantor or anyone else with regard to the condition,
construction, maintenance or operation of the Mortgaged Property nor
Beneficiary's approval of any certification given to Beneficiary nor relieve
Grantor of any of Grantor's obligations.

        6.17 INDEMNIFICATION.

        (a) Grantor will indemnify and hold harmless Beneficiary and Trustee
from and against, and reimburse them on demand for, any and all Indemnified
Matters (defined below). For purposes of this SECTION 6.17, the terms
"BENEFICIARY" and "TRUSTEE" shall include the directors, officers, partners,
employees and agents of Trustee and Beneficiary, respectively, and any persons
owned or controlled by, owning or controlling, or under common control or
affiliated with Beneficiary or Trustee, respectively. WITHOUT LIMITATION, THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PERSON WITH RESPECT TO
MATTERS WHICH IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED
TO BE CAUSED BY OR ARISE OUT OF, THE NEGLIGENCE OR STRICT LIABILITY OF SUCH
(AND/OR ANY OTHER) INDEMNIFIED PERSON. HOWEVER, SUCH INDEMNITIES SHALL NOT APPLY
TO A PARTICULAR INDEMNIFIED PERSON TO THE EXTENT THAT THE SUBJECT OF THE
INDEMNIFICATION IS CAUSED BY OR ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THAT INDEMNIFIED PERSON. Any amount to be paid under this SECTION
6.17 by Grantor to Beneficiary and/or Trustee shall be a demand obligation owing
by Grantor (which Grantor hereby promises to pay) to Beneficiary and/or Trustee
pursuant to this Deed of Trust. Nothing in this paragraph, elsewhere in this
Deed of Trust or in any other Loan Instrument shall limit or impair any rights
or remedies of Beneficiary and/or Trustee (including without limitation any
rights of contribution or indemnification) against Grantor or any other person
under any other provision of this Deed of Trust, any other Loan Instrument, any
other agreement or any applicable legal requirement.

        (b) As used herein, the term "INDEMNIFIED MATTERS" means any and all
claims, demands, liabilities (including strict liability), losses, damages
(including consequential damages), causes of action, judgments, penalties, costs
and expenses (including without limitation, reasonable fees and expenses of
attorneys and other professional consultants and experts, and of the
investigation and defense of any claim, whether or not such claim is ultimately
withdrawn or defeated, and the settlement of any claim or judgment including all
value paid or given in settlement) of every kind, known or unknown, foreseeable
or unforeseeable, which may be imposed upon, asserted against or incurred or
paid by Beneficiary and/or Trustee at any time and from time to time, whenever
imposed, asserted or incurred, because of, resulting from, in connection with,
or arising out of any transaction, act, omission, event or circumstance in any
way connected with the Mortgaged Property or with this Deed of Trust or any
other Loan Instrument, including but not limited to any bodily injury or death
or property damage occurring in or upon or in the vicinity of the Mortgaged
Property through any cause whatsoever at any time on or before the Release Date
(as hereinafter defined), any act performed or omitted to be performed hereunder
or under any other Loan Instrument, any breach by Grantor of any representation,
warranty, covenant, agreement or condition contained in this Deed of Trust or in
any other Loan Instrument, any Default as defined herein, any claim under or
with respect to any Lease and any Environmental Matter (defined below). As used
herein, the term "ENVIRONMENTAL MATTER" means: (a) the presence of any Hazardous
Materials (as


<PAGE>

defined in SECTION 7.1 hereof) on, in, under, above or about the
Mortgaged Property, or the migration or release or threatened migration or
release of any Hazardous Materials on, to, from or through the Mortgaged
Property, on or at any time before the Release Date; or (b) any act, omission,
event or circumstance existing or occurring in connection with the handling,
treatment, containment, removal, storage, decontamination, clean-up, transport
or disposal of any Hazardous Materials which is at any time on or before the
Release Date present on, in, under, above or about the Mortgaged Property; or
(c) any violation on or before the Release Date, of any Governmental Requirement
in effect on or before the Release Date, regardless of whether any act,
omission, event or circumstance giving rise to the violation constituted a
violation at the time of the occurrence or inception of such act, omission,
event or circumstance; or (d) any environmental claim, or the filing or
imposition of any environmental lien against the Mortgaged Property, because of,
resulting from, in connection with, or arising out of any of the matters
referred to in clauses (a) through (c) preceding; and regardless of whether any
of the matters referred to in the foregoing clauses (a) through (d) was caused
by Grantor or Grantor's tenant or any subtenant, or a prior owner of the
Mortgaged Property or its tenant or any subtenant, or any third party. Without
limitation of the definition of Indemnified Matters herein, Grantor's
indemnification obligations regarding any Environmental Matter shall include
injury or damage to any person, property or natural resource occurring upon or
off of the Mortgaged Property (including but not limited to the cost of
demolition and rebuilding of any improvements on real property), the preparation
of any feasibility studies or reports and the performance of any cleanup,
remediation, removal, response, abatement, containment, closure, restoration,
monitoring or similar work required by any Governmental Requirement or necessary
to have the full use and benefit of the Mortgaged Property as contemplated by
the Loan Instruments (including, without limitation, any of the same in
connection with any foreclosure or transfer in lieu thereof), and all liability
to pay or indemnify any person for costs in connection with any of the
foregoing. The term "RELEASE DATE" as used herein means the earlier of the
following two dates: (i) the date on which the Indebtedness secured hereby has
been paid and performed in full and this Deed of Trust has been released, or
(ii) the date on which the lien of this Deed of Trust is fully and finally
foreclosed or a conveyance by deed in lieu of such foreclosure is fully and
finally effective, and possession of the Mortgaged Property has been given to
the purchaser or grantee free of occupancy and claims to occupancy by Grantor
and Grantor's heirs, devisees, representatives, successors and assigns;
provided, that if such payment, performance, release, foreclosure or conveyance
is challenged, in bankruptcy proceedings or otherwise, the Release Date shall be
deemed not to have occurred until such challenge is rejected, dismissed or
withdrawn with prejudice. The indemnities in this SECTION 6.17 shall not
terminate upon the Release Date or upon the release, foreclosure or other
termination of this Deed of Trust but will survive the Release Date, foreclosure
of this Deed of Trust or conveyance in lieu of foreclosure, the repayment of the
Indebtedness, the discharge and release of this Deed of Trust and the other Loan
Instruments, any bankruptcy or other debtor relief proceeding, and any other
event whatsoever.

        6.18 TRADE NAMES. At the request of Beneficiary, Grantor shall execute a
certificate in form satisfactory to Beneficiary listing the trade names under
which Grantor intends to operate the Mortgaged Property, and representing and
warranting that Grantor does business under no other trade name with respect to
the Mortgaged Property. Grantor shall immediately notify Beneficiary in writing
of any change in said trade names, and shall, upon request of Beneficiary,
execute any additional financing statements and other certificates required to
reflect the change in trade names and shall execute and file any assumed name
certificate required by applicable laws.

        6.19 FURTHER ASSURANCES. Grantor will, promptly on request of
Beneficiary, (a) correct any defect, error or omission which may be discovered
in the contents, execution or acknowledgment of this Deed of Trust or any other
Loan Instrument; (b) execute, acknowledge, deliver, procure and record and/or
file such further documents (including, without limitation, further deeds of
trust, security agreements, financing statements, continuation statements, and
assignments of rents or leases) and do such further acts as may be necessary,
desirable or proper to carry out more effectively the purposes of this Deed of
Trust


<PAGE>

and the other Loan Instruments, to more fully identify and subject to the
liens and security interests hereof any property intended to be covered hereby
(including specifically, but without limitation, any renewals, additions,
substitutions, replacements, or appurtenances to the Mortgaged Property) or as
deemed advisable by Beneficiary to protect the lien or the security interest
hereunder against the rights or interests of third persons; and (c) provide such
certificates, documents, reports, information, affidavits and other instruments
and do such further acts as may be necessary, desirable or proper in the
reasonable determination of Beneficiary to enable Beneficiary to comply with the
requirements or requests of any agency having jurisdiction over Beneficiary or
any examiners of such agencies with respect to the Indebtedness, Grantor or the
Mortgaged Property. Grantor shall pay all costs connected with any of the
foregoing, which shall be a demand obligation owing by Grantor (which Grantor
hereby promises to pay) to Beneficiary pursuant to this Deed of Trust.

        6.20 FEES AND EXPENSES. Without limitation of any other provision of
this Deed of Trust or of any other Loan Instrument and to the extent not
prohibited by applicable law, Grantor will pay, and will reimburse to
Beneficiary and/or Trustee on demand to the extent paid by Beneficiary and/or
Trustee: (a) all appraisal fees, filing and recording fees, taxes, brokerage
fees and commissions, abstract fees, title search or examination fees, title
policy and endorsement premiums and fees, uniform commercial code search fees,
escrow fees, reasonable attorneys' fees, architect fees, construction consultant
fees, environmental inspection fees, survey fees, and all other out-of-pocket
costs and expenses of every character incurred by Grantor or Beneficiary and/or
Trustee in connection with the preparation of the Loan Instruments, the
evaluation, closing and funding of the loan evidenced by the Loan Instruments,
and any and all amendments and supplements to this Deed of Trust, the Note or
any other Loan Instruments or any approval, consent, waiver, release or other
matter requested or required hereunder or thereunder, or otherwise attributable
or chargeable to Grantor as owner of the Mortgaged Property; and (b) all costs
and expenses, including reasonable attorneys' fees and expenses, incurred or
expended in connection with the exercise of any right or remedy, or the
enforcement of any obligation of Grantor, hereunder or under any other Loan
Instrument.

        6.21 RECORDING AND FILING. Grantor shall cause the Loan Instruments and
all amendments, supplements and extensions thereto and substitutions therefor to
be recorded, filed, rerecorded and refiled in such manner and in such places as
Beneficiary shall reasonably request, and shall pay all such recording, filing,
rerecording and refiling fees, title insurance premiums, and other charges.

        6.22 PAYMENT OF DEBTS. Grantor shall promptly pay when due all
obligations regarding the ownership and operation of the Mortgaged Property
except any such obligations which are being Contested in Good Faith as that term
is defined in the Loan Agreement.

        6.23 MODIFICATION BY SUBSEQUENT OWNERS. Each Grantor agrees that it
shall be bound by any modification of this Deed of Trust or any of the other
Loan Instruments made by Beneficiary and any subsequent owner of the Mortgaged
Property, with or without notice to such Grantor, and no such modifications
shall impair the obligations of such Grantor under this Deed of Trust or any
other Loan Instrument. Nothing in this Section shall be construed as permitting
any transfer of the Mortgaged Property which would constitute an Event of
Default under other provisions of this Deed of Trust.

        6.24 NOTIFICATION OF DEFAULT. Grantor shall notify Beneficiary
immediately if it becomes aware of the occurrence of any Event of Default or any
fact, condition or event that only with the giving of notice or passage of time,
or both, could become an Event of Default, or the failure of Grantor or any
guarantor to observe any of its or his undertakings under any of the Loan
Instruments.

        6.25 BUSINESS PURPOSES. The loan evidenced by the Note is solely for the
purpose of carrying on or acquiring a business of Grantor, and is not for
personal, family household, or agricultural purposes.


<PAGE>

                                   ARTICLE 7

                               HAZARDOUS MATERIALS

        7.1 DEFINITIONS. For the purposes of this Deed of Trust, Grantor,
Beneficiary and Trustee agree that, unless the context otherwise specified or
requires, the following terms shall have the meaning herein specified:

        (a) "HAZARDOUS MATERIALS" shall mean (a) any "hazardous waste" or
"regulated substance" as defined by the Resource Conservation and Recovery Act
of 1976 (42 U.S.C.A. ss. 6901, ET SEQ. (West 1983 & Supp. 1993)), and
regulations promulgated thereunder, both as amended from time to time; (b) any
"hazardous substance" as defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C.A. ss. 9601, ET SEQ. (West 1983
& Supp. 1993)) ("CERCLA"), and regulations promulgated thereunder, both as
amended from time to time; (c) any "toxic substance" as defined by the Toxic
Substances Control Act (15 U.S.C.A. ss. 2601, ET SEQ. (West 1983 & Supp. 1993)),
and regulations promulgated thereunder, both as amended from time to time; (d)
any "waste" as defined by the Texas Water Quality Control Act (Tex. Water Code
Ann. ss.ss. 26.01-225 (Vernon 1988)), and regulations promulgated thereunder,
both as amended from time to time; (e) any "solid waste" as defined by the Texas
Solid Waste Disposal Act (Tex. Health & Safety Code Ann. ss. 361.001, ET SEQ.
(Vernon 1992)), and regulations promulgated thereunder, both as amended from
time to time; (f) any "air contaminant " as defined by the Texas Clean Air Act
(Tex. Health & Safety Code Ann., ss. 382.001, ET SEQ. (Vernon 1992)), and
regulations promulgated thereunder, both as amended from time to time; (g) any
"hazardous substance" as defined by the Texas Hazardous Substances Spill
Prevention and Control Act (Tex. Water Code Ann. ss.ss. 26.261-268 (Vernon
1988)), and regulations promulgated thereunder, both as amended from time to
time; (h) any "toxic chemical" as defined by the Texas Toxic Chemical Release
Reporting Act (Tex. Health & Safety Code Ann. ss. 370.001, ET SEQ. (Vernon
1992)), and regulations promulgated thereunder, both as amended from time to
time; (i) any "regulated asbestos-containing material" as defined in the
National Emission Standard for Asbestos (40 C.F.R. ss. 61.140, ET SEQ. (1992));
(j) polychlorinated biphenyls ("PCBS") as defined in 40 C.F.R. Part 761 (1992);
(k) underground storage tanks, whether active, inactive, empty, filled or
partially filled with any substance, (l) any substance the presence of which on
the Mortgaged Property is prohibited by any Governmental Requirements; and (m)
any other substance which by any Governmental Requirements requires special
handling or notification of any federal, state or local governmental entity in
its collection, storage, transportation, treatment, processing, management or
disposal.

        (b) "HAZARDOUS MATERIALS CONTAMINATION" shall mean the contamination
(whether presently existing or hereafter occurring) of the Improvements,
facilities, soil, surface water, groundwater, air or other elements on or of the
Mortgaged Property by Hazardous Materials, or the contamination of the
buildings, facilities, soil, surface water, groundwater, air or other elements
on or of any other property as a result of Hazardous Materials at any time
(whether before or after the date of this Deed of Trust) emanating from the
Mortgaged Property.

        (c) "GOVERNMENTAL REQUIREMENTS" shall mean any and all of the following
that may now or hereafter be applicable to Grantor or the Mortgaged Property:
(i) judicial decisions, statutes, rulings, rules, regulations, permits,
certificates or ordinances of any and all governmental or quasi governmental
entities of any nature whatsoever, whether federal, state, county, district,
city or otherwise, and whether now or hereafter in existence ("GOVERNMENTAL
AUTHORITY"); (ii) restrictions of record; and (iii) any other governmental
directive or requirement of any nature.

        7.2 GRANTOR'S WARRANTIES. Grantor hereby represents and warrants that
except as disclosed in (i) the Phase I Environmental Assessment dated May 18,
2004 prepared by Property Solutions, Inc.,


<PAGE>

and (ii) the Asbestos Operations & Maintenance Program dated December 1998
prepared by Law Engineering and Environmental Services, Inc. (Project No.
60300-8-6572-04-606):

        (a) No Hazardous Materials are now located on the Mortgaged Property,
and neither Grantor nor, to Grantor's knowledge, any other person has ever
caused or permitted any Hazardous Materials to be placed, held, located or
disposed of on, under or at the Mortgaged Property or any part thereof;

        (b) No part of the Mortgaged Property is being used or, to the knowledge
of Grantor, has been used at any previous time for the disposal, storage,
treatment, processing or other handling of Hazardous Materials, nor is any part
of the Mortgaged Property affected by any Hazardous Materials Contamination;

        (c) To the best of the Grantor's knowledge and belief, no property
adjoining the Mortgaged Property is being used, or has ever been used at any
previous time for the disposal, storage, treatment, processing or other handling
of Hazardous Materials nor is any other property adjoining the Mortgaged
Property affected by Hazardous Materials Contamination; and

        (d) No investigation, administrative order, consent order and agreement,
litigation or settlement with respect to Hazardous Materials or Hazardous
Materials Contamination is proposed, threatened, anticipated or in existence
with respect to the Mortgaged Property. The Mortgaged Property is not currently
on, and to Grantor's knowledge, after diligent investigation and inquiry, has
never been on, any federal or state "Superfund" or "Superlien" list.

        (e) Grantor has undertaken all appropriate inquiry into the previous
ownership and uses of the Mortgaged Property consistent with good commercial or
customary practice in an effort to minimize liability associated with Hazardous
Materials or Hazardous Materials Contamination.

        7.3 GRANTOR'S COVENANTS. Grantor agrees to (a) give notice to
Beneficiary immediately upon Grantor's acquiring knowledge of the presence of
any Hazardous Materials on the Mortgaged Property or of any Hazardous Materials
Contamination with a full description thereof; (b) promptly comply with any
Governmental Requirements requiring the removal, treatment, mitigation or
disposal of such Hazardous Materials or Hazardous Materials Contamination and
provide Beneficiary with satisfactory evidence of such compliance; and (c)
provide Beneficiary, within thirty (30) days after demand by Beneficiary, with a
bond, letter of credit or similar financial assurance evidencing to
Beneficiary's satisfaction that the necessary funds are available to pay the
cost of removing, treating, mitigating and disposing of such Hazardous Materials
or Hazardous Materials Contamination and discharging any assessments which may
be established on the Mortgaged Property as a result thereof.

        7.4 SITE ASSESSMENTS. Beneficiary (by its officers, employees and
agents) at any time and from time to time, either prior to or after the
occurrence of an Event of Default, may contract for the services of persons (the
"SITE REVIEWERS") to perform environmental site assessments ("SITE ASSESSMENTS")
on the Mortgaged Property for the purpose of determining whether there exists on
the Mortgaged Property any environmental condition which could reasonably be
expected to result in any liability, cost or expense to the owner, occupier or
operator of such Mortgaged Property arising under any state, federal or local
law, rule or regulation relating to Hazardous Materials. The Site Assessments
may be performed at any time or times, upon reasonable notice, and under
reasonable conditions established by Grantor which do not impede the performance
of the Site Assessments. The Site Reviewers are hereby authorized to enter upon
the Mortgaged Property for such purposes. The Site Reviewers are further
authorized to perform both above and below the ground testing for environmental
damage or the presence of Hazardous Materials on the Mortgaged Property and such
other tests on the Mortgaged Property as may be necessary to conduct the Site
Assessments in the reasonable opinion of the Site Reviewers.


<PAGE>

Grantor will supply to the Site Reviewers such historical and operational
information regarding the Mortgaged Property as may be reasonably requested by
the Site Reviewers to facilitate the Site Assessments and will make available
for meetings with the Site Reviewers appropriate personnel having knowledge of
such matters. On request, Beneficiary shall make the results of such Site
Assessments fully available to Grantor, which (prior to an Event of Default) may
at its election participate under reasonable procedures in the direction of such
Site Assessments and the description of tasks of the Site Reviewers. The cost of
performing such Site Assessments shall be paid by Grantor upon demand of
Beneficiary and any such obligations shall be Indebtedness secured by this Deed
of Trust. Beneficiary's right to require such Site Assessment shall be for the
sole purpose of protecting Beneficiary's security for the repayment of the
Indebtedness and shall not under any circumstances be construed as granting the
right to participate or constitute participation by the Beneficiary in the
management of the Mortgaged Property or the business conducted thereon.

        7.5 BENEFICIARY'S RIGHT TO REMOVE HAZARDOUS MATERIALS. Beneficiary shall
have the right but not the obligation, prior or subsequent to an Event of
Default, without in any way limiting Beneficiary's other rights and remedies
under this Deed of Trust, to enter onto the Mortgaged Property or to take such
other actions as it deems necessary or advisable to clean up, remove, resolve or
minimize the impact of, or otherwise deal with, any Hazardous Materials or
Hazardous Materials Contamination on the Mortgaged Property following receipt of
any notice from any person or entity asserting the existence of any Hazardous
Materials or Hazardous Materials Contamination pertaining to the Mortgaged
Property or any part thereof which, if true, could result in an order, suit,
imposition of a lien on the Mortgaged Property, or other action and/or which, in
Beneficiary's sole opinion, could jeopardize Beneficiary's security under this
Deed of Trust. All costs and expenses paid or incurred by Beneficiary in the
exercise of any such rights shall be Indebtedness secured by this Deed of Trust
and shall be payable by Grantor upon demand. Beneficiary's right to require such
removal of Hazardous Materials shall be for the sole purpose of protecting
Beneficiary's security for the repayment of the Indebtedness and shall not under
any circumstances be construed as granting the right to participate or
constitute participation in the management of the Mortgaged Property or the
business conducted thereon.

        7.6 SURVIVAL. The provisions of ARTICLE 7 shall survive the release,
foreclosure or other enforcement of this Deed of Trust.

                                   ARTICLE 8

                                EVENTS OF DEFAULT

         The occurrence of any one of the following shall be a default hereunder
("EVENT OF DEFAULT").

        8.1 EVENT OF DEFAULT UNDER LOAN AGREEMENT. The occurrence of an Event of
Default as defined in the Loan Agreement.

        8.2 NONPERFORMANCE OF COVENANTS. (i) (A) Grantor shall default in the
due performance or observance by it of any term, covenant or agreement on its
part to be performed or observed pursuant to SECTION 6.1 hereof beyond any grace
or cure period provided in the other Loan Instruments, or (B) Grantor shall
default in the due performance or observance by it of any term, covenant or
agreement on its part to be performed or observed pursuant to SECTION 6.12 or
SECTION 6.24 hereof (collectively, the "NO CURE PERIOD COVENANTS"), or (ii)
Grantor shall default in the due performance or observance by it of any term,
covenant or agreement on its part to be performed or observed pursuant to any
provision of this Deed of Trust other than the No Cure Period Covenants, and
such default shall continue unremedied for a period of thirty (30) days after:
(a) notice of such default from Beneficiary; or (b) Beneficiary is notified


<PAGE>

of such default or should have been so notified pursuant to the provisions of
SECTION 6.24 hereof, whichever is earlier.

        8.3 TRANSFER OF THE MORTGAGED PROPERTY. Title to all or any part of the
Mortgaged Property (other than obsolete or worn personal property replaced by
adequate substitutes of equal or greater value than the replaced items when new)
shall become vested in any party other than Grantor, whether by operation of law
or otherwise. Beneficiary may, in its sole discretion, waive this Event of
Default, but it shall have no obligation to do so, and any waiver may be
conditioned upon such one or more of the following which Beneficiary may
require: the grantee's integrity, reputation, character, creditworthiness and
management ability being satisfactory to Beneficiary in its sole judgment, and
grantee executing, prior to such sale or transfer, a written assumption
agreement containing such terms as Beneficiary may require, a principal paydown
on the Note, an increase in the rate of interest payable under the Note, a
transfer fee, and any other modification of the Loan Instruments which
Beneficiary may require.

        8.4 GRANT OF EASEMENT, ETC. Without the prior written consent of
Beneficiary, Grantor grants any easement or dedication, files any plat,
condominium declaration, or restriction, or otherwise encumbers the Mortgaged
Property, unless such action is expressly permitted by the Loan Instruments or
does not affect the Mortgaged Property.

        8.5 ABANDONMENT. Grantor or the owner of the Mortgaged Property (if
other than Grantor) abandons any of the Mortgaged Property.

        8.6 FORECLOSURE OF OTHER LIENS. The holder of any lien, security
interest or assignment on the Mortgaged Property institutes foreclosure or other
proceedings for the enforcement of its remedies thereunder.

                                   ARTICLE 9

                                    REMEDIES

        9.1 EXERCISE OF SPECIFIC REMEDIES. If an Event of Default shall occur,
Beneficiary may exercise any one or more of the following remedies, without
notice (unless notice is required by applicable statute):

        (a) ACCELERATION. Upon the occurrence of an Event of Default described
in Section 11.6 of the Loan Agreement, the entire principal of and accrued
interest of the Indebtedness shall forthwith be due and payable without demand,
presentment for payment, notice of nonpayment, protest, notice of protest,
notice of intent to accelerate, notice of acceleration and all other notices of
further actions of any kind, all of which are hereby expressly waived by
Grantor. In the event that any other Event of Default shall occur and be
continuing, Beneficiary may declare the Indebtedness immediately due and
payable, whereupon all of the Indebtedness shall be forthwith due and payable
without demand, presentment for payment, notice of nonpayment, protest, notice
of protest, notice of intent to accelerate, notice of acceleration and all other
notices or further actions of any kind, all of which are hereby expressly waived
by Grantor. Grantor hereby waives notice of intent to accelerate and notice of
acceleration.

        (b) ENFORCEMENT OF ASSIGNMENT OF RENTS AND LEASES. Prior or subsequent
to taking possession of any portion of the Mortgaged Property or taking any
action with respect to such possession, Beneficiary may:


<PAGE>

                (i) collect and/or sue for the Rents in Beneficiary's own name,
        give receipts and releases therefor, and after deducting all expenses of
        collection, including attorneys' fees and expenses, apply the net
        proceeds thereof to any Indebtedness as Beneficiary may elect;

                (ii) make, modify, enforce, cancel, terminate or accept
        surrender of any Leases, evict tenants, adjust the Rents, maintain,
        decorate, refurbish, repair, clean, and make space ready for renting,
        and otherwise do anything Beneficiary deems advisable in connection with
        the Mortgaged Property;

                (iii) apply the Rents so collected to the operation and
        management of the Mortgaged Property, including the payment of
        management, brokerage and attorneys' fees and expenses, and/or to the
        Indebtedness; and

                (iv) require Grantor to transfer all security deposits and
        records thereof to Beneficiary together with all original counterparts
        of the Leases.

        (c) FORECLOSURE. Beneficiary may require the Trustee to sell all or part
of the Mortgaged Property, at public auction, to the highest bidder, for cash,
at the county courthouse of the county in Texas in which the Mortgaged Property
or any part thereof is situated, or if the Mortgaged Property is located in more
than one county such sale may be made at the courthouse in any county in which
the Mortgaged Property is situated. The sale shall take place at such area of
the courthouse as shall be properly designated from time to time by the
commissioners court (or, if not so designated by the commissioners court, at
such other area in the courthouse as may be provided in the notice of sale
hereinafter described) of the specified county, between the hours of 10:00
o'clock a.m. and 4:00 o'clock p.m. (the commencement of such sale to occur
within three hours following the time designated in the hereinafter described
notice of sale as the earliest time at which such sale shall occur, if required
by applicable law) on the first Tuesday of any month, after giving notice of the
time, place and terms of said sale (including the earliest time at which such
sale shall occur) and of the property to be sold in the manner hereinafter
described. Notice of a sale of all or part of the Mortgaged Property by the
Trustee shall be given by posting written notice thereof at the courthouse door
(or other area in the courthouse as may be designated for such public notices)
of the county in which the sale is to be made, and by filing a copy of the
notice in the office of the county clerk of the county in which the sale is to
be made, at least twenty-one (21) days preceding the date of the sale, and if
the property to be sold is in more than one county a notice shall be posted at
the courthouse door (or other area in the courthouse as may be designated for
such public notices) and filed with the county clerk of each county in which the
property to be sold is situated. In addition, Beneficiary shall, at least
twenty-one (21) days preceding the date of sale, serve written notice of the
proposed sale by certified mail on Grantor and each debtor obligated to pay the
Indebtedness secured hereby according to the records of Beneficiary. Service of
such notice shall be completed upon deposit of the notice, enclosed in a
postpaid wrapper, properly addressed to such debtor at the most recent address
as shown by the records of Beneficiary, in a post office or official depository
under the care and custody of the United States Postal Service. The affidavit of
any person having knowledge of the facts to the effect that such service was
completed shall be prima facie evidence of the fact of service. Any notice that
is required or permitted to be given to Grantor may be addressed to Grantor at
Grantor's address as stated above. Any notice that is to be given by certified
mail to any other debtor may, if no address for such other debtor is shown by
the records of Beneficiary, be addressed to such other debtor at the address of
Grantor as is shown by the records of Beneficiary. Notwithstanding the foregoing
provisions of this paragraph, notice of such sale given in accordance with the
requirements of the applicable laws of the State of Texas in effect at the time
of such sale shall constitute sufficient notice of such sale. Trustee may sell
all or any portion of the Mortgaged Property, together or in lots or parcels,
and may execute and deliver to the purchaser or purchasers of such property good
and sufficient deeds of conveyance of fee simple title with covenants of general
warranty made on behalf of Grantor. In no event shall Trustee be


<PAGE>

required to exhibit, present or display at any such sale any of the personalty
described herein to be sold at such sale. Trustee making such sale shall receive
the proceeds thereof and shall apply the same as follows: (i) first, he shall
pay the reasonable expenses of Trustee and a reasonable Trustee's fee or
commission; (ii) second, he shall pay, so far as may be possible, the
Indebtedness, discharging first that portion of the Indebtedness arising under
the covenants or agreements herein contained and not evidenced by the Note;
(iii) third, he shall pay the residue, if any, to the persons legally entitled
thereto. Payment of the purchase price to Trustee shall satisfy the obligation
of the purchaser at such sale therefor, and such purchaser shall not be
responsible for the application thereof. The sale or sales by Trustee of less
than the whole of the Mortgaged Property shall not exhaust the power of sale
herein granted, and Trustee is specifically empowered to make successive sale or
sales under such power until the whole of the Mortgaged Property shall be sold;
and if the proceeds of such sale or sales of less than the whole of the
Mortgaged Property shall be less than the aggregate of the Indebtedness and the
expenses thereof, this Deed of Trust and the lien, security interest and
assignment hereof shall remain in full force and effect as to the unsold portion
of the Mortgaged Property just as though no sale or sales had been made;
provided, however, that Grantor shall never have any right to require the sale
or sales of less than the whole of the Mortgaged Property, but Beneficiary shall
have the right, at its sole election, to request Trustee to sell less than the
whole of the Mortgaged Property. If default is made hereunder, the holder of the
Indebtedness or any part thereof on which the payment is delinquent shall have
the option to proceed with foreclosure in satisfaction of such item either
through judicial proceedings or by directing Trustee to proceed as if under a
full foreclosure, conducting the sale as herein provided without declaring the
entire Indebtedness due, and if sale is made because of default of an
installment, or a part of an installment, such sale may be made subject to the
unmatured part of the Indebtedness; and it is agreed that such sale, if so made,
shall not in any manner affect the unmatured part of the Indebtedness, but as to
such unmatured part this Deed of Trust shall remain in full force and effect as
though no sale had been made under the provisions of this paragraph. Several
sales may be made hereunder without exhausting the right of sale for any
unmatured part of the Indebtedness. At any such sale (1) Grantor hereby agrees,
in its behalf and in behalf of its heirs, executors, administrators, successors,
personal representatives and assigns, that any and all recitals made in any deed
of conveyance given by Trustee with respect to the identity of Beneficiary, the
occurrence or existence of any default, the acceleration of the maturity of any
of the Indebtedness, the request to sell, the notice of sale, the giving of
notice to all debtors legally entitled thereto, the time, place, terms, and
manner of sale, and receipt, distribution and application of the money realized
therefrom, or the due and proper appointment of a substitute Trustee, and,
without being limited by the foregoing, with respect to any other act or thing
having been duly done by Beneficiary or by Trustee hereunder, shall be taken by
all courts of law and equity as prima facie evidence that the statements or
recitals state facts and are without further question to be so accepted, and
Grantor hereby ratifies and confirms every act that Trustee or any substitute
Trustee hereunder may lawfully do in the premises by virtue hereof, and (2) the
purchaser may disaffirm any easement granted, or rental, lease or other contract
made in violation of any provision of this Deed of Trust, and may take immediate
possession of the Mortgaged Property free from, and despite the terms of, such
grant of easement and rental or lease contract. Beneficiary may bid and become
the purchaser of all or any part of the Mortgaged Property at any trustee's or
foreclosure sale hereunder, and the amount of Beneficiary's successful bid may
be credited on the Indebtedness.

        (d) UNIFORM COMMERCIAL CODE. Without limitation of Beneficiary's rights
of enforcement with respect to the Collateral or any part thereof in accordance
with the procedures for foreclosure of real estate, Beneficiary may exercise its
rights of enforcement with respect to the Collateral or any part thereof under
the Code as amended (or under the Uniform Commercial Code in force in any other
state to the extent the same is applicable law) and in conjunction with, in
addition to or in substitution for those rights and remedies: (1) Beneficiary
may enter upon Grantor's premises to take possession of, assemble and collect
the Collateral or, to the extent and for those items of the Collateral permitted
under applicable law, to render it unusable; (2) Beneficiary may require Grantor
to assemble the Collateral and make it available at a place Beneficiary
designates which is mutually convenient to allow Beneficiary to take


<PAGE>

possession or dispose of the Collateral; (3) written notice mailed to Grantor as
provided herein at least ten (10) days prior to the date of public sale of the
Collateral or prior to the date after which private sale of the Collateral will
be made shall constitute reasonable notice; (4) any sale made pursuant to the
provisions of this paragraph shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held contemporaneously with and
upon the same notice as required for the sale of the Mortgaged Property under
power of sale as provided in paragraph (c) above in this SECTION 9.1; (5) in the
event of a foreclosure sale, whether made by Trustee under the terms hereof, or
under judgment of a court, the Collateral and the other Mortgaged Property may,
at the option of Beneficiary, be sold as a whole; (6) it shall not be necessary
that Beneficiary take possession of the Collateral or any part thereof prior to
the time that any sale pursuant to the provisions of this Section is conducted
and it shall not be necessary that the Collateral or any part thereof be present
at the location of such sale; (7) with respect to application of proceeds of
disposition of the Collateral, the costs and expenses incident to disposition
shall include the reasonable expenses of retaking, holding, preparing for sale
or lease, selling, leasing and the like and the reasonable attorneys' fees and
legal expenses incurred by Beneficiary; (8) any and all statements of fact or
other recitals made in any bill of sale or assignment or other instrument
evidencing any foreclosure sale hereunder as to nonpayment of the Indebtedness
or as to the occurrence of any default, or as to Beneficiary having declared all
of such indebtedness to be due and payable, or as to notice of time, place and
terms of sale and of the properties to be sold having been duly given, or as to
any other act or thing having been duly done by Beneficiary, shall be taken as
prima facie evidence of the truth of the facts so stated and recited; and (9)
Beneficiary may appoint or delegate any one or more persons as agent to perform
any act or acts necessary or incident to any sale held by Beneficiary, including
the sending of notices and the conduct of the sale, but in the name and on
behalf of Beneficiary.

        (e) LAWSUITS. Beneficiary may proceed by a suit or suits in equity or at
law, whether for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, or for any
foreclosure hereunder or for the sale of the Mortgaged Property under the
judgment or decree of any court or courts of competent jurisdiction.

        (f) ENTRY ON MORTGAGED PROPERTY. Upon occurrence of an Event of Default
hereunder, Beneficiary may enter into and upon and take possession of all or any
part of the Mortgaged Property, and may exclude Grantor, and all persons
claiming under Grantor, and its or their agents or servants, wholly or partly
therefrom; and, holding the same, Beneficiary may use, administer, manage,
operate, and control the Mortgaged Property and may exercise all rights and
powers of Grantor in the name, place and stead of Grantor, or otherwise, as the
Beneficiary shall deem best; and in the exercise of any of the foregoing rights
and powers Beneficiary shall not be liable to Grantor for any loss or damage
thereby sustained unless due solely to the willful misconduct or gross
negligence of Beneficiary.

        (g) TRUSTEE OR RECEIVER. Beneficiary may make application to a court of
competent jurisdiction, as a matter of strict right and without notice to
Grantor or regard to the adequacy of the Mortgaged Property for the repayment of
the Indebtedness, for appointment of a receiver of the Mortgaged Property, and
Grantor does hereby irrevocably consent to such appointment. Any such receiver
shall have all the usual powers and duties of receivers in similar cases,
including the full power to rent, maintain and otherwise operate the Mortgaged
Property upon such terms as may be approved by the court, and shall apply the
Rents in accordance with the provisions of SECTION 4.1.

        (h) TERMINATION OF COMMITMENT TO LEND. Beneficiary may terminate any
commitment or obligation to lend or disburse funds under any Loan Instrument.

        9.2 TENANCY AT WILL. In the event of a trustee's sale hereunder and if
at the time of such sale Grantor or any other party occupies the portion of the
Mortgaged Property so sold or any part thereof, such occupant shall immediately
become the tenant of the purchaser at such sale, which tenancy shall be a

<PAGE>

tenancy from day to day, terminable at the will of either tenant or landlord, at
a reasonable rental per day based upon the value of the portion of the Mortgaged
Property so occupied, such rental to be due and payable daily to the purchaser.
An action of forcible detainer shall lie if the tenant holds over after a demand
in writing for possession of such Mortgaged Property.

        9.3 SUBSTITUTE TRUSTEE. If, for any reason, Beneficiary prefers to
appoint a substitute Trustee hereunder, Beneficiary may, from time to time, by
written instrument, appoint one or more substitute Trustees, who shall succeed
to all the estate, rights, powers, and duties of the original Trustee named
herein. Such appointment may be executed by anyone acting in a representative
capacity, and such appointment shall be conclusively presumed to have been
executed with appropriate authority.

        9.4 INDEMNIFICATION OF TRUSTEE. Except for gross negligence or willful
misconduct, Trustee shall not be liable for any act or omission or error of
judgment. Trustee may rely on any document believed by him in good faith to be
genuine. All money received by Trustee shall, until used or applied as herein
provided, be held in trust, but need not be segregated (except to the extent
required by law), and Trustee shall not be liable for interest thereon. Grantor
hereby indemnifies Trustee against all liability and expenses that he may incur
in the performance of his duties hereunder. WITHOUT LIMITATION, THE FOREGOING
INDEMNITY SHALL APPLY WITH RESPECT TO MATTERS WHICH IN WHOLE OR IN PART ARE
CAUSED BY OR ARISE OUT OF, OR ARE CLAIMED TO BE CAUSED BY OR ARISE OUT OF, THE
NEGLIGENCE OR STRICT LIABILITY OF TRUSTEE. HOWEVER, SUCH INDEMNITY SHALL NOT
APPLY TO THE EXTENT THAT THE SUBJECT OF THE INDEMNIFICATION IS CAUSED BY OR
ARISES OUT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF TRUSTEE.

        9.5 BENEFICIARY'S RIGHT TO PERFORM. Upon Grantor's failure to make a
payment or perform an act required by the Loan Instruments, then at any time
thereafter, and without notice to or demand upon Grantor and without waiving or
releasing any other right, remedy or recourse, Beneficiary may (but shall not be
obligated to) make such payment or perform such act for the account of and at
the expense of Grantor, and shall have the right to enter upon the Mortgaged
Property for such purpose and to take all such action as it may deem necessary
or appropriate.

        9.6 REIMBURSEMENT OF EXPENDITURE. If Beneficiary shall expend any money
chargeable to Grantor or subject to reimbursement by Grantor under the terms of
the Loan Instruments, Grantor shall repay the same to Beneficiary immediately at
the place where the Note is payable, together with interest thereon at the
Default Rate, as defined in the Loan Agreement, from and after the date of each
such expenditure by Beneficiary until paid by Grantor.

        9.7 OTHER RIGHTS. Beneficiary may exercise any and all other rights,
remedies and recourses granted under the Loan Instruments now or hereafter
existing in equity or at law for the protection and preservation of the
Mortgaged Property.

        9.8 REMEDIES CUMULATIVE, CONCURRENT AND NONEXCLUSIVE. Beneficiary shall
have all rights, remedies and recourses granted in the Loan Instruments and
available at law or equity (including, without limitation, those granted by the
Code and applicable to the Mortgaged Property, or any portion thereof), and same
(a) shall be cumulative and concurrent, (b) may be pursued separately,
successively or concurrently against Grantor or others obligated for the
Indebtedness, or any part thereof or against any one or more of them, or against
the Mortgaged Property, at the sole discretion of Beneficiary, (c) may be
exercised as often as occasion therefor shall arise, it being agreed by Grantor
that the exercise of or failure to exercise any of same shall in no event be
construed as a waiver or release thereof or of any other right, remedy or
recourse, and (d) are intended to be, and shall be, nonexclusive.


<PAGE>

        9.9 RIGHTS AND REMEDIES OF SURETIES. Grantor waives any right or remedy
which Grantor may have or be able to assert pursuant to Chapter 34 of the
Business and Commerce Code of the State of Texas pertaining to the rights and
remedies of sureties.

                                   ARTICLE 10

                                  MISCELLANEOUS

        10.1 COLLECTION. If the Indebtedness shall be collected by legal
proceedings, whether through a probate or bankruptcy court or otherwise, or
shall be placed in the hands of an attorney for collection after an Event of
Default or maturity, Grantor agrees to pay the attorneys' and collection fees
and expenses as set forth in the Note, and such fees and expenses shall be a
part of the Indebtedness.

        10.2 CHANGE IN OWNERSHIP. If the ownership (legal or beneficial) of the
Mortgaged Property or any part thereof becomes vested in a person other than
Grantor, or in the event of a change of any ownership of Grantor (legal or
beneficial), Beneficiary may, without notice to Grantor, deal with such
successor or successors in interest with reference to this Deed of Trust and to
the Indebtedness in the same manner as with Grantor without in any way vitiating
or discharging Grantor's liability hereunder or upon the Indebtedness. No sale
of the Mortgaged Property, and no forbearance on the part of Beneficiary, and no
extension of the time for the payment of the Indebtedness, shall operate to
release or affect the original liability of Grantor.

        10.3 RELEASE OF LIEN. If Grantor shall perform each of the covenants and
agreements herein contained, then this conveyance shall become null and void and
shall be released at Grantor's written request and expense; otherwise, it shall
remain in full force and effect. No release or modification of this conveyance,
or of the lien, security interest or assignment created and evidenced hereby,
shall be valid unless executed by Beneficiary.

        10.4 PARTIAL RELEASE OF LIEN, EXTENSION, ETC. Any part of the Mortgaged
Property may be released by Beneficiary without affecting the lien, security
interest and assignment hereof against the remainder. The lien, security
interest and other rights granted hereby shall not affect or be affected by any
other security taken for the Indebtedness. The taking of additional security, or
the extension or renewal of the Indebtedness or any part thereof, shall not
release or impair the lien, security interest and other rights granted hereby,
or affect the liability of any endorser or guarantor or improve the right of any
permitted junior lienholder; and this Deed of Trust, as well as any instrument
given to secure any renewal or extension of the Indebtedness, or any part
thereof, shall be and remain a first and prior lien, except as otherwise
provided herein, on all of the Mortgaged Property not expressly released until
the Indebtedness is paid.

        10.5 NO IMPAIRMENT OF SECURITY. The lien, security interest and other
security rights of Beneficiary hereunder or under any other Loan Instrument
shall not be impaired by any indulgence, moratorium or release granted by
Beneficiary including, but not limited to, any renewal, extension or
modification which Beneficiary may grant with respect to any Indebtedness, or
any surrender, compromise, release, renewal, extension, exchange or substitution
which Beneficiary may grant in respect of the Mortgaged Property, or any part
thereof or any interest therein, or any release or indulgence granted to any
endorser, guarantor or surety of any Indebtedness. The taking of additional
security by Beneficiary shall not release or impair the lien, security interest
or other security rights of Beneficiary hereunder or affect the liability of
Grantor or of any endorser, guarantor or surety, or improve the right of any
junior lienholder in the Mortgaged Property (without implying hereby
Beneficiary's consent to any junior lien).


<PAGE>

        10.6 ACTS NOT CONSTITUTING WAIVER BY BENEFICIARY. Beneficiary may waive
any default without waiving any other prior or subsequent default. Beneficiary
may remedy any default without waiving the default remedied. Neither failure by
Beneficiary to exercise, nor delay by Beneficiary in exercising, nor
discontinuance of the exercise of any right, power or remedy (including but not
limited to the right to accelerate the maturity of the Indebtedness or any part
thereof) upon or after any default shall be construed as a waiver of such
default or as a waiver of the right to exercise any such right, power or remedy
at a later date. No single or partial exercise by Beneficiary of any right,
power or remedy hereunder shall exhaust the same or shall preclude any other or
further exercise thereof, and every such right, power or remedy hereunder may be
exercised at any time and from time to time. No modification or waiver of any
provision hereof nor consent to any departure by Grantor therefrom shall in any
event be effective unless the same shall be in writing and signed by Beneficiary
and then such waiver or consent shall be effective only in the specific
instance, for the purpose for which given and to the extent therein specified.
No notice to nor demand on Grantor in any case shall of itself entitle Grantor
to any other or further notice or demand in similar or other circumstances.
Remittances in payment of any part of the of the Indebtedness other than in the
required amount in immediately available U.S. funds shall not, regardless of any
receipt or credit issued therefor, constitute payment until the required amount
is actually received by Beneficiary in immediately available U.S. funds and
shall be made and accepted subject to the condition that any check or draft may
be handled for collection in accordance with the practice of the collecting bank
or banks. Acceptance by Beneficiary of any payment in an amount less than the
amount then due on any of the Indebtedness shall be deemed an acceptance on
account only and shall not in any way excuse the existence of a default
hereunder.

        10.7 WAIVER OF MARSHALLING AND CERTAIN RIGHTS. To the extent that
Grantor may lawfully do so, Grantor hereby expressly waives any right pertaining
to the marshalling of assets, the exemption of homestead, the administration of
estates of decedents, or other matter to defeat, reduce or affect the right of
Beneficiary to sell the Mortgaged Property for the collection of the
Indebtedness (without any prior or different resort for collection), or the
right of Beneficiary to the payment of the Indebtedness out of the proceeds of
sale of the Mortgaged Property in preference to every other person and claimant.

        10.8 SUBROGATION. To the extent that proceeds of the Indebtedness are
used to pay any outstanding lien, charge or encumbrance affecting the Mortgaged
Property, such proceeds have been advanced by Beneficiary at Grantor's request,
and Beneficiary shall be subrogated to all rights, interests and liens owned or
held by any owner or holder of such outstanding liens, charges and encumbrances,
irrespective of whether such liens, charges or encumbrances are released of
record; provided, however, that the terms and provisions hereof shall govern the
rights and remedies of Beneficiary and shall supersede the terms, provisions,
rights, and remedies under the lien or liens to which Beneficiary is subrogated
hereunder.

        10.9 NO WAIVER. No waiver of any Event of Default or any other default
on the part of Grantor or breach of any of the provisions of this Deed of Trust
or of any other instrument executed in connection with the Indebtedness shall be
considered a waiver of any other or subsequent default or breach, and no delay
or omission in exercising or enforcing the rights and powers herein granted
shall be construed as a waiver of such rights and powers, and likewise no
exercise or enforcement of any rights or powers hereunder shall be held to
exhaust such rights and powers, and every such right and power may be exercised
from time to time. Acceptance by Beneficiary of partial payments shall not
constitute a waiver of the default by failure to make full payments.

        10.10 LIMITATION ON INTEREST. All agreements between Grantor and
Beneficiary, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason of
acceleration of the maturity of any of the Indebtedness or otherwise, shall the
interest contracted for, charged or received by Beneficiary exceed the maximum
amount permissible


<PAGE>

under applicable law. If from any circumstance whatsoever, interest would
otherwise be payable to Beneficiary in excess of the maximum lawful amount, the
interest payable to Beneficiary shall be reduced to the maximum amount permitted
under applicable law; and if from any circumstance Beneficiary shall ever
receive anything of value deemed interest by applicable law in excess of the
maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal balance of the Indebtedness and not to
the payment of interest or, if such excessive interest exceeds the unpaid
balance of principal of the Indebtedness, such excess shall be refunded to
Grantor. All interest paid or agreed to be paid to Beneficiary shall, to the
extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full period until payment in full of the principal of the
Indebtedness (including the period of any renewal or extension thereof) so that
the interest thereon for such full period shall not exceed the maximum amount
permitted by applicable law. This paragraph shall control all agreements between
Grantor and Beneficiary.

        10.11 SUCCESSORS AND ASSIGNS; USE OF TERMS. The covenants herein
contained shall bind, and the benefits and advantages shall inure to, the
respective heirs, executors, administrators, personal representatives,
successors, and assigns of the parties hereto. Whenever used, the singular
number shall include the plural and the plural the singular, and the use of any
gender shall be applicable to all genders. The term "GRANTOR" shall include in
their individual capacities and jointly all parties hereinabove named a Grantor.
The term "BENEFICIARY" shall include any lawful owner, holder, pledgee, or
assignee of any of the Indebtedness. The duties, covenants, conditions,
obligations, and warranties of Grantor in this Deed of Trust shall be joint and
several obligations of Grantor and each Grantor, if more than one, and each
Grantor's heirs, executors, administrators, personal representatives, successors
and assigns. Each party who executes this Deed of Trust and each subsequent
owner of the Mortgaged Property, or any part thereof (other than Beneficiary),
covenants and agrees that it will perform, or cause to be performed, each term
and covenant of this Deed of Trust.

        10.12 BENEFICIARY'S CONSENT. In any instance hereunder where
Beneficiary's approval or consent is required or the exercise of Beneficiary's
judgment is required, the granting or denial of such approval or consent and the
exercise of such judgment shall be within the sole discretion of Beneficiary
free from any limitation or requirement of reasonableness, and Beneficiary shall
not, for any reason or to any extent, be required to grant such approval or
consent or exercise such judgment in any particular manner regardless of the
reasonableness of either the request or Beneficiary's judgment.

        10.13 SEVERABILITY. If any provision of this Deed of Trust is held to be
illegal, invalid, or unenforceable under present or future laws effective while
this Deed of Trust is in effect, the legality, validity and enforceability of
the remaining provisions of this Deed of Trust shall not be affected thereby,
and in lieu of each such illegal, invalid or unenforceable provision there shall
be added automatically as a part of this Deed of Trust a provision that is
legal, valid and enforceable and as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.

        10.14 NO PARTNERSHIP. Nothing contained in the Loan Instruments is
intended to create any partnership, joint venture or association between Grantor
and Beneficiary, or in any way make Beneficiary a co-principal with Grantor with
reference to the Mortgaged Property, and any inferences to the contrary are
hereby expressly negated.

        10.15 HEADINGS. The article, paragraph and subparagraph headings hereof
are inserted for convenience of reference only and shall not alter, define, or
be used in construing the text of such articles, paragraphs or subparagraphs.


<PAGE>

        10.16 CONSTRUCTION DEED OF TRUST. This Deed of Trust constitutes a
"construction mortgage" as defined in Section 9.334(h) of the Code to the extent
that it secures an obligation incurred for the construction of the Improvements,
including the acquisition cost of the Land.

        10.17 APPLICABLE TO PRIOR LIENS. If this Deed of Trust is or becomes
subordinate to any other liens, security interests, assignments of leases or
rents or any other encumbrances (collectively, the "PRIOR LIENS") affecting any
of the Mortgaged Property (all documents creating the Prior Liens and evidencing
and governing the indebtedness secured thereby being collectively called the
"PRIOR LIEN DOCUMENTS"), in addition to the provisions of SECTION 6.12, the
provisions of this SECTION 10.17 shall apply. Grantor shall not enter into any
renewal, extension, modification, increase or refinancing of any of the Prior
Lien Documents or the indebtedness secured thereby without the prior written
consent of Beneficiary. Grantor shall pay when due all indebtedness evidenced
and secured by the Prior Lien Documents and shall timely perform all other
obligations of the Grantor under the Prior Lien Documents. Beneficiary may, but
shall not be obligated to, pay any such indebtedness or perform any such
obligations for the account of Grantor, and any sum so expended shall be part of
the Indebtedness secured hereby. Grantor shall pay to Beneficiary all amounts so
expended by Beneficiary with interest on such amounts from the date expended at
the rate set forth in the Note, but not in excess of the highest rate permitted
by applicable law. Any default under any of the Prior Lien Documents shall
constitute an Event of Default hereunder. If Beneficiary should cure any such
default under any of the Prior Lien Documents, the curing thereof by Beneficiary
shall not constitute a cure of the default under this Deed of Trust. Grantor
shall send to Beneficiary a copy of each notice of default or notice of
acceleration or other notice received by Grantor from the holder of any of the
Prior Lien Documents within one (1) business day after receipt thereof by
Grantor. Notwithstanding the foregoing, Beneficiary does not consent to any
Prior Lien unless otherwise expressly permitted in this Deed of Trust.

        10.18 ABSENCE OF OBLIGATIONS OF BENEFICIARY WITH RESPECT TO MORTGAGED
PROPERTY. Notwithstanding anything in this Deed of Trust to the contrary,
including, without limitation, the definition of "MORTGAGED PROPERTY" and/or the
provisions of ARTICLE 4 hereof, (a) to the extent permitted by applicable law,
the Mortgaged Property is comprised of Grantor's rights, title and interests
therein but not its obligations, duties or liabilities pertaining thereto, (b)
Beneficiary neither assumes nor shall have any obligations, duties or
liabilities in connection with any portion of the items described in connection
with the definition of "MORTGAGED PROPERTY" herein, either prior to or after
obtaining title to such Mortgaged Property, whether by foreclosure sale, the
granting of a deed in lieu of foreclosure or otherwise, and (c) Beneficiary may,
at any time prior to or after the acquisition of title to any portion of the
Mortgaged Property as above described, advise any party in writing as to the
extent of Beneficiary's interest therein and/or expressly disaffirm in writing
any rights, interests, obligations, duties and/or liabilities with respect to
such Mortgaged Property or matters related thereto. Without limiting the
generality of the foregoing, it is understood and agreed that Beneficiary shall
have no obligations, duties or liabilities prior to or after acquisition of
title to any portion of the Mortgaged Property, as lessee under any lease or
purchaser or seller under any contract or option unless Beneficiary elects
otherwise by written notification.

        10.19 NOTICES. Except as otherwise provided in subparagraph (c) of
SECTION 9.1, all notices demands, requests, approvals and other communications
required or permitted hereunder shall be given as provided in the Loan
Agreement.

        10.20 APPLICATION OF PAYMENTS TO CERTAIN INDEBTEDNESS. If any part of
the Indebtedness cannot be lawfully secured by this Deed of Trust or if any part
of the Mortgaged Property cannot be lawfully subject to the lien and security
interest hereof to the full extent of such Indebtedness, then all payments made
shall be applied on the Indebtedness first in discharge of that portion thereof
which is not secured by this Deed of Trust.


<PAGE>

        10.21 GENDER; TITLES; CONSTRUCTION. Within this Deed of Trust, words of
any gender shall be held and construed to include any other gender, and words in
the singular number shall be held and construed to include the plural, unless
the context otherwise requires. Titles appearing at the beginning of any
subdivisions hereof are for convenience only, do not constitute any part of such
subdivisions, and shall be disregarded in construing the language contained in
such subdivisions. The use of the words "herein," "hereof, " "hereunder" and
other similar compounds of the word "here" shall refer to this entire Deed of
Trust and not to any particular Article, Section, paragraph or provision. The
term "person" and words importing persons as used in this Deed of Trust shall
include firms, associations, partnerships (including limited partnerships),
joint ventures, trusts, corporations and other legal entities, including public
or governmental bodies, agencies or instrumentalities, as well as natural
persons.

        10.22 REPORTING COMPLIANCE. Grantor agrees to comply with any and all
reporting requirements applicable to the transaction evidenced by the Note and
secured by this Deed of Trust which are set forth in any law, statute,
ordinance, rule, regulation, order or determination of any governmental
authority, including but not limited to The International Investment Survey Act
of 1976, The Agricultural Foreign Investment Disclosure Act of 1978, The Foreign
Investment in Real Property Tax Act of 1980 and the Tax Reform Act of 1984 and
further agrees upon request of Beneficiary to furnish Beneficiary with evidence
of such compliance.

        10.23 GRANTOR. Unless the context clearly indicates otherwise, as used
in this Deed of Trust, "GRANTOR" means the grantors named in ARTICLE 1 hereof or
any of them. The obligations of Grantor hereunder shall be joint and several. If
any Grantor, or any signatory who signs on behalf of any Grantor, is a
corporation, partnership or other legal entity, Grantor and any such signatory,
and the person or persons signing for it, represent and warrant to Beneficiary
that this instrument is executed, acknowledged and delivered by Grantor's duly
authorized representatives. If Grantor is an individual, no power of attorney
granted by Grantor herein shall terminate on Grantor's disability.

        10.24 EXECUTION. This Deed of Trust has been executed in several
counterparts, all of which are identical, and all of which counterparts together
shall constitute one and the same instrument. The date or dates reflected in the
acknowledgments hereto indicate the date or dates of actual execution of this
Deed of Trust, but such execution is as of the date shown on the first page
hereof, and for purposes of identification and reference the date of this Deed
of Trust shall be deemed to be the date reflected on the first page hereof.
Grantor will cause this Deed of Trust and all amendments and supplements thereto
and substitutions therefor and all financing statements and continuation
statements relating thereto to be recorded, filed, re-recorded and refiled in
such manner and in such places as Trustee or Beneficiary shall reasonably
request and will pay all such recording, filing, re-recording and refiling
taxes, fees and other charges.

        10.25 MODIFICATION OR TERMINATION. The Loan Instruments may only be
modified or terminated by a written instrument or instruments intended for that
purpose and executed by the party against which enforcement of the modification
or termination is asserted. Any alleged modification or termination which is not
so documented shall not be effective as to any party.

        10.26 APPLICABLE LAW. THIS DEED OF TRUST, AND ITS VALIDITY, ENFORCEMENT
AND INTERPRETATION, SHALL BE GOVERNED BY TEXAS LAW (WITHOUT REGARD TO ANY
CONFLICT OF LAWS PRINCIPLES) AND APPLICABLE UNITED STATES FEDERAL LAW.

        10.27 WAIVER OF JURY TRIAL. GRANTOR AND BENEFICIARY IRREVOCABLY WAIVE
ANY AND ALL RIGHT EITHER OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS DEED OF TRUST, OR ANY
DOCUMENTS EXECUTED IN CONNECTION WITH THIS DEED OF


<PAGE>

TRUST, OR ANY TRANSACTIONS CONTEMPLATED IN ANY SUCH DOCUMENTS. GRANTOR AND
BENEFICIARY ACKNOWLEDGE THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY.
Grantor acknowledges that it has read and understands all of the provisions of
this Deed of Trust, including the waiver of jury trial, and has been advised by
counsel as necessary or appropriate.

        10.28 ENTIRE AGREEMENT. The Loan Instruments constitute the entire
understanding and agreement between Grantor and Beneficiary with respect to the
transactions arising in connection with the Indebtedness and supersede all prior
written or oral understandings and agreements between Grantor and Beneficiary
with respect to the matters addressed in the Loan Instruments. Grantor hereby
acknowledges that, except as incorporated in writing in the Loan Instruments,
there are not, and were not, and no persons are or were authorized by
Beneficiary to make, any representations, understandings, stipulations,
agreements or promises, oral or written, with respect to the matters addressed
in the Loan Instruments.

         THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

         THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED on the date(s) of the acknowledgment(s) below, to be effective
as of the date first set forth above.

                                         BEHRINGER HARVARD QUORUM I LP

                                         By:  Behringer Harvard Quorum I GP, LLC
                                              Its General Partner

                                              By:   /s/ Gerald J. Reihsen, III
                                                 -------------------------------
                                                  Gerald J. Reihsen, III
                                                  Secretary

STATE OF TEXAS    ss.
                  ss.
COUNTY OF DALLAS  ss.

This instrument was acknowledged before me on July __, 2004, by Gerald J.
Reihsen, III, Secretary of Behringer Harvard Quorum I GP, LLC, a Texas limited
liability company, acting in its capacity as general partner of Behringer
Harvard Quorum I LP, a Texas limited partnership on behalf of said limited
partnership.

                                                   _____________________________
                                                   Notary Public, State of Texas