Document:

EXHIBIT 10.9

                       EXCEPTIONS TO NON-RECOURSE GUARANTY

         This EXCEPTIONS TO NON-RECOURSE  GUARANTY (this  "Guaranty") is entered
into as of December  15,  2000,  by HUB REALTY  COLLEGE  PARK I, LLC, a Maryland
limited  liability company (the  "Guarantor"),  for the benefit of MERRILL LYNCH
MORTGAGE LENDING, INC., a Delaware corporation (together with its successors and
assigns, the "Lender").

                                    RECITALS

         A. Cedars LA LLC,  Herald  Square LLC and Indiana  Avenue LLC,  each, a
Delaware limited liability  company,  and Bridgepoint  Property Trust,  Lakewood
Property  Trust and 1600 Market  Street  Property  Trust,  each, a Maryland real
estate investment trust (each, a "Borrower" and  collectively,  the "Borrowers")
have  requested and Lender has agreed to make a loan in the principal  amount of
$260,000,000 (the "Loan"),  pursuant to a Loan and Security Agreement,  dated of
even date  herewith (as amended,  modified or restated,  the "Loan  Agreement"),
among the  Borrowers  and Lender  which Loan will be  evidenced  by a Promissory
Note,  dated of even date herewith (as amended,  modified,  renewed or restated,
and  any  replacement  notes  therefor,  collectively,  the  "Note"),  from  the
Borrowers to Lender and secured by, among other things, certain  Mortgages/Deeds
of Trust,  Assignments  of Leases and Rents,  Security  Agreements  and  Fixture
Filings, dated of even date herewith (as amended, modified,  restated, spread or
consolidated,   collectively,   the  "Instruments"),   covering  the  respective
properties more particularly described in the Instruments (the "Properties"). As
used herein, the term "Loan Documents" shall mean the Note, the Instruments, and
any other documents or instruments given by the Borrowers or others and accepted
by Lender for the purposes of evidencing,  securing,  or guaranteeing  the Loan,
each as amended or modified  from time to time.  Capitalized  terms used but not
otherwise defined herein shall have the respective meanings given thereto in the
Loan Agreement.

         B. Guarantor will derive substantial  benefits from Lender's making the
Loan to Borrowers.

         C. As a condition to making the Loan to the Borrowers,  Lender requires
that Guarantor execute this Guaranty.

          NOW,  THEREFORE,  in order to  induce  Lender  to make the Loan to the
Borrowers, and in consideration thereof, Guarantor agrees as follows:

         1. As used herein, the term  "Indebtedness"  shall mean all obligations
evidenced by the Note or secured by the Instruments.

         2.  Guarantor  hereby  absolutely,   unconditionally   and  irrevocably
guarantees to Lender the full and prompt  payment when due,  whether at maturity
or earlier, by reason of
<PAGE>

acceleration or otherwise, and at all times thereafter,  and the full and prompt
performance  when due, of all of the following  (collectively,  the  "Guaranteed
Obligations"):

         (a)      All amounts for which the  Borrowers  are liable under Article
                  XII of the Loan Agreement; and

         (b)      All costs and expenses,  including  reasonable fees and out of
                  pocket expenses of attorneys and expert witnesses, incurred by
                  Lender in enforcing its rights under this Guaranty.

For purposes of  determining  Guarantor's  liability  under this  Guaranty,  all
payments made by the Borrowers with respect to the  Indebtedness and all amounts
received  by Lender from the  enforcement  of its rights  under the  Instruments
shall be applied first to the portion of the  Indebtedness for which neither the
Borrowers nor Guarantor have personal liability.

Guarantor  hereby  promises  to pay and  perform,  as and when due  (whether  by
acceleration,  at maturity, or otherwise) and at all times thereafter,  each and
all of the items and obligations which are stated to be guaranteed hereunder but
which  are  obligations  for  which  Guarantor  is  primarily  liable or are not
obligations of others.  Guarantor  hereby agrees that any such sums shall accrue
interest  at the  Default  Rate  until paid if not paid as and when due and that
such sums,  together with any accrued interest  thereon,  shall become a part of
Guarantor's obligations hereunder.

         3. The  obligations of Guarantor  under this Guaranty shall survive any
foreclosure  proceeding,  any foreclosure sale, any delivery of any deed in lieu
of foreclosure, and any release of record of any Instrument.

         4.   Guarantor's   obligations   under  this  Guaranty   constitute  an
unconditional guaranty of payment and not merely a guaranty of collection.

         5. The  obligations of Guarantor under this Guaranty shall be performed
without  demand  by  Lender  and  shall  be  unconditional  irrespective  of the
genuineness,   validity,  regularity  or  enforceability  of  any  of  the  Loan
Documents,  and without regard to any other  circumstance  which might otherwise
constitute a legal or equitable discharge of a surety or a guarantor.  Guarantor
shall be liable even if the  Borrowers had no liability at the time of execution
of the Loan Documents, or thereafter cease to be liable. Guarantor hereby waives
the benefit of all  principles  or  provisions  of law,  statutory or otherwise,
which are or might be in  conflict  with the terms of this  Guaranty  and agrees
that Guarantor's obligations shall not be affected by any circumstances, whether
or not referred to in this Guaranty, which might otherwise constitute a legal or
equitable  discharge of a surety or a  guarantor.  Guarantor  hereby  waives the
benefits  of any right of  discharge  under any and all  statutes  or other laws
relating  to  guarantors  or  sureties  and any  other  rights of  sureties  and
guarantors  thereunder.  Without  limiting  the  generality  of  the  foregoing,
Guarantor hereby waives,  to the fullest extent  permitted by law,  diligence in
collecting  the  Indebtedness,  presentment,  demand for payment,  protest,  all
notices  with respect to the Note,  this  Guaranty,  or any other Loan  Document
which may be required by statute,  rule of law or otherwise to preserve Lender's
rights against  Guarantor  under this Guaranty,  including,  but not limited to,
notice of acceptance,  notice of any amendment of the Loan Documents,  notice of
the  occurrence  of any  default,  notice  of intent  to  accelerate,  notice of
acceleration,  notice of

                                       2
<PAGE>

dishonor, notice of foreclosure,  notice of protest, and notice of the incurring
by any Borrower of any obligation or indebtedness. Guarantor also waives, to the
fullest extent  permitted by law,  following an Event of Default,  all rights to
require  Lender to (a) proceed  against any or all of the Borrowers or any other
guarantor  of  the  Borrowers'  payment  or  performance  with  respect  to  the
Indebtedness (an "Other Guarantor"),  (b) if any Borrower or any Other Guarantor
is a  partnership,  proceed  against any general  partner of any Borrower or the
Other Guarantor, (c) proceed against or exhaust any collateral held by Lender to
secure the repayment of the Indebtedness,  or (d) pursue any other remedy it may
now  or  hereafter  have  against  the  Borrowers,  or  if  any  Borrower  is  a
partnership, any general partner of such Borrower.

         6. Guarantor  understands that the exercise by Lender of certain rights
and remedies  contained in the  Instruments  (such as a nonjudicial  foreclosure
sale) may affect or  eliminate  Guarantor's  right of  subrogation  against  the
Borrowers  and  that  Guarantor  may  therefore  incur a  partially  or  totally
nonreimbursable  liability under this Guaranty.  Nevertheless,  Guarantor hereby
authorizes and empowers Lender to exercise, in its sole and absolute discretion,
any right or remedy,  or any combination  thereof,  which may then be available,
since it is the intent and purpose of Guarantor that its obligations  under this
Guaranty  shall be absolute,  independent  and  unconditional  under any and all
circumstances.  Guarantor  expressly  waives  any  defense  (which  defense,  if
Guarantor  had not given  this  waiver,  Guarantor  might  otherwise  have) to a
judgment against  Guarantor by reason of a judicial or nonjudicial  foreclosure.
Without  limiting the generality of the foregoing,  Guarantor  hereby  expressly
waives any and all benefits under any applicable law which, if Guarantor had not
given this waiver,  (i) would  otherwise  limit  Guarantor's  liability  after a
foreclosure  sale to the difference  between the  obligations of Guarantor under
this  Guaranty and the fair market  value of the  property or interests  sold at
such nonjudicial  foreclosure sale, (ii) would otherwise limit Lender's right to
recover  a  deficiency  judgment  after a  foreclosure  sale,  and  (iii)  would
otherwise  require  Lender to  exhaust  all of its  security  before a  personal
judgment could be obtained for a deficiency.  Notwithstanding any foreclosure of
the  lien of any  Instrument,  whether  by the  exercise  of the  power  of sale
contained  in any  Instrument,  by an  action  for  judicial  foreclosure  or by
Lender's  acceptance of a deed in lieu of  foreclosure,  Guarantor  shall remain
bound  under this  Guaranty.  Guarantor  waives all  rights  and  defenses  that
Guarantor may have because Borrower's  obligations are secured by real property.
This means, among other things:

                  (i)  Lender  may  collect   from   Guarantor   without   first
foreclosing on any real or personal property collateral pledged by the Borrowers
or others; and

                  (ii) If  Lender  forecloses  on any real  property  collateral
pledged by the  Borrowers  or others:  (a) the amount of the debt may be reduced
only by the price for which that  collateral  is sold at the  foreclosure  sale,
even if the  collateral  is worth more than the sale  price;  and (b) Lender may
collect from  Guarantor  even if Lender,  by  foreclosing  on the real  property
collateral,  has  destroyed  any right  Guarantor  may have to collect  from the
Borrowers.

This is an unconditional and irrevocable  waiver of any rights and defenses that
Guarantor  may have  because  the  Borrowers'  obligations  are  secured by real
property.

         7. Guarantor also waives any right or defense based upon an election of
remedies by Lender,  even though such election  (e.g.,  nonjudicial  foreclosure
with  respect  to any  collateral

                                       3
<PAGE>

held by Lender to secure  repayment of the  Indebtedness)  destroys or otherwise
impairs the  subrogation  rights of Guarantor  or the right of Guarantor  (after
payment of the  obligations  guaranteed  by  Guarantor  under this  Guaranty) to
proceed against the Borrowers for reimbursement, or both.

         8. Guarantor  shall have no right to assert or exercise,  or attempt to
assert or exercise,  and hereby  waives any right to assert or attempt to assert
any claim for,  subrogation,  reimbursement,  indemnification,  and contribution
against  any  Borrower  and  against  any  general  partner,   member  or  other
constituent  of any Borrower,  and against any other person or any collateral or
security for the Indebtedness, until the Indebtedness has been indefeasibly paid
and  satisfied  in full,  and there has  expired  the  maximum  possible  period
thereafter  during which any payment  made by the  Borrowers or others to Lender
with respect to the  Indebtedness  could be deemed a preference under the United
States Bankruptcy Code.

         9. At any time or from time to time,  without  notice to Guarantor  and
without affecting the liability of Guarantor for the Guaranteed Obligations, (a)
the time for payment of the principal of or interest on the  Indebtedness may be
extended or the  Indebtedness  may be renewed in whole or in part;  (b) the time
for the Borrowers'  performance of or compliance  with any covenant or agreement
contained in the Note,  the Loan  Agreement,  the  Instruments or any other Loan
Document,  whether  presently  existing  or  hereinafter  entered  into,  may be
extended or such  performance or compliance  may be waived;  (c) the maturity of
the Indebtedness may be accelerated as provided in the Note, the Loan Agreement,
the Instruments,  or any other Loan Document;  (d) the Note, the Loan Agreement,
the Instruments, or any other Loan Document may be modified or amended by Lender
and the Borrowers in any respect,  including, but not limited to, an increase in
the principal amount; and (e) any security for the Indebtedness may be modified,
exchanged,  surrendered  or otherwise  dealt with or additional  security may be
pledged or mortgaged for the Indebtedness.

         10. Any  indebtedness  of the Borrowers held by Guarantor now or in the
future  is  and  shall  be  subordinated  to  the   Indebtedness  and  any  such
indebtedness  of the  Borrowers  shall be  collected,  enforced  and received by
Guarantor,  as trustee for  Lender,  but without  reducing or  affecting  in any
manner the liability of Guarantor under the other provisions of this Guaranty.

         11. If any payment by the  Borrowers is held to constitute a preference
under any  applicable  bankruptcy,  insolvency,  or similar  laws, or if for any
other reason Lender is required to refund any sums to the Borrowers, such refund
shall  not  constitute  a release  of any  liability  of  Guarantor  under  this
Guaranty.  It  is  the  intention  of  Lender  and  Guarantor  that  Guarantor's
obligations  under this Guaranty  shall not be discharged  except by Guarantor's
performance of such obligations and then only to the extent of such performance.

         12.  Lender may assign its rights  under this  Guaranty  in whole or in
part and upon any such assignment, all the terms and provisions of this Guaranty
shall inure to the benefit of such assignee to the extent so assigned. The terms
used to  designate  any of the  parties  herein  shall be deemed to include  the
heirs, legal  representatives,  successors and assigns of such parties;  and the
term "Lender" shall include,  in addition to Lender, any lawful owner, holder or
pledgee of the Note.

                                       4
<PAGE>

         13. This  Guaranty  and the other Loan  Documents  represent  the final
agreement  between the parties and may not be contradicted by evidence of prior,
contemporaneous  or  subsequent  oral  agreements.  There are no unwritten  oral
agreements  between  the  parties.  All  prior  or  contemporaneous  agreements,
understandings,  representations,  and statements,  oral or written,  are merged
into this Guaranty and the other Loan Documents.  Guarantor acknowledges that it
has  received  copies of the Note and all other  Loan  Documents.  Neither  this
Guaranty nor any of its provisions may be waived, modified, amended, discharged,
or  terminated  except by an  agreement in writing  signed by the party  against
which the  enforcement of the waiver,  modification,  amendment,  discharge,  or
termination is sought, and then only to the extent set forth in that agreement.

         14. THIS  GUARANTY  SHALL BE GOVERNED  BY, AND SHALL BE  CONSTRUED  AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.

         15. This Guaranty has been duly  authorized,  executed and delivered by
Guarantor  and  constitutes  the  valid and  binding  obligation  of  Guarantor,
enforceable  against  Guarantor  in  accordance  with its  terms.  No  approval,
consent,   order  or  authorization   of  any  governmental   authority  and  no
designation, registration, declaration or filing with any governmental authority
is required in  connection  with the  execution and delivery of this Guaranty by
Guarantor.  Guarantor  has no  defense  or  offset  to the  enforcement  of this
Guaranty.  The  execution  and  delivery  of this  Guaranty  will not violate or
contravene  in any way the articles of  incorporation  or bylaws or  partnership
agreement,  articles of organization or operating agreement, as the case may be,
of Guarantor or any indenture,  agreement or instrument to which  Guarantor is a
party or by which it or its  property  may be  bound,  or be in  conflict  with,
result  in a breach  of or  constitute  a  default  under  any  such  indenture,
agreement or other instrument, result in the creation or imposition of any lien,
charge or  encumbrance  of any nature  whatsoever  upon any of the  property  or
assets  of  Guarantor,  except as  contemplated  by the  provisions  of the Loan
Documents, and no action or approval with respect thereto by any third person is
required.

         16.  GUARANTOR  AND LENDER  EACH (A) AGREE NOT TO ELECT A TRIAL BY JURY
WITH  RESPECT TO ANY ISSUE  ARISING  OUT OF THIS  GUARANTY  OR THE  RELATIONSHIP
BETWEEN THE PARTIES AS  GUARANTOR  AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY
AND (B)  WAIVES  ANY RIGHT TO TRIAL BY JURY WITH  RESPECT  TO SUCH  ISSUE TO THE
EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE.  THIS WAIVER OF RIGHT TO
TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY,  KNOWINGLY AND VOLUNTARILY WITH
THE BENEFIT OF COMPETENT LEGAL COUNSEL.

         17.  Guarantor hereby agrees that, (a) at all times while this Guaranty
is in effect (measured on a quarterly basis), it shall be required to maintain a
net worth (calculated in accordance with GAAP) of not less than $25,000,000 (the
"Minimum  Net Worth  Amount")  exclusive  of the capital  evidenced  by the HRPT
Demand Note  (hereinafter  defined) and (b) in  addition,  until the third (3rd)
anniversary  of the  date  hereof  (the  "Note  Expiration  Date"),  it shall be
required to maintain  additional capital in the amount of $10,000,000  evidenced
by a demand

                                       5
<PAGE>

note of even  principal  amount (the "HRPT  Demand  Note") from HRPT  Properties
Trust, a Maryland real estate investment trust (together with its successors and
assigns, "HRPT"), to Guarantor. In the event that Guarantor's net worth shall be
less than the Minimum Net Worth Amount as of the end of any calendar  quarter or
the HRPT Demand Note shall be released or  terminated  (except  upon  payment in
full  thereof in cash by HRPT)  prior to the Note  Expiration  Date,  same shall
constitute an Event of Default hereunder and under the Loan Agreement unless (in
the case of a breach of the net worth  covenant  only)  within  thirty (30) days
after  the  earlier  of (a)  the  date  of  delivery  of  Guarantor's  financial
statements  for  such  quarter  pursuant  to  Section  5.1(A)(iii)  of the  Loan
Agreement and (b) the date that Guarantor has knowledge that its net worth as of
the end of such quarter was less than the Minimum Net Worth Amount:

                  (i)   Guarantor   shall   effect  a   Guarantor   Substitution
(hereinafter  defined)  pursuant to which a Replacement  Guarantor  (hereinafter
defined)  shall assume all of  Guarantor's  obligations  under this  Guaranty in
accordance with the terms and conditions of Section 18; or

                  (ii) Guarantor shall deliver to Lender cash or an irrevocable,
unconditional  clean sight draft letter of credit issued by a bank, and in form,
reasonably acceptable to Lender (and which shall either be an "evergreen" letter
of credit or have a term  expiring not less than thirty (30) Business Days after
the Maturity  Date) (a "Letter of Credit") in an amount equal to the  difference
(the "Net Worth  Deficiency")  between (A) the Minimum Net Worth  Amount and (B)
Guarantor's  net  worth  as  indicated  in the  applicable  quarterly  financial
statements.  Lender,  in its sole discretion,  may require Guarantor to increase
such  cash  deposit  or  Letter  of  Credit  to the  extent  that the Net  Worth
Deficiency continues to decline in subsequent  quarters.  Such cash or Letter of
Credit will only be released to Guarantor when Guarantor's net worth exceeds the
Minimum Net Worth Amount for four (4) consecutive calendar quarters and provided
no Event of Default has occurred and is continuing. If not sooner returned, such
cash or Letter of Credit shall be returned to Guarantor  upon payment in full of
the Loan and all other  obligations  by the Borrowers on the Maturity  Date. Any
cash or Letter of Credit  provided  under this  Section 17 shall be security for
Guarantor's obligations hereunder.

         18. Guarantor,  upon at least thirty (30) days notice to Lender,  shall
have the one-time right, to transfer all of its obligations  under this Guaranty
and under that certain  Environmental  Indemnity  Agreement,  dated of even date
herewith  (the  "Environmental   Indemnity")  to  a  replacement   guarantor  (a
"Replacement  Guarantor")  and have such  Replacement  Guarantor  assume  all of
Guarantor's  obligations  hereunder (including compliance with the provisions of
Section 17 hereof) and thereunder  (such transfer and  assumption,  a "Guarantor
Substitution")  provided  and upon the  conditions  with  respect  to each  such
Guarantor Substitution that:

                  (i) No Event of Default shall have occurred and be continuing;

                  (ii) Guarantor shall have delivered  current annual  financial
statements and quarterly financial statements for the Replacement  Guarantor for
the four (4) most  recent  calendar  quarters  satisfying  the  requirements  of
Sections 5.1(A)(i) and (iii), respectively,  of the Loan Agreement and submitted
to Lender true, correct and complete copies of any and all other information and
documents of any kind reasonably  requested by Lender concerning the Replacement
Guarantor and all of such financial  statements and other  information  shall be
acceptable to Lender;

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<PAGE>

                  (iii)  Guarantor shall have obtained and delivered to Lender a
Rating Confirmation with respect to the Guarantor Substitution;

                  (iv)  Guarantor  shall  have paid all of  Lender's  reasonable
costs and expenses (including,  without limitation,  reasonable  attorney's fees
and  disbursements)  in connection with  considering and effecting the Guarantor
Substitution,  and the preparation,  negotiation,  execution and delivery of any
and all  documents  and  agreements  required by Lender in  connection  with the
Guarantor Substitution;

                  (v) The  Replacement  Guarantor's  net  worth as of the end of
each of the  most  recent  four  (4)  calendar  quarters  (as  indicated  on the
financial  statements  delivered  under clause (ii) above) shall equal or exceed
the Minimum Net Worth  Amount and the  financial  condition  of the  Replacement
Guarantor  shall  otherwise  be  satisfactory  to Lender in its sole good  faith
discretion;

                  (vii) The Replacement  Guarantor shall execute and deliver any
and all documents reasonably required by Lender in connection with the Guarantor
Substitution, each in form and substance reasonably acceptable to Lender;

                  (viii) Counsel to the  Replacement  Guarantor shall deliver to
Lender opinions in form and substance  satisfactory to Lender as to such matters
as Lender and the Rating Agencies shall  reasonably  require,  which may include
opinions as to  substantially  the same matters as were required with respect to
Guarantor in connection  with the  origination  of the Loan  including,  without
limitation, a bankruptcy non-consolidation opinion;

                  (ix) In the event  such  Guarantor  Substitution  shall  occur
prior to the Note  Expiration  Date,  Guarantor shall transfer and assign all of
its  right,  title  and  interest  in the HRPT  Demand  Note to the  Replacement
Guarantor (or HRPT shall deliver a new demand note to the Replacement  Guarantor
in the amount of $10,000,000);

                  (x)  Guarantor  shall not be permitted to effect more than two
(2) Guarantor Substitutions during any twenty-four month period and shall not be
permitted  to effect  more than  three (3)  Guarantor  Substitutions  during the
entire  term  of the  Loan,  hereunder  and,  in the  case of the  second  (2nd)
Guarantor  Substitution,  the Replacement Guarantor shall be SP Holding Property
Trust, a Maryland real estate  investment trust which is the sole shareholder or
sole  member of the  Borrowers,  as the case may be,  which shall be required to
comply with the net worth  requirements of Section 17 exclusive of its ownership
interests in the Borrowers.

         19.  This  Guaranty  shall not be secured by the  Properties,  the Loan
Documents,  or any other  collateral  of any nature  which is  security  for the
Obligations. Without limitation, this Section 19 has priority over any provision
in this Guaranty or any of the other Loan Documents which states or implies that
the this Guaranty is so secured.

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<PAGE>

         IN WITNESS WHEREOF,  Guarantor has executed and delivered this Guaranty
as of the date first written above.

                                          GUARANTOR:

                                          HUB REALTY COLLEGE PARK I, LLC,
                                          a Maryland limited liability company

                                            By: /s/ John A. Mannix
                                                Name: John A. Mannix
                                                Title: PresidentEXHIBIT 10.10

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

                           LOAN AND SECURITY AGREEMENT

                          Dated as of December 15, 2000

                                     between

                          FRANKLIN PLAZA PROPERTY TRUST
                                   as Borrower

                                       and

                      MERRILL LYNCH MORTGAGE LENDING, INC.
                                    as Lender

                               One Franklin Plaza
                           Philadelphia, Pennsylvania

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

<PAGE>
                           LOAN AND SECURITY AGREEMENT

                  This LOAN AND SECURITY  AGREEMENT  (this "Loan  Agreement") is
dated as of December  15, 2000 and entered  into by and between  FRANKLIN  PLAZA
PROPERTY  TRUST,  a Maryland  real estate  investment  trust  ("Borrower");  and
MERRILL LYNCH MORTGAGE LENDING,  INC., a Delaware corporation (together with its
successors and assigns, "Lender").

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
agreements,  provisions and covenants  herein  contained,  Borrower  Parties and
Lender agree as follows:

                                   ARTICLE I
                                   DEFINITIONS

Section 1.1 Certain Defined Terms. The terms defined below are used in this Loan
Agreement as so defined.  Terms  defined in the preamble to this Loan  Agreement
are used in this Loan Agreement as so defined.

         "Accounts" means,  collectively,  the Central Account, the Sub-Accounts
thereof,  any Loss  Proceeds  Account and any other  accounts  pledged to Lender
pursuant to this Loan Agreement or any other Loan Document.

         "Account  Collateral" means all of Borrower's right, title and interest
in and to the Accounts, the Reserves, all monies and amounts which may from time
to  time  be  on  deposit  therein,  all  monies,  checks,  notes,  instruments,
documents,  deposits,  and credits from time to time in the possession of Lender
representing  or  evidencing  such  Accounts  and  Reserves and all earnings and
investments held therein and proceeds thereof.

         "Accrued Interest" has the meaning set forth in Section 2.4(A)(ii).

         "Adjusted Interest Rate" has the meaning set forth in Section 2.2(A).

         "Affiliate"  means in  relation to any Person,  any other  Person:  (i)
directly or indirectly controlling, controlled by, or under common control with,
the first Person;  (ii)  directly or indirectly  owning or holding fifty percent
(50%) or more of any equity interest in the first Person; or (iii) fifty percent
(50%) or more of whose  voting  stock or other  equity  interest  is directly or
indirectly  owned or held by the first Person.  In addition,  the  Affiliates of
each Borrower Party include,  without  limitation,  all other Borrower  Parties,
irrespective  of whether they now or hereafter  satisfy the foregoing  criteria.
For purposes of this definition, "control" (including with correlative meanings,
the terms "controlling",  "controlled by" and "under common control with") means
the  possession  directly  or  indirectly  of the  power to  direct or cause the
direction  of the  management  and  policies  of a Person,  whether  through the
ownership of voting securities, by contract or otherwise. Where expressions such
as "[name of party] or any  Affiliate"  are used,  the same  shall  refer to the
named party and any Affiliate of the named party.

                                      -1-
<PAGE>

         "Assignment of Leases" means the Assignment of Leases and Rents of even
date herewith from Borrower to Lender,  constituting an assignment of the Leases
and proceeds  therefrom as  Collateral  for the Loan,  as same may be amended or
modified from time to time.

         "Assignment of Management  Agreement" means that certain  Assignment of
Management  Agreement  of even date  herewith  executed by Borrower  and current
Manager,  constituting  an assignment of the Management  Agreement as Collateral
for the Loan, as same may be amended or modified from time to time.

         "Bankruptcy  Code" means Title 11 of the United States Code, as amended
from time to time, and all rules and regulations promulgated thereunder.

         "Borrower" has the meaning set forth in the preamble.

         "Borrower   Party"  and  "Borrower   Parties"  mean,   individually  or
collectively, Borrower, Member and Guarantor.

         "Borrower Party Secretary" has the meaning set forth in Section 3.1.

         "Business Day" means any day excluding (i) Saturday, (ii) Sunday, (iii)
any day which is a legal  holiday  under the laws of the State of New York,  and
(iv) any day on which banking  institutions  located in such state are generally
not open for the conduct of regular business.

         "Capital  Expenditures"  means  expenditures for capital  improvements,
furnishings, fixtures and equipment (whether paid in cash or property or accrued
as liabilities)  made by Borrower that, in conformity with GAAP, are required to
be included in the property, plant, or equipment, or similar fixed asset account
or otherwise capitalized.

         "Capital  Expenditure  Budget"  means  Borrower's  budget  for  Capital
Expenditures  for the  Property,  the  costs  of which  are to be paid  from the
Replacement  Reserve,  which  budget has been  approved  by Lender as and to the
extent required hereunder.

         "Cash Management Agreement" means the Cash Management Agreement of even
date herewith among Borrower, Lender, Manager, and Central Account Bank, as same
may be amended or modified from time to time.

         "Central  Account"  and "Central  Account  Bank" are defined in Section
7.1.

         "Claims" has the meaning set forth in Section 5.3.

         "Closing"  means  the  funding  of the Loan  contemplated  by this Loan
Agreement.

         "Closing Date" means the date on which the Closing occurs.

         "Collateral" means rights,  interests, and property of every kind, real
and personal,  tangible and intangible,  which is granted,  pledged,  liened, or
encumbered as security for the Loan or any of the other  Obligations  under this
Loan  Agreement,  the  Mortgage,  the Cash

                                      -2-
<PAGE>

Management  Agreement or other Loan Documents,  including without limitation the
Property and the Accounts.

         "Compliance Certificate" has the meaning set forth in Section 5.1.

         "Contingent Obligation",  as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (A) with respect to
any indebtedness,  lease, dividend or other obligation of another if the primary
purpose or intent of the Person incurring such liability,  or the primary effect
thereof,  is to provide  assurance  to the obligee of such  liability  that such
liability will be paid or discharged,  or that any agreements  relating  thereto
will be complied  with, or that the holders of such  liability will be protected
(in whole or in part) against loss with respect thereto; (B) with respect to any
letter of credit  issued  for the  account  of that  Person or as to which  that
Person is otherwise liable for reimbursement of drawings; (C) under any interest
rate swap agreement, interest rate cap agreement, interest rate collar agreement
or  other  similar   agreement  or  arrangement   designed  to  protect  against
fluctuations  in interest  rates;  or (D) under any foreign  exchange  contract,
currency swap agreement or other similar  agreement or  arrangement  designed to
protect  that  Person  against  fluctuations  in  currency  values.   Contingent
Obligations  shall  include  (i) the direct or  indirect  guaranty,  endorsement
(other  than for  collection  or deposit in the  ordinary  course of  business),
co-making, discounting with recourse or sale with recourse by such Person of the
obligation  of  another,  (ii) the  obligation  to make  take-or-pay  or similar
payments if required  regardless of nonperformance by any other party or parties
to an agreement,  and (iii) any liability of such Person for the  obligations of
another through any agreement to purchase,  repurchase or otherwise acquire such
obligation or any property  constituting security therefor, to provide funds for
the  payment or  discharge  of such  obligation  or to  maintain  the  solvency,
financial condition or any balance sheet item or level of income of another. For
purposes of this definition, the amount of any Contingent Obligation at any time
shall  be  computed  as the  amount  that,  in  light  of all of the  facts  and
circumstances  existing at such time,  represents the amount that can reasonably
be expected to become an actual or matured liability.

         "Contractual   Obligation",   as  applied  to  any  Person,  means  any
indenture,  mortgage, deed of trust, contract,  undertaking,  agreement or other
instrument  to  which  that  Person  is a  party  or by  which  it or any of its
properties  is  bound  or to  which  it or  any  of its  properties  is  subject
including, without limitation, the Loan Documents.

         "Debt Service Coverage Ratio" shall mean, for any period,  the ratio of
(i) Underwritable  Cash Flow for such period  immediately  preceding the date of
calculation  to (ii) the amount of principal and interest due under the Loan for
such period.

         "Debt Service Sub-Account" has the meaning set forth in Section 7.1.

         "Default"  means any breach or default under any of the Loan Documents,
whether or not the same is an Event of Default,  and also any condition or event
that,  after  notice  or  lapse of time or both,  would  constitute  an Event of
Default  if that  condition  or event  were  not  cured or  removed  within  any
applicable grace or cure period.

         "Default Rate" has the meaning set forth in Section 2.2.

                                      -3-
<PAGE>

         "Dollars"  and the sign "$" mean the lawful money of the United  States
of America.

         "Eligible Account" shall mean a separate and identifiable  account from
all other funds held by the holding institution,  which account is either (i) an
account  maintained  with an Eligible  Bank or (ii) a segregated  trust  account
maintained by a corporate trust department of a federal  depository  institution
or a state chartered  depository  institution  subject to regulations  regarding
fiduciary  funds  on  deposit  similar  to  Title  12 of  the  Code  of  Federal
Regulations ss.  9.10(B),  which has corporate trust powers and is acting in its
fiduciary capacity.

         "Eligible  Bank"  shall  mean a bank  that  (i)  satisfies  the  Rating
Criteria  and (ii) insures the deposits  hereunder  through the Federal  Deposit
Insurance Corporation.

         "Employee  Benefit  Plan" means any  employee  benefit  plan within the
meaning of Section 3(3) of ERISA (including any Multiemployer Plan) (i) which is
maintained  for  employees of Borrower or any  Affiliate,  (ii) which has at any
time within the  preceding  six (6) years been  maintained  for the employees of
Borrower or any current or former  Affiliate or (iii) for which  Borrower or any
Affiliate has any liability, including contingent liability.

         "Environmental Claims" has the meaning set forth in Section 4.16.

         "Environmental  Indemnity" means the Environmental  Indemnity Agreement
of even date  herewith  from  Borrower and  Guarantor to Lender,  as same may be
amended or modified from time to time.

         "Environmental Laws" means any federal,  state, or local law, ordinance
or  regulation  or any court  judgment or order of any  federal,  state or local
agency or regulatory body applicable to Borrower or to the Property  relating to
industrial hygiene or to environmental or unsafe conditions  including,  but not
limited to, those relating to the generation,  manufacture,  storage,  handling,
transportation,  disposal, release, emission or discharge of Hazardous Material,
those in connection with the  construction,  fuel supply,  power  generation and
transmission,  waste disposal or any other  operations or processes  relating to
the Property,  and those relating to the  atmosphere,  soil,  surface and ground
water,  wetlands,  stream  sediments and vegetation  on, under,  in or about the
Property.  "Environmental  Laws" also shall include,  but not be limited to, the
Comprehensive  Environmental  Response,  Compensation  and  Liability  Act,  the
Hazardous Materials  Transportation Act, the Resource  Conservation and Recovery
Act, the Solid Waste  Disposal  Act, the Clean Water Act, the Clean Air Act, the
Toxic  Substance  Control Act, the Safe Drinking Water Act and the  Occupational
Safety and Health Act, and all  regulations  adopted in respect to the foregoing
laws.

         "Environmental  Report" means the environmental  report,  dated October
10, 2000,  prepared by AquaTerra  Assessment  Services Corp. with respect to the
Property.

         "ERISA" means the Employee  Retirement Income Security Act of 1974, and
all rules and regulations promulgated thereunder.

         "Event of Default" has the meaning set forth in Section 8.1.

         "Excess Interest" has the meaning set forth in Section 2.2.

                                      -4-
<PAGE>

         "Extraordinary Expense" has the meaning set forth in Section 5.1(D).

         "Financial  Statements" means (i) statements of operations and retained
earnings,  statements  of cash  flow,  and  balance  sheets  and (ii) such other
financial reports as the subject entity shall routinely and regularly prepare.

         "Financing  Statements"  means the Uniform  Commercial  Code  Financing
Statements  naming the  applicable  Borrower  Parties  as debtor,  and Lender as
secured  party,  required  under  applicable  state law to perfect the  security
interests created hereunder or under the other Loan Documents.

         "First Payment Date" has the meaning set forth in Section 2.4(A).

         "GAAP" means generally accepted  accounting  principles as in effect in
the United States of America from time to time.

         "Gross Revenues" means, without  duplication,  all revenue derived from
the ownership  and  operation of the Property by Borrower  from whatever  source
determined on a GAAP basis, including,  but not limited to, Rents, but excluding
sales, use and occupancy or other taxes on receipts required to be accounted for
by Borrower to any governmental authority,  non-recurring revenues as reasonably
determined  by Lender  (e.g.  proceeds  from a sale of  assets or  refinancing),
security  deposits  (except to the extent  determined  by Lender to be  properly
utilized to offset a loss of Rent), refunds and uncollectible accounts, proceeds
of casualty insurance and condemnation awards (other than business  interruption
or other loss of income  insurance  related to business  interruption or loss of
income for the period in question),  and any  disbursements to Borrower from the
Reserve  Sub-Accounts or any other fund established by the Loan Documents or any
proceeds from the sale,  refinancing of the Property or  recapitalization of the
Borrower.  In addition,  if required by Lender,  income  accrued but not paid in
cash during an  accounting  period  shall be  discounted  for an  allowance  for
doubtful accounts in a manner consistent with historical net realizable value.

         "Ground Lease" means that certain Ground Lease,  of even date herewith,
between Ground Lessor,  as lessor,  and Borrower,  as lessee,  pursuant to which
Borrower holds the ground lessee's interest in and to the Property.

         "Ground  Lessor"  means HUB  Properties  Trust,  a Maryland real estate
investment trust, which is the fee owner of the Property.
         "Guaranty"  means the Guaranty of Non-Recourse  Exceptions of even date
herewith  executed by  Guarantor  in favor of Lender,  as same may be amended or
modified from time to time.

         "Guarantor"  means HUB Realty  College Park I, LLC, a Maryland  limited
liability company.

         "Hazardous Material" means all or any of the following: (i) substances,
materials, compounds, wastes, products, emissions and vapors that are defined or
listed in,  regulated by, or otherwise  classified  pursuant to, any  applicable
Environmental Laws, including any so defined,

                                      -5-
<PAGE>

listed,   regulated  or  classified  as   "hazardous   substances",   "hazardous
materials",    "hazardous    wastes",    "toxic    substances",    "pollutants",
"contaminants",  or any other formulation intended to regulate,  define, list or
classify substances by reason of deleterious,  harmful or dangerous  properties;
(ii) waste oil, oil,  petroleum or petroleum  derived  substances,  natural gas,
natural gas liquids or synthetic gas and drilling  fluids,  produced  waters and
other wastes associated with the exploration, development or production of crude
oil,  natural gas or geothermal  resources;  (iii) any  flammable  substances or
explosives  or  any  radioactive  materials;  (iv)  asbestos  in any  form;  (v)
electrical or hydraulic  equipment  which  contains any oil or dielectric  fluid
containing polychlorinated biphenyls; (vi) radon; or (vii) urea formaldehyde.

         "Hazardous Materials Remediation Reserve" means the Reserve established
pursuant to Section 6.5.

         "HRPT" means HRPT Properties  Trust, a Maryland real estate  investment
trust.

         "Impositions"  means (A) all real estate and personal  property  taxes,
and vault  charges and all other taxes,  levies,  assessments  and other similar
charges,  general  and  special,   ordinary  and  extraordinary,   foreseen  and
unforeseen,  of every kind and nature whatsoever (including any payments in lieu
of taxes),  which at any time prior to, at or after the execution  hereof may be
assessed,  levied or imposed by, in each case, a governmental authority upon the
Property or the rents relating thereto or upon the ownership,  use, occupancy or
enjoyment  thereof,  and  any  interest,  cost  or  penalties  imposed  by  such
governmental  authority  with respect to any of the  foregoing and (B) all rents
payable  under the Ground  Lease  (excluding  any such rents  prepaid  under the
Ground Lease on the date  hereof)..  Impositions  shall not include any sales or
use taxes payable by Borrower.

         "Impositions  and  Insurance  Reserve"  means the  reserve  established
pursuant to Section 6.3.

         "Improvements"  means all  buildings,  structures and  improvements  of
every  kind and  nature  existing  and to be  constructed  upon  the land  which
comprises any portion of the Property.

         "Indebtedness" or "indebtedness",  as applied to any Person, means: (A)
all  indebtedness  for  borrowed  money;  (B) that portion of  obligations  with
respect to leases that is properly  classified as a liability on a balance sheet
in conformity  with GAAP  (excluding any prepaid rents under Leases);  (C) notes
payable and drafts  accepted  representing  extensions of credit  whether or not
representing  obligations for borrowed money; (D) any obligation owed for all or
any part of the deferred  purchase price of property or services if the purchase
price is due more than six months from the date the obligation is incurred or is
evidenced  by a note or similar  written  instrument;  and (E) all  indebtedness
secured  by any  Lien on any  property  or asset  owned  or held by that  Person
regardless of whether the  indebtedness  secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person.

         "Indemnified Liabilities" has the meaning set forth in Section 14.2.

         "Initial Interest Rate" has the meaning set forth in Section 2.2(A).

                                      -6-
<PAGE>

         "Insurance  Premiums"  means  the  annual  insurance  premiums  for the
insurance  policies  required to be  maintained  by Borrower with respect to the
Property under Section 5.4.

         "Interest Rate" has the meaning set forth in Section 2.2.

         "Involuntary  Borrower Party  Bankruptcy"  means any  involuntary  case
under the  Bankruptcy  Code or any  applicable  bankruptcy,  insolvency or other
similar law now or hereafter in effect,  in which any Borrower Party is a debtor
or all or any portion of the Property is property of the estate therein.

         "IRC"  means  the  Internal  Revenue  Code of  1986,  and  any  rule or
regulation promulgated thereunder from time to time, in each case as amended.

         "IRS" means the Internal Revenue Service or any successor thereto.

         "Knowledge":  Whenever  in  this  Loan  Agreement  or any  of the  Loan
Documents,  or in any document or certificate executed on behalf of any Borrower
Party pursuant to this Loan Agreement or any of the Loan Documents, reference is
made to the knowledge of Borrower or any other Borrower Party (whether by use of
the words "knowledge" or "known", or other words of similar meaning, and whether
or not the same are  capitalized),  such  shall be deemed to refer to the actual
knowledge, without duty of independent inquiry or investigation (except that the
persons  described  in clause (i) shall make  reasonable  inquiry of the persons
described in clause (ii) below), of (i) John A. Mannix,  John C. Popeo, David M.
Lepore and Jennifer B. Clark;  and (ii) the individuals  owning  interests in or
employed by any  Borrower  Party with whom the persons  mentioned  in clause (i)
above would  reasonably  be expected to consult for  information  on the subject
matter,  including  without  limitation,   the  property  manager,   maintenance
supervisor,  or other  individuals  with  responsibility  for  management of the
Property and/or the applicable entity.

         "Lease" means any lease, tenancy, license, sublease,  assignment and/or
other rental or occupancy agreement (including,  without limitation, any and all
guarantees  of  any of the  foregoing)  heretofore  or  hereafter  entered  into
affecting  the use,  enjoyment  or  occupancy  of the  Property  or any  portion
thereof,  including  any  extensions,   renewals,  modifications  or  amendments
thereof.

         "Lender" is defined in the preamble.

         "Lien" means any lien, mortgage,  pledge, security interest,  charge or
encumbrance  of any kind,  whether  voluntary  or  involuntary,  (including  any
conditional  sale or other title  retention  agreement,  any lease in the nature
thereof, and any agreement to give any security interest).

         "Loan" has the meaning set forth in Section 2.1.

         "Loan Agreement" means this Loan and Security Agreement, as same may be
amended  or  modified  from time to time  (including  all  schedules,  exhibits,
annexes and appendices hereto).

         "Loan Documents" means this Loan Agreement, the Note, the Mortgage, the
Assignment of Leases, the Assignment of Management Agreement,  the Guaranty, the

                                      -7-
<PAGE>

Environmental Indemnity, the Financing Statements, the Cash Management Agreement
and any and all other  documents  and  agreements  accepted  by  Lender  for the
purposes of evidencing and/or securing the Loan.

         "Loss  Proceeds  Account"  has the  meaning  given  thereto in the Cash
Management Agreement.

         "Major Lease" means any Lease demising  (together with all other Leases
to the same tenant or any Affiliate thereof) 26,000 square feet or more.

         "Management  Agreement" means the management agreement for the Property
in effect on the date hereof  between  Borrower and the current  Manager and any
management  agreement which may hereafter be entered into in accordance with the
terms and  conditions  hereof,  pursuant  to which any  subsequent  Manager  may
hereafter manage the Property.

         "Management  Fee" means the fee earned by Manager pursuant to the terms
of the Management Agreement.

         "Manager" means REIT  Management & Research,  Inc., the current manager
of the  Property,  or  such  other  Person  as may  hereafter  be  charged  with
management of the Property pursuant to a Management Agreement in accordance with
the terms and conditions hereof.

         "Material  Alteration"  means any  improvement or alteration  affecting
structural  elements  of the  Property  the  cost of which  exceeds  $2,200,000;
provided,  however,  that in no event  shall  (i) any  tenant  improvement  work
performed  pursuant to any Lease  existing  on the date  hereof or entered  into
hereafter in  accordance  with the  provisions  of this Loan  Agreement or (iii)
alterations   performed  as  part  of  a  Restoration,   constitute  a  Material
Alteration.

         "Material  Adverse Effect" means (A) a material adverse effect upon the
business,  operations,  properties, assets or condition (financial or otherwise)
of Borrower or any other  Borrower  Party taken as a whole,  or (B) the material
impairment of the ability of Borrower or any other Borrower Party to perform its
material  obligations  under any Loan  Documents,  or (C) the  impairment of the
ability of Lender to enforce or collect any of the  Obligations.  In determining
whether  any  individual  event  would  result  in a  Material  Adverse  Effect,
notwithstanding  that such event does not of itself have such effect, a Material
Adverse Effect shall be deemed to have occurred if the cumulative effect of such
event and all other then occurring  events and existing  conditions would result
in a Material Adverse Effect.

         "Maturity Date" shall mean January 1, 2029, or such other date on which
the final  payment of principal of the Note becomes due an payable as therein or
herein  provided,  whether at such stated  maturity  date, by  acceleration,  or
otherwise.

         "Maximum Rate" has the meaning set forth in Section 2.2(D).

         "Member"  means SP  Holding  Property  Trust,  a Maryland  real  estate
investment trust, which is the sole shareholder of Borrower.

         "Monthly  Debt  Service  Payment  Amount"  has the meaning set forth in
Section 2.4(A).

                                      -8-
<PAGE>
         "Mortgage" means that certain Mortgage, Assignment of Leases and Rents,
Security  Agreement  and Fixture  Filing of even date  herewith from Borrower to
Lender,  constituting  a Lien on the Ground Lease as Collateral  for the Loan as
same may be modified or amended from time to time.

         "Multiemployer Plan" means a "multiemployer plan" as defined in Section
3(37) or Section  4001(a)(3)  of ERISA to which  Borrower  or any  Affiliate  is
making, or is accruing an obligation to make, contributions or has made, or been
obligated to make,  contributions  within the  preceding  six (6) years,  or for
which  Borrower  or  any  Affiliate  has  any  liability,  including  contingent
liability.

         "Note" has the meaning set forth in Section 2.1.

         "O&M Plan" has the meaning set forth in Section 5.7(D).

         "Obligations"  means all  obligations,  liabilities and indebtedness of
every  nature  of  Borrower  from  time to time  owed to  Lender  under the Loan
Documents, including the principal amount of all debts, claims and indebtedness,
accrued and unpaid interest and all fees,  costs and expenses,  whether primary,
secondary, direct, contingent,  fixed or otherwise,  heretofore, now and/or from
time to time hereafter  owing,  due or payable under the Loan Documents  whether
before  or after the  filing of a  proceeding  under the  Bankruptcy  Code by or
against Borrower.

         "Operating  Budget" means  Borrower's  budget setting forth  Borrower's
best estimate,  after due  consideration,  of all revenue,  costs, and expenses,
Gross  Revenues and Operating  Expenses,  for the Property which budget has been
reasonably approved by Lender if and to the extent required hereunder.

         "Operating Expenses" means all costs and expenses accrued in accordance
with GAAP relating to the operation,  maintenance, repair, use and management of
the Property, including, without limitation, utilities, repairs and maintenance,
insurance,  property taxes and assessments,  advertising  expenses,  payroll and
related taxes, equipment lease payments,  actual management fees and all amounts
paid into Reserves but excluding (i) principal, interest and other payments made
by Borrower under the Loan Documents, (ii) depreciation,  amortization and other
non-cash  expenses of the  Property;  provided,  however such costs and expenses
shall be subject to reasonable  adjustment by Lender to normalize such costs and
expenses,  (iii) capital expenditures and other costs and expenses to the extent
paid from Reserves and (iv) any rents prepaid under the Ground Lease on the date
hereof (to the extent such prepaid rents or amortization thereof would otherwise
be included in operating expenses in accordance with GAAP).

         "Optional Prepayment Date" shall mean January 31, 2011.

         "Outside Director" is defined in Section 9.2.

         "Payment Date" has the meaning set forth in Section 2.4(A).

         "PBGC" means the Pension Benefit Guaranty  Corporation or any successor
thereto.

                                      -9-
<PAGE>
         "Pension  Plan"  means  any  Employee   Benefit  Plan,   other  than  a
Multiemployer  Plan,  which is subject to the provisions of Part 3 of Title I of
ERISA,  Title IV of ERISA or Section 412 of the IRC and (i) which is  maintained
for employees of Borrower, or any of its ERISA Affiliates, (ii) which has at any
time within the  preceding  six (6) years been  maintained  for the employees of
Borrower or any of its current or former  ERISA  Affiliates,  or (iii) for which
Borrower  or  any  ERISA  Affiliate  has  any  liability,  including  contingent
liability.

         "Permitted  Encumbrances" means (i) the Mortgage and the other Liens of
the Loan Documents in favor of Lender; (ii) the items shown in Schedule B to the
Title  Policy  as  of  Closing;  (iii)  future  liens  for  property  taxes  and
assessments  not then  delinquent;  (iv) Liens for  Impositions  not yet due and
payable or Liens arising after the date hereof which are being contested in good
faith by appropriate proceedings promptly instituted and diligently conducted in
accordance  with Section 5.3(B)  hereof;  (v) in the case of Liens arising after
the  date  hereof,  statutory  Liens  of  carriers,   warehousemen,   mechanics,
materialmen  and other  similar  Liens  arising by operation  of law,  which are
incurred  in the  ordinary  course of  business  and  discharged  by Borrower by
payment,  bonding or otherwise  within thirty (30) days after the filing thereof
or which are being  contested in good faith in  accordance  with Section  5.3(B)
hereof;  (vi)  Liens  arising  from  reasonable  and  customary  purchase  money
financing of personal  property and equipment leasing to the extent the same are
created in the ordinary  course of business in accordance  with Section  5.17(B)
hereof;  (vii) all  easements,  rights-of-way,  restrictions  and other  similar
charges  or  non-monetary  encumbrances  against  real  property  which  do  not
materially  and  adversely  affect (A) the ability of Borrower to pay any of its
obligations to any Person as and when due, (B) the marketability of title to the
Property, (C) the fair market value of the Property, or (D) the use or operation
of the Property as of the Closing Date and thereafter; (viii) rights of existing
and future tenants,  as tenants only, pursuant to the Leases; and (ix) any other
Lien to which Lender may expressly consent in writing.

         "Permitted   Investments"  has  the  meaning  set  forth  in  the  Cash
Management Agreement.

         "Person"  means and includes  natural  persons,  corporations,  limited
liability companies,  limited partnerships,  general  partnerships,  joint stock
companies,  joint  ventures,  associations,   companies,  trusts,  banks,  trust
companies,  land trusts, business trusts or other organizations,  whether or not
legal entities,  and governments and agencies and political subdivisions thereof
and their  respective  permitted  successors  and  assigns  (or in the case of a
governmental Person, the successor functional equivalent of such Person).

         "Pre-Existing Condition" has the meaning set forth in Section 5.5.

         "Prepayment Consideration" has the meaning set forth in Section 2.6.

         "Primary Borrower Parties" means, collectively, Borrower and Member.

         "Property"  means  the real  property  commonly  known as One  Franklin
Plaza,  200  North  16th  Street,  Philadelphia,  Pennsylvania  which  serves as
Collateral  for  the  Loan  and  which  shall  be  encumbered  by  (and  is more
particularly described in) the Mortgage.

                                      -10-
<PAGE>
         "Rating  Agency"  shall  mean any of S&P,  Moody's  Investors  Service,
Fitch, Inc., or any other nationally-recognized  statistical rating organization
designated by Lender in its sole discretion.

         "Rating  Confirmation"  with  respect to the  transaction  or matter in
question,  shall  mean:  (i) if all or any  portion  of the  Loan,  by itself or
together with other loans, has been the subject of a  Securitization,  then each
applicable  Rating Agency shall have confirmed in writing that such  transaction
or matter shall not result in a downgrade,  qualification,  or withdrawal of any
rating then in effect for any class of certificates or other  securities  issued
in connection  with such  Securitization;  and (ii) if the Loan has not been the
subject of a Securitization, then Lender shall have determined in its reasonable
discretion  (taking into  consideration  such  factors as Lender may  determine,
including the attributes of the loan pool in which the Loan might  reasonably be
expected  to be  securitized)  that no  rating  for  any  certificate  or  other
securities  that  would be  issued in  connection  with  Securitization  of such
portion of the Loan would be  downgraded,  qualified,  or  withheld by reason of
such transaction or matter.

         "Rating  Criteria" with respect to any Person,  shall mean that (i) the
short-term unsecured debt obligations of such Person are rated at least "A-1" by
S&P "P-1" by Moody's and "F-l+" by Fitch,  if  deposits  are held by such Person
for a  period  of less  than one  year,  or (ii) the  long-term  unsecured  debt
obligations of such Person are rated at least "AA-" by S&P, "Aa2" by Moody's and
"AA" by Fitch,  if deposits  are held by such Person for a period of one year or
more.

         "Receipts"  means all  revenues,  receipts and other  payments of every
kind  arising  from  ownership  or  operation  of the  Property  and received by
Borrower  or  an  Affiliate  of  Borrower,  including  without  limitation,  all
warrants,  stock options,  or equity interests in any tenant,  licensee or other
Person  occupying space at, or providing  services related to or for the benefit
of, the  Property  received by Borrower or any  Affiliate of Borrower in lieu of
rent or other payment.

         "Related Person" means in relation to any Person, any other Person that
is (i) an Affiliate of the first Person; (ii) the sibling of the first Person or
of the Affiliate;  (iii) the then-current and former spouses of the first Person
or of the  Affiliate;  (iv) a Person that shares or has shared a residence  with
the first Person or with the  Affiliate;  (v) the ancestor or  descendant of the
first  Person or of any other  Person  described  in this items (i) through (iv)
above; or (vi) any other Person that, by reason of familial, economic, social or
other relationship, would reasonably be expected to favor the first Person or to
act as requested by the first Person. Where expressions such as "[name of party]
or any Related Person" are used, the same shall refer to the named party and any
Related Person of the named party.

         "Rent Roll" has the meaning set forth in Section 3.1.

         "Rents"  has the  meaning  set  forth in the  Granting  Clauses  of the
Mortgage.

         "Replacement Reserve" means the reserve established pursuant to Section
6.4.

         "Reserves"  means the reserves held by or on behalf of Lender  pursuant
to this Loan Agreement or other Loan Documents,  including  without  limitation,
the reserves established pursuant to Article VI.

                                      -11-
<PAGE>
         "Reserve Sub-Accounts" has the meaning set forth in Section 7.1.

         "Restoration" has the meaning set forth in Section 5.5(B).

         "Restoration Threshold" means $2,200,000.

         "S&P" shall mean Standard & Poor's Rating  Services,  a division of The
McGraw-Hill Companies, Inc.

         "Secondary  Market  Transaction"  has the  meaning set forth in Section
10.1.

         "Securities"  (whether  or not  capitalized)  means any stock,  shares,
voting trust certificates, bonds, debentures, options, warrants, notes, or other
evidences of indebtedness,  secured or unsecured,  convertible,  subordinated or
otherwise,  or in general any instruments  commonly known as "securities" or any
certificates  of  interest,  shares or  participations  in  temporary or interim
certificates  for the purchase or acquisition  of, or any right to subscribe to,
purchase or acquire, any of the foregoing.

         "Securitization" means a public or private rated offering of securities
representing  direct or indirect  interests in one or more mortgage loans or the
right to receive income therefrom.

         "Servicer" means a servicer selected by Lender from time to time in its
sole discretion to service the Loan.

         "Sub-Accounts" has the meaning set forth in Section 7.1.

         "Survey" has the meaning set forth in Section 3.1(H).

         "Tax Liabilities" has the meaning given to such term in Section 2.8.

         "Title  Company" means Lawyers Title Insurance  Company,  or such other
national title insurance company as may be reasonably acceptable to Lender.

         "Title  Policy"  means  a  mortgagee's  policy  or  policies  of  title
insurance  pertaining to the Mortgage  issued to Lender in  connection  with the
Closing.

         "Transfer and Assumption"  and  "Transferee  Borrower" have the meaning
set forth in Section 11.3.

         "Underwritable  Cash  Flow"  means for any  period  the excess of Gross
Revenues  over  Operating  Expenses  for such  period as  determined  by Lender.
Underwritable Cash Flow (including determination of any necessary adjustments to
Gross Revenues or Operating  Expenses)  shall be calculated by Lender based upon
Lender's sole good faith determination of Rating Agency criteria.

         "Waiving Party" has the meaning set forth in Article XIII.

         "Yield Maintenance Amount" has the meaning set forth in Section 2.6(C).

                                      -12-
<PAGE>
Section 1.2 Accounting Terms.

         Except as otherwise expressly provided herein, all accounting terms not
otherwise  defined  herein  shall have the  meanings  assigned  to such terms in
conformity with GAAP.

Section 1.3 Other Definitional Provisions.

         References to  "Articles",  "Sections",  "Subsections",  "Exhibits" and
"Schedules" shall be to Articles, Sections, Subsections, Exhibits and Schedules,
respectively, of this Loan Agreement unless otherwise specifically provided. Any
of the terms defined in Section 1.1 may, unless the context otherwise  requires,
be used in the singular or the plural  depending on the reference.  In this Loan
Agreement, "hereof", "herein", "hereto", "hereunder" and the like mean and refer
to this Loan  Agreement  as a whole  and not  merely  to the  specific  article,
section,  subsection,  paragraph or clause in which the respective word appears;
words  importing any gender include the other  genders;  references to "writing"
include printing,  typing, lithography and other means of reproducing words in a
tangible visible form; the words "including",  "includes" and "include" shall be
deemed to be followed by the words  "without  limitation";  and any reference to
any statute or regulation  may include any  amendments of same and any successor
statutes and regulations.  Further,  (i) any reference to any agreement or other
document   shall  include   subsequent   amendments,   assignments,   and  other
modifications  thereto,  and (ii) any  reference  to any Person may include such
Person's  respective  permitted  successors  and  assigns  or,  in the  case  of
governmental  Persons,  Persons  succeeding  to the  relevant  functions of such
Persons.

                                   ARTICLE II
                                TERMS OF THE LOAN

Section 2.1 Loan.

         (A) Loan.  Subject to the terms and  conditions of this Loan  Agreement
and in reliance upon the  representations  and warranties of Borrower  contained
herein,  Lender agrees to lend to Borrower,  and Borrower  agrees to borrow from
Lender,  a loan in the amount of  $44,000,000  (such loan and the  obligation of
Borrower to repay the same  together  with all interest  and other  amounts from
time to time owing hereunder may be referred to as the "Loan").

         (B) Note.  On the Closing Date,  Borrower  shall execute and deliver to
Lender a Promissory Note,  dated of even date herewith (as amended,  modified or
restated,  and any replacement notes therefor,  the "Note"), made by Borrower to
the order of Lender, in the original principal amount of $44,000,000.

         (C) Use of Proceeds.  The proceeds of the Loan funded at Closing  shall
be  used  to (i)  repay  any  existing  indebtedness  secured  by  any  mortgage
encumbering  all or any part of the Property;  (ii) pay all  recording  fees and
taxes, title insurance  premiums,  the reasonable costs and expenses incurred by
Lender,  including  the legal fees and expenses of counsel to Lender,  and other
costs and expenses  approved by Lender (which  approval will not be unreasonably
withheld) related to the Loan; (iii) establish the Reserves required  hereunder;
and (iv) to prepay  ground rent under the Ground  Lease in  accordance  with the
terms thereof. The remaining proceeds of the Loan, if any, shall be disbursed to
Borrower;  provided,  however,  that any and all

                                      -13-
<PAGE>

such remaining  proceeds of the Loan will be used for  commercial  purposes only
and will not be used for personal, family, agricultural or household use.

Section 2.2 Interest.

         (A) Rate of Interest.  The  outstanding  principal  balance of the Loan
shall bear  interest  at a rate per annum  equal to:  (i) six and seven  hundred
ninety-four  one  thousandths  percent  (6.794%) (the "Initial  Interest  Rate")
during the period from the Closing Date through but not  including  the Optional
Prepayment  Date and (ii) the sum of (a) two  percent  (2%) plus (b) the Initial
Interest  Rate (such sum, the "Adjusted  Interest  Rate") during the period from
and  including the Optional  Prepayment  Date to and including the Maturity Date
(the Initial  Interest Rate or the Adjusted  Interest Rate as shall be in effect
from time to time hereunder, the "Interest Rate").

         (B) Default Rate.  Notwithstanding  the foregoing,  upon the occurrence
and during  the  continuance  of an Event of  Default  and in any event from and
after the Maturity Date of the Loan, the  outstanding  principal  balance of the
Loan and all other  Obligations shall bear interest until paid in full at a rate
per annum that is five percent  (5.0%) in excess of the Interest Rate  otherwise
applicable under this Loan Agreement and the Note (the "Default Rate").

         (C)  Computation  of  Interest.  Interest  on the  Loan  and all  other
Obligations  owing to Lender  shall be computed on the basis of a 360-day  year,
and shall be charged for the actual  number of days elapsed  during any month or
other accrual period. Interest shall be payable in arrears.

         (D)  Interest  Laws.  Notwithstanding  any  provision  to the  contrary
contained in this Loan Agreement or the other Loan Documents, Borrower shall not
be required to pay, and Lender shall not be permitted to collect,  any amount of
interest in excess of the maximum  amount of interest  permitted by law ("Excess
Interest").  If any Excess  Interest is provided for or determined by a court of
competent  jurisdiction  to have been provided for in this Loan  Agreement or in
any of the other Loan Documents,  then in such event: (1) the provisions of this
subsection shall govern and control;  (2) Borrower shall not be obligated to pay
any Excess  Interest;  (3) any Excess  Interest  that  Lender may have  received
hereunder shall be, at Lender's  option,  (a) applied as a credit against either
or both of the outstanding  principal  balance of the Loan or accrued and unpaid
interest  thereunder  (not to exceed the maximum  amount  permitted by law), (b)
refunded to the payor thereof, or (c) any combination of the foregoing;  (4) the
interest  rate(s)  provided  for herein  shall be  automatically  reduced to the
maximum lawful rate allowed from time to time under applicable law (the "Maximum
Rate"),  and this Loan Agreement and the other Loan Documents shall be deemed to
have been and shall be, reformed and modified to reflect such reduction; and (5)
Borrower shall not have any action against Lender for any damages arising out of
the payment or collection of any Excess Interest. Notwithstanding the foregoing,
if for any  period of time  interest  on any  Obligation  is  calculated  at the
Maximum  Rate rather than the  applicable  rate under this Loan  Agreement,  and
thereafter  such applicable rate becomes less than the Maximum Rate, the rate of
interest  payable on such  Obligations  shall,  to the extent  permitted by law,
remain at the  Maximum  Rate until  Lender  shall have  received  or accrued the
amount of interest  which  Lender  would have  received  or accrued  during such
period on  Obligations  had the rate of interest not been limited to the Maximum
Rate

                                      -14-
<PAGE>
during  such  period.  If the  Default  Rate shall be finally  determined  to be
unlawful,  then the applicable Interest Rate shall be applicable during any time
when the Default Rate would have been  applicable  hereunder,  provided  however
that if the Maximum Rate is greater or lesser than the applicable Interest Rate,
then the foregoing provisions of this paragraph shall apply.

         (E) Late Charges.  If an Event of Default  relating to  non-payment  of
principal,  interest or other sums due  hereunder or under any of the other Loan
Documents  shall occur,  then Borrower  shall pay to Lender,  in addition to all
sums  otherwise  due and payable,  a late fee in an amount equal to five percent
(5.0%) of such  principal,  interest  or other sums due  hereunder  or under any
other Loan Document (or, in the case of a partial  payment,  the unpaid  portion
thereof),  such late charge to be immediately  due and payable without demand by
Lender.

         (F)  Additional  Administrative  Fee. In  addition to the Default  Rate
provided for above,  upon  failure of any  Borrower  Party to deliver any of the
financial  statements,  reports or other information required to be delivered to
Lender as  provided  in  Section  5.1 hereof  upon their due dates,  if any such
failure shall continue for fifteen (15) Business Days  following  notice thereof
from Lender,  Borrower shall pay to Lender  together with the scheduled  monthly
payments  of  principal  and  interest  on the Note,  for each  month or portion
thereof that any such financial  statement,  report or other information remains
undelivered,  an  administrative  fee in the  amount  of  Two  Thousand  Dollars
($2,000).  Borrower  agrees  that  such  administrative  fee  (i) is a fair  and
reasonable fee necessary to compensate Lender for its additional  administrative
costs under the  circumstances,  (ii) is not a penalty and (iii) is necessary to
compensate  Lender  for  increased  costs and  obligations  to third  parties in
connection with the planned Securitization of the Loan.

Section 2.3 Reserved.

Section 2.4 Payments.

         (A) Payments of Interest and Principal.

               (i) Payments Prior to Optional  Prepayment  Date.  Borrower shall
make a payment to Lender of  interest  only on the  Closing  Date for the period
from the Closing Date  through the last day of the  calendar  month in which the
Closing Date occurs.  Commencing on the first day of the second  calendar  month
following the Closing (the "First Payment Date") and continuing on the first day
of each calendar month thereafter (each, a "Payment Date") through and including
January 1, 2004,  Borrower shall make payments to Lender of interest only at the
Initial Interest Rate. Thereafter,  commencing on the third (3rd) anniversary of
the First Payment Date and  continuing on each Payment Date  thereafter  through
and including the Optional  Prepayment  Date,  Borrower shall make equal monthly
payments of principal  and interest in the amount of  $305.224.69  (the "Monthly
Debt Service  Payment  Amount").  Each payment shall be applied first to accrued
and unpaid  interest  and the balance to  principal.  The Monthly  Debt  Service
Payment  Amount  was  calculated  using a  twenty-five  (25)  year  amortization
schedule based upon a 360 day year comprised of twelve-30 day months.

               (ii) Payments After Optional Prepayment Date. On the first day of
each calendar month after the Optional Prepayment Date and until the Obligations
are paid in full

                                      -15-
<PAGE>

Borrower  shall (a) make a payment to Lender of  principal  and  interest in the
amount of the Monthly Debt Service Payment Amount, such payment to be applied to
interest  in an  amount  equal  to  interest  that  would  have  accrued  on the
outstanding  principal  balance of the Loan at the Initial Interest Rate and the
balance  applied  to  principal  and (b) pay to Lender  amounts to be applied to
principal and Accrued Interest (as hereinafter defined) as set forth in Sections
3.3(b)(vi) and (vii) of the Cash Management  Agreement.  Interest accrued at the
Adjusted Interest Rate and not paid pursuant to the preceding  sentence shall be
paid on the Maturity Date (such accrued interest, "Accrued Interest").

         (B)  Date  and Time of  Payment.  Borrower  shall  receive  credit  for
payments on the Loan which are  transferred to the account of Lender as provided
below (i) on the day that  such  funds are  received  by Lender if such  receipt
occurs by 1:00 p.m. (New York time) on such day, or (ii) on the next  succeeding
Business  Day after such funds are  received  by Lender if such  receipt  occurs
after 1:00 p.m. (New York time). Whenever any payment to be made hereunder shall
be stated to be due on a day that is not a Business Day, the payment may be made
on the next succeeding Business Day.

         (C) Manner of Payment.  Borrower promises to pay all of the Obligations
relating to the Loan as such amounts  become due or are declared due pursuant to
the terms of this Loan Agreement.  All payments by Borrower on the Loan shall be
made without  deduction,  defense,  set off or  counterclaim  and in immediately
available  funds  delivered to Lender by wire  transfer to such accounts at such
banks as Lender may from time to time designate.

Section 2.5  Maturity.  To the extent not sooner due and  payable in  accordance
with the Loan Documents, the then outstanding principal balance of the Loan, all
accrued and unpaid interest thereon (including,  without limitation, the Accrued
Interest),  the applicable Prepayment Consideration (if any), and all other sums
then owing to Lender  hereunder  and under the Note,  the Mortgage and the other
Loan Documents, shall be due and payable on the Maturity Date.

Section 2.6 Prepayment.

         (A)  Limitation  on  Prepayment;   Prepayment   Consideration   Due  on
Acceleration.  Borrower  shall have no right to prepay the Loan in whole or part
at any time,  except as  expressly  set  forth in this  provision.  On and after
August 1, 2010,  Borrower may prepay the Loan in whole, but not in part, without
payment of Prepayment Consideration, provided that (i) Borrower shall provide to
Lender  not less than 30 days  prior  written  notice of such  prepayment,  (ii)
together  with such  prepayment  Borrower  also shall pay all accrued and unpaid
interest and all other  Obligations and (iii) if such  prepayment  occurs on any
day other  than the first  day of a  calendar  month,  then  together  therewith
Borrower also shall pay to Lender the amount of interest that would have accrued
on the amount being prepaid from and  including  the date of such  prepayment to
the first day of the following  calendar month.  Notwithstanding  the foregoing,
Borrower  shall have the right to obtain the  release of the  Property  from the
lien of the Mortgage by defeasance in accordance  with the terms and  conditions
of the Note.

         (B)  Prepayment  Consideration  Due.  If any  prepayment  of all or any
portion of the Loan shall occur prior to August 1, 2010, whether such prepayment
is voluntary,  involuntary,  on account of  acceleration of the Loan (whether or
not due to an Event of  Default),  or  otherwise,

                                      -16-
<PAGE>

then except only as expressly provided herein to the contrary, Borrower shall be
required  to pay the  Prepayment  Consideration  to  Lender  together  with such
prepayment,  as liquidated  damages and compensation for costs incurred,  and in
addition  to all other  amounts  due and owing to  Lender.  Notwithstanding  the
foregoing,  no  Prepayment  Consideration  will  be  due as to a  prepayment  of
insurance  or  condemnation  proceeds  required by Lender  pursuant to this Loan
Agreement or the Mortgage in the absence of an Event of Default.  The  foregoing
designation of any amount of Prepayment  Consideration  in this Agreement  shall
not  create a right to prepay  at any time or in any  circumstances  where  this
Agreement does not expressly state that such a right exists.

         (C) Definitions. The following terms shall have the meanings indicated:

                  "Prepayment  Consideration"  shall mean an amount equal to the
greater of (i) one percent  (1%) of the Loan  balance at the time of  prepayment
and (ii) the Yield Maintenance Amount.

                  "Yield Maintenance Amount" shall mean the positive difference,
if any, between (i) the present value on the date of prepayment (by acceleration
or  otherwise)  of all future  installments  of  principal  and  interest  which
Borrower would otherwise be required to pay under the Note from the date of such
prepayment until the Optional Prepayment Date absent such prepayment,  including
the unpaid  principal  amount  which might  otherwise  be due upon the  Optional
Prepayment Date absent such prepayment, with such present value being determined
by the use of a discount  rate  equal to the yield to  maturity  (adjusted  to a
"Mortgage  Equivalent  Basis"  pursuant to the  standards  and  practices of the
Securities Industry  Association),  on the date of such prepayment of the United
States Treasury  Security having the term to maturity  closest to what otherwise
would have been the remaining  term hereof absent such  prepayment  and (ii) the
principal balance of the Loan on the date of such prepayment.

Section 2.7 Outstanding Balance. The balance on Lender's books and records shall
be presumptive  evidence  (absent manifest error) of the amounts owing to Lender
by Borrower;  provided that any failure to record any transaction affecting such
balance  or any  error in so  recording  shall  not  limit or  otherwise  affect
Borrower's obligation to pay the Obligations.

Section 2.8 Taxes.  Any and all  payments or  reimbursements  made  hereunder or
under the Note shall be made free and clear of and without deduction for any and
all  taxes,  levies,  imposts,  deductions,  charges  or  withholdings,  and all
liabilities  with  respect  thereto  arising  out of or in  connection  with the
transactions  contemplated  by the  Loan  Documents  (all  such  taxes,  levies,
imposts,  deductions,  charges or withholdings  and all liabilities with respect
thereto  [excluding taxes imposed on net income in accordance with the following
sentence] herein "Tax  Liabilities").  Notwithstanding  the foregoing,  Borrower
shall  not be  liable  for  taxes  imposed  on the net  income  of Lender by the
jurisdiction  under the laws of which Lender is  organized or doing  business or
any  political  subdivision  thereof and taxes  imposed on its net income by the
jurisdiction of Lender's applicable lending office or any political  subdivision
thereof. If Borrower shall be required by law to deduct any such Tax Liabilities
(or amounts in estimation or  reimbursement  for the same) from or in respect of
any sum payable  hereunder to Lender,  then the sum payable  hereunder  shall be
increased  as may be necessary  so that,  after making all

                                      -17-
<PAGE>

required  deductions,  Lender  receives an amount equal to the sum it would have
received had no such deductions been made.

Section 2.9  Reasonableness  of  Charges.  Borrower  Parties  agree that (i) the
actual  costs and  damages  that  Lender  would  suffer by reason of an Event of
Default (exclusive of the attorneys' fees and other costs incurred in connection
with  enforcement of Lender's  rights under the Loan  Documents) or a prepayment
would be difficult and needlessly expensive to calculate and establish, and (ii)
the  amounts  of  the  Default  Rate,  the  late  charges,  and  the  Prepayment
Consideration are reasonable,  taking into consideration the circumstances known
to the parties at this time,  and (iii) such  Default  Rate and late charges and
Lender's  reasonable  attorneys'  fees and other costs and expenses  incurred in
connection with enforcement of Lender's rights under the Loan Documents shall be
due and  payable  as  provided  herein,  and (iv) such  Default  Interest,  late
charges, Prepayment Consideration, and the obligation to pay Lender's reasonable
attorneys'   fees  and  other   enforcement   costs  do  not,   individually  or
collectively, constitute a penalty.

                                  ARTICLE III
                               CONDITIONS TO LOAN

Section  3.1  Conditions  to  Funding  of the  Loan  on the  Closing  Date.  The
obligations  of Lender to fund the Loan are  subject to the prior or  concurrent
satisfaction or waiver of the conditions set forth below, and to satisfaction of
any other conditions specified herein or elsewhere in the Loan Documents.  Where
in this Section any documents, instruments or information are to be delivered to
Lender,  then the condition shall not be satisfied  unless (i) the same shall be
in form and substance satisfactory to Lender, and (ii) if so required by Lender,
Borrower shall deliver to Lender a certificate duly executed by Borrower stating
that the applicable document, instrument or information is true and complete and
does not omit to state any information  without which the same might  reasonably
be deemed materially misleading.

         (A) Loan  Documents.  On or before the  Closing  Date,  Borrower  shall
execute and deliver and cause to be executed and  delivered to Lender all of the
Loan  Documents  specified  in Schedule  3.1(A),  together  with such other Loan
Documents as may be reasonably required by Lender, each, unless otherwise noted,
of even date herewith,  duly  executed,  in form and substance  satisfactory  to
Lender and in  quantities  designated  by Lender  (except for the Note, of which
only one shall be signed),  which Loan Documents shall become effective upon the
Closing.

         (B) Origination  Fees. At the Closing and retained from the proceeds of
the Loan,  Lender shall have  received  its  origination  fee of  $220,000.  The
amount, if any, by which the application fee and expense deposit previously paid
to Lender on Borrower's  behalf exceeds  Lender's  reasonable costs and expenses
incurred in connection with the Loan,  shall be credited against the origination
fee.

         (C)  Deposits.   The  deposits   required  herein,   including  without
limitation, the initial deposits into the Reserves and Accounts, shall have been
made (and at  Borrower's  option,  the same may be made from the proceeds of the
Loan).

                                      -18-
<PAGE>

         (D) Performance of Agreements, Truth of Representations and Warranties.
Each Borrower  Party and all other Persons  executing any agreement on behalf of
any Borrower Party shall have performed in all material  respects all agreements
which this Loan  Agreement  provides shall be performed on or before the Closing
Date. The representations and warranties  contained herein and in the other Loan
Documents shall be true, correct and complete in all material respects on and as
of the Closing Date.

         (E) Closing  Certificate.  On or before the Closing Date,  Lender shall
have received  certificates of even date herewith executed on behalf of Borrower
by the chief  financial  officer  (or  similar  officer of  Borrower)  truly and
correctly  stating  that:  (i) on such date,  no Default or Event of Default has
occurred and is  continuing;  (ii) no material  adverse  change in the financial
condition or operations  of the business of Borrower or the projected  cash flow
of Borrower or the  Property  has  occurred  since the delivery to Lender of any
financial statements,  budgets, proformas, or similar materials (or if there has
been any change,  specifying  such change in detail),  and that,  to  Borrower's
knowledge,  such materials  delivered to Lender are true and materially complete
and fairly  represent the  financial  condition of Borrower and the cash flow of
the Property;  and (iii) the  representations  and  warranties set forth in this
Loan  Agreement are true and correct in all material  respects on and as of such
date with the same  effect as though made on and as of such date (or if any such
representations   or   warranties   require   qualification,   specifying   such
qualification in detail) and (iv) to Borrower's knowledge, there are no material
adverse facts or conditions  concerning  the Property or any Borrower Party that
have not been disclosed to Lender.

         (F) Opinions of Counsel.  On or before the Closing  Date,  Lender shall
have received from Skadden,  Arps, Slate,  Meagher & Flom LLP ("SASMF") or other
legal counsel for Borrower  reasonably  satisfactory  to Lender,  such counsel's
written opinion as to such matters as Lender shall reasonably request, including
opinions to the effect  that (i) each of the  Borrower  Parties is duly  formed,
validly existing,  and in good standing in its state of organization and, in the
case of  Borrower,  in the state where the  Property is located,  (ii) this Loan
Agreement  and the Loan  Documents  have  been  duly  authorized,  executed  and
delivered  and are  enforceable  in  accordance  with  their  terms  subject  to
customary  qualifications for bankruptcy and general equitable  principles;  and
(iii) Borrower would not be consolidated  in  bankruptcies of its Member,  HRPT,
Ground  Lessor,  Manager or certain other  Affiliates  of Borrower  specified by
Lender.  Also on or before the Closing  Date,  Lender shall have received (a) an
opinion of  Borrower's  local counsel in the state where the Property is located
as to the enforceability of the Mortgage and Assignment of Leases and such other
matters as Lender may  reasonably  request  and (b)  opinions  of SASMF or other
legal counsel for Borrower in the State of Delaware  reasonably  satisfactory to
Lender that,  among other matters,  (1) under  Delaware law the prior  unanimous
written consent of Member and the board of directors or managers  (including the
Outside  Director)  would be  required  for a  voluntary  bankruptcy  filing  by
Borrower and such unanimous consent requirement is enforceable against Member in
accordance with its terms;  (2) under Delaware law the bankruptcy or dissolution
of Member would not cause the  dissolution of Borrower;  (3) under Delaware law,
creditors of Member shall have no legal or  equitable  remedies  with respect to
the  assets of  Borrower;  and (4) a federal  bankruptcy  court  would hold that
Delaware law governs the  determination of what Persons have authority to file a
voluntary bankruptcy petition on behalf of Borrower.

                                      -19-
<PAGE>

         (G) Title Policy. Lender shall have received a preliminary title report
or title  commitment  for the Property.  On or before the Closing  Date,  Lender
shall have received and approved a pro forma Title Policy for the Mortgage,  and
as of the Closing,  Title  Company shall be  irrevocably  committed and prepared
immediately  to issue the Title  Policy.  The Title  Policy shall be in form and
substance  satisfactory  to Lender.  Without  limitation,  Lender may reasonably
require  that the  Title  Policy  be  issued  on the 1970 ALTA form by the Title
Company,  together with such reinsurance and direct access  agreements as Lender
may require,  insuring that the Mortgage is a valid first and prior  enforceable
lien  on the  Borrower's  leasehold  interest  in the  Property  (including  any
easements  appurtenant  thereto)  subject only to such exceptions to coverage as
are acceptable to Lender.  The Title Policy shall contain such  endorsements  as
Lender may require (to the extent  available  in the state where the Property is
located) in form  reasonably  acceptable  to Lender,  including  deletion of the
creditors' rights exception and affirmative  endorsement coverage for creditors'
rights risks.

         (H)  Survey.  Lender  shall  have  received  a survey of the  Property,
certified  to Lender and its  successors,  assigns  and  designees  and to Title
Company by a surveyor  reasonably  satisfactory  to Lender (the  "Survey").  All
surveys  shall  contain the  minimum  detail for land  surveys as most  recently
adopted  by  ALTA/ASCM,   shall   substantially   comply  with  Lender's  survey
requirements  and shall  contain  Lender's  standard  form  certification.  Said
surveys shall show no state of facts or conditions  reasonably  objectionable to
Lender.

         (I) Zoning.  On or before the Closing Date,  Lender shall have received
evidence  reasonably  satisfactory  to Lender as to the zoning  and  subdivision
compliance of the Property.

         (J)  Certificates  of  Formation  and Good  Standing.  On or before the
Closing Date, Lender shall have received copies of the organizational  documents
and filings of each Borrower Party, together with good standing certificates (or
similar documentation)  (including verification of tax status if available) from
the  state of its  formation,  from the state in which  its  principal  place of
business is located,  and from all states in which the laws thereof require such
Person  to be  qualified  and/or  licensed  to do  business  (including  without
limitation,  the state in which the Property is located for Borrower). Each such
certificate  shall be dated not more than 30 days prior to the Closing  Date, as
applicable,  and  certified  by the  applicable  Secretary  of  State  or  other
authorized  governmental entity. In addition,  on or before the Closing Date the
secretary or  corresponding  officer of each Borrower Party, or the secretary or
corresponding  officer of the partner,  trustee,  or other Person as required by
such  Borrower  Party's  organizational  documents  (as the  case  may  be,  the
"Borrower Party Secretary") shall have delivered to Lender a certificate stating
that the copies of the organizational  documents as delivered to Lender are true
and complete  and are in full force and effect,  and that the same have not been
amended except by such amendments as have been so delivered to Lender.

         (K)  Certificates  of  Incumbency  and  Resolutions.  On or before  the
Closing  Date,  Lender  shall  have  received  certificates  of  incumbency  and
resolutions of each Borrower Party and its  constituents as requested by Lender,
approving and authorizing  the Loan and the execution,  delivery and performance
of the Loan  Documents,  certified as of the Closing Date by the Borrower  Party
Secretary as being in full force and effect without modification or amendment.

                                      -20-
<PAGE>

         (L) Financial  Statements.  On or before the Closing Date, Lender shall
have received such financial statements and other financial information as shall
be satisfactory to Lender for each Borrower Party and for the Property. All such
financial  statements  shall be certified to Lender by the  applicable  Borrower
Party (through its chief financial  officer),  which  certification  shall be in
form and substance reasonably satisfactory to Lender.

         (M) Intentionally Omitted.

         (N)  Agreements.  On or before  the  Closing  Date,  Lender  shall have
received  copies of all material  operating  agreements,  service  contracts and
equipment leases, if any, relating to Borrower's  ownership and operation of the
Property.

         (O) Management  Agreement.  On or before the Closing Date, Lender shall
have  received  copies of the  existing  Management  Agreement  and any  leasing
brokerage agreements pertaining to the Property and the Assignment of Management
Agreement, duly executed by current Manager and Borrower.

         (P) Rent Roll, Leases,  Estoppels.  Prior to the Closing,  Lender shall
have  received  from  Borrower a rent roll (the "Rent  Roll") for the  Property,
certified by Borrower,  and in form and substance  satisfactory  to Lender.  The
Rent Roll shall constitute a true, correct,  and complete list of each and every
Lease, together with all extensions and amendments thereof, and shall accurately
and  completely  disclose all annual and monthly  rents  payable by all tenants,
including all percentage rents, if any,  expiration dates of the Leases, and the
amount of security deposit being held by Borrower under each Lease, if any. Also
prior to the  Closing,  Lender  shall have  received  copies of the Leases,  and
tenant estoppel  certificates and subordination,  non-disturbance and attornment
agreements on Lenders form duly executed by Borrower and tenants  (including all
tenants under Major Leases) occupying, in the aggregate, at least eighty percent
(80%) of the rentable space at the Property.

         (Q) Licenses,  Permits and Approvals. On or before Closing Date, Lender
shall have received copies of the final, unconditional certificates of occupancy
issued  with  respect  to the  Property,  together  with  all  other  applicable
licenses,  permits and approvals  required for the Borrower to own, use, occupy,
operate and maintain the Property.

         (R) Insurance Policies and Endorsements. On or before the Closing Date,
Lender  shall  have  received  copies  of  insurance  policies  required  to  be
maintained   under  this  Loan  Agreement  and  the  other  Loan  Documents  and
certificates  of  insurance  (dated not more than 20 days  prior to the  Closing
Date) evidencing such insurance coverages, together with endorsements reasonably
satisfactory to Lender naming Lender as an additional insured and loss payee, as
required  by Lender,  under such  policies.  In  addition,  as to any  insurance
matters  arising under  Environmental  Laws or  pertaining to any  environmental
insurance  that Borrower has as to the  Property,  the same shall be endorsed to
Lender as required by Lender.

         (S) Environmental  Assessment.  Lender shall have received and approved
an Environmental Report prepared or updated not later than sixty (60) days prior
to the  Closing,  relating  to the  Property,  together  with a letter  from the
preparer  thereof  entitling  Lender and its

                                      -21-
<PAGE>

successors  and assigns to rely upon said  Environmental  Report (if same is not
addressed to Lender).

         (T) Property  Condition  Report.  On or before the Closing Date, Lender
shall have received a property condition report for the Property, which shall be
prepared by an engineer or other  consultant  reasonably  satisfactory to Lender
and otherwise shall be in form and substance  satisfactory to Lender in its sole
discretion. Such report shall set forth any items of deferred maintenance at the
Property.

         (U)  Appraisal.  On or before  the  Closing  Date,  Lender  shall  have
received an independent appraisal,  dated not more than sixty (60) days prior to
the Closing Date, of the Property from a state  certified  appraiser  engaged by
Lender,  which indicates a fair market value of the Property which would reflect
a  loan-to-value  ratio  for the Loan of not more  than  65%,  and is  otherwise
satisfactory  to  Lender  in its sole  discretion  in all  respects.  Each  such
appraisal shall conform in all respects to the criteria for appraisals set forth
in  the  Financial  Institutions  Reform  and  Recovery  Act  of  1989  and  the
regulations  promulgated  thereunder (as if Lender were an institution under the
jurisdiction  thereof)  and the  Uniform  Standards  of  Professional  Appraisal
Practices of the Appraisal Foundation.

         (V)  Searches.  Prior to the Closing  Date Lender  shall have  received
certified copies of Uniform Commercial Code, judgment,  tax lien, bankruptcy and
litigation  search reports with respect to all Borrower  Parties,  all dated not
more than thirty (30) days prior to the Closing Date.

         (W)  Documentation  Regarding  Application  of  Proceeds.  Prior to the
Closing  Date,  Lender  shall have  received  payoff  demand  letters and wiring
instructions  from each  lender or other  obligee of any  existing  indebtedness
which is required to be repaid  pursuant to this Loan  Agreement and by Borrower
regarding the application of any remaining available proceeds of the Loan.

         (X) Ground  Lease;  Ground  Lessor  Estoppel.  On or before the Closing
Date,  Lender shall have received (i) a certified  copy of the Ground Lease duly
executed  by Ground  Lessor  and  Borrower  and same  shall be in full force and
effect and (ii) an estoppel and agreement duly executed by Ground Lessor in form
and substance reasonably acceptable to Lender.

         (Y) Legal Fees; Closing Expenses.  Borrower shall have paid any and all
reasonable  legal fees and  expenses  of counsel  to Lender,  together  with all
recording fees and taxes, title insurance  premiums,  and other reasonable costs
and expenses related to the Closing.

         (Z) Other  Review.  Lender  shall have  completed  all other  review of
Borrower Parties, the Property, and such other items as it reasonably determines
relevant,  and shall have  determined  based upon such  review to fund the Loan.
Borrower Parties shall have satisfied such other  reasonable  criteria as Lender
may reasonably specify.

                                      -22-
<PAGE>

                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

         In order to induce Lender to enter into this Loan Agreement and to make
the Loan,  Borrower  represents  and warrants to Lender that the  statements set
forth in this  Article IV, after  giving  effect to the Closing,  will be, true,
correct and complete in all material  respects as of the Closing Date.  Further,
each of the other  Borrower  Parties  represents and warrants to Lender that the
statements  set forth in this Article IV pertaining to such party,  after giving
effect to the  Closing,  will be,  true,  correct and  complete in all  material
respects as of the Closing Date.

Section 4.1 Organization, Powers, Capitalization, Good Standing, Business.

         (A) Organization and Powers.  Borrower is a limited liability  company,
duly  organized,  validly  existing and in good  standing  under the laws of the
State of Delaware.  Guarantor is a limited  liability  company,  duly organized,
validly  existing and in good standing  under the laws of the State of Delaware.
Each Borrower Party has all requisite power and authority to own and operate its
properties,  to  carry on its  business  as now  conducted  and  proposed  to be
conducted,  and to enter into each Loan  Document  to which it is a party and to
perform the terms thereof.

         (B)  Qualification.  Each Borrower  Party is duly qualified and in good
standing in the state of its formation.  Borrower and, to the extent required by
law,  Member are also duly qualified and in good standing in the state where the
Property is located.  In addition,  each Borrower Party is duly qualified and in
good standing in each state where necessary to carry on its present business and
operations,  except in jurisdictions in which the failure to be qualified and in
good  standing  could not  reasonably  be  expected  to have a Material  Adverse
Effect.

         (C) Organization. The organizational chart set forth as Schedule 4.1(C)
accurately  sets  forth the  direct  and  indirect  ownership  structure  of the
Borrower Parties.

Section 4.2 Authorization of Borrowing, etc.

         (A) Authorization of Borrowing. Borrower has the power and authority to
incur the  Indebtedness  evidenced  by the Note.  The  execution,  delivery  and
performance  by each Borrower Party of each of the Loan Documents to which it is
a party and the consummation of the transactions  contemplated thereby have been
duly  authorized  by all  necessary  partnership,  trustee,  corporate  or other
action, as the case may be.

         (B) No  Conflict.  The  execution,  delivery  and  performance  by each
Borrower Party of the Loan Documents to which it is a party and the consummation
of the  transactions  contemplated  thereby do not and will not: (1) violate (x)
any  provision of law  applicable  to any Borrower  Party;  (y) the  partnership
agreement,  certificate of limited  partnership,  certificate of  incorporation,
bylaws,  declaration  of  trust,  operating  agreement  or other  organizational
documents,  as the  case  may be,  of each  Borrower  Party;  or (z) any  order,
judgment  or decree of any court or other  agency of  government  binding on any
Borrower Party or any of its Affiliates;  (2) conflict with,  result in a breach
of or constitute  (with due notice or lapse of time or both) a default under any
Contractual  Obligation of any Borrower Party or any of its Affiliates except to
the  extent  that such  conflict,  breach or  default  could not  reasonably  be
expected  to have a

                                      -23-
<PAGE>

Material Adverse Effect;  (3) result in or require the creation or imposition of
any material Lien (other than the Lien of the Loan  Documents) upon the Property
or assets of any Borrower Party or any of its  Affiliates;  or (4) except as set
forth on Schedule  4.2 and except for any  approvals  or consents the failure to
obtain which could not reasonably be expected to have a Material Adverse Effect,
require any approval or consent of any Person under any  Contractual  Obligation
of any Borrower  Party,  which  approvals or consents  have been  obtained on or
before the dates required  under such  Contractual  Obligation,  but in no event
later than the Closing Date.

         (C) Governmental Consents.  The execution,  delivery and performance by
each  Borrower  Party of the  Loan  Documents  to  which it is a party,  and the
consummation  of the  transactions  contemplated  thereby  do not and  will  not
require any  registration  with,  consent or approval of, or notice to, or other
action to, with or by, any  federal,  state or other  governmental  authority or
regulatory  body  except for the  recording  of the  Mortgage  and  filings  and
recordings  required in connection  with the creation or perfection of any other
security  interests  with  respect  to the  Collateral  granted  under this Loan
Agreement or any of the other Loan Documents.

         (D)  Binding  Obligations.   This  Loan  Agreement  is,  and  the  Loan
Documents,  including the Note, when executed and delivered will be, the legally
valid and binding  obligations  of each  Borrower  Party,  as  applicable,  each
enforceable  against Borrower Parties,  as applicable,  in accordance with their
respective terms, subject to bankruptcy, insolvency, moratorium,  reorganization
and other similar laws  affecting  creditor's  rights  generally or by equitable
principles  relating to  enforceability.  No  Borrower  Party has any defense or
offset to any of its obligations under the Loan Documents. No Borrower Party has
any claim against Lender or any Affiliate of Lender.

Section 4.3 Financial  Statements.  All financial  statements  concerning any of
Borrower,  its  Affiliates and the Property which have been or will hereafter be
furnished by or on behalf of Borrower to Lender  pursuant to this Loan Agreement
have been or will be  prepared  in  accordance  with GAAP  consistently  applied
(except as disclosed  therein) and do (or will, as to those  statements that are
not yet due)  present  fairly the  financial  condition  of the Persons  covered
thereby as at the dates  thereof  and the  results of their  operations  for the
periods  then ended.  Since the date of the  financial  statements  delivered to
Lender,  there has been no material  adverse change in the financial  condition,
operations  or business of the Borrower  Parties or the  Property  from that set
forth in said financial statements.

Section 4.4 Indebtedness and Contingent Obligations.  As of the Closing, Primary
Borrower Parties shall have no Indebtedness or Contingent Obligations other than
the Obligations or any other  Indebtedness  expressly  permitted under this Loan
Agreement or the other Loan Documents.

Section  4.5 Title to  Property.  Borrower  has good  marketable  and  insurable
leasehold  title to the  Property,  free and clear of all Liens  except  for any
liens   described  in  clauses   (i)-(iii)  of  the   definition  of  "Permitted
Encumbrances".  Borrower  owns and will own at all times all  personal  property
relating to the Property  (other than personal  property  which is (a) leased by
Borrower (as to which Borrower has valid leasehold title),  (b) owned by Manager
or (c) is both owned by tenants of the Property  and not used or  necessary  for
the operation of the Property),  subject only to Permitted  Encumbrances.  There
are no pending  proceedings  in  condemnation  or eminent

                                      -24-
<PAGE>

domain affecting the Property, and to the knowledge of Borrower Parties, none is
threatened.  No Person  has any  option or other  right to  purchase  all or any
portion of the Property or any interest  therein.  To the knowledge of Borrower,
there are no  mechanic's,  materialman's  or other similar liens or claims which
have been filed for work, labor or materials affecting the Property which are or
may be liens prior to, or equal or  coordinate  with,  the lien of the Mortgage.
None of the Permitted Encumbrances, individually or in the aggregate, materially
interfere  with the  benefits  of the  security  intended  to be provided by the
Mortgage and this Loan Agreement,  materially and adversely  affect the value of
the Property,  impair the use or operations of the Property or impair Borrower's
ability to pay its obligations in a timely manner.

Section 4.6 Zoning;  Compliance  with Laws. The Property is zoned for commercial
use, which zoning designation is unconditional, in full force and effect, and is
beyond all applicable  appeal periods.  To the knowledge of Borrower,  Borrower,
the  Property  and the use  thereof  comply in all  material  respects  with all
applicable  zoning,  subdivision and land use laws,  regulations and ordinances,
all applicable health,  fire,  building codes,  parking laws and all other laws,
statutes,  codes, ordinances,  rules and regulations applicable to the Property,
including  without  limitation  the  Americans  with  Disabilities  Act.  To the
knowledge of Borrower,  there are no illegal  activities  relating to controlled
substances on the Property.  All  certificates  of occupancy or the  equivalent,
and, to the  knowledge of Borrower,  all other  required  permits,  licenses and
certificates for the lawful use and operation of the Property have been obtained
and are current and in full force and effect.  To the knowledge of Borrower,  in
the event that all or any part of the  Improvements  located on the Property are
destroyed or damaged,  said  Improvements can be legally  reconstructed to their
condition prior to such damage or destruction, and thereafter exist for the same
use without  violating  any zoning or other  ordinances  applicable  thereto and
without the necessity of obtaining any variances or special permits,  other than
customary demolition,  building and other construction related permits. No legal
proceedings  are pending  or, to the  knowledge  of  Borrower,  threatened  with
respect to the zoning of the Property. Neither the zoning nor any other right to
construct,  use or operate the Property is in any way dependent  upon or related
to any  real  estate  other  than  the  Property.  No  tract  map,  parcel  map,
condominium  plan,  condominium  declaration,  or  plat of  subdivision  will be
recorded by Borrower with respect to the Property without Lender's prior written
consent,  which  consent  shall  not  be  unreasonably   withheld,   delayed  or
conditioned.

Section 4.7 Leases; Agreements.

         (A)  Leases;  Agreements.  Borrower  has  delivered  to Lender true and
complete  copies of all (i) Leases and (ii) material  contracts  and  agreements
affecting  the operation and  management  of the  Property,  including,  without
limitation,  the existing Management Agreement,  any leasing brokerage agreement
and any  service  and  maintenance  contracts  and such  Leases,  contracts  and
agreements  have not been modified or amended  except  pursuant to amendments or
modifications  delivered  to Lender.  Except  for the rights of current  Manager
pursuant  to the  existing  Management  Agreement,  no  Person  has any right or
obligation to manage the Property or to receive  compensation in connection with
such management.  Except for the parties to any leasing brokerage agreement that
has been delivered to Lender,  no Person has any right or obligation to lease or
solicit tenants for the Property, or (except for cooperating outside brokers) to
receive compensation in connection with such leasing.

                                      -25-
<PAGE>

         (B) Rent Roll, Disclosure.  A true and correct copy of the Rent Roll is
attached  hereto as Schedule  4.7(B) and except for the Leases  described in the
Rent Roll the Property is not subject to any Leases. Except only as specified in
the Rent Roll,  (i) the Leases are in full force and effect;  (ii)  Borrower has
not given any  notice of default to any  tenant  under any Lease  which  remains
uncured;  (iii) no tenant has asserted in writing any rights of set off,  claims
or defenses  under any Lease and no tenant has any such rights of set off, claim
or defense to the  enforcement of any Lease except as expressly set forth in the
Leases; (iv) no tenant is in arrears in the payment of rent,  additional rent or
any other  material  charges  due  under any  Lease,  or,  to the  knowledge  of
Borrower,  is materially in default in the performance of any other  obligations
under the applicable  Lease;  (v) Borrower has completed all work or alterations
required to be  completed  by the  landlord or lessor under each Lease as of the
date hereof,  and all of the other  obligations  of landlord or lessor under the
Leases required to be completed as of the date hereof, have been performed; (vi)
there  are no rent  concessions  (whether  in form of cash  contributions,  work
agreements,  assumption of an existing tenant's other obligations, or otherwise)
or  extensions  of time  whatsoever  not  reflected in such Rent Roll;  (vii) no
tenant has an option to terminate its respective Lease except as provided in the
Leases;  and (viii) to the  knowledge of Borrower no  bankruptcy  or  insolvency
proceeding has been commenced (and is continuing) by or against any tenant under
any Lease.

         (C) Lease Issues.  Except as set forth on Schedule 4.7(C), there are no
legal proceedings  commenced (or, to the knowledge of the Borrower,  threatened)
against  Borrower or any Affiliate  thereof by any tenant or former  tenant.  No
rental in excess of one month's  rent has been  prepaid  under any of the Leases
(except for security  deposits  and  estimated  additional  rent amounts paid on
account  of  operating   expenses,   taxes  and  other  expense  escalations  or
pass-throughs).  Each of the Leases is valid and binding on the parties  thereto
in accordance with its terms.

         (D) No  Residential  Units.  There  are  no  residential  units  in the
Property. To Borrower's  knowledge,  no person occupies any part of the Property
for dwelling purposes.

Section 4.8 Condition of Property. To Borrower's knowledge,  except as set forth
in the  property  condition  report for the Property  delivered  to Lender,  all
Improvements  including,   without  limitation,  the  roof  and  all  structural
components,  plumbing systems, HVAC systems, fire protection systems, electrical
systems, equipment, elevators, exterior doors, parking facilities, sidewalks and
landscaping  are in good  condition  and  repair.  Borrower  is not aware of any
latent or patent  structural  or other  material  defect  or  deficiency  in the
Property. City water supply, storm and sanitary sewers, and electrical,  gas and
telephone  facilities are available to the Property within the boundary lines of
the Property, are fully connected to the Improvements and are fully operational,
are  sufficient  to meet the  reasonable  needs of the  Property  as now used or
presently contemplated to be used, and no other utility facilities are necessary
to  meet  the  reasonable  needs  of the  Property  as  now  used  or  presently
contemplated.  To the knowledge of Borrower,  the design and as-built conditions
of the Property are such that surface and storm water does not accumulate on the
Property (except in facilities  specifically designed for the same) and does not
drain from the Property  across land of adjacent  property  owners in any manner
which would have a Material  Adverse  Effect on the Property  or, to  Borrower's
knowledge, violate any applicable law. To Borrower's knowledge, except as may be
shown on the Survey, no part of the Property is within a flood plain and none of
the  Improvements  create

                                      -26-
<PAGE>

encroachment over, across or upon the Property's  boundary lines,  rights of way
or easements,  and no building or other  improvements  on adjoining  land create
such an  encroachment  which  could  reasonably  be  expected to have a Material
Adverse  Effect.  Access to the Property for the current and  contemplated  uses
thereof is provided by means of public  roads and streets  which are  physically
and legally open for use by the public. To Borrower's  knowledge,  any liquid or
solid waste disposal,  septic or sewer system located at the Property is in good
and safe condition and repair and in compliance with all applicable law.

Section 4.9  Litigation;  Adverse  Facts.  Except as set forth on Schedule  4.9,
there are no judgments  outstanding against any Borrower Party, or affecting the
Property or any property of any Borrower Party, nor is there any action, charge,
claim,  demand,  suit,  proceeding,   petition,  governmental  investigation  or
arbitration  now pending or, to the  knowledge  of Borrower  after due  inquiry,
threatened  against any Borrower Party or affecting the Property  which,  in the
case of Guarantor,  could reasonably be expected to result in a Material Adverse
Effect and other  than any  claims or  proceedings  fully  covered by  insurance
maintained  by  the   applicable   Borrower  Party  (except  to  the  extent  of
commercially  reasonable  deductibles).  The actions,  charges,  claims, demand,
suits,  proceedings,  petitions,  investigations  and  arbitrations set forth on
Schedule 4.9 will not result, if adversely determined,  and could not reasonably
be expected to result, either individually or in the aggregate,  in any Material
Adverse Effect and do not relate to and will not affect the  consummation of the
transactions contemplated hereby.

Section  4.10  Payment of Taxes.  All  federal,  state and local tax returns and
reports of each Borrower Party required to be filed have been timely filed,  and
all taxes,  assessments,  fees and other  governmental  charges  (including  any
payments  in lieu of taxes) upon such  Person and upon its  properties,  assets,
income  and  franchises  which are due and  payable  have been paid when due and
payable,  except  for those  taxes  which are being  contested  in good faith by
appropriate  proceedings and for which adequate  reserves have been established.
Except as  otherwise  disclosed  in writing to  Lender,  there is not  presently
pending (and to Borrower's  knowledge,  there is not  contemplated)  any special
assessment  against  the  Property or any part  thereof.  No tax liens have been
filed and to the  knowledge of Borrower  Parties,  no claims are being  asserted
with respect to any such taxes. The charges,  accruals and reserves on the books
of Borrower Parties in respect of any taxes or other governmental charges are in
accordance with GAAP.

Section  4.11  Adverse  Contracts.  Except for the Loan  Documents,  none of the
Borrower  Parties is a party to or bound by, nor is any  property of such Person
subject to or bound by, any contract or other  agreement  which  restricts  such
Person's  ability to conduct its  business  in the  ordinary  course or,  either
individually  or in the  aggregate,  has a  Material  Adverse  Effect  or  could
reasonably be expected to have a Material Adverse Effect.

Section 4.12  Performance of Agreements.  No Borrower Party is in default in the
performance,  observance  or  fulfillment  of any of the  material  obligations,
covenants or  conditions  contained in any  Contractual  Obligation  of any such
Person which could have a Material Adverse Effect, and no condition exists that,
with the giving of notice or the lapse of time or both,  would constitute such a
default.

Section 4.13 Governmental Regulation. No Borrower Party is subject to regulation
under the Public Utility  Holding  Company Act of 1935, the Federal Power Act or
the  Investment  Company

                                      -27-
<PAGE>

Act of 1940 or to any  federal  or state  statute  or  regulation  limiting  its
ability to incur indebtedness for borrowed money.

Section 4.14 Employee  Benefit Plans.  No Primary  Borrower  Party  maintains or
contributes to, or has any obligation (including a contingent obligation) under,
any Employee Benefit Plans.

Section 4.15 Broker's  Fees. No broker's or finder's fee,  commission or similar
compensation  will be payable by or pursuant to any contract or other obligation
of any Borrower Party with respect to the making of the Loan or any of the other
transactions contemplated hereby or by any of the Loan Documents.

Section 4.16 Environmental Compliance.

         (A)  No  Environmental  Claims.  There  are  no  claims,   liabilities,
investigations,  litigation,  administrative  proceedings,  pending  or  to  the
knowledge  of  Borrower,  threatened,  or  judgments  or orders  relating to any
Hazardous  Materials  (collectively,  "Environmental  Claims")  asserted  or, to
Borrower's  knowledge,  threatened against Borrower or relating to the Property.
Except as disclosed in the  Environmental  Report,  neither Borrower nor, to the
knowledge of Borrower,  any other Person has caused or permitted  any  Hazardous
Material  to be used,  generated,  reclaimed,  transported,  released,  treated,
stored  or  disposed  of  in  a  manner  which  could  form  the  basis  for  a,
Environmental Claim against Borrower or relating to the Property.

         (B)  Storage  of  Hazardous  Materials.  Except  as  disclosed  in  the
Environmental  Report,  except  for  materials  customarily  used or  stored  in
connection with operation and management of properties  similar to the Property,
which  materials at the Property  exist only in  reasonable  quantities  and are
stored, contained,  transported,  used, released, and disposed of reasonably and
without  violation of any Environmental  Laws, to the knowledge of Borrower,  no
Hazardous Materials are or were stored or otherwise located,  and no underground
storage tanks or surface  impoundments  are or were located,  on the Property or
any other real  property  currently  or  formerly  owned,  leased or operated by
Borrower, or to the knowledge of Borrower, on adjacent parcels of real property,
and no part of such real property,  or to the knowledge of Borrower,  no part of
such  adjacent  parcels of real  property,  including  the  groundwater  located
therein or thereunder, is presently contaminated by Hazardous Materials.

         (C) Compliance with Environmental Laws. To Borrower's knowledge, except
as may be set  forth  in the  Environmental  Report,  Borrower  has  been and is
currently  in   compliance  in  all  material   respects  with  all   applicable
Environmental  Laws,  including obtaining and maintaining in effect all permits,
licenses or other authorizations required by applicable Environmental Laws.

Section 4.17 Solvency.  Borrower (a) has not entered into the transaction or any
Loan Document with the actual intent to hinder,  delay,  or defraud any creditor
and (b) received  reasonably  equivalent  value in exchange for its  obligations
under the Loan Documents.  Giving effect to the Loan, the fair saleable value of
Borrower's  assets  exceeds and will,  immediately  following  the making of the
Loan,  exceed  Borrower's  total  liabilities,  including,  without  limitation,
subordinated,  unliquidated,  disputed  and  Contingent  Obligations.  The  fair
saleable

                                      -28-
<PAGE>

value of Borrower's assets is and will,  immediately following the making of the
Loan, be greater than  Borrower's  probable  liabilities,  including the maximum
amount of its Contingent  Obligations on its debts as such debts become absolute
and matured.  Borrower's assets do not and, immediately  following the making of
the Loan  will  not,  constitute  unreasonably  small  capital  to carry out its
business as conducted or as proposed to be  conducted.  Borrower does not intend
to,  and does not  believe  that it will,  incur  Indebtedness  and  liabilities
(including  Contingent  Obligations and other commitments) beyond its ability to
pay such  Indebtedness  and  liabilities as they mature (taking into account the
timing and  amounts of cash to be  received  by  Borrower  and the amounts to be
payable on or in respect of obligations of Borrower).

Section 4.18  Disclosure.  No financial  statements,  Loan Document or any other
document,  certificate or written statement  furnished to Lender by any Borrower
Party and, to the knowledge of Borrower,  no document or statement  furnished by
any third party on behalf of any Borrower Party,  for use in connection with the
Loan  contains  any untrue  representation,  warranty or statement of a material
fact, and none omits or will omit to state a material fact necessary in order to
make the  statements  contained  herein or therein not  misleading.  There is no
material  fact known to  Borrower  that has had or will have a Material  Adverse
Effect and that has not been disclosed in writing to Lender by Borrower.

Section 4.19 Use of Proceeds and Margin Security. Borrower Parties shall use the
proceeds of the Loan only for the purposes set forth herein and consistent  with
all applicable laws, statutes, rules and regulations. No portion of the proceeds
of the Loan shall be used by  Borrower  or any  Person in any manner  that might
cause the borrowing or the application of such proceeds to violate Regulation T,
Regulation U or  Regulation X or any other  regulation of the Board of Governors
of the Federal Reserve System.

Section 4.20  Insurance.  Set forth on Schedule  4.20 is a complete and accurate
description  of all policies of insurance  for Borrower that are in effect as of
the  Closing  Date.  Borrower's  insurance  under such  policies  satisfies  the
requirements contained in Section 5.4 hereof, no notice of cancellation has been
received  with  respect to such  policies,  and, to the  knowledge  of Borrower,
Borrower is in compliance with all conditions contained in such policies.

Section  4.21  Separate  Tax Lots.  The Property is comprised of one (1) or more
parcels which constitute  separate tax lots. No part of the Property is included
or assessed  under or as part of another  tax lot or parcel,  and no part of any
other  property  is  included  or  assessed  under or as part of the tax lots or
parcels comprising the Property.

Section  4.22  Investments.  No  Primary  Borrower  Party has any (i)  direct or
indirect interest in, including without limitation stock,  partnership  interest
or other  securities  of, any other  Person,  or (ii) direct or  indirect  loan,
advance or capital contribution to any other Person,  including all indebtedness
and accounts receivable from that other Person.

Section  4.23  Bankruptcy.  No  Borrower  Party is or has been a debtor,  and no
property of any of them  (including the Property) is property of the estate,  in
any  voluntary  or  involuntary  case  under  the  Bankruptcy  Code or under any
applicable  bankruptcy,  insolvency  or other  similar law now or  hereafter  in
effect.  No  Borrower  Party and no property of any of them is or has been under
the possession or control of a receiver, trustee or other custodian. No Borrower
Party has

                                      -29-
<PAGE>

made  any  assignment  for the  benefit  of  creditors.  No such  assignment  or
bankruptcy or similar case or proceeding is now contemplated.

Section 4.24 Defaults. No Default or Event of Default exists.

Section  4.25 No Plan  Assets.  Borrower  is not and will not be (i) an employee
benefit plan as defined in Section 3(3) of ERISA which is subject to ERISA, (ii)
a plan as defined in Section  4975(e)(1)  of the IRC which is subject to Section
4975 of the IRC, or (iii) an entity whose  underlying  assets  constitute  "plan
assets" of any such  employee  benefit  plan or plan for  purposes of Title I of
ERISA or Section 4975 of the IRC.

Section 4.26 Governmental Plan.  Borrower is not and will not be a "governmental
plan" within the meaning of Section 3(32) of ERISA and  transactions  by or with
Borrower  are not and  will  not be  subject  to state  statutes  applicable  to
Borrower's regulating  investments of and fiduciary obligations with obligations
with respect to governmental plans.

Section 4.27 Not Foreign Person.  No Borrower Party is a "foreign person" within
the meaning of Section 1445(f)(3) of the IRC.

Section 4.28 No Collective Bargaining Agreement. No Borrower Party is a party to
any collective bargaining agreement.

                                   ARTICLE V
                          COVENANTS OF BORROWER PARTIES

         Each Borrower Party  covenants and agrees that until payment in full of
the Loan,  all accrued and unpaid  interest  and all other  Obligations,  unless
Lender shall otherwise give its prior written consent, such Person shall perform
and comply with all covenants in this Article V applicable to such Person.

Section 5.1 Financial Statements and Other Reports.

         (A) Financial Statements.

               (i) Annual  Reporting.  Within  ninety (90) days after the end of
each calendar year,  Borrower and Guarantor shall each provide true and complete
copies of its Financial Statements for such year to Lender. The annual Financial
Statements  for each  Borrower  Party shall be  accompanied  by a  certification
executed by the entity's chief  executive  officer or chief  financial  officer,
satisfying  the criteria set forth below.  The annual  Financial  Statements  of
Borrower  also shall be  accompanied  by a  Compliance  Certificate  (as defined
below).

               (ii) Quarterly Reporting - Borrower.  Within forty-five (45) days
after the end of each calendar quarter, Borrower shall provide true and complete
copies of its Financial  Statements for such quarter to Lender,  together with a
certification  executed on behalf of Borrower by its chief executive  officer or
chief  financial  officer in accordance  with the criteria set forth below and a
Compliance Certificate.

                                      -30-
<PAGE>

               (iii)  Quarterly  Reporting - Guarantor.  Within  forty-five (45)
days after the end of each calendar  quarter,  Guarantor  shall provide true and
complete copies of its Financial Statements for such quarter to Lender, together
with a  certification  executed on behalf of  Guarantor  by its chief  executive
officer or chief  financial  officer in  accordance  with the criteria set forth
below.

               (iv) Leasing  Reports.  Within  thirty (30) days after the end of
each calendar quarter,  Borrower shall provide to Lender certified Rent Roll and
a schedule  of  security  deposits  held  under  Leases,  in form and  substance
reasonably acceptable to Lender.

               (v) Monthly  Reporting.  Within thirty (30) days after the end of
each calendar  month,  Borrower shall provide to Lender accrual basis  operating
statements  together with  statements  of cash flow for the Property,  each in a
form reasonably  satisfactory to Lender, (a) for such month, (b) for the year to
date and (c) for the 12 month period ended as of the end of such calendar month.

               (vi)  Additional  Reporting.  In addition to the foregoing,  each
Borrower  Party shall  promptly  provide to Lender such  further  documents  and
information concerning its operations,  properties,  ownership,  and finances as
Lender shall from time to time reasonably request.

               (vii) GAAP.  Borrower Parties will maintain systems of accounting
established and  administered  in accordance  with sound business  practices and
sufficient  in all respects to permit  preparation  of Financial  Statements  in
conformity with GAAP. All Financial  Statements  shall be prepared in accordance
with GAAP, consistently applied.

               (viii)   Certifications   of  Financial   Statements   and  Other
Documents,  Compliance  Certificate.  Together with the Financial Statements and
other  documents  and  information  provided  to  Lender  by or on behalf of any
Borrower  Party under this Section,  such  Borrower  Party also shall deliver to
Lender a certification in form and substance reasonably  satisfactory to Lender,
executed  on behalf of such  Borrower  Party by its chief  executive  officer or
chief  financial  officer,  stating  that,  to such  officer's  knowledge,  such
Financial  Statements,  documents,  and information are true and complete in all
material  respects  and do not omit to state any  material  information  without
which the same might  reasonably  be  misleading.  In addition,  where this Loan
Agreement  requires a "Compliance  Certificate",  the Borrower Party required to
submit the same shall  deliver a  certificate  duly  executed  on behalf of such
Borrower Party by its chief  executive  officer or chief financial  officer,  in
form and substance  reasonably  satisfactory to Lender,  stating that there does
not exist any Default or Event of Default  under the Loan  Documents  (or if the
any exists, specifying the same in detail) and stating the Debt Service Coverage
Ratio for the twelve (12) month period ended as of the end of such quarter.

               (ix) Fiscal Year. Each Borrower Party  represents that its fiscal
year ends on December 31, and agrees that it shall not change its fiscal year.

         (B) Accountants'  Reports.  Promptly upon receipt thereof, each Primary
Borrower  Party will  deliver  copies of all  significant  reports  submitted by
independent  public  accountants  in  connection  with each  annual,  interim or
special  audit of the  Financial  Statements  or other  affairs

                                      -31-
<PAGE>

of such Borrower  Party made by such  accountants,  including the comment letter
submitted by such accountants to management in connection with the annual audit.

         (C) Tax  Returns.  Within  thirty  (30)  days  after  filing  the same,
Borrower  shall  deliver to Lender a copy of its Federal  income tax returns (or
the return of the  applicable  Person into which  Borrower's  Federal income tax
return is consolidated)  certified on its behalf by its chief financial  officer
(or similar position) to be true and correct.

         (D) Annual  Operating and Capital  Expenditure  Budgets.  No later than
thirty (30) days prior to the expiration of each calendar  year,  Borrower shall
deliver to Lender for  informational  purposes only the Operating Budget and the
Capital  Expenditure  Budget  (in each case  presented  on a monthly  and annual
basis) for the Property for the following calendar year; which Operating Budgets
and Capital Expenditure Budgets shall be subject to Lender's reasonable approval
commencing  with the proposed  budgets for the calendar year 2011.  The proposed
Operating  Budget shall identify and set forth  Borrower's best estimate,  after
due consideration,  of all revenue, costs, and expenses, and shall specify Gross
Revenue and Operating Expenses. If any of said budgets or plans for any calendar
year from and after calendar year 2011 are not in form and substance  reasonably
satisfactory  to Lender,  Lender may disapprove the same and specify the reasons
therefor,  and Borrower shall  promptly amend and resubmit for approval  revised
budgets or plans, as applicable,  making such changes as are necessary to comply
with the reasonable requirements of Lender. In the event that after the Optional
Prepayment  Date,  Borrower  incurs  any  extraordinary   operating  expense  or
extraordinary  Capital  Expenditure  not set  forth in the  Operating  Budget or
Capital  Expenditure  Budget (each, an "Extraordinary  Expense"),  then Borrower
shall  promptly  deliver to Lender a  reasonably  detailed  explanation  of such
proposed Extraordinary Expense for Lender's approval.

         (E) Material Notices.

               (i) Borrower shall promptly deliver, or caused to be delivered to
Lender,  copies of all  notices of default  given or  received  with  respect to
noncompliance  related to any  Indebtedness  of any  Borrower  Party,  including
Indebtedness under the Loan Documents.

               (ii) Borrower shall promptly  deliver to Lender copies of any and
all material  notices  (including  without  limitation  any notice  alleging any
default or breach) received from any manager, franchisors,  licensors, or tenant
for or pertaining to the Property.

         (F) Events of Default,  etc. Promptly upon Borrower obtaining knowledge
of  any of  the  following  events  or  conditions,  Borrower  shall  deliver  a
certificate  executed  on its behalf by its chief  financial  officer or similar
officer specifying the nature and period of existence of such condition or event
and what action  Borrower  or any  Affiliate  thereof  has taken,  is taking and
proposes  to  take  with  respect  thereto:  (i) any  condition  or  event  that
constitutes an Event of Default or Default; (ii) any Material Adverse Effect; or
(iii) any actual or alleged breach or default or assertion of (or written threat
to assert) remedies under any Management Agreement.

         (G) Litigation. Promptly upon Borrower's obtaining knowledge of (1) the
institution  of any action,  suit,  proceeding,  governmental  investigation  or
arbitration  against  or  affecting  Borrower  or the  Property  not  previously
disclosed  in writing by Borrower to Lender or (2) any

                                      -32-
<PAGE>

material development in any action, suit, proceeding, governmental investigation
or arbitration at any time pending against or affecting Borrower or the Property
which,  in each case, if adversely  determined  would  reasonably be expected to
have a Material Adverse Effect,  Borrower will give notice thereof to Lender and
provide such other  information as may be reasonably  available to enable Lender
and its counsel to evaluate such matter.

         (H)  Insurance.  Within the thirty (30) day period  prior to the end of
each  insurance  policy  period of Borrower,  Borrower  will deliver  binders or
certificates  of  insurance  evidencing  renewal of any existing  coverages  (or
copies of any new  insurance  policies  not  previously  delivered  to  Lender),
reports,  and/or  other  information  (all  in  form  and  substance  reasonably
satisfactory  to  Lender),   (i)  outlining  all  material   insurance  coverage
maintained  as of the  date  thereof  by  Borrower  and all  material  insurance
coverage planned to be maintained by Borrower in the subsequent insurance policy
period,  and (ii) evidencing  payment in full of the premiums for such insurance
policies.

         (I) Other Information.  With reasonable promptness, each Borrower Party
will deliver such other information and data with respect to such Person and its
Affiliates or the Property as from time to time may be  reasonably  requested by
Lender.

Section 5.2 Existence;  Qualification.  Each Primary  Borrower Party will at all
times  preserve  and keep in full force and effect  its  existence  as a limited
partnership,  limited liability company, or corporation,  as the case may be and
all rights and franchises material to its business,  including its qualification
to do business in each state where it is required by law to so qualify.  Without
limitation of the foregoing,  Borrower and, to the extent required by applicable
law,  Member  shall at all times be qualified to business in the state where the
Property is located.

Section 5.3 Payment of Impositions and Claims.

         (A) Subject to Borrower's  contest  rights set forth in subsection  (B)
below, Borrower will pay (i) all Impositions;  (ii) all claims (including claims
for labor,  services,  materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its  properties or
assets (hereinafter referred to as the "Claims");  and (iii) all federal,  state
and local  income  taxes,  sales  taxes,  excise  taxes and all other  taxes and
assessments  of Borrower on its  business,  income or assets;  in each  instance
before any penalty or fine is incurred with respect thereto.

         (B)  Borrower  shall not be  required to pay,  discharge  or remove any
Imposition or Claim so long as Borrower  contests in good faith such  Imposition
or Claim or the  validity,  applicability  or amount  thereof by an  appropriate
legal  proceeding  which  operates to prevent the collection of such amounts and
the sale of the  Property  or any portion  thereof,  so long as: (i) no Event of
Default shall have occurred and be  continuing,  (ii) prior to the date on which
such Imposition or Claim would otherwise have become delinquent,  Borrower shall
have given Lender prior written notice of its intent to contest said  Imposition
or  Claim;  (iii)  prior to the date on which  such  Imposition  or Claim  would
otherwise have become delinquent, in the case of Impositions or Claims in excess
of  $200,000,  Borrower  shall have  deposited  with  Lender (or with a court of
competent  jurisdiction  or other  appropriate  body  approved  by Lender)  such
additional  amounts as are necessary to keep on deposit at all times,  an amount
equal to at least

                                      -33-
<PAGE>

one hundred twenty-five percent (125%) (or such higher amount as may be required
by applicable  law) of the total of (x) the balance of such  Imposition or Claim
then  remaining  unpaid,  and (y) all  interest,  penalties,  costs and  charges
accrued or accumulated thereon;  (iv) no risk of sale, forfeiture or loss of any
interest in the  Property or any part  thereof  arises,  in Lender's  reasonable
judgment,  during the  pendency of such  contest;  (v) such contest does not, in
Lender's reasonable determination, have a Material Adverse Effect; and (vi) such
contest is based on bona fide, material,  and reasonable claims or defenses. Any
such contest shall be prosecuted with due diligence, and Borrower shall promptly
pay the amount of such Imposition or Claim as finally determined,  together with
all interest and penalties  payable in connection  therewith.  Lender shall have
full power and authority, but no obligation,  to apply any amount deposited with
Lender under this subsection to the payment of any unpaid Imposition or Claim to
prevent the sale or  forfeiture  of the Property  for  non-payment  thereof,  if
Lender  reasonably  believes  that such sale or forfeiture  is  threatened.  Any
surplus  retained by Lender after payment of the Imposition or Claim for which a
deposit was made shall be promptly repaid to Borrower unless an Event of Default
shall have occurred,  in which case said surplus may be retained by Lender to be
applied to the Obligations. Notwithstanding any provision of this Section to the
contrary, Borrower shall pay any Imposition or Claim which it might otherwise be
entitled to contest if an Event of Default shall occur, or if, in the reasonable
determination  of Lender,  the  Property  is in  jeopardy  or in danger of being
forfeited  or  foreclosed.  If Borrower  refuses to pay any such  Imposition  or
Claim, upon five (5) Business Days' prior written notice,  Lender may (but shall
not be obligated to) make such payment and Borrower  shall  reimburse  Lender on
demand for all such advances.

Section 5.4  Maintenance  of  Insurance.  Borrower  will maintain or cause to be
maintained,  with financially  sound and reputable  insurers,  public liability,
property damage, business interruption and other types of insurance with respect
to its business and the Property  (including  all  Improvements  now existing or
hereafter erected thereon) against all losses, hazards, casualties,  liabilities
and contingencies as customarily carried or maintained by Persons of established
reputation  engaged in similar  businesses  and as Lender (and,  if the Mortgage
encumbers a leasehold,  the applicable  lease) shall require and in such amounts
and for  such  periods  as  Lender  shall  require.  Without  limitation  of the
foregoing,  Borrower  shall  maintain  or cause  to be  maintained  policies  of
insurance with respect to the Property in the following amounts and covering the
following risks:

               (i)  Property  damage  insurance  covering  loss or damage to the
Property caused by fire, lightning,  hail, windstorm,  explosion,  hurricane (to
the extent available),  vandalism,  malicious  mischief,  and such other losses,
hazards,  casualties,  liabilities and contingencies as are normally and usually
covered by fire  policies in effect  where the  Property is located  endorsed to
include  all of the  extended  coverage  perils  and other  broad  form  perils,
including the standard "all risks" clauses, with such endorsements as Lender may
from time to time reasonably require  including,  without  limitation,  building
ordinance and law (including demolition costs and increased cost of construction
coverage),  lightning,  windstorm,  civil commotion,  hail, riot, strike,  water
damage, sprinkler leakage, collapse and malicious mischief. Such policy shall be
in an amount  not less  than  that  necessary  to  comply  with any  coinsurance
percentage  stipulated  in the  policy,  but not  less  than  100%  of the  full
replacement cost of all Improvements  (without any deduction for  depreciation),
and shall contain a replacement cost and agreed amount endorsements in an amount
not less than the outstanding principal amount of the

                                      -34-
<PAGE>

Loan. The deductible under such policy,  shall not exceed an amount  customarily
required by institutional lenders for similar properties in the general vicinity
of the Property, but in no event in excess of $100,000.

               (ii) Broad form boiler and machinery insurance in an amount equal
to the lesser of 100% of the full replacement cost of the building  (without any
deduction for depreciation) in which the boiler or similar vessel is located, or
$2,000,000.  In  addition,  Lender may  require a rider to such policy to extend
such  coverage  to  electrical   machinery  and  equipment,   air  conditioning,
refrigeration, and mechanical objects.

               (iii) Intentionally Omitted.

               (iv)  Flood  insurance  if  the  Property  is in an  area  now or
hereafter  designated  as "flood  prone" or a "special  flood  hazard  area" (as
defined  under the National  Flood  Insurance  Act of 1968,  the Flood  Disaster
Protection  Act of 1973 or the National Flood  Insurance  Reform Act of 1994 (as
each may be amended,  or any successor law,  collectively,  the "Flood Insurance
Acts")).  Such  policy  shall be in an  amount  equal to the  lesser  of (1) the
outstanding  principal  balance of the Loan and (2) the  maximum  amount of such
insurance  available  under the Flood  Insurance  Acts and shall  have a maximum
permissible  deductible equal to an amount customarily required by institutional
lenders for similar  properties in the general vicinity of the Property,  but in
no event in excess of $100,000.

               (v)  Business  interruption  or rent loss  insurance in an amount
equal to the gross income or rentals  from the Property for an indemnity  period
of eighteen (18) months,  such amount being adjusted  annually.  Lender shall be
named as loss payee under such insurance.

               (vi)  During  any  period  of   reconstruction,   renovation   or
alteration of the Property,  a complete value, "All Risks" Builders Risk form or
"Course of Construction" insurance policy in non-reporting form and in an amount
reasonably satisfactory to Lender.

               (vii)  Commercial  General  Liability  insurance  covering bodily
injury  and  death in an amount  not less than  $1,000,000  per  occurrence  and
$3,000,000 in the aggregate with a deductible in an amount customarily  required
by institutional  lenders for similar  properties in the general vicinity of the
Property,  but in no event in  excess of  $100,000,  and an  umbrella  liability
policy in the amount of $50,000,000.  If Lender permits such liability  coverage
to be  written on a blanket  basis,  then such  policy  shall  provide  that the
aggregate limit of insurance applies separately to the Property.

               (viii)  If  required   by   applicable   state   laws,   worker's
compensation or employer's liability insurance in accordance with such laws.

               (ix)  Borrower  shall  cause  Manager  to  maintain   errors  and
omissions  insurance  in an amount  satisfactory  to  Lender  in its  reasonable
discretion.

               (x) Such other insurance and  endorsements,  if any, with respect
to the Property and the operation thereof as Lender may reasonably  require from
time to time,  provided same are customarily  required by institutional  lenders
for similar  properties in the general  vicinity of the  Property,  or which are
otherwise required by the Loan Documents.

                                      -35-
<PAGE>

                  Each carrier  providing  any  insurance,  or portion  thereof,
required by this Section shall be licensed to do business in the jurisdiction or
jurisdictions  in which the Property is located,  and shall have a claims paying
ability  rating by S&P of not less than "AA",  by Moody's of not less than "Aa2"
and by Fitch of not less than "AA" and an A.M. Best Company,  Inc. rating of not
less  than A and  financial  size  category  of not less  than  XIII.  Except as
otherwise  expressly set forth in this Loan Agreement,  Borrower shall cause all
insurance (except general public liability and workers' compensation  insurance)
carried in  accordance  with this Section to be payable to Lender as a mortgagee
and not as a coinsured, and, in the case of all policies of insurance carried by
each lessee for the benefit of Borrower,  if any, to cause all such  policies to
be  payable to Lender as  Lender's  interest  may  appear.  Notwithstanding  the
foregoing, Lender hereby approves: (a) St. Paul Fire and Marine Insurance Co. as
the carrier providing the commercial general liability  insurance required under
clause  (vii) of this  Section  5.4 so long as such  carrier  maintains a claims
paying  ability  by S&P of not less than  "AA-" and by  Moody's of not less than
"Aa3" and (b) Great American Insurance Co. as the carrier providing the umbrella
liability  insurance  required under clause (vii) of this Section 5.4 so long as
such carrier  maintains a claims paying ability by S&P of not less than "A+", by
Moody's  of not less than  "A3" and by Fitch of not less than  "AA-" and an A.M.
Best Company,  Inc. rating of not less than A and financial size category of not
less than XII. In the event that such  general or umbrella  liability  insurance
required  under clause (vii) of this Section 5.4 shall  hereafter be provided by
another  insurance  carrier,  any such carrier  shall  thereafter be required to
comply with the ratings requirements of the first sentence of this paragraph.

                  All insurance  policies and renewals thereof (i) shall be in a
form reasonably  acceptable to Lender, (ii) shall provide for a term of not less
than one year,  (iii) shall  provide by way of  endorsement,  rider or otherwise
that such insurance policy shall not be canceled, endorsed, altered, or reissued
to effect a change in coverage unless such insurer shall have first given Lender
thirty (30) days prior  written  notice  thereof,  (iv) shall include a standard
mortgagee clause in favor of and in form acceptable to Lender, (v) shall provide
for claims to be made on an occurrence  basis,  except that boiler and machinery
coverage  may be made on an  accident  basis,  and (vi) shall  contain an agreed
value clause  updated  annually (if the amount of coverage  under such policy is
based upon the replacement cost of the Property).  All property damage insurance
policies (except for flood and earthquake policies) must automatically reinstate
after each loss.

Section 5.5 Maintenance of the Property; Casualty.

         (A)  Borrower  will  maintain  the Property or cause the Property to be
maintained in good repair, working order and condition, subject to ordinary wear
and tear and the  provisions of this Loan Agreement with respect to casualty and
condemnation and will make or cause to be made all appropriate repairs, renewals
and replacements  thereof.  Without  limitation of the foregoing,  Borrower will
operate  and  maintain  the  Property   substantially  in  accordance  with  the
applicable  Operating Budget and Capital Expenditure Budget. In addition,  after
the Optional  Prepayment Date,  unless Lender agrees  otherwise,  Borrower shall
cause all items in the Capital  Expenditure Budget to be performed and completed
in  substantially  in accordance  with such plan. All work required or permitted
under this Loan  Agreement  shall be  performed in a  workmanlike  manner and in
compliance with all applicable laws. So long as no Event of Default has occurred
and is continuing,  Borrower may, without Lender's consent,  perform alterations
to the Property which (i) do not constitute a Material  Alteration,  (ii) do not
adversely affect

                                      -36-
<PAGE>

Borrower's  financial  condition  or the  value or Net  Operating  Income of the
Property and (iii) are in the ordinary course of Borrower's  business.  Borrower
shall not  perform  any  Material  Alteration  without  Lender's  prior  written
consent, which consent shall not be unreasonably withheld or delayed;  provided,
however, that Lender may, in its sole and absolute discretion,  withhold consent
to any  Material  Alteration  which is likely to  result  in a  decrease  of Net
Operating  Income  from the  Property  by 5% or more for a period  of 30 days or
longer.  Lender  shall  approve or  disapprove  any request for  approval of any
Material  Alteration  within  fifteen (15) Business Days after the submission by
Borrower  to Lender of a  written  request  for such  approval  together  with a
reasonably  detailed   description  of  such  Material  Alteration  including  a
construction  budget  therefor  on a line  item  basis,  copies of the plans and
specifications for same, a list of all contractors and subcontractors  providing
services or materials in connection with such Material  Alteration and copies of
all  material  contracts  and  subcontracts.  Lender's  consent to any  Material
Alteration shall be deemed given, if the correspondence  from Borrower to Lender
requesting such approval contains a bold-faced, conspicuous legend at the top of
the first page  thereof  stating that "IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY
DENY THIS REQUEST FOR APPROVAL IN WRITING  WITHIN  FIFTEEN (15)  BUSINESS  DAYS,
YOUR APPROVAL  SHALL BE DEEMED GIVEN," and if Lender shall fail to respond to or
to  expressly  deny such  request for  approval in writing  within  fifteen (15)
Business Days after receipt of Borrower's written request therefor together with
the  documents  and  information   required  above  and  any  other  information
reasonably  requested  by  Lender in  writing  prior to the  expiration  of such
fifteen (15)  Business Day period in order to adequately  review the same,  then
Lender shall be deemed to have approved such Material Alteration. Lender may, as
a  condition  to giving  its  consent  to a Material  Alteration,  require  that
Borrower  deliver to Lender  evidence  reasonably  satisfactory  to Lender  that
Borrower has cash available for payment of the cost of such Material  Alteration
in an amount equal to 125% of the cost of the Material  Alteration as reasonably
estimated by Lender.  Upon  substantial  completion of the Material  Alteration,
Borrower shall provide evidence  reasonably  satisfactory to Lender that (i) the
Material  Alteration was  constructed in accordance with all applicable laws and
substantially  in accordance  with plans and  specifications  approved by Lender
(which  approval  shall  not be  unreasonably  withheld  or  delayed),  (ii) all
contractors,  subcontractors,  materialmen and  professionals who provided work,
materials or services in connection with the Material  Alteration have been paid
in full and have delivered unconditional releases of lien and (iii) all material
licenses  necessary  for  the  use,  operation  and  occupancy  of the  Material
Alteration  (other  than  those  which  depend  on  the  performance  of  tenant
improvement work) have been issued.  Borrower shall reimburse Lender upon demand
for all reasonable  out-of-pocket  costs and expenses  (including the reasonable
fees of any  architect,  engineer  or  other  professional  engaged  by  Lender)
incurred  by  Lender in  reviewing  plans and  specifications  or in making  any
determinations necessary to implement the provisions of this Section 5.5(A).

(B) In the  event of  casualty  or loss at the  Property,  Borrower  shall  give
immediate  written notice of the same to the insurance carrier and to Lender and
shall promptly  commence and diligently  prosecute to completion,  in accordance
with the terms hereof,  the repair and  restoration of the Property as nearly as
possible to the Pre-Existing  Condition (hereinafter defined) (a "Restoration").
Borrower shall pay all costs of such  Restoration  whether or not such costs are
covered  by  insurance.  Borrower  hereby  authorizes  and  empowers  Lender  as
attorney-in-fact  for Borrower to make proof of loss,  to adjust and  compromise
any claim  under  insurance  policies,  to appear in and  prosecute  any  action
arising from such insurance policies, to collect

                                      -37-
<PAGE>

and  receive  insurance  proceeds,  and to deduct  therefrom  Lender's  expenses
incurred in the  collection of such  proceeds;  provided  however,  that nothing
contained in this Section shall require  Lender to incur any expense or take any
action hereunder. Borrower further authorizes Lender, at Lender's option, (i) to
hold the balance of such proceeds to be used to reimburse  Borrower for the cost
of  Restoration of the Property or (ii) subject to Subsection  5.5(C),  to apply
such  proceeds  to payment of the  Obligations  whether or not then due,  in any
order,  and,  provided that no Event of Default has occurred and is  continuing,
upon any such application of insurance  proceeds to the Obligations  pursuant to
the  foregoing,   no  Prepayment   Consideration   shall  be  due  and  payable.
Notwithstanding  the  foregoing,  in the event of a casualty where the loss does
not exceed the Restoration Threshold, Borrower may settle and adjust such claim;
provided  that (a) no Event of Default has  occurred and is  continuing  and (b)
such adjustment is carried out in a commercially reasonable and timely manner.

         (C)  Lender  shall not  exercise  Lender's  option  to apply  insurance
proceeds to payment of the  Obligations  if all of the following  conditions are
met: (i) no Event of Default then exists; (ii) Lender reasonably determines that
there will be sufficient funds to complete the Restoration of the Property to at
least the  Pre-Existing  Condition and to timely make all payments due under the
Loan Documents during the Restoration of the Property;  (iii) Lender  reasonably
determines that the rental income of the Property, after the Restoration thereof
to the  Pre-Existing  Condition  (and  after  the  expiration  of  any  business
interruption or rent loss  insurance),  will be sufficient to meet all Operating
Expenses, payments for Reserves and payments of principal and interest under the
Note and any other loan payment obligations (including any obligations under any
permitted  subordinate  financing)  relating to the Property and maintain a Debt
Service Coverage Ratio at least equal to the lesser of the Debt Service Coverage
Ratio as of the Closing Date and immediately preceding the casualty; (iv) Lender
reasonably  determines that the Restoration of the Property to the  Pre-Existing
Condition  will be  completed  within  one (1)  year of the  date of the loss or
casualty to the Property, but in no event later than six (6) months prior to the
Optional  Prepayment  Date; (v) less than fifty percent (50%) of the total floor
area of the Improvements has been damaged,  destroyed or rendered  unusable as a
result of such fire or other casualty;  (vi) tenant leases requiring  payment of
annual rent equal to at least seventy  percent (70%) of the Gross  Revenues from
the Property during the twelve (12) month period immediately  preceding the date
of such fire or other casualty  remain in full force and effect during and after
the Restoration of the Property;  and (vii) Lender is reasonably  satisfied that
the Property can be restored and repaired as nearly as possible to the condition
it was in  immediately  prior  to  such  casualty  and in  compliance  with  all
applicable  zoning,  building  and  other  laws  and  codes  (the  "Pre-Existing
Condition").  Notwithstanding anything to the contrary set forth in this Section
5.5, to the extent the  insurance  proceeds  paid or payable with respect to any
casualty to the Property  (either singly or when  aggregated with all other then
unapplied  proceeds with respect to the Property) do not exceed the  Restoration
Threshold, the estimated cost of completing the applicable Restoration shall not
be greater than the Restoration Threshold, and provided that no Event of Default
shall have occurred and be continuing,  such proceeds are to be paid directly to
Borrower to be applied to  Restoration  of the Property in  accordance  with the
terms hereof (except that insurance  proceeds paid with respect to the insurance
maintained under Section 5.4(v) above shall be deposited directly to the Central
Account and applied in accordance  with the  provisions  of the Cash  Management
Agreement).

                                      -38-
<PAGE>

         (D) If Lender elects to make the insurance  proceeds  available for the
Restoration  of the  Property  (or is required to make such  proceeds  available
pursuant to Section 5.5(C) above),  Borrower  agrees that, if at any time during
the  Restoration,  the  cost  of  completing  such  Restoration,  as  reasonably
determined  by Lender,  exceeds the  undisbursed  insurance  proceeds,  Borrower
shall,  promptly  upon demand by Lender,  deposit the amount of such excess with
Lender,  and Lender  shall first  disburse  such deposit to pay for the costs of
such Restoration on the same terms and conditions as the insurance  proceeds are
disbursed. If Borrower deposits such excess with Lender and if, after completion
of the Restoration,  any funds remain from the combination of insurance proceeds
and the funds so deposited  with Lender by Borrower,  and if no Event of Default
shall have occurred and be  continuing,  then Lender shall  disburse to Borrower
such remaining funds (together with any interest earned thereon).

         (E) Lender may,  at  Lender's  option,  condition  disbursement  of any
insurance  proceeds  on  Lender's  approval  of plans and  specifications  of an
independent  architect  licensed in the state where the  Property is located and
reasonably  satisfactory  to  Lender  (the  "Architect"),  any and all  material
contractors,  subcontractors and materialmen  engaged in the Restoration and the
contracts and subcontracts under which they have been engaged, contractor's cost
estimates,  architect's  certificates,  waivers of liens,  sworn  statements  of
mechanics  and  materialmen  and  such  other  evidence  of  costs,   percentage
completion of construction,  application of payments,  and satisfaction of liens
as Lender may  reasonably  require.  Lender  shall not be  obligated to disburse
insurance  proceeds more frequently than once every calendar month. If insurance
proceeds are applied to the payment of the Obligations,  any such application of
proceeds to principal  shall not extend or postpone the due dates of the monthly
payments due under the Note or otherwise under the Loan Documents, or change the
amounts of such payments. Any amount of insurance proceeds remaining in Lender's
possession  after full and final payment and discharge of all Obligations  shall
be refunded to Borrower or otherwise paid in accordance  with applicable law. If
the Property is sold at foreclosure or if Lender acquires title to the Property,
Lender shall have all of the right, title and interest of Borrower in and to any
insurance  policies  and  unearned  premiums  thereon and in and to the proceeds
resulting from any damage to the Property prior to such sale or acquisition.

         (F) In no event shall  Lender be  obligated  to make  disbursements  of
insurance  proceeds in excess of an amount equal to the costs actually  incurred
from time to time for work in place as part of the Restoration,  as certified by
the  Architect,  less a  retainage  equal  to five  percent  (5%) of such  costs
incurred until the  Restoration  has been  completed.  The retainage shall in no
event be less than the amount  actually held back by Borrower from  contractors,
subcontractors and materialmen  engaged in the Restoration.  The retainage shall
not be released until the Architect certifies to Lender that the Restoration has
been completed  substantially  in accordance with the provisions of this Section
5.5 and that all material  approvals  necessary for the  re-occupancy and use of
the Property have been obtained from all appropriate  governmental  authorities,
and Lender receives evidence reasonably satisfactory to Lender that the costs of
the  Restoration  have  been  paid in  full  or will be paid in full  out of the
retainage.

Section 5.6 Inspection.  Subject to the rights of tenants, Borrower shall permit
any authorized  representatives designated by Lender to visit and inspect during
normal business hours the Property and its business, including its financial and
accounting  records,  and to make  copies and take  extracts  therefrom,  and to
discuss its affairs,  finances and  business  with its officers and

                                      -39-
<PAGE>

independent public accountants (with such Borrower's representative(s) present),
at such  reasonable  times during normal  business  hours and as often as may be
reasonably  requested.  Unless an Event of Default has  occurred,  Lender  shall
provide  advance  written  notice of at least three (3)  Business  Days prior to
visiting or inspecting the Property or Borrower's offices.

Section 5.7 Environmental Compliance.

         (A)  Environmental  Laws.  Borrower  shall at all  times  comply in all
material respects with all applicable  Environmental  Laws.  Borrower shall not:
(i) violate any applicable  Environmental Law; or (ii) generate, use, transport,
handle,  store,  release or dispose of any Hazardous Materials in or into, on or
onto, or from the Property  (except in accordance with applicable law); or (iii)
permit any Lien imposed  pursuant to any  Environmental  Law to be imposed or to
remain on the Property.

         (B)  Remedial  Action.  Borrower  shall  promptly  take and  diligently
prosecute any and all necessary remedial actions upon obtaining knowledge of the
presence, storage, use, disposal,  transportation,  active or passive migration,
release or discharge of any Hazardous  Materials on, under or about the Property
in violation of any  Environmental  Laws. In the event  Borrower  undertakes any
remedial  action with respect to any  Hazardous  Material on, under or about the
Property, Borrower shall conduct and complete such remedial action in compliance
with all applicable  Environmental  Laws, and in accordance  with the applicable
policies,  orders and  directives of all federal,  state and local  governmental
authorities.

         (C) Further Assurance.  If Lender at any time has a reasonable basis to
believe  that a violation of any  Environmental  Law related to the Property has
occurred and is continuing or that any basis for a material  Environmental Claim
affecting  Borrower or related to the Property  exists,  then  Borrower  agrees,
promptly after written request from Lender, to provide Lender with such reports,
certificates,  engineering  studies or other written  material or data as Lender
may  reasonably  require so as to satisfy  Lender that Borrower and the Property
are in material compliance with all applicable Environmental Laws.

         (D) O&M Plan.  Borrower  agrees to develop,  implement and carry out an
operations   and   maintenance    program   with   respect   to   asbestos   and
asbestos-containing  materials  (the "O&M  Plan")  located  in the  Property  as
recommended in the Environmental  Report. Within thirty (30) days after the date
hereof,  Borrower  shall cause the O&M Plan to be prepared by the  environmental
consultant  or  engineer  that  prepared  the  Environmental  Report or  another
environmental  consultant  or  engineer  reasonably  acceptable  to Lender,  and
deliver such O&M Plan to Lender for Lender's  approval  which approval shall not
be unreasonably  withheld,  conditioned or delayed.  Lender's  requirement  that
Borrower  develop and comply with the O&M Plan shall not be deemed to constitute
a waiver or modification of any covenants or agreements of Borrower or Guarantor
with respect to Hazardous  Material or Environmental Laws as set forth herein or
in the Environmental Indemnity.

Section 5.8 Environmental Disclosure.

         (A) Borrower  shall  promptly upon becoming aware thereof advise Lender
in writing and in reasonable  detail of: (1) any release,  disposal or discharge
of any  Hazardous  Material  on,

                                      -40-
<PAGE>

under,  or about the Property  required to be reported to any federal,  state or
local governmental or regulatory agency under any applicable  Environmental Laws
except such releases, disposals or discharges pursuant to and in compliance with
valid permits,  authorizations or registrations  under said Environmental  Laws;
(2) any and all written communications sent or received by Borrower with respect
to any Environmental  Claims or any release,  disposal or discharge of Hazardous
Material required to be reported to any federal,  state or local governmental or
regulatory agency; (3) any remedial action taken by Borrower or any other Person
in response to any Hazardous  Material on, under or about the Property;  (4) the
discovery  by Borrower  of any  occurrence  or  condition  on any real  property
adjoining or in the  vicinity of the  Property  that could cause the Property or
any part thereof to be classified as  "border-zone  property" or to be otherwise
subject to any restrictions on the ownership, occupancy,  transferability or use
thereof under any  Environmental  Laws the existence of which could result in an
Environmental  Claim  with  respect to the  Property;  and (5) any  request  for
information  from  any  governmental   agency  that  indicates  such  agency  is
investigating  whether  Borrower may be potentially  responsible  for a release,
disposal or discharge of Hazardous Materials.

         (B) Borrower shall promptly  notify Lender of any proposed action to be
taken  pertaining  in any way to the  Property to commence any  operations  that
could  reasonably be expected to subject  Borrower or the Property to additional
laws,  rules or  regulations,  including laws,  rules and regulations  requiring
additional or amended  environmental  permits or licenses which could reasonably
be expected to subject  Borrower to any  material  obligations  or  requirements
under any Environmental Laws. Borrower shall, at its own expense, provide copies
of such documents or information as Lender may reasonably request in relation to
any matters disclosed pursuant to this Section.

Section 5.9 Compliance with Laws and Contractual Obligations.  Borrower will (A)
comply with the requirements of all present and future  applicable laws,  rules,
regulations and orders of any  governmental  authority in all  jurisdictions  in
which it is now doing  business or may hereafter be doing  business,  other than
those laws, rules, regulations and orders the noncompliance with which would not
reasonably  be expected to have,  either  individually  or in the  aggregate,  a
Material  Adverse  Effect,  (B)  maintain  all  licenses and permits now held or
hereafter acquired by Borrower, the loss, suspension, or revocation of which, or
failure to renew, could have a Material Adverse Effect and (C) perform, observe,
comply and fulfill all of its obligations, covenants and conditions contained in
any Contractual Obligation, including the Loan Documents.

Section 5.10 Further  Assurances.  Borrower Parties and their Affiliates  shall,
from  time  to  time,  execute  and/or  deliver  such  documents,   instruments,
agreements,  financing  statements,  and perform such acts as Lender at any time
may reasonably  request to evidence,  preserve  and/or protect the Collateral at
any time  securing or intended  to secure the  Obligations  and/or to better and
more  effectively  carry out the purposes of this Loan  Agreement  and the other
Loan Documents.

Section 5.11  Performance  of Agreements  and Leases.  Each Borrower Party shall
duly and punctually  perform,  observe and comply in all material  respects with
all of the terms, provisions,  conditions,  covenants and agreements on its part
to be performed,  observed and complied with  hereunder and under the other Loan
Documents  to which it is a party and all  material  agreements

                                      -41-
<PAGE>

entered into or assumed by such Person in connection with the Property, and will
not suffer or permit  any  default  or event of  default  (giving  effect to any
applicable  notice  requirements  and cure  periods)  to exist  under any of the
foregoing.  Borrower  shall comply with,  observe and perform all of  Borrower's
material obligations as landlord under all Leases and shall enforce the material
terms,  covenants  and  conditions  contained in the Leases upon the part of the
tenants thereunder to be observed or performed.

Section 5.12 Leases.

         (A) Without the prior written consent of Lender, Borrower shall not (i)
enter  into any Major  Lease;  (ii)  cancel  or  terminate  (including,  without
limitation,  by  exercise  of any  landlord  recapture  rights)  any Major Lease
(except to enforce any such Major  Lease after an "event of default"  thereunder
or pursuant to the exercise by any tenant of any  termination  rights  expressly
provided  in any  existing  Major  Lease or Major  Lease  hereafter  approved by
Lender);  (iii)  approve any  assignment  of any Major Lease (except as required
pursuant  to the  express  terms of any  existing  Major  Lease  or Major  Lease
hereafter  approved  by Lender)  that  releases  the  original  tenant  from its
obligations under such Major Lease,  (iv) amend,  modify or waive the provisions
of any Major Lease in any  material  and  adverse  respect  (including,  without
limitation,  any amendment,  modification  or waiver  reducing the fixed initial
term of any Major  Lease,  reducing  the rent  payable  under  any Major  Lease,
changing any renewal provisions of any Major Lease or materially  increasing the
obligations  of the landlord or materially  decreasing  the  obligations  of the
tenant under any Major Lease or pursuant to which any  premises  covered by such
Major Lease is  surrendered);  or (v) cancel or modify any guaranty,  or release
any security  deposit,  letter of credit,  or other item  constituting  security
pertaining to any Major Lease (except as required  pursuant to the express terms
of any existing Major Lease or Major Lease hereafter approved by Lender).

                  Lender shall not unreasonably withhold, delay or condition its
consent to any Major Lease transaction  described in items (i) through (v) above
provided that (x) no Event of Default shall have occurred and be continuing, (y)
the conditions of clauses (i) and (ii) of Subsection  5.12(B) are satisfied with
respect to such  proposed  Major  Lease and (z) in the  reasonable  judgment  of
Lender, the proposed tenant thereunder (if not then a tenant of the Property) is
a reputable  Person  engaged in a business  activity  which is  consistent  with
ordinary office building uses and with  creditworthiness  reasonably adequate to
perform its obligations  under the proposed Major Lease (taking into account any
security,  guarantees  or other  credit  support  posted  or  delivered  by such
proposed tenant).

         (B)   Notwithstanding  the  provisions  of  Subsection  5.12(A)  above,
provided  that no  Event of  Default  shall  have  occurred  and be  continuing,
Lender's  consent  shall not be  required as  provided  above for the  creation,
assignment,  termination  (including,  without  limitation,  by  exercise of any
recapture  rights,  amendment or  modification of any Lease which is not a Major
Lease  (including  the renewal or  extension  after the date hereof of any Lease
(which is not a Major Lease) (such  renewal or  extension,  a "Renewal  Lease"))
provided that the applicable Lease (or Renewal Lease):

               (i) provides for payment of a net  effective  rent (after  taking
into account any free rent, construction allowances or other concessions granted
by landlord) and other material

                                      -42-
<PAGE>

amounts  payable no less than  ninety-five  percent (95%) of the then  effective
fair market rent then prevailing for similar properties and leases in the market
area (and taking into account the type and  creditworthiness  of the tenant, the
length of the term  including  any  renewals  and the  location  and size of the
premises covered thereby);

               (ii) is otherwise on commercially reasonable terms; and

               (iii) a copy of such Lease is delivered to Lender  promptly after
execution  thereof  together  with  Borrower's  certification  that  such  Lease
satisfies the foregoing conditions of this Section 5.12.

         (C) Any request for  approval  of a Lease or  assignment,  termination,
amendment or  modification  of any Lease  requiring  approval as set forth above
shall be made to Lender in writing and together with such request Borrower shall
furnish to Lender: (i) a brief biographical description of and current financial
statements for the proposed tenant and any guarantor of the proposed Lease, (ii)
a copy of the proposed form of Lease (or amendment or modification), and (iii) a
summary  of  the  material  terms  of  such  proposed  Lease  (or  amendment  or
modification)  including,  without limitation,  rental terms and the term of the
proposed  Lease and any options.  Lender shall approve or disapprove  each Major
Lease or other Lease (or amendment or  modification  of any Major Lease or other
Lease) for which Lender's  approval is required under this Loan Agreement within
ten (10) Business  Days after the  submission by Borrower to Lender of a written
request for such  approval,  accompanied by a  substantially  final draft of the
Major Lease or other Lease (or  amendment  or  modification)  together  with the
information  and documents  required  under clauses (i) through (iii) above (and
provided that any such  approval  shall be subject to delivery by Borrower of an
executed  copy of the  Lease  (or  amendment  or  modification)  promptly  after
execution thereof, which executed Lease (or amendment or modification) shall not
have been  modified or revised in any  material  respect  from the prior  drafts
thereof reviewed by Lender).  Lender's consent to any Major Lease or other Lease
shall be deemed given, if the correspondence  from Borrower to Lender requesting
such approval contains a bold-faced,  conspicuous legend at the top of the first
page thereof  stating that "IF YOU FAIL TO RESPOND TO OR TO EXPRESSLY  DENY THIS
REQUEST FOR APPROVAL IN WRITING  WITHIN TEN (10)  BUSINESS  DAYS,  YOUR APPROVAL
SHALL BE DEEMED  GIVEN," and if Lender fails to respond to or to expressly  deny
such request for approval in writing within ten (10) Business Days after receipt
by Lender of such written  request and the  information  and documents  required
above and any other information  reasonably requested by Lender in writing prior
to the  expiration  of such ten (10)  Business Day period in order to adequately
review the same,  then Lender shall be deemed to have  approved such Major Lease
or other Lease.

                  Borrower  shall  promptly send Lender copies of any notices of
default  received  from the tenant under any Lease;  and will enforce  (short of
terminating   such  Lease)  the  performance  by  the  tenant  of  the  tenant's
obligations under any Lease.

                  Except for  security  deposits or  estimated  additional  rent
amounts  on  account  of  operating   expense,   tax  or  other  escalations  or
pass-throughs, no Lease shall provide for payment of rent more than one month in
advance,  and Borrower shall not under any  circumstances  collect any rent more
than one month in advance.  Borrower, at Lender's request,  shall furnish Lender

                                      -43-
<PAGE>
with executed copies of all Leases hereafter made (to the extent not theretofore
provided to Lender).  Each Lease or a separate agreement with the tenant of such
Lease, in recordable form and substance reasonably satisfactory to Lender, shall
specifically  provide  that,  subject to the following  sentence,  such Lease is
subordinate to the Mortgage;  that the tenant attorns to Lender, such attornment
to be effective  upon Lender's  acquisition  of title to the Property;  that the
tenant agrees to execute such further evidences of attornment as Lender may from
time to time reasonably request;  that the attornment of the tenant shall not be
terminated  by  foreclosure;  that in no event  shall  Lender,  as holder of the
Mortgage  or as  successor  landlord,  be  liable to the  tenant  for any act or
omission of any prior  landlord or for any  liability or obligation of any prior
landlord occurring prior to the date that Lender or any subsequent owner acquire
title to the Property.  Lender shall enter into,  and, if required by applicable
law to  provide  constructive  notice,  record in the county  where the  subject
Property is located, and permit the applicable tenant to record a subordination,
non-disturbance and attornment  agreement,  in form and substance  substantially
similar  to  the  form  attached   hereto  as  Exhibit  A  (a   "Non-Disturbance
Agreement"), with any tenant (other than an Affiliate of Borrower) entering into
any Lease  demising at least 5,000 square feet of the  Property  within ten (10)
Business Days after written request therefor by Borrower delivered together with
an executed copy of the  applicable  Lease,  and provided that Lender shall have
confirmed  that such Lease  satisfies the  conditions of clauses (i) and (ii) of
Subsection 5.12(B) above.

Section 5.13 Management.

         (A) Borrower  shall cause  Manager to manage the Property in accordance
with the Management Agreement. Borrower shall (i) diligently perform and observe
all of the material terms,  covenants and conditions of the Management Agreement
on the part of Borrower to be performed  and observed and (ii)  promptly  notify
Lender of any notice to Borrower of any default under the  Management  Agreement
of which it is aware. If Borrower shall default in the performance or observance
of any material term,  covenant or condition of the Management  Agreement on the
part of Borrower to be performed or observed beyond  applicable  notice and cure
periods,  then,  without  limiting  Lender's other rights or remedies under this
Agreement or the other Loan Documents, and without waiving or releasing Borrower
from any of its  obligations  hereunder or under the  Management  Agreement upon
five (5) Business  Days' notice to  Borrower,  Lender shall have the right,  but
shall be under no  obligation,  to pay any sums and to perform any act as may be
appropriate  to cause all the material  terms,  covenants and  conditions of the
Management  Agreement  on the part of  Borrower  to be  performed  or  observed.
Borrower  shall cause any new  Manager to execute  and  deliver a  subordination
agreement  reasonably  satisfactory  to  Lender  at the  time of  execution  and
delivery of any Management Agreement.

         (B) Borrower shall not surrender,  terminate (except in connection with
the enforcement of Borrower's rights  thereunder upon a default by Manager,  and
after  delivery of notice  thereof to Lender (but no consent of Lender  shall be
required for such termination)),  cancel, materially modify, renew or extend the
Management  Agreement  (except any renewal or extension  pursuant to the express
terms of the  Management  Agreement  as in  effect  on the date  hereof or other
renewal or extension of the Management  Agreement  with the existing  Manager on
terms no less favorable to Borrower than those in effect on the date hereof), or
enter into any other Management  Agreement with Manager or any other Person,  or
consent to the  assignment by the Manager of its interest  under the  Management
Agreement,  in each case without the

                                      -44-
<PAGE>

express consent of Lender, which consent shall not be unreasonably  withheld and
may be conditioned  upon Borrower  delivering a Rating  Confirmation.  If at any
time Lender consents to the  appointment of a new Manager,  such new Manager and
Borrower shall, as a condition of Lender's  consent,  execute a subordination of
management agreement in the form delivered in connection with the closing of the
Loan.

         (C)  Lender  shall have the right to require  Borrower  to replace  the
Manager with a Person chosen by Lender, upon the earliest to occur of any one or
more of the following events: (i) upon the occurrence and during the continuance
of an Event of Default;  (ii) at any time following the date which is sixty (60)
days after the Optional  Prepayment Date; or (iii) thirty (30) days after notice
from Lender to Borrower that Manager has engaged in fraud,  gross  negligence or
willful  misconduct arising from or in connection with its performance under the
Management Agreement.

Section 5.14  Material  Agreements.  Except for Leases  complying  with the Loan
Documents and Management Agreements complying with the foregoing, Borrower shall
not enter into or become  obligated under any material  agreement  pertaining to
the Property, including without limitation brokerage agreements, unless the same
may be terminated without cause and without payment of a penalty or premium,  on
not more than 30 day's prior written notice.

Section  5.15  Deposits;  Application  of  Receipts.  Borrower  will deposit all
Receipts  from the  Property  into,  and  otherwise  comply  with,  the Accounts
established  from time to time hereunder.  Subject to Article VII hereof and the
Cash  Management  Agreement,  Borrower shall promptly apply such Receipts to the
payment of all current and past due Operating Expenses,  and to the repayment of
all sums  currently  due or past due under  the Loan  Documents,  including  all
payments into the Reserves.

Section 5.16 Estoppel Certificates.

         (A)  Within  ten (10)  Business  Days  following  a request  by Lender,
Borrower  shall  provide  to  Lender  a  duly  acknowledged   written  statement
confirming (i) the amount of the outstanding principal balance of the Loan, (ii)
the terms of  payment  and  maturity  date of the Note,  (iii) the date to which
interest has been paid,  (iv) to the knowledge of Borrower,  whether any offsets
or defenses exist against the  Obligations,  and if any such offsets or defenses
are alleged to exist,  the nature  thereof  shall be set forth in detail and (v)
that this Loan  Agreement,  the Note,  the Mortgage and the other Loan Documents
are valid, legal and binding  obligations of Borrower and have not been modified
or  amended,  or, if modified or  amended,  giving the  particulars  of any such
modification or amendment.

         (B)  Within  ten (10)  Business  Days  following  a written  request by
Borrower,  Lender shall provide to Borrower for  informational  purposes only, a
duly acknowledged  written statement setting forth the amount of the outstanding
principal  balance of the Loan,  the date to which  interest has been paid,  and
whether Lender has provided Borrower with written notice of any Event of Default
which  remains  uncured.  Compliance  by Lender  with the  requirements  of this
Section shall be for informational purposes only and shall not be deemed to be a
waiver of any rights or  remedies  of Lender  hereunder  or under any other Loan
Document.

                                      -45-
<PAGE>

Section  5.17  Indebtedness.  So long as the  Loan is  outstanding,  no  Primary
Borrower Party will directly or indirectly create,  incur, assume,  guaranty, or
otherwise  become or remain  directly or  indirectly  liable with respect to any
Indebtedness except:

         (A) the Obligations;

         (B) (i)  unsecured  trade  payables not evidenced by a note and arising
out of  purchases  of goods or services in the  ordinary  course of business and
(ii)  Indebtedness  incurred in the  financing of  equipment  or other  personal
property used at the Property in the ordinary course of business,  provided that
(a) each such trade payable is payable not later than 60 days after the original
invoice  date and is not  overdue  by more  than 30 days  and (b) the  aggregate
amount of such  Indebtedness  relating to financing  of  equipment  and personal
property  referred  to in clause (ii) above  outstanding  does not, at any time,
exceed two percent (2%) of the annual Gross  Revenues from the  Property.  In no
event  shall any  Indebtedness  other than the Loan be  secured,  in whole or in
part, by the Property or any portion thereof or interest therein; and

         (C) tenant  improvement  obligations  (or allowances  therefor) due and
payable by Borrower  pursuant to the Leases and amounts due under the Management
Agreement.

Section 5.18 Liens and Related  Matters.  The  obligations  of Borrower  Parties
under this Section are in addition to and not in limitation of their obligations
under Article XI herein. So long as the Loan is outstanding:

         (A) No Liens.  No Primary  Borrower  Party shall directly or indirectly
create,  incur,  assume or permit  to exist any Lien on or with  respect  to the
Property,  any other Collateral or any direct or indirect  ownership interest in
Borrower, except Permitted Encumbrances.

         (B) No Negative Pledges.  No Primary Borrower Party shall enter into or
assume any agreement (other than the Loan Documents) prohibiting the creation or
assumption  of any Lien upon its  properties  or  assets,  whether  now owned or
hereafter acquired.

Section 5.19 Contingent Obligations. No Primary Borrower Party shall directly or
indirectly  create  or  become  or be  liable  with  respect  to any  Contingent
Obligation  except  Contingent  Obligations  existing  on the  Closing  Date and
described in Schedule 4.4.

Section 5.20 Restriction on Fundamental  Changes.  Except as otherwise expressly
permitted  under  this Loan  Agreement  (or with the prior  written  consent  of
Lender):

         (A) No Primary  Borrower Party shall,  or shall permit any other Person
to, (i) amend,  modify or waive any term or provision of such  Borrower  Party's
partnership   agreement,   certificate  of  limited  partnership,   articles  of
incorporation,  by-laws, articles of organization, operating agreement, or other
organizational  documents relating to any of the representations,  warranties or
covenants of Article IX of this Loan Agreement or this Section 5.20 or any other
material term or provision of such Borrower  Party's  organizational  documents,
unless  required by law; or (ii)  liquidate,  wind-up or dissolve  such Borrower
Party.

         (B) No Primary  Borrower  Party  shall,  nor permit or suffer any other
Person on its behalf, to (i) issue, sell,  assign,  pledge,  convey,  dispose or
otherwise encumber any stock,

                                      -46-
<PAGE>

membership  interest,  partnership  interest,  or  other  equity  or  beneficial
interest in Borrower or (ii) grant any  options,  warrants,  purchase  rights or
other similar agreements or understandings with respect thereto.

         (C) No Primary  Borrower  Party shall  acquire by purchase or otherwise
all or any part of the  business  or assets  of, or stock or other  evidence  of
beneficial ownership of, any Person.

Section  5.21  Transactions  with  Related  Persons.  Except for fees payable to
Manager under the Management  Agreement,  Borrower shall not pay any management,
consulting, director or similar fees to any Related Person of Borrower or to any
director  (other than any customary  fees of the Outside  Director),  officer or
employee of Borrower.  Borrower  shall not directly or indirectly  enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any  property or the  rendering of any  service)  with any Related  Person of
Borrower or with any director, officer or employee of any Borrower Party, except
transactions   in  the  ordinary  course  of  and  pursuant  to  the  reasonable
requirements  of the  business of Borrower  and upon fair and  reasonable  terms
which are no less  favorable to Borrower  than would be obtained in a comparable
arm's length transaction with a Person that is not a Related Person of Borrower.
Borrower  shall not make any  payment  or permit  any  payment to be made to any
Related  Person of  Borrower  when or as to any time  when any Event of  Default
shall exist.

Section 5.22 ERISA.

         (A) No ERISA Plans. None of the Primary Borrower Parties will establish
any Employee Benefit Plan, Pension Plan or Multiemployer  Plan, or will commence
making  contributions  to (or become  obligated  to make  contributions  to) any
Employee Benefit Plan, Pension Plan or Multiemployer Plan.

         (B)  Compliance  with  ERISA.  Borrower  shall  not:  (i) engage in any
prohibited transaction under Section 406 of ERISA or Section 4975 of the IRC; or
(ii)  permit  the   establishment   of  any  Employee   Benefit  Plan  providing
post-retirement welfare benefits or establish or amend any Employee Benefit Plan
which  establishment  or amendment  could result in liability to Borrower or any
ERISA Affiliate or increase the obligation of Borrower.

         (C) No Plan Assets.  Borrower  shall not at any time during the term of
this Loan Agreement  become (1) an employee benefit plan defined in Section 3(3)
of ERISA which is subject to ERISA, (2) a plan as defined in Section  4975(e)(1)
of the IRC which is  subject  to Section  4975 of the IRC,  (3) a  "governmental
plan" within the meaning of Section 3(32) of ERISA or (4) an entity any of whose
underlying  assets  constitute  "plan assets" of any such employee benefit plan,
plan or governmental plan for purposes of Title I or ERISA,  Section 4975 of the
IRC or any state statutes applicable to the Borrowers regulating  investments of
governmental plans.

Section 5.23 Lender's  Expenses.  Borrower  shall pay, on demand by Lender,  all
reasonable expenses,  charges,  costs and fees (including  reasonable attorneys'
fees and expenses) in connection with the negotiation,  documentation,  closing,
administration,  servicing,  enforcement  interpretation,  and collection of the
Loan and the Loan Documents,  and in the preservation and protection of Lender's
rights hereunder and thereunder. Without limitation Borrower shall pay

                                      -47-
<PAGE>

all costs and expenses, including reasonable attorneys' fees, incurred by Lender
in any case or  proceeding  under Title 11 of the United States Code (or any law
succeeding or replacing any of the same).  At the Closing,  Lender is authorized
to pay  directly  from the  proceeds  of the  Loan  any or all of the  foregoing
expenses then or theretofore incurred.

Section 5.24 Tenant Estoppels.  Upon request by Lender,  Borrower shall exercise
commercially  reasonable  efforts to obtain and deliver,  in form and  substance
reasonably  satisfactory to Lender,  estoppel  certificates and/or subordination
agreements from tenants from which  satisfactory  estoppel  certificates  and/or
subordination  agreements  were not  obtained  prior to Closing.  The failure of
Borrower to obtain any such additional  estoppel  certificates or  subordination
agreements after exercising such commercially  reasonable efforts shall not be a
default hereunder.

                                   ARTICLE VI
                                    RESERVES

Section 6.1 Security Interest in Reserves; Other Matters Pertaining to Reserves.

         (A) Borrower  hereby  pledges,  assigns and grants to Lender a security
interest in and to all of  Borrower's  right,  title and  interest in and to the
Reserves,  as security  for payment and  performance  of all of the  Obligations
hereunder  and  under  the Note  and the  other  Loan  Documents.  The  Reserves
constitute  Account Collateral and are subject to the security interest in favor
of Lender created herein and all provisions of this Loan Agreement and the other
Loan Documents pertaining to Account Collateral.

         (B) In addition to the rights and remedies  provided in Article VII and
elsewhere herein, upon the occurrence of any Event of Default, Lender shall have
all rights and remedies pertaining to the Reserves as are provided for in any of
the Loan Documents or under any applicable law.  Without limiting the foregoing,
upon and at all times after the  occurrence  and during the  continuance  of any
Event  of  Default,  Lender  in its sole and  absolute  discretion,  may use the
Reserves (or any portion thereof) for any purpose,  including but not limited to
any  combination  of the  following:  (i)  payment  of  any  of the  Obligations
including  the  Prepayment  Consideration  applicable  upon such payment in such
order as Lender may determine in its sole discretion;  provided,  however,  that
such application of funds shall not cure or be deemed to cure any default;  (ii)
reimbursement  of  Lender  for  any  losses  or  expenses  (including,   without
limitation,  reasonable  legal  fees)  suffered  or incurred as a result of such
default;  (iii) payment for the work or obligation  for which such Reserves were
reserved or were required to be reserved;  and (iv)  application of the Reserves
in connection with the exercise of any and all rights and remedies  available to
Lender at law or in equity or under this Loan  Agreement  or  pursuant to any of
the other Loan Documents.

Section 6.2 Funds Deposited with Lender.

         (A)  Interest,  Offsets.  Except only as expressly  provided  otherwise
herein,  all funds of  Borrower  which are  deposited  with  Lender as  Reserves
hereunder shall be held by Lender in one or more Permitted  Investments.  Lender
is  authorized  to commingle  any of the  Reserves  with each other and with any
other funds held by Lender.  All interest which accrues on the Reserves

                                      -48-
<PAGE>

shall be taxable to  Borrower  and shall be added to and  disbursed  in the same
manner and under the same conditions as the principal sum on which said interest
accrued.  Additional  provisions  pertaining  to  investments  are set  forth in
Article VII.

         (B) Funding at Closing.  Borrower shall deposit with Lender the amounts
necessary  to fund each of the Reserves as set forth  below.  Deposits  into the
Reserves  at  Closing  may occur by  deduction  from the amount of the Loan that
otherwise would be disbursed to Borrower, followed by prompt deposit of the same
into the applicable  Sub-Account of the Central  Account in accordance  with the
Cash Management  Agreement.  Notwithstanding such deductions,  the Loan shall be
deemed for all purposes to be fully disbursed at Closing.

Section 6.3 Impositions  and Insurance  Reserve.  On the Closing Date,  Borrower
shall  deposit  with Lender (or such agent of Lender as Lender may  designate in
writing to Borrower from time to time)  $2,136,702.54  and, pursuant to the Cash
Management  Agreement,  Borrower shall deposit monthly, on the first day of each
calendar month  commencing  with February 1, 2001,  1/12th of the annual charges
(as reasonably  estimated by Lender) for all Impositions and, to the extent such
amounts are required to the  escrowed  hereunder  as provided  below,  Insurance
Premiums  payable with respect to the Property  hereunder (said funds,  together
with any interest thereon and additions thereto,  the "Impositions and Insurance
Reserve").  The  initial  amount  of  the  monthly  deposit  to be  made  to the
Impositions  and  Insurance  Reserve  from and  after the date  hereof  shall be
$167,391.44.  Borrower shall also deposit with Lender on demand,  to be added to
and  included  within  such  reserve,  a sum of money  which  Lender  reasonably
estimates,  together with such monthly deposits,  will be sufficient to make the
payment  of each  such  charge  at  least  thirty  (30)  days  prior to the date
initially due.  Borrower shall provide Lender with bills and all other documents
necessary  for the payment of the  foregoing  charges at least  thirty (30) days
prior to the date on which each  payment  shall first become due. So long as (i)
no Event of Default has occurred and is  continuing,  (ii) Borrower has provided
Lender with the  foregoing  bills and other  documents in a timely  manner,  and
(iii) sufficient funds are held by Lender for the payment of the Impositions and
Insurance  Premiums (if applicable)  relating to the Property,  Lender shall pay
said items or disburse to Borrower from such Reserve an amount sufficient to pay
said items.  Notwithstanding the foregoing or anything to the contrary contained
herein or in the other Loan Documents, Borrower shall not be required to deposit
Insurance  Premiums in the  Impositions  and Insurance  Reserve unless and until
Borrower fails to maintain any of the insurance  coverage required under Section
5.4  hereof or any other  Event of  Default  shall  occur  hereunder;  whereupon
Borrower  shall  immediately  be  required to  commence  and  continue to escrow
Insurance  Premiums in accordance with this Section 6.3 for the remainder of the
term of the Loan.

Section 6.4 Replacement Reserve. At Closing,  Borrower shall deposit with Lender
(or its agent) $-0- and,  pursuant to the Cash  Management  Agreement,  Borrower
shall  deposit  with  Lender (or such agent)  monthly,  on the first day of each
calendar month  commencing  with February 1, 2001,  $17,738,  for the purpose of
creating a reserve  for  Capital  Expenditures  in  accordance  with the Capital
Expenditure  Budget  then in effect  (said  funds,  together  with any  interest
thereon and additions thereto, the "Replacement  Reserve").  The funds contained
in the  Replacement  Reserve  shall be utilized  by Borrower  solely for Capital
Expenditures  performed  during the term of the Loan in accordance  with Capital
Expenditure  Budget  (as  amended  from time to time and which  shall  have been
approved annually in advance by Lender  commencing

                                      -49-
<PAGE>

with the Capital  Expenditure  Budget for the calendar year 2011), and shall not
be used by Borrower  for purposes  for which any other  Reserve is  established.
Within ten (10) days after written  request from  Borrower,  Lender shall direct
the Central Account Bank to disburse funds from the  Replacement  Reserve to pay
for costs that have been  incurred by Borrower  for such  Capital  Expenditures,
provided  that (i) no Event of Default  has  occurred  and is  continuing,  (ii)
Borrower shall provide to Lender such documentation and certifications as Lender
may reasonably  request to  substantiate  the requirement for and entitlement to
such  disbursement,  (iii)  Borrower  shall  provide  Lender with all  invoices,
receipts,  lien  waivers  and  other  documentation  of lawful  and  workmanlike
progress or completion,  lien-free status, and availability of sufficient funds,
all as may be  reasonably  requested  by  Lender  and  Lender  may  require,  at
Borrower's  expense,  an  inspection  of the Property  and/or a  certificate  of
completion by a licensed independent architect approved by Lender.

Section 6.5 Hazardous Materials Remediation Reserve. At Closing,  Borrower shall
reserve  from the  proceeds of the Loan and shall  deposit  with Lender (or such
agent of Lender as Lender may designate in writing from time to time), an amount
equal to $2,500 (said funds,  together  with any interest  thereon and additions
thereto, the "Hazardous Materials Remediation Reserve") for certain work related
to Hazardous Materials on the Property as indicated in the Environmental  Report
for the Property prepared and delivered prior to the Closing and as such work is
more particularly  described on Schedule 6.5 (the "Environmental  Work"). Within
six (6) months after the Closing,  Borrower  shall  complete such  Environmental
Work and  shall  provide  to  Lender  such  closure  reports,  no-further-action
letters,  and other  evidence of  compliance  with law as Lender may  reasonably
require.  The funds  contained in the Hazardous  Materials  Remediation  Reserve
shall be utilized by Borrower solely for performance of the  Environmental  Work
in accordance with the Environmental  Reports, and shall not be used by Borrower
for  purposes  for  which  any  other  Reserve  is  established.   Upon  written
application  of Borrower,  Borrower shall be entitled to draw upon the Hazardous
Materials  Remediation  Reserve  to pay for costs  that have  been  incurred  by
Borrower for such Environmental  Work, provided that (i) no Event of Default has
occurred  and  is  continuing,  (ii)  Borrower  shall  provide  to  Lender  such
documentation   and   certifications   as  Lender  may  reasonably   request  to
substantiate  the requirement for and  entitlement to such  disbursement,  (iii)
Borrower  shall  provide  Lender with all invoices,  receipts,  lien waivers and
other documentation of lawful and workmanlike progress or completion,  lien-free
status, and availability of sufficient funds, all as may be reasonably requested
by Lender,  and (iv)  Borrower  shall  provide  Lender  such  evidence as may be
reasonably  satisfactory  to Lender that,  after payment of such draw, the funds
remaining in such Reserve  shall be  sufficient to pay for the remainder of such
Environmental  Work.  Subject to the  foregoing  conditions,  Borrower  shall be
entitled to draw any remaining  balance in the Hazardous  Materials  Remediation
Reserve  when all such  Environmental  Work is complete  to Lender's  reasonable
satisfaction and is paid for.

                                  ARTICLE VII
                         CENTRAL ACCOUNT/CASH MANAGEMENT

Section 7.1 Establishment of Central Account.

         (A) Central  Account.  On or before the Closing  Date,  pursuant to the
terms of the Cash Management Agreement, Borrower shall establish and maintain an
Eligible Account in the

                                      -50-
<PAGE>

name of the  Lender,  as  secured  party  hereunder,  to serve  as the  "Central
Account" (said account,  and any account  replacing the same in accordance  with
this Loan Agreement and the Cash Management  Agreement,  the "Central  Account";
and the depositary  institution in which the Central Account is maintained,  the
"Central  Account  Bank").  The Central Account shall be under the sole dominion
and control of Lender (which dominion and control may be exercised by Servicer);
and  except  as  expressly  provided  hereunder  and/or  in the Cash  Management
Agreement,  Borrower shall have no rights to control or direct the investment or
payment of funds therein.  Lender may elect to change any financial  institution
in which the Central  Account shall be maintained.  The Central Account shall be
deemed to contain such  sub-accounts  as Lender may designate  ("Sub-Accounts"),
which may be  maintained  as separate  ledger  accounts and need not be separate
Eligible  Accounts.  The  Sub-Accounts  shall  include  the  following  as  more
particularly described in the Cash Management Agreement:

               (i) "Debt Service  Sub-Account" shall mean the Sub-Account of the
Central  Account  established  for the  purposes of  reserving  for  payments of
principal  and  interest  and other  amounts due under the Loan  Documents  (but
without duplication of amounts covered under item (ii) below); and

               (ii) "Reserve  Sub-Accounts"  shall mean the  Sub-Accounts of the
Central  Account  established  for the purpose of holding  funds in the Reserves
including:  (a) the "Imposition and Insurance Reserve Sub-Account";  and (b) the
"Replacement Reserve Sub-Account".

Section 7.2 Flow of Funds.

         (A) Deposit of Receipts into the Central Account.  Pursuant to the Cash
Management Agreement,  Borrower shall direct (i) all tenants under the Leases to
pay all Rents thereunder  directly into the Central Account and (ii) any and all
other Receipts  (including  Rents that are not paid into the Central  Account in
accordance with the foregoing) to be deposited promptly into the Central Account
and in no event later than two (2)  Business  Days after the same are paid to or
for the  benefit of  Borrower.  To the  extent  that  Borrower  or any Person on
Borrower's  behalf  holds any  Receipts,  whether in  accordance  with this Loan
Agreement or otherwise,  Borrower  shall be deemed to hold the same in trust for
Lender for the  protection  of the  interests of Lender  hereunder and under the
Loan Documents.

         (B)  Application  of Funds in  Central  Account.  Funds in the  Central
Account shall be allocated to the  Sub-Accounts (or paid, as the case may be) in
accordance with the Cash Management Agreement.

Section 7.3 Application of Funds After Event of Default. If any Event of Default
shall occur and be continuing,  then notwithstanding anything to the contrary in
this Section or elsewhere,  Lender shall have all rights and remedies  available
under  applicable law and under the Loan  Documents.  Without  limitation of the
foregoing,  for so long as an Event of Default exists,  Lender may apply any and
all funds in the  Central  Account  and/or any  Sub-Accounts  against all or any
portion of any of the Obligations, in any order.

                                      -51-
<PAGE>

                                  ARTICLE VIII
                          DEFAULT, RIGHTS AND REMEDIES

Section 8.1 Event of Default.

         "Event of Default" shall mean the occurrence or existence of any one or
more of the following:

         (A)  Scheduled  Payments.  Failure  of  Borrower  to pay any  scheduled
payment amount when the same is due under this Loan Agreement,  the Note, or any
other Loan Documents (whether such amount is interest,  principal,  Reserves, or
otherwise); or

         (B) Other Payments.  Failure of Borrower to pay any amount from time to
time owing  under this Loan  Agreement,  the Note,  or any other Loan  Documents
(other than amounts  subject to the  preceding  paragraph)  within ten (10) days
after written notice to Borrower that same is due; or

         (C) Breach of Reporting  Provisions.  Failure of any Borrower  Party to
perform or comply  with any term or  condition  contained  in Section  5.1 which
continues for a period of thirty (30) days after written notice; or

         (D) Breach of Provisions Regarding Insurance,  Transfers, Liens, Single
Purpose.  (i)  Failure to keep in force the  insurance  required  by Section 5.4
hereof or (ii) the  failure to comply  with any other  covenant  of Section  5.4
which failure under this clause (ii)  continues for five (5) Business Days after
notice from Lender.  The demolition or removal of, or except as permitted  under
Section 5.5(A), the making of any Material Alteration to any of the Improvements
without Lender's consent. Breach or default under any of Sections 5.13(B), 5.17,
5.18,  5.19 or 5.20,  Article  IX or  Section  11.1  hereof or  Section 9 of the
Mortgage; or

         (E) Breach of Warranty. Any representation,  warranty, certification or
other  statement  made by any Borrower  Party or  Affiliate  thereof in any Loan
Document  or in any  statement  or  certificate  at any time  given  in  writing
pursuant to or in  connection  with any Loan  Document is false in any  material
respect  as of the date  made and if such  breach is  capable  of cure (it being
acknowledged  that any material  breach of the  representations  and  warranties
under  Sections 4.3, 4.4, 4.7, 4.9 or 4.18 shall not be deemed capable of cure),
such  breach is not cured  within the  applicable  cure  period  provided  under
Section 8.1(F); or

         (F) Other Defaults Under Loan  Documents.  A default shall occur in the
performance  of or compliance  with any term contained in this Loan Agreement or
the other Loan  Documents and such default is not fully cured within thirty (30)
days after receipt by Borrower of notice from Lender of such default (other than
occurrences  described  in other  provisions  of this  Section  8.1 for  which a
different grace or cure period is specified or which constitute immediate Events
of  Default);  provided  however  that if (i) the default is capable of cure but
with  diligence  cannot be cured  within such  period of thirty (30) days,  (ii)
Borrower (or the applicable  Borrower  Party) has commenced the cure within such
thirty (30) day period and at all times after such commencement has pursued such
cure diligently, and (iii) Borrower delivers to Lender promptly following demand
(which demand may be made from time to time by Lender) evidence  satisfactory to
Lender of the  foregoing,  then such period  shall be extended for so long as is

                                      -52-
<PAGE>

reasonably  necessary for Borrower in the exercise of due diligence to cure such
default,  but in no event  beyond  the 90th day  after  the  original  notice of
default; or

         (G) Involuntary  Bankruptcy;  Appointment of Receiver, etc. (i) A court
enters a decree or order for relief with  respect to any Borrower  Party,  in an
Involuntary  Borrower Party  Bankruptcy,  which decree or order is not stayed or
other similar relief is not granted under any  applicable  federal or state law;
(ii) the  occurrence and  continuance  of any of the following  events for sixty
(60) days unless  dismissed or discharged  within such time:  (x) an Involuntary
Borrower Party Bankruptcy is commenced, (y) a decree or order of a court for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or other
officer  having  similar  powers  over  any  Borrower  Party  or  over  all or a
substantial  part of its  property,  is  entered,  or (z) an  interim  receiver,
trustee or other  custodian  is  appointed  without the consent of any  Borrower
Party, for all or a substantial part of the property of such Person; or

         (H) Voluntary  Bankruptcy;  Appointment of Receiver,  etc. (i) An order
for relief is entered  with respect to any  Borrower  Party,  or any such Person
commences  a  voluntary  case  under  the  Bankruptcy  Code  or  any  applicable
bankruptcy,  insolvency  or other  similar law now or  hereafter  in effect,  or
consents  to the entry of an order for relief in an  involuntary  case or to the
conversion  of an  involuntary  case to a  voluntary  case under any such law or
consents to the  appointment of or taking  possession by a receiver,  trustee or
other  custodian for any Borrower Party or for all or a substantial  part of the
property of any Borrower Party; (ii) any Borrower Party makes any assignment for
the benefit of  creditors;  or (iii) the Board of Directors  or other  governing
body of any Borrower Party adopts any resolution or otherwise  authorizes action
to approve any of the actions referred to in this subsection 8.1(H); or

         (I) Bankruptcy Involving Ownership Interests or Property. Other than as
described in either of Subsections  8.1(G) or 8.1(H),  all or any portion of the
Collateral  becomes  property of the estate or subject to the automatic  stay in
any case or proceeding  under the Bankruptcy Code or any applicable  bankruptcy,
insolvency or other similar law now or hereafter in effect (provided that if the
same occurs in the context of an involuntary proceeding, it shall not constitute
an Event of Default if it is  dismissed  or  discharged  within  sixty (60) days
following its occurrence); or

         (J)  Solvency.  Any  Borrower  Party  ceases to be solvent or admits in
writing its inability to pay its debts as they become due; or

         (K) Judgment and Attachments. Any lien, money judgment, writ or warrant
of attachment, or similar process is entered or filed against any Borrower Party
or any of its assets,  which claim is not fully covered by insurance (other than
with  respect to the amount of  commercially  reasonable  deductibles  permitted
hereunder),  could  reasonably be expected to have a Material Adverse Effect and
remains  undischarged,  unvacated,  unbonded or unstayed  for a period of thirty
(30) days; or

         (L)  Injunction.  Any Borrower Party is enjoined,  restrained or in any
way  prevented  by the order of any court or any  administrative  or  regulatory
agency from conducting all or any material part of its business which injunction
could  reasonably be expected to have a Material  Adverse  Effect and such order
continues for more than sixty (60) days; or

                                      -53-
<PAGE>

         (M) Invalidity of Loan Documents.  This Loan Agreement, the Mortgage or
any Loan Document for any reason ceases to be in full force and effect or ceases
to be a legally  valid,  binding and  enforceable  obligation of Borrower or any
Lien  securing  the  Obligations  shall,  in  whole  or in  part,  cease to be a
perfected first priority Lien, subject to the Permitted  Encumbrances (except in
any of the  foregoing  cases in  accordance  with the terms  hereof or under any
other Loan Document); or

         (N)  Cross-Default  with Other  Loan  Documents.  A default  beyond any
applicable grace periods shall occur under any of the other Loan Documents;

         (O) Default  under  Management  Agreement.  Any event of default on the
part of Borrower shall occur and be continuing  under the Management  Agreement;
or

         (P) Ground Lease Default. Any default by Borrower beyond any applicable
grace  period  shall occur under the Ground  Lease or any actual,  attempted  or
purported surrender, termination,  modification or amendment of the Ground Lease
without Lender's consent.

If more than one of the foregoing  paragraphs  shall describe the same condition
or  event,  then  Lender  shall  have the  right to select  which  paragraph  or
paragraphs  shall apply. In any such case,  Lender shall have the right (but not
the  obligation)  to designate  the  paragraph or  paragraphs  which provide for
non-written  notice (or for no notice) or for a shorter  time to cure (or for no
time to cure).

Section 8.2 Acceleration and Remedies.

         (A) Upon the  occurrence  of any Event of Default  described  in any of
Subsections  8.1(G),  8.1(H),  or  8.1(I),  the unpaid  principal  amount of and
accrued  interest  and  fees  on  the  Loan  and  all  other  Obligations  shall
automatically become immediately due and payable,  without presentment,  demand,
protest,  notice of  intent  to  accelerate,  notice  of  acceleration  or other
requirements  of any kind,  all of which  are  hereby  expressly  waived by each
Borrower Party.  Upon and at any time after the occurrence of any other Event of
Default,  at the  option of Lender,  which may be  exercised  without  notice or
demand to anyone,  all or any  portion of the Loan and other  Obligations  shall
immediately become due and payable.

         (B) Upon the occurrence of an Event of Default,  all or any one or more
of the rights, powers, privileges and other remedies available to Lender against
Borrower under this Loan Agreement or any of the other Loan Documents, or at law
or in  equity,  may be  exercised  by  Lender at any time and from time to time,
whether or not all or any of the Obligations  shall be declared due and payable,
and whether or not Lender shall have  commenced  any  foreclosure  proceeding or
other action for the  enforcement  of its rights and  remedies  under any of the
Loan  Documents  with respect to the Property.  Any such actions taken by Lender
shall be cumulative  and concurrent  and may be pursued  independently,  singly,
successively,  together or  otherwise,  at such time and in such order as Lender
may determine in its sole  discretion,  to the fullest extent  permitted by law,
without impairing or otherwise affecting the other rights and remedies of Lender
permitted by law, equity or contract or as set forth herein or in the other Loan
Documents.  Without  limiting the  generality of the  foregoing,  if an Event of
Default is continuing (i) to the fullest extent  permitted by law,  Lender shall
not be subject to any "one

                                      -54-
<PAGE>

action" or  "election  of  remedies"  law or rule,  and (ii) all liens and other
rights, remedies or privileges provided to Lender shall remain in full force and
effect until Lender has exhausted  all of its remedies  against the Property and
the  Mortgage  has been  foreclosed,  sold  and/or  otherwise  realized  upon in
satisfaction of the Obligations or the Obligations have been paid in full.

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

         (D) Lender shall have the right from time to time to sever the Note and
the other Loan  Documents into one or more separate  notes,  mortgages and other
security  documents in such  denominations as Lender shall determine in its sole
discretion  for purposes of  evidencing  and  enforcing  its rights and remedies
provided  hereunder.  Borrower  shall execute and deliver to Lender from time to
time, promptly after the request of Lender, a severance agreement and such other
documents as Lender shall request in order to effect the severance  described in
the preceding  sentence,  all in form and substance  reasonably  satisfactory to
Lender.  Borrower hereby absolutely and irrevocably  appoints Lender as its true
and lawful attorney, coupled with an interest, in its name and stead to make and
execute all documents  necessary or desirable to effect the aforesaid  severance
upon the occurrence and during the continuance of an Event of Default,  Borrower
ratifying  all that its said  attorney  shall do by  virtue  thereof;  provided,
however,  Lender shall not make or execute any such  documents  under such power
until  three (3) days  after  notice  has been  given to  Borrower  by Lender of
Lender's intent to exercise its rights under such power.

         (E) Any amounts recovered from the Property or any other collateral for
the Loan after an Event of Default  may be applied by Lender  toward the payment
of any interest and/or  principal of the Loan and/or any other amounts due under
the Loan Documents in such order, priority and proportions as Lender in its sole
discretion shall determine.

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

                                      -55-
<PAGE>

Borrower  shall not be  construed  to be a waiver of any  subsequent  Default or
Event of Default by Borrower or to impair any remedy,  right or power consequent
thereon.

Section 8.3 Performance by Lender.

         (A) If any  Borrower  Party  shall  fail to  perform,  or  cause  to be
performed,  any  covenant,  duty  or  agreement  contained  in any  of the  Loan
Documents  beyond any applicable  notice and cure period,  Lender may (but shall
have no  obligation  to) perform or attempt to perform  such  covenant,  duty or
agreement on behalf of such Borrower  Party.  In such event,  Borrower shall, at
the request of Lender,  promptly pay to Lender any amount reasonably expended by
Lender in such  performance  or attempted  performance,  together  with interest
thereon at the Default Rate, from the date of such  expenditure  until paid. Any
amounts advanced or expended by Lender to perform or attempt to perform any such
matter shall be added to and included within the  indebtedness  evidenced by the
applicable  Note and shall be  secured  by all of the  Collateral  securing  the
applicable  Loan.  Notwithstanding  the foregoing,  it is expressly  agreed that
Lender shall not have any liability or responsibility for the performance of any
obligation of Borrower under this Loan Agreement or any other Loan Document.

         (B) Lender may cease or suspend  any and all  performance  required  of
Lender under the Loan Documents upon and during the  continuance of any Event of
Default.

                                   ARTICLE IX
               SINGLE-PURPOSE, BANKRUPTCY-REMOTE REPRESENTATIONS,
                            WARRANTIES AND COVENANTS

Section 9.1 Applicable to Primary Borrower Parties.  Each Primary Borrower Party
hereby  jointly and  severally  represents,  warrants  and  covenants  as of the
Closing  Date and until  such  time as all  Obligations  are paid in full,  that
absent  express  advance  written  waiver from Lender,  which may be withheld in
Lender's sole discretion, such Primary Borrower Party.

         (A) does not own and will not own any assets  other  than the  Property
(including  incidental personal property necessary for the operation thereof and
proceeds  therefrom) or direct or indirect ownership  interests in Borrower (the
"Ownership Interests");

         (B) is not  engaged  and will not engage in any  business,  directly or
indirectly,  other than the ownership,  management and operation of the Property
or the Ownership Interests;

         (C) will not enter into any  contract or  agreement  with any  partner,
member,  shareholder,  trustee,  beneficiary,  principal  or  Affiliate  of  any
Borrower Party except upon terms and conditions that are intrinsically  fair and
substantially  similar to those that would be available on an arms-length  basis
with third parties other than such Affiliate;

         (D) has not incurred and will not incur any debt, secured or unsecured,
direct or contingent (including guaranteeing any obligation), other than (i) the
Obligations, (ii) subject to the terms and conditions of Section 5.17, unsecured
trade  payables  incurred in the ordinary  course of business of  operating  the
Property  and  Indebtedness  relating to  financing  of  equipment  and personal
property in the  ordinary  course of business  and (iii) any other  Indebtedness
expressly permitted hereunder or under the other Loan Documents;

                                      -56-
<PAGE>

         (E) has not made and will not make any loan or  advances  to any Person
(including any of its Affiliates);

         (F) is and  reasonably  expects  to  remain  solvent  and  pay  its own
liabilities,  indebtedness,  and  obligations  of any kind from its own separate
assets as the same shall become due;

         (G) has done or caused to be done and will do all things  necessary  to
preserve its existence;

         (H) shall  continuously  maintain its  existence and be qualified to do
business in all states  necessary to carry on its business  including  the state
where the Property is located;

         (I) will conduct and operate its business as  presently  conducted  and
operated;

         (J) will  maintain  books and records and bank  accounts  separate from
those  of  its  partners,  members,   shareholders,   trustees,   beneficiaries,
principals, Affiliates, and any other Person;

         (K) will be, and at all times will hold  itself out to the public as, a
legal entity  separate and distinct from any other Person  (including any of its
partners,  members,  shareholders,   trustees,  beneficiaries,   principals  and
Affiliates,  and any Affiliates of any of the same),  and not as a department or
division of any Person;

         (L) will  file  such tax  returns  with  respect  to  itself  as may be
required under applicable law;

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

         (N) will not enter into any transaction of merger or consolidation,  or
acquire by purchase or  otherwise  all or  substantially  all of the business or
assets of, or any stock or beneficial ownership of, any Person;

         (O) will not  commingle or permit to be  commingled  its funds or other
assets with those of any other Person;

         (P) has and will  maintain  its assets in such a manner  that it is not
costly or difficult to segregate,  ascertain or identify its  individual  assets
from those of any other Person;

         (Q) does not and will not hold  itself  out to be  responsible  for the
debts or obligations of any other Person;

         (R) has not and will not guarantee or otherwise  become liable on or in
connection with any obligation of any other Person;

                                      -57-
<PAGE>

         (S) except for funds deposited into the Accounts in accordance with the
Loan Documents, shall not hold title to its assets other than in its name;

         (T)   shall   comply   with   all  of  the   assumptions,   statements,
certifications,  representations,  warranties and covenants regarding or made by
it contained in or appended to the  nonconsolidation  opinion delivered pursuant
hereto.

Section 9.2 Applicable to Member and Borrower.  In addition to their  respective
obligations  under Section 9.1,  each of Borrower and Member hereby  represents,
warrants  and  covenants  as of the  Closing  Date and  until  such  time as all
Obligations  are paid in full,  that absent express  advance written waiver from
Lender, which may be withheld in Lender's sole discretion:

         (A) Member shall at all times act as the sole  shareholder of Borrower,
with all of the rights,  powers,  obligations and liabilities  thereof under the
trust  agreement  of Borrower  and shall take any and all actions and do any and
all things necessary or appropriate to the  accomplishment  of the same and will
engage in no other business.

         (B) Neither Member nor Borrower shall,  without the affirmative vote of
the  Outside  Director,  institute  proceedings  to be  adjudicated  bankrupt or
insolvent;  consent to the institution of a bankruptcy or insolvency proceedings
against it or Borrower;  file a petition seeking, or consent to,  reorganization
or relief  under any  applicable  federal or state law  relating to  bankruptcy;
consent  to  the  appointment  of a  receiver,  liquidator,  assignee,  trustee,
sequestrator (or other similar official) for itself or Borrower or a substantial
part of its or  Borrower's  property;  make any  assignment  for the  benefit of
creditors;  or admit in writing its inability to pay its debts generally as they
become due.

         (C) Neither Member nor Borrower shall,  without the affirmative vote of
the Outside Director,  for itself or for Borrower (i) liquidate or dissolve,  in
whole  or  in  part;  (ii)  consolidate,   merge  or  enter  into  any  form  of
consolidation with or into any other Person,  nor convey,  transfer or lease its
or Borrower's  assets  substantially as an entirety to any Person nor permit any
Person to  consolidate,  merge or enter into any form of  consolidation  with or
into itself or Borrower, nor convey,  transfer or lease its or Borrower's assets
substantially  as an entirety to any Person;  and (iii) amend any  provisions of
its or Borrower's  organizational  documents  containing  provisions  similar to
those contained in this Article IX.

         (D) Each of Borrower and Member shall  promptly  elect and at all times
maintain at least one independent director (an "Outside Director"), who shall be
selected  by Member or the sole  member of  Member,  respectively,  and shall be
reasonably  satisfactory  to Lender  and shall not have been at the time of such
individual's  appointment as Outside Director, and may not have been at any time
during  the  preceding  five  years  (except  solely by virtue of such  person's
serving as an independent  director or  independent  manager of any Affiliate of
Borrower  or Manager  (other  than HRPT or any  Person  directly  or  indirectly
controlling any Borrower Party)), (i) a shareholder, member or partner of, or an
officer,  director,  paid  consultant  or  employee  of,  Borrower or any of its
shareholders,  members,

                                      -58-
<PAGE>

partners,  subsidiaries or Affiliates, (ii) a customer, supplier or creditor of,
or any Person that has provided any service in any form  whatsoever  to Borrower
or any Affiliate of Borrower or any of their respective  shareholders,  members,
partners, subsidiaries or Affiliates, (iii) a Person controlling or under common
control  with any such  shareholder,  director,  partner,  member,  supplier  or
customer,  or (iv) a member of the  immediate  family  of any such  shareholder,
member,  officer,  director,  partner,  employee,  supplier or customer. As used
herein, the term "control" means the possession,  directly or indirectly, of the
power to direct or cause the direction of  management  and policies of a Person,
whether  through  ownership  of  voting   securities  or  beneficial   ownership
interests, by contract or otherwise.

                                   ARTICLE X
                RESTRUCTURING LOAN, SECONDARY MARKET TRANSACTIONS

Section 10.1  Secondary  Market  Transactions  Generally.  Lender shall have the
right to engage in one or more Secondary Market Transactions with respect to the
Loan, and to structure and  restructure  all or any part of the Loan,  including
without limitation in multiple tranches,  as a wraparound loan, or for inclusion
in a REMIC or other  Securitization.  Without limitation,  Lender shall have the
right to cause the Note and the  Mortgage  to be split into a first and a second
mortgage loan, or into a one or more loans secured by mortgages and by ownership
interests in Borrower in whatever  proportion Lender determines,  and thereafter
to engage in Secondary  Market  Transactions  with respect to all or any part of
the indebtedness and loan  documentation.  Each Borrower Party acknowledges that
it is the  intention  of the  parties  that all or a portion of the Loan will be
securitized  and that all or a portion  of the Loan will be rated by one or more
Rating  Agencies.  Each Borrower  Party  further  acknowledges  that  additional
structural  modifications may be required to satisfy issues raised by any Rating
Agencies.  As used herein,  "Secondary Market  Transaction" means any of (i) the
sale, assignment,  or other transfer of all or any portion of the Obligations or
the Loan Documents or any interest  therein to one or more  investors,  (ii) the
sale,  assignment,  or other transfer of one or more participation  interests in
the  Obligations  or Loan  Documents  to one or more  investors,  or  (iii)  the
transfer or deposit of all or any portion of the  Obligations  or Loan Documents
to or with one or more trusts or other entities which may sell  certificates  or
other instruments to investors evidencing an ownership interest in the assets of
such  trust or the right to  receive  income or  proceeds  therefrom  including,
without limitation, in connection with a Securitization.

Section 10.2 Cooperation; Limitations. Borrower Parties shall use all reasonable
efforts and cooperate  reasonably and in good faith with Lender in effecting any
such  restructuring or Secondary  Market  Transaction.  Such  cooperation  shall
include without limitation,  executing and delivering such reasonable amendments
to the Loan  Documents  and the  organizational  documents  of Primary  Borrower
Parties  as  Lender  may  reasonably  request,  provided  however  that  no such
amendment  shall modify (i) the interest rate payable  under the Note;  (ii) the
stated maturity date of the Note, (iii) the amortization of the principal amount
of the Note, (iv) any other material economic terms of the Obligations,  (v) the
non-recourse  provisions of the Loan or (vi) any provision,  the effect of which
would  materially  increase   Borrower's   obligations  or  materially  decrease
Borrower's rights under the Loan Documents.  Such cooperation also shall include
using  reasonable  efforts  to obtain  such  certificates  and  assurances  from
governmental  entities  and others as Lender may  reasonably  request.  Borrower
Parties  shall not be required  to provide  additional  collateral  that was not
initially  contemplated  by the  parties  to effect  any such  restructuring  or
Secondary Market Transaction after the Closing Date.  Borrower Parties shall not
be  required to pay any third  party  costs and  expenses  incurred by Lender in
connection with any

                                      -59-
<PAGE>

such  Secondary  Market  Transaction  unless  otherwise  payable by the Borrower
Parties under this Loan Agreement or the other Loan Documents.

Section  10.3  Information.  At no  cost or  expense  to the  Borrower  Parties,
Borrower Parties shall provide such access to personnel and such information and
documents relating to Borrower Parties, Manager, the Property and Collateral and
the business and operations of all of the foregoing and such opinions of counsel
(including,  without  limitation,   nonconsolidation  opinions)  as  Lender  may
reasonably  request or as any Rating Agency may request in  connection  with any
such  Secondary  Market  Transaction  including,  without  limitation,   updated
financial information,  appraisals, market studies, environmental reviews (Phase
I's and, if appropriate,  Phase II's),  property condition reports and other due
diligence  investigations together with appropriate verification of such updated
information and reports  through letters of auditors and consultants  and, as of
the closing date of the Secondary Market  Transaction,  updated  representations
and warranties  made in the Loan Documents and such  additional  representations
and warranties as Lender or the Rating Agencies may reasonably  require.  Lender
shall be permitted to share all such  information  with the  investment  banking
firms, Rating Agencies,  accounting firms, law firms, other third party advisory
firms,  potential  investors,  servicers and other  service  providers and other
parties  involved  in  any  proposed  Secondary  Market  Transaction.   Borrower
understands  that any such  information  may be  incorporated  into any offering
circular,  prospectus,  prospectus  supplement,  private placement memorandum or
other offering documents for any Secondary Market Transaction. Lender and all of
the aforesaid third-party advisors and professional firms and investors shall be
entitled to rely upon such information. Without limiting the foregoing, Borrower
and Guarantor  shall provide in connection  with each of (i) a preliminary and a
final private placement memorandum or (ii) a preliminary and final prospectus or
prospectus supplement, as applicable (the documents referred to in the foregoing
clauses (i) and (ii), collectively,  the "Disclosure  Documents"),  an agreement
certifying that Borrower and Guarantor have examined such  Disclosure  Documents
specified  by Lender and that each such  Disclosure  Document,  as it relates to
Borrower, Guarantor, any Affiliates, the Property, Manager and all other aspects
of the Loan, does not, and as to information  provided in third party reports of
engineers  and   environmental   consultants,   to  Borrower's  and  Guarantor's
knowledge,  does not, contain any untrue statement of a material fact or omit to
state a material  fact  necessary in order to make the  statements  made, in the
light of the circumstances under which they were made, not misleading.  Borrower
and Guarantor shall indemnify, defend, protect and hold harmless Lender, Merrill
Lynch, Pierce, Fenner & Smith Incorporated  ("Merrill Lynch"),  their respective
Affiliates,  directors,  employees, agents and each Person, if any, who controls
Lender,  Merrill Lynch or any such Affiliate within the meaning of Section 15 of
the Securities Act of 1993 or Section 20 of the Securities Exchange Act of 1934,
and any other placement agent or underwriter with respect to any  Securitization
or Secondary Market  Transaction from and against any losses,  claims,  damages,
liabilities,  costs and  expenses  (including,  without  limitation,  reasonable
attorneys'  fees and  disbursements)  that  arise out of or are  based  upon any
untrue  statement or alleged untrue  statement of any material fact contained in
any  information  or  documents  furnished  by  Borrower,   Guarantor  or  their
Affiliates  or  representative  or in  any  representation  or  warranty  of any
Borrower Party  contained  herein or in the other Loan Documents or arise out of
or are based upon the omission or alleged  omission to state  therein a material
fact required to be stated in such information or necessary in order to make the
statements in such information not materially  misleading.  Lender may publicize
the

                                      -60-
<PAGE>

existence of the  Obligations  in  connection  with  Lender's  Secondary  Market
Transaction activities or otherwise.

Section 10.4 Additional Provisions. In any Secondary Market Transaction,  Lender
may transfer its obligations  under this Loan Agreement and under the other Loan
Documents (or may transfer the portion thereof  corresponding to the transferred
portion of the  Obligations),  and  thereafter  Lender  shall be relieved of any
obligations  hereunder and under the other Loan Documents arising after the date
of said  transfer  with respect to the  transferred  interest.  Each  transferee
investor shall become a "Lender" hereunder.

                                   ARTICLE XI
                 RESTRICTIONS ON LIENS, TRANSFERS; ASSUMABILITY

Section  11.1  Restrictions  on Transfer  and  Encumbrance.  Except as expressly
permitted in this Article XI or as otherwise expressly permitted under this Loan
Agreement or in the other Loan Documents,  Borrower shall not cause or suffer to
occur or  exist,  directly  or  indirectly,  voluntarily  or  involuntarily,  by
operation of law or otherwise,  any sale,  transfer,  mortgage,  pledge, Lien or
encumbrance  (other than Permitted  Encumbrances)  of (i) all or any part of the
Property or any interest  therein,  or (ii) any direct or indirect  ownership or
beneficial  interest  in  Borrower,  irrespective  of the  number  of  tiers  of
ownership, without the prior written consent of Lender.

Section 11.2 Transfers of Beneficial Interests in Borrower. For purposes of this
Section, a sale or transfer of a beneficial interest in Borrower shall be deemed
to include, but is not limited to:

         (A) if Borrower or any general  partner or managing  member of Borrower
is a corporation, (i) the voluntary or involuntary sale, conveyance, transfer or
pledge  of a  majority  of  such  corporation's  stock  (or  the  stock  of  any
corporation directly or indirectly  controlling such corporation by operation of
law or otherwise)  or (ii) the creation or issuance of new stock,  in any of the
foregoing  cases,  by which an aggregate of more than 49% of such  corporation's
stock shall be vested in a party or parties who are not now stockholders;

         (B) if Borrower or any general  partner or managing  member of Borrower
is a limited  liability  company,  (i) the change,  removal or  resignation of a
managing  member of Borrower or such general partner or member or (ii) the sale,
conveyance, transfer or pledge of all or any portion of the membership interests
of a managing member (or for a single member limited liability company, the sole
member) of Borrower or such general partner or managing member or any profits or
proceeds  relating  to such  membership  interest;  provided,  however,  that if
Borrower  or any  general  partner or  managing  member of  Borrower is a single
member limited liability company,  the sale,  conveyance,  transfer or pledge in
the aggregate of not more than 49% of the sole member's  interest in Borrower or
such general  partner or managing member shall not constitute a sale or transfer
prohibited by this Section 11 provided that such sale,  conveyance,  transfer or
pledge  does not in the  aggregate  result in a change of control of Borrower or
such general partner or managing member;

                                      -61-
<PAGE>

         (C) if Borrower, or any general partner or managing member of Borrower,
is a limited or general partnership, (i) the change, removal or resignation of a
managing  general  partner or  managing  partner  or (ii) the sale,  conveyance,
transfer or pledge of all or any portion of the  general  partner's  interest of
any general partner or managing  partner or any profits or proceeds  relating to
such partnership interest; or

         (D) if Borrower or any general  partner or managing  member of Borrower
is a limited  partnership or limited liability  company,  the sale,  conveyance,
transfer or pledge of limited partnership  interests or non-managing  membership
interests which in the aggregate constitute more than a 49% interest in Borrower
or any managing  general partner or managing member of Borrower,  or any profits
or proceeds  relating to such  limited  partnership  interests  or  non-managing
membership interests.

Notwithstanding the foregoing, the sale, transfer, issuance,  conveyance, pledge
or  hypothecation  of any  shares  of  stock in HRPT,  the  recapitalization  or
restructuring of any debt and/or  shareholders'  equity of HRPT or the merger or
consolidation  of HRPT with or into another Person shall not be deemed a sale or
transfer of a beneficial interest in Borrower for purposes of this Section.  Any
reference in this  paragraph to HRPT shall also apply to any  successor to HRPT,
whether by operation of law or otherwise.

Section 11.3 Assumability.

         (A) In the event  Borrower  desires to transfer  all of the Property to
another  party (the  "Transferee  Borrower")  and have the  Transferee  Borrower
assume  all of  Borrower's  obligations  under  the  Loan  Documents,  and  have
replacement  guarantors  and  indemnitors  assume all of the  obligations of the
indemnitors and guarantors of the Loan Documents,  and have replacement pledgors
pledge all of the ownership interests in the Transferee Borrower  (collectively,
a "Transfer and Assumption"),  Borrower may make a written application to Lender
for Lender's  consent to the Transfer and Assumption,  subject to the conditions
set forth in paragraphs (B) and (C) of this Section.  Together with such written
application, Borrower will pay to Lender the reasonable review fee then required
by Lender.  Borrower  also shall pay on demand all of the  reasonable  costs and
expenses incurred by Lender,  including reasonable attorneys' fees and expenses,
and  including  the fees and  expenses  of Rating  Agencies  and  other  outside
entities,  in connection with considering any proposed  Transfer and Assumption,
whether or not the same is permitted or occurs.

         (B) Lender  shall not  unreasonably  withhold its consent to a Transfer
and Assumption provided and upon the conditions that:

               (i) No Event of Default shall have occurred and be continuing;

               (ii) Borrower  shall have  submitted to Lender true,  correct and
complete  copies of any and all information and documents of any kind reasonably
requested by Lender concerning the Property,  Transferee  Borrower,  replacement
guarantors and indemnitors and Borrower;

               (iii)  Evidence  satisfactory  to Lender shall have been provided
showing  that the  Transferee  Borrower and such of its  Affiliates  as shall be
designated by Lender comply and will

                                      -62-
<PAGE>

comply with  Article IX, as those  provisions  may be modified by Lender  taking
into account the ownership structure of Transferee Borrower and its Affiliates;

               (iv) Borrower  shall have  obtained  (and  delivered to Lender) a
Rating  Confirmation with respect to the Transfer and Assumption and all related
transactions;

               (v) Borrower shall have paid all of Lender's reasonable costs and
expenses in connection with  considering the Transfer and Assumption,  and shall
have paid the amount requested by Lender as a deposit against Lender's costs and
expenses in connection with effecting the Transfer and Assumption;

               (vi)  Borrower,  the  Transferee  Borrower,  and the  replacement
guarantors and indemnitors shall have indicated in writing in form and substance
reasonably  satisfactory  to Lender their  readiness  and ability to satisfy the
conditions set forth in Subsection (C) below; and

               (vii) The identity,  experience,  and financial  condition of the
Transferee  Borrower and the  replacement  guarantors and  indemnitors  shall be
satisfactory to Lender in its sole discretion.

         (C) If Lender consents to the Transfer and  Assumption,  the Transferee
Borrower  and/or  Borrower,  as the case may be, shall  immediately  deliver the
following to Lender:

               (i) Borrower  shall  deliver to Lender an  assumption  fee in the
amount of one-half of one percent (.50%) of the then unpaid principal balance of
the Loan;

               (ii) Borrower,  Transferee Borrower, the original and replacement
guarantors  and  indemnitors  shall  execute and  deliver any and all  documents
reasonably  required by Lender,  in form and  substance  reasonably  required by
Lender;

               (iii)  Counsel  to  the  Transferee   Borrower  and   replacement
guarantors  and  indemnitors  shall  deliver  to  Lender  opinions  in form  and
substance  satisfactory  to Lender as to such  matters  as Lender and the Rating
Agencies  shall   reasonably   require,   which  may  include   opinions  as  to
substantially  the  same  matters  as  were  required  in  connection  with  the
origination   of  the  Loan   including,   without   limitation,   a  bankruptcy
non-consolidation opinion;

               (iv)  Borrower  shall  cause  to  be  delivered  to  Lender,   an
endorsement  (relating to the change in the identity of the vestee and execution
and delivery of the Transfer and  Assumption  documents)  to Lender's  policy of
title  insurance  in form  and  substance  acceptable  to  Lender,  in  Lender's
reasonable discretion; and

               (v) Borrower  shall  deliver to Lender a payment in the amount of
all remaining  unpaid costs  incurred by Lender in connection  with the Transfer
and  Assumption,  including  but not limited  to,  Lender's  attorneys  fees and
expenses,  all  recording  fees,  and all fees  payable to the title  company in
connection with the Transfer and Assumption.

                                      -63-
<PAGE>

                                  ARTICLE XII
                        RECOURSE; LIMITATIONS ON RECOURSE

Section 12.1 Limitations on Recourse. Subject to the provisions of this Article,
and notwithstanding any provision of the Loan Documents other than this Article,
no  personal  liability  shall be  asserted,  sought  or  obtained  by Lender or
enforceable  against (i) any Borrower Party,  (ii) any Affiliate of any Borrower
Party, (iii) any Person owning, directly or indirectly,  any legal or beneficial
interest in any Borrower  Party or any  Affiliate of any Borrower  Party or (iv)
any  partner,  member,  principal,  officer,  controlling  person,  beneficiary,
trustee,  advisor,  shareholder,  employee,  agent, Affiliate or director of any
Persons  described  in  clauses  (i)  through  (iv)  above  (collectively,   the
"Exculpated  Parties")  by  Lender  in  respect  of the  Obligations,  this Loan
Agreement,  the Mortgage,  the Note, the Property or any other Loan Document, or
the making,  issuance or transfer  thereof,  all such  liability,  if any, being
expressly  waived  by  Lender  and each  successive  holder  of the Note and the
Mortgage shall accept the Note and the Mortgage upon the express  condition that
Lender's sole recourse for the Obligations and the performance and observance of
the obligations contained in this Loan Agreement, the Note, the Mortgage and the
other Loan Documents  shall be to exercise any or all of its rights and remedies
with respect to the Property, the Rents and other Collateral including,  without
limitation, any or all of the following:

               (i)  Foreclosure  of the lien of the Mortgage in accordance  with
the terms and provisions set forth in the Mortgage;

               (ii)  Action  against  any other  security  at any time  given to
secure the payment of the Note and under the other Loan Documents;

               (iii)  Exercise  of any  other  remedy  set  forth  in this  Loan
Agreement, the Mortgage or any other Loan Document.

Notwithstanding anything to the contrary in this Loan Agreement, the Mortgage or
any of the Loan  Documents,  Lender shall not be deemed to have waived any right
which  Lender  may have  under  Section  506(a),  506(b),  1111(b)  or any other
provisions  of the  Bankruptcy  Code to file a claim for the full  amount of the
Obligations  secured by the  Mortgage or to require  that all  collateral  shall
continue to secure all of the Obligations owing to Lender in accordance with the
Loan Documents.

Section 12.2 Partial Recourse. Notwithstanding Section 12.1, Borrower, Guarantor
and any general partner of Borrower shall be personally  liable in the amount of
any liability,  loss, damage,  cost or expense  (including,  without limitation,
attorneys' fees and expenses)  resulting from any and all of the following:  (i)
fraud; (ii) material and intentional  misrepresentation by any Borrower Party in
this Loan  Agreement or any other Loan Document or otherwise in connection  with
obtaining the Loan; (iii) insurance proceeds, condemnation awards, or other sums
or payments  attributable  to the Property which Borrower has received and which
are not applied in accordance  with the provisions of the Loan  Documents;  (iv)
all rents,  profits,  issues,  products and income of the  Property  received or
collected  by or on behalf of Borrower or any Borrower  Party and not  deposited
into the Central  Account in accordance with Article VII and the Cash Management
Agreement or otherwise  received after the occurrence and during the

                                      -64-
<PAGE>

continuance  of an Event of Default  (other than by Lender or Servicer)  and not
applied  in  accordance  with the Loan  Documents;  (v)  failure to turn over to
Lender,  after the occurrence and during the continuance of an Event of Default,
or  misappropriation  of any tenant  security  deposits  or rents  collected  in
advance  (other  than by Lender or  Servicer);  (vi)  failure by  Borrower,  any
general  partner of Borrower,  or any indemnitor or guarantor to comply with the
covenants, obligations, liabilities, warranties and representations contained in
the Environmental  Indemnity or otherwise  pertaining to environmental  matters;
(vii) waste; (viii) all reasonable costs and expenses, including attorneys' fees
and expenses,  incurred in collecting  any amount due under the Loan  Documents;
(ix) all  liabilities  and  expenses  under the  indemnification  provisions  of
Section 10.3 and (x) any actual, attempted or purported modification, amendment,
termination or surrender of the Ground Lease (except  pursuant to a rejection of
the Ground Lease in any proceeding  under the Bankruptcy  Code in which Borrower
or the ground lessor is a debtor) without the prior written consent of Lender.

Section 12.3  Miscellaneous.  No provision of this Article  shall (i) affect the
enforcement  of the  Environmental  Indemnity,  the  Guaranty or any guaranty or
similar  agreement  executed in connection with the Loan, (ii) release or reduce
the debt  evidenced  by the Note,  (iii)  impair the lien of the Mortgage or any
other  security  document,  (iv)  impair  the  rights of Lender to  enforce  any
provisions  of the Loan  Documents,  or (v) limit  Lender's  ability to obtain a
deficiency  judgment or judgment on the Note or  otherwise  against any Borrower
Party to the extent necessary to obtain any amount for which such Borrower Party
may be  personally  liable in  accordance  with this  Article  or any other Loan
Document.

                                  ARTICLE XIII
                 WAIVERS OF DEFENSES OF GUARANTORS AND SURETIES

                  To the extent  that any  Borrower  Party (in this  Article,  a
"Waiving  Party") is deemed for any reason to be a guarantor or surety of or for
any other  Borrower  Party or to have rights or obligations in the nature of the
rights or obligations  of a guarantor or surety  (whether by reason of execution
of a  guaranty,  provision  of  security  for the  obligations  of  another,  or
otherwise)  then this  Article  shall apply.  This Article  shall not affect the
rights of the  Waiving  Party other than to waive or limit  rights and  defenses
that  Waiving  Party would have (i) in its  capacity as a guarantor or surety or
(ii) in its  capacity  as one having  rights or  obligations  in the nature of a
guarantor or surety.  Waiving  Party,  in the  broadest  and most  comprehensive
sense,  hereby  waives  any and all  claims,  rights,  or  defenses  that may be
asserted by a guarantor or surety against a creditor.  Without limitation of the
foregoing:

                  Waiving Party hereby waives diligence,  presentment, demand of
payment,  filing  of  claims  with a  court  in the  event  of  receivership  or
bankruptcy of any of the other Borrower Parties,  protest or notice with respect
to any of the  obligations  of any of the other  Borrower  Parties,  setoffs and
counterclaims  and  all  presentments,   demands  for  performance,  notices  of
nonperformance, protests, notices of protest, notices of dishonor and notices of
acceptance,  the benefits of all statutes of  limitation,  and all other demands
whatsoever (and,  except to the extent expressly  required under any of the Loan
Documents,  shall not require that the same be made on any of the other Borrower
Parties as a condition  precedent  to the  obligations  of Waiving  Party),  and
covenants that the Loan  Documents  will not be  discharged,  except by complete
payment and performance of the obligations evidenced and secured thereby, except
only as limited by the

                                      -65-
<PAGE>

express  contractual  provisions  of the Loan  Documents.  Waiving Party further
waives all notices that the principal amount, or any portion thereof, and/or any
interest  on any  instrument  or  document  evidencing  all or any  part  of the
obligations  of any of the other Borrower  Parties to Lender is due,  notices of
any and all proceedings to collect from any of the other Borrower Parties or any
endorser or any other guarantor of all or any part of their obligations, or from
any other  person or entity,  and, to the extent  permitted  by law,  notices of
exchange,  sale, surrender or other handling of any security or collateral given
to Lender to secure payment of all or any part of the  obligations of any of the
other Borrower Parties.

                  Except only to the extent  provided  otherwise  in the express
contractual  provisions of the Loan Documents,  Waiving Party hereby agrees that
all of its  obligations  under the Loan Documents shall remain in full force and
effect,  without  defense,  offset or counterclaim of any kind,  notwithstanding
that any right of Waiving  Party  against any of the other  Borrower  Parties or
defense of Waiving Party against Lender may be impaired, destroyed, or otherwise
affected  by reason of any action or  inaction  on the part of  Lender.  Waiving
Party waives all rights and  defenses  arising out of an election of remedies by
the Lender,  even  though that  election of  remedies,  may have  destroyed  the
Waiving  Party's  rights of  subrogation  and  reimbursement  against  the other
Borrower Parties.

                  Lender is hereby  authorized,  without notice or demand,  from
time to time, (a) to renew, extend,  accelerate or otherwise change the time for
payment of, or other terms  relating to, all or any part of the  obligations  of
any of the other Borrower Parties;  (b) to accept partial payments on all or any
part of the  obligations of any of the other Borrower  Parties;  (c) to take and
hold  security  or  collateral  for  the  payment  of  all or  any  part  of the
obligations  of any of the other  Borrower  Parties;  (d) to exchange,  enforce,
waive and release any such security or collateral for such  obligations;  (e) to
apply such security or collateral and direct the order or manner of sale thereof
as in  its  discretion  it may  determine;  (f) to  settle,  release,  exchange,
enforce,  waive, compromise or collect or otherwise liquidate all or any part of
such obligations and any security or collateral for such obligations. Any of the
foregoing  may be done in any  manner,  and Waiving  Party  agrees that the same
shall not  affect or impair the  obligations  of  Waiving  Party  under the Loan
Documents.

                  Waiving Party hereby assumes responsibility for keeping itself
informed of the financial condition of all of the other Borrower Parties and any
and all endorsers  and/or other guarantors of all or any part of the obligations
of the other Borrower Parties,  and of all other circumstances  bearing upon the
risk of  nonpayment  of such  obligations,  and Waiving Party hereby agrees that
Lender shall have no duty to advise  Waiving  Party of  information  known to it
regarding such condition or any such circumstances.

                  Waiving  Party  agrees that  neither  Lender nor any person or
entity  acting  for or on  behalf of Lender  shall be under  any  obligation  to
marshall any assets in favor of Waiving Party or against or in payment of any or
all of the obligations secured hereby. Waiving Party further agrees that, to the
extent that any of the other Borrower  Parties or any other  guarantor of all or
any part of the  obligations  of the other  Borrower  Parties makes a payment or
payments to Lender, or Lender receives any proceeds of collateral for any of the
obligations of the other Borrower Parties, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid or refunded,  then,

                                      -66-
<PAGE>

to the extent of such payment or repayment,  the part of such obligations  which
has been paid,  reduced or  satisfied  by such amount  shall be  reinstated  and
continued  in full force and effect as of the time  immediately  preceding  such
initial payment, reduction or satisfaction.

                  Waiving  Party (i)  shall  have no right of  subrogation  with
respect to the obligations of the other Borrower Parties;  (ii) waives any right
to enforce any remedy that Lender now has or may  hereafter  have against any of
the other  Borrower  Parties any endorser or any guarantor of all or any part of
such  obligations or any other person;  and (iii) waives any benefit of, and any
right to  participate  in, any security or collateral  given to Lender to secure
the payment or performance  of all or any part of such  obligations or any other
liability of the other parties to Lender.

                  Waiving  Party agrees that any and all claims that it may have
against any of the other Borrower  Parties,  any endorser or any other guarantor
of all or any part of the obligations of the other Borrower Parties,  or against
any of their respective properties, shall be subordinate and subject in right of
payment  to the  prior  payment  in  full  of all  obligations  secured  hereby.
Notwithstanding  any right of any of the Waiving Party to ask, demand,  sue for,
take or receive any payment from the other Borrower Parties,  all rights,  liens
and security  interests of Waiving Party,  whether now or hereafter  arising and
howsoever existing,  in any assets of any of the other Borrower Parties (whether
constituting  part of the  security  or  collateral  given to  Lender  to secure
payment of all or any part of the  obligations of the other Borrower  Parties or
otherwise) shall be and hereby are subordinated to the rights of Lender in those
assets.

                                  ARTICLE XIV
                                  MISCELLANEOUS

Section  14.1  Expenses and  Attorneys'  Fees.  Whether or not the  transactions
contemplated  hereby shall be  consummated,  Borrower agrees to promptly pay all
reasonable  fees,  costs and expenses  incurred by Lender in connection with any
matters  contemplated  by or arising out of this Loan  Agreement,  including the
following,  and  all  such  fees,  costs  and  expenses  shall  be  part  of the
Obligations,  payable  on  demand:  (A)  reasonable  fees,  costs  and  expenses
(including  reasonable  attorneys'  fees,  and other  professionals  retained by
Lender)  incurred in  connection  with the  examination,  review,  due diligence
investigation, documentation and closing of the financing arrangements evidenced
by the Loan  Documents;  (B)  reasonable  fees,  costs and  expenses  (including
reasonable attorneys' fees and other professionals  retained by Lender) incurred
in connection with the administration of the Loan Documents and the Loan and any
amendments,  modifications  and waivers relating  thereto;  (C) reasonable fees,
costs and expenses (including reasonable attorneys' fees) incurred in connection
with the review, documentation,  negotiation,  closing and administration of any
subordination  or intercreditor  agreements;  and (D) reasonable fees, costs and
expenses (including attorneys' fees and fees of other professionals  retained by
Lender)  incurred in any action to enforce or interpret  this Loan  Agreement or
the other Loan Documents or to collect any payments due from Borrower under this
Loan  Agreement,  the Note or any other Loan  Document or incurred in connection
with any refinancing or restructuring of the credit arrangements  provided under
this Loan Agreement,  whether in the nature of a "workout" or in connection with
any insolvency or bankruptcy  proceedings  or otherwise.  Any costs and expenses
due and payable to Lender after the Closing Date may be paid to Lender  pursuant
to the Cash Management Agreement.

                                      -67-
<PAGE>

Section  14.2  Indemnity.  In  addition  to the  payment of expenses as required
elsewhere herein,  whether or not the transactions  contemplated hereby shall be
consummated, Borrower agrees to indemnify, defend, protect, pay and hold Lender,
its successors and assigns (including,  without  limitation,  the trustee and/or
the  trust  under  any  trust   agreement   executed  in  connection   with  any
Securitization backed in whole or in part by the Loan and any other Person which
may  hereafter  be the  holder  of the Note or any  interest  therein),  and the
officers,  directors,  stockholders,  partners,  members,  employees, agents and
Affiliates of Lender and such  successors and assigns  (collectively  called the
"Indemnitees")  harmless from and against any and all liabilities,  obligations,
losses, damages, penalties,  actions, judgments, suits, claims, Tax Liabilities,
broker's or finders fees,  reasonable  costs,  expenses and disbursements of any
kind or nature  whatsoever  (including the reasonable fees and  disbursements of
counsel   for  such   Indemnitees   in   connection   with  any   investigative,
administrative or judicial  proceeding  commenced or threatened,  whether or not
such  Indemnitee  shall be  designated a party  thereto) that may be imposed on,
incurred by, or asserted against that  Indemnitee,  in any manner relating to or
arising out of any of the following (to the extent that insurance  proceeds paid
on account of same shall be inadequate)  (A) the  enforcement of any of the Loan
Documents; (B) any breach by Borrower of any representation, warranty, covenant,
or other  agreement  contained in any of the Loan  Documents;  (C) the presence,
release,  threatened  release,  disposal,  removal,  or cleanup of any Hazardous
Material located on, about, within or affecting the Property or any violation of
any applicable  Environmental  Law for which  Borrower is liable;  (D) any claim
brought by any third party  arising out of any  condition  or  occurrence  at or
pertaining to the Property;  (E) any design,  construction,  operation,  repair,
maintenance,  use,  non-use  or  condition  of  the  Property  or  Improvements,
including  claims or penalties  arising from violation of any applicable laws or
insurance  requirements,  as well as any  claim  based on any  patent  or latent
defect,  whether or not discoverable by Lender; (F) any performance of any labor
or services or the  furnishing of any materials or other  property in respect of
the Property or any part thereof;  (G) any contest referred to in Section 5.3(B)
hereof;  (H) any  obligation  or  undertaking  relating  to the  performance  or
discharge  of  any  of the  terms,  covenants  and  conditions  of the  landlord
contained  in the Leases;  (I) any action or  proceeding  relating to the Ground
Lease  including,  without  limitation,  any case commenced by or against Ground
Lessor under the Bankruptcy  Code or any applicable  state or local  bankruptcy,
insolvency or similar law; or (J) the use or intended use of the proceeds of any
of the Loan (the foregoing  liabilities herein  collectively  referred to as the
"Indemnified  Liabilities");  provided, however, that Borrower shall be relieved
of its  obligations  to an  Indemnitee  under this  Section 14.2 with respect to
Indemnified  Liabilities  arising  (i)  from the  gross  negligence  or  willful
misconduct of such Indemnitee as determined by a court of competent jurisdiction
or (ii) from any of the matters  described in clauses  (C)-(I)  above  occurring
after the date (the  "Transfer  Date") of transfer  of title to the  Property to
such Indemnitee by foreclosure,  deed-in-lieu  thereof, the exercise of power of
sale or otherwise,  except for any Indemnified Liabilities arising under clauses
(C) or (E) above as a result of any Hazardous Material located on, about, within
or affecting  the Property or any latent  defect  affecting  the Property  which
existed prior to the Transfer  Date.  Any amounts  payable to any  Indemnitee by
reason of the  application  of this  Section 14.2 shall be payable on demand and
shall bear  interest  at the  Default  Rate from the date such loss or damage is
sustained by any  Indemnitee  until paid.  The  obligations  and  liabilities of
Borrower  under this  Section  14.2 shall  survive  the term of the Loan and the
exercise  by Lender of any of its rights or remedies  under the

                                      -68-
<PAGE>
Loan  Documents,  including the  acquisition of the Property by foreclosure or a
conveyance in lieu of foreclosure.

Section 14.3 Amendments and Waivers.  Except as otherwise  provided  herein,  no
amendment,  modification,  termination  or waiver of any  provision of this Loan
Agreement,  the Note or any other Loan  Document,  or  consent to any  departure
therefrom,  shall in any event be effective  unless the same shall be in writing
and  signed  by  Lender  and any  other  party to be  charged.  Each  amendment,
modification,  termination  or waiver  shall be  effective  only in the specific
instance  and for the specific  purpose for which it was given.  No notice to or
demand on Borrower  in any case shall  entitle  Borrower or other  Person to any
other or further notice or demand in similar or other circumstances  (except for
any notices as expressly required herein or under the other Loan Documents).

Section 14.4 Retention of Borrower's  Documents.  Lender may, in accordance with
Lender's  customary  practices,  destroy or otherwise  dispose of all documents,
schedules,  invoices or other  papers,  delivered  by Borrower to Lender  unless
Borrower  requests in writing  that same be  returned.  Upon such request and at
such Borrower's expense, Lender shall return such papers when Lender's actual or
anticipated need for same has terminated.

Section 14.5 Notices.  Unless otherwise specifically provided herein, any notice
or other communication required or permitted to be given shall be in writing and
addressed to the respective party as set forth below. Notices shall be effective
(i) three  (3) days  after the date  such  notice  is  mailed,  (ii) on the next
Business Day if sent by a nationally recognized overnight courier service, (iii)
on  the  date  of  delivery  by  personal  delivery  and  (iv)  on the  date  of
transmission  if sent  by  telefax  during  business  hours  on a  Business  Day
(otherwise on the next Business Day) (with receipt of confirmation).

Notices shall be addressed as follows:

If to Borrower or any Borrower Party:

c/o HRPT Properties Trust
400 Centre Street
Newton, Massachusetts 02458-2076
Attn:  Jennifer Clark, Esq.
Facsimile: (617) 928-1305

With copies to:

Skadden, Arps, Slate, Meagher & Flom LLP
4 Times Square
New York, New York 10036
Attn:    Harvey R. Uris, Esq.
Facsimile: (917) 977-2212

                                      -69-
<PAGE>

If to Lender:

c/o Merrill Lynch & Co.
100 Church Street
18th Floor
New York, New York 10080
Attn:  Andrea Balkan
Facsimile:  (212) 602-7552

With a copy to:

Sidley & Austin
875 Third Avenue
New York, New York 10022
Attn:    Robert L. Boyd, Esq.
Facsimile:  (212) 906-2021

Any party may  change the  address at which it is to receive  notices to another
address  in the  United  States  at  which  business  is  conducted  (and  not a
post-office box or other similar receptacle), by giving notice of such change of
address in accordance with the foregoing. This provision shall not invalidate or
impose  additional  requirements for the delivery or effectiveness of any notice
(i) given in accordance with  applicable  statutes or rules of court, or (ii) by
service of process in accordance with applicable law. If there is any assignment
or  transfer of  Lender's  interest  in the Loan,  then the new Lenders may give
notice to the parties in accordance with this Section,  specifying the addresses
at which the new Lenders  shall  receive  notice,  and they shall be entitled to
notice at such address in accordance with this Section.

Section 14.6  Survival of Warranties  and Certain  Agreements.  All  agreements,
representations  and  warranties  made herein shall  survive the  execution  and
delivery  of this  Loan  Agreement,  the  making of the Loan  hereunder  and the
execution  and  delivery  of the  Note.  Notwithstanding  anything  in this Loan
Agreement or implied by law to the contrary,  the agreements of Borrower Parties
to indemnify or release Lender or Persons related to Lender,  or to pay Lender's
costs,  expenses,  or  taxes  shall  survive  the  payment  of the  Loan and the
termination of this Loan Agreement.

Section 14.7 Failure or Indulgence Not Waiver;  Remedies Cumulative.  No failure
or delay on the part of Lender in the exercise of any power,  right or privilege
hereunder or under the Note or any other Loan Document  shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein,  nor shall any single or partial  exercise of any such power,  right or
privilege  preclude  other or further  exercise  thereof or of any other  right,
power or privilege.  All rights and remedies existing under this Loan Agreement,
the Note and the other Loan  Documents are  cumulative to, and not exclusive of,
any rights or remedies otherwise available.

Section  14.8  Marshaling;  Payments  Set Aside.  Lender  shall not be under any
obligation to marshal any assets in favor of any Person or against or in payment
of any or all of the Obligations.  To the extent that any Person makes a payment
or payments to Lender,  or Lender

                                      -70-
<PAGE>
enforces its  remedies or  exercises  its rights of set off, and such payment or
payments or the proceeds of such  enforcement or set off or any part thereof are
subsequently invalidated,  declared to be fraudulent or preferential,  set aside
and/or required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such recovery,  the Obligations or part thereof originally intended to
be satisfied,  and all Liens, if any, and rights and remedies therefor, shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or set off had not occurred.

Section 14.9 Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation  under this Loan  Agreement,  the
Note or other Loan Documents  shall not affect or impair the validity,  legality
or  enforceability  of the remaining  provisions or obligations  under this Loan
Agreement,  the Note or other Loan  Documents or of such provision or obligation
in any other jurisdiction.

Section 14.10 Headings.  Section and subsection  headings in this Loan Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Loan  Agreement for any other  purpose or be given any  substantive
effect.

Section 14.11  APPLICABLE  LAW. THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS
WERE  NEGOTIATED  IN THE STATE OF NEW YORK,  AND EXECUTED  AND  DELIVERED IN THE
STATE OF NEW YORK,  AND THE PROCEEDS OF THE LOAN WERE  DISBURSED  FROM NEW YORK,
WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL  RELATIONSHIP TO THE PARTIES AND
TO THE UNDERLYING  TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS,  INCLUDING,
WITHOUT  LIMITING THE  GENERALITY  OF THE  FOREGOING,  MATTERS OF  CONSTRUCTION,
VALIDITY AND  PERFORMANCE.  THIS LOAN AGREEMENT AND THE OTHER LOAN DOCUMENTS AND
THE  OBLIGATIONS  ARISING  HEREUNDER  AND  THEREUNDER  SHALL BE  GOVERNED BY AND
CONSTRUED IN ACCORDANCE  WITH,  THE LAWS OF THE STATE OF NEW YORK  APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK AND ANY APPLICABLE LAWS OF
THE UNITED  STATES OF AMERICA  EXCEPT THAT AT ALL TIMES THE  PROVISIONS  FOR THE
CREATION, PERFECTION AND ENFORCEMENT OF THE LIENS AND SECURITY INTERESTS CREATED
PURSUANT TO THE MORTGAGE AND THE  ASSIGNMENT  OF LEASES SHALL BE GOVERNED BY THE
LAWS OF THE STATE  WHERE THE  PROPERTY  IS  LOCATED,  EXCEPT  THAT THE  SECURITY
INTERESTS  IN ACCOUNT  COLLATERAL  SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK OR THE STATE WHERE THE SAME IS HELD, AT THE OPTION OF LENDER.

Section 14.12 Successors and Assigns.  This Loan Agreement shall be binding upon
and inure to the benefit of the parties hereto and their  respective  successors
and assigns  except that no Borrower  Party may assign its rights or obligations
hereunder or under any of the other Loan Documents except as expressly  provided
in Article XI.

Section   14.13   Sophisticated   Parties,   Reasonable   Terms,   No  Fiduciary
Relationship.  Borrower Parties represent, warrant and acknowledge that (i) they
are  sophisticated  real estate

                                      -71-
<PAGE>

investors,  familiar with  transactions of this kind, and (ii) they have entered
into this Loan Agreement and the other Loan Documents after conducting their own
assessment  of the  alternatives  available  to them in the  market,  and  after
lengthy  negotiations  in which they have been  represented  by competent  legal
counsel of their choice.  Borrower  Parties also  acknowledge and agree that the
rights of Lender  under this Loan  Agreement  and the other Loan  Documents  are
reasonable  and  appropriate,  taking  into  consideration  all of the facts and
circumstances  including without limitation the quantity of the Loan, the nature
of the  Property,  and the risks  incurred  by Lender  in this  transaction.  No
provision in this Loan  Agreement or in any of the other Loan  Documents  and no
course of  dealing  between  the  parties  shall be  deemed  to  create  (i) any
partnership or joint venture between Lender and Borrower or any other Person, or
(ii) any  fiduciary or similar  duty by Lender to Borrower or any other  Person.
The relationship  between Lender and Borrower is exclusively the relationship of
a creditor  and a debtor,  and all  relationships  between  Lender and any other
Borrower Party are ancillary to such creditor/debtor relationship.

Section  14.14  Reasonableness  of  Determinations.  In any  instance  where any
consent,  approval,  determination or other action by Lender is, pursuant to the
Loan Documents or applicable law, required to be done reasonably or required not
to be unreasonably withheld,  Borrower shall bear the burden of proof of showing
that the same was not  reasonable.  In all cases  Lender shall  conclusively  be
deemed to be acting  reasonably when implementing any standard or requirement of
any applicable  Rating Agency. In the event that a claim or adjudication is made
that Lender or its agents have acted unreasonably or unreasonably delayed acting
in any case  where,  by law or under  this  Loan  Agreement  or the  other  Loan
Documents,  Lender or such agent,  as the case may be, has an  obligation to act
reasonably  or promptly,  neither  Lender nor its agents shall be liable for any
monetary  damages,  and Borrower's sole remedy shall be limited to commencing an
action  seeking  injunctive  relief  or  declaratory  judgment.  Any  action  or
proceeding to determine  whether Lender has acted reasonably shall be determined
by an action seeking declaratory judgment.

Section  14.15  No Duty.  All  attorneys,  accountants,  appraisers,  and  other
professional  Persons and consultants retained by Lender shall have the right to
act  exclusively in the interest of Lender and shall have no duty of disclosure,
duty of loyalty, duty of care, or other duty or obligation of any type or nature
whatsoever to any Borrower Party or Affiliates thereof, or any other Person.

Section 14.16 Entire  Agreement.  This Loan  Agreement,  the Note, and the other
Loan Documents  referred to herein embody the final,  entire agreement among the
parties  hereto  and  supersede  any  and  all  prior  commitments,  agreements,
representations,  and  understandings,  whether written or oral, relating to the
subject  matter  hereof and may not be  contradicted  or varied by  evidence  of
prior,  contemporaneous,  or subsequent  oral  agreements or  discussions of the
parties  hereto.  There are no oral  agreements  among the  parties  to the Loan
Documents.

Section 14.17  Construction;  Supremacy of Loan Agreement.  Borrower Parties and
Lender acknowledge that each of them has had the benefit of legal counsel of its
own choice and has been afforded an  opportunity  to review this Loan  Agreement
and the other Loan Documents with its legal counsel and that this Loan Agreement
and the other  Loan  Documents  shall be  construed  as if  jointly  drafted  by
Borrower and Lender. If any term,  condition or provision of this Loan

                                      -72-
<PAGE>

Agreement  shall be  inconsistent  with any term,  condition or provision of any
other Loan Document, then this Loan Agreement shall control.

Section 14.18 Consent to  Jurisdiction.  EACH BORROWER PARTY HEREBY  CONSENTS TO
THE  JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW
YORK,  STATE OF NEW YORK OR WITHIN THE COUNTY AND STATE IN WHICH THE PROPERTY IS
LOCATED AND IRREVOCABLY AGREES THAT,  SUBJECT TO LENDER'S ELECTION,  ALL ACTIONS
OR  PROCEEDINGS  ARISING OUT OF OR RELATING TO THIS  AGREEMENT OR THE OTHER LOAN
DOCUMENTS  SHALL BE LITIGATED IN SUCH COURTS.  EACH  BORROWER  PARTY ACCEPTS FOR
ITSELF AND IN CONNECTION WITH THE PROPERTY,  GENERALLY AND UNCONDITIONALLY,  THE
NONEXCLUSIVE  JURISDICTION  OF THE  AFORESAID  COURTS AND WAIVES ANY  DEFENSE OF
FORUM  NON  CONVENIENS,  AND  IRREVOCABLY  AGREES  TO BE BOUND  BY ANY  JUDGMENT
RENDERED  THEREBY IN CONNECTION WITH THIS  AGREEMENT,  THE NOTE, SUCH OTHER LOAN
DOCUMENTS  OR SUCH  OBLIGATION.  NOTHING  HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER  PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF LENDER
TO BRING  PROCEEDINGS  AGAINST  ANY  BORROWER  PARTY IN THE  COURTS OF ANY OTHER
JURISDICTION.

Section  14.19 Waiver of Jury Trial EACH OF BORROWER  PARTIES AND LENDER  HEREBY
WAIVES  ITS  RESPECTIVE  RIGHTS TO A JURY  TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS LOAN AGREEMENT,  ANY OF THE LOAN DOCUMENTS, OR
ANY  DEALINGS  BETWEEN  ANY  BORROWER  PARTY AND LENDER  RELATING TO THE SUBJECT
MATTER OF THIS LOAN  TRANSACTION AND THE  LENDER/BORROWER  RELATIONSHIP  THAT IS
BEING  ESTABLISHED.  EACH OF BORROWER PARTIES AND LENDER ALSO WAIVES ANY BOND OR
SURETY OR SECURITY UPON SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER,  BE REQUIRED
OF IT. THE SCOPE OF THIS WAIVER IS INTENDED  TO BE  ALL-ENCOMPASSING  OF ANY AND
ALL  DISPUTES  THAT MAY BE FILED IN ANY  COURT AND THAT  RELATE  TO THE  SUBJECT
MATTER OF THIS TRANSACTION,  INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS,  BREACH OF DUTY CLAIMS,  AND ALL OTHER COMMON LAW AND STATUTORY  CLAIMS.
EACH OF BORROWER PARTIES AND LENDER  ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL
INDUCEMENT TO ENTER INTO THIS LOAN  AGREEMENT,  THAT EACH HAS ALREADY  RELIED ON
THE WAIVER IN ENTERING  INTO THIS LOAN  AGREEMENT AND THAT EACH WILL CONTINUE TO
RELY ON THE WAIVER IN THE FUTURE.  EACH OF BORROWER  PARTIES AND LENDER  FURTHER
WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL,
AND THAT IT KNOWINGLY  AND  VOLUNTARILY  WAIVES ITS JURY TRIAL RIGHTS  FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED  EITHER  ORALLY OR IN WRITING  (OTHER  THAN BY A MUTUAL  WRITTEN
WAIVER SPECIFICALLY  REFERRING TO THIS SECTION 14.19 AND EXECUTED BY EACH OF THE
PARTIES  HERETO),  AND THE  WAIVER  SHALL

                                      -73-
<PAGE>

APPLY TO ANY SUBSEQUENT  AMENDMENTS,  RENEWALS,  SUPPLEMENTS OR MODIFICATIONS TO
THIS LOAN AGREEMENT, THE LOAN DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOAN.  IN THE EVENT OF  LITIGATION,  THIS LOAN  AGREEMENT MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

Section 14.20  Counterparts;  Effectiveness.  This Loan Agreement and other Loan
Documents  and any  amendments  or  supplements  thereto  may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and  delivered  shall be deemed an original,  but
all of  which  counterparts  together  shall  constitute  but one  and the  same
instrument.  This Loan Agreement shall become  effective upon the execution of a
counterpart hereof by each of the parties hereto.

Section  14.21  Servicer.  Lender  shall  have the  right  from  time to time to
designate  and  appoint  one or more  Servicers,  and to change or  replace  any
Servicer. All rights of the Lender hereunder may exercised by Servicer. Servicer
shall be entitled to the benefit of all  obligations of any of Borrower Party in
favor of Lender.

Section  14.22  Obligations  of Borrower  Parties.  Borrower  Parties other than
Borrower  are  parties  to  this  Loan   Agreement   only  with  regard  to  the
representations, warranties, and covenants specifically applicable to them.

Section 14.23 Guaranties Unsecured. Anything to the contrary herein or elsewhere
notwithstanding,  the Guaranty and all obligations arising under same, including
the obligations  incorporated therein from this Agreement by reference,  are not
and shall not be secured in any manner whatsoever,  including by the Mortgage or
by any Lien on any Collateral.

Section 14.24  Confidentiality.  Subject to and without limiting Lender's rights
under  Article  X  hereof,  Lender  shall  use  reasonable  efforts  to hold all
non-public  information  obtained in connection with the Loan in accordance with
Lender's  customary  procedures  for handling  confidential  information of this
nature and in accordance with prudent lending or investing  practices,  it being
understood and agreed by Borrower that in any event Lender may make  disclosures
to   Lender's   employees,   officers,   agents,   representatives,   attorneys,
accountants, consultants and advisors in connection with the Loan, Affiliates of
Lender  (and to other  Persons  authorized  by Lender to  organize,  present  or
disseminate such  information in connection with  disclosures  otherwise made in
accordance  with  this  Section  14.24),  to  the  Rating  Agencies,  assignees,
participants,  investors or prospective  assignees,  participants  or investors,
servicers,  trustees or other  Persons as Lender,  in its sole  discretion,  may
require in connection with any Secondary Market  Transaction or  Securitization,
or   disclosures   required  or   requested  by  any   governmental   agency  or
representative   thereof  of  pursuant  to  legal  process;   provided,   unless
specifically  prohibited  by  applicable  law or court order,  Lender shall make
reasonable efforts to notify Borrower of any request by any governmental  agency
or  representative  thereof (other than any such request in connection  with any
examination of the financial condition or other routine examination of Lender by
such  governmental  agency) for  disclosure of any such  non-public  information
prior to disclosure of such information.

                                      -74-
<PAGE>

Section 14.25  Non-liability of Trustees.  The Declarations of Trust of Borrower
and Member,  copies of which are duly filed with the  Department of  Assessments
and  Taxation of the State of Maryland,  provides  that the names of such Trusts
refer to the  trustees  under each such  Declaration  of Trust  collectively  as
trustees,  but not  individually  or personally,  and that no trustee,  officer,
shareholder,  employee or agent of Borrower or Member,  as applicable,  shall be
held to any personal liability,  jointly or severally, for any obligation of, or
claim against, Borrower or Member, as applicable.  Except as otherwise expressly
provided in this Loan  Agreement,  persons  dealing with Borrower or Member,  as
applicable,  in any way shall look only to the assets of Borrower or Member,  as
applicable,  for the  payment of any sum or the  performance  of any  obligation
under this Loan Agreement or the other Loan Documents.

                        [signatures follow on next page]

<PAGE>

                  IN WITNESS WHEREOF,  the parties hereto have duly executed and
delivered this Loan Agreement as of the date first written above.

BORROWER:

FRANKLIN PLAZA PROPERTY TRUST,
a Maryland real estate investment trust

By:  /s/ John A. Mannix
Name:  John A. Mannix
Title:  President

MEMBER:

SP HOLDING PROPERTY TRUST,
a Maryland real estate investment trust

By:  /s/ John A. Mannix
Name:  John A. Mannix
Title:  President

GUARANTOR:
HUB REALTY COLLEGE PARK I, LLC,
a Maryland limited liability company

By: HUB Management, Inc.,
     Its Manager

By:  /s/ John A. Mannix
Name:  John A. Mannix
Title:  President

LENDER:

MERRILL LYNCH MORTGAGE LENDING, INC.,
a Delaware corporation

By:      /s/ Andrea Balkam
Name:    Andrea Balkam
Title:   Vice President

                                Signature Page 1

<PAGE>

                  IN WITNESS WHEREOF,  the parties hereto have duly executed and
delivered this Loan Agreement as of the date first written above.

GUARANTOR:
HUB REALTY COLLEGE PARK I, LLC,
a Maryland limited liability company

By:  HUB Management, Inc.,
        its manager

By:  /s/ John A. Mannix
Name:  John A. Mannix
Title:  President

                                Signature Page 2

<PAGE>

                         LIST OF EXHIBITS AND SCHEDULES

Exhibits
Exhibit A - Form of Subordination, Non-Disturbance and Attornment Agreement

Schedules
Schedule 3.1(A) - Loan Documents
Schedule 4.1(C) - Organizational Chart for Borrower Parties
Schedule 4.2    - Consents
Schedule 4.7(B) - Rent Roll
Schedule 4.7(C) - Lease Proceedings
Schedule 4.9    - Litigation
Schedule 4.20   - Insurance
Schedule 6.5    - Environmental Work

                                List of Schedules

<PAGE>

                                    EXHIBIT A

                             FORM OF SUBORDINATION,
                    NEW DISTURBANCE AND ATTORNMENT AGREEMENT

                                                 TENANT: __________________

                                 SUBORDINATION,
                    NON-DISTURBANCE AND ATTORNMENT AGREEMENT

                  THIS SUBORDINATION,  NON-DISTURBANCE AND ATTORNMENT  AGREEMENT
(this "Agreement") is entered into by and among  ______________________________,
a      ___________________________      ("Tenant"),     whose     address     is
_____________________________,         ______________________________,         a
___________________________       ("Landlord"),       whose      address      is
___________________________,         and         _______________________________
_______________________________, its successors and/or assigns ("Lender"), whose
address is _____________________________________________.

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

                  WHEREAS,  Landlord  is the  owner  in fee  simple  of the real
property described in Exhibit A attached hereto,  together with the improvements
thereon (the "Property");

                  WHEREAS,  Landlord or its  predecessor and Tenant have entered
into     a     certain      lease,      dated      __________________,      [and
amended/modified/extended/renewed    by   ____________________________,    dated
_______________]  (as the same may  hereafter  be  amended,  modified,  renewed,
extended or replaced, the "Lease"),  leasing to Tenant a portion of the Property
(the "Premises");

                  WHEREAS,  Lender has agreed to make a certain mortgage loan to
Landlord (the "Loan"),  which will be evidenced by Landlord's Promissory Note in
such amount (the "Note") and secured by, among other things,  a certain Mortgage
[Deed of Trust],  Assignment of Rents, Security Agreement and Fixture Filing (as
the same may hereafter be amended, modified, extended or recast, the "Mortgage")
and a certain  Assignment  of Leases  and Rents  (the  "Assignment  of  Leases")
encumbering  the  Property,  which  Mortgage and  Assignment of Leases are to be
recorded simultaneously herewith;

                  WHEREAS,  Lender,  Landlord and Tenant desire to confirm their
understanding  with  respect  to the Lease and the Loan and the rights of Tenant
and Lender thereunder.

                  NOW THEREFORE,  in  consideration  of the mutual covenants and
agreements contained herein and for other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

                  1.  Subordination.  The  Lease,  including  all of  the  terms
thereof,  is and shall be  subject  and  subordinate  to the lien and all of the
terms of the Mortgage to the full extent of all amounts  secured by the Mortgage
and interest thereon.

                  2.  Attornment.  Tenant  agrees  that  it will  attorn  to and
recognize  any purchaser of the Property at a Mortgage  foreclosure  sale or any
transferee  who acquires the

                                      A-1
<PAGE>

Property  by deed  in lieu of  foreclosure  or  exercise  of a power  of sale or
otherwise in respect of the Mortgage (in any such case, the "New Owner") and the
successors and assigns of such purchaser or transferee,  as its landlord for the
unexpired balance (and any extensions or renewals,  if exercised) of the term of
said Lease upon the same terms and conditions set forth in said Lease.

                  3.  Non-Disturbance.  Provided  there is no default  under the
Lease  after any  applicable  notice and grace  period,  such New Owner will not
terminate the Lease or disturb  Tenant's  possession  of the Premises  under the
Lease or the right to quiet enjoyment  thereof,  but the Lease shall continue in
accordance with its terms as a direct lease between Tenant and New Owner.

                  4. Cure by Lender of Landlord Defaults.  Tenant agrees to give
Lender or any other New Owner (in accordance  with Paragraph 8 hereof) a copy of
any notice of default  served  upon  Landlord  which with the passage of time or
otherwise  would entitle  Tenant to cancel the Lease or abate the rent under the
Lease, provided that prior to such notice Tenant has been notified in writing of
the address of the New Owner, or its agent, servicer or designee. Tenant further
agrees that if Landlord  shall have failed to cure such default  within the time
provided  for in the Lease,  then Lender have an  additional  ten (10) days with
respect  to  a  monetary  default  and  thirty  (30)  days  with  respect  to  a
non-monetary  default  after its  receipt  of notice  within  which to cure such
default or if such  non-monetary  default cannot be cured within that time, then
such  additional  time as may be necessary to cure such default shall be granted
if within such thirty (30) days Lender has commenced and is diligently  pursuing
the  remedies  necessary to cure such  default  (including,  but not limited to,
commencement of foreclosure proceedings necessary to effect such cure), in which
event the  Lease  shall  not be  terminated  while  such  remedies  are being so
diligently pursued.

                  5.  Payments to Lender and  Exculpation  of Tenant.  Tenant is
hereby  notified  that the Lease and the rent and all other sums due  thereunder
have been  assigned to Lender as security for the Loan. In the event that Lender
notifies  Tenant of a default under the Mortgage and directs that Tenant pay its
rent and all other sums due under the Lease to Lender,  Tenant  shall honor such
direction  without  inquiry  and pay its rent and all  other  sums due under the
Lease in accordance with such notice. Landlord agrees that Tenant shall have the
right to rely on any such notice from Lender without incurring any obligation or
liability to Landlord as if such notice were given at the direction of Landlord.
Tenant is hereby  instructed  to disregard  any notice to the contrary  received
from or at the behest of Landlord.

                  6.  Limitation  of  Liability.  If the New Owner  acquires the
interest of Landlord under the Lease, the New Owner shall not be:

                  (a)  liable  for any act or  omission  of any  prior  landlord
(including Landlord);

                  (b) subject to any claims, offsets,  defenses or counterclaims
which Tenant might have against any prior landlord (including  Landlord) arising
prior to the date upon which the New Owner  shall  succeed to the  interests  of
Landlord under the Lease;

                                      A-2
<PAGE>

                  (c) bound by any rent or  additional  rent which  Tenant shall
have paid more than one (1) month in  advance to any prior  landlord  (including
Landlord) unless received by New Owner;

                  (d) liable for the return of any security deposit not actually
received by New Owner;

                  (e) bound by any amendment or  modification  of the Lease made
without  the  written  consent of New Owner (if  consent is  required  under the
Mortgage  or any of the other loan  documents  evidencing  and/or  securing  the
Loan);

                  (f)  bound  by any  covenant  to  undertake  or  complete  any
improvement  to or  restoration  of the Premises or the Property,  except to the
extent insurance proceeds or condemnation awards are made available to New Owner
to cover the cost of the improvement.

Lender shall not, either by virtue of the Mortgage,  the Assignment of Leases or
this Agreement,  be or become (i) a  mortgagee-in-possession  or (ii) subject to
any liability or obligation under the Lease or otherwise until Lender shall have
acquired by  foreclosure  or otherwise the interest of Landlord in the Premises.
Lender's  liability  or  obligation  under the Lease shall  extend only to those
liabilities  or  obligations  accruing  subsequent  to the date that  Lender has
acquired  the  interest of Landlord in the  Premises as modified by the terms of
this  Agreement.  In  addition,  upon such  acquisition,  Lender  shall  have no
obligation,  nor incur any  liability,  beyond  Lender's  then  interest  in the
Property.  In the event of the  assignment or transfer of the interest of Lender
under this  Agreement,  all  obligations  and  liabilities  of Lender under this
Agreement shall terminate and,  thereupon,  all such obligations and liabilities
shall be the sole  responsibility  of the  party to whom  Lender's  interest  is
assigned or transferred.

                  7. Notice.  Any notice,  consent or other  communication  made
hereunder  shall be in writing  and  delivered  (i)  personally,  (ii) mailed by
certified or registered mail, postage prepaid, return receipt requested or (iii)
by  depositing  the same with a reputable  overnight  courier  service,  postage
prepaid, for next business day delivery, to the parties at their addresses first
set  forth  above  and if to  Lender,  with  a  copy  to  Merrill  Lynch  Credit
Corporation  at 4802 Deer Lake Drive  East,  Jacksonville,  Florida  32246-6484,
Attention:  Commercial  Mortgage  Servicing.  Notice  shall be deemed given when
delivered personally, or four (4) business days after being placed in the United
States mail,  if sent by certified or  registered  mail, or one (1) business day
after  deposit with such  overnight  courier  service.  Any party can change its
address or party to receive  notice by giving at least  fifteen  (15) days prior
notice to the other parties  hereto in accordance  with this  provision.  Tenant
agrees to send a copy of any  notice or  statement  under the Lease to Lender at
the same time such notice or statement is sent to Landlord.

                  8. Miscellaneous.

                  (a)  Successors  and Assigns.  This  Agreement  shall bind and
inure to the benefit of the parties hereto and their  respective  successors and
assigns.

                  (b)  Governing  Law. This  Agreement  shall be governed by and
construed  in  accordance  with the laws of the State in which the  Property  is
located.

                                      A-3
<PAGE>

                  (c)  Amendment.  This  Agreement  shall be deemed to amend any
provisions of the Lease which are inconsistent with the terms hereof.

                  (d) Counterparts. This Agreement may be executed in any number
of separate counterparts,  each of which shall be deemed an original, but all of
which, collectively and separately, shall constitute one and the same agreement.

                  (e)   Non-disturbance.   Tenant  agrees  that  this  Agreement
satisfies any condition or  requirement in the Lease relating to the granting of
a non-disturbance agreement.

         IN WITNESS WHEREOF,  the parties have executed this Agreement as of the
dates set forth  adjacent to their  signatures  below to be  effective as of the
date of the Mortgage.

Date: ______________                        TENANT:  _____________________

                                            By:   ________________________
                                                     Name: _______________
                                                     Title: ______________

Date: ______________                        LANDLORD:  ___________________

                                            By:   ________________________
                                                     Name: _______________
                                                     Title: ______________

Date: ______________                        LENDER:

                                            By:   ________________________
                                                     Name: _______________
                                                     Title: ______________

WHEN RECORDED, RETURN TO:

                                      A-4
<PAGE>

                        NOTARIZATION FORMS FOR SIGNATURES

Form of Notarial Acknowledgment

STATE OF ________________ss.
                                          ss.    ss.
COUNTY OF ______________ ss.

         On ___________________,  before me, _____________________________,  the
undersigned,    a   notary   public   for   the   state,   personally   appeared
________________________________, personally known to me (or proved to me on the
basis  of  satisfactory  evidence)  to be the  person(s)  whose  name(s)  is/are
subscribed to the within  instrument  and  acknowledged  to me that  he/she/they
executed  the  same  in  his/her/their  authorized  capacity(ies),  and  that by
his/her/their  signature(s)  on the  instrument the person(s) or the entity upon
behalf of which the person(s) acted, executed the instrument.

         WITNESS my hand and official seal.

Signature_______________________________________
          (SEAL)

                                      A-5
<PAGE>

                                 SCHEDULE 3.1(A)

                             List of Loan Documents

2.       Loan Agreement
3.       Note
4.       Mortgage
5.       Assignment of Leases
6.       Assignment of Management Agreement
7.       Guaranty
8.       Environmental Indemnity
9.       Financing Statements
10.      Cash Management Agreement

                                 Schedule 3.1(A)

<PAGE>

                                  SCHEDULE 4.2

                                    Consents

None.

                                  Schedule 4.2

<PAGE>

                                 SCHEDULE 4.7(C)

                                Lease Proceedings

None.

                                 Schedule 4.7(C)

<PAGE>

                                  SCHEDULE 4.9

                                   Litigation

None.

                                  Schedule 4.9

<PAGE>

                                  SCHEDULE 4.20

                                    Insurance

                                  Schedule 4.20

<PAGE>

                                  SCHEDULE 6.5

                               ENVIRONMENTAL WORK

                                                             Estimated Cost
Construction of concrete berm or containment  area
to  protect  against  leaks  from  two  275-gallon
diesel oil above ground  storage tanks in the tank
room  of  Parking  Level  I of the  Property.  The
secondary  containment  should be able to  contain
110% of the total volume of the tanks.                           $2,000

                                  Schedule 6.5

<PAGE>

                               Omitted Schedules

         The following  schedules to the Loan and Security  Agreement  have been
omitted:

          Schedule                           Schedule Title

          4.1(C)                             Organizational Chart
                                             for Borrower Parties

          4.7(B)                             Rent Roll

         The Registrant agrees to furnish supplementally a copy of the foregoing
omitted schedules to the Securities and Exchange Commission upon request.

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