Document:

REVOLVING CREDIT
                             SECURED PROMISSORY NOTE
                                    ("Note")

$50,000,000.00                                                     March 1, 2000

FOR  VALUE  RECEIVED,   Mission  West  Properties,   L.P.,  a  Delaware  limited
partnership,  Mission West Properties,  L.P. I, a Delaware limited  partnership,
Mission West Properties  L.P. II, a Delaware  limited  partnership,  and Mission
West  Properties,   L.P.  III,  a  Delaware  limited  partnership  (collectively
"Borrower"),  promises  to pay to the order of Berg & Berg  Enterprises,  LLC, a
California limited liability company ("Lender") or its assigns, at 10050 Bandley
Drive, Cupertino, California 95014, or at such other place as the holder of this
Note may from time to time designate, the principal sum of Fifty Million Dollars
($50,000,000.00) (the "Credit Amount") or so much of that sum as may be advanced
under  this Note from time to time by any  holder,  plus  interest  as  computed
herein.

Interest on the principal sum of this Note from time to time outstanding will be
computed  from the date of each  advance of  principal  at LIBOR plus 1.30% (the
"Applicable  Interest Rate").  Interest will be computed on the basis of a three
hundred sixty (360) day year and the actual  number of days elapsed,  which will
result in the payment of more interest than if a 365-day year were used.

All accrued and unpaid  principal and interest shall be due and payable no later
than February 28, 2001.

Advances under this Note may be drawn by Borrower, up to the Credit Amount, upon
not less than 5 days notice to Lender.

Each payment shall be credited  first on the interest then due and the remainder
on the principal sum.

The undersigned  agrees that the holder of this Note may,  without notice to the
undersigned  and without  affecting  the  liability of the  undersigned,  accept
additional or substitute  security for this Note, or release any security or any
party liable for this Note, or extend or renew this Note.

If the  undersigned  consist of more than one person or entity,  their liability
and obligations under this Note will be joint and several.  Borrower jointly and
severally waives diligence,  presentment, protest and demand, notice of protest,
dishonor and  non-payment of this Note,  expressly  agrees that this Note or any
payment  hereunder,  may be  extended  from time to time,  and  consents  to the
acceptance of further security for this Note, including other types of security,
all without in any way affecting  the  liability of the  Borrower.  The right to
plead any and all  statutes  of  limitations  as a defense to any demand on this
Note, or on any guaranty hereof,  or to any agreement to pay the same, or to any
demand  secured by the Deed of Trust,  or other  security,  securing  this Note,
against Borrower,  the holder of any property encumbered by the Deed of Trust or
other  instrument  securing  this  Note,  and any  guarantors  or  sureties,  is
expressly waived by each and all said parties.

All amounts  payable  under this Note are payable in lawful  money of the United
States, free from any offset, deduction or counterclaim.  Checks will constitute
payment only when collected.

Upon any  default in the  payment of any amounts due under this Note or upon any
default under the Deed of Trust, the holder may, at its option and upon ten (10)
days' written notice to the undersigned, declare the entire unpaid principal sum
of this Note together with all accrued interest to be due and payable  provided,
however, that if the undersigned should cure such default under this Note or the
Deed of Trust within the time period described above, the right of the holder to
declare the entire  unpaid  principal sum of this Note together with all accrued
interest immediately due and payable shall terminate as to such default as if no
such default occurred.

The undersigned  agrees to pay all costs of collection when incurred,  including
but not  limited  to  reasonable  attorneys'  fees.  If any  suit or  action  is
instituted to enforce this Note, the undersigned promises to pay, in addition to
the costs and disbursements  otherwise allowed by law, such sum as the court may
adjudge as reasonable attorneys' fees in such suit or action.

This Note may be prepaid in whole or in part at any time without penalty.  Until
the maturity  date,  including all  extensions  thereof,  amounts  repaid may be
subsequently advanced under this Note, up to the Credit Amount.

This Note will be governed by the laws of the State of California.

This Note is a  non-recourse  loan secured by a Deed of Trust and  Assignment of
Rents (the "Deed of Trust")  executed by the  undersigned in favor of Lender and
covering  real  property  located  in San  Jose,  California.  The Deed of Trust
contains provisions for the acceleration of the maturity of this Note.

         Mission West Properties, L.P.,
         Mission West Properties, L.P. I,
         Mission West Properties, L.P. II, and
         Mission West Properties, L.P. III

           By: Mission West Properties, Inc., their general partner

               /s/ Carl E. Berg
               -----------------------------------------
               By: Carl E. Berg, PresidentRECORDING REQUESTED BY
        AND WHEN RECORDED MAIL TO

Name    Berg & Berg Enterprises, LLC

Street  10050 Bandley Drive
Address

City,State, Zip  Cupertino, CA  95014

Order No.
--------------------------------------------------------------------------------

                     DEED OF TRUST WITH ASSIGNMENT OF RENTS
              (This Deed of Trust contains a "DUE-ON-SALE" clause)

This DEED OF TRUST, made March 1, 2000                                 , between

Mission West Properties, L.P. II, a Delaware limited partnership, herein called
TRUSTOR,

whose address is 10050 Bandley Drive, Cupertino, CA  95014

ALLIANCE TITLE COMPANY, a California Corporation, herein called TRUSTEE, and

Berg & Berg Enterprises, LLC, a California limited liability company           ,
herein called BENEFICIARY,

Trustor  irrevocably  grants,  transfers  and assigns to Trustee in Trust,  with
Power of Sale, that property in the County of Santa Clara,  State of California,
described as:

See Exhibits A, and B attached hereto for Legal Description

If the  trustor  shall  sell,  convey or  alienate  said  property,  or any part
thereof,  or any  interest  therein,  or shall be  divested  of his title or any
interest  therein in any manner or way,  whether  voluntarily or  involuntarily,
without the written  consent of the  beneficiary  being first had and  obtained,
beneficiary  shall have the right, at its option, to declare any indebtedness or
obligations  secured hereby,  irrespective of the maturity date specified in any
note evidencing the same, immediately due and payable.

Together with the rents,  issues and profits thereof,  subject,  however, to the
right,  power and authority  hereinafter given to and conferred upon Beneficiary
to collect and apply such rents, issues and profits.

For the  Purpose of  Securing  (1)  payment of the sum of  $50,000,000.00,  with
interest  thereon  according to the terms of a promissory  note or notes of even
date herewith made by Trustor,  payable to order of Beneficiary,  and extensions
or  renewals  thereof;   (2)  the  performance  of  each  agreement  of  Trustor
incorporated by reference or contained herein or reciting it is so secured;  (3)
Payment of additional sums and interest thereon which may hereafter be loaned to
Trustor,  or his successors or assigns,  when evidenced by a promissory  note or
notes reciting that they are secured by this Deed of Trust.

<PAGE>

To protect the security of this Deed of Trust,  and with respect to the property
above  described,  Trustor  expressly makes each and all of the agreements,  and
adopts  and  agrees  to  perform  and be bound by each and all of the  terms and
provisions set forth in subdivision A of that certain  Fictitious  Deed of Trust
referenced  herein,  and it is mutually  agreed that all of the  provisions  set
forth in subdivision B of that certain  Fictitious Deed of trust recorded in the
book and page of  Official  Records in the office of the county  recorder of the
county where said property is located,  noted below ormopposite the name of such
county, namely:
<TABLE>
<CAPTION>
<S>             <C>   <C>         <C>           <C>        <C>   <C>            <C>          <C>       <C>            <C>      <C>
COUNTY           BOOK    PAGE      COUNTY          BOOK     PAGE  COUNTY             BOOK     PAGE      COUNTY         BOOK     PAGE
Alameda          1288     556      Kings            858      713  Placer             1028      379      Sierra           38      187
Alpine              3  130-31      Lake             437      110  Plumas              166     1307      Siskiyou        506      762
Amador            133     438      Lassen           192      367  Riverside          3788      347      Solano         1287      621
Butte            1330     513      Los Angeles   T-3878      874  Sacramento     71-10-26      615      Sonoma         2067      427
Calaveras         185     338      Madera           911      136  San Benito          300      405      Stanislaus     1970       56
Colusa            323     391      Marin           1849      122  San                6213      768      Sutter          655      585
Contra Costa     4684       1      Mariposa          90      453  San Francisco     A-804      596      Tehama          457      183
Del Norte         101     549      Mendocino        667       99  San Joaquin        2855      283      Trinity         108      595
El Dorado         704     635      Merced          1660      753  San      Luis      1311      137      Tulare         2530      108
Fresno           5052     623      Modoc            191       93  San Mateo          4788      175      Tuolumne        177      160
Glenn             469      76      Mono              69      302  Santa Barbara      2065      881      Ventura        2607      237
Humboldt          801      83      Monterey         357      239  Santa Clara        6626      664      Yolo            769       16
Imperial         1189     701      Napa             704      742  Santa Cruz         1638      607      Yuba            398      693
Inyo              165     672      Nevada           363       94  Shasta              800      633
Kern             3756     690      Orange          7182       18  San Diego SERIES 5 Book 1964, Page 149774
</TABLE>

Said  agreements,  terms and provisions  contained in said  subdivision A and B,
(identical  in all  counties  are printed on the reverse side hereof) are by the
within reference  thereto,  incorporated  herein and made a part of this Deed of
Trust  for  all  purposes  as  fully  as if set  forth  at  length  herein,  and
Beneficiary may charge for a statement  regarding the obligation secured hereby,
provided the charge therefor does not exceed the maximum allowed by laws.

The foregoing  assignment of rents is absolute  unless  initialed here, in which
case, the assignment serves as additional security.

The undersigned  Trustor,  requests that a copy of any notice of default and any
notice  of sale  hereunder  be mailed to him at this  address  hereinbefore  set
forth.

   Dated:
         ------------------------------------------
   STATE OF CALIFORNIA
   COUNTY OF                                                    S.S.
            ---------------------------------------------------

   On                                         before me,
     -----------------------------------------

   A Notary  Public  in and for said  County  and  State,  personally

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

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

<PAGE>

DO NOT RECORD

The following is a copy of Subdivision A and B of the  fictitious  Deed of Trust
recorded in each county in California  as stated in the foregoing  Deed of Trust
and  incorporated  by reference is said Deed of Trust as being a part thereof as
if set forth at length therein.

A.  To protect the security of this Deed of Trust, Trustor agrees:

    (1) To keep said  property  in good  condition  and  repair not to remove or
demolish any building  thereon;  to complete or restore promptly and in good and
workmanlike  manner any building which may be constructed,  damaged or destroyed
thereon  and to pay  when due all  claims  for  labor  performed  and  materials
furnished therefor; to comply with all laws affecting said property or requiring
any  alterations  or  improvements  to be made thereon,  not to commit or permit
waste  thereof;  not to commit,  suffer or permit any act upon said  property in
violation of law; to cultivate,  irrigate, fertilize, fumigate, prune and do all
other acts which from the  character or use of said  property may be  reasonably
necessary, the specific enumerations herein not excluding the general.

    (2)  To  provide,   maintain  and  deliver  to  Beneficiary  fire  insurance
satisfactory to and with loss payable to Beneficiary. The amount collected under
any fire or other  insurance  policy  may be  applied  by  Beneficiary  upon any
indebtedness  secured hereby and in such order as Beneficiary may determine,  or
at option of Beneficiary  the entire amount so collected or any part thereof may
be released to Trustor.  Such application or release shall not cure or waive any
default or notice of default  hereunder or  invalidate  any act done pursuant to
such notice.

    (3) To appear in and defend any action or  proceeding  purporting  to affect
the security  hereof or the rights or powers of Beneficiary  or Trustee;  and to
pay all costs and expenses,  including  cost of evidence of title and attorney's
fees in a reasonable sum, in any such action or proceeding in which  Beneficiary
or Trustee may appear,  and in any suit brought by Beneficiary to foreclose this
Deed.

    (4) To pay: at least ten days before  delinquency  all taxes and assessments
affecting said property,  including assessments on appurtenant water stock; when
due, all encumbrances, charges and liens, with interest, on said property or any
part thereof,  which appear to be prior or superior hereto;  all costs, fees and
expenses of this Trust.

    Should Trustor fail to make any payment or to do any act as herein provided,
then Beneficiary or Trustee,  but without obligation so to do and without notice
to or demand upon  Trustor and without  releasing  Trustor  from any  obligation
hereof, may: make or do the same in such manner and to such extent as either may
deem  necessary to protect the security  hereof,  Beneficiary  or Trustee  being
authorized to enter upon said property for such  purposes;  appear in and defend
any action or proceeding  purporting to affect the security hereof or the rights
or powers of Beneficiary or Trustee;  pay,  purchase,  contest or compromise any
encumbrance,  charge or lien which in the judgment of either appears to be prior
or superior hereto;  and, in exercising any such powers, pay necessary expenses,
employ counsel and pay his reasonable fees.

    (5)  To  pay  immediately  and  without  demand  all  sums  so  expended  by
Beneficiary  or Trustee,  with interest from date of  expenditure  at the amount
allowed  by law in  effect  at the  date  hereof,  and to pay for any  statement
provided  for by law in  effect  at the date  hereof  regarding  the  obligation
secured hereby any amount  demanded by the Beneficiary not to exceed the maximum
allowed by law at the time when said statement is demanded.

B.     It is mutually agreed:

    (1) That any award of damages in connection with any condemnation for public
use of or injury to said  property or any part  thereof is hereby  assigned  and
shall be paid to  Beneficiary  who may apply or release such moneys  received by
him in the  same  manner  and  with  the  same  effect  as  above  provided  for
disposition of proceeds of fire or other insurance.

    (2) That by accepting  payment of any sum secured hereby after its due date,
Beneficiary  does not waive his right either to require  prompt payment when due
of all other sums so secured or to declare default for failure so to pay.

    (3) That at any time or from time to time,  without  liability  therefor and
without notice,  upon written  request of Beneficiary  and  presentation of this
Deed and said note for endorsement, and without affecting the personal liability
of any person for  payment of the  indebtedness  secured  hereby,  Trustee  may:
reconvey  any part of said  property;  consent to the making of any map or plate
thereof;  join in  granting  any  easement  thereon;  or  join in any  extension
agreement or any agreement subordinating the lien or charge hereof.

    (4) That upon written  request of beneficiary  stating that all sums secured
hereby have been paid,  and upon surrender of this Deed and said note to Trustee
for  cancellation  and  retention  or other  disposition  as Trustee in its sole
discretion  may choose and upon  payment of its fees,  Trustee  shall  reconvey,
without warranty, the property then hereunder. The recitals in such reconveyance
of any matter or facts shall be conclusive  proof of the  truthfulness  thereof.
The  Grantee in such  reconveyance  may be  described  as "the person or persons
legally entitled thereto."

    (5) That as additional  security,  Trustor  hereby gives to and confers upon
Beneficiary  the right,  power and authority,  during the  continuances of these
Trusts,  to collect the rents,  issues and profits of said  property,  reserving
unto  Trustor  the  right,  prior to any  default  by  Trustor in payment of any
indebtedness  secured hereby or in performance  of any agreement  hereunder,  to
collect  and  retain  such  rents,  issues and  profits  as they  become due and
payable.  Upon any such  default,  Beneficiary  may at any time without  notice,
either in person,  by agent,  or by a receiver to be appointed  by a court,  and
without  regard to the  adequacy of any  security  for the  indebtedness  hereby
secured, enter upon and take possession of said property or any part thereof, in
his own name sue for or  otherwise  collect  such rents,  issues,  and  profits,
including those past due and unpaid, and apply the same, less costs and expenses
of operation and  collection,  including  reasonable  attorney's  fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may determine. The
entering upon and taking  possession of said  property,  the  collection of such
rents,  issues and profits and the application  thereof as aforesaid,  shall not
cure or waive any default or notice of default  hereunder or invalidate  any act
done pursuant to such notice.

    (6) That upon  default by Trustor  in  payment of any  indebtedness  secured
hereby or in performance of any agreement hereunder, Beneficiary may declare all
sums  secured  hereby  immediately  due and  payable by  delivery  to Trustee of
written  declaration  of default  and  demand for sale and of written  notice of
default and of election to cause to be sold said property,  which notice Trustee
shall cause to be filed for record.  Beneficiary also shall deposit with Trustee
this Deed, said note and all documents evidencing expenditures secured hereby.

    After the lapse of such time as may then be  required by law  following  the
recordation  of said notice of default,  and notice of sale having been given as
then  required  by law,  Trustee,  without  demand on  Trustor,  shall sell said
property at the time and place  fixed by it in said notice of sale,  either as a
whole or in separate parcels,  and in such order as it may determine,  at public
auction to the  highest  bidder for cash in lawful  money of the United  States,
payable at time of sale, Trustee may postpone sale of all or any portion of said
property by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public  announcement at the time fixed
by the preceding postponement.  Trustee shall deliver to such purchaser its deed
conveying the property so sold, but without any covenant or warranty, express or
implied.  The recitals in such deed of any matters or facts shall be  conclusive
proof of the truthfulness  thereof. Any person,  including Trustor,  Trustee, or
Beneficiary as hereinafter defined, may purchase at such sale.

    After  deducting all costs,  fees and expenses of Trustee and of this Trust,
including cost of evidence of title in connection with sale, Trustee shall apply
the proceeds of sale to payment of: all sums  expended  under the terms  hereof,
not then repaid, with accrued interest at the amount allowed by law in effect at
the date hereof; all other sums then secured hereby; and the remainder,  if any,
to the persons legally entitled thereto.

    (7) Beneficiary,  or any successor in ownership of any indebtedness  secured
hereby, may from time to time, by instrument in writing,  substitute a successor
or successors to any Trustee named herein or acting hereunder, which instrument,
executed by the Beneficiary and duly  acknowledged and recorded in the office of
the recorder of the county or counties where said property is situated, shall be
conclusive proof of proper  substitution of such successor  Trustee or Trustees,
who shall, without conveyance from the Trustee  predecessor,  succeed to all its
title, estate,  rights, powers and duties. Said instrument must contain the name
of the original Trustor,  Trustee and Beneficiary  hereunder,  the book and page
where this Deed is recorded and the name and address of the new Trustee.

    (8) That this Deed  applies  to,  insures to the  benefit  of, and binds all
parties hereto,  their heirs,  legatees,  devisees,  administrators,  executors,
successors and assigns.  The term  Beneficiary  shall mean the owner and holder,
including  pledges,  of  the  note  secured  hereby,  whether  or not  named  as
Beneficiary  herein.  In this  Deed,  whenever  the  context  so  requires,  the
masculine  gender includes the feminine  and/or neuter,  and the singular number
includes the plural.

    (9) That  Trustee  accepts  this  Trust when this Deed,  duly  executed  and
acknowledged,  is made a  public  record  as  provided  by law.  Trustee  is not
obligated  to notify any party  hereto of  pending  sale under any other Deed of
Trust or of any action or proceeding in which  Trustor,  Beneficiary  or Trustee
shall be a party unless brought by Trustee.

                                                  REQUEST FOR FULL RECONVEYANCE
TO Alliance Title Company, TRUSTEE:

       The  undersigned is the legal owner and holder of the note or notes,  and
of all other  indebtedness  secured by the foregoing Deed of Trust. Said note or
notes,  together with all other indebtedness secured by said Deed of Trust, have
been fully paid and  satisfied;  and you are hereby  requested and directed,  on
payment  to you of any sums  owing to you under the terms of said Deed of Trust,
to cancel  said  note or notes  above  mentioned,  and all  other  evidences  of
indebtedness  secured by said Deed of Trust delivered to you herewith,  together
with the said Deed of Trust, and to reconvey,  without warranty,  to the parties
designated  by the terms of said Deed of Trust,  all the  estate now held by you
under the same.

Dated
     ----------------------------------

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

              Signature must be notarized
                                          -------------------------------------
Please mail Deed of Trust,
Note and Reconveyance to
                        -------------------------------------------------------

Do not lose or  destroy  this Deed of Trust OR THE NOTE which it  secures.  Both
must be delivered to the Trustee for cancellation  before  reconveyance  will be
made.
<PAGE>
                                    Exhibit A

                                Legal Description

All that real property situated in the City of Milpitas,  County of Santa Clara,
State of California, described as follows:

Parcels  3, 6, 7 and 13, as shown on that  Parcel  Map  filed for  record in the
office of the  Recorder of the County of Santa  Clara,  State of  California  on
December 5, 1984, in Book 536 of Maps, page(s) 41,42, and 43.

<PAGE>

                                    Exhibit B

                                Legal Description

All that real property  situated in the City of San Jose, County of Santa Clara,
State of California, described as follows:

Parcel One:

Lot 1, as shown on that certain Map of Tract No.  7502,  which Map was filed for
record in the  Office of the  Recorder  of the County of Santa  Clara,  State of
California on April 19, 1984 in book 527 of Maps, pages 39, 40 and 41.

Parcel Two:

All that certain  Parcel of Land lying Westerly of the most Westerly line of Lot
1, Tract No.  7502,  filed April 19, 1984 in Book 527 of Maps,  pages 39, 40 and
41, shown on Plat Map of Parcel Three in Resolution  No. 59585,  recorded  April
16, 1987 in book K 112, Page 1927, Official Records.

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